Replies to This Discussion

Permalink Reply by Jim Litwinowicz on March 26, 2013 at 2:13am

Jack;  in the first article they site a decline in production in both the Barnett and the Haynseville as areas of concern. The implication, or at least what I inferred, was that these formations not only are producing less but the decline is evidence that they do not have the reserves they were previously thought to have. But they did not discuss the current rate of drilling in those shale plays. I would submit that the decline is less a result of formation issues but more a result of economics. 

Since the Marcellus is by far the cheapest gas to produce the companies have restricted activities in the Barnett and Haynseville. As soon as prices support drilling in those shales again it will resume. With the Marcellus and the Utica being so large, it may be decades before the B and H become active again but they will do so some day.

Permalink Reply by Jack Straw on March 26, 2013 at 4:54pm

RE: "I would submit that the decline is less a result of formation issues but more a result of economics.
 

and RE: "Since the Marcellus is by far the cheapest gas to produce the companies have restricted activities in the Barnett and Haynseville. As soon as prices support drilling in those shales again it will resume."

 

I am in full agreement with you assessment.

The cure for low Natural Gas prices are low Natural Gas prices.

When Natural Gas prices drop lower that Finding & Development costs, drilling slows ... resulting in less production ... resulting in shortages ... resulting in higher prices.

The problem is that the rapid expansion of the shale gas drilling resulted in many drilled wells that awaited fracing for completion and many fraced/completed wells still await tie into a gathering line and pipeline (with sufficient capacity). This has resulted in an extended lag between low prices and the impact of what will be lessening supply. This lack of infrastructure has numbed the reality of the steep decline curves, this time the pendulum has swung very far towards over supply. 

But, eventually ... the cure for low Natural Gas prices are low Natural Gas prices.

 

Sadly there is a converse: the cure for high Natural Gas prices are high Natural Gas prices.

Once Natural Gas prices reach a certain threshold ($6/mcf?) the rigs will reappear .... greedy Operators will over drill ... and prices will collapse.

 

This Boom/Bust cycle is the constant companion of the 150+ year history of the O&G Industry.

When someone says "this time is different!" I do not know whether to laugh or to puke.

I am old enough and jaded enough to likely laugh.

 

All IMHO,

                  JS

 

 

Permalink Reply by Joseph-Ohio on March 28, 2013 at 5:09am

Politics.

Marketing / Economic Throttling.

Maneuvering stalling the work that needs to be done.

 

Permalink Reply by Bluflame on March 29, 2013 at 2:04am

"Please, Lord, just give me one more oil boom. I promise not to screw it up". Seems an appropriate posting for Good Friday and consistent with the train of thought on this string!

BluFlame

Permalink Reply by Jack Straw on March 27, 2013 at 1:43pm

 

I hear a train a'comin, but it ain't here yet. I hear it spilled its oil and made quite a mess .... with apologies to the "Man in Black". 

Wouldn’t a pipeline be a lot safer way to move oil?

Oh wait, the “Silly People” do not want the Keystone Pipeline, they would rather have in go by rail … as in Barak’s friend Warren’s Burlington Northern Railroad.

 

Source: http://www.scientificamerican.com/article.cfm?id=canadian-pacific-t...

 

March 27, 2013

Canadian Pacific train derails, spills oil in Minnesota: media

(Reuters) - A Canadian Pacific Railway Ltd train hauling crude oil has derailed in western Minnesota, spilling 20,000 gallons of oil, the Star Tribune newspaper said, citing the Associated Press.

The Otter Tail Sheriff's Department said 14 cars of the 94-car train derailed near Parkers Prairie on Wednesday morning, the AP reported.

A spokesman for the Minnesota Pollution Control Agency said one heavily damaged car has spilled much of its 26,000-gallon load, the AP reported, and two others have tipped over and are leaking. The spokesman said there is no threat to ground or surface water as the ground is frozen.

(Reporting By David Sheppard; Editing by Gerald E. McCormick)

 

Permalink Reply by Jack Straw on March 28, 2013 at 4:55pm

Another one bites the dust
Another one bites the dust
And another one gone, and another one gone
Another one bites the dust

http://www.youtube.com/watch?v=921o5oKjFtw

 

Source: http://finance.yahoo.com/news/fisker-hires-law-firm-prepare-1843223...

Fisker hires law firm to prepare for possible bankruptcy -source

Reuters 

 

by Nick Brown and Deepa Seetharaman

NEW YORK/DETROIT (Reuters) - Fisker Automotive, the green-car company that has not built a car since July, has hired law firm Kirkland & Ellis to advise it on a possible bankruptcy filing, a person close to the matter said on Thursday.

Kirkland's Anup Sathy, a bankruptcy lawyer who handled the Chapter 11 filings of General Growth Properties and Innkeepers USA Trust, is advising the U.S. automaker, the source said, declining to be named because the matter is not public.

Neither Kirkland & Ellis nor Sathy were immediately available to comment.

Fisker, which furloughed its more than 200 U.S. workers this week to conserve cash, has been exploring bankruptcy as an option while it continues to look for a strategic partner, two other sources briefed on the matter said late on Wednesday.

A Fisker spokesman declined to comment on Thursday.

Next month, Fisker must make a payment on a U.S. Department of Energy loan that was extended to the company in 2009 as part of an Obama administration program to spur advanced vehicle development. Fisker declined to divulge the amount of the loan payment, which is due April 22.

Fisker had drawn down $193 million of its $529 million federal loan before U.S. officials froze the credit line, citing delays in the launch of Fisker's flagship car, the Karma plug-in hybrid. The remaining money was earmarked to develop Fisker's second model, the Atlantic plug-in hybrid.

Fisker had been in talks with Chinese automakers Dongfeng Motor Group and Zhejiang Geely Holding Group (GEELY.UL) to gauge their interest in acquiring a majority stake in Fisker. The talks were unsuccessful.

Fisker's chief executive, Tony Posawatz, visited China this week to try to rekindle those deals, sources previously said.

The Wall Street Journal first reported the hiring of Kirkland & Ellis.

(Reporting by Nick Brown in New York and Deepa Seetharaman in Detroit; additional reporting by Paul Lienert in New York; Editing by Leslie Adler)

 

Permalink Reply by Trapper on March 29, 2013 at 2:42am

I wonder how much of this "stimulus" money gets siphoned off and directed to off shore accounts to be enjoyed at a later date by a certain retired ex-president to be...........?

Permalink Reply by mark ayers on March 29, 2013 at 6:05am

Fisker sold 1000 cars at a price of $100,000.00, add that to the $139,000.00 per car the feds gave them and I bet you have a very sweet car.... 

http://green.autoblog.com/2012/03/08/fisker-karma-owned-by-consumer...

Permalink Reply by Joseph-Ohio on March 29, 2013 at 6:23am

Leadership?!?!?

Permalink Reply by mark ayers on March 29, 2013 at 8:18am

Sorry, that should be $193,000.00.

Permalink Reply by Jack Straw on March 29, 2013 at 9:31am

Looks like some seriously Bad Karma to me.

 

JS

Permalink Reply by Joseph-Ohio on March 29, 2013 at 9:55am

Bad Karma.
Seriously.
That kind of dough!
No return?!?!
WTF?!?!

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