What do you do if your cash flow is dwindling in the oil and gas industry?

O Planejamento de todos processo financeiro, desde, contas a pagar, em especial as compras, a receber, contribui para que a empresa tenha Capital de giro, para futuros investimentos.

Conduct a thorough review of all assets to identify underutilized resources that can be optimized for better returns. This may include enhancing the productivity of existing wells, repurposing infrastructure, or leveraging real estate for alternative uses.

In my different experiences, a quick and easy way to improve cash flow has been to make salary adjustments, especially to reduce bonuses or lay off staff. Then when business is better, those bonuses and extra staffing can increase. So while this should definitely be explored, the rest of the financials should be compared year over year for other costs that have possibly gone out of control. Other top ways are to look at delaying or cutting back on planned investments. The last thing to look at is reducing cash dividends. You will not find all the cost savings yourself. Including staff in this process will make them happier and will help find more cost savings. Finally, be sure to include cost savings incentives in bonus calculations.

In order to cut costs, upstream operators and service companies must take drastic measures to compete on price, or transform their value propositions. They should implement alternative commercial models, including investing with peers by taking equity stakes through services performed, or shifting from capex-based pricing models to opex-based ones, and introducing performance-based contracts. In addition, offering a one-stop shop or integrated solutions will reduce the number of interfaces for the client and lead to other integration benefits. Finally, companies may leverage digital enablers to become more client-centric, develop commercial and technical capabilities, and align their governance models with the desired expectations.

Look for opportunities to form strategic partnerships or joint ventures with other companies to share resources, access new markets, or jointly develop new technologies or products. This can help spread risk and open up new revenue opportunities without the need for significant capital investment.

One of the best options is to put your treasury management to best use. Review all your assets and Liabilities, make quick decisions on some options like liquidation, additional borrowings, tapping into increased grant funding etc.

Understand the current market conditions for the assets you plan to liquidate. The oil and gas industry is known for its volatility, and asset values can fluctuate significantly. Timing the sale to coincide with favorable market conditions can maximize the returns from asset liquidation. Have a clear plan for the proceeds from the asset liquidation. Whether the funds will be used to alleviate immediate cash flow issues, pay down debt, or reinvested into more strategic areas of the business, a thoughtful reinvestment strategy is critical to ensuring the long-term health of the company.

Stay informed about government incentives, tax credits, or grants available for energy companies, especially those related to environmental sustainability, exploration, or technology innovation. Leveraging these incentives can provide financial relief and support investment in strategic areas.

In response to the changing customers' buying criteria and risk-taking appetite, operators and service companies must undergo structural change by transforming their operating models. In terms of commercial, they should collaborate with each other to create value propositions to overcome development challenges, and establish long-term partnerships to shift from serving as solution providers to business partners. From an organizational perspective, they should develop risk management capabilities, align governance model through strong contractual agreements to focus on performance management, and align KPIs across various stakeholders. Finally, they should leverage digital as a value driver to translate the vast amount of data into insight.

Strengthen your community engagement and corporate social responsibility (CSR) initiatives. Building a strong reputation in CSR can enhance your brand value, attract investment, and open up new partnership opportunities that can have positive financial implications.