In Biggest Victory For Saudi Arabia, North Dakota's Largest Oil Producer Suspends All Fracking

Tyler Durden's picture

Yesterday, during his speech at CERAWeek in Houston, Saudi oil minister Ali al-Naimi made it explicitly clear that Saudi Arabia would not cut production, instead saying that it is high-cost producers that would need to either "lower costs, borrow cash or liquidate” adding that there is "no need for cuts as marginal barrel will get out of the market." He was right.

Today his wish is slowly coming true after news that North Dakota's largest producer, Whiting Petroleum, would suspend all fracking, and that Continental Resources has effectively done the same after reporting that it no longer has any fracking crews working in the Bakken shale.

As Reuters reports, Whiting said it would "suspend all fracking and spend 80 percent less this year, the biggest cutback to date by a major U.S. shale company reacting to the plunge in crude prices."

It was also confirmation that the Saudi plan to put high-cost producers on ice is working, if only temporarily.

After sliding 5.6% to $3.72, Whiting stock jumped 8% to over $4 per share in after-hours trading as investors cheered the decision to preserve capital, even if it means generating far less revenue.

Whiting's cut is one of the largest so far this year in an energy industry crippled by oil prices at 10-year lows. The cuts will have a big impact in North Dakota, where Whiting is the largest producer.

The Denver-based company said it would stop fracking and completing wells as of April 1. Most of its $500 million budget will be spent to mothball drilling and fracking operations in the first half of the year. After June, Whiting said it plans to spend only $160 million, mostly on maintenance.

Rival producers Hess Corp and Continental Resources Inc have also slashed their budgets for the year, though neither has cut as much as Whiting.

As noted above, during its earnings report, Continental said that in 2016, the Bakken drilling program will continue to focus on high rate-of-return areas in McKenzie and Mountrail counties, targeting wells with an average EUR of 900,000 Boe per well.  Based on the higher EUR and a lower targeted completed well cost of $6.7 million per well, the Company expects capital efficiency to increase 17% and finding cost to decrease 15% in 2016.

Given its plans to defer most Bakken completions in 2016, Continental expects to increase its Bakken DUC inventory to approximately 195 gross operated DUCs at year-end 2016. However, Continental also said that while the Company currently has four operated drilling rigs in the North Dakota Bakken and plans to maintain this level through year end, it noted that it currently has no fracking crews deployed in the Bakken, which led some, including Bloomberg to believe, that Continental too has halted Bakken shale fracking.

One thing is certain: the cuts will drag down production and likely reverberate in the economy of North Dakota, the second-largest U.S. oil producing state after Texas, which currently pumps 1.1 million barrels per day. It means that after the 250,000 oil workers already laid off (according to Credit Suisse estimates), tens of thousands of new pink slips to highly paid workers are about to be handed out.

And another thing: as of this moment, Saudi's oil minister is taking a victory lap in his Lamborghini - after all his plan to push the price of oil so low that marginal oil producers have no choice but to mothball production is starting to bear fruit.

There is just one problem.  Whiting Chief Executive Officer Jim Volker said that "we believe this conservative strategy should help us to maintain our liquidity position and leave us well positioned to capitalize on a rebound in oil prices."

In other words, the moment oil prices rebound even modestly, and according to many the new breakeven shale prices are as low at $40-$50/barrel, the Whitings and Continentals will immediately resume production, forcing Saudi Arabia to go back to square one, boosting supply even higher, and repeat the entire charade from scratch.

And so on.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
nmewn's picture

We just smiled and waved.

Sittin on that sack-a-seeds.

LetThemEatRand's picture

I'm still trying to remember why lower oil prices and less injection of toxic chemicals/earthquake producing activity is a bad thing for most Americans.  I'm sure someone here can remind me.

Chris Dakota's picture

Tesla new car gets 240 miles on a charge.

Cost: 35K

US Gov rebate: 10K

cost: 25K

savings 75% of your gas per year or month, day.

So the car is basically free after about 4 yrs at my use.

Oil is over, why it crashed.

discovery of fossil fuel 75K feet deep.

No mamals present, the Russians said yrs ago that oil is produced by hydrogen and not animals.

The control of oil I have always seen as a method  of control, we don't go to war for oil, we go to war

to control the flow of oil

Saudi Arabia is over.

Chris Dakota's picture

South node of Pluto is ready to get visited by transit Pluto.

That happened in 1776, because the nodes of Pluto stay for 2000 yrs in one sign.

It brought a new world order, the monarchy was out and democracy birthed.

This will happen in 2017-2022.

The elites know this, why they call for a new world order that THEY contol.

They will lose, they are not in control of this.

Just as King George III lost control.

 

OrangeJews's picture

The economy should really be robust after the supply glut and prices soar.

Stainless Steel Rat's picture

If this keeps up, oil will be $600 soon.

MisterMousePotato's picture

"In other words, the moment oil prices rebound even modestly, and according to many the new breakeven shale prices are as low at $40-$50/barrel, the Whitings and Continentals will immediately resume production, forcing Saudi Arabia to go back to square one, boosting supply even higher, and repeat the entire charade from scratch."

This is the first thing that occurred to me when this whole Saudi Arabia drives oil prices down thing happened. (Works for Russia, too.)

So the Saudis want to "retain market?"

Hm. Wouldn't they be a lot better off selling one barrel of oil for $100 than five for $20? Less work. Less transportation. Less overhead and expense. And, their stash will last five times as long.

Nah. Something's going on here, and I'm not sure anyone has a clue.

Maybe some new energy source that hasn't been made public? Or some rediculously huge oil deposit that can be recovered for a dollar a barrel? Something that would cause the value of Saudi oil to be next to nothing?

Dunno. But, otherwise, all the Saudis are doing is inflicting some short-term pain on others. And themselves.

ZippyDooDah's picture

You might think that the dunderheads in the US gov't would view American oil production as a national interest and do something to protect it.  But apparently, no, we do whatever the Saudis want, whether it's to trash our national oil production in favor of their oil production, or trash Middle East Shias in favor of their Sunnis.  America first is a concept foreign to the US government.

Gonzogal's picture

Here is a very interesting article on how SA runs US policy...not the other way around.

http://www.washingtonsblog.com/2015/12/richest-man-world-rules-u-s-riyad...

melvin sneard's picture

"I'm not sure anyone has a clue."

Be sure that quite a few humans do have a clue.

https://animpossibleinvention.com/2016/02/18/historic-event-one-year-1-m...


FrankieGoesToHollywood's picture

Chris, you can post here anytime.

jeff montanye's picture

so what is birthed in 2017-2022?  (i am treating the plutonian nodes/transit interaction a settled science.)

democracy out and ? birthed.  can't help but be reminded of mr. yeats's ditty.

 

THE SECOND COMING

 

    Turning and turning in the widening gyre

    The falcon cannot hear the falconer;

    Things fall apart; the centre cannot hold;

    Mere anarchy is loosed upon the world,

    The blood-dimmed tide is loosed, and everywhere

    The ceremony of innocence is drowned;

    The best lack all conviction, while the worst

    Are full of passionate intensity.

 

    Surely some revelation is at hand;

    Surely the Second Coming is at hand.

    The Second Coming! Hardly are those words out

    When a vast image out of Spiritus Mundi

    Troubles my sight: a waste of desert sand;

    A shape with lion body and the head of a man,

    A gaze blank and pitiless as the sun,

    Is moving its slow thighs, while all about it

    Wind shadows of the indignant desert birds.

 

    The darkness drops again but now I know

    That twenty centuries of stony sleep

    Were vexed to nightmare by a rocking cradle,

    And what rough beast, its hour come round at last,

    Slouches towards Bethlehem to be born

Chris Dakota's picture

For evidence just look at the

 US Presidental cycle.

The old is being overthrown

The falcon cannot hear the falconer

Chris Dakota's picture

This refers to the Egyptian Spynix.

"A shape with lion body and the head of a man"

dating to the spyinx goes right to the change of age of Leo (lion) to Virgo (the human)

Virgo the only sign represented by the human form.

Larry Dallas's picture

Chris:

I am fascinated by this. Which blogs do you read or books. 

 

Chris Dakota's picture

I don't have blog, don't read any.

I studied under a great astrologer in the 70s.

I have a gigantic library many of the books out of print that

I purchased in used bookstores over the years. The best books

written before the 70s.

I have been a student for 45 yrs.

I don't do readings for money, I feel it is wrong.

I don't like doing idividuals charts because most don't want the truth.

I just cast charts for events, people who are in power, and some random people like

in the news who are connected to larger trends. I did many charts for 911 victims when I saw

their birthdata posted on bills in NYC. I found 8* of the mutable signs (mostly Virgo/Sag) linked with war on terror, from victims to

suicide bombers to those in power who pushed this war.  I have those degrees myself, maybe why I am the only one who noticed the synchronicity of it.

My teacher called me the reluctant guru and visionary.  Pretty spot on, I use it in a stealth sort of way. I don't want to attract attention

and practice in the dim light, I am an intuitive astrologer. 

Most astrologers are hard core leftists, pushing an agenda and prostituting themselves for a political agenda.

I am a political atheist, I am only seeking the truth and  where that leads me.

BringOnTheAsteroid's picture

By what mechanism do the position of the planets against a backdrop of constellations many hundreds of light years away affect human beings. Does the gravity induced by the planets interact with the atoms in our bodies and if so why has that got anything to do with their apparent position to us against the constellations.

Anyway, you've got it all wrong. Apparently the path to truth can only be found in the 64 books of the bible and then only if you understand the difference between precepts and commandments and that you do not invalidate the subject verb agreement or confuse a clause with a phrase and be aware that a preposition is not a preposition unless it is attached to a related noun or pronoun. Because god expects us to hold a fucking Phd in grammar before being able to decipher the fucking bible.

Come on buddy, it's enough to have to take theists to task on their whacky beliefs. I thought astrologers would be too embarrased to even show up here.

Anyway, just for the record, astrology is complete and utter bunk, just ask a theologian.

You're welcome to post here but go a bit light on the complete and utter fucking bullshit.

ZippyDooDah's picture

Well put, for a man who's counting on an asteroid.

wahrheit's picture

What do you think about the US chart's upcoming Pluto return, especially in comparison with what happened when transiting Pluto opposed its natal Pluto back during the inception of the Fed and the IRS?

TheAntiProgressive's picture

So I am paying for the "incentives" to put coin in your pocket.  Electricty is produced primarily with fossil fuels.  Electricity has effeciency loss in transmission.  Electricty prices are controlled by the state not the free market.  Enjoy your electric ride there.  To me it is a mocch on me.  You can say thank you anytime.

Chris Dakota's picture

Tesla is working on a system for the house too.

uh oh........

LetThemEatRand's picture

Aside from the tax incentive issue which is a legitimate gripe, you are a fucking idiot.  You are on a computer powered by electricity, probably with a battery, complaining that electricity and batteries are bad because you have been brainwashed.  Even regular cars have a battery, dim wit.  And my regular car runs great on cheaper gas.

Kissy Ass's picture

Tell him Rand. Fucking bullshit this lower priced oil. Let's fill the price gap with some FEDERAL FUCKING TAXES and get this bitch back up to $4/gal!

Chris Dakota's picture

"On me" like you are personally paying for the incentive.

Stop with these conservative worn out memes.

You aren't paying for shit, the government is stealing all our money

to make rich corporations that pay no tax. The bag money to the operatives in

DC is massive.

LA_Goldbug's picture

The Foundation for this bullshit was in place from the very start of the project called "United States". This book is one of the best to show that what we are observing today is the same bullshit that was going on in this country in 1780's.

"The Whiskey Rebellion: Frontier Epilogue to the American Revolution, First Edition by Thomas P. Slaughter"

pitz's picture

The Teslas won't forever get away with evading fuel taxes. 

Chris Dakota's picture

yes tax them for something they don't use.

Like me  paying a penalty for not buying Obamacare this year.

ahahaha

San Francisco City taxes me for my office furniture, machines that I own.

They call it a "use tax" tax me to use my own property.

At one point one of the kooks who was city supervisor, now State legislature proposed a city income tax on top of federal income tax.

What a hoot this town has become with gay liberals in charge.

Now we have Chinese Commies running the shit show.

Chris Dakota's picture

There is a Jewish astrologer who's name is something like Merimar (not it but similar) said when oil was 200 per barrel that when Neptune in Pisces oil would lose 90% of its value. He said "I know it sounds crazy but that is what I see" He does financial astrology.

Neptune came home to Pisces in 2011  just after Fukushima.

Are we there yet?

Kissy Ass's picture

Fuck off with your jew whoreship.

jeff montanye's picture

wait, wait!  i want all the taxes back that paid for all the wars since at least vietnam.  and all we gave israel.  and the bankster bailouts and the oil depletion allowance and the bullets that killed kennedy and.............................................................................................................................................

Arrowflinger's picture

Georgia withdrew its green vehicle tax credit and added a new $200 per year luxury tax on them.

Chris Dakota's picture

All this will be attacked.

Tax you for not polluting.

Chris Dakota's picture

Here is a gift for an astrologers who read here.

the soul or human identity is:

Pluto sign, house, aspects of other planets, its planetary ruler

Nodes of Pluto, which are North Cancer19-22, South Node of Pluto Capricorn 19-22

House, aspects from other planets

This is the core of any chart of any human being

It goes to past lives, dynamics and memories which manifest in current incarnation

all else will eminate from this core.

Next would be nodes of moon, sign, house, rulers, aspects from other planets.

This is the trunk of the tree that the roots (core, Pluto nodes of Pluto) birthed.

From my teacher the best in the world evolutionary astrologer and visionary.

At this time everyone alive has the same south node of Pluto at 19-22 of Capricorn and the ruler is Saturn whos South node is 18-30 of Capricorn

Wanna know why you are here?

To be a witness of the greatest shift known to mankind and the next five years will play it in living color.

God Bless

Chris Dakota's picture

My new interest of the day is a guy who was formerly an Islamic Radical who is now

older and disavowed radical and a psychotherapist.

He calls them "Generation Allah" He says they find the religion a cornerstone of their human identity.

He says it is taught in schools in Europe and that they are executioners for Allah.

I find it odd that an entire generation had no real identity.

Would like to read the book but it is written in German only.

They are the Pluto Scorpio generation that is hell bent on destruction of the old world , in every culture.

Born from late 1983-1995

Why does the old world have to die?

Soon they will pass and the Pluto Sagittarius will emerge.

In order to reach the light in Sagittarius one must pass through the war in Scorpio.

wahrheit's picture

It may help others to point out what happened to the world during the last generation of Pluto in Scorpio natives. Most of the founding fathers were born during it, and then of course there's the French Revolution.

Chris Dakota's picture

Ben Franklin had Pluto Leo like baby boomers who are the parents of the Pluto Scropio's.

Franklin really was the father of the revolution, funded it through his charisma and wisdom.

Jefferson was Pluto Scorpio as were those who fought it.

 

OldPhart's picture

The words are in english, but I don't have a clue what they mean.

The only reason I'm here is because mom and dad had a poke'n'tickle late one night nearly sixty years ago.

Nothing metaphysical about that (though it might have been at the time for them).

Astrology is not something I'm remotely into nor interested in.  If it were true, then every one born the same day, and adjusted time, as I was would be exactly like me.  And I am one, odd, ball.

BringOnTheAsteroid's picture

All the christians just let out a huge sigh of relief. At least for a while they don't hold the honour of having the dumbest beliefs of all the people posting on this forum.

MSimon's picture

The theory is that your position in the universe at the time of you birth matters,

 

But a LOT of things matter. Like DNA. Your parents. Your experience.

Chris Dakota's picture

My teachers first lesson.

Ask where were you born, where do you live?

What do you want to know?

A woman from Afganistan will not have the same experience as a man from America.

So yes, it does play a role.

Repeat in order to resolve, that is why the past life and the past of this life are the same.

It takes at least 12 lifetimes to resolve one issue. This issue can be seen in the birth chart.

Hope this answers your question.

Chris Dakota's picture

Not all souls are the same, they may share a birthdate but you have to take into account the stage of evolution of each individual.  That is pretty easy to determine.

1. Consensus Stage (accepts system)

A. factory workers

B. managers of factory

C. Presidents, leaders

 

2. Individuated Stage  (rejects system)

A. Drops out of system to some minor degree

B. Artists, Punk Rockers

C. Throws grenades from periphery

 

3. Spiritual Stage

A. childlike spiritual being

B. Has following, has fall from grace. The guru with 20 Rolls Royce's

C. Love is all that is left, merges with creator

LA_Goldbug's picture

Hi Chris - can you recommend a good book with which to start to understand your ideas. Cheers

Chris Dakota's picture

First you must understand Astrology.

Their is a series of books "The only way to learn astrology"

I think it is 4 or 5 volumes.

Then you can read Steven Forrest who is entertaining Pluto book.

you can do your chart for free at www.astro.com

set up an account (free) and save your chart and others you may do.

Then read Jeff Wolf Green "Pluto the evolutionary journey of the soul"

hard read but don't give up.

Jeff Green had a dream he was told to study astrology and he didn't want to do it.

so he said "God if you want me to be an astrologer, you must teach me."

He dreamed the Pluto book in one night, it is translated into 26 languages.

He himself has Saturn (authority) conjuct Pluto so he is known as the authority on Pluto, which is the soul.

An entire generation has Pluto in the same sign, why? Because it takes more than one person to change the world.

 

LA_Goldbug's picture

Well I like Astronomy so this may be an interesting journey.

Thanks Chris :-)

East Indian's picture

yes, but how is that electricity generated?

 

 

FredFlintstone's picture

Progressives are math-challenged as we see here. First this person pays no tax on her Tesla, then she drives about 125,000 miles per year with no maintenenace required and then breaks even. That is assuming 30 miles to the gallon and $2/gallon for gas (we have been paying less than that for a while now). I know some salesmen who put 50,000 miles on a car, but never heard of someone putting 125,000 miles per year.

That is how they reconcile their world view with reality: ignore math, which reminds me of a good Dilbert quote: " its a little trick I call math".

still kicking's picture

where was fossil fuel found at 75K feet deep?

Kirk2NCC1701's picture

Looks like you got what I get a lot, when asking an awkward question:  Radio silence or junks.

:-)