Insight
US Independents; cost of debt and arbitrage in tight oil
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Report summary
After years of financial under performance, tight oil is facing higher cost of capital. More specifically, debt financing costs are on the rise. Some companies have already taken on debt with a double-digit interest rates. Using the bond market as a proxy, we calculate the cost of capital tight oil companies are facing in the future. Widening cost of capital could result in more M&A as financially strong companies look to consolidate core assets.
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- Executive Summary
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Current vs Future WACC
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