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Page added on March 2, 2016
US Shale’s Message For OPEC: Above $40, We Are Coming Back
For leading U.S. shale oil producers, $40 is the new $70.
Less than a year ago major shale firms were saying they needed oil above $60 a barrel to produce more; now some say they will settle for far less in deciding whether to crank up output after the worst oil price crash in a generation.
Their latest comments highlight the industry’s remarkable resilience, but also serve as a warning to rivals and traders: a retreat in U.S. oil production that would help ease global oversupply and let prices recover may prove shorter than some may have expected.
Continental Resources Inc, led by billionaire wildcatter Harold Hamm, is prepared to increase capital spending if U.S. crude reaches the low- to mid-$40s range, allowing it to boost 2017 production by more than 10 percent, chief financial official John Hart said last week.
Rival Whiting Petroleum Corp, the biggest producer in North Dakota’s Bakken formation, will stop fracking new wells by the end of March, but would “consider completing some of these wells” if oil reached $40 to $45 a barrel, Chairman and CEO Jim Volker told analysts. Less than a year ago, when the company was still in spending mode, Volker said it might deploy more rigs if U.S. crude hit $70.
While the comments were couched with caution, they serve as a reminder of how a dramatic decline in costs and rapid efficiency gains have turned U.S. shale, initially seen by rivals as a marginal, high cost sector, into a major player – and a thorn in the side of big OPEC producers.
Nimble shale drillers are now helping mitigate the nearly 70-percent slide crude price rout by cutting back output, but may also limit any rally by quickly turning up the spigots once prices start recovering from current levels just above $30.
The threat of a shale rebound is “putting a cap on oil prices,” said John Kilduff, partner at Again Capital LLC. “If there’s some bullish outlook for demand or the economy, they will try to get ahead of the curve and increase production even sooner.”
Some producers have already began hedging future production, with prices for 2017 oil trading at near $45 a barrel, which could put a floor under any future production cuts.
Global Ambitions
While the worst oil downturn since the 1980s sounds the death knell for scores of debt-laden shale producers, it has also hastened the decline in costs of hydraulic fracturing and improvements of the still-developing technology.
For example, Hess Corp., which pumps one of every 15 barrels of North Dakota crude, cut the cost of a new Bakken oil well by 28 percent last year.
What once helped fatten margins is now key to survival in what Saudi Oil Minister Ali al-Naimi described last week as the “harsh” reality of a global market in which the Organization of Oil Exporting Countries is no longer willing to curb its supplies to bolster prices.
While Deloitte auditing and consulting warns that a third of U.S. oil producers may face bankruptcy, leading shale producers say their ambitions go beyond just outrunning domestic rivals.
“It’s no longer enough to be the low cost producer in U.S. horizontal shale,” Bill Thomas, chairman of EOG Resources Inc , said on Friday. “EOG’s goal is to be competitive, low-cost oil producer in the global market.”
Thomas did not say what price would spur EOG to boost output this year, but said it had a “premium inventory” of 3,200 well locations that can yield returns of 30 percent or more with oil at $40.
Apache Corp, forecasts its output will drop by as much as 11 percent this year, but said it would probably manage to match 2015 North American production if oil averaged $45 this year.
One reason shale producers can be so fleet-footed is the record backlog of wells that have already been drilled but wait to get fractured to keep oil trapped in shale rocks flowing.
There were 945 such wells in North Dakota, birthplace of the U.S. shale boom in December, compared to 585 in mid-2014, when prices peaked, according to the latest available data from the Department of Mineral Resources. Their numbers are growing as firms like Whiting keep drilling, but hold off with fracking.
Some warn that fracking the uncompleted wells can offer only a short-term supply boost and a sustained increase would require costly drilling of new wells and therefore higher prices.
“It’s going to take a move up to $55 before we see anyone plan new production,” says Carl Larry, director of business development for oil and gas at Frost & Sullivan.
To be sure, it is far from certain whether oil prices will even reach $40 any time soon. Morgan Stanley and ANZ expect average prices in the low $30s for the full year.
Some analysts also warn resuming drilling quickly may prove hard after firms laid off thousands of workers and idled more than three-quarters of their rigs since late 2014.
In fact, John Hess, chief executive of Hess Corp last week took issue with labeling U.S. shale oil as a “swing producer.” Hess told Reuters in an interview that U.S. shale firms should be rather considered as “short-cycle” producers, which might need up to a year to stop or restart production.
And even scarred veterans of past boom-bust oil cycles are not sure what will happen once prices start to recover – during the last big upswing a decade ago, shale oil did not even exist.
“We are a little concerned that this time there is one dynamic we’ve never had previously,” said Darrell Hollek, vice president of U.S. onshore at Anadarko Petroleum Corp.
35 Comments on "US Shale’s Message For OPEC: Above $40, We Are Coming Back"
ghung on Wed, 2nd Mar 2016 2:22 pm
Ex-Chesapeake CEO Aubrey McClendon dead after car accident
“Former Chesapeake CEO Aubrey McClendon died in a car crash on Wednesday, one day after being indicted by a federal grand jury on bid rigging charges.
McClendon, 56, was identified as the victim in the car crash by the Oklahoma City Police Department.
The former founder and CEO of Chesapeake (CHK) was indicted late on Tuesday for allegedly conspiring to rig the price oil and natural gas leases in Oklahoma.”
ghung on Wed, 2nd Mar 2016 2:28 pm
Re: McClendon– Wikipedia quick draw:
“McClendon was in a fatal single-vehicle crash on March 2, 2016 the day after his federal indictment regarding his actions while the CEO of Chesapeake Energy.[69] According to police reports he died instantly when his vehicle, a 2013 Chevrolet Tahoe, traveled over the speed limit and crashed into a viaduct under a bridge on Midwest Blvd in Oklahoma City, Oklahoma.”
Suicide by viaduct?
ghung on Wed, 2nd Mar 2016 2:32 pm
Chesapeake (CHK) stock up 22% so far today. Jeez….
Ralph on Wed, 2nd Mar 2016 2:43 pm
I see no reason for the question mark.
Pennsyguy on Wed, 2nd Mar 2016 2:59 pm
Coal will be big again in the U.S. when the railroads reconvert back o steam locomotives. Bring back the K-4s.
Apneaman on Wed, 2nd Mar 2016 3:28 pm
Aubrey McClendon – that’s a shame. I mean that he died instantly. Oh well, he’ll feel the burn elsewhere……….for eternity.
twocats on Wed, 2nd Mar 2016 3:28 pm
Now that companies have life-support cash for the next 6 months to 2 years, we can seriously talk about this being peak liquids.
http://www.zerohedge.com/news/2016-03-02/frenzied-wall-street-buys-shale-equity-offering-record-pace-exxons-ceo-has-stark-war
This almost guarantees that shale producers can produce at or below carrying costs for years to come.
This is why we are getting a parade of articles saying $40 is the new $70 (in addition to service providers being strangled slowly to death), because they have reserve cash to cover any losses.
LIKELY OUTCOME –> So we will see fewer bankruptcies, which will mean lower for logererer, which means cuts in capex by the largest producers, which means a bigger “air gap” in long term production projects, which means natural depletion will be the only “cuts” in production, which means when demand and production finally, finally, finally meet up (be it late 2016, or increasingly likely, 2017 – a 3 year oversupplied situation!), it will be too late to bring large projects on-line, and after whatever limited bumps from quick-increased drillings are over, we will either get one more brief new liquids peak (2018), or September 2015 will remain the peak.
Just like in 2008-9, a step-down DELAYS peak oil by destroying demand and undercutting short term production to restore price balance.
This continued access to capital keeps the zombie moving while undermining long-term production. By the time oil prices recover to a $70+ level, we will be running on vapors.
maniacal laugh, maniacal laugh.
Apneaman on Wed, 2nd Mar 2016 4:36 pm
Aubrey McClendon – too bad.
Too bad he wasn’t car pooling with Rex Tillerson, Warren Buffett, Ben Bernanke and Larry Summers.
makati1 on Wed, 2nd Mar 2016 5:42 pm
Pennsyguy, you see the future. The claim that “they will be back” is ludicrous. They will go down and stay down as no one will have the resources to invest in them, and banks will be having their own problems staying solvent.
I see even lower prices before the bottom is reached and a long wait for any significant and lasting increase in prices. But then, this article is from RIGPORN. Not a reliable source of info.
makati1 on Wed, 2nd Mar 2016 5:52 pm
Ap, I have a long list of suggested passengers for his last ride. Maybe he could have used a bus? Or a 747? Suicide looks to be the obvious reason for his timely demise. Greed will kill a lot of people before this is all over.
I almost wish there was a Hell so he could go there, but all he got was instant nothing. Too bad he wasn’t just seriously injured and a quadriplegic for the rest of his sorry life. Oh, wait, then the taxpayers would have to pay for his long jail term and medical expenses. Better dead.
ennui2 on Wed, 2nd Mar 2016 5:53 pm
‘The claim that “they will be back” is ludicrous.’
And if they do, your commentary on Peakoil.com will be proven ridiculous.
Harquebus on Wed, 2nd Mar 2016 7:26 pm
For the first time in history, all currencies are fiat. All products are currently being traded for currencies that are intrinsically worthless.
When confidence in the $US is lost, all trade will collapse.
When oil producers stop trading it for worthless $US, will the U.S. simply just come and take it?
Harquebus on Wed, 2nd Mar 2016 7:39 pm
Financial analyst Bix Weir says the mother of all money meltdowns is a sure thing. Weir contends there is one big question everybody should be asking. Weir says, “What’s the dollar going to be worth? What’s fiat money going to be worth after the banks crash?”
http://usawatchdog.com/default-on-global-monetary-system-coming-bix-weir/
rockman on Wed, 2nd Mar 2016 7:54 pm
Did anyone besides the Rockman notice the big “IF” that this optimism is based upon: IF oil prices increase about 35%. And then there’s the unspoken “if”: if the shale players, many that can’t meet their loan obligations today, secure capex from the same lenders that are looking at oil patch defaults in the many $BILLIONS. And the other unstated IF: there are as many good drill sites left as has been drilled during the boom. That is IF companies didn’t drill the better prospects first. Sure, the Rockman has always drilled his poorer prospects first…he like a big flashy finish. LOL.
The great news about these predictions: we’re not going to have to wait decades to see the proof like like for global PO. In just 12 months we’ll see the shales booming again…assuming all those if’s become FACTS.
twocats on Wed, 2nd Mar 2016 9:08 pm
rockman, those shale companies have not only secured tons of cash through equity sales, but in the 2012 and 2013 era they secured lots of “covenant light” loans which remain only half-tapped. the banks could have let the industry collapse, but for the moment, it looks unlikely, despite continued losses.
We shall see – the pace of bankruptcies has been picking up in recent months. Let’s see if that pace continues or begins to roll over in February, March, April.
A warm spring is predicted… would that change demand significantly for heating oils?
shallow sand on Wed, 2nd Mar 2016 11:13 pm
If anyone would bother to read and analyze the 10K’s these companies just filed, they would immediately realize that $40-45 WTI doesn’t work, even for EOG.
One would also find some pretty wild assumptions in the statements of future cash flows, that were likely made so there would actually be some level of future cash flows shown. Without future cash flows, there is $0 PV10.
Keep in mind, the 2015 SEC price was $50.28 for oil and $2.58 for natural gas. It is currently more like $34 and $1.70.
Note that CLR had to talk Ryder Scott into cutting company wide estimated future production costs from 12/31/14 assumptions by 60% just to arrive at a standard measure PV10 of a little more than half a billion $ LESS than long term debt. Not development costs, production costs. This is walking on water production cost reductions.
Now, plug $34 WTI and $1.70 H Hub into that statement of future cash flows. Guess what, net future cash flow disappears, even with the 60% miracle production cuts.
I continue to be amazed that apparently no one actually reads 10K and 10Q but me and a few others. US business media is absolutely worthless when it comes to analyzing LTO, leading me to believe on the whole of it is likely incapable of analyzing the profitability, or lack there of, of anything.
We tell everyone to invest their retirement in stocks, yet almost no one can truly analyze sufficiently what they are investing in. Unfortunately, I believe the financial advisors many times cannot either.
In summary, how many businesses are able to withstand a 70%+ revenue reduction? So why do people keep believing the spin. IMO because they are too lazy to spend 1/2 hour even skimming the highpoint of SEC filings.
Apneaman on Thu, 3rd Mar 2016 12:02 am
last year
The Guardian becomes first publication to stop investing in fossil fuels
http://mashable.com/2015/04/01/guardian-divests-fossil-fuels/#0jkS_1sfdkqm
I wonder how many other publications and media companies are heavily invested in fossil fuels? How many funds and/or powerful individuals are invested in both? I’m too fucking tired to do the research anymore, but my guess is enough to explain, at least in part, why the business media has the cheerleader groupthink. Like most institutions, except for fox news, it’s subtle – you don’t have to tell them which way to lean. They notice that the ones who don’t fall in line or self censor don’t last. Not a conspiracy – just how power works in this age.
makati1 on Thu, 3rd Mar 2016 12:27 am
The Rah!Rah! fraking cheer leaders are out in force. Just as the whole oily house of cards tremble and collapse, never to rise again.
yoananda on Thu, 3rd Mar 2016 1:31 am
they need fund right now, and they will say anything to get them !
rockman on Thu, 3rd Mar 2016 7:34 am
Cat – “rockman, those shale companies have not only secured tons of cash through equity sales” It’s not relevant how much cash or borrowing basis those companies have if most of the remaining shale prospects aren’t economical at the current price. And if/when prices do increase it will have to be to a level that converts enough of the currently uneconomical projects to the viable list. Which again takes the discussion to full circle as to how many projects become viable at $45/bbl, $55/bbl, $65/bbl, etc. IOW there is no single price that suddenly makes the shale play viable: there are different projects that become viable at different price levels.
As shallow points out it appears that even the more successful companies don’t look too profitable at $45/bbl. Which isn’t to say there wouldn’t be an uptick in shale drilling at $45/bbl or even a bit less. Remember the big money on the line at the moment for all the public shale playing companies is their stock price and not the profit margin of future drilling projects. Stock prices have fallen 60% to 99% for most companies. Back in 2008 (when the pubcos were hit as hard by prices as low as they are now) the total market cap of the production companies fell from $4.1 trillion to $2.3 trillion…an almost $2 trillion loss of shareholder value. But the value built again to $3.9 trillion by 2014. I can’t find a current market cap for the industry…probably too soon for the analysts. So let’s look at the company that many feel was the most successful shale player….EOG. At the height of the boom their market cap was $68.3 billion. Today its $36.8 billion. So their shareholders of just this one shale pubco collectively lost $31.5 billion in stock value. And understand that among the shale pubcos EOC is probably the most diversified with numerous other arenas they drill. Many of the other shale pubcos are just one-trick ponies: all shale with little else. So while EOG is still paying a 1% dividend most shale pubcos aren’t paying any dividends. But given their current low stock prices those dividends wouldn’t be very much anyway. IOW for the hypothetical shareholder that rode the EOG stock from the high to the current level it will take them 85 years to recover their loss via dividend payments. IOW they lost their collective ass.
And that’s one of the most profitable shale players. Now let’s go to the other end of the spectrum: Magnum Hunter. From 2014 their market cap fell from $1.41 BILLION to the current level of $1.7 MILLION. IOW shareholders collectively lost $1.405 BILLION in share value. IOW the market cap fell 99.88%. And that’s just one relatively small shale players that perhaps most here have never heard of.
And as far as companies digging themselves out of a hole by selling assets let’s see how those numbers are working out for some companies and their lenders: “In May, American Eagle Energy Corp. filed for bankruptcy with debts of $215 million. Its properties sold for $45 million in October. BPZ Resources Inc. owed $275.2 million. Its assets fetched about $9 million. Endeavour International Corp. went into bankruptcy owing $1.63 billion. The company sold some assets for $9.65 million and handed over the rest to lenders. ERG Resources LLC opened an auction with a minimum bid of $250 million. Response? No takers.” IOW selling assets to get healthy is one thing. Liquidating a company’s assets at bargain basement prices and paying off just a small fraction of debt is not “getting healthy” LOL.
As the Rockman has pointed out many times the serious money being made playing the shales wasn’t from producing them but playing the stock angle. Again folks may choose to not believe it but very few in the oil patch didn’t anticipate the collapse we’ve seen. It was always just a question of when and not if. The $trillions lost in the shale companies market cap didn’t burn up and disappear: every penny went into someone savings account…someone who bought low and sold high before the crash. And a great many of them were the management of the shale companies. And all perfectly legal as long as they followed the SEC regs.
Of course some waited too long: pigs get fat and hogs get slaughtered…which is how Dog intended it to work. LOL. Back to my favorite shale player: Petrohawk. They put a lot of shale acreage together dirt cheap, drilled some seed wells and then sold the entire company for $15 billion. Do you think any of those principals feel bad for the folks that were burned to death by that acquisition? It weren’t personal…just business. LOL.
Nony on Thu, 3rd Mar 2016 10:02 am
“Note that CLR had to talk Ryder Scott into cutting company wide estimated future production costs from 12/31/14 assumptions by 60% just to arrive at a standard measure PV10 of a little more than half a billion $ LESS than long term debt.”
Ryder Scott is the class of the industry in reserves accounting. How do you think CLR got that agreed to? Is it possibly somehow justified?
P.s. With you, I wish this had been pushed harder on the analyst call but then it is hard for these guys (I guess) to go through the 10K so fast and figure out what to push questions on. Also, there were a lot of similar E&P calls within a few days of each other. (EOG, EOG, WLL etc.). Perhaps this gets pushed on the next quarterly call.
Nony on Thu, 3rd Mar 2016 10:31 am
I thought about it a little, Shallowsand. Perhaps you are right and CLR is just giving bad numbers. But we ought to at least be open to other explanations and try to get them. Perhaps the change in expense could have to do with more of the PV10 coming from OK and less from ND? There has been a trend of this over the years with CLR and if anything seems to have accelerated lately (look at where they are drilling more now).
Consider that OK is more gassy (lower cost of production) and has better infrastructure and service providers and better weather (lower cost of production). Page 54 of the 10K also says that OK has better taxes than ND and that shifting the portfolio there, thus tends to lower cost of production. Doc also mentions ND lowering taxes from 11.5% to 10% this JAN.
Donno the right answer. Just don’t assume your suspicions are true. Drive them to an answer.
twocats on Thu, 3rd Mar 2016 11:18 am
e at $45/bbl, $55/bbl, $65/bbl, etc. I [rockman]
sorry rock, i stopped reading your post, you quote oil prices as if they mean something, but you’ve said at least a dozen times these oil prices mean nothing for what oil companies actually get. You’ve said it over and over and over, and then you quote the price of oil like it fucking means something.
Very annoying.
So which is it, does the price of oil mean something for oil companies or not?!
Now I’ll read the rest of your post.
twocats on Thu, 3rd Mar 2016 11:31 am
As for the rest of your comment, very informative, and you and shallow sand make a great argument for why the shale sector is in serious trouble.
I was surprised as anyone of just how much capital they have been able to raise in recent months – 9.2 billion in just the past month!! And light covenant loans at Canadian Banks have a reserve amount that can be tapped by these energy companies of another 50 billion!! (give or take)
Most of the companies you’ve mentioned looks like they’ve already gone bankrupt, and yep, you are right, lots of people have lost their shirts.
But 60 Billion Dollars isn’t nothing, and my point was that a lot of people think the well has run dry (on capital), including people like Art Berman, but its not completely true, not yet anyway.
Okay, can they last two more years at $35 a barrel (hey, i thought the price of oil didn’t matter?), maybe not, but my low end was 6 months. Especially if they stop all activity other than existing wells, which is easy money.
Time will tell, let’s look at the rate of bankruptcies over February and March and then we can decide whether this capital inflow was a bucket against the tide.
shallow sand on Thu, 3rd Mar 2016 4:48 pm
Nony. Admittedly, I am just looking at the numbers, maybe they can reduce production costs 60%. Maybe there are explanations.
Thing is, CLR is not alone, they just about all whacked them tremendously. Just look at some 10K for these guys.
Then we have Diamondback, a small Permian company who has some inherent advantages in that they, though a sub they created, bought a large area of minerals on very favorable terms, plus, by all accounts, is drilling very good wells.
Diamondback PV10 is still 3 times long term debt. And guess what, unlike everyone else practically, no slashing of estimate of future production costs from 2014 to 2015.
It is amazing how so many shale companies somehow managed to have PV10 come out to just over long term debt.
Again, I have no proof of anything. Just discussing what they all reported recently to the SEC.
Funny no hot shot analyst or business reporter has mentioned this?
Nony on Thu, 3rd Mar 2016 5:04 pm
I’m open to the interpretation (I guess your hypothesis is just rosy numbers). I just want it proved one way or another.
One other thing to check: is there some accounting cost thingie that could be affecting the numbers? Depreciation?
shallow sand on Thu, 3rd Mar 2016 5:07 pm
I will add to the above, admittedly there are a couple valid explanations.
First, of course there has been cost cutting throughout the industry. We have benefitted, even as small fries. I am sure the big boys have hammered the crap out of the service guys.
Second, if there is a big reserve write down, there should be a commensurate production cost drop.
ExxonMobil, had a 29% drop in estimated future production costs to go along with a 24% drop in proved reserves. This makes sense.
CLR, with a 60% cost drop, yet only 9% proved reserve drop, WLL, 41% cost drop with increase in proved reserves need more explanation IMO.
shallow sand on Thu, 3rd Mar 2016 5:19 pm
The reason, of course, I look at this stuff is, whether, long term, these guys can make $$ at low prices. They all vary, but I think we are finding $20s and $30s is no good. Given earnings from 2015, plus cash flow estimates using $50.28 WTI, looks like they need above that to be viable also.
I’d say many have a good business at $80. I would note, this is lower than where I was a year ago, as costs have come down.
I am not yet sold on better tech leading to more barrels. Better tech does play a part in cutting costs, completing wells faster. Also appears to help with greater IP. However, not seeing EUR shooting up, like it did in 2005-2008 time frames in Bakken. Greater IP seem to also have steeper decline.
Nony on Thu, 3rd Mar 2016 7:04 pm
Did you read my comment 10:31 AM. How about the shift to OK versus ND? Gas versus oil cost structure.
Enno on Fri, 4th Mar 2016 1:34 am
Shallow,
Great comments.
Nony,
“P.s. With you, I wish this had been pushed harder on the analyst call but then it is hard for these guys (I guess) to go through the 10K so fast and figure out what to push questions on. Also, there were a lot of similar E&P calls within a few days of each other. (EOG, EOG, WLL etc.). Perhaps this gets pushed on the next quarterly call.”
Honestly, do you hear many critical questions from analysts on conference calls? I listened to quite a few, and I didn’t. These guys depend on business from the companies they interview.
There are so many good questions that could have been asked, but never were, that it is clear to me they aren’t even trying.
Nony on Fri, 4th Mar 2016 4:37 am
Yeah, sell side equities for retail is a scam. Everyone should buy the index, not individual stocks and from a low cost fund. I think part of the problem is also these guys not as bright as they want to act. You can still get some insights from the call transcripts and presentations.
shallow sand on Sat, 5th Mar 2016 4:39 pm
Nony, may be too late in the post for you to see it, but yes, I agree, looks like CLR is going to produce greater percentage of gas, an explanation for them having LOE per BOE drop.
I also note I am note sold on SCOOP, but that is based on limited information.
High decline $12-20 million wells with mostly gas and NGLs dont work, IMO.
Nony on Sat, 5th Mar 2016 7:07 pm
I’m OK with skepticism. I just want to learn. I am open to the “these guys are crazy” hypothesis. (numbers don’t add up, etc.) But I also am open to the “maybe they are doing what makes sense economically” option also. And we need to parse things more.
That doesn’t mean we will never know either. Or that it is just a matter of taste.
Not a doubt in my mind that these guys have a WORLD OF HURT at two dollar gas and thirty dollar oil. Then again, realize there were peakers here saying these guys were not drilling economic wells when oil was at 100 and gas was at 4. Which was crazy. Those dollars flowed to the plays for a reason.
And they have really run away from the plays for a reason also. Yes, we’re not down to no rigs. But we have gotten down to 500 rigs (about 400 oil and 100 gas) very quickly. And still dropping. EOG answered directly on the conf call that they were drilling in the Bakken only because of a fifty million penalty contract for their rigs (so might as well). I suspect same answer for CLR. Then, once the contracts are up, if prices not recovered, both companies may completely stop drilling. (Or really only drill the most extremely good wells…right on the Nesson in McKenzie County for CLR and any remaining prime Sanish/Parshall for EOG.)
The natural gas situation is fascinating as it is hard to blame THAT on OPEC. And there’s even been several more years for overproduction to correct. But still here we are. Granted, it is a warm winter. But even looking forward, prices are sub three dollars for the rest of the decade. That is shale delivering. No way to argue otherwise…
GregT on Sat, 5th Mar 2016 8:27 pm
“Those dollars flowed to the plays for a reason.”
Central bank’s monetary policies. TARP, QE1, QE2, QE3, and ZIRP. The free market died when they bailed out the TBTF to the tune of 4.3 Trillion dollars.
Nony on Sat, 5th Mar 2016 9:50 pm
SS,
Anadarko basin has held up pretty well during the downturn. Not sure where you are getting those kinds of well costs, doesn’t match what I read. Also rigs have held up, even increased in some counties over the last year. Felix made a lot of money selling out to Devon. That area seems to have decent flows of oil/gas, low produced water, reasonable drilling costs, and great infrastructure and low basis differences.