Description: With oil prices continuing to head south, resource companies have to reconsider their capital plans. Recently, Canada Natural Resources Ltd (CNRL) announced that it may be required to revisit its over $8 billion capital budget in the face of these resource price declines. Investors threaten to punish energy companies that do not show themselves nimble enough to cope with the current economic situation.
Source: The Globe and Mail.com
Date: November 6, 2014
1) What role would an accountant play in helping a resource company deal with declining resource prices?
2) How would these declining oil prices affect a capital budget of an energy company?
3) What do you think of changing capital budgeting plans in response to investor pressure? Are there downsides to this strategy?