sellers of these
long-dated contracts (many of which
are those of shale
companies that have financed the boom with mounds of debt) are
offering them at a
discount to existing prices. Shorting The Future To
Cover The Present
Who's to know if your
soul will fade at all The
one you sold to fool the world You lost your self-esteem along the
way Fake It
"The U.S. Energy Information Administration projects that nearly
four of every five new barrels of oil produced in
North Dakota's Bakken
South Texas' Eagle Ford Shale simply replace output lost to the high
“North American shale
is currently the marginal source of supply in the world oil market, and
most producers claim they can break even at $70 or even $60 per barrel.”
Virtually all of the growth—92%, on an energy-adjusted basis—has come
from unconventionals, specifically, Canadian oil sands and US shale
Indeed, 70% of the net growth of the global oil supply from 2005
through 2013 came from US shales alone. Shales are not the icing on the cake;
they are the cake itself.
2005 when the clean water act was changed by Cheney - Bush &
Fracking became the new rage January 2005 -
North Dakota had 3154
producing wells at 90,219 bbls oil a day = 29.0 bbls oil per day per
well Oct. 2016 - North
Dakota has 13148
wells at 1,043,207 bbls oil a day 13148 - 3154 =
9994 wells divided into
(1,043,207 - 90219 = 952,988) = 95.3 bbls oil a day per well 9994 wells
at 8 million a well is
- 79 billion, 900 million dollars. dmr.nd.gov
seems that most oil companies are spending more than their revenues by
increasing their debts. Countries
can live for a long
time with huge debt increase, not companies. They count on the
stock market by
delivering optimistic reports and keep drilling to avoid the production
to decline. With shale oil or
shale play, in
contrary with conventional where wells are dry or producing, oil can be
produced even for a while if not economical. Such behavior
explains why most peak
forecasts are wrong. But the main question is about the slope of the
decline after the peak. EIA forecast a
LTO (light tight oil =
shale oil) peak in 2017 it is not too far after my forecast, the big
difference is the slow EIA LTO decline.
Bakken June 2014 -
Watcher’s question the other day of which operators dominate Mountrail
County piqued my interest in asking the same question for other
So I charted the results for the four big counties along with Divide
and Stark, the two most important peripheral counties.
For space I have included only the top 10 operators of each county in
the chart below. This is an exclusive to this blog, I hope you like it.
The county abbreviations are the
same as what the NDIC uses (DUN=Dunn, MCK=McKenzie, MTL=Mountrail,
WIL=Williams, DIV=Divide, STK=Stark).
The well count includes active wells, confidential wells that have been
spud, and wells on ‘DRL’ status (drilled but not yet completed).
If desired I can chart other counties or show more than just the top 10
for any of these counties.
To Check Their Current Financials
Use Yahoo Finance - Quote Lookup - Enter Stock Ticker Symbol - Click
Key Statistics Yahoo Finance
Saudi Arabia's Oil-Price
War Is With Stupid Money Some
rationalize the negative free cash flow as an expansion of capital base
that will result in future profits.
The following table shows that over the past 4 years, tight oil
negative cash flow increased and has reached a cumulative of
more than -$21 billion for the representative companies. Almost half of
that negative cash flow took place in 2014.
many times do you hear it? It goes on all day long Everyone knows everything And no one's ever wrong Until later... Show Me Dont Tell Me Half
of the 41 fracking companies operating in the U.S. will be dead or sold
by year-end Because of slashed spending by oil
companies, an executive with Weatherford International Plc said. Dead Or Sold SLB - CEO Offers Panacea For
Oil Industry Ills Schlumberger Panacea
Arthur Berman: Why Today's Shale Era Is
The Retirement Party For Oil Production At 11:45 - "Recent Study For A
Client In The Core - The Sweet Spot Of The Bakken - You Need About
$83.00 BOE To Break Even" Febuary 7th - 2015 The
first step to price recovery
is the severing of capital supply to companies that could not fund
from cash flow when oil prices were more than $90 per barrel. If this
does not happen, we could be in for a long period of low prices.
out-spent cash flow by 25%, spending $1.25 for every $1.00 earned from
operations. Only 3 companies
–OXY, EOG and Marathon– had positive free cash flow. Total debt
increased from $83.4 to $90.3 billion from 2013 to 2014.
Debt must be continually re-financed on increasingly poorer terms
because it can never be repaid from cash flow
by many of these companies. The U.S. E&P business has, in
effect, become financialized: investment in this class
of company has become the sub-prime derivative of the
post-Financial Crisis period. There is no performance requirement by
investors other than the implicit need to maintain net asset values
above debt covenant trigger thresholds.
These terrible financial results
reflect a year when average WTI oil prices were more than $93 per
First quarter 2015 earnings will make these results look good.
1. Full-year 2014 earnings data for representative tight oil
exploration and production companies.
Dollar amounts in millions of U.S. dollars. FCF=free cash flow; CF=cash
flow; CE=capital expenditures.
Source: 2014 10-K filings, Google Finance and Labyrinth Consulting
A Great thanks to Arthur Berman &
His Experience & Insight Into The Hydrocarbon Industry artberman.com The Scheme To Export Americas Security
We're setting sail To the place on the map from which no one
has ever returned Drawn by the promise of the joker and
the fool By the light of the
crosses that burn Oh, save me. Save me from tomorrow I don't want to sail with this ship of
Photo Says It All
Bakken Maturity Map
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