Utica boom bust / blew?

 So, whaddya thing? Is the Utica a bust? Over?

or just stalled for a few weeks, months, years, a decade?

Since it is looking a bit bust this week anyway,

your opinion and .25 will not get you a cup of coffee this time.

But it would make an interesting discussion.

Of course, we JUST HAD a bust, a couple years ago,

when gas went from $14 to $2/ MCF ( or dekatherm if you insist on calling it that.)

Of course, if our bet depends on peace in the middle east , it looks like we will do ok pretty soon again.

Anyones guess at this point... whats yours?

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Permalink Reply by Dexter Green on April 18, 2015 at 4:24am

These things are cyclical.  Macroeconomic factors are the ultimate determination for any viable oil and gas play, conventional or otherwise.  Macro headwinds are huge right now.  China's inevitable deceleration (and a lack of a soft landing) will probably cause demand to stay lower through 1H16.  The huge debts accumulated by American shale operators will start to weigh on their balance sheets and banks will eventually need to restructure the debt in order to avoid total chaos.  The layoffs within the industry are already getting pretty bad.  The issue then becomes how you jump back in once prices have rebounded.  A lot of those workers are going to other industries or going back to school to try to find more stable jobs.  So the American shale job renaissance will have a second act as companies look to rapidly hire (and train) new people once they have a better handle on future prices.  This may start to happen in the next 18-24 months.  Until then companies are simply cutting capex and looking for a way to survive the storm.  

Permalink Reply by bo boboski on April 18, 2015 at 5:26am

The big dogs will buy out the little dogs, they'll try to buy out all the mineral rights they can, then prices will go back up and the drilling will resume. Don't believe in cycles, I believe there's a plan in place. Just the rich finding a way to get richer.

Permalink Reply by Jack Young on April 18, 2015 at 6:28am

If there's a plan in place, lots of folks in the industry would love to be told what it involves. The pain is real, and there have been layoffs all over to prove it. Trouble in the Middle East won't help our gas market or slow down the anti-fossil fuel movement. I would doubt we'll have any more booms for many years, so we all need to preserve and enjoy our memories of the last one.

Permalink Reply by Dexter Green on April 18, 2015 at 1:25pm

Cycles are natural and are driven by demographics, population growth, technology, and government policies globally.  If there were no cycles then operators would keep drilling no matter the price and mineral buyers would spend whatever they could get their hands on to own a position.  Without natural volatility the price would always steadily go up, which is obviously not how it works.

Permalink Reply by Shon Lenzo on April 18, 2015 at 1:54pm

History shows an endless series of boom and bust in the oil/gas business.,

I have seen three obvious boom/bust cycles in my life time.

Some people thought we might not see another boom

after gas crashed last time.

If one was optimistic, one might want to buy while the price is low,

sell when it goes up.

It is difficult to get excited and want to spend money during the bust though.

Permalink Reply by Joseph-Ohio on April 18, 2015 at 3:24pm
Only IMHO (as it always is) :

No, not a bust.

Rather, controlled development.

Constant pressure by the developers to maximize their return.

Time spent improving their return isn't money lost from the developers perspective.

All only IMHO.
Permalink Reply by Tim Tarr on April 18, 2015 at 4:52pm

Keep in mind lots of wells drilled to HBP. Those wells need pipelines but pipeline companies need minimum commitment to install pipelines so enough have to be drilled for that too. So in the short term (3-5 years) you get a glut.
Longer term Natural gas will replace most oil (Diesel(Heating oil)and Gasoline. Than you have Coal and Nuclear power being replaced too. Throw in some LNG exports and in 5-10 years Nat. Gas will be Golden. Just hope those of us in production now, have some gas left by then!!

Permalink Reply by Billy Park Whyde on April 19, 2015 at 12:51am

Iran gets the bomb they get the Middle East Oil. I doubt if the US would give a dang if Iran decided to use it in Saudi Arabia or other places. Israel on the other hand Iran will only threaten as the Iranian leaders know wealth can't be spent if your a cinder. 

 When Iran control the oil the price will go ballistic.

Permalink Reply by bo boboski on April 19, 2015 at 1:03am

18 months. IMO. worth 2Cents.  Give them time to get pipelines and compressor stations built. and time for oil&gas prices to rebound. Time to discourage landowners and buy,or lease minerals cheap, Time to bankrupt some small producers and buy em out,Some of the largest,most profitable companies in the world are oil co.s. They don't let things happen by chance or "cycles". that's weathermen! They plan things out,years in advance. What's happening now,was planned,what's gonna happen in the Oil&gas biz, will be by design. Ups & downs, gluts & shortages,even political decisions may be manipulated to their liking. Whatever reasons they have for doing what they do,they do it, IMO ,for profits! And the #1 rule may just be;"don't tell anyone what you're doing till it's done"  All we can do is sit back and watch,hope we don't get ripped off too bad!

Permalink Reply by Joseph-Ohio on April 19, 2015 at 1:27am
I'm on your bus.
Permalink Reply by Shon Lenzo on April 19, 2015 at 1:35am

shake out the small players,

lease cheap instead of paying a lot more as it keeps escalating

I, too think we will see the boom again, in 1 1/2-3 years.

Some still get offers for $8k/acre on this forum.......this month !

They just have to figure out what to do with all that 'nuisance oil'

Permalink Reply by Shon Lenzo on April 19, 2015 at 1:43am

;"don't tell anyone what you're doing till it's done" 

seems to be the #1 rule in the Oil/Gas business,

unless you are promoting,

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