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Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.

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(edited)

Within the last year Sheffield said the U.S. would be producing 14 to15 million barrels a year now if we had the pipelines. (also need VLLC capable export terminals)

Sheffield now on Bloomberg (again)  to give his (biased) opinion of where oil prices are going or maybe where he wants price to go. 

Sheffield still has not been forgiven for heralding the U.S. shale industry to the detriment of its price.  He spoke of slowing shale production of U.S. shsle oil.  I agree it is slowing but where I differ is I believe it is gor a transitional short term slowing.  The overleveraged, high royalty expense and less efficient firms CONSOLIDATION takes place.

The Shale haters talk about drillers lying to banks, banks and investors "drunken" with optimism.  They make excuses, complain and put down the industry. One has to take a look of what has transpired in the industry. 

WHAT HAPPENED

.It's simple.  When the shale industry started out (1) The Peak Supply crowd was strong (2) Oil Traded $90 to $100 barrel (3) Saudi Oil Minister said Oil was going to $200 a barrel.  Business plans were based on these notions. (a) Banks lent money to producers based on this.  (b) Equity and Bond offerings were based on this. (c)  About 95% of those involved thought Oil Prices always go up.  It was taken as gospel.  Financing was available.  Producers signed contracts with landowners way overpaying, overly generous royalties.  It didn't matter.  Plenty of room for profit with $100 oil. GROW , GROW , GROW !

ITS VERY SIMPLE.  VAST MAJORITY WERE WRONG.  IT HAPPENS.  

Naysayers assumption that the demise of U.S.Shale and it's economic viability is misplaced.  Some early entrants just overpaid based on wrong assumptions.

IF NOT FOR SHALE OIL WOULD BE TRADING SOMEWHERE AROUND SAUDI Oil MINISTER'S $200 PROJECTION.

The damage was done.  When reality settled in the balance sheet and financials were already a mess.  The huge profits were all piled back into buying reserves at overpriced value. 

When the eventual downturn materialized the producers then stated . . . Oil is cyclical it ALWAYS comes back. EVERYONE (producers, investors, banks, analyst) bought into this.  when the smart money said "its different this time" they ignored them.

THERE IS A BIFURCATION IN THE INDUSTRY.  THOSE THAT CAN PRODUCE AT $45 to $55 AND THOSE THAT CAN PRODUCE AT SUB $30.

OPECs attempt to prop up prices has thrown a lifeline to the high cost shale producers.  Looks like the day of reckoning is coming 2020. The consolidation is long overdue.  Many like Chevron and Occidental have said EUR yield could double from 10% to high teens or even 20 %.  Conoco using new techniques has just  garnered 20% yield testing at a few Eagleford wells.  

Back To Pioneer's Sheffield    

Today Sheffield talked about all the "problems" .  He talked about the new model.  He said OPECs positive shale projections were TOO optimistic.  He noted Pioneer exports all of its oil and gages their business against Brent Pricing.  

GROWTH:  Sheffield talked about new supply coming online from Norway, Guyana, Brazil over the next year.  He stated no major new projects 2021 to 2025. Therefore a $10 increase in Brent to $65 to $75 for his oil exports.  (1) Did not consider U.S. Gulf of Mexico (2) Did not allow for possibility of millions of barrels back on market if Iran, Venezuela and Libya bring idled production back online (3) Does not discuss Argentina Shale and Offshore oil production if new government does not kill the goose. (4) Does not mention that almost ALL OPEC members plan to increase production when cuts are ended or OPEC falls apart.  

TOO MUCH OIL 

Sheffield said OPECs Report stating slowing demand projection were too soon.  Said they were overly optimistic as to uptake of Electric Vehicles.  That all depends .  I believe EVs will advance much faster than CEO Sheffield will admit.  The world is about an inflection point where we will see uptake in Electrical Cars, Trucks. Delivery Vans, Buses. Last check 230 new electric car models by 2023.  New next generation vehicle batteries within 3 to 5 years. The green legislation is coming mandating si called "green" technology. Can't stop it. 

* IEA says peak demand less than 10 years

* OPEC says peak demand less than 10 years

* Pioneer CEO Sheffield says between 2030 to 2050. 

My opinion. Oil Price trades within a range.  The 2020 year will be transition , consolidation, continued productivity gains. Firms with over leveraged balance sheets absorbed into strong Shale producers We will see continued growth in OPEC Supply, Non-OPEC Offshore, Non-OPEC Shale Supply.  . 

 

 

Edited by Jabbar
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Scott Sheffield is a very smart man who bought most of Pioneer's acreage in the Permian when prices were still low. He has always looked at this problem with light tight oil through the lenses of his own price point. His son, who started Parsley, did almost as well. I'm sure their dinner table and boardroom talk is based on their low entry prices. As the first CEO of Pioneer, now doing a repeat performance to rescue the company from ruin, he has always been a cheerleader for his company and shale oil in particular, much like the late Aubrey McClendon did. Aubrey didn't seem to realize that in cheerleading and putting the pedal to the metal he was actually driving down the price of gas. Scott is similar with oil. He's also a Texas, born and raised, and doesn't see too many Teslas on his way to the Petroleum Club for lunch. Where I live, if I make the two-mile trek to the ACE Hardware store, I will meet a dozen Teslas and there will be twenty in the parking lot. The United States is growing more divisive by the day . . . and that hasn't spared attitudes about electric vehicles. Personally, I wouldn't ride in a Tesla if you gave me the car. I think the EV world is largely hype, and when you dig deeper, into the methods of obtaining cobalt from the Congo, the petrochemical cost of the battery, chassis, the wheels and rubber, it's going to take a mighty long time to get to the breakeven point on carbon footprints, as they like to say. It's a bit like Al Gore flying around a million miles a year preaching to the rest of us pudknockers about saving the planet. So I say, give old Scott a break--he's not a bad guy and he's talking his book. Opinions are like assholes: everyone has one. Mine is unique to me, of course: I think we will wallow around a bit, mainly because the Saudis can't force themselves to make the two million barrel a day cuts they need to make. Then they will, because things will get rough. And then, and only then, will oil prices reach $100. Peak oil demand? I have to say, I think old Scott hit the nail on the head--some time after 2030. The middle class is buying cars. EV sales are tapering off. The International Maritime Organization MARPOL mandate of using 0.5% sulfur fuel instead of 3.5% in 60,000 oceangoing freighters is going to literally turn around the global pollution stratosphere. We are still in the tailend of the last Ice Age. So move over, Scott, I'm right there with you. Just talk quieter: the whole damn world is listening, including those morons who want to go all-renewable tomorrow.

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6 minutes ago, Gerry Maddoux said:

Personally, I wouldn't ride in a Tesla if you gave me the car. I think the EV world is largely hype, and when you dig deeper, into the methods of obtaining cobalt from the Congo, the petrochemical cost of the battery, chassis, the wheels and rubber, it's going to take a mighty long time to get to the breakeven point on carbon footprints, as they like to say.

DING

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(edited)

25 minutes ago, DayTrader said:

DING

Agree Sheffield must be smart.  He can try to talk don SHALE and talk up prices.  Personally don't think it works.

We could debate the carbon footprint of an EV  . . . . 

But the only thing that matters is the "perception" of the carbon footprint of an EV

Plus Tesla is first generation EV.  You won't believe the models available in 5 years.  

 

Edited by Jabbar

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(edited)

I prefer reality to ''perception'' ...

I will stick with my joy.

image.jpeg.7e520e10905f08797bcff8f37bd542f5.jpeg

When the Tesla stops catching fire you can get back to me though ...?  ;) 

image.jpeg.d78b00f4653eaf63dc43ec1410cb94e2.jpeg

Or am I ''perceiving'' them wrong ...?  :) 

image.jpeg.483265c8041562d71047cc9f214061f8.jpeg

Edited by DayTrader
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(edited)

5 minutes ago, DayTrader said:

I prefer reality to ''perception'' ...

I will stick with my joy.

image.jpeg.7e520e10905f08797bcff8f37bd542f5.jpeg

When the Tesla stops catching fire you can get back to me though ...?  ;) 

image.jpeg.d78b00f4653eaf63dc43ec1410cb94e2.jpeg

Or am I ''perceiving'' them wrong ...?  :) 

Read my post " . . . when next gen solid state batteries . . .  

Glad you prefer reality  . . .  you are not the majority of people

Technology stands still for no one

We would still be communicating with drums if Alexander Graham Bell thought like you

LOL

Edited by Jabbar
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(edited)

17 minutes ago, Jabbar said:

Technology stands still for no one

I agree, I just don't like them.

I have a classic - it stands still for no one either.

#england #quality #class

17 minutes ago, Jabbar said:

We would still be communicating with drums if Alexander Graham Bell thought like you

Haha gold 🤣🤣🤣  Yep I'm old school and proud baby  :) 

17 minutes ago, Jabbar said:

Glad you prefer reality  . . .  you are not the majority of people

I certainly hope not. 

Edited by DayTrader
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Whatch the producer's panic selling when it finally sinks in that EVs are reducing oil demand substantially and that the barrel of oil they sell "tomorrow" will be priced lower than the barrel they sell today.  

 Don't know the date . .  but it's coming.

 

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1 hour ago, Jabbar said:

But the only thing that matters is the "perception" of the carbon footprint of an EV

I respectfully disagree: The perception of something only lasts until reality kicks in. My perception of my first wife was one thing; the reality was a bit different. With mass production--real mass--we'll see more and more cobalt sourced by skinny little ten-year-old boys shimmying down ratholes retrieve it, more shitty lithium pits, and a landscape littered by batteries. The first real recession--again a real one--is going to wipe out Tesla. Maybe not literally but to the point verging on Chapter 11. The world--especially the young, which I presume you are part of--assumes that fossil fuels are going to prematurely end life on earth . . . yet again (if those damn dinosaurs hadn't driven so much!). They assume that there will be no breakthroughs on carbon capture, scrubbers, or improvement in fuel. But on the flip side they assume, as you suggested, that "you won't believe what is available in five years" in EV vehicles. Well, you, and they, may be right, but I predict that there will be substantial improvement in both ICE and EV vehicles, and also that the hole in the ozone will keep on improving due to warmer summer weather, that pollution levels are going to drop globally even though the number of ICE vehicles rise in number. Why? Because the MARPOL mandate is going to make a tremendous difference. Barron's--a pretty reliable financial newsletter--stated that the largest 15 oceangoing freighters release as much NOX and SOX as all 760 million cars on the planet. Fifteen! There are 60,000, all total. What do you think that result is going to be? I think it's going to be the equivalent of all 760 million cars not even start up, nor planes or big rigs. What the hell are the greenies going to say when the damage starts to repair itself. I'm not a very argumentative fellow, but that number in Barron's just gobsmacked me. And of course we need a carbon tax: Richard Branson bragged about logging a million miles a year in his Gulfstream. That is the equivalent of a hundred thousand people flying commercial a thousand miles a year, which is the number most middle income retired people fly. There are quite a few "Richard Branson's" out there. Now Richard may well drive an EV--I'd be surprised if he didn't--but it doesn't make a damn; it's like peeing in the river to make the ocean rise. Folks have lost their perspective!

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17 minutes ago, Gerry Maddoux said:

I respectfully disagree: The perception of something only lasts until reality kicks in. My perception of my first wife was one thing; the reality was a bit different. With mass production--real mass--we'll see more and more cobalt sourced by skinny little ten-year-old boys shimmying down ratholes retrieve it, more shitty lithium pits, and a landscape littered by batteries. The first real recession--again a real one--is going to wipe out Tesla. Maybe not literally but to the point verging on Chapter 11. The world--especially the young, which I presume you are part of--assumes that fossil fuels are going to prematurely end life on earth . . . yet again (if those damn dinosaurs hadn't driven so much!). They assume that there will be no breakthroughs on carbon capture, scrubbers, or improvement in fuel. But on the flip side they assume, as you suggested, that "you won't believe what is available in five years" in EV vehicles. Well, you, and they, may be right, but I predict that there will be substantial improvement in both ICE and EV vehicles, and also that the hole in the ozone will keep on improving due to warmer summer weather, that pollution levels are going to drop globally even though the number of ICE vehicles rise in number. Why? Because the MARPOL mandate is going to make a tremendous difference. Barron's--a pretty reliable financial newsletter--stated that the largest 15 oceangoing freighters release as much NOX and SOX as all 760 million cars on the planet. Fifteen! There are 60,000, all total. What do you think that result is going to be? I think it's going to be the equivalent of all 760 million cars not even start up, nor planes or big rigs. What the hell are the greenies going to say when the damage starts to repair itself. I'm not a very argumentative fellow, but that number in Barron's just gobsmacked me. And of course we need a carbon tax: Richard Branson bragged about logging a million miles a year in his Gulfstream. That is the equivalent of a hundred thousand people flying commercial a thousand miles a year, which is the number most middle income retired people fly. There are quite a few "Richard Branson's" out there. Now Richard may well drive an EV--I'd be surprised if he didn't--but it doesn't make a damn; it's like peeing in the river to make the ocean rise. Folks have lost their perspective!

I don't know about all that. 

I'll be buying an EV within 3 years.  I'm not alone.

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(edited)

OPEC has put a floor under prices by cutting production just 1.2 million barrels of oil day. 

Iran and Venezuela coming back online will initially add 3 million barrels. What does that do to prices. They are capable of producing 4 X times that.

What would happen if EVs reduce production 3 million barrels ? How many EVs needed world wide to reduce daily production 3 million barrels or 3% ?

 

Edited by Jabbar

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53 minutes ago, Gerry Maddoux said:

I respectfully disagree: The perception of something only lasts until reality kicks in. My perception of my first wife was one thing; the reality was a bit different. With mass production--real mass--we'll see more and more cobalt sourced by skinny little ten-year-old boys shimmying down ratholes retrieve it, more shitty lithium pits, and a landscape littered by batteries. The first real recession--again a real one--is going to wipe out Tesla. Maybe not literally but to the point verging on Chapter 11. The world--especially the young, which I presume you are part of--assumes that fossil fuels are going to prematurely end life on earth . . . yet again (if those damn dinosaurs hadn't driven so much!). They assume that there will be no breakthroughs on carbon capture, scrubbers, or improvement in fuel. But on the flip side they assume, as you suggested, that "you won't believe what is available in five years" in EV vehicles. Well, you, and they, may be right, but I predict that there will be substantial improvement in both ICE and EV vehicles, and also that the hole in the ozone will keep on improving due to warmer summer weather, that pollution levels are going to drop globally even though the number of ICE vehicles rise in number. Why? Because the MARPOL mandate is going to make a tremendous difference. Barron's--a pretty reliable financial newsletter--stated that the largest 15 oceangoing freighters release as much NOX and SOX as all 760 million cars on the planet. Fifteen! There are 60,000, all total. What do you think that result is going to be? I think it's going to be the equivalent of all 760 million cars not even start up, nor planes or big rigs. What the hell are the greenies going to say when the damage starts to repair itself. I'm not a very argumentative fellow, but that number in Barron's just gobsmacked me. And of course we need a carbon tax: Richard Branson bragged about logging a million miles a year in his Gulfstream. That is the equivalent of a hundred thousand people flying commercial a thousand miles a year, which is the number most middle income retired people fly. There are quite a few "Richard Branson's" out there. Now Richard may well drive an EV--I'd be surprised if he didn't--but it doesn't make a damn; it's like peeing in the river to make the ocean rise. Folks have lost their perspective!

I read something similar, and while NOX and SOX (both toxic) emissions are taken into account here, CO2 emissions and Methane emissions (nontoxic, but yes primary greenhouse gases) are not considered here... 

https://www.cadmatic.com/resource/articles/does-one-ship-pollute-as-much-as-50-million-cars- 

This article was actually quite interesting to read.

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4 hours ago, Jabbar said:

Whatch the producer's panic selling when it finally sinks in that EVs are reducing oil demand substantially and that the barrel of oil they sell "tomorrow" will be priced lower than the barrel they sell today.  

 Don't know the date . .  but it's coming.

 

2065 give or take 40 years.

 

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48 minutes ago, Old-Ruffneck said:

2065 give or take 40 years.

 

Bet ya a beer it's less than 10 years.

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4 hours ago, Jabbar said:

What would happen if EVs reduce production 3 million barrels ? How many EVs needed world wide to reduce daily production 3 million barrels or 3% ?

Well, for one, there are exactly--exactly--3 million barrels of oil produced on federal lands in Alaska, North Dakota and Texas. I would presume that if we have so many EV's that they reduce oil consumption by 3 million barrels, we'll have a Democratic president like Elizabeth Warren who has vowed to stop fracking but can only do so on federal lands without a Senate and House majority vote. So in that case, the reduction in oil production would exactly balance out the oil consumption--except for figuring in how much petrochemicals are needed to produce the chassis, wheels, tires, interior and battery of the EV (which will be considerable). 

I don't know all the answers to your questions but I do know that some day we'll have a recession--a bad one--and during that thing it won't make a damn to most people how big the hole is in the ozone or how many EV's there are. During a bad recession, the price of oil will fall right along with everything else and people will want to drive ICE vehicles mostly. I don't personally think Tesla can survive a major downturn--they've after all never seen one. 

Oil is going to be in demand for quite a long time. It's going to either come from the US or from some other country. You talk about trying to impeach a president for doing something that every president since George Washington has probably done, watch what happens to one that tells Texas, Oklahoma, North Dakota, Louisiana and even Colorado that they've got to stop production--that'll by God start secession proceedings so fast it'll make your head spin. And I don't know about you, but if it came down to Texas against the rest of the country, I suppose I'd pick Texas. 

Look, if EV's are superior, bring 'em on. But don't subsidize them. If you want to buy an EV in three years, as you say, well, buy one. But for goodness sakes, look at the debt load in the world. The US is in the best shape of any country and even here the debt load is staggering. These European countries that mandated high NOX emitting exhaust diesels for ten years and then set some artificial goals have fourteen trillion dollars worth of upside down bonds! Hell, they're going to be lucky not to have civil unrest all across Europe. Hong Kong is already in free fall. 

Right now the wealth effect is pumping up the spirits of the sort of people who would drive a Tesla. Give the Dow a 25% hickey and see how many of those suckers drive themselves off the showroom floors. 

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2 minutes ago, Jabbar said:

Bet ya a beer it's less than 10 years.

Well, in 10 years I will be without a beer 42 years. World population growth isn't slowing down and in fact still increasing. Now in 10 years if some disease hits that's catastrophic, or California fall into the Ocean, I reckon rate of consumption will keep rising. Plastics, Fertilizers, Gas, damn near everything involves petro. I really think flatten out by around 2050, which really isn't that far away.

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Did anyone read Nick Cunningham’s article yesterday about EIA overestimating shale industry?

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6 hours ago, DayTrader said:

I prefer reality to ''perception'' ...

I will stick with my joy.

image.jpeg.7e520e10905f08797bcff8f37bd542f5.jpeg

When the Tesla stops catching fire you can get back to me though ...?  ;) 

image.jpeg.d78b00f4653eaf63dc43ec1410cb94e2.jpeg

Or am I ''perceiving'' them wrong ...?  :) 

image.jpeg.483265c8041562d71047cc9f214061f8.jpeg

Wait, is that a "fooking BMW" in the top picture? 

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No it is not!! How dare you!

#stolendreams #germancrap

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(edited)

38 minutes ago, Douglas Buckland said:

Did anyone read Nick Cunningham’s article yesterday about EIA overestimating shale industry?

Yes. What do u expect.  Cunningham quoted an article from a grenie "The Post Carbon Project"  

Is it fair to say Cunningham is everything anti shale.

Edited by Jabbar
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3 minutes ago, Jabbar said:

Yes. What do u expect.  Cunningham quoted an article from a grenie "The Post Carbon Project"  

Is it fair to say Cunningham everything anti shale.

So, I guess that since Nick’s viewpoint is different than, say yours, we should discount his opinion and embrace yours?

That is not debate, that is bias.

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4 minutes ago, Jabbar said:

Yes. What do u expect.  Cunningham quoted an article from a grenie "The Post Carbon Project"  

Is it fair to say Cunningham everything anti shale.

That article was same as others, "doom an gloom" thinking his opinion piece will sway the market. Not much impressed N.C.

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(edited)

58 minutes ago, Gerry Maddoux said:

Well, for one, there are exactly--exactly--3 million barrels of oil produced on federal lands in Alaska, North Dakota and Texas. I would presume that if we have so many EV's that they reduce oil consumption by 3 million barrels, we'll have a Democratic president like Elizabeth Warren who has vowed to stop fracking but can only do so on federal lands without a Senate and House majority vote. So in that case, the reduction in oil production would exactly balance out the oil consumption--except for figuring in how much petrochemicals are needed to produce the chassis, wheels, tires, interior and battery of the EV (which will be considerable). 

I don't know all the answers to your questions but I do know that some day we'll have a recession--a bad one--and during that thing it won't make a damn to most people how big the hole is in the ozone or how many EV's there are. During a bad recession, the price of oil will fall right along with everything else and people will want to drive ICE vehicles mostly. I don't personally think Tesla can survive a major downturn--they've after all never seen one. 

Oil is going to be in demand for quite a long time. It's going to either come from the US or from some other country. You talk about trying to impeach a president for doing something that every president since George Washington has probably done, watch what happens to one that tells Texas, Oklahoma, North Dakota, Louisiana and even Colorado that they've got to stop production--that'll by God start secession proceedings so fast it'll make your head spin. And I don't know about you, but if it came down to Texas against the rest of the country, I suppose I'd pick Texas. 

Look, if EV's are superior, bring 'em on. But don't subsidize them. If you want to buy an EV in three years, as you say, well, buy one. But for goodness sakes, look at the debt load in the world. The US is in the best shape of any country and even here the debt load is staggering. These European countries that mandated high NOX emitting exhaust diesels for ten years and then set some artificial goals have fourteen trillion dollars worth of upside down bonds! Hell, they're going to be lucky not to have civil unrest all across Europe. Hong Kong is already in free fall. 

Right now the wealth effect is pumping up the spirits of the sort of people who would drive a Tesla. Give the Dow a 25% hickey and see how many of those suckers drive themselves off the showroom floors. 

Gerry

Did you know last month, October, the ozone hole is the smallest ever recorded.

Petrochemicals will never make up for the crude used that makes up gasoline.

What does Pocahontas have to do with this.  She won't win.  

Tesla can't survive ? Every worldwide vehicle mfg is investing billions. Tesla might be one of the survivors. The way shsle disrupted the oil industry , EBs will disrupt car industry. 

Yes a lot of world debt . . Europe . . . China others.  So high debt means no EV industry.

Who cares. Just my opinion guys.

I do believe oil price settles lower.  

One saving grace for OPEC may be the lack of VLCC crude export terminals until 2022. However that hurts WTI price if supply backs up in the U.S. 

Edited by Jabbar

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9 minutes ago, Douglas Buckland said:

So, I guess that since Nick’s viewpoint is different than, say yours, we should discount his opinion and embrace yours?

That is not debate, that is bias.

Would you be willing to concede that Nick brings his Own bias to every single thing he writes? 

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