The percentage drop in stock prices of Halliburton Company (NYSE:HAL),Goodrich Petroleum Corporation (NYSE:GDP) and Linn Energy LLC (NASDAQ:LINE) was as eye popping as the pop of oil bubble itself. During a panel discussion on Fox Business, the analysts expressed their opinion on which companies in the energy sector might just be going out of business.
Halliburton Company (NYSE:HAL) was affected the least of the above mentioned group of three after OPEC decided not to cut production in its latest meeting. It dropped 10.86%, while Goodrich Petroleum Corporation (NYSE:GDP)’s stock declined 34.24%, and Linn Energy LLC (NASDAQ:LINE) slid 16.86% after the OPEC’s decision made the headlines.
Heritage Foundation Chief Economist, Steve Moore was hopeful of the future of shale oil industry despite plummeting oil prices. For him, it was only a matter of time when companies like Halliburton Company (NYSE:HAL),Goodrich Petroleum Corporation (NYSE:GDP) and Linn Energy LLC (NASDAQ:LINE) will come up with technology to push their costs even lower.
“[…] The technology is improving so dramatically with the fracking technologies that it is going to get cheaper and cheaper with time. There was a report by one of the Russian oil companies saying that this is all just a big bubble in the shale oil and gas in the United States. It is not a bubble, it is here to stay, and as the technology makes it better, it is going to be cheaper […],” said Moore.
On the other hand, Lido Isle Advisors managing partner, Jason Rotman was much less hopeful for the future of shale, which in his opinion was debt ridden, and in his opinion the situation for Halliburton Company (NYSE:HAL),Goodrich Petroleum Corporation (NYSE:GDP) and Linn Energy LLC (NASDAQ:LINE) was only going to get worse from now on as macroeconomic fears that affected oil price had been overplayed, which can be seen by the oversupply that is present in the market.
” […] At least 60% to 70% of the recent upstarts who have relied on you know cheap debt and financing just to get their businesses going, when oil was at a $110 a barrel. I think those companies will either go out of business, or scale back dramatically, probably leaning towards going out of business unfortunately […],” said Rotman.
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