article: "SHALE BUST HAS BEGUN WITH A FURY"

Hopefully the natural gas will be our saving grace....

http://www.theburningplatform.com/2014/12/03/shale-bust-has-begun-w...

In the last few days I’ve noticed a plethora of news stories from the usual suspects in the corporate mainstream media about how shale oil producers can still make a profit with oil selling for $66 a barrel. All of a sudden their breakeven costs are supposedly $40 per barrel or lower. That’s funny, because every legitimate estimate prior to this year was that oil needed to stay above $80 per barrel just so they could breakeven. When you see the new propaganda, you realize the entire shale miracle is nothing more than a Wall Street hyped debt financed Ponzi scheme. The Wall Street shysters are sending out their mouthpieces to lie, obfuscate, and mislead the public into thinking this fraud is still legitimate. The MSM pundits don’t even question the lies because their living depends upon perpetuating the lies.

The truth is revealed by the actions of the participants in the shale boom. The companies whose existence depends upon generating profits and cash flow will always take actions that will be in their own self interest. No company purposely takes actions to lose more money. All of the happy talk was just revealed to be false. 

New shale oil wells are expensive to begin and are 90% depleted after 2 years. Those are facts. Permits for new wells absolutely COLLAPSED in November. A 40% decline in one month is an epic collapse. If the Wall Street shysters were telling the truth and breakeven costs are really $40 per barrel, why would drillers stop drilling new wells when oil prices are $66? They wouldn’t. 

The shale oil boom is only sustainable at $100 a barrel oil. The Arabs know it. The big oil companies know it. The drillers know it. And the Wall Street shysters know it. The peak in U.S. oil production has arrived again, until prices go back up to $100 a barrel.

Facts don’t cease to be facts because they are ignored. Reality really is a bitch.

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Permalink Reply by craig on December 5, 2014 at 2:55am

I believe you will see that History will show this article's premise to be garbage itself. 

Permalink Reply by Joseph-Ohio on December 5, 2014 at 5:24am
Once again I find myself asking myself and you folks :

Corn Kernal or Horse Pucky ?

Leaning toward Horse Pucky right now myself but realizing even any vagrant Corn Kernal I may find is also Horse Pucky surrounded by (you guessed it) Horse Pucky.

How about the rest of you folks ?
Permalink Reply by Joseph-Ohio on December 5, 2014 at 5:47am
BTW, shouldn't we also all be asking ourselves how we feel about $40 - $60 per barrel 'Break Even' costs and how much much we paid for fuels when oil was up over $100 per barrel (without benefit of domestic shale natural gas / oil drilling / development ) ?

I think so and I am.
Permalink Reply by Joseph-Ohio on December 5, 2014 at 5:55am
I'm not ruling out that the linked article might well be fractivist propaganda.

Can't do anything about slanted media / Wall Street / profiteering anyway - all we can do is the best we can to survive.
Permalink Reply by Frank Walker on December 5, 2014 at 8:17am

Fracking shale to obtain oil is one thing.  Fracking shale to obtain natural gas is another matter entirely!  Conflation of the two is unwise and misguided.

Permalink Reply by Joseph-Ohio on December 5, 2014 at 8:37am
Frank,

Puzzled as to your concerns.

Your use of the word 'conflation' (meaning 'combining') causes me to inquire.

Natural Gas = Energy and Oil = Energy

Also where there is Oil there is also Natural Gas as I understand things.

What is the concern developing / harvesting either or both via fracturing strata containing either or both ?
Permalink Reply by Joseph-Ohio on December 5, 2014 at 10:14am
Meaning that horizontal fracturing to harvest / exploit only natural gas is one thing and not rewarding enough when compared to oil I guess the answer to be then.

Problem is where you find one you also find the other not too far away (my understanding anyway) and then what do you do with it (the natural gas that is) ?

Also condensibles exist in natural gas which increase it's value.

And in my near geography a Gas To Liquids facility is scheduled to be constructed soon which it seems to me to add value to new natural gas production.

I guess my point is that many factors it seems influence decisions to drill / produce natural gas and perhaps too many factors to draw such a hard line between developing or not developing / drilling wells which will produce natural gas (only and / or in conjunction with oil).

And I haven't mentioned a huge unknown variable yet but will now - marketing the production would of course be a driver toward making a decision.
Permalink Reply by Dave Mahan on December 5, 2014 at 8:43am

One great thing about this forum is the exposure it provides to a wide variety of resources and viewpoints.  I do a considerable amount of work researching the industry, especially online, and until today I had never heard of theburningplatform.com.  Thanks for passing this link along.

That said - it appears that all O&G stocks have been beaten down by the decline in oil prices, however, NG prices are relatively unscathed, so there may be some opportunity in overly discounted producers that are primarily gas-focused, like certain Marcellus operators.

There is still the strong possibility of a gradual, sustained increase in NG prices over the next 2-4 years as more coal generation is eliminated, distribution networks are expanded into new gas utility markets, and export capability is developed.

Maybe NG production is the tortoise of the O&G industry, and despite currently discouraging pricing and markets, it will slowly and steadily win the race.

Permalink Reply by george m vietze on December 5, 2014 at 9:54am

Commodity prices flucuate for many reasons including but not limited to demand, supply, economic conditions both in this country and world wide.  Saudia Arabia is facing direct and indirect competition from shale oil production but cannot afford to oversupply its production on a long term basis.  Natural Gas and oil is a long term play and price flucuations has always been a main part of this industry.  This time is a good time to continue to build infrastructure, develop new technology to increase effeciency in order to reduce future production costs.  The larger companies have the capability to plan and budget and allow for the inevitable flucuations   that have always been a part of the gas and oil business.  The governments both State and Federal need to do more to decrease regulation and red tape and tax considerations and allow industry to prosper and move this country toward energy self sufficiency instead to trying to over-tax and over regulate the industry.  Landowners should be patient, the gas and oil is where it is and is not going to evaporate or disapear and as technology increases the projects will safer and more efficient.  Natural gas and oil was not created overnight be thankful that you own the mineral rights that you now have the right to own, in some countries individuals are not allowed to own mineral rights.  Maybe some time and thought to the formation of mineral rights owners into an organization that represents the interests of the owners in order to influence and mitigate the politics and unfair and sometimes illegal behavior that affect the rights and money of mineral rights interest.  Politicians and gas and oil companies have lobbyists that represent their intererst and the landowners and mineral rights owners are left to fend for themselves?    

Permalink Reply by Joseph-Ohio on December 5, 2014 at 10:34am
The more I read the more and steady pressure I sense toward stripping the landowners of their mineral rights by the industry and our government.

Am I alone in this perception ?

As far as I can tell all recent legislation (enacted within say the past five (5) years) and pertaining to mineral rights have been at the expense of the landowner's mineral rights and pro-industry / pro-government.

What does everyone else perceive ?
Permalink Reply by frank speaker on December 5, 2014 at 2:03pm

The ODNR works on behalf of the oil and gas industry. They are guided by the governor's policies, which because it is a Republican administration is pro- business. If a Democratic administration were elected it would not be pro land owner, but would favor more regulation. The landowner must work for the happy medium.

Permalink Reply by Joseph-Ohio on December 5, 2014 at 2:18pm
frank s.,

Aren't we also seeing more regulation and delay with the empowered Republicans ?

Personally, I think the two party system is a myth / distraction / deception / ruse; and that in reality there's really only one political party.

If I had to come up with a name for it I'd call it the 'Politico Party / The Party of the Politicians'.

Only IMHO.

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