Energy Stocks Fall Faster Than Oil Prices - GoHaynesvilleShale.com2024-03-29T11:30:50Zhttps://gohaynesvilleshale.com/forum/topics/energy-stocks-fall-faster-than-oil-prices?feed=yes&xn_auth=noHANG:
Let's not forget that A…tag:gohaynesvilleshale.com,2019-10-22:2117179:Comment:38612652019-10-22T16:25:50.547ZDion Warr, CPLhttps://gohaynesvilleshale.com/profile/DionWarr
<p>HANG:</p>
<p>Let's not forget that Aubrey made that pronouncement well after CHK had locked up most of their projected core acreage at an average of below $5,000. He was as much marketing his own position for potential partnership as he was running his late-coming opponents dry of cash. His JVs with Plains in the Haynesville and Statoil in the Marcellus effectively paid off his original land acquisition costs and derisked his acreage and drilling expense while consigning a cash-rich,…</p>
<p>HANG:</p>
<p>Let's not forget that Aubrey made that pronouncement well after CHK had locked up most of their projected core acreage at an average of below $5,000. He was as much marketing his own position for potential partnership as he was running his late-coming opponents dry of cash. His JVs with Plains in the Haynesville and Statoil in the Marcellus effectively paid off his original land acquisition costs and derisked his acreage and drilling expense while consigning a cash-rich, anxious, willing partner to each play.</p>
<p>The problem with other people's money is that other people eventually lose their stomach for our rollercoaster industry, and shift their focus to their unending search for higher returns. Nearly all VC and hedge funds are opportunistic in their strategies - when the opportunity is gone, they pull out as soon as possible and look for the next "big thing". A scant few are actual partners through the entire cycle of boom and bust, hot and cold. If an E&P startup or established outfit is based upon OPM alone, it can be a short ride to oblivion - and the costs of E&P of unconventionals is uniquely punishing to those who do not find consistent and sustainable returns.</p> Lest we forget Aubrey's famou…tag:gohaynesvilleshale.com,2019-10-21:2117179:Comment:38611662019-10-21T23:51:34.286ZHopeful About Natural Gashttps://gohaynesvilleshale.com/profile/HopefulAboutNaturalGas
<p>Lest we forget Aubrey's famous, nearly last words ... "$30,000 an acre is chump change for a lease". He said that not long before the market topped. Aubrey was not the only executive who got caught up in things. Lots of folks (including me) were swept up in its promises.</p>
<p>The Haynesville Rush was a financial mania - almost exactly like a manic episode in a person with bipolar. In both cases reality goes out the window in the up phase, but sooner or later they crash. There will be books…</p>
<p>Lest we forget Aubrey's famous, nearly last words ... "$30,000 an acre is chump change for a lease". He said that not long before the market topped. Aubrey was not the only executive who got caught up in things. Lots of folks (including me) were swept up in its promises.</p>
<p>The Haynesville Rush was a financial mania - almost exactly like a manic episode in a person with bipolar. In both cases reality goes out the window in the up phase, but sooner or later they crash. There will be books written about this for business students. Mania never goes out of style. There is always a new rainbow waiting to be chased.</p>
<p>BUT, the good news is that we as consumers and Americans got a new source of domestic oil and gas with a new technology - and we got back in control over our own energy destiny. I don't like the ultra low prices, but I am glad to have the big supplies.</p>
<p></p> Too much drilling to HBP leas…tag:gohaynesvilleshale.com,2019-10-21:2117179:Comment:38611612019-10-21T23:33:57.421ZGoRickyhttps://gohaynesvilleshale.com/profile/RichardMFoshee
<p>Too much drilling to HBP leases; too much drilling to fulfill long-term drilling contracts (should-a never signed those), too much natural gas production (aggravated by casinghead gas produced from OIL wells), too much drilling, 'hoping prices go up', too many uncompleted wells that keep the glut going as they are completed, too much $$$ paid for other people's problems - - - too much "Too Much" ...</p>
<p>Too much drilling to HBP leases; too much drilling to fulfill long-term drilling contracts (should-a never signed those), too much natural gas production (aggravated by casinghead gas produced from OIL wells), too much drilling, 'hoping prices go up', too many uncompleted wells that keep the glut going as they are completed, too much $$$ paid for other people's problems - - - too much "Too Much" ...</p> Gotta ya, I agree-I think as…tag:gohaynesvilleshale.com,2019-10-20:2117179:Comment:38608982019-10-20T00:18:49.188ZGARY SHEFFIELDhttps://gohaynesvilleshale.com/profile/GARYSHEFFIELD
<p>Gotta ya, I agree-I think as far as natural gas is concerned, it is just a matter of time before it reaches equilibrium-post build-out of LNG facilities, pipelines, etc...but in the meantime they are in the same boat, to much production and not enough take away, for whatever use.</p>
<p>Gotta ya, I agree-I think as far as natural gas is concerned, it is just a matter of time before it reaches equilibrium-post build-out of LNG facilities, pipelines, etc...but in the meantime they are in the same boat, to much production and not enough take away, for whatever use.</p> No need to price fix, simply…tag:gohaynesvilleshale.com,2019-10-20:2117179:Comment:38609672019-10-20T00:12:46.202ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>No need to price fix, simply slow the pace of development. It is the companies that have no choice but to drill at a pace that will cover their heavy debt obligations and operating overhead that sustain the supply glut. I'm not sure what the breakeven crude price is in the Permian and other oil basins but Haynesville operators have an average of $2.30/mcf break even. So stable natural gas prices around $3 provide an acceptable return on investment and serves to keep natural gas cheap…</p>
<p>No need to price fix, simply slow the pace of development. It is the companies that have no choice but to drill at a pace that will cover their heavy debt obligations and operating overhead that sustain the supply glut. I'm not sure what the breakeven crude price is in the Permian and other oil basins but Haynesville operators have an average of $2.30/mcf break even. So stable natural gas prices around $3 provide an acceptable return on investment and serves to keep natural gas cheap enough for continued electric generation switching and LNG profitability. You don't have to move the needle much to create a much more healthy situation for natural gas. Natural gas is a different story than crude. A much more global equation as you correctly point out. </p>
<p></p> Yeah Skip, I really have not…tag:gohaynesvilleshale.com,2019-10-19:2117179:Comment:38607452019-10-19T23:59:09.733ZGARY SHEFFIELDhttps://gohaynesvilleshale.com/profile/GARYSHEFFIELD
<p>Yeah Skip, I really have not thought of that angel. I had often wondered what OPEC+ was going to do, I would not think they can just keep cutting and cutting production while we keep the spigot wide open and pushing! I had this discussion with someone, the other day, and said that the Arabs, Russians, etc.. own their own oil and produce it themselves or control it, with no royalties, little oversite and environmental or safety concerns, probably low pay for there own workforce, basically can…</p>
<p>Yeah Skip, I really have not thought of that angel. I had often wondered what OPEC+ was going to do, I would not think they can just keep cutting and cutting production while we keep the spigot wide open and pushing! I had this discussion with someone, the other day, and said that the Arabs, Russians, etc.. own their own oil and produce it themselves or control it, with no royalties, little oversite and environmental or safety concerns, probably low pay for there own workforce, basically can produce there oil and gas, a lot cheaper-whereas America is not controlled by one entity, and you can not tell all the oil companies to do anything and letting market conditions control, apparently, is not working. But, you are right, if there was more consolidation then maybe this would be ONE time when it would be good to not have as much competition and a sort of agreement or modified "price fixing" so the industry does not fall apart and it cost more to fix it, than save it after the fact. I don't think anyone thinks, we do not half to have oil and gas, at least for the foreseeable future. </p>
<p></p> It was a silly season indeed,…tag:gohaynesvilleshale.com,2019-10-19:2117179:Comment:38608932019-10-19T21:17:45.995ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>It was a silly season indeed, Martin. From the $30K+/acre that Petrohawk paid in south Caddo (with a 30% royalty) to the $25K/acre that XTO paid in north Natchitoches Parish. Then, companies had more acres under short term leases than they could comfortably drill. They had to drill to hold those leases as the price of natural gas took a tumble. In June 2008, before drilling really got started, NG was $12.69/mcf. By June of 2009, it was $3.80/mcf.</p>
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<p>It was a silly season indeed, Martin. From the $30K+/acre that Petrohawk paid in south Caddo (with a 30% royalty) to the $25K/acre that XTO paid in north Natchitoches Parish. Then, companies had more acres under short term leases than they could comfortably drill. They had to drill to hold those leases as the price of natural gas took a tumble. In June 2008, before drilling really got started, NG was $12.69/mcf. By June of 2009, it was $3.80/mcf.</p>
<p></p> Indeed Skip. I can remember w…tag:gohaynesvilleshale.com,2019-10-19:2117179:Comment:38607392019-10-19T20:40:54.525ZMartinhttps://gohaynesvilleshale.com/profile/jcmagness
<p>Indeed Skip. I can remember when lease signing bonuses were reaching $12,000.00/acre in 2008 & 29009, by Cheasapeake. And that was in Sabine par<font color="#3C3C3C">ish.</font></p>
<p></p>
<p><font color="#3C3C3C"> Another driver of crude oil prices is international. Iran. Plus OPEC production limitations.</font></p>
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<p><font color="#3C3C3C"> And Schlumberget lost over 2 billion in the third quarter this year</font></p>
<p>Indeed Skip. I can remember when lease signing bonuses were reaching $12,000.00/acre in 2008 & 29009, by Cheasapeake. And that was in Sabine par<font color="#3C3C3C">ish.</font></p>
<p></p>
<p><font color="#3C3C3C"> Another driver of crude oil prices is international. Iran. Plus OPEC production limitations.</font></p>
<p></p>
<p><font color="#3C3C3C"> And Schlumberget lost over 2 billion in the third quarter this year</font></p> Thanks, Gary. I am afraid th…tag:gohaynesvilleshale.com,2019-10-18:2117179:Comment:38608702019-10-18T23:38:50.448ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Thanks, Gary. I am afraid that the only good option left to remedy this over supply situation is consolidation. The majors and super majors, particularly those that are vertically integrated, not only have more capital to weather the low commodity price environment, they do not have to drill to maintain cash flow and service debt. They can slow the pace of supply until it better matches demand which should boost prices. I worry about the pressure on field service companies which…</p>
<p>Thanks, Gary. I am afraid that the only good option left to remedy this over supply situation is consolidation. The majors and super majors, particularly those that are vertically integrated, not only have more capital to weather the low commodity price environment, they do not have to drill to maintain cash flow and service debt. They can slow the pace of supply until it better matches demand which should boost prices. I worry about the pressure on field service companies which represent a lot of the jobs in the patch. Low commodity prices have caused operators to put pressure on them to reduce their prices when many are as vulnerable as the operators. The trend we are in now is destructive and needs a solution sooner than later.</p>
<p></p> I agree Skip
tag:gohaynesvilleshale.com,2019-10-18:2117179:Comment:38607762019-10-18T23:31:01.245ZGARY SHEFFIELDhttps://gohaynesvilleshale.com/profile/GARYSHEFFIELD
<p>I agree Skip</p>
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<p>I agree Skip</p>
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