Here is a chart from the good old days of late 2013. Bakken oil production was soaring past 1 million barrels per day on their way to a peak of 1.33 million barrels per day in March of 2015. It’s amazing what junk bond debt and $100 a barrel oil prices can accomplish.
The number of rigs operating grew from 101 in April 2010 to 218 in June of 2012. What a spectacular display of American ingenuity. We were on our way to energy independence according the Wall Street shysters, moronic politicians, and oil industry lackeys.
But a funny thing happened on the way to energy independence. Oil prices collapsed to $50 per barrel. The honest analysts know that oil prices need to be in the range of $80 for shale oil rigs to breakeven. The shysters said not to worry. They could make a profit well below $80.
I wonder how they can explain the absolute collapse in rigs working in the Bakken fields from 194 in September of last year to 101 today. Do companies reduce the number of rigs by 48% in the space of a few months if they can make money at $50 per barrel (their oil actually sells at a $13 discount of $37 per barrel)?
Oil production has already fallen to 1.29 million barrels per day and is headed back down to 600,000 barrels per day at the current rig count. OPEC is pumping a record 31.5 million barrels per day and prices are headed even lower. The Bakken miracle is over. Stick a fork in it. You can check the data yourself at this link:
http://www.eia.gov/petroleum/drilling/#tabs-summary-2
Schlumberger is lay off 11,000 workers as we proceed to energy independence.
Worked for Schlumberger once back in the early 70’s. Better working conditions than most of the competition in the industry in those days, probably still is.
Oil is always a boom or bust situation, ride the tide to wealth during the boom and look elsewhere after it ends (you’ll be too old next time, it’s a young mans work).
The problem we faced when I was there was that when you’re young you never think about doing anything with your paycheck beyond the next few weeks, many bar owners and waitresses got rich off of my crew back then and most of my crew exited the boom broke.
I imagine it is about the same now for the most part.
BP CEO warns oil could stay low for few years
By Sarah Kent
Published: Apr 16, 2015 11:12 a.m. ET
LONDON–BP PLC’s BP, +0.56% Chief Executive Bob Dudley warned Thursday that oil prices could stay low for several years and that he isn’t optimistic that they will bounce back soon.
Oil prices have fallen around 50% since the middle of last year, prompting energy companies to slash costs and cut spending. BP has cut capital spending by 20% this year and took a loss in the fourth quarter of 2014.
“We’ve got to plan in BP for a lower-for-longer world,” Mr. Dudley said on the sidelines of the company’s annual general meeting. “I’m not optimistic from the fundamentals that it’s going to bounce back,” he added.
I know people that were laid off there months ago. Mostly support services.
The number of active oil rigs in the US keeps plunging.
This week the number of US oil rigs in use this week fell by 26 to 734, according to data from oil driller Baker Hughes. This is the lowest oil rig count total since November 2010.
Combined oil and gas rigs fell by 34 this week to 954, the lowest since July 2009.
In a note to clients earlier this week, analysts at Morgan Stanley said the decline in rig count usually troughs about 25 weeks after the plunge starts and said that we’ve got about 3 more months of rig count declines before reaching a bottom.
In January, Baker Hughes said that the decline in rig count has usually been about 40%-60% in past oil downturns, and as of this week, the rig count has fallen by about 55% since the October 2014 peak of 1,609 active US oil rigs.
Read more: http://www.businessinsider.com/baker-hughes-rig-count-april-17-2015-4#ixzz3XaVsyqSo
Whoever Anon is,he knows the oil patch!
Anon says: Oil is always a boom or bust situation, ride the tide to wealth during the boom and look elsewhere after it ends (you’ll be too old next time, it’s a young mans work).
That’s the reason I exited the oil patch in 2004.
Dismiss this post. More doom and gloom bullshit. Yawn.
The U.S. oil industry may stall, but it will be back. In spades. Too many moving parts in the global oil economy. Sooner or later, punching a hole in the ground and getting oil at a cost of $10-15 a barrel in the Middle East will come to a grinding halt.
The U.S. has a potential 1.5 trillion barrels of untapped oil in the West. And we already have the technology to get it. And if we have to, we will. Book it, Dano.
P.S. We have domestic natural gas coming out the ying yang. Heh.
SSS still looking for a clue when it comes to the law of supply and demand. Gas rigs are shutting down as fast as the oil rigs. Bankruptcies R Us is the new show in town.
Good thing Obama stopped the Keystone Pipeline 🙂
WhoTFk cares about oil and why should we?
All my cars use synthetic oil. It’s better than the real thing and lasts longer.
Why can’t we switch to synthetic and forget Braaken, Brent, and foreign crude?
F— the Ruskies, the Saudis, the Iranians, and other oil producers.
Let’s go synthetic and confound all the black-hand bastards.
IraK, less than half of all oil goes to transportation fuel. Consumer products use most of the rest. Everything from nylon undies to perfumes to asphalt for paving streets. Natural gas is the raw material for over 400 consumer products–including the plastic of iphones and computers.
Z, having an alternative source of oil will always be an intelligent choice. The Middle East will go up in flames sooner rather later, when that happens, oil prices will make a vertical ascent. The pipeline will get built after the 2016 election no doubt. But believe me, there’s a whole lot of people in the pipeline industry that need those jobs now.
SSS says:
P.S. We have domestic natural gas coming out the ying yang. Heh.
___________________________
Who is this “we” partner? The only time I produce natural gas is about the time I need to take a dump.
Sensetti says:
Z, having an alternative source of oil will always be an intelligent choice. The Middle East will go up in flames sooner rather later, when that happens, oil prices will make a vertical ascent. The pipeline will get built after the 2016 election no doubt. But believe me, there’s a whole lot of people in the pipeline industry that need those jobs now.
______________________________
We both know what’s going on with these low oil prices. It is a tacit agreement between the gulf states and DC to fuck Iran, Russia and Venezuela. The Bakkan fields and Canadian tar sands are collateral damage. Given that, only a moron would build a pipeline more than a thousand miles to oil fields that are going tits up.
“Given that, only a moron would build a pipeline more than a thousand miles to oil fields that are going tits up.”
Why prepare for the future? After all, those oil fields will never again be used.
Sarcasm mode off.
It looks like renewable energy is outpacing fossil fuels.
http://bizmology.hoovers.com/renewable-energy-growth-now-outpaces-fossil-fuel-growth/
Baker Hughes cuts 17% of staff, closes facilities
By Chelsey Dulaney
Published: Apr 21, 2015 9:43 a.m. ET
Baker Hughes Inc.on Tuesday said it ramped up head count reductions to 17% of its total workforce during the first quarter, while the oil-field services company also closed or consolidated 140 facilities during the first quarter amid falling oil prices.
The company also reported first-quarter results that came in sharply below Wall Street expectations.
Shares were down 0.8% in early trading Tuesday.
Baker Hughes, which had previously estimated job cuts at 7,000, said it has now slashed 10,500 positions.
The moves, expected to reduce costs by $700 million a year, come as tumbling oil prices are prompting many of its customers to curtail or cancel projects. Chief Executive Martin Craighead said he expects the tough market conditions to continue.
For the quarter ended March 31, Baker Hughes reported a loss of $589 million, or $1.35 a share, compared with a prior-year profit of $328 million, or 74 cents a share. Excluding restructuring and severance charges, among other items, the company’s adjusted per-share loss was seven cents.
Revenue fell 20% to $4.6 billion.
Analysts polled by Thomson Reuters were expecting adjusted earnings of 46 cents a share on revenue of $5.35 billion.
“Our first quarter results are a reflection of the extreme market forces faced by our industry since late December,” Mr. Craighead said.
Earlier this month, Baker Hughes said it suspended the quarterly publication of the U.S. onshore well count as it seeks to cut costs and continue publishing its closely watched weekly rig count reports.
Meanwhile, Baker Hughes is moving forward with its deal to be bought by larger rival Halliburton Co. The deal, struck in November and valued at almost $35 billion at the time, underscored the new realities for energy companies in a world suddenly awash with oil. As a result, oil-field services companies, which are hired to drill and pump wells, are facing less demand for their services and pressure to cut prices.
Industry experts have predicted that firms like Baker Hughes and Halliburton will have to shrink further as clients demand price cuts.
Halliburton said Monday that it has cut 9,000 jobs, or 10% of its workforce, in the past two quarters and plans to lay off more employees in the coming months.
Meanwhile, Schlumberger Ltd., the largest oil-field service company in the world, last week said it would lay off an additional 11,000 employees, bringing its total job cuts to 20,000, or 15% of its workforce.
@IraK, seriously? Do you not use gasoline? Crude oil = gasoline too, not just motor oil. And if electric, you are using natural gas and that comes from the same industry. Not to mention that most of our pharmaceuticals are based on petrol-chemicals, entirely not possible without oil and its byproducts. The mentioned list of stuff left out plastic shopping bags and food additives of all colors. Yum!
@SSS, you are right, but still off. Yep it will come back, but it will be sold off to other countries just like a huge percentage of our food production making everything, once again, more expensive here. This will very effectively cut the salaries and wages (only bright spot) of OUR jobs, and when it comes back the energy/drilling sector may find what Tech did, you are no longer worth what you think you are. Bye-bye more of the middle, bye-bye.
@Zara, you amuse me. It wasn’t accidental. EVERYTHING Washington does is to wipe out the non-government connected middle class, including the middle class of the energy sector. For now the safety net for the falling middle is strong, soon it will be yanked away and we will be used to do the crap labor for mega-nationals and our resources and foodstuffs will be sent overseas. If lucky that is, odds are it will be the new immigrants and work visas doing it as they would be easier to control and willing to work for much less than us ‘murkins would. Russia, btw, seems just fine, once again we are the ones that will really pay. Always the ‘murkin worker and little guy, nah, I know Russia! China! fear them!
Things are accelerating and most still want to believe these happenings are the fault of “market” forces, or the “evil” Russians, Terrorists or others.
EVERY problem we have including cancer rates, autism, terrorism, war, crime, financial, human/civil rights, murder, nearly every damn one can be laid directly at the feet of our government.
Nah, its just an accident and collateral damage. Unforeseen, and even better, thanks to the complicity of the MSM, your neighbors won’t even know you were disappeared because the news will never tell them and they won’t believe your wife and kids.
A nation of egotistical, self-righteous, worthless, over-valued, POS, thinking it can stay this way in perpetuity. Man, isn’t man deliciously, stupidly, delusional? Have to laugh to keep from crying.