Jump to content

sunset87

Certifiably Surly
  • Posts

    463
  • Joined

  • Last visited

Everything posted by sunset87

  1. The author of that article, Art Berman, was an early skeptic of the economics of shale plays. He wrote quite a few articles on the subject. I think in this article he is implying that we are going to see a huge reset of the world economy. Which will take a very long time to recover back to what we consider “normal”. According to him maybe never. How long is the real question.
  2. You can produce your wells a few days during the month so that you are reporting production and holding leases. The key is to not sell oil during this time. You need ample storage in your tank batteries to be able to produce a little oil for several months but not have to sell the stuff.
  3. Admittedly, I am not as well versed as others in my company on what other options we had for loan products. The better ability we have to minimize our losses the better chance we have to keep our employees. Again, happy to have help and we don’t plan on letting anyone go, unless this drags on for quite a while. Which would probably mean we’re done anyway. Just pointing out it would be nice to have some options.
  4. Yeah I get that, but I don’t see the harm in having a longer term for use. Like 6 months or a year. It’s fine if they want to tie the funding to a two month pay period, but some latitude on when and how you use it seems to make a lot more sense. All that being said, I’m thankful and feel somewhat lucky we got funded.
  5. This has probably already been discussed but, our business has received the PPP funding through a small bank. I guess you have to use all of the money in 8 weeks and return what is not used. So if we were allowed to use the money for as long as possible, we could have cut or employees salaries by 25% and covered our losses for maybe 4 or 5 months with the loan money. Instead we are going to pay full salaries for 8 weeks. Otherwise we leave money on the table that we couldn’t use. The loan would have been much more beneficial and efficient if we could spread it out over time. Because this thing is going to last a lot longer than 8 weeks.
  6. I guess we’re going to rip the band-aid off, skin and all.
  7. You must feel pretty special...
  8. Yeah were not selling. That is just the likely scenario if we had to for some reason.
  9. By the way, anyone with banks or financial institutions that are taking possession of O&G properties and are looking for a contract operating arrangement, PM me. We have been producing/operating for 50 years and have 0 debt.
  10. We operate one lease in Hidalgo County, Tx (deep south Texas). It's one of the worst areas in Texas for transportation costs. Our trucking/deduct number is going to $13.00/barrel in May. Using the standard purchasing formula (subbing Houston/Cush differential for the Mid/Cush diff.) for that lease, the May oil price numbers are likely to be negative! We would have to pay the oil purchaser to come get our oil...😬
  11. For Permian producers, May's pricing using the standard WTI posting (not Nymex) formula, with about a week to go for determining the P+ and the WTI/Cushing differential (for Permian crude), is currently at P+ $-2.3, WTI/Cush diff $-5.00. So subtract whatever your deduct/trucking number is from the oil purchaser (maybe around $2.50 as an estimate for leases in the Permian). In this scenario you are looking at (using current monthly averages for P+, and WTI/Cush diff.) around $-10.00/bbl + whatever the WTI posting averages for May. Right now WTI posting is in the $16 to $17 dollar range. If that pricing continues into May (most people think it will, but who knows), you are looking at $6 to $7 a barrel for oil at the wellhead price for producers in May. tldr: lots of wells are going to be shut-in in the upcoming months
  12. Yeah no doubt the high rate horizontals are profitable at $20, but do you want to produce those wells with that price environment. It's got to put a big dent in the economics if you have to produce them for very long at those prices. On the other hand, you've got to pay the bills... Unfortunately, our company is strictly conventional and a lot of it is older production.
  13. We booked a European trip through EF Ultimate Break back in November for a trip in May for our daughter, and paid for the trip insurance. They are telling us we can receive credit and book another trip, but if we cancel they keep about 15% of the total cost. She can't go any time this summer or next and has no idea about her future schedule because of graduating from college in 2 years, so we want the refund. It seems like 15% of the total cost of the trip would be close to their profit margin in normal times. They say they are taking losses from having to cancel hotels, etc..., but I would think they would have insurance for that scenario. Feels like they aren't losing much of anything if you cancel, even if you bought the trip insurance. Are you still going on your trip?
  14. We operate, and are having some heated discussions on this topic right now.
  15. I guess hedged oil is the biggest problem, supply wise, for domestic production in 2020. Assuming it can be sold. I would think the percentage of production that is profitable at $20 to $25/bbl can't be too high. If companies start shutting in production losing money, that should take a fair amount off the market. Do companies shutting in or reducing production reduce AO to working interest owners? Profitability from our companies production in the $20 dollar range is fugly, like 10 to 20%. Of course we have a bunch of stripper wells.
  16. I’m not sure I agree with his statement about lifting costs for shale wells being minuscule. Relative to offshore maybe, but submersibles are not cheap to run. Operating expenses are quite a bit higher than your average domestic onshore well, simply because of the complexity and nature of horizontal wells. There will be a quick ramp up, whenever that occurs, because of the stock pile of DUCs.
  17. Might be at some point. Right now we are getting cancellation notices from our oil purchasers starting May 1. So, not sure how long that will go on, and how or if it will effect well performance when the wells are put back on production. I think most people are just trying to strategize on how to stay a float, for who knows how long. I'm sure there are companies that are in a position to take advantage, but many more are not.
  18. Obviously a gutted US shale industry is win for SA and Russia. I'm just wondering if the whole tiff between these two wasn't orchestrated. Their main goal is to hurt US shale not each other. Maybe too tinfoil...
  19. Could the Saudis and Russia be playing some kind of behind the scenes, end game, to blow up the US shale industry?
  20. I got sick around February 28th. It lasted about 4 to 5 days, dry cough, aches, low grade fever. Tested negative for the flu (had a flu shot) but it felt like a mild case of the flu. I just assumed it was a garden variety virus of some sort.
  21. This may have already been covered, but what are the prevailing thoughts on this exhibiting seasonality? If it does, that might create some time to develop some vaccines and meds.
  22. I guess it depends on your perspective. I was around, just starting my career for the 86' one, and I'm a native Midlander. It just about buried this town. Bank failures, massive layoffs, company bankruptcies left and right. It was ugly. Like I said, it may get that bad again, but right now team shale doesn't seem to be getting the message.. Yes, it has slowed down and it needed to. The musical chairs have finally started stopping. It's not a surprise to a lot of people. This has been more of a technology boom and bust not price controlled like 86' and others.
×
×
  • Create New...