Supposedly they've been warning us for awhile now - and not having a lot of luck either. But now that the numbers are showing up in print.....
This is a paid Substack but the summary tells you what a lot of us have been saying for awhile. Butane and pentane blended into crude might pass for crude when it goes into a ship, but it wasn't crude coming out of the ground......we accountants used to call not being able to figure out both sides of a transaction as a "balancing item". Polite term for heck if we know what it is but we have to close the books.
The "flood" of oil from the USA, Brazil and Guyana over the past twelve months is totally false.
Spanish . Read comments ,
Any thoughts ?
https://www.firstpost.com/world/will-crude-price-drop-to-50-a-barrel-saudi-minister-warns-it-could-if-13821493.html
Everybody, almost, is now jumping off the shale oil growth boat.
July is down 25K BOPD from June based on some EIA metric called 914 forms filed by a few of the biggest operators in the country...under penatly of fines or worse if they don't tell the truth. Right. This is the stuff that generally gets adjusted upwards in a few months. In Texas the ONLY entitiy that knows what Texas production is, is the TRRC. There are really dumb internet experts on social media that believes the EIA knows more about Texas production than the TRRC does.
Look for July production to be less than the EIA reports. And look for the downward trend to continue. For U.S. production to grow the Permian has to grow and it takes more drilling rigs to make more well completions for tight oil to grow, Kemp, above, says that zero growth by late 2024. Well, we're already there.
Its going to be soooooooooo hard for people to accept that a resource play like the Permian can actually start depleting. They will find aaaaaaaalllll kinds of excuses for this other than depletion, starting with Biden, too many regulations and not enough drilling permits, LNG exports and ending with the nerve of investors expecting dividends.
Matterhorn went on line today...watch and see how many rigs don't come out of the barn because of that.
And Rystad, another big time cheerleader, says costs are going up for the sector (no shit!) but the breakeven is still low enough for the sector to make money. Not enough money to pay dividends, keep drilling $8.5MM wells, pay back debt and prepare for the Big P&A party coming, but thats another story. Wild Horse, that sold its junk to CHK, then bought it back from CHK 3 years later, has 285 wells on the plugging block all making less than 5 BOPD.
Internal rate of return IRR is the same ROI so if you spend $8.5MM to drill a tight oil well you can hope to make $3MM over 15 years from your investment, hopefully, which equates to 2.3% annual average rate of return. Your grandchild can do better than that selling lemondade on the street corner.
Please read this garbage from Forbes and don't believe anything in the media anymore; this article has more lies in it than tonights vice presidential debate.