Haynes and Boone Partner Buddy Clark on CNBC’s Squawk Box

12/3/2014

Haynes and Boone, LLP Partner Buddy Clark, leader of the firm’s energy practice, was interviewed Dec. 2 as an energy industry expert on the impact of falling oil prices on Squawk Box, CNBC‘s the popular morning business program.

Clark, appearing with Wall Street Journal special writer Greg Zuckerman, said the fallout will be far from the catastrophe some have predicted for oil and gas producers. 

“I think the market is going to adjust to the prices,” he said. “Frankly, I don’t see it as a major crisis for the U.S. industry because I think we’ve seen these decrease in prices before and the market will readjust.”

Rather than focus on producers, Clark told the Squawk Box hosts, oilfield service companies are likely to experience the most business disruptions if prices continue to dip.

“In 2008-2009, there were a lot more overly stretched producers who are just buying raw land without any cash flow coming out of the ground through production,” he said. “And in the last five years, most of those companies have been able to turn that raw acreage into productive land. So to the extent they have cash flow now, they can meet their interest carry. They can weather through a six-month and probably 12-month downturn. There will be losers, but by in large I don’t see this as a major crisis.” Moreover, Clark concluded, as commodity prices decrease, the prices oilfield service companies charge for their services will come down, making the cost of drilling new wells more economic for the producer.

To watch the full video, click here.

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