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936horn

By 936horn
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Llano Estacado

Llano Estacado 1257

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For the week ending 4/3/20, we had a 600,000 bopd reduction to 12.4 MMBBLS. We need to convince the world we’re gonna get down to 10.5/11 MMBBLS/D. I think that will happen but I’m not a foreign oil minister.


Assuming this subject was broached last week at the CEO meeting. POTUS does the messaging with inputs from DOE, DOI, BH rig count, and private sector?

Had a remote conversation w/ coworkers, but don’t see how US Shale could ever join OPEC++ type agreement on anything stronger than handshake agreement.

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Llano Estacado

Llano Estacado 1257

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It would have to be a national mandate. Too many states need royalties/taxes for budgets and have differing government agencies. I have no idea on US production vol % by state, but as soon as TxRRC set production numbers for the majors in the Permian to comply with OPEC++, you know some jackwagon Delaware Basin wildcatter operating out of Carlsbad would complete a bunch of wells.

At this time US can’t promise anything aside from “market is going to drive market”...which we back of envelope, after talking to CEOs, DOE, and state agencies ball park at around the round number of xxBOPD +/- 10% and a 6 week window.

Unreal is right.

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Storm the Field

Storm the Field 5294

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14 minutes ago, Lobwedgephil said:

Looks like a Russia-OPEC deal has been made, up to 20M barrels/day. 

Yeah, I'm gonna wait until I see an announcement of the actual number. The 20M barrel thing is so far "rumored" or "reportedly."

One report I saw was that Saudis would cut 4M, Russia 2M. Where the other 14 gonna come from?

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Lobwedgephil

Lobwedgephil 1139

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3 minutes ago, Storm the Field said:

Yeah, I'm gonna wait until I see an announcement of the actual number. The 20M barrel thing is so far "rumored" or "reportedly."

One report I saw was that Saudis would cut 4M, Russia 2M. Where the other 14 gonna come from?

Yeah I don't know how they get there either, sad thing is that massive number would still not be enough. I just said the number CNBC was mentioning, haven't seen any details yet. 

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Lobwedgephil

Lobwedgephil 1139

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4 minutes ago, Dr. Beeper said:

I am reading the reason why oil is dropping from its modest gains this morning is because the market don’t believe the 10 MMBBLS/D cut Is enough. The market is reacting rationally. 

Haven't read anything about a 20 MM cut. I don’t know how that’s possible. 

Was just the number said on CNBC, haven't seen a real number or confirmation of one either. 

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Lobwedgephil

Lobwedgephil 1139

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4 minutes ago, Dr. Beeper said:

Whoa. If there is substance to it that is huge. I just don’t see how it’s possible?

I guess they got the number from this. 

 

DUBAI/MOSCOW/LONDON (Reuters) - OPEC and other oil nations held talks on Thursday on record production cuts of up to 20 million barrels per day, equivalent to about 20% of global supplies, to support prices hammered by the coronavirus crisis, OPEC and Russian sources said. 

Talks have been complicated by frictions between OPEC leader Saudi Arabia and non-OPEC Russia, but OPEC and Russian sources said they had managed to overcome differences. 

“That is a global deal,” one OPEC source said, without specifying whether it would involve the participation of the United States, something Russia and OPEC producers have insisted on. 

 

 

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Storm the Field

Storm the Field 5294

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Latest details I'm seeing on OPEC+ meeting:

Somewhere around ~12M/day cut through end of June, followed by ~8M/day through the end of the year, followed by ~6M/day through April 2022.

Also, possible that an outline of a deal gets announced today, formal announcement tomorrow in conjunction with G-20.

Source: https://twitter.com/Amena__Bakr

 

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Trey3216

Trey3216 15346

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27 minutes ago, Dr. Beeper said:

Very difficult to find any reliable info on the cut. Would be very difficult to promise, quantify, and enforce any US cut. But we will be cutting whether mandated or not.

Yep, our cuts will be the recourse for drilling into absurdity and over leveraging debts 

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sunset87

sunset87 240

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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.

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Trey3216

Trey3216 15346

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28 minutes ago, Dr. Beeper said:

Everyone wants their own company and banks and PE were happy to provide the capital. Through BKs, troubled companies shutting in, lack of new completions, and other measures, we're gonna drop and drop fast. It won’t be long until we get to 10 mmbbls/d. 

Yep 

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sunset87

sunset87 240

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4 minutes ago, Dr. Beeper said:

The op / non-op component is really interesting, but I don’t think nonops can do a damn thing about it, and this highlights why you’d want to be an operator, always. I say this as one with ties to two nonop positions

We operate, and are having some heated discussions on this topic right now.

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Archer

Archer 474

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1 hour ago, sunset87 said:

I would think the percentage of production that is profitable at $20 to $25/bbl can't be too high. 

It depends on how you look at it, by well count you're correct that most wells are not going to be profitable at $20. On a production basis I bet a lot more is profitable than thought with the decline rates of the big shale rates and how much they produce early time. 
 

At $20 40%+ of my wells are losing but 98% of my production is profitable. Mix of strippers and horizontals 

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sunset87

sunset87 240

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31 minutes ago, Archer said:

It depends on how you look at it, by well count you're correct that most wells are not going to be profitable at $20. On a production basis I bet a lot more is profitable than thought with the decline rates of the big shale rates and how much they produce early time. 
 

At $20 40%+ of my wells are losing but 98% of my production is profitable. Mix of strippers and horizontals 

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.

Edited by sunset87
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Planet Houston

Planet Houston 4930

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39 minutes ago, HoustonFrog said:

 

Who is @HoustonFrog on in the #EFT world? I know one of those guys revealed he went to TCU the other day, but they all run together...

I’m surprised that there isn’t a bigger intersection between Surly/Shaggy and EFT. Similar type of assholes who love to shit on Aggy.  Anyone else?

Anyhow, US shale is FUBAR, cuts or not. 

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HoustonFrog

HoustonFrog 368

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It’s a corner of Twitter with a bunch of oil and gas finance guys. EnergyFinTwit I believe is the moniker they came up with. They spend their days combing through 10-Ks, 8-Ks, proxies and other filings of oil and gas companies, and justifiably rip into the bullshit and cronyism. 

Bingo

I think most are currently in O&G finance, and for obvious reasons can’t really put a face to the name.

I’m a relative newbie to the O&G finance, and it took me until 6-8 months ago to figure it out, but there’s so much bullshit. And the petroleum engineers and geologists fundamentally blew it on shale.

It’s all about Management... amazing how a couple clients are going to be totally fine unless this lingers 18+ months at sub $35/$2.00. They didn’t do anything special, they didn’t reinvent the wheel, they just take care of business by keeping G&A low and opportunistically hedging at any opportunity.

I fucking begged people to hedge when oil spiked into the $60s last year... fucking begged and most all of them didn’t do shit or put on a couple hedges. No surprise the morons who did nothing are about to file in next couple months.
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DCA_HORN

DCA_HORN 725

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Bingo

I think most are currently in O&G finance, and for obvious reasons can’t really put a face to the name.

I’m a relative newbie to the O&G finance, and it took me until 6-8 months ago to figure it out, but there’s so much bullshit. And the petroleum engineers and geologists fundamentally blew it on shale.

It’s all about Management... amazing how a couple clients are going to be totally fine unless this lingers 18+ months at sub $35/$2.00. They didn’t do anything special, they didn’t reinvent the wheel, they just take care of business by keeping G&A low and opportunistically hedging at any opportunity.

I fucking begged people to hedge when oil spiked into the $60s last year... fucking begged and most all of them didn’t do shit or put on a couple hedges. No surprise the morons who did nothing are about to file in next couple months.
Well how dare you expect them to hedge into a backwardated curve? How can you expect me to hedge into a con tango market? Prices are going up!
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