Midland O&G independent here. Lots office lights were on unusually early this am on the way to work. I maintain that much of the continued drilling into low prices in the first Trump term was at least partially due to continuous development requirements from OGL’s. Now that we are nearing the end of available locations, those cdc’s should have been fulfilled and financially responsible operators will lay rigs down and delay completions. That being said, we as an industry have a history of financial irresponsibility.
A 3 month stop leads to 500 mbo/d permanent decline that we unlikely recover from … that offsets OPEC and puts the ball in their court to prove their real capacity which is the open question to me.
I agree with this assessment. Most think it takes long term shut-in or delays to have an impact, but a little bit of coordinated discipline goes a long way. The gas producers have figured that out and it’s time for the oilers.
We’re about to find out which producers are over leveraged and which ones have the discipline to curtail higher cost production for a undefined period. This will not be great for shale imo or the industry as a whole. I absolutely agree it will have all the positives you outlined.
The old oilfield mantra about "not pissing away another boom" keeps playing in my head, and it's followed by "it's different this time". The only thing different this time will be that investors and lenders will put on the brakes if the industry just can't help itself. The US shale industry has subsidized the global economy for over 15 years now, aided and abetted by Billy Bob wannabes who as usual were enticed by the idea of hitting it big. Now, we're seeing 5+ level earthquakes in West Texas on top of low prices. Even God seems to be saying "put the damn rigs down".
It also really bad for oil workers. Less drilling means less work and more layoffs coming. And if it does come back at some point, people will have moved into different fields and are going to be reluctant to come back. The bigger the cycle, the tougher it will be to maintain a skilled workforce. We ran into this in 2000 when we started coming back, and looks like we are headed there again.
As I’ve been saying for 6 years … we were always losing a minimum of 50% of the jobs and virtually all the companies. There is nothing left to do in the U.S. but blow it down and focus on natural gas. They should leave the industry ,.. and hopefully there will be some good minerals or timber or coal or rare earth metals extraction jobs equally good.
Midland O&G independent here. Lots office lights were on unusually early this am on the way to work. I maintain that much of the continued drilling into low prices in the first Trump term was at least partially due to continuous development requirements from OGL’s. Now that we are nearing the end of available locations, those cdc’s should have been fulfilled and financially responsible operators will lay rigs down and delay completions. That being said, we as an industry have a history of financial irresponsibility.
A 3 month stop leads to 500 mbo/d permanent decline that we unlikely recover from … that offsets OPEC and puts the ball in their court to prove their real capacity which is the open question to me.
I agree with this assessment. Most think it takes long term shut-in or delays to have an impact, but a little bit of coordinated discipline goes a long way. The gas producers have figured that out and it’s time for the oilers.
We’re about to find out which producers are over leveraged and which ones have the discipline to curtail higher cost production for a undefined period. This will not be great for shale imo or the industry as a whole. I absolutely agree it will have all the positives you outlined.
The old oilfield mantra about "not pissing away another boom" keeps playing in my head, and it's followed by "it's different this time". The only thing different this time will be that investors and lenders will put on the brakes if the industry just can't help itself. The US shale industry has subsidized the global economy for over 15 years now, aided and abetted by Billy Bob wannabes who as usual were enticed by the idea of hitting it big. Now, we're seeing 5+ level earthquakes in West Texas on top of low prices. Even God seems to be saying "put the damn rigs down".
It also really bad for oil workers. Less drilling means less work and more layoffs coming. And if it does come back at some point, people will have moved into different fields and are going to be reluctant to come back. The bigger the cycle, the tougher it will be to maintain a skilled workforce. We ran into this in 2000 when we started coming back, and looks like we are headed there again.
As I’ve been saying for 6 years … we were always losing a minimum of 50% of the jobs and virtually all the companies. There is nothing left to do in the U.S. but blow it down and focus on natural gas. They should leave the industry ,.. and hopefully there will be some good minerals or timber or coal or rare earth metals extraction jobs equally good.