Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-21-2018, 11:40 AM   #41
Thinks s/he gets paid by the post
street's Avatar
 
Join Date: Nov 2016
Posts: 4,626
Quote:
Originally Posted by Breedlove View Post
I'm probably not explaining it easily . In the oil business you have many independent drilling companies . Most are leveraged big time when the price of oil goes down they must continue to work ie reducing rig costs to pay debts. Same for pumping companies . a few years ago with the 27.00 oil Odessa had rigs stacked for miles . But before that happened the people with land leases had them drilled at the cheaper rig and pumping costs ..a mad rush . They cement the well in with a BP so it is not performing . This is like money in the bank as soon as the price goes up they come in and drill out the BP and stimulate the well . The Service companies have to work and at 54.00 they are making money.


A good indicator is Halliburton , Schlumberger Baker . Their profits are down but they are working like crazy .

That is true, but some states have laws that once the finish date is done they have so much time to produce that well or the well has to be reclaimed. They (oil company) are very tricky in how they operate and states and mineral owners are wise to their crook business ways.
street is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-21-2018, 02:32 PM   #42
Thinks s/he gets paid by the post
 
Join Date: Nov 2016
Location: Richards
Posts: 1,067
Here is something to think about 700 wells drilled 400 completed , fracking is slowing down . people are holding off completing the wells till prices go up .
Breedlove is offline   Reply With Quote
Old 11-21-2018, 04:37 PM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by Breedlove View Post
I'm probably not explaining it easily . In the oil business you have many independent drilling companies . Most are leveraged big time when the price of oil goes down they must continue to work ie reducing rig costs to pay debts. Same for pumping companies . a few years ago with the 27.00 oil Odessa had rigs stacked for miles . But before that happened the people with land leases had them drilled at the cheaper rig and pumping costs ..a mad rush . They cement the well in with a BP so it is not performing . This is like money in the bank as soon as the price goes up they come in and drill out the BP and stimulate the well . The Service companies have to work and at 54.00 they are making money.


A good indicator is Halliburton , Schlumberger Baker . Their profits are down but they are working like crazy .
Can you tell me what is a BP?

Thanks, Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 11-21-2018, 11:32 PM   #44
Recycles dryer sheets
 
Join Date: Jun 2018
Location: Delmarva
Posts: 205
Blowout preventer (?).
__________________
"I can't complain, but sometimes I still do." - Joe Walsh, Life's Been Good
Crabby Mike is offline   Reply With Quote
Old 11-21-2018, 11:53 PM   #45
Recycles dryer sheets
 
Join Date: Feb 2014
Location: SF Bay Area
Posts: 289
I'm anxiously awaiting the pork belly thread...
__________________
"The only function of economic forecasting is to make astrology look respectable"
- J.K. Galbraith
FireBug is offline   Reply With Quote
Old 11-22-2018, 01:27 AM   #46
Dryer sheet aficionado
 
Join Date: Apr 2017
Posts: 33
Quote:
Originally Posted by CaptTom View Post
... why are the financial news outlets always crying when the price goes down, and happy when it goes up?
I think Marketwatch and other financial news outlets have a laser focus on trying to deliver information that will allow investors to make short-term decisions on things like oil futures, oil company stocks, or market fluctuations.

I think the positive consequences of low oil prices, that you mention, will be felt globally throughout every industry, and can't be linked to a particular buy/sell decision, so it's just not relevant to that kind of news source.
Seagirt is offline   Reply With Quote
Old 11-22-2018, 06:01 AM   #47
Recycles dryer sheets
 
Join Date: Feb 2018
Posts: 98
I bought oil stocks early this week. XOM and BP.
If crude stays low, I'll buy more, probably TOT and OXY
Crude won't stay this low very long, and there are some bargains out there now, plus I love the dividends
jjflyman is offline   Reply With Quote
Old 11-22-2018, 09:42 AM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by haha View Post
Can you tell me what is a BP?

Thanks, Ha
I just thought-blowout preventer! Thanks Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 11-22-2018, 11:52 AM   #49
Thinks s/he gets paid by the post
 
Join Date: Nov 2016
Location: Richards
Posts: 1,067
Sorry everyone , a BP is a Bridge Plug , used to shut a well off . Some Bridge plugs are permanent and some are removeable . They use them a lot after a well has been drilled during a time of cheap oils ( cheap rig time ) They will wait till the price of oil goes up and remove the Bridge Plugs and maybe do an acid frac and then good to go .
Breedlove is offline   Reply With Quote
Old 11-22-2018, 12:11 PM   #50
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 12,552
Quote:
Originally Posted by explanade View Post
Heard this podcast where they discuss the economics of fracking.

Low interest rates as a result of the financial crisis led to a boom in fracking, which is capital intensive.

One of the guys interviewed is Jim Chanos, hedge fund manager who has studied the economics of fracking.

He believes unlike standard wells, fracked wells require constant capital infusion to keep up production.

But with interest rates rising, that makes the economics precarious.

He also thinks there are bad incentives in the industry, where production rather than profitability is incentivized.

He didnít say it but sounds like he was shorting or considering shorting many of these fracking companies.
The "fracking companies? Who are these subcontractors to the oil producers?

First of all, we (U.S.) have been fracturing rock formations in oil/gas wells for 100 years. Nothing new here. What's different is we are now able to drill horizontal wells with multiple long laterals and break the rock (shale, limestone, etc.) using high pressure liquids and small explosive charges. Then the wells produce more liquids and gasses than a conventional well used to produce.

I don't know about this "constant capital infusion" being something new as ALL wells need to be re-entered and serviced occasionally, regardless of whether or not they are conventional or horizontal. Nothing new here.

In the scheme of things, we are now producing more hydrocarbons as a nation due to the ability to recover hydrocarbons from shale formations, the advent of horizontal drilling, and the ability to fracture hard rock formations in long lateral wells.

It's all good for the U.S. as it takes the dependency legerage away from OPEC and we can be more self reliant on our energy needs.

Since crude oil is a worldwide commodity, the contract price will find its way to one that (hopefully) most producers will make money at.
__________________
Everyone has a plan until they get punched in the mouth...philosopher Mike Tyson
aja8888 is offline   Reply With Quote
Old 11-27-2018, 07:19 PM   #51
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Reno
Posts: 1,017
We are swing producer + of oil now and a significant exporter of LNG. There is more than a few shale companies that are profitable (not greatly) at 40$ oil or above, and we are the largest producer now.

Meanwhile, as new electric generation sources, wind and solar are cheapest, so we're in a sweet spot of increasingly shifting renewables while exporting/producing carbon-based needs. Electric cars will ride that tail, increasingly over the next 10-15 years.




Quote:
Originally Posted by aja8888 View Post
We still import about 1/4 of our crude oil needs. We export many products, including diesel fuel, gasoline, natural gas liquids, etc.

What the U.S. producers have done in the last decade is become a threat as to being the "swing producer" in worldwide crude oil production. Our ability to develop horizontal drilling and figure out how to economically get hydrocarbons out of hard shale has given our producers about 2 MM BPD of increased production over the last decade.

Our shale reserves are large and as an example of our ability to bring on crude oil production quickly, we have about 3,600 wells drilled in south Texas that are "not completed" (not fracced) and could be producing in 30 days or so. Similar drill and shut in but not complete strategy is going on in North Dakota.

So it's all good.
RobLJ is offline   Reply With Quote
Old 11-28-2018, 04:28 AM   #52
Full time employment: Posting here.
 
Join Date: May 2015
Location: Atlanta suburbs
Posts: 633
Given that there are more oil consumers than producers, low prices are good for most people.
DEC-1982 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 12:00 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.