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19 US Shale Areas That Are Suddenly Endangered, "The Shale Revolution Doesn't Work At $80"
Despite the constant blather that lower oil prices are "unequivocally good" for America, we suspect companies working and people living these 19 Shale regions will have a different perspective...
Drilling for oil in 19 shale regions loses money at $75 a barrel, according to calculations by Bloomberg New Energy Finance. Those areas pumped about 413,000 barrels a day, according to the latest data available from Drillinginfo Inc. and company presentations.
“Everybody is trying to put a very happy spin on their ability to weather $80 oil, but a lot of that is just smoke,” said Daniel Dicker, president of MercBloc Wealth Management Solutions with 25 years’ experience trading crude on the New York Mercantile Exchange. “The shale revolution doesn’t work at $80, period.”
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We endangered some folks
Someone needs to do a data mashup on this - the red/blue voting records overlaid on the map. I bet it would be very telling.
We manipulate some markets.
Jeffrey Skillling is doing hard time for Enron doing the exact same thing that our government now does every single day...manipulate the energy market.
Too funny. "But we've doubled the price of nat gas and screwed everybody including theMarine Corps! What's the problem?"
So is oil crashing the long awaited Black Swan!?
Hey.. It's even the right color!
Oil at $75!!!
This bitch is going to $40, because that's what the House of Saud wants and they are financially insulated to that price!
That will destroy all the competition and there enemies all in one swoop, so if you think the shit is getting serious at $80, man you haven't seen pain yet!!
I'm going to but myself a really cheap jet ski and fishing boat from Texas next year, that's for sure:)
Our own producers can't survive at 40 dollars a barrel. They are doing everything they can to hurt russia, but I think they are playing a dangeorus game.
Oil at 40USD for a prolonged period of time?
Uh-oh, I see a group of peaceful young protesters on the streets of Riyadh protesting against the oppressive, tyrannical and totaly undemocratic (not cool!) House of Saud. And, yeah, Vicky will be there handing her home-made cookies left and right.
The Black Swan is one you didn't see coming.
The peak oil crowd has been bubbling over about the shale bubble since the boom began.
I drill in the eagleford and permian. Those numbers are bullshit.
Meanwhile... back in reality.... Triple digit returns at $80 WTI..... 10% at 40 bucks a barrel. https://www.linkedin.com/pulse/article/20141124234334-79760909-eog-plans...
How perfect it would be if "The Shale Oil Miracle" bursted "The Recovery."
Not so hard- he's doing his time at an Air Force base in a warm-ish Alabama minimum security country club. He'll gets out in 2 years, with his offshore accounts intact...... Hell, they lopped off 10 years of his sentence for bothering to show up at all.....
Oil and gold prices falling is part of an economic war against Russia. No coincidence this started happening after Ukraine flared up.
I wouldn't say November is right after February
an ineffective economic war
.
You know ' h_h' it's not rocket science what these clowns are doing... When you have unlimited access to liquidity you could be an 8 year old riding around in a wheelchair yelling " Timmah- Timmah" and still make money.
along with every other
just another collapsing empire trying financial tricks to hide what the world already knows
I bet that they would be fine at $60 if they didn't spend money like idiots because oil was $100 and they are in a rush to get it out of the ground.
The wells that are already producing will continue to produce just fine. The capex was already spent and stopping now would mean the lenders won't get paid. The loans will be renegotiated or the debt holders will take over. They're not going to shut them down. The problem is no new projects, which will hurt all the oil service and equipment companies and construction industry like CAT.
arms dealers don't care who wins the war, they just care when the war stops
Ya can't have winners without a few losers. Tuff shit.
I'm sure they'll be comforted by their participation trophies AKA debt obligations.
Those at the top already were rewarded well through salaries and bonuses. The debt is left to all of the small suppliers that gave them credit.
We, that's all falks
Shale boom
shale bust
the coming layoffs in the energy and automotive sector ... will be messy
The automotive layoffs will start as soon as they run out of empty parking lots to put the new cars in.
They should start parking them in Mexico as a convenience for when the world turns Mad Max.
I wonder how many of those roughnecks went out and bought a $50K truck when they got the $30/hr job on the rigs. As the job market gets worse on the rigs, the pay will drop to $25 then $20. Then you have 5 million new illegals who can now legally work. Why pay an American $20 when you can pay an illegal $15?
You nailed it!!! Living in the godforsaken cesspool that is Midland Texas during the 80s, I remember the line of trucks, motorcycles, RVs, etc. along Wadley Avenue. All for sale due to the owners no longer making the big bucks working on the rigs. They have managed to work themselves into a deeper hole this time with even more mcmansion communities and everyone thinking the money will last forever.
It is already starting to hit them. The best business to own in Midland right now is a pawn shop, car title loan place or a payday loan joint.
That place has all the ignorance of a small town and none of the charm.
I don't think $150.00 40" FLAT SCREEN TV's are going to save Q-4.
The lame stream financial talking heads will continue with their lies. I've read a dozen articles claiming sales and profits are up when in reality both the top and bottom lines were down for a vast majority of companies that reported. The only thing that went up was EPS due to share repurchases. There are also dozens of articles claming that corporate balance sheets have been fixed and debt is lower now than before the crash. Another complete lie as the majority of companies borrowed money or emptied their bank accounts for the share repurchases.
I agree whole heartedly with your comment.
And the biggest sellers back to the companies were their own officers. Insider selling WAYYYYY up.
Bottled water is still more expensive than oil and water falls from the sky for free.
can you imagine people in NYC paying to drink bottled water, from fucking Fiji, that is in terms of fecal count, likely worse than NYC tapwater?
... no need to imagine, friend - that's the modern quasi-free market - no government interfuckingventionism, just getting people to believe it makes sense to pay a lot for what they could have for free or near free...
http://www.omgfacts.com/lists/12685/Fiji-Water-contains-several-contamin...
Shipping water in 20 oz bottles from fucing Fiji to the east coast of the US is anything but "economical."
The real atrocity is not shipping 20oz water bottles from Fiji. You gotta remember - they ship empty water bottles to Fiji to get filled up. Empty fucking water bottles...
Na, it's really simple to 'inflate' a water bottle from the blank plastic slugs, (can't remember the actual name for the things), anyway, it's done at the bottling plant.
All I know is that I purchased 2 - 16.9 ounce bottles of water at the gas station, cost = $2.50; gas where I live = $2.49 per gallon.
The two bottles I purchased were 16.9 ounces each so 34 ounces. There are 128 ounces in a gallon.
So yeah...bottled water is fracking expensive.
Gas is generally the cheapest thing you can buy at a gas station.
I once got five days of diahrrea from drinking the water in fiji.
Folk who pay extra to drink imported water from places like Fiji make up for it by reducing their carbon footprint with a Prius.
In California we drink oil diluted with Aquafarian water.
California aquifers contaminated with billions of gallons of fracking wastewater — RT USA
Maybe that's why everyone I've met from CA seems to have a learning disability.
That's unfortunate. I was born and raised in California and agree there's a lot of fruits and nuts.
There's also some great enclaves of sanity. ;-) Albeit I only spend about 1/2 my time there nowadays.
Perhaps your learning disability has somehow impaired your discernment, lol......
"...lot of fruits and nuts."
And don't forget the flakes. I teach there (here); and there are seniors in high school that don't know the multiplication facts. Multiply or divide fractions? Are you fucking kidding...
But of course you can't say anything aloud about the facts of the situation in front of anyone in administration: "There are just a few gaps in their knowledge. They can all go to Harvard. You are now on notice for insubordination!"
Bottled water is more expensive because it must first fracking in groundwater.
hehe.
Fortunately bottled water DOES NOT fall from the sky yet... not even for a price...
Elephants do not have wings, watermelons grow in the soil.
My point was, you don't want a rain of bottled water... and you pay for the bottling operation, not for the water itself. What was yours ? By the way, do dig much for your watermelons ?
My point was a joke.
Wings with elephants cagariam in your head and kill you and your water bottles falling from the sky and a palm tree that watermelons.
Bottled water without fracking needs Geological Survey in the mine, an insane structure of hygiene, a number of security measures for filling and sealing the container.
Do not forget that those recyclable water bottles shall be valid as well as the cost of shipping.
Water can come out of heaven from hell (aquifers) or the air conditioner drains, you choose.
I swear I tried to make a joke but their lack of knowledge is so great that I had to draw you why water so expensive.
Oh, my watermelons are good, here in Brazil the lack of rainfall is seasonal, we are accustomed.
No hard feelings.
No "-" you.
:-)
Bullshit. Not anymore.
The food is next. Chemtrailing here has nuked all deciduous trees.
Dream on.
Ha, Dupont Chroma Premeier Ferrari Fly Yellow is $122 a pint.
That's over $1000 a gallon fukkerz.
Go whine somewhere else about expensive water or gas.
Look - shale was a stupid fuckin' idea anyway.
So is buying Saudi oil and not Iranian.
Shale == QE == buying time
dup
Not to worry, Obama's executive enviro actions and EPA regulations kicking in will soon have oil at $150/bbl, gas at the pump $7.50, and your refrigerator and air conditioner will be criminalized and turned into black market items.
Look at cheap oil's bright side....demand for Teslas will soaaaar ! .. <cackles>
and solyndra will rise from the ashes!!
Daniel Yergin disagrees:
"About 80 percent of shale “oil production coming into the system in 2015 would be economic between $50 and $69 a barrel,” Yergin said. “I think there was an assumption among OPEC countries and, you know, Europeans and others, kind of below $90 the shale gas, the shale oil, would not be viable.”
http://www.businessweek.com/news/2014-11-21/opec-underestimated-resilien...
Here’s a list of break-even points for some of America’s biggest shale-oil regions. Note that most regions continue to be profitable below $80, including the Bakken and Eagle Ford formations, two of the most important sources. Much of the Eagle Ford play would still be profitable with $50 oil.
http://www.bloomberg.com/image/iXaVTKmyvJfo.jpg
Spare me the BS. They haven't been profitable when the oil was 110 $ per barrel, it was just the "free money" that helped them survive. They'll do MUCH worse at 80 $ per barrel. I would't trust Bloomberg to tell me the time...
Bloomberg = cheerleader
Good news for residents, their drinking water will smell less ass-y in the future.
see my comments above. they will probably get worse. who is really going to stop these guys from ruining the environment, when people with lobbies have money to lose?
:) - nice job fcking over other people thinking you can profit and just move on.
This is a short term issue....
BS...its called consolidation...efficiency of large numbers
I sang the ball two months ago, said they worked refineries.
There is estranhem "ISIS" lead to fame when some pipelines, refineries and ports begin to explode in the Middle East ...
Or ...
The oil extraction Shale will pro bag ...
The cards are on the table, who the fuck blink.
hehe.
What.........................................................................................................................................
@ Bitterwolf:
Again need to draw ...
Oil extraction in the US is not feasible to less than $ 80.00.
Middle East can explore oil and sell at a profit to $ 45.00.
There are two options:
Sabotaging refineries and pipelines in Iraq and Libya blaming ISIS for such a thing abject and thus increase the price of oil or ...
Accept the price of oil and let fuck all gas extraction industry Shale from Canada to the US.
Next time you put "What ......" at some comment from me, I ask you to read more about how things happen in the world.
Geopolitics is a specific matter.
No hard feelings or "-" to you.
Regards.
Alexandre.
@ Bitterwolf:
There is another thing known as time zone I'm in Brazil, here are 23: 55h, the temperature is 24,7º Celsius, 56% humidity, I'm at 1,100 meters of altitude in full Central Plateau of a part of my country with very proud to be part of the BRICS.
If I'm sorry the delay in response.
hehe.
not surprised
with wells bringing in 150 - 200 barrels a day, how long do invesors have to wait till they break even? @$80? @$60? @$40?
Am I the only one that remembers when this happened in the early 80's to Colorado Western Slope oil shale? Iranian crisis ended with the election of Regan, "fear eased, so did the price of oil, and furthur oil shale development ceased. Grand Junction housing prices were depressed for most of the decade after the collapse.
Not only... I remember 80's boom was not long
Agree with this article about the Mississippi Lime. I know it some.
Near three Years back guy contacted us for drilling lease offer per acre many times above price from
last boom for our NorthCentral OK lands.
Was actually a established good rep company...
that was time of uphill mood...now hearing much negative
We doubt as usual for boom, but always take the monies..
It is crazy amount spending and equip around there...We seen it before, but
never like this...and always before it bust and bankrupt.
They said were in hurry to drill, then time passed, more of same...
now near lease expire, doubt they will drill at all
Extreme greed and easy money more than ever before and improved marketing to
seperate $ from gullible investors.
Its always the same, only worse
And where more frack, more earthquakes than ever....
You do not know us from other countries that we know what is happening in the Empire, we are terrified!
An earthquake the first thing is to stay away from shattering glass, second is to run away from buildings.
BRICS, Holland, Germany to a lesser extent, France and Switzerland, the enlightened citizens came to the conclusion that gold is the currency.
Before them, Hugo Chavez of Venezuela who was killed by polonium could repatriate their gold, Gaddafi in Libya had gold to the mountains and was killed blatantly, Ukraine had some 32 tons.
Ukraine was interesting, one of these days I tell the story I was told ...
hehe.
Drill and they will come. Who could know that price is suddenly an equation of supply and demand?
It does work at $80 and below. Costs are way overstated and stacks of fat are build into every aspect of the operation.
mountainman is probably correct. $80 is based on making an attempt not to completely destroy the surrounding environment.
take away keeping the environment clean - and prices probably drop hugely.
thanks for that - i haven't seen anybody else here state that. - so, we know what's next, what we had before.
a lot of people with cancers and a lot of places that if anybody wants to live, will give them short horrible lifes and families and lots of cancer and other health problems.
nice one.. thank allah for profits!
Can you or someone else illustrate such stacks of fat, .gov or otherwise?
Forget the shale energy "revolution". The Saudis will crush to oblivion.
Sorry for the blokes who invested in it, tough. Tough luck. That's free trade and unregulated free competition for ya, BTW: use all means available to kill the competition, no-holds-barred Battle Mode.
Let this be a lesson to libertarians, who keep bleating "free trade, no regulations and liberty".
Suckers.
Pretty sure being a libertarian has jack shit to do with this.
Basic math.
You're damn right it is about unregulated free trade. It should be a pure competition and may the best man win. Anytime you start giving handicaps and favors, it spirals into the over-regulated, corrupt mess we have today. If the US gov hadn't been propping up militarily and subsidising the Saudis all this time, they wouldn't be able to drop the price. There is regulation, dummy. Regulation works both ways; when you make things easier for someone else, you by default make it harder on the other guy. Quit being so simple minded and "union" like. I don't want any gov office making my job harder OR easier. They need to stay out of the way and let the market regulate itself.
Now whose the sucker?
A comapny in the eagle ford i am invested in, is Break even @ $44 and currently hedged sales till 2015 end @ $90
What is the depletion rate of the well? What is the depreciation length of the CAPEX? What is the payback period on the well?
What company is that?? 44 bucks?
And the lower the price of oil, the lower their exorbitant royalty payments.
When oil is $100/barrel you exploit some $100/barrel areas.
When oil is $75/barrel you don't.
And even the frackers who have an initial cost down around $50/barrel see the per-barrel price rise very quickly, and will now presumably have to shut wells down much earlier than before.
It will seek its own level, and my guess is that around $70 for WTIC will be the support line for the next year.
Remember inflation - $80/barrel today is like $60/barrel five years ago.
.....couldn't see this coming.
LOL
Nope
Flow is a magic word.
Few people see the water flow in the river, when they arrive at the waterfall is simple claim that they did not know the abyss!
Kkkkkkkkkkkkkkkkkkkkkk!
Barter is another magic word!
Pure and simple exchange of products!
Politically Incorrect between Banksters, it is!
hehe.
Before some high-school-educated hicks blow a gasket, remember that losses can be greater when drilling stops than when selling oil below break-even price. Some areas will keep drilling even when market price drops below break-even because that's the best business descision.
Not really convinced this price war is about "competition" in the oil patch.
Saudi's economy doesn't need the oil industry the way our economy does. 90% of their people live in poverty and the people with money have enough to fuel a bonfire for the next 30 years. They don't "need" the income the way our independent, self-employed small business people do.
I am more convinced it is a squeeze on geopolitical rivals like Russia, Brazil, Iran, etc. I think Russia is he wild card, maverick today that is not playing nice with the NWO bunch. Russia is the muscle behind all the other "rebels" out there. If you are not playing ball with DC and Brussels, then you are the enemy. Russia is Saudi's enemy when it comes to Iran and Syria. The lines are getting clearer by the month. I am just wondering how much longer before someone lights this candle.
Crushing independent small business minded entreprenuers in the once land of the free -- bonus for NWO bunch, but not primary goal in this price war.
JMHO.
Most of it's not profitable even at $120.
The production decline of shale is so severe, that, the industry has been on negative cash flow
since it's beginning 10 years ago.
But but but, Cramer said production costs are $40.
Eagle Ford shale.
$6 million to drill the well.
$7 million to frack
Initial test-500 bls per day.
Initial production 100 bls per day.
Production after 12 months- 16 bls per day.
Production after 24 months- 8 bls per day.
Pick your price and do the math.
your production number are way low. 500-1000 BPD initial production and down to 100 BPD after two years. Still a math problem just different constants than you suggest...
Nothing solves low (or high) prices like low (or high) prices
shale revolution...horseshit.
destroy the earth, water and air for oil.
you people are friggin' nuts.
http://www.bloomberg.com/news/2014-09-03/trader-who-scored-100-million-p...
Peak cheap oil.
400,000 barrels per day are unprofitable out of 9,000,000 barrels per day the US produces? Not that i disagree with the stated breakeven point but what am I missing?