Shale is just Paying Lip Service

[James Regan + 1,776]

As per Oil Price- Are we finally hearing and seeing a Peak in the Rhetoric.

Years of that kind of spin are starting to wear thin on investors. As such, a bit of real-talk is creeping into the discussion. As noted previously, the former chief executive of EQT, the largest natural gas producer in the U.S., told an industry conference in Pittsburgh that fracking was “an unmitigated disaster.”

Edited July 31, 2019 by James Regan

[Sebastian Meana + 278]

Likely yes, shale production has peaked. Independent oil producers will likely return to the marginal wells and lower production wells they always operated.  And the supermajors will likely dominate the Shale industry. Independent producers have the risk approach supermajors have the scale, shale is not a immature experimental industry anymore.


Most of the current producers of shale oil are independent ones, that have no more than 10 billion dollars in revenue, but now that Tight oil is a mature industry that requires scale in order to be competitive the production will go from independent oil companies to the Supermajors because they have the scale, the finances, the resources, and the long term mindset and vertically integrated structures that the independent oil producers don't have, they can consume what they produce

All of that natural gas the independent producers are flaring the Supermajors see as a potential replacement for the Oil they use in their refineries, nevermind that Shale/Tight is in a point where scale matters more than innovation. Devon, Anadarko, Pioneer,  or Whiting petroleum are not going to invest in a multi-layer, multi-lateral drilled pad with 50 drills every side each one with 10 miles in length. Even if it can produce 50,000 barrels a day, because is too expensive at the moment, and because even if they could afford it they wouldn't have anyone to sell all of the natural gas it could produce.

Big oil didn't started the oil revolution because they weren't able to do it, but because they are not going to risk to use a technology that isn't mature and proven, the Independent oil companies don't get into deep-water oil not because they don't have the technology, but because they don't have the scale and neither the long-term financial resources the super-majors have.

Edited July 31, 2019 by Sebastian Meana

[SKEP + 229]

4 hours ago, James Regan said:

As per Oil Price- Are we finally hearing and seeing a Peak in the Rhetoric.

Years of that kind of spin are starting to wear thin on investors. As such, a bit of real-talk is creeping into the discussion. As noted previously, the former chief executive of EQT, the largest natural gas producer in the U.S., told an industry conference in Pittsburgh that fracking was “an unmitigated disaster.”

Sir James

You failed to mention that the EQT CEO was summarily FIRED right after that excuse filled rant at the conference.  His performance as CEO was a disaster.  Previous management took over and detailed a professional strategic plan. 

ANYONE CAN RUN A SHALE OIL OR GAS COMPANY WHEN OIL IS SELLING AT $85 TO $100 A BARREL and GAS WAS SELLING AT $8 MM/BTU.  CEO's that are not independent thinkers, that are just sheep following the herd, that didn't understand industry life cycles, that don't understand the power of new technology and efficientcy will be gone. 

MY 12 YEAR OLD DAUGHTER COULD HAVE RUN A PROFITABLE SHALE COMPANY IN 2013.

Those forecasting the end of US Shale are in for a big surprise come 2020.

The end of many present shale companies will happen, too much debt, too generous royalty payments, too late to change.

The shakeout and consolidation happens in 2020 .  Maybe sooner ?

Investors that fed the misguided CEOs unfortunately will lose along with those companies. 

ITS THE OPEC+ CUTS THAT ARE AN UNMITIGATED DISASTER.  THE CHARADE CONTINUES FOR NOW.  

THE CUTS FAIL SO NOW CREATE HORMUZ CONFLICTS.  HOW LONG DOES THAT LAST.

 

Edited July 31, 2019 by SKEP

[James Regan + 1,776]

31 minutes ago, SKEP said:

Sir James

You failed to mention that the EQT CEO was summarily FIRED right after that excuse filled rant at the conference.  His performance as CEO was a disaster.  Previous management took over and detailed a professional strategic plan. 

ANYONE CAN RUN A SHALE OIL OR GAS COMPANY WHEN OIL IS SELLING AT $85 TO $100 A BARREL and GAS WAS SELLING AT $8 MM/BTU.  CEO's that are not independent thinkers, that are just sheep following the herd, that didn't understand industry life cycles, that don't understand the power of new technology and efficientcy will be gone. 

MY 12 YEAR OLD DAUGHTER COULD HAVE RUN A PROFITABLE SHALE COMPANY IN 2013.

Those forecasting the end of US Shale are in for a big surprise come 2020.

The end of many present shale companies will happen, too much debt, too generous royalty payments, too late to change.

The shakeout and consolidation happens in 2020 .  Maybe sooner ?

Investors that fed the misguided CEOs unfortunately will lose along with those companies. 

ITS THE OPEC+ CUTS THAT ARE AN UNMITIGATED DISASTER.  THE CHARADE CONTINUES FOR NOW.  

THE CUTS FAIL SO NOW CREATE HORMUZ CONFLICTS.  HOW LONG DOES THAT LAST.

  

“ITS THE OPEC+ CUTS THAT ARE AN UNMITIGATED DISASTER.  THE CHARADE CONTINUES FOR NOW.” - Disaster for who? The price of oil Brent anyway is at a well balanced position.

OPEC are not the new kids on the block and I’m sure they don’t consider there actions as Disastrous.

THE CUTS FAIL SO NOW CREATE HORMUZ CONFLICTS.  HOW LONG DOES THAT LAST.

This is to benefit US oil nothing to do with OPEC.

Its without doubt the US who are behind the SOH situation and its proxies as is in Venezuela and also toe dipping in Libya.

The USA has a seasoned habit of playing hard and influencing regional disputes in oil rich countries.

[Justin Hicks + 162]

As I've stated for a while, the fracking revolution has amounted to the "Red Queen" in Alice in Wonderland. 

Despite the hype, it was well known throughout the industry that decline rates eclipsed gains. But when you drill with other people's money, especially those that don't know how the industry operates or have never set foot on location, it's easy to hoodwink the masses.....for a time.

When investors first started rumbling, we employed a little technique forged in fire during the Robert Hefner and ultra deep drilling infancy.... underbalanced drilling.
Underbalanced drilling is a dangerous technique first used in unstable formations where too much mud weight would knock the bottom out of a formation, so what we did was employ just enough weight to keep the gas down. Sometimes it worked, sometimes you called Bobby Joe Cudd 😊

In later years and understanding more about formation properties, we use underbalanced drilling to get IP( initial production) rates up that looked good to investors.  The higher the IP rate the more money was thrown at us ( speculative greed).

But there's only so many tricks you can employ before people start to notice the " man behind the curtain" 

Unfortunately as the veil is slowly lifted, the illusion begins to fade, leaving ticket holders to wonder if the show was worth the price of admission after all .

[James Regan + 1,776]

2 hours ago, Justin Hicks said:

As I've stated for a while, the fracking revolution has amounted to the "Red Queen" in Alice in Wonderland. 

Despite the hype, it was well known throughout the industry that decline rates eclipsed gains. But when you drill with other people's money, especially those that don't know how the industry operates or have never set foot on location, it's easy to hoodwink the masses.....for a time.

When investors first started rumbling, we employed a little technique forged in fire during the Robert Hefner and ultra deep drilling infancy.... underbalanced drilling.
Underbalanced drilling is a dangerous technique first used in unstable formations where too much mud weight would knock the bottom out of a formation, so what we did was employ just enough weight to keep the gas down. Sometimes it worked, sometimes you called Bobby Joe Cudd 😊

In later years and understanding more about formation properties, we use underbalanced drilling to get IP( initial production) rates up that looked good to investors.  The higher the IP rate the more money was thrown at us ( speculative greed).

But there's only so many tricks you can employ before people start to notice the " man behind the curtain" 

Unfortunately as the veil is slowly lifted, the illusion begins to fade, leaving ticket holders to wonder if the show was worth the price of admission after all .

When investors first started rumbling, we employed a little technique forged in fire during the Robert Hefner and ultra deep drilling infancy.... underbalanced drilling.
Underbalanced drilling is a dangerous technique first used in unstable formations where too much mud weight would knock the bottom out of a formation, so what we did was employ just enough weight to keep the gas down. Sometimes it worked, sometimes you called Bobby Joe Cudd 😊

Literally “Drilling for Kicks” - Flow Check Please👏👏

Edited July 31, 2019 by James Regan

[James Regan + 1,776]

Will the fed rate cut just add fuel to the fire?

Already debt ridden is it healthy to offer cheaper debt?

 

“One argument for an interest rate cut right now is that the economy may be slowing and we are seeing a potential sign of that in the oil patch. Some U.S. drillers are cutting back on drilling activity because they can’t service their debt to the banks. The interest payments to the bank are too high. A lower interest rate may allow some drillers to refinance operations and perhaps start to drill again. In fact if the Fed cuts rates, it could add barrels to the market (which would be a good thing, because lower interest rates also typically increase oil demand.)”