Author Topic: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.  (Read 197583 times)

SharperDingaan

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Re gas: Keep in mind that a shale well primarily depletes because of a rising gas cut that is by-product; & we're drowning in gas.
Re CPG & WCP. They reflect the norm for light oil producers, and the diff is about the cost of rail shipment.

SD
« Last Edit: March 05, 2018, 11:35:12 AM by SharperDingaan »


Cardboard

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U.S. rig count looking for oil -4. Don't expect to find such news in the MSM;

http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother

Devon among many other players is planning for more cash to return to shareholders. Less money for capex has a direct effect on U.S. production growth. With more discipline, only the best wells are drilled which also reduces overall output. Their share price was well rewarded yesterday for such "new" behaviour:

https://www.barrons.com/articles/devon-energy-hikes-its-dividend-1520538516?mod=yahoobarrons&ru=yahoo&yptr=yahoo

There has been a mine failure at the Aurora site owned by Syncrude/Suncor. This should result in over 100,000 bls/d being curtailed for a month. This by the way exceeds the current restriction of just over 60,000 bls/d on Transcanada Keystone and should provide a boost to WCS. By the time it restarts, more railcars should be moving, Keystone should move back up and is badly needed as Cushing is being emptied out fast:

https://twitter.com/staunovo/status/971856038315089921

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Joe689

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Move along.....

I do not get it either. 

I am not a big fan of this guy but he sums it up:

http://www.ninepoint.com/commentary/commentaries/032018/energy-strategy-032018/

tombgrt

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. The big boogeyman in the room, US shale, will not grow as quickly as people believe and will be limited to ~1.2MM Bbl/d. This is due to an incredibly important and yet still under appreciated shift in management mindset (and incentive plans with 60%-70% of companies adopting returns based incentive plan in 2018, up from 10% in 2015) to generating acceptable economic rates of return versus absolute production growth (aka “growth for growth’s sake”). In addition, infrastructure, labour, and equipment shortages all are acting as further anchors to growth potential."

Anyone actually stating these shortages claims with actual numbers? I would like to believe it but production growth shows otherwise so far.

sculpin

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https://seekingalpha.com/article/4156080-last-time-energy-stocks-underperformed-bad-went-multi-year-bull-market

In a tweet storm from Warren Pies, Energy Strategist at Ned Davis Research, he went to show in a few slide decks of just how bad the underperformance has been and when this level of underperformance took place last time.

According to Warren, energy sector's public share of total public equity is now down to 5%, which is lower than where it was in early 2016 when WTI was at $26:

What followed the year after was the birth of a multi-year bull period for energy stocks. Of course, the backdrop of the oil market fundamentals need to remain bullish for energy stocks to keep performing, and long-time readers will know that our outlook on oil prices remain very bullish.

2003 – 24.81%
2004 – 30.93%
2005 – 40.53%
2006 – 18.21%
2007 – 34.69%

Cardboard

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Whether you carry oil via railcar in the U.S. or in Canada, you have to go across the Rockies. This is much more risky in terms of spill and containment than any pipeline. Think about all the river crossings, falling rocks, etc. Insane!

https://www.bloomberg.com/news/articles/2018-03-14/canadian-crude-is-finding-a-new-way-to-asia-without-a-pipeline

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jeffmori7

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Hey Carboard, and others, here is a blog that you could find interesting about oil and its impact on the world economy: https://ourfiniteworld.com/2018/03/13/our-latest-oil-predicament/

tombgrt

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Sorry, but that article is mostly crap in my opinion. A lot of non-essential trivia and silly conjecture.

Uccmal

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Sorry, but that article is mostly crap in my opinion. A lot of non-essential trivia and silly conjecture.

I agree.  The writer has the cart before the horse.  High oil prices precede recessions, not the other way around.  Jeremy Grantham has gone as far as to say that the 2008 crisis was caused primarily by high oil prices.  Whether he is right or not the idea has some merit to it since oil and gas are the largest raw material inputs into industry. 
GARP tending toward value

SafetyinNumbers

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FWIW, WCS oil prices have rallied about 10% in the last two days not that you can tell from the prices of stocks most heavily linked to it!

http://www.psac.ca/business/GMPFirstEnergy/
Top 5 positions: ELF IAM GCM.NT/GCM PIF EFR.DB