Military-->UT MBA-->O&G billionaire CR?
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Poast new message in this thread
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Date: September 25th, 2014 10:16 AM Author: bearded pit
70-80% decline rates within 12 months for each drilled lateral does not a long term profitable program make
you start losing money at like $80 a barrel
all this easy fed reserve money is drying up and you could see a pretty big reduction in drilling, which will result in lower production when the laterals drop off
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26393872) |
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Date: September 25th, 2014 10:22 AM Author: bearded pit
it's not really the dollar's strength that I'm getting at...it's the ease with which operators can borrow money to finance the drilling program, which is directly attributable to QE
very few operators have enough free cash to sustain the drilling and recompletion activity necessary to keep their fields profitable over the long term, it's all debt funded
that's why onshore activity ground to a halt for months after the credit crunch in 08
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26393904) |
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Date: September 25th, 2014 10:26 AM Author: mischievous insecure bawdyhouse cuckoldry
My bad bro, I guess I just misunderstood your poast.
I thought you were implying that QE tapering would lead to oil prices falling.
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26393933)
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Date: September 25th, 2014 10:31 AM Author: bearded pit
nah breh, I see how that could be misinterpreted. I don't think that at all.
If anything, oil prices could have upward pressure when credit tightens. The unconventional side is too capital intensive right now and too reliant on debt. That's great for short-term gains when the credit is easy like right now, but when it tightens, activity dries up, which means less production, and thus upward pressure on futures due to demand outstripping supply.
Great for XOM, bad for EOG/SWN/CLR/DVN/etc
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26393964)
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Date: September 25th, 2014 11:35 AM Author: titillating chrome masturbator chad
idiot pumo:
activity ground to a halt for months after late 08 primarily because many operators were tied up with dry gas plays and NG prices went straight to hell with no basis for their return.
it took some time for operators to reinvent themselves in liquids/oily plays. the operations well positioned in liquids post 08 were first movers and obviously did better.
i do agree with you about needing $70-$80 a BBL to make the wells worth drilling, and i think the USD is going higher, however you do not address the supply/demand issue.
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26394350)
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Date: September 25th, 2014 10:19 AM Author: bearded pit
see above
also, two other things:
saltwater disposal costs stay fixed or increase while your profits decrease, which compounds the pressure you feel when the decline rate settles in after that first year
and gas is so shitty right now that it's not worth the money to compress and transport it for sale, so you just end up flaring it off and losing more money.
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26393890) |
Date: September 25th, 2014 10:41 AM Author: Motley rebellious dragon
just oil or gas too?
how will this impact midstream and downstraem?
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26394030) |
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Date: September 25th, 2014 10:46 AM Author: bearded pit
You're barely in the money at $3.90/mmbtu gas. Most of the shit they've been drilling is just to HBP the leases and then subsequently shut the wells in until prices increase.
the optimist in me hopes that pressure will be applied on Gazprom around the time we get LNG exports up and running, so we can start supplying Europe right when Russia gets sanctionpwned
as for midstream, that's great for increased development in places like the Rockies where the pipelines are at capacity, but the federal and state governments have been fucking over midstream construction through public lands making it take longer (see Keystone XL for the most egregious and public example).
cheap gas, paradoxically, is great for downstream feedstock (manufacturing, chemicals, etc). It would be an interesting study to see what the equilibrium price is between downstream demand and upstream production.
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26394049) |
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Date: September 25th, 2014 10:54 AM Author: bearded pit
well, they can truck or train it out, which sucks but that's how they do it now
I honestly don't know why there hasn't been a massive boom in midstream development...there's an uptick, sure, but nothing like the drilling frenzy we've seen over the last few years.
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26394101)
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Date: September 25th, 2014 11:07 AM Author: mischievous insecure bawdyhouse cuckoldry
I imagine we are gonna see pullback starting the middle of next year.
But more important than the credit issue is the inflation issue. I think more businesses are concerned about inflation in the US, as well as emerging markets, than the credit markets drying up from QE tapering.
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26394170)
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Date: September 25th, 2014 11:15 AM Author: bearded pit
lol just do bond buying forever until your balance sheet explodes, bros
guess that means more oil jerbs for all!
(by all, I mean people who already have them or know people who have them)
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26394221) |
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Date: September 25th, 2014 11:25 AM Author: mischievous insecure bawdyhouse cuckoldry
Switzerland is still pretty insulated from the broader Euro Zone (although they were retarded to peg the Franc to the Euro).
Most emerging markets are going to get fucked by tapering, so that pretty much rules out anything in LATAM.
Idk, we should probably just all learn Mandarin and be done with it.
(http://www.autoadmit.com/thread.php?thread_id=2683729&forum_id=2#26394287)
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