A Texas-based midstream energy company secured larger clients and bigger contracts by boosting its cash flow with FundThrough. Here’s what happened next.
The COVID-19 outbreak created one of the most volatile periods in the oil-and-gas industry’s history.
In April 2020, oil futures markets experienced negative prices (under $0 per barrel) for the first time. Since April, oil prices have recovered from single-digit levels. However, by August, prices remained below breakeven levels for many producers.
The result was more idled rigs, reduced capital expenditure, and greater uncertainty around new projects. These concerns ripped up the energy supply chain for midstream companies that construct new pipelines and storage facilities.
COVID-19 and broader market conditions also raised new concerns about future cash flow and payment terms across the industry. Contractors working with large North American oil-and-gas companies know that competitive bids for new projects will require significant cash on hand.
Today, we look at Global Pipeline, a midstream pipeline and facility services firm based in Texas. The midstream company has found a way to reduce cash flow gaps, access new funding, and ensure it has enough working capital to make payroll and bid on larger products. Its new best practice is the integration of invoice factoring into its cash management and project planning.