Triangle Petroleum Corporation (TPLM) To Tamper With Capital Spending

Posted by Lynn Eisler December 30, 2014 0 Comment 1276 views


It is known everywhere that falling oil price is putting pressure on oil companies. Triangle Petroleum Corporation (NYSEMKT:TPLM) is one such oil company that is exposed to the current adversity in the oil industry. Does the company have what it takes to withstand the hardship in the industry?

Most players in the oil industry have reacted to the soft price environment by cutting capital spending for the coming year. That is the approach that Triangle Petroleum Corporation (NYSEMKT:TPLM) also hinted when discussing its most recent quarterly performance.

Projects deferred

The company revealed plans to defer some projects in the current quarter, 4Q, and only return to them when the situation becomes manageable. Falling oil prices have meant that oil companies are not able to attract good revenue from their production. That makes it necessary to put on hold some capital projects so as to save money and avoid a situation of overcapacity.

Although Triangle Petroleum announced plans to slow down capital spending, the company disclosed that it was on track to meeting its production goals. In the most recent quarter, the company reported nearly 16% increase in production sequentially. It also completed more wells in the quarter than in the previous ones. However, it emerged that the company was spending more on well projects than its peers, which is not good for a company that wants to have an efficient operational system.

Additionally, the lack of well performance update from Triangle Petroleum Corporation (NYSEMKT:TPLM) has denied investors the opportunity to assess the performance of the company’s wells.

Shrinking cash position

Triangle Petroleum Corporation (NYSEMKT:TPLM) disclosed $53.24 million in cash and equivalents at the end of the most recent quarter. That signaled a decline from $107.53 million in the previous quarter. The company’s long-term debt stood at $679 million at the end of October 2014.

The unfavorable oil price condition, the high cost of wells and the shrinking cash position indicate that the company needs to make more adjustments in its system to deliver strong shareholder value.



About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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