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Third of oil and gas firms risk running out of cash next year

Research from corporate health monitor Company Watch has found that one third of the UK's listed oil and gas companies could run out of cash within a year, following a sharp slide in the price of crude. Company Watch said the sustained low price of oil and gas was likely to present 'significant problems' for the UK's 126 listed companies operating in the sector, one third of which are not currently generating any revenues. Ewan Mitchell, the firm's head of analytics, commented: 'Many of the smaller quoted oil and gas firms were set up specifically to take advantage of historically high and rising commodity prices. The recent large falls in the price of oil and gas could leave the weaker companies in difficulties, especially the ones that need to raise funds to keep exploring. Looking at the cash burn of the quoted companies, we conservatively estimate there are 38 - around a third of quoted companies - likely to burn through their cash within a year.'

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