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Remember when Aubrey McClendon liquidated CHK's gas hedges? How'd that work out?

After thinking of CHK and SD, I'd by leary of the boys from Oklahoma.

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This isn't even close to the gas hedges that CHK had vs the NG market when that happened. Not to mention the shady stuff he did along with that, like his hedge fund and new energy company he started that sniped away half of CHK's personnel.

I'm not saying the oil market is going to get killed like gas did or CLR is going to fall like CHK, just that big company CEOs don't have a crystal ball when they do stuff like this. It seems like a dumb move for a public company to dump their hedges as their commodity price falls. Rolling down collars is understandable, but I can't imagine the market rewards CLR for going naked right now.

As a second bachelor's student in petroleum engineering this thread just warms my heart.

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As a second bachelor's student in petroleum engineering this thread just warms my heart.

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You WILL make a **** ton of money amigo, maybe just not in the next 2-4 years

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As a second bachelor's student in petroleum engineering this thread just warms my heart.

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I am happy I'm not in school right now.

Not encouraging to you, I know, but I had that exact thought last week.

You will be just fine Dirty Mike.

Imagine graduating December 08. Was laid 5 months into first gig.

More signs, article from Upstream:

The Switzerland-based rig giant revealed on Friday that its third-quarter results will be hit by a non-cash charge $1.97 billion related to impairment of goodwill "due to the decline in the market valuation of the contract drilling business".

Its goodwill had a value of around $2.99 billion at the end of the second quarter, the company stated.
Transocean also expects to record an impairment of $788 million on its deep-water rig assets "due to the deterioration of the market outlook, reflecting the recent decline in dayrates and utilisation for this particular rig class", the company said in a statement.

New York-listed Transocean's share was predicted to be heading for a drop of as much as 10% ahead of trading on the bourse set to start at 15:30 CET as it delayed an announcement of third-quarter results that had been due on Friday, with no revised date given.

Transocean has sold off more than 60 ageing rigs and disposed of its entire standard jack-up flotilla over the past three years as part of an effort to high-grade its fleet, with a focus on ultra-deepwater and harsh-environment units.

The company currently has 12 rigs under construction with another two drillships expected to be delivered for work in the fourth quarter.

The list of newbuilds includes five high-specification jack-ups and seven ultra-deepwater drillships, of which five units have contracts, with most to be delivered from 2016 and beyond.

Transocean is among contractors worst hit by the drilling slump, with four out of six floaters currently working off Norway due to come off contract next year, while worldwide it also has eight ultra-deepwater rigs either idle or rolling off charter in the fourth quarter.

Its existing operational 79-rig fleet comprises 48 floaters including ultra-deepwater, deep-water and harsh-environment rigs as well as 21 midwater units and 10 high-spec jack-ups.

The company this week saw Statoil suspend a charter for its semi-submersible Transocean Spitsbergen until the end of the year, resulting in a reduced dayrate for the rig, with the prospect the suspension could be extended due to cost-cutting moves by the Norwegian state-owned operator.

Transocean has though recently secured a contract for a second semisub on charter to Statoil, Transocean Leader, with the rig reportedly lined up to carry out production drilling on the EnQuest-operated Kraken field off the UK after the current contract expires next year.

The rig market retreat has been triggered by reduced demand from operators that are seeking to cut investments to boost returns to shareholders as profitability has been eroded by rising costs, with Statoil alone looking to make savings of more than $5 billion from 2014 to 2016.

As a result, floater rig dayrates off Norway have plummeted over the past year by between 20% and 30%, with a fifth-generation semisub currently commanding a rate of around $375,000 compared with $525,000 or more a year ago, according to data from Pareto Securities.

And another one:

The Norwegian engineering and construction giant will be shedding primarily hired-in personnel early next year as it nears completion of the process module for the topsides of Lundin Petroleum's Edvard Grieg platform, according to a report on state TV channel NRK's website.

Work on equipment for Statoil's Aasgard subsea compression project , due for launch in mid-2015, is also being wrapped up at the yard.

However, the company is reported to be looking at possible cuts in its own 660-strong workforce at the yard if it fails to line up more work beyond 2015.

A union official was quoted as saying the contractor was hopeful of winning fabrication work on the giant Johan Sverdrup project off Norway - for which it is already carrying out front-end engineering and design with awards likely to be made within the next year.

An Aker spokeswoman told news wire NTB the latest job cuts by the contractor, which has earlier announced several hundred lay-offs, would not affect its permanent staff, adding they were the result of "seasonal swings" as project contracts expire.

Cuts cuts and more cuts:

The Houston-based company now plans to spend about $173 million on exploration in 2015. It had previously set aside $257 million for 2015 spending.

"The 33% decrease in the capital budget is a prudent action considering the recent decline in crude oil prices and the decline in realised natural gas prices in the (US) North-east," Gastar said in a statement.
"The reduced capital budget will allow Gastar to maintain a strong balance sheet and liquidity position during the current commodity price environment."

Under the new budget, Gastar will spend $138 million on drilling, completion and infrastructure costs, down from previously $222 million previously.

Another $28 million will go towards land and seismic expenditures, with $7 million set aside for other capitalised costs.

Smaller shale operators such as Gastar are thought to be at particular risk in a low oil-price environment. Moves by Saudi Arabia to cut crude prices are seen as a direct assault on US producers.

Bakken champion Continental Resources, one of the US' top onshore producers, said it will cut spending next year by $600 million as a result of lower crude prices.

Gastar envisages drilling 31 gross wells, down from 44, in the Hunton Limestone play, where Gastar must drill in order to hold the leases as it has no existing production on the properties. It will defer other drilling previously planned on lands that are held by production.

The company will also drill three gross Marcellus wells and one gross Utica shale well. It will postpone drilling oftwo gross Mid-Continent wells in the Stack play of souther Oklahoma, as well as a vertical probe in the Marcellus East.

Gastar does not expect the drilling decrease to result in "significant year-over-year production growth". It revised its production guidance to between 14,000 barrels of oil equivalent per day and 16,500 boepd with 44% to 48% liquids.

Gastar swung to a profit in the third quarter, posting income of $9.8 million, up from a loss of $3.9 million a year earlier.

Revenues increased 46% to $35.1 million from $24.1 million a year ago. Of that, 80% came from oil, condensate and NGL output.

Average daily production for the third quarter of 2014 was 9,800 boepd, a 1% from a year ago.

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Nice buy Crossbow

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I'm up $2k

Up $12k myself...can I buy us a new Def Coord?

I suspect this drop in oil price is short term as the Saudis figure out a plan. They are slashing to keep our prices down and keep market share. I don't believe it is sustainable as they also need larger profits for their economy. That and China will pay. Just don't see an incentive for them to keep price low for too long.

I suspect you operators are OK for at least the next couple qtr's as the pipeline spots are already sold so product will be pushed.

I'm still waiting for Russia to cut the gas off from Europe then our LNG and all the drilling and infrastructure to go with it will go through the roof.

Halcn to slash spending, cut rigs as oil prices fall

The company plans to cut its capital expenditures from $950 million this year to $750 to $800 million next year, Halcn said in a release of its third-quarter earnings. The firm also said it will pull back on the number of rigs it plans to operate next year from 11 to six, down from the eight Halcn is currently operating.

Halcon is a terribly run company. Floyd Wilson is looking like a blind hog who found an acorn with PetroHawk.

Halcon will still produce more in 15 than they did in 14.

some encouraging news from UPI

http://www.upi.com/Business_News/Energy-Resources/2014/11/11/WTI-price-no-deterrent-in-US-shale-basins/6271415715675/

The oil pricing war isn't with the US shale players, its with the Western Canadian Crude producers. Not all oil is the same and the large, complex refineries on the gulf coast are set up to primarily run heavy / heavy sour crudes. These crude grades are predominately imported from: Saudi Arabia, offshore Mexico, Iraq, Venezuela, and Western Canada. The US gulf coast is really the only significant market for these grades of crude. Offshore Mexico is in decline and Venezuela can't get out of its own way. This puts Canada in direct competition with Saudi / Iraq. Until just this past month, in order for WCS (Western Canadian Select) to reach the US gulf coast, it had to pass through a rather extended logistics operation including trains, barges, and pipelines. This meant that WCS, which is priced at Hardistry had to be priced at significant discounts to WTI in order to get to market. This discount ranged from $20-$40 over the past 2-3 years. With the completion of the Flanagan South / Seaway pipelines, heavy oil can now efficiently flow from Western Canada to Houston. This discount on WCS is now going to shrink / disappear. This means a greater net-back to the Canadian producers, which gives them more pricing power and delivery certainty to make deals with the gulf refineries. This is going to be an on-going battle in the heavy sour crude market and will likely wind up disconnecting the price from light sweet. In case you didn't notice, it was widely swept to the side that Saudi actually raised the premium to Asia for their light sweet production (because they could...there isn't competition). The market for light sweet is still equally balanced (no glut as everyone keeps saying) and i expect the price for WTI to rebound.

http://www.calgaryherald.com/business/Ewart+Oilsands+crude+finds+ways+Gulf+Coast+refineries/10357366/story.html

Nobody remembers it, but FM radio was squashed and discouraged by special interests in the US for decades after its introduction. The Keystone Pipeline is much the same: superior technology that existing special interests fight because it harms their profits.

73.85 and falling

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73.85 and falling

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And the OPEC meeting is in 2 weeks. If you are singing all I want for Christmas is $65 dollar oil, you might get it

Whether the meeting decides to stop the fall of prices or not, reports are looking like Saudi Arabia can be expecting a 2-5% deficit in its budget next year with current price levels and they continue to commit to large CAPEX infrastructure projects and wellfare spending in their country and others in order to try and "keep" regional stability for the sake of oil production. Though I wasn't old enough to remember the 80's oil bust, I try to research and learn from history since I am in the industry, and I personally see this going one of a few ways.
1. OPEC decides it is in their best interest to stop the fall of oil prices, and cuts production/raises their export prices and does so, stabilizing oil in the mid to low 80s and it climbs back slowly over the next few years.
2. OPEC (Saudi) refuses to stop the fall, the begin to take record deficits over the next year as prices continue falling, they lose the ability to "promote peace and stability" (read: hand out money to appease the masses), and regional unrest begins to destabilize things causing a fall in exports, and a spike in the price back up the pre fall prices. the bonus here is if it is large enough rest, perhaps OPEC would lose its controlling power over the market as the void is filled with entrepreneurial countries. Also in this scenario the companies who were able to weather the storm will see some massive returns.
3. ISIS pulls a Saddam and starts lighting up oil wells and pipelines, and prices jump, making everyone but the Iraqi's happen, and some more politicians break their promise that no one really believe to not put boots on the ground over ISIS.

But George, they'll go with Potter otherwise!

What is the short-term outlook (next couple years) for the fracking industry? I have a possible opportunity to go work for a small, private fracking company that has had crazy growth lately and there is a good chance they will do an IPO in the next year. This would be a finance/accounting role.

I'd be going from a very large & stable company to a private fracking company that sounds like they have very little structure and sort of crazy environment because of how fast they have been growing.

I'll have a much better idea after I interview for the type of atmosphere and all that, but from those who know a lot more than me what is the outlook for the fracking industry?

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sort of crazy environment because of how fast they have been growing.

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Do you think the Halliburton/Baker Hughes deal will add insult to injury with the potential problems some of you are forecasting? Or what kind of long term effect do you see the deal having?

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sort of crazy environment because of how fast they have been growing.

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Exactly... That is my concern as well. That is why I am asking y'all who know a lot more than me what a realistic outlook is for the industry? I don't know anything about the industry at all to be honest.

Is there significant benefit in moving? Do you have a family? Are you young? As an accountant, can you easily move to another industry if **** hits the fan?

API set to release inventory report today followed by EIA tomorrow.

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Keep your stable job, not the time in the cycle to make a change like that. You could easily become unemployed if there is a prolonged downturn. Many of these small fracking companies and leveraged service companies could go belly up or get bought out.

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Being young, 25, with a wife and a 1 yr old daughter I do not plan to do anything I do not feel 100% confident about. With this current opportunity, I am definitely leaning towards the keep my current job side. This came from a recruiter and has happened pretty quick out of nowhere, so I am going to go to the interview to see for myself and use it as interviewing experience.

Thanks for the input from everyone.

You should probably ask that question on the job network board as there are several guys that work on frack crews that can answer your question better.