Spending rise follows increases by 70% of companies in 2013
Nearly two-thirds of oil and gas companies are planning to increase their capital spending in 2014, a quarter of them by 10% or more, according to a global industry survey by UHY LLP Certified Public Accountants and PennWell Publishing’s Oil & Gas Financial Journal.
Next year’s planned increases come on the heels of capital spending hikes in 2013 by 70% among the survey respondents, of which one-third were increases of 10% or more. For 2014, one-in-four survey respondents report plans to expand capital spending by 10% or more; 18% expect their companies’ capex to expand 15% or more.
“Across industry segments, almost 70% of companies report increased capex spending for 2013 and 2014, with the exception of a decline to 55% of upstream companies in 2014 plans,” said UHY LLP Energy Partner Scott Barker. “This likely reflects companies’ needs to focus their unconventional projects on improved production in 2014 following a period of intensive expansion and exploration investment, and to align with current market price trends.”
Other study highlights
- More than half (55%) of the respondents indicated that internally generated cash was the primary source of capex funding;
- The two primary drivers for increases in capex spending were internal growth and international expansion opportunities;
- Current political and economic conditions had more impact on non-US survey respondents then their US counterparts; and
- The survey’s 129 respondent companies accounted for more than $700 billion in 2013 revenues, and almost $100 billion in capex expenditures. Half are headquartered in the U.S., half in other countries. The survey was conducted online between Nov. 27 and Dec. 9, 2013.
A copy of the full survey report is available upon request via email@example.com.
PennWell Corporation is a highly diversified, business-to-business media company providing authoritative print and online publications, conferences and exhibitions, research, databases, online exchanges and information products to strategic global markets. Since 1910, PennWell has embraced a mission of transforming diverse information into practical business intelligence for strategic markets worldwide. PennWell delivers key resources and audiences for your business success in today's global market with a broad portfolio of industry-leading publications, events, e-newsletters and more to provide unparalleled opportunities to grow your business.
Oil & Gas Financial Journal provides global financial decision makers with specific, easily accessible, and essential business intelligence regarding worldwide oil and gas markets, both in the form of content and informative advertising, in a manner that generates value for its readers, advertisers, and stakeholders.
UHY LLP, a licensed independent CPA firm in Texas, performs attest services through an alternative practice structure with UHY Advisors TX, LLC. UHY Advisors TX, LLC conducts operations in Texas as a subsidiary of UHY Advisors, Inc. The firm also has an office in Dallas. UHY Advisors, Inc. and its subsidiary entities have nearly 1,000 professionals providing services from offices throughout the United States. UHY Advisors is ranked as one of the Top 20 professional services firms providing tax and business consulting services in the country by Accounting Today.
UHY Advisors Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. For additional information, please visit their website at www.uhy-us.com/.
UHY LLP is a licensed independent CPA firm that performs attest services. UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms.
This is the second survey in a joint series by UHY and Oil & Gas Financial Journal. Results from the first survey can be found by clicking here.