Good news for frackers.
In mid-May 2015, domestic oil production increased by 300,000 bbl/day over the past 3 months to a grand total of 9.6 million bbl/day. This total domestic production is the highest it’s been since 1970, when domestic oil production started a long, 35 year slide to just under 5 million bbl/day in 2005.
In the 10 years since, the U.S. has added over 4.6 million bbl/day to its production, and fracking has accounted for 90% of that increase. For the math challenged, that’s 4.14 million bbl/day.
So why is domestic oil production increasing when so many predicted a death knell for the fracking industry as the global PRICE of oil plummeted from $110 a barrel to its current level of $60. It’s because the fracking companies still standing can profit from $60 a barrel and not the “conventional wisdom” that they need the global price of oil to remain at or above $80-85 a barrel. Several factors are in play.
—-Half of the NEW fracking wells started in September 2014 have been idled. Lower cost to the companies in energy consumed, equipment purchased or leased, and jobs required.
—-100,000 workers laid off. Huge savings to the companies in labor costs.
—-Less productive wells idled. Production at the best wells ramped up. Yes, this will deplete these wells even faster, but the companies have already identified promising replacements through …….
—-Skyrocketing technology in horizontal drilling, which can now burrow its way through the earth up to 15,000 feet using seismic imaging and a host of other breakthroughs to find what they’re looking for: huge amounts of recoverable oil. And the technology is working very, very well.
—-Bankruptcies. Sorry about the jobs lost or idled, but that’s how destructive capitalism works. The companies left standing are snapping up oil leases and idled equipment at fire sale prices, and …..
—-Institutional investors are watching closely. And they like what they see and have poured over $20 billion into the fracking companies in the past few months. This is precisely the OPPOSITE of what occurred in 1986 when the domestic oil industry collapsed and the banks and investors stampeded to the exits.
—-Finally, a coup de grace has been delivered to the radical environmental groups who have been fighting fracking for years based on spurious allegations that fracking threatens under ground water sources. Two days ago, the EPA released a multi-year study costing nearly $50 million dollars that it does not. The EPA study did not reveal ONE SINGLE INSTANCE of fracking fluids which compromised under ground water. Not one.
Fracking for oil is safe and critical to the economy and national security. Critical. I challenge the anti-frackers who have read these comments to present any case which refutes my analysis and firm support of the fracking industry. It will survive, and it will prosper. Greatly to the nation’s and individual’s benefit.
And I invite Admin to go first.
Only SSS could post some drivel that says 100,000 layoffs, bankruptcies, and $60 conventional oil prices are great for the fracking industry.
The only thing stopping a complete collapse are their hedges, which will be rolling off shortly.
Shale oil sells at a $13 discount to regular oil, so the frackers are only getting $47 per barrel. Breakeven is in the $80 range. Sounds promising for this thriving industry that laid off 100,000 people in 6 months.
SSS is hysterical. Do you just love to be made a fool?
US Shale Will Not Bounce Back At Current Prices
By Leonard Brecken
Posted on Mon, 01 June 2015 17:13 | 0
This week starts with a refreshing call by Deutsche Bank (DB), which basically encapsulates my view on the E&P group. Notwithstanding the valuation issues in the group that remain significant, there continues to be ample evidence that $55 oil does not support production increases in either 2015 or 2016 for that matter.
To reiterate, my view, which DB essentially shares, is that virtually all E&P company cash flows aren’t sufficient to support increases in capital spending. Most, through 2015, are out spending operational cash flow even with reduced capital spending. To further the point, most E&P companies are well hedged in 2015 (over 50 percent) thus their effective oil price is much higher than spot or strip pricing.
Thus, when hedges roll off in 2016, the cash flow situation will grow worse and so will the breakeven price for them to support increased capital spending. The 20 percent reduction in drilling costs will offset some of the loss of hedging but not all, as most hedges are in the $70s, well above the current $60 spot price and strip. Both Deutsche Bank’s and my research continues to support $70 as the price whereby production can be added as supported by cash flow. They believe at $72 operation cash flow will only equal capital spending for oil producers in 2016/2017.
The ease with which this can calculated, plus what was said on their first quarter conference calls, makes us wonder what the basis of the Goldman Sachs’ (GS) call is, while rendering it as nonsense motived by more than fundamental research. It just cannot be that someone who studies this day in and day out can miss the simple math yet, not only has GS missed it, they have gone to the other extreme by saying oil “must” fall to $45 by summers’ end to balance the market.
DB states that, by 2017, the call on US production will grow to 1 million barrels per day (Bbls/day), as depletion math dictates, and major fields that began development in June 2014 will fall in 2015 again and be well below 23 year average. That ties in well with prior thoughts that the oil market may end this downturn, like others, in a huge deficit on the supply side.
Months ago, The Saudis sounded the same alarm about the urgency for oil producers to continue to support capital spending despite low prices. The problem is, with high debt levels on US producers and their not being government entities, with virtually unlimited borrowing capacity or reserve use, they simply cannot fund operational growth. The stronger ones, like Pioneer Resources (PXD) can, and maybe the majors too, but not the smaller independents. That is why reality will set in and by the second half of this year, ahead of the fall credit determination, the smaller ones will be forced to sell outright or begin to monetize low-growth assets.
On a separate note, this morning Cornerstone Analytics points out something that was missed in earlier analysis. The “missing oil” phenomena began to expand on global basis exactly when oil peaked and the US dollar began to fall. Another coincidence? This “miscellaneous to balance” adjustment shows up in the EIA weekly data analysis as a supply adjustment, if one wants to check it. It should be noted that it started at a small number in 2014, then accelerated and grew from there to nearly 20 million Bbls/day cumulatively so far in 2015 alone. In the world of calculated propaganda, nothing is coincidental.
Oil will likely be range bound until either the EIA or IEA capitulate on their figures by restating them and thereby showing the supply/demand balance as much tighter or, production falls off reducing the stated US oil inventory. Another option is the US dollar falls in reflection of the recession we are currently in, or about to enter, and the nonsense of raising rates later in 2015 gets rebuked.
Administrator: “Only SSS could post some drivel that says 100,000 layoffs, bankruptcies, and $60 conventional oil prices are great for the fracking industry.”
Er, it’s not just your bete noir, Admin. It’s a principle of economics recognized since Adam Smith’s time. Shaking out the marginal guys (“creative destruction”) is how a market-driven division-of-labor society applies negative feedback to purposeful human action, thereby improving cost-efficiency.
Witness all those buggy whip factories that had to go over to making bondage gear a century ago.
What the hell are you, some kinda friggin’ Keynesian?
Tucci78
No one survives long-term at $47 per barrel of shale oil. Technology can only advance you so far down the cost curve. The industry will completely shut down if prices stay where they are.
You trust EPA bullshit? Those same whores approved glyphosate to be sprayed on crops just prior to harvest. Feed that crap to your kids because they said it is safe…..
Writes Administrator: “No one survives long-term at $47 per barrel of shale oil. Technology can only advance you so far down the cost curve. The industry will completely shut down if prices stay where they are.”
Even if it’s admitted (per Brecken) that “…virtually all E&P company cash flows aren’t sufficient to support increases in capital spending,” there’s the sunk capital already invested in oil shale exploration and exploitation which continues to produce from the U.S. fields, with resources in land, equipment, and personnel released by the liquidation of the marginal actors in this market segment.
No “increases in capital spending” doesn’t equal “completely shut down.”
Say’s Law operates whether one acknowledges it or not.
(As for how “George Soros, Morgan Stanley and other top money managers are making big bets on the coming Argentinian shale boom,” let us consider Cristina Elisabet Fernández de Kirchner and the kleptomaniac kakistocracy she figureheads. Argentina has not exactly provided solid ground for foreign _or_ domestic investors in the past half-century or so.)
Tucci78
Yes it does. A shale oil well is 90% depleted within 2 years. These aren’t your mother’s wells. The Saudi oil fields have been pumping for decades.
If the existing wells deplete in the next two to three years and shale oil is still selling for $47 per barrel or lower, there will be no replacement wells started.
So solly. Supply, demand and price matter.
And if SSS cared to do any research, he would find out that virtually no fracking company was even making money when oil prices were $100 because they are nothing but heavily indebted (junk bonds) Wall Street frauds living on the Federal Reserve easy money bubble and Wall Street hype.
Tucci78
Checkout the cash flows and debt levels of the major players in the shale oil industry in 2014, when oil prices were over $100 per barrel.
Lookout below!!!!!
Facts trump hype.
http://www.artberman.com/the-oil-price-collapse-is-because-of-expensive-tight-oil/
Administrator: “Checkout the cash flows and debt levels of the major players in the shale oil industry in 2014, when oil prices were over $100 per barrel.”
Nevertheless, the sunk capital (in terms of wells established, rigs either deployed or deployable, men available to work the equipment, markets for the product, etc.) does not disappear simply because the price of the product has – relatively – undergone “collapse.”
Certainly, “the cash flows and debt levels of the major players in the shale oil industry” are not to be denied, but even when _they_ go toes-up, the capital goods they’d developed and acquired don’t magically vanish into thin air.
(Or Argentina; same thing, really….)
Yet again, there’s Say’s Law, which trumps hysterical caterwauls of doom.
Tucci78
It appears you don’t want to hear the facts. The capital is sunk for 2 years. The well is depleted. A new well will require a major upfront investment that does not make sense at $47 per barrel. The investment will not be made. You are assuming the equipment was bought outright and is owned by the fracking companies. How naive. The capital equipment was leased or financed with junk bond debt. With negative cash flow and no new financing coming from the Wall Street hypesters, these companies can’t make the lease or debt payments. Got it?
These companies have their equipment repossessed and declare bankruptcy. Your “deployable men” are deployed to the unemployment line as has been happening at a breakneck pace for the last 6 months.
The capital goods you keep babbling about will lie dormant until prices say otherwise.
I love when someone like yourself has no fucking facts but uses doom as your comeback.
Pretty pathetic, if you ask me.
Why don’t you throw something in about Argentina which has nothing to do with the discussion.
Where is SSS to defend?
The doddering old fool was busy night putting.
He’s dreaming of nuclear plants and winning the War on Drugs.
I think I’ll post an article about fracking causing earthquakes. That usually results in him having to take more blood pressure meds.
OPEC will not stop until the US fracking industry is bankrupt.
OPEC’s Dilemma: The Long View
Posted in The Petroleum Truth Report on June 5, 2015
By Art Berman
It is unlikely that OPEC will cut production at its June 5, 2015 meeting in Vienna. Assuming no cut, oil prices should continue the descent that began in early May (Figure 1). Prices may fall into the $50+ per barrel range since there is no tangible reason for their rise from January’s $46 low.
It is remotely possible that OPEC may decide to cut production because many members are strapped for cash but I suspect that Saudi Arabia’s longer view of demand and market share will dominate the decision and that there will be no cut.
World oil production has undergone a structural shift from supply dominated by relatively inexpensive conventional production to increasingly more supply coming from expensive deep-water and unconventional production. Most conventional oil will be increasingly focused in the Arabian, Siberian and North Caspian basins (Figure 2) while deep-water and unconventional production is focused along the margins of the Atlantic Ocean and in North America.
This shift is at the root of the current price conflict between OPEC and North American oil producers. Since 2008, OPEC liquids production has been fairly flat until mid-2014 (Figure 3). Non-OPEC production outside of North America has been flat. Most production growth has occurred in the U.S. and Canada but it is not only from tight oil.
The competition for OPEC market share is from Canadian oil sands, Gulf of Mexico deep-water and tight oil production. U.S. plus Canadian production has increased 6.2 million barrels per day (mmbpd) since January 2008. OPEC production has increased 2 mmbpd over that period with 1.3 mmbpd (65%) of that increase since June 2014.
Lower oil prices over the past year (Figure 4) have not resulted yet in any observable decrease in North American production. Higher prices over the last few months further complicate the situation for OPEC. The global production surplus has gotten worse, not better, in recent months but prices rose based on sentiment.
It is true that U.S. production may be falling but a 3-month lag in reporting prevents us from seeing this. It is also true that OPEC may have limited capacity to increase their production further although Middle East rig counts have never been higher.
The only way for OPEC to significantly increase its market share is to undermine North American expensive oil production with low oil prices for at least another 6 months. Unless short-term interests carry the day at OPEC’s meeting on Friday, a production cut at this time makes little sense to them.
Dont forget Round Up, he spied some baby weedlings next to his mailbox, he is on his morning run to Home Despot to get a few gallons.
SSS- Kidding aside, I live in Fracking Land and my brother sell’s trucks to the Frackers, I must admit I thought there would be more visible damage to the industry at this point. It seems to be rather stabilized. I suspect Admins hedging point along with your fire sale points are the main factors.
Seems to me that it’s good that fracking technology has been developed, but we shouldn’t use it until we have to. Let other countries sell us their more easily recoverable oil for now. If they run out then we can go after our less easily recoverable oil from the Arctic and via fracking, etc.
Iska, I’ve been thinking that’s why ANWAR has been locked up for all this time.
“Where is SSS to defend?”
—-Wip
Why interfere when Tucci78 is doing such a good job of pinch-hitting and running up the score on a hapless Admin? Heh.
“Doddering old fool”
—-Admin’s latest complimentary description of SSS
Good one. You’re getting more creative with your insults.
The mangy curs – SSS & Tucci scamper with their tails between their legs as Admin once again kicks their asses with facts.
Be gone you mangy curs
“I live in Fracking Land and my brother sell’s trucks to the Frackers, I must admit I thought there would be more visible damage to the industry at this point. It seems to be rather stabilized.”
—-ottomatik
A lot of others also saw big trouble for the Frackers. I have a friend who just drove through Midland-Odessa, Texas, the heartland of West Texas Intermediate, this past week. He told me that he did not see one idle drilling rig. Not one.
“Why interfere when Tucci78 is doing such a good job of pinch-hitting and running up the score ….” ——-SSS
After reaming SSS several new assholes regarding his bogus accusations about my lawnmower, aluminum foil, and baggies … the old cur said he was just trying to get under my skin.
Now this.
Toss a grenade and run. Leave the heavy work to others. Playing games. Hardly makes arguing with him worthwhile.
SSS looking for oil.
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“With negative cash flow and no new financing coming from the Wall Street hypesters, these companies can’t make the lease or debt payments. Got it?”
—-Admin @ Tucci78
WTF? Did you miss this part of my article, Admin?
“Institutional investors are watching closely. And they like what they see and have poured over $20 billion into the fracking companies in the past few months. This is precisely the OPPOSITE of what occurred in 1986 when the domestic oil industry collapsed and the banks and investors stampeded to the exits.”
Yep. Things are booming in good old Texas.
Facts versus anecdotes. Who wins?
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When SSS supplements his income.jpg)
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“Toss a grenade and run. Leave the heavy work to others. Playing games. Hardly makes arguing with him worthwhile.”
—-Stucky @ SSS
You need to be more patient, Sticky. See my comment to Admin at 12:16 pm.
SSS goes on a fracking expedition
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SSS
Please provide proof of the $20 billion infusion.
Any money being put into frackers today would be just attempting to prolong the agony before bankruptcy. If Goldman has sunk $5 billion into a money losing fracker that will go belly up in the next six months because of huge negative cashflow, they might just take the Fed’s 0% money and plow another billion in to keep them alive for another 6 months.
If oil prices were to shoot back into the $80s, the bet might payoff. If prices stay where they are, or gasp -go lower, the $5 billion loss will be a $6 billion loss.
Do you have any concept of cash flow, debt payments, prices, and economics in general?
It doesn’t appear so.
Four shale oil companies have declared bankruptcy already this year: American Eagle Energy, Quicksilver Resources, BPZ Resources, and WBH Energy.
Many more to come.
‘Shale-ionaires’ Suffering from Wave of Bankrupt Oil Drillers
by Kelly Gilblom
May 20, 2015 — 8:00 PM EDT
At the height of the U.S. energy boom, Texas landowner John Baen received about $100,000 a month in royalty payments from companies producing oil and natural gas on his property.
Now the checks are much smaller, and when he opens his mailbox each day, he’s afraid he’ll find yet another bankruptcy notice. So far, four of the producers sending him checks have caved in to rising debts as oil prices slumped, seeking court protection from their creditors.
“I feel like crying because I know I’m going to get another 10 notices,” said Baen, 67, who owns 10,000 acres of land and mineral rights on other property.
A rebound in oil prices that bottomed near $44 a barrel in March has provided some relief to stronger companies that have been able to compensate with cost cuts and more efficient operations. For many smaller, cash-strapped producers, current prices of almost $60 still aren’t enough to make ends meet compared to the $100-plus prices seen during the boom days.
West Texas Intermediate crude, the U.S. benchmark grade, gained 74 cents to $59.72 a barrel in electronic trading on the New York Mercantile Exchange at 11:47 a.m. London time.
There have been at least a dozen bankruptcy filings in recent months, and more than a dozen have defaulted on bond payments or warned investors of challenging times ahead, according to data compiled by Bloomberg.
That’s sending shock waves through the world of private land and mineral rights owners — sometimes called “shale-ionaires” — who were enriched by the explosion in U.S. shale drilling. Those resource owners basically rent out their oil and gas rights to producers in return for a share of the revenues. When the industry does well, the mineral rights owners do well. When business tanks, they share the pain with producers.
Shrinking Payouts
Royalty payouts from bankrupt operations have shrunk to a fraction of the rates paid before the crash, sometimes more than can be explained by the drop in oil price. In the worst cases, landowners can be left with no one to take responsibility for abandoned waste, spills and other hazards, say industry experts who have past experience with oil busts.
“If you’re a landowner and you’re not happy with an operator, you don’t want them to go bankrupt,” said Jenna Keller, a Colorado oil and gas attorney, by telephone. “Because then you’re stuck with a mess.”
Many more companies, which make monthly royalty payments to tens of thousands of people, may go bankrupt in the next year, said John Castellano, a managing director at AlixPartners LLC, who focuses on company restructuring.
More Soon
“We’re seeing highly-levered companies, with high break-even cost requirements, with little ability to generate cash and little access to liquidity,” Castellano said. “I don’t believe we are near the end of this.”
WBH Energy Partners LLC is typical of companies seeking court relief from debts. After a drilling spree in the run-up to the oil price crash last year, the company filed for Chapter 11 bankruptcy law protection in January. A judge appointed one of WBH’s partners, U.S. Energy Development Corp. of Getzville, New York, to take over some of its Texas operations.
Baen, a rancher and business professor at the University of North Texas in Denton, said his first royalty check from U.S. Energy on March 30 was $51.88, a third of what his previous check, signed on March 2, had been.
The company had changed the payout for royalties, and reclassified some oil production as lower-priced “condensate,” according to an April 16 letter Baen received from U.S. Energy.
Legal Help
“I was just flabbergasted when I saw the check and the price,” he said by telephone. Baen said he’s hired an attorney to pursue money he may be owed.
Calls and e-mails made on Wednesday to a U.S. Development Corp. media line and to its attorneys weren’t returned.
Jason Cohen, a Houston-based bankruptcy attorney for Bracewell & Giuliani LLP who represents WBH Energy, said the company he represents no longer has control over royalty payments and is seeking to liquidate its remaining assets to repay its creditors.
Keller, the Colorado oil and gas attorney, said such problems are commonplace for private land and minerals owners caught in the middle of corporate bankruptcies. One of the biggest concerns is that workers who haven’t been paid may walk off the job without taking the necessary steps to clean up or secure the site.
Landowner Risks
That leaves the ranchers and homeowners that allowed companies to extract minerals from their land at risk. Filing a lawsuit isn’t helpful because the company responsible is insolvent, Keller said. Turning to state officials for help is a waiting game, as the agencies responsible for oil and gas cleanups are shorthanded and usually have a long waiting list.
Finding a company representative to sort out problems with royalty payments also is more difficult during bankruptcies, when company workforces may have been reduced to skeleton crews.
Paul Midkiff, head of the Oil, Gas and Minerals Group at Wells Fargo Private Bank in Fort Worth, helps royalty owners manage their finances and relationship with drillers. He said he’s fielding calls from mineral rights owners across the U.S. trying to make sense of their monthly checks.
“They don’t know where to look,” Midkiff said by telephone. “You’re calling an 800 number and not getting the call backs or not getting the responses in a timely manner.”
Logistical Difficulties
Geography can also become a headache when royalty owners don’t have easy access to court proceedings in another state. Quicksilver Resources Inc., which filed for bankruptcy protection in March, said in court documents it owes $12.3 million to mineral rights owners and other interests.
Most of those resource owners are in Texas, but an April 27 hearing held to give creditors a chance to meet with the company was in a court in Wilmington, Delaware, where the company filed for bankruptcy. Calls and e-mails Wednesday to a media line for Fort Worth, Texas-based Quicksilver Resources and to the company’s attorney weren’t returned.
Clint Liles, 73, a frequent poster on “Mineral Rights Forum,” an online chatroom for private citizens coping with the complexities of oil and gas leases, often dispenses advice to royalty owners. Liles thinks he’ll be getting busier as more drillers face down bankruptcy.
“I’ve had several people call me or message me,” Liles said by telephone from his West Texas ranch. “These oil companies — it’s hard to figure out what they’re going to do.”
I’ll be back later today. OHMIGAWD!! I can’t take the abuse and violence which Admin is inflicting on SSS. Pitiful. Oh, so very pitiful. Pray for SSS!
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Stuck is a wise and observant sage. He knows a beating when he sees one.
SSS after his latest tussle with the almighty Admin.
Admin
I already said this in my article, “100,000 workers laid off. Huge savings to the companies in labor costs.” So why are you posting a chart @ 12:18 pm which VALIDATES what I said?
Or are you denying that those layoffs don’t represent a huge savings in labor costs to the fracking companies?
SSS
Fracking requires men to do the fracking. It is very personnel dependent. The layoffs are occurring because rigs are being shutdown. They aren’t being laid off because the companies are getting more efficient.
The number of oil drilling rigs operating in the US has dropped by 55% since late 2014, while production has stayed high. This is the Wiley E. Coyote moment. There is a lag, but gravity will win.
Read it and weep old man.
http://marketrealist.com/2015/06/us-rig-count-drop-hits-12-year-low/
Fight!
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“Four shale oil companies have declared bankruptcy already this year: American Eagle Energy, Quicksilver Resources, BPZ Resources, and WBH Energy. Many more to come.”
—-Admin
Jesus Christ. Can you read? From my article ……
“Bankruptcies. Sorry about the jobs lost or idled, but that’s how destructive capitalism works. The companies left standing are snapping up oil leases and idled equipment at fire sale prices”
The companies left standing do not have the resources to buy shit. They all have massive levels of debt, billions in negative free cashflow, debt payments, lease payments, and in the not so distant future bankruptcy. Your fantasy scenario is a delusion.
Cashflow is all that matters in this world. None of these fracking companies can generate a positive cashflow at these prices. You don’t appear capable of reconciling current conditions (propped up by hedges) and the reality of what happens when the hedges run out.
All of the positive spin articles are coming from Wall Street shills because they know they are screwed when all the debt gets written off in the coming bankruptcies. They are looking for greater fools to take on their “investments”.
I think you are a perfect candidate for their greater fool. I suppose you are investing in fracking companies, since you believe all is well in their industry. Are you putting your money where your mouth is?
SSS, tucci, STRONG. Me, cowardly. Gonna sit this one out. Good luck, boys
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“You just brought piss to a shit fight”
https://www.youtube.com/watch?v=cpuexiPFgnY
Oil related jobs in ND are drying up. I know a few who have been laid off over there and they were in oil rig support services.
Apart from that, I have to trust what I read from people I trust. Currently admin is applying a thorough beatdown to SSS.
“The companies left standing do not have the resources to buy shit. They all have massive levels of debt, billions in negative free cashflow, debt payments, lease payments, and in the not so distant future bankruptcy. Your fantasy scenario is a delusion.”
—-Admin @ SSS
“Private equity firms are on pace to invest $20.6 billion in startup oil and gas companies this year, according to Preqin, which tracks private equity expenditures …… Luxe Energy LLC recently secured $500 million from Natural Gas Partners, a Dallas-based private equity firm. Luxe is using the money to acquire oil and gas leases in West Texas.”
—-“Easy Access to Money Keeps U.S. Oil Pumping,” article by Russell Gold, Wall Street Journal, 1 June 2015.
You just got buried, Admin. Again. Keep digging in that pile of shit you’re shoveling to TBP readers. There’s a pony in there somewhere.
SSS
You don’t even investigate the drivel you post.
Luxe Energy LLC isn’t an existing fracking company.
It is being formed with this $500 million to buy up the assets after the existing debt ridden companies go belly up. It’s a vulture firm that will feed off the bones of the dead.
The title of your story tells it all. EASY MONEY mal-investment created by Ben and Janet is the reason for the fracking debacle.
Please provide me a transaction where a debt ridden existing fracker is getting new money from Wall Street.
Sound of crickets.
I’m off to a high school graduation party.
I’ll be back to kick your bony ass later.
Bankruptcy doesn’t mean going out of business. Bankruptcy gives these companies time to adjust to the market. Gives them a break from creditors.
Admin ,you should know this .Maybe you just like giving SSS a hard time.
Shut the fuck up bb. You’re out of your element.
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Chapter 7 is liquidation.
If we want your opinion on something you know about – we’ll ask on a child porn thread.
Admin, . None of these companies are going completely out of business. They are restructuring their business.Liquidation means selling some assets to pay creditors so they can stay in business. Hell ,if nothing else Google the companies.
I know more then you think big boy.Just ask Stucky ,lipoh and IS.Now they run like little cowards.
Writes Administrator: “Why don’t you throw something in about Argentina which has nothing to do with the discussion.”
Hm? I’m not the one who followed that copy-and-paste of Brecken’s article (above). You were responsible for mention of how “George Soros, Morgan Stanley and other top money managers are making big bets on the coming Argentinian shale boom.”
Ah, but you’d redacted your comment in order to obliterate that paragraph, didn’tcha?
As for the issue of capital already sunk in proven oil shale wells (including those idled by limited productivity and lower product prices), that capital does _not_ simply disappear “within 2 years.” Nor does the capital investment in drilling rigs, exploration and extraction technologies, leases, and expertise (indeed, in the last category, with the shakeout in the industry caused by falling crude oil prices, _only_ the most effective and efficient people in the fracking sector are likely to have even the prospect of showing profits, meaning that they’re the _human_ capital more likely than not to attract the lion’s share of the investment yet going into the sector).
“Luxe Energy LLC isn’t an existing fracking company. It is being formed with this $500 million to buy up the assets after the existing debt ridden companies go belly up. It’s a vulture firm that will feed off the bones of the dead.”
So what? I’ve already said in my article, “The companies left standing are snapping up oil leases and idled equipment at fire sale prices.” And that’s true PLUS the fact that start-ups are attracting over $20 billion from private equity investors. That’s big money. Do you think those people are stupid and just throwing money down the drain? I guess you do, and you, and only you, can see clearly into the future of fracking.
Well, the CEO of Luxe Energy is Lance Langford, who has already made a fortune from fracking in North Dakota. Got that? A proven WINNER in the business, who said, “Essentially, everyone we talked to wanted to do a deal with us.” And he got big bucks from a Dallas private equity company to take his fracking expertise to West Texas. Ah, those Texans. They’re just eat up with a terminal case of dumbass, aren’t they, Admin?
Well, you’ve always got the support of lapdogs Stucky and Indentured Servant, so don’t despair.
Admin posts stuff that I already pointed out in my article, like bankruptcies and charts on lost jobs and idled oil rigs. The big problem with his analysis is that he sees the glass half-empty, and I see it as half-full..
Fracking companies still standing are saving BILLIONS from huge drops in operations and maintenance costs. Billions. And not all fracking companies are buried in a mountain of debt, as Admin presupposes.
Yes, fracking is a capital-intensive business. It requires huge investments in labor and equipment before you even start to drill, but the smart companies paid off much of their debt as they reaped the rewards of their efforts and paid down much of the debt.
Admin asserts that ALL fracking companies are buried in debt and can’t survive at the current price of oil. I can’t wait for the chart to arrive. It will NOT include individual companies, just the total debt. More bullshit for the masses.
“EPA Finds Compound Used in Fracking in Wyoming Aquifer”
http://www.propublica.org/article/epa-finds-fracking-compound-in-wyoming-aquifer
Maybe they forgot about this?
Of course, then there was this clusterfuck:
http://rt.com/usa/194620-california-aquifers-fracking-contamination/
Good thing water is plentiful in California, right?
Take a very close look at the X-ray picture that Admin posted at 2:36 pm. It says “Foot in Ass. I told you I would shove my foot up your ass.”
Big problem. Admin shows a foot supposed going up the ass of the anterior (frontal) view of the victim. Neat trick when the only way to do that is from the posterior (rear).
Nobody, but nobody, on this site can deconstruct Admin as well as I can. School’s out, kiddies.
AC, there is this from today:
http://www.zerohedge.com/news/2015-06-06/awkward-day-after-epa-finds-fracking-does-not-pollute-water-top-oil-regulator-resign
Spooky – If I could talk my game as well as you, I would be a freakkin billionaire. You got game SSS, I’ll give you that.
AC shows up with 2 links to an enviro site dated 2011 and a 2014 Russia Today article, which is heavily dependent on quotes from the Center for Biodiversity, the most radical of the left-wing environmental movements.
What does AC stand for? Almost Coherent?
The EPA investigated ALL of the issues your links addressed. It found NO fracking ops linked to pollution of underground water sources. As in none, dipstick. What part of none do you not understand. And it came from Obama’s EPA, the most radical in EPA’s history.
bb has the title VILLAGE IDIOT locked up tighter than a drum.
SSS relies on EPA statements. WTF??? “Me from government.Work for CIA. Me know government speak’um truth!” Bwaahahahahahahahahaha!!!!!!!!
I propose SSS be given the title VILLAGE DUMB-ASS. What an embarrassing set of commentary from him … if the CIA ever sees it, they’re going to cut off his pension.
SSS is so oblivious, he doesn’t even realize the link I posted early in the thread showed cashflows and debt by individual companies.
Here is your fucking list SSS. Click the link and try to understand the chart by company. If you have trouble ask one of your grandkids to explain the numbers.
http://www.artberman.com/the-oil-price-collapse-is-because-of-expensive-tight-oil/
Please provide me your list of fracking companies with debt free balance sheets. Sound of crickets.
Do you ever tire of having your bullshit obliterated with my facts?
Tucci
The Soros part of the article was an advertisement designed to lure idiots into clicking through to an ad. It wasn’t part of the article.
I think you should find the article and see how you can get rich investing in Argentina shale properties. It’s a can’t miss investment.
I see plenty of blood. Just not sure who’s it is. i’ll take another large popcorn please
Re: SSS ….It found NO fracking ops linked to pollution of underground water sources.
Do you know how I know you have not even glanced at the EPA report you seem to have become so fond of?
From the EPA report :
….we found specific instances where one or more mechanisms led to impacts on drinking water resources, including contamination of drinking water wells.
. . . . Below ground movement of fluids, including gas, most likely via the production well, have contaminated drinking water resources. In some cases, hydraulic fracturing fluids have also been directly injected into drinking water resources . . .
You can download it from here: http://cfpub.epa.gov/ncea/hfstudy/recordisplay.cfm?deid=244651
Anyone reporting anything being reported by the EPA can blow me.
That means you, AC. I mean, seriously, using the fucking EPA as a source? You vying for village idiot status? That stupidity alone moves you right to the top of the rankings.
Admin seriously needs to require posters pass an IQ test before posting.