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This Berman chart suggests world crude oil inventories are in a significant deficit and implies that crude oil prices might be underpriced by as much as $10 per barrel of oil.
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"Despite turning America into the world’s top oil-producing country, the U.S. shale oil industry succeeded in alienating the investors who enabled its astounding growth. Between 2010 and 2020 the industry had negative net free cash flows of $300 billion, more than the annual revenue of Exxon Mobil, according to a study last year by accounting firm Deloitte. Disillusioned venture capital firms and other high-growth-seeking funds were already exiting the sector before the pandemic, but the virus-caused oil rout accelerated their retreat." Forbes
This chart is from AFE Leaks, an informative outfit, and shows how well productivity is now declining in the Midland Basin, in spite of longer laterals. I told you this was going to happen.
How can that be, you ask?
They are still drilling wells too close together. It was inevitable in a Basin stuffed with 10,000 foot laterals and with operators in desperate need of better economics, more bang for their buck, they would squeeze longer laterals into the mix too close to older, legacy wells.
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The materials provided on this site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. I may make data related mistakes occasionally; if you use my opinions about oil reserves or shale well economics for financial purposes, to buy or sell stocks, your nuts. Don't do that. If I have used a photograph incorrectly it was for educational purposes and I have done my best of to give credit where credit is due. My stories are all true, slightly embellished, perhaps, but true; I don't change names to protect the guilty. I am as accurate as possible about history and historical facts; I work very hard at that.All rights are reserved, whatever that means. Don't blame me, I didn't do it.
