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Posted
Dude it’s already out there. PE, large family offices, rich guys (some of our BMDs) have billions committed to companies that don’t have assets, waiting for them and sellers to come together. That is not in question. What is in question is whether they’d pull commitments if prices fall. 
Banks are fatigued much more so than in 2016-2017, which is when they were extremely fatigued after enduring 2015-2016 and the lows of $26/bbl and $1.62/mcf. Because the A&D market has worsened since then, considerably. It is nonexistent right now. And, there is a lot of bank consolidation going on. I know of several whose charge is, “before this merger/takeover, you must jettison all your underperforming energy loans, or the deal doesn’t happen.”  Its significantly worse than it was at any point of the 5.5 year downturn. Banks will take the losses. 
Im sure the hilldebrands of the world will scoop up assets on the cheap. What banks are merging besides iberia and SunTrust deals?
Posted

I’m just curious how Russia can also afford this price war. It seems like it will impact them as much as it will anyone else, won’t it?

Posted

Disclaimer: I know very little about hedge contracts.

What is the likelihood of companies committing an efficient break of a hedge contract? Some companies are hedged at $60 for millions of barrels.

Posted
Disclaimer: I know very little about hedge contracts.

What is the likelihood of companies committing an efficient break of a hedge contract? Some companies are hedged at $60 for millions of barrels.
There is counter party risk but it hasnt been a problem. Until now at least.
Posted
1 hour ago, Hate said:

I’m just curious how Russia can also afford this price war. It seems like it will impact them as much as it will anyone else, won’t it?

They don’t care about ancillary domestic issues if they can destroy sectors in other nations. They also use a ton of slave labor to produce oil 

Posted
23 minutes ago, The Ace of Aces said:

They also use a ton of slave labor to produce oil 

Are they digging their wells using picks and shovels? Hauling their oil in wheelbarrows?

Posted
2 minutes ago, TonyTexas said:

Are they digging their wells using picks and shovels? Hauling their oil in wheelbarrows?

You know Temple of Doom? I assume it’s a lot like that. 

Posted
7 minutes ago, TonyTexas said:

Are they digging their wells using picks and shovels? Hauling their oil in wheelbarrows?

Well with an estimated 800,000 laborers (likely more now after the Ukrainian bullshit) they have manpower for it.

Posted
It’s totally fine but why would they do that unless their banks made them or they’re in default and their banks pulled that trigger for them?
Edit: it’s totally fine because the counterparties are Shell, BP, Cargill, or large banks. Those counterparties are fine. I’m saying they won’t unwind the trade because they stand to preserve their business keeping those trades in place and collecting large settlements. 
Until they need to pay down their bb.
Posted
8 hours ago, LABEVO said:

Lulz I remember when on that other site people are debating peak oil and now we are looking at $30

Peak oil demand was going to happen sometime this decade, but the Coronavirus means we may have already passed it.

Posted

If I had to choose a horse in this race I think that I may go with Russia.

US shale drillers are facing a wave of bankruptcies no matter what. There will be massive consolidation / reorganization with most private equity backed companies disappearing. The “buy and flip” model that has been popular over the past 6-8 years is over.

That leaves OPEC vs Russia. Both rely heavily on O&G revenues for government budgets with breakeven most likely higher than the current market price. The difference is that Saudi Arabia in particular needs the revenue for massive social spending and subsidies that keeps the population from uprising against the royal family. It’s no secret that KSA is the epicenter of the Salafi jihadist movement and based on MbS recent string of arrests for “treason”, it looks like plenty of powerful people in the royal family / military / intelligence groups are not happy. Russia, on the other hand, seems to be almost completely united behind Putin. They have also endured far, far worse suffering than whatever low oil prices will bring. They have a pretty good record in wars of attrition.

  • Like 1
Posted
1 hour ago, Rip76 said:

https://mobile.twitter.com/pickeringenergy/status/1236861642375344128

As I type, front month $WTI is trading ~$28/bbl. From OPEC share announcement in 2014 it took 14-15 months for oil to break $30 (Feb 2016) This time it took less than 1 trading day. Breathtaking! Energy industry, welcome back to Hell. 

Oil was still about $75 prior to the OPEC announcement in Nov 2014 and was $42 on Friday.  I wonder why it took longer to break $30 back then?

Posted
Can US Shale make it work at $20 a barrel?


Lol they weren’t going to make it at $45, hardly at $50. They are fucking sunk. The petroleum engineers were painfully wrong and the finance side levered up
Posted
Quote

MOSCOW, March 9 (Reuters) - Russia’s Finance Ministry said on Monday that the country could weather oil prices of $25 to 30$ per barrel for between six and 10 years after prices plunged in their biggest daily rout since the 1991.

The ministry said it could tap into the country’s National Wealth Fund to ensure macroeconomic stability if low oil prices linger. As of March 1, the fund held more than $150 billion or 9.2% of Russia’s growth domestic product, the ministry said.

https://uk.reuters.com/article/russia-finmin/russia-can-weather-oil-prices-of-25-30-for-6-10-years-ministry-idUKR4N2AC00N

Posted
13 minutes ago, bernorange said:

Russia’s Finance Ministry said on Monday that the country could weather oil prices of $25 to 30$ per barrel for between six and 10 years

Doubt it.  They can last longer than our shale drillers, but they can't hold it down that long.

  • Like 1
Posted
Well, yeah. I don’t think that’s what Eastwood was asking though. 
The meat of my question was more along the lines of why would a company keep their end of a contract that forces them to pay twice market price. For some companies, it might be cheaper to breach then buy at spot price. But, again, I know close to nothing about that side of the business.
Posted
58 minutes ago, Lobwedgephil said:

Can't sell at these prices until bankruptcy, can't buy because there is no money. 

 

Lots of private companies have been waiting for this opportunity for years. Hilcorp is a great example.

Posted
4 minutes ago, HoustonFrog said:

 


Explain....

Hilcorp has plenty of its own issues

 

What issues? Spinning off $700 million annually in organic free cash flow? 

They are in a much better position than many companies that are over levered in shale plays that will never work at sub-$40 oil.

Posted
What issues? Spinning off $700 million annually in organic free cash flow? 
They are in a much better position than many companies that are over levered in shale plays that will never work at sub-$40 oil.


Over levered like the rest. I don’t disagree they are better off than most shale shitcos

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