Shale Overhead Costs Under Fire as Investors Drill Even Deeper - Bloomberg

Shale Overhead Costs Under Fire as Investors Drill Even Deeper - Bloomberg:

U.S. shale producers that have reined in growth plans to mollify investors are now facing increasing pressure to slash their own pay and gut bloated offices.

Almost all major U.S. explorers cut their capital budgets after oil prices fell at the end of 2018. The goal: Show they were willing to pay back shareholders at a time when their stocks were under-performing the broader market. But it didn’t stop there, investors are now increasingly focused on general and administrative budgets, or G&A, used for everyday costs.

Consider Fir Tree Partners, a hedge fund that’s aggressively targeted bloated cost structures at companies it’s invested in. Three small drillers -- Linn Energy LLC, Midstates Petroleum Co. and Amplify Energy Corp. -- responded by collectively cutting overhead by about $107 million from 2017 levels, according to Evan Lederman, a partner at the New York-based fund.