Investors are renewing their interest in US oil and gas properties that are deemed to come with more risk, as the rebound in crude oil prices boosts hopes that the oil industry faces a more positive future in the long term.
Signs of a vehement change in attitude are starting to show, with one prominent example being the fact that Extraction Oil & Gas – a US oil production and exploration business – just recently was able to raise $633m in an introductory public offering – a feat that amounts to the largest public investment in the sector since oil process started to crash in 2014.
Another sign of increased confidence in the market can be found in the increased sales of high-yield exploration and production company bond sales, of which there were five since the beginning of September, and which had all but dried up prior to that time.
Speaking to The Financial Times, the head of equity capital markets of origination in the Americas for Credit Suisse, Rob Santangelo, said:
“There is a pool of capital that wants exposure to the oil industry. We think the market is ready to put money to work.”
This can only be more good news for companies like ExxonMobil, which produces Mobil Unirex N3 amd will already have had a morale boost in the past few weeks due to the fact that OPEC reached a deal to freeze output. Such a move will help to drive up oil prices in the future.