Stephen Lacey is US Editor for International Financing Review, helping to oversee editorial content across the region. He has particular expertise in coverage of the equity capital markets – IPOs, follow-on stock sales, and equity-linked securities – spanning the entire corporate life cycle, from venture and private equity to entry and maturation in the public markets.
- +1 646 223 8808
Now seems an odd time to raise money to launch a new oil company. As crude prices have slumped to the 30s, US explorers have found access to capital markets funding choked off. In an effort to fill the funding gap created by the new price dynamic, E&P companies are ditching assets.
Fresh from reporting a historic loss, mid-major oil E&P Hess Corporation is looking to bolster its balance sheet with a two-part, US$1.5bn equity-linked raise. The financing, structured as US$1bn of common stock and US$500m mandatory convertible preferred, is due to price overnight Thursday.
It is a horrible time to be raising money across the oil patch – a 5.5% drop in WTI Tuesday to US$29.88 quashed any hopes US explorers may have had funding in the capital markets. Then again a lower-for-longer environment presents plenty of opportunities for those starting anew.