BDO United States

Chicago, IL – According to a new study by BDO Seidman, LLP, one of the nation’s leading accounting and consulting organizations, 57 percent of chief financial officers (CFOs) at U.S. oil and gas exploration and production companies say that “credit capacity restraints, including access to capital” will be their greatest financial challenge in 2009, followed by “falling oil or natural gas prices” (21%). Nearly three-quarters (72%) expect the economic crisis in the U.S. to impact their ability to borrow money or extend bank debt in 2009. In the past 12 months, only 26 percent of respondents had oil or gas exploration projects significantly delayed or terminated. Among those who did, 80 percent stated “lack of capital to fund project” as a reason.

“Energy companies have remained relatively unscathed by the downturn this year and continued with record profits. However, a storm front is gathering for 2009,” said Charles Dewhurst, a partner and National Energy Industry Practice Leader at BDO Seidman, LLP. “The survey was conducted as oil prices and demand continued to drop – and this volatility, combined with the state of the economy – has energy companies treading more cautiously.”

These findings are from the BDO Seidman Natural Resources 2009 Outlook Survey which examined the opinions of 100 chief financial officers at U.S. oil and gas exploration and production companies. The survey was conducted in October and November of 2008. 

Some of the major findings of BDO Seidman Natural Resources 2009 Outlook Survey of CFOs include:

• Staffing Efficiencies. Most respondents (63%) are keeping the same level of field personnel; 29 percent expect to increase levels at least somewhat and eight percent are decreasing field staff. Twelve percent indicated that “recruiting or retaining skilled workforce talent” will be their greatest financial challenge in 2009.

• Potential Growth Drivers for 2009. Increasing demand for oil and gas both internationally (36%) and domestically (22%) were cited as the top potential drivers for overall growth in 2009 in the U.S. oil and gas industry, followed by “new production technologies to increase supply” (17%), “adoption of alternative energies” (12%) and “oil and gas exploration” (10%).

• International Growth. CFOs cited access to capital (19%) and uncertain business or political climates (16%) as the top two barriers to international growth; five percent cited international tax or environmental regulations.

The BDO Seidman Natural Resources 2009 Outlook Survey is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief financial officers, using a telephone survey performed within a scientifically-developed, pure random sample of U.S. oil and gas exploration and production companies.

About BDO Seidman, LLP   

BDO Seidman, LLP is a national professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. Guided by core values including, competence, honesty and integrity, professionalism, dedication, responsibility and accountability for almost 100 years, we have provided quality service and leadership through the active involvement of our most experienced and committed professionals.

BDO Seidman serves clients through 37 offices and more than 400 independent alliance firm locations nationwide. As a Member Firm of BDO International, BDO Seidman, LLP serves multi-national clients by leveraging a global network of resources comprised of 626 Member Firm offices in 110 countries. BDO International is a worldwide network of public accounting firms, called BDO Member Firms, serving international clients. Each BDO Member Firm is an independent legal entity in its own country.