Author Archive: Tom Sanzillo

Director of Finance Tom Sanzillo has 30 years of experience in public and private finance, including as a first deputy comptroller of New York State, where he held oversight over a $156 billion pension fund and $200 billion in municipal bond programs.

IEEFA Update: Oil and gas industry caught in a capex conundrum

Invest in the future or return cash to shareholders?

The oil and gas industry confronts a host of challenges that would have been inconceivable a decade ago: weak cash flows, meager profits, slumping stock values, volatile revenues, unreliable demand growth, and rising competition from renewables, to name just a few. The industry now faces a quandary. Should companies continue to invest in new drilling […]

IEFFA update: How should shareholders react to New York’s ExxonMobil lawsuit?

Time to hold management accountable

Acting New York State Attorney General Barbara Underwood has sued ExxonMobil for fraud, alleging the company misled investors about how its current and future profitability was—and will be—shaped by climate change. The Attorney General’s case tests legal compliance. ExxonMobil shareholders face a different test. The lawsuit charges that ExxonMobil, in effect, kept at least two […]

and October 29, 2018 Read More →

IEEFA update: In Exxon lawsuit, another indication of growing oil-industry peril

Risks outweigh potential rewards; Fossil fuel stocks grow increasingly speculative

The lawsuit filed yesterday by New York’s attorney general against Exxon Mobil is a stark indication of just how risky investing in oil and gas companies has become. The lawsuit asserts that the company defrauded shareholders by downplaying the business risk of climate change, and litigation poses obvious financial risk. It may even expose ExxonMobil—and […]

and October 25, 2018 Read More →

IEEFA Puerto Rico: Why PREPA receivership is a worthy proposal

An Imperfect solution, from a suspect source, to be decided by the wrong authority – and it just might work

A group of bondholders and insurers are asking the judge overseeing the bankruptcy of the Puerto Rico Electric Power Authority (PREPA) to appoint a receiver to manage the dysfunctional agency. Their motion, filed earlier this month in Judge Laura Swain’s federal bankruptcy court, represents a significant change of position on the part of some of […]

October 19, 2018 Read More →

IEEFA U.S.: More red flags on fracking-focused companies

As earnings season begins, a worrisome trend persists

The U.S. fracking sector continued to spill alarming volumes of red ink in the first half of 2018. We detail the trend in a research brief published jointly today by IEEFA and Sightline Institute that describes how fracking companies continue to struggle.  Even after two and a half years of rising oil prices and growing expectations […]

IEEFA Canada: Ill-advised oil sands project faces rough future

Math doesn’t add up on Teck’s Frontier initiative

Teck’s $20.6 billion Frontier Oil Sands Mine Project, now before the Canadian Environmental Assessment Agency Joint Review Panel, faces an extraordinary and alarming combination of risks.  The project will face financial distress for its entire 41-year life cycle, according to the report by our organization, the Institute for Energy Economics and Financial Analysis (IEEFA.org),  neither […]

and October 10, 2018 Read More →

IEEFA update: The unsustainable debt deal that won’t die

Magical debt thinking persists even with Puerto Rico’s economy declining and PREPA losing money

July’s proposal to pay bondholders 77 cents on the dollar for about a third of the debt of the Puerto Rico Electric Power Authority (PREPA) straggles on, neither approved nor rejected despite deadlines passing. If the measure of success of a debt settlement is that it offers realistic payouts to bondholders while allowing the debtor […]

IEEFA op-ed: Conflicted consultants prove costly for Puerto Rico

Millions of dollars squandered on rejected restructuring plans, and a $1.1 billion loss on risky interest rate bets

Overreliance on outside consultants with conflicts of interest and the failure to invest in a competent workforce have imposed huge costs on and severely weakened the Puerto Rico Electric Power Authority (PREPA) and other Puerto Rico government agencies. That’s one of many important lessons from the investigation of Puerto Rico’s debt crisis recently published by […]

October 4, 2018 Read More →

IEEFA update: Whether prices are high or low, the oil and gas industry is freighted with risk

As technology advances, fossil fuels are expensive at any price

Over the past few years, the rationale for investment in fossil fuels has changed from being one supported by blue-chip, long-term value into a more speculative, volatile proposition driven by quarterly dividends. As a result, the direction of oil prices is increasingly relevant, having become the lens through which investment is assessed, and revenue and […]

IEEFA update: Peabody continues to grapple with decline

Lease relinquishments are a sign of deeper trouble

In Peabody Energy’s recent relinquishment of some of its federal coal leases, the company is cleaning up its production cost side in the face of declining demand, particularly for the lower-quality 8400 BTU product that comes out of the Powder River Basin. The particular Wyoming coal in question has gone from being an asset to […]

September 20, 2018 Read More →