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Made in us
5th God of Chaos! (Yea'rly!)




The Great State of Texas

 whembly wrote:
 Frazzled wrote:
 whembly wrote:
 Frazzled wrote:
Canada petroleum market is imploding actually.

Short term, yes.

Long term... vast potential.


only at a certain price point.

Of course, last I heard is that for shale oil extraction is at $65/ to turn a profit.



Remember, about 3 years ago, that profitability target was in the $90 /barrel range.

FWIW: Current oil prices is hovering around $60/ barrel, and granted it's been very volitile for a while.

We'll see.



Thats US and it depends by region and field. Canada is a different animal.

-"Wait a minute.....who is that Frazz is talking to in the gallery? Hmmm something is going on here.....Oh.... it seems there is some dispute over video taping of some sort......Frazz is really upset now..........wait a minute......whats he go there.......is it? Can it be?....Frazz has just unleashed his hidden weiner dog from his mini bag, while quoting shakespeares "Let slip the dogs the war!!" GG
-"Don't mind Frazzled. He's just Dakka's crazy old dude locked in the attic. He's harmless. Mostly."
-TBone the Magnificent 1999-2014, Long Live the King!
 
   
Made in gb
Courageous Grand Master




-

dereksatkinson wrote:
 whembly wrote:
I wonder if it make any sort of blip globally (or even locally) if we were able to export oil.


It's irrelevant because we are still a net importer of oil and they are including natural gas in there. They aren't even remotely the same thing.

 Do_I_Not_Like_That wrote:
I thought Saudi Arabia had killed the US shale oil industry?


It has and the job losses we've seen over the past 9 months reflects that. The only reason a lot of these companies are still in operation and producing is because they did forward sales and have obligations to deliver their product.

For those of you who don't understand what a forward sale constitutes.. The oil company issues the debt to finance the production. Then sells a futures contract so there is certainty of getting the price they need in order to be profitable(this is the forward sales contract).

The number of companies that did this is likely pretty high considering 17% of the high yield debt market is from oil and gas. http://online.barrons.com/articles/high-yields-oil-slick-1416028569

The problem with this though is that we do NOT have enough commercial open interest to cover the debt they took out. We can see how much open interest there is in the COT (commitment of traders report) which is published weekly. So once they eat away at their forward sales (at higher prices) they will have to face the reality that their projects aren't economic at these price levels. That's when we will see production suddenly fall off a cliff.


Is there no way back for the US shale industry?

"Our crops will wither, our children will die piteous
deaths and the sun will be swept from the sky. But is it true?" - Tom Kirby, CEO, Games Workshop Ltd 
   
Made in pt
Tea-Kettle of Blood




 Do_I_Not_Like_That wrote:


Is there no way back for the US shale industry?


Its about time for the US to invade Saudi Arabia?
   
Made in gb
Courageous Grand Master




-

PhantomViper wrote:
 Do_I_Not_Like_That wrote:


Is there no way back for the US shale industry?


Its about time for the US to invade Saudi Arabia?


Of all the countries in the world, invading Saudi Arabia would probably be the most sensible thing the USA did in a long time. The Saudi's support a wide range of extremist groups (from what I've read in the newspapers) and these groups are active against US interests...and not in a good way.

"Our crops will wither, our children will die piteous
deaths and the sun will be swept from the sky. But is it true?" - Tom Kirby, CEO, Games Workshop Ltd 
   
Made in us
Dakka Veteran




 Do_I_Not_Like_That wrote:
Is there no way back for the US shale industry?


It will but it wont be the same. You'll have lower production and new projects wont be coming online as fast on the way back up. Too many deals were financed on the basis of 0% rates and all that did was lead to ridiculous levels of speculation. 17% of the entire high yield bond market was in energy.. That's outrageous and we still haven't see the impact of that.

After the sector is washed out, projects will restart once they are well above break even and management believes prices will go higher. They will have a higher interest rate and fewer people willing to lend them money so they are going to be way more conservative next time around.


   
Made in nl
Wolf Guard Bodyguard in Terminator Armor




 Sigvatr wrote:
 Soladrin wrote:
Why Belgium..?


Belgium hosts the best fries in the world.


And the best beers. I think (well, I'm pretty certain) it's because the countryside is dotted with centuries-old monasteries whose inhabitants have nothing to do but pray and figure out how to make the best beer, since they're not allowed, ah,'other' entertainments .
   
Made in us
Virulent Space Marine dedicated to Nurgle





USA

I feel this title will come and go as the price of oil waxes and wanes.

We are producing more through shale mining, which isn't profitable when oil drops below 60$ PB.

1500pt
2500pt 
   
Made in ca
Plastictrees





Calgary, Alberta, Canada

 Frazzled wrote:
 whembly wrote:
 Frazzled wrote:
 whembly wrote:
 Frazzled wrote:
Canada petroleum market is imploding actually.

Short term, yes.

Long term... vast potential.


only at a certain price point.

Of course, last I heard is that for shale oil extraction is at $65/ to turn a profit.



Remember, about 3 years ago, that profitability target was in the $90 /barrel range.

FWIW: Current oil prices is hovering around $60/ barrel, and granted it's been very volitile for a while.

We'll see.



Thats US and it depends by region and field. Canada is a different animal.


That you might know very much about if you think "imploding" is a relevant descriptor.
Canadian plays are hugely diverse and have seen the same technological leaps as US shale production.
WTI and Brent are incredibly close, which is good for us and hides the fact that our price has recovered much better than global.

Maybe try reading more than hysterical click bait.
   
Made in au
The Dread Evil Lord Varlak





PhantomViper wrote:
But isn't that the rule for every one of these shale oil explorations? That with the current oil prices they are simply not profitable enough to be worth it?


Sure, and that’s the thing people are missing. Shale is viable because prices are high. So shale isn’t a means to a glorious new future of cheap prices, instead its just the next step, as rising oil prices drive us to exploit the next cheapest source of gas.

With the expansion of shale encouraged under the very high prices there’s been an overreach (coupled with unexpected falling demand, esp in China), resulting in reduced prices, which then means future shale development is put on hold. But long term prices will drift up, and so we’ll move in to those next stages of shale expectation. The long term price increase lead to marginal production becoming viable leading to increased supply.

High oil prices are both the problem and the solution.


Automatically Appended Next Post:
 Frazzled wrote:
only at a certain price point.


And that price point is, long term, inevitable. Along the way there'll be fits and starts of oversupply and undersupply, but in the long term we're only going to want more and more energy.


Automatically Appended Next Post:
dereksatkinson wrote:
It has and the job losses we've seen over the past 9 months reflects that.


Not really. The drop in price is a production of overexpansion coupled with a decline in energy consumption (esp in China). Resource extraction is inherently volatile. There are periods of expansion and periods of contraction. Claiming its due to something the Saudis have done is telling stories.


dereksatkinson wrote:


It will but it wont be the same. You'll have lower production and new projects wont be coming online as fast on the way back up. Too many deals were financed on the basis of 0% rates and all that did was lead to ridiculous levels of speculation. 17% of the entire high yield bond market was in energy.. That's outrageous and we still haven't see the impact of that.


Again, that’s just how resource extraction rolls. It’s a basic boom and bust cycle driven by the reality that we’re looking at projects with massive up front capital costs, and long time delays before production starts.

You call it ridiculous speculation, but no-one was forecasting the massive drop in the price per barrel. A rollback was expected, but nothing like this.

This message was edited 6 times. Last update was at 2015/06/12 04:19:17


“We may observe that the government in a civilized country is much more expensive than in a barbarous one; and when we say that one government is more expensive than another, it is the same as if we said that that one country is farther advanced in improvement than another. To say that the government is expensive and the people not oppressed is to say that the people are rich.”

Adam Smith, who must have been some kind of leftie or something. 
   
Made in us
5th God of Chaos! (Yea'rly!)




The Great State of Texas

 plastictrees wrote:
 Frazzled wrote:
 whembly wrote:
 Frazzled wrote:
 whembly wrote:
 Frazzled wrote:
Canada petroleum market is imploding actually.

Short term, yes.

Long term... vast potential.


only at a certain price point.

Of course, last I heard is that for shale oil extraction is at $65/ to turn a profit.



Remember, about 3 years ago, that profitability target was in the $90 /barrel range.

FWIW: Current oil prices is hovering around $60/ barrel, and granted it's been very volitile for a while.

We'll see.



Thats US and it depends by region and field. Canada is a different animal.


That you might know very much about if you think "imploding" is a relevant descriptor.
Canadian plays are hugely diverse and have seen the same technological leaps as US shale production.
WTI and Brent are incredibly close, which is good for us and hides the fact that our price has recovered much better than global.

Maybe try reading more than hysterical click bait.


Have you seen the Canadian drill count lately? CD Oil is not cost advantaged vs. Bakken, utica, Permian, or Eagleford. The cost to produce tar sands significantly higher than North America or Saudi sweets. Your government has to put out press releases that there's not going to be a housing burst because of the downturn.

This message was edited 2 times. Last update was at 2015/06/12 13:13:36


-"Wait a minute.....who is that Frazz is talking to in the gallery? Hmmm something is going on here.....Oh.... it seems there is some dispute over video taping of some sort......Frazz is really upset now..........wait a minute......whats he go there.......is it? Can it be?....Frazz has just unleashed his hidden weiner dog from his mini bag, while quoting shakespeares "Let slip the dogs the war!!" GG
-"Don't mind Frazzled. He's just Dakka's crazy old dude locked in the attic. He's harmless. Mostly."
-TBone the Magnificent 1999-2014, Long Live the King!
 
   
Made in us
Fixture of Dakka




I have seen oil prices fluctuate in roughly 5 year cycles. What is going to be interesting is to see what happens in the merger with Baker Hughs and Halliburton, two of the biggest drillers out there.
There are going to have to be some assets being sold due to laws on monopolies, but when the dust settles on this low cycle, the deep pockets of these companies, and Slumberger are going to see them possibly as the only ones standing strong for a while.
The Chinese are up and coming in the drilling industry, though and have been for some time, and will be a player to watch in the next few years.
   
Made in ca
Plastictrees





Calgary, Alberta, Canada



Have you seen the Canadian drill count lately? CD Oil is not cost advantaged vs. Bakken, utica, Permian, or Eagleford. The cost to produce tar sands significantly higher than North America or Saudi sweets. Your government has to put out press releases that there's not going to be a housing burst because of the downturn.

Yup, I check it daily, talk to oil and gas people in Calgary daily and sell houses in Calgary...daily.

The government has to counter reckless reporting, and people like you. I'm living in it and there is no implosion, this is the cycle that we've ha since the 80s.
   
Made in us
Decrepit Dakkanaut






New Orleans, LA

Oil prices, please go back up. I own a lot of ExxonMobil stock.

I'll pay an extra buck a gallon to get to retire a few years earlier.


DA:70S+G+M+B++I++Pw40k08+D++A++/fWD-R+T(M)DM+
 
   
Made in us
5th God of Chaos! (Yea'rly!)




The Great State of Texas

 plastictrees wrote:


Have you seen the Canadian drill count lately? CD Oil is not cost advantaged vs. Bakken, utica, Permian, or Eagleford. The cost to produce tar sands significantly higher than North America or Saudi sweets. Your government has to put out press releases that there's not going to be a housing burst because of the downturn.

Yup, I check it daily, talk to oil and gas people in Calgary daily and sell houses in Calgary...daily.

The government has to counter reckless reporting, and people like you. I'm living in it and there is no implosion, this is the cycle that we've ha since the 80s.


You must not know anyone working in the OFS industry then. if you saw Canadian drill counts you'd know they've gone through the floor.

-"Wait a minute.....who is that Frazz is talking to in the gallery? Hmmm something is going on here.....Oh.... it seems there is some dispute over video taping of some sort......Frazz is really upset now..........wait a minute......whats he go there.......is it? Can it be?....Frazz has just unleashed his hidden weiner dog from his mini bag, while quoting shakespeares "Let slip the dogs the war!!" GG
-"Don't mind Frazzled. He's just Dakka's crazy old dude locked in the attic. He's harmless. Mostly."
-TBone the Magnificent 1999-2014, Long Live the King!
 
   
Made in ca
Plastictrees





Calgary, Alberta, Canada

Down by 45%, so less than the % drop in US rigs....

What I'm most curious about is what the last OPEC meeting looked like. Do the Saudi delegates have armed guards in the room....there are surely some pretty unhappy members in there with them.
   
Made in us
Dakka Veteran




 plastictrees wrote:
What I'm most curious about is what the last OPEC meeting looked like. Do the Saudi delegates have armed guards in the room....there are surely some pretty unhappy members in there with them.


OPEC is fine with it. Their goal is to eliminate competition and that's what they have done. They started openly talking about this In the summer of 2013.

http://www.wsj.com/articles/SB10001424127887323854904578635500251760848

No one should have been surprised by this decline. Especially given their EXTENSIVE history of sabotaging competition in the past.

http://theweek.com/articles/442334/saudi-arabia-trying-sabotage-americas-shale-oil-boom

And not only that.. They are gloating about it.

http://www.ibtimes.com/saudi-arabia-says-its-flood-low-cost-oil-hobbling-us-shale-rivals-1922455

OPEC knows what it's doing and I can't believe people are trying to argue they aren't behind it.



Automatically Appended Next Post:
 plastictrees wrote:
Down by 45%, so less than the % drop in US rigs....


Ignore rig count. What matters is commercial short interest. When the Commercial shorts are no longer heavily short the commodity, companies will then be only drilling at current prices and we will have an accurate assessment of what the true production numbers are. Should take another 9 months IMO.

This message was edited 1 time. Last update was at 2015/06/12 19:07:18


 
   
 
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