Okay bros - Oil Prices & Energy Stocks - time to buy?
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Strifen
Molten Core Raider
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Log In - The New York Times
"The national rig count had remained surprisingly resilient over recent months even as oil prices dropped by more than 50 percent since June, and it still tops the count of a year ago as domestic production continues to surge.
But an announcement on Wednesday by Helmerich & Payne, the giant contract rig company, that it planned to idle up to 50 rigs over the next month sent shudders through the industry. And that came on top of 11 rigs that it has already mothballed, meaning that in just a few weeks, its shale drilling activity will be reduced by about 20 percent."
"The national rig count had remained surprisingly resilient over recent months even as oil prices dropped by more than 50 percent since June, and it still tops the count of a year ago as domestic production continues to surge.
But an announcement on Wednesday by Helmerich & Payne, the giant contract rig company, that it planned to idle up to 50 rigs over the next month sent shudders through the industry. And that came on top of 11 rigs that it has already mothballed, meaning that in just a few weeks, its shale drilling activity will be reduced by about 20 percent."
Springbok
Karen
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Now is not the time to buy E&P's. I would go all in on refinery stocks though (Marathon, P66, Valero, CVR etc). I'd also seriously consider staying away from most midstream company stocks as well. Projections of $50 oil throughout the year and hedges running off at the end of this year means we'd need to see a dramatic change in price before then to move the market. OPEC meeting in June will go a long way in determining how it plays out but as of now they don't appear to be flinching.
I'm hoping the depressed prices cause someone to come buy me out - I'm ready to sell my production and get back into royalties/minerals.
Prices will probably remain low for the rest of 2015. Hedges will keep companies from dropping production TOO fast. Money already invested will continue to keep US production steady. OPEC finally realized they can't drive up prices by cutting production, because the US and Russia can make up the difference. No one knows how low it will go with all the negative pressure currently, but it IS unsustainable under $50.
From a play standpoint, the Eagle Ford and Bakken are the best (lowest cost per barrel) shale plays. Avoid like the plague any company in other "up and coming" plays like the Tuscaloosa Marine Shale. We've known about it for years, but its in early stages and well costs are waaaaaay above EF and Bakken. Would also avoid companies with large positions in Mississippi Lime. Your best bet are companies with strong base production that can net a positive cash flow while prices are down so low.
From a play standpoint, the Eagle Ford and Bakken are the best (lowest cost per barrel) shale plays. Avoid like the plague any company in other "up and coming" plays like the Tuscaloosa Marine Shale. We've known about it for years, but its in early stages and well costs are waaaaaay above EF and Bakken. Would also avoid companies with large positions in Mississippi Lime. Your best bet are companies with strong base production that can net a positive cash flow while prices are down so low.
Do you have any sources for this assertion? You can't just come in here and spout off at the mouth, this is our thread scrub.
Who the fuck knows. It's up to some dumpfuck sand munching arabas. Who have the temperament of an amphetamine fueled 2007 Britney Spears mixed with the savvy of a well done mutton chop. $20bb wouldn't surprise me.
They can keep it up for years if they want. Which probably isn't a bad plan, given that they might as well get it all out of the ground for something rather than wait 20 years and have to deal with real competition and a product that is worth orders of magnitude less.
They can keep it up for years if they want. Which probably isn't a bad plan, given that they might as well get it all out of the ground for something rather than wait 20 years and have to deal with real competition and a product that is worth orders of magnitude less.
Shonuff
Mr. Poopybutthole
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Where is the extra oil production coming from in the US and Russia? Shale? Anyway, I was reading that companies are buying their way out of drill contracts, as that is cheaper than to start drilling right now.
I don't think I'd touch oil for the next six months.
Shonuff
Mr. Poopybutthole
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We have two producing leases that were capped. They still are paying land use rights but production is gone now until things improve price wise.
I don't see the strategy of artificially lowering price to ween out the shale / frack oil working. The oil will still be in the ground, regardless if the company that owns the rights or not survives the oil will be there and the rights will get passed on to another company at auction or they will sit on the rights until prices improve. I just don't see it as a viable way to limit competition if that is what they are trying to do. Once prices break past a certain point production will ramp right up again.
Now if the intent of this is to fuck over certain Eastern European powers that would make a little more sense.
Either way, I wouldn't bet any money on the oil marketplace anytime soon.
I don't see the strategy of artificially lowering price to ween out the shale / frack oil working. The oil will still be in the ground, regardless if the company that owns the rights or not survives the oil will be there and the rights will get passed on to another company at auction or they will sit on the rights until prices improve. I just don't see it as a viable way to limit competition if that is what they are trying to do. Once prices break past a certain point production will ramp right up again.
Now if the intent of this is to fuck over certain Eastern European powers that would make a little more sense.
Either way, I wouldn't bet any money on the oil marketplace anytime soon.
Shonuff
Mr. Poopybutthole
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No, because I only was able to charge for half the increase in gas prices over the last few years. I'm already at the high end of the spectrum because of having real equipment, higher skilled labor than the competitors, and full insurance, so I couldn't increase much further. The net effect is that monthly margins have been decreased by $3k a month for the last few years.
Borzak
Bronze Baron of the Realm
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They are moving the drillers from here out of the shale oil further west back into areas they can drill for natural gas. I don' tknow what the long term outlook is really. Members of OPEC have stated they want to drive out the frackers, that's going to take more than a few months. They will have massive lay offs first but still just as rapidly could get back into it is short term.
For December even OPEC outpaced their stated goal, so more oil.
For December even OPEC outpaced their stated goal, so more oil.
Borzak
Bronze Baron of the Realm
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Same here. I have leased rights in two states, the leases run for 3 years and they have been renewing. But when they aren't producing you don't get that share of production which is 25% for my leases. So you get a lease payment at the start of the 3 years and 25% production and rights of first refusal.
