With Fiscal Cliff Avoided, Oil Companies Step Up Investment

Oil and gas companies are stepping up investment for 2013, citing greater certainty over their potential tax bills.

Like much of the business world, the oil and gas sector was looking forward to New Year’s Day with a sense of dread. The Bush tax cuts were set to expire, and steep cuts in federal spending were due to kick in automatically.

“We anticipated somewhat of a lull in the industry at the beginning of 2013 from a transactional standpoint, but it’s actually been exactly the opposite.”

J. Wayne Bellew is an attorney with the Houston office of Looper Reed & McGraw. He says the deal in Congress that averted the so-called fiscal cliff is encouraging energy firms to push ahead with investments they’d had on hold.

“We just closed a transaction yesterday and are funding today in the Eagle Ford Shale, and we’re looking forward to more of that for the rest of the year. So I think now that there’s some certainty within the regime, I think it’s going to be as good or better of a year than we had in 2012.”

Bellew says he expects to see the industry consolidate further over the coming year, with more companies moving their operations to Houston.

 

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...