And there was much rejoicing in the land.... Gas Prices

[Sean88gt]

$2.14 for reg in Benbrook.

[snacksnack]

$2.14 for reg in Benbrook.

damm!

[Snatch Napkin]

Offshore is where it's at man... Noble, Transocean, Oceaneering, Hornbeck.... check em out. There does not seem to be any shortage of work going on out in the gulf right now...

I've been curious about doing offshore. If nothing else, just for the experience.

Sent from my SAMSUNG-SM-G870A using Tapatalk

[slow99]

This doesn't sound promising for those needing oil price appreciation:

http://www.wsj.com/articles/despite-glut-of-oil-energy-firms-struggle-to-turn-off-the-tap-1438904654

Despite Glut of Oil, Energy Firms Struggle to Turn Off the Tap

Companies keep finding ways to drill wells faster in an effort to deal with declining crude prices.

Despite all their spending cutbacks and idle drilling rigs, American energy producers are finding it hard to turn off the taps that have helped lead to a global glut of oil.

Rising crude production was a major theme in the past week as shale drillers reported their second-quarter earnings.

Devon Energy Corp. and Whiting Petroleum Corp. said they pulled record amounts of oil from the ground. Anadarko Petroleum Corp. revealed that in some areas it has doubled the number of wells it can drill with a single rig. And Pioneer Natural Resources Co. said it plans to ramp up its drilling activity to pre-oil bust levels by early next year.

Analysts say American oil pumpers need to cut their output by at least 500,000 barrels a day to stem the oversupply that has sent oil prices tumbling over the past 14 months to just under $45 a barrel.

But monthly oil production rose steadily through March, peaking at a record 9.7 million barrels a day that month and just slightly less in April, before edging down to 9.5 million barrels in May, according to the latest federal data.

“We need to cut a whole lot more,” said Jamie Webster, a senior director at IHS Energy, a consultancy. “This industry has been going through some pretty tough times in the last year, and it keeps getting up off the mat.”

For oil production to fall that far, Mr. Webster added, the benchmark U.S. crude price will have to average $45 a barrel for at least six months. Roughly 200 oil drilling rigs—about a third the number working today—will also need to come out of the field by 2016.

But companies keep finding ways to drill wells faster and cheaper in an effort to deal with oil that is selling for half the price it was a year ago. They had little incentive to be so innovative when crude oil traded at around $100 a barrel.

“If you step back and think about what happens at $100 oil, you don’t have a lot of efficiencies,” said David Tameron, a senior analyst at Wells Fargo Securities. “Everyone has so much cash it doesn’t matter.”

But now, the easiest way for many producers to make up revenue lost to declining oil prices is to pump more.

So even though companies recognize that pulling more fuel from the ground won’t ease the supply glut that is pressuring prices lower, scaling back isn’t necessarily an option.

The struggle has been apparent as U.S. producers reported their second-quarter earnings. Even as falling oil prices have companies taking write-downs worth millions—and in some cases billions—or disclosing losses and shrinking revenues, analysts say they have repeatedly been surprised by better than expected production results and increases in full-year production estimates.

Whiting, the biggest shale producer in North Dakota, pumped 170,000 barrels of oil equivalent a day in the second quarter—a record amount for the company.

“We are tooling Whiting to run and grow at $40 to $50 oil,” Chief Executive James Volker said.

Amid a refrain about keeping growth in check, executives at Anadarko, a Texas-based oil and gas producer, told analysts last week that the company has doubled its rig efficiency. Anadarko can now drill 70 wells with one rig in Colorado’s Wattenberg field, compared with 35 wells per rig a year ago. The company posted a $61-million profit on revenue of $2.6 billion—both down significantly from the same period last year.

Time after time in the past week, energy companies revealed swelling oil-production figures. Devon, based in Oklahoma City, said it pumped more than 30% more crude in the second quarter compared with the prior-year period, and said it is on track to produce up to 35% more oil this year compared with last. The company reported a $2.8 billion loss on revenue of $3.4 billion.

Meanwhile, Pioneer Natural Resources, based in Irving, Texas, expects to pump at least 10% more oil this year than it did in 2014, and earlier this week reiterated plans to add two rigs a month back to its oil patches between now and year’s end. It will also add eight rigs in the first three months of 2016.

That ramp up, Chief Executive Scott Sheffield said, will bring drilling activity back to the level it was before oil prices collapsed in late 2014.

“It’s important to show growth as long as we’re having very good returns,” Mr. Sheffield said. Pioneer posted a loss of $218 million in the second quarter, including a $222 million write-down on the value of its hedges, as its revenue fell 30% to $648 million.

Even natural-gas producers—also dealing with low commodity prices—are finding it hard to choke back.

Steven Mueller, chief executive of Southwestern Energy Co. in Houston, said he sees little incentive to grow right now, but can’t justify holding off on drilling for a year—and delaying returns to shareholders—unless he expects prices to rise dramatically. He doesn’t.

“You have to be really bullish on prices to delay,” he said. “So we’ll take our best guess at the future, we’ll drill what looks economic and if there happens to be growth, there will be growth.”

[Cooter]

lol @ being too effective at production

gimme dat dollar diesel!

[Ruffdaddy]

Thats a very interesting article slow99. It actually may be good for me...meaning the number of wells will stay high regardless. The active rig count can be half, but the tools our company supplies will still get the same number of hours since its more related to well count not rig count. I mean technically, the rig count being high greatly helps...but its not the end of the road now.

[Ruffdaddy]

lol @ being too effective at production

gimme dat dollar diesel!

I read this as we are much more efficient than OPEC ever planned.

AKA: f*** you Saudi!!!!

[Broncojohnny]

Slow99s article is spot on, they are going to drive the price down until you start seeing a lot of bankruptcies. The low interest rates are making it worse.

[Ruffdaddy]

We have very little debt as a company, but the hard part now is getting customers to pay. Drillers also arent getting paid by the operators so theyre stuck in a similar position.

Its going to be tough even for those in a good financial position at the start of this.

But the delivery model will change as well as terms, and the better companies will hold tight.

[Strychnine]

Bets on rig count in an hour?

I say -6

Saudi Arabia Might Just Have Blinked In The Oil War


Kenny Rogers is probably not well known in Saudi Arabia but if recent speculation about the kingdom resorting to the international debt market is correct then the words of The Gambler should be called, loudly, from every minaret in Riyadh.

If you don’t know Kenny’s signature song, it’s the one which includes the refrain: “You’ve got to know when to hold em, know when to fold ‘em, know when to walk away, know when to run.”

In the case of Saudi Arabia, and the unconfirmed reports of it seeking $27 billion in debt via an issue of bonds, it appears to be adopting the gamblers strategy of seeing off its opponents in the increasingly competitive oil world by calling “raise ‘em.”

Betting The House (Of Saud)

What the debt raising signals is that the kingdom is prepared to bet the house of Saud on a high-risk gamble based on a belief that its vast oilfields can outlast everyone else’s oilfields, especially the newcomer, U.S. unconventional (or shale) oil.

Until now, Saudi Arabia’s low cost oil and its cash reserves, estimated to be around $670 billion, was believed to be sufficient to frighten rival oil producers out of the business, clearing the way for a much-needed increase in the price, once the oil-glut subsides.

Several recent events indicate that the tactic of flooding the oil market to drive high-cost producers out of business might not be going to plan.

More Rigs Drilling Not Fewer

The first hint that all is not well on the Saudi side of the table came in the form of last week’s count of active U.S. oil and gas drilling rigs by the oilfield consulting firm Baker Hughes BHI -1.04%.

Rather than decreasing, which had been the trend for months, the rig count rose, only by five to 664 active rigs, but the increase indicated that the tactic of oil-market flooding is not working as well as was expected when launched last November.

The next clue that the oil flood will not abate soon comes with estimates of U.S. unconventional oil production efficiency improving dramatically since the oil price started to fall because of the Saudi-led flood.

Shale Drillers Becoming More Efficient

One claim is that U.S. unconventional oil producers are 50% more efficient than this time last year, and that more savings have been identified which could keep oil output at near record levels for months and possibly years.

Saudi Arabia’s rumored resort to the debt market is not a sign that the kingdom is about to “fold,” but it is a pointer to the increasing pressure under which the big oil producer has found itself, with oil income falling as it seeks to spend more on defense to counter the likely reemergence of Iran as a regional power.

A year ago, the Saudi government was confident that the traditional approach to an oil glut, a cut in production, was not the correct approach in the current situation.

The Technology Is Out Of Its Box

The concern was that a production cut would encourage even faster expansion of U.S. unconventional production and a worldwide spread of the technology which has made it possible to extract oil and gas from rocks once considered too tightly packed to ever produce commercial quantities of oil.

Increasing, rather than decreasing output was seen as a clever move because in a war of attrition the leaders of Saudi Arabia were confident that they would win.

But, rather than U.S. unconventional oil producers being squeezed out of business a dangerous game of bluff has developed with everyone in the energy business being hurt in some way.

The question which no-one can answer yet is: Who will blink first because the pain has become too great? While the Saudi debt plan might not be a blink, it is a hint that other gamblers at the oil table might see as a sign of weakness.

[bluecollar]

My back room is full of snap on tools and toys/guns/etc. because no one is working and bills are still due.

It's amazing to listen to some of the guys who have been doing this for years, and STILL cannot figure out how to save money for times like these.

[Sean88gt]

It would be nice to have a pro-energy president and Congress that would offer to bolster the companies in the pursuit of sliding 12" balls deep in the middle east.

[Cooter]

I read this as we are much more efficient than OPEC ever planned.

AKA: f*** you Saudi!!!!

I love that shit too

[Cooter]

My back room is full of snap on tools and toys/guns/etc. because no one is working and bills are still due.

It's amazing to listen to some of the guys who have been doing this for years, and STILL cannot figure out how to save money for times like these.

I'm getting fucking antsy... really hoping for the right property deal to come along within the next year or so. My war chest took a little dip this spring, but it's back and ready to pounce. The wife keeps looking at these tan-slathered retail houses, and I'm like "why the fuck would I pay cash for something that I can easily get traditional financing on?"

[Ruffdaddy]

+10!!! Woot woot!!!

I was gonna guess +4 but forgot to submit my ballot.