| |
• | Compass’ ability to operate successfully as an independent business; |
| |
• | Compass’ ability to replace natural gas marketing services upon the expiration of the current arrangements with EXCO Resources, Inc.; |
| |
• | the impact on Compass if it is unable to successfully execute or consummate one or more disposition, acquisition or reserve development opportunities; |
| |
• | Compass’ ability to market and sell its oil, natural gas liquids and natural gas and its exposure to the credit risk of its customers, working interest owners and other counterparties and the risks associated with drilling activities; |
| |
• | the inherent uncertainty of estimates of oil and natural gas reserves; |
| |
• | the risk that Compass will be unable to identify or complete, or complete on economically attractive terms, suitable disposition and/or acquisition opportunities of oil and gas properties; |
| |
• | Compass’ ability to successfully operate in a highly regulated and litigious environment, including exposure to operating hazards and uninsured risks; |
| |
• | Compass’ ability to effectively mitigate the impact of commodity price volatility from its cash flows with its hedging strategy; |
| |
• | changes in the U.S. federal income tax laws and regulations that may affect the relative income tax advantages of Compass’ products; |
| |
• | the impact of future and existing environmental regulations; |
| |
• | the effects of climate change and unusual weather activity; |
| |
• | the intense competition in the oil and gas industry, including acquiring properties, contracting for drilling equipment and hiring experienced personnel; |
| |
• | the unavailability of pipelines or other facilities interconnected to Compass’ gathering and transportation pipelines; |
| |
• | the ability to satisfy the applicable closing conditions and close, on a timely basis or at all, the sale of the equity of Compass. |
We caution the reader that undue reliance should not be placed on any forward-looking statements, which speak only as of the date of this document. Neither we nor any of our subsidiaries undertake any duty or responsibility to update any of these forward-looking statements to reflect events or circumstances after the date of this document or to reflect actual outcomes.
See Note 13, Commitments and Contingencies, to the Company’s Condensed Consolidated Financial Statements included in Part I - Item 1. Financial Statements.
When considering an investment in the Company, you should carefully consider the risk factors discussed in our Form 10-K and last quarterly reports on Form 10-Q (together "Form 10-Qs"), as well as the risk factor below. Any of these risk factors could materially and adversely affect our or our subsidiaries’ business, financial condition and results of operations, and these risk factors are not the only risks that we or our subsidiaries may face. Additional risks and uncertainties not presently known to us or our subsidiaries or that are not currently believed to be material also may adversely affect us or our subsidiaries. With the exception of the additions and modifications to previously disclosed risk factors discussed below, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our Form 10-K and Part II, Item IA, of our Form 10-Qs.
Risks Related to Spectrum Brands
Risk Relating to the Referendum of the United Kingdom’s Membership of the European Union.
The announcement of the Referendum of the United Kingdom’s (“UK”) Membership of the European Union (“EU”) on June 23, 2016 (referred to as “Brexit”), advising for the exit of the UK from the EU, has adversely impacted global markets and foreign currencies. In particular, the value of the Pound Sterling has sharply declined as compared to the US Dollar and other currencies. This volatility in foreign currencies is expected to continue as the UK negotiates and executes its exit from the EU, but it is uncertain over what time period this will occur. A significantly weaker Pound Sterling compared to the US Dollar could have a significant negative effect on Spectrum Brands’ business, financial condition and results of operations. The decrease in value to the Pound Sterling and impacts across global markets and foreign currencies may influence trends in consumer confidence and discretionary spending habits, but given the lack of precedent and uncertainty, it is unclear how the implications will affect Spectrum Brands.
For now, the UK remains a member of the EU and there will not be any immediate change in either EU or UK law as a consequence of the “leave” vote. Negotiations will commence to determine the future terms of the UK relationship with the EU, including the
