Oil, gas capital raises in July: Sector raised $1.65B driven by debt offerings

U.S. and Canadian oil and natural gas companies covered by S&P Global Market Intelligence raised $1.65 billion in July, a large drop from the $3.62 billion of capital raised by the sector the previous month.

The sector completed six common equity offerings and three debt offerings in July. About $1.63 billion came from the debt offerings, according to an analysis by S&P Global Market Intelligence.

Amount of capital drops YOY

All oil and gas segments saw large year-over-year declines in capital raised through the end of July. The storage and transportation segment raised the most, with $11.25 billion year to date, but that was down by about 40.7% from the same period in 2021. Exploration and production companies raised $7.19 billion year to date, down about 62.7% year over year. Refining and marketing raised $1.13 billion, down 85.9% year over year.

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Debt offerings issued in July

Almost all of the capital raised by the sector for this month came from two debt offerings issued by Kinder Morgan Inc. totaling $1.5 billion. On July 25, Kinder Morgan issued $750 million of 4.807% senior unsecured notes due 2033 and $750 million of 5.475% senior unsecured notes due 2052. The company will use the net proceeds from both debt offerings for general corporate purposes and redemption or repayment of debt securities. Kinder Morgan will also use some of the proceeds from the senior unsecured notes due 2033 for working capital.

The next largest debt offering, and the third of the month, was the offering from Canadian oil and gas producer Obsidian Energy Ltd. Obsidian Energy issued $127.6 million of senior unsecured notes due 2027. The company planned to use the net proceeds to repay all existing senior secured notes due Nov. 30, repay the outstanding balances under existing credit facilities due Nov. 30, and repay a recourse loan due on Dec. 31, which was incurred by the company through a 2021 acquisition.

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