The ripple effects are huge. CNBC had an article the other day about the merger of Forest and Sabine. Wells Fargo and Barclays financed the merger, but were unable to syndicate the loan. They are on the hook for a combined $850MM while the value of the deal drops every day. Odds are high that the regulators will require them to write down the loan which will impact bank earnings.

http://www.ft.com/cms/s/0/c9f4e9e8-757c-11e4-b1bf-00144feabdc0.html" class="postlink " target="_blank">http://www.ft.com/cms/s/0/c9f4e9e8-757c-11e4-b1bf-00144feabdc0.html

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Now banks are also being affected, with Barclays and Wells said to face potential losses on an energy-related loan. Earlier this year, the two banks led an $850m "bridge loan" to help fund the merger of Sabine Oil & Gas and Forest Oil, US-based oil companies.
Investors, however, balked at buying the loan when it was first offered in June and slumping oil prices combined with volatile credit markets in the months since have scuppered further attempts to sell, or syndicate, the loan, according to market participants. Barclays and Wells declined to comment.
With underwriting banks unable to offload the loan to investors, they are now facing losses on the deal as the value of the two oil companies' debt erodes.

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This is just one example of a "non-energy" related ripple effect.

Guess I need to tap the breaks a bit here. I'm not saying there is going to be an 80's collapse. That was a once in a lifetime event. Since then there have been several hard but not crippling downturns. Odds are this may be just a return to the old boom/ bust cycle where companies trimmed dead wood, cherry picked the hell outa each other and most came out ok.

I know things have changed drastically wth the 'shale revolution', but didn't we see this all play out (much more drastic change) from 2008-2010 or so? Didn't oil go from about $140 to $40 seemingly overnight? And didn't we recover in a huge way up through about 6 months ago?

It hurts now, and it makes me literally sick to my stomach to open my 'investment' accounts, but haven't we done this before, recently? I remember owning EOG stock at about 80, then pissing my pants when it was 40ish or something like that, then being elated when I sold it for even, then kicking myselft when it went to 200+ (pre split).

I'm in midstream/downstream projects, and we haven't slowed down a bit.

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Guess I need to tap the breaks a bit here. I'm not saying there is going to be an 80's collapse. That was a once in a lifetime event. Since then there have been several hard but not crippling downturns. Odds are this may be just a return to the old boom/ bust cycle where companies trimmed dead wood, cherry picked the hell outa each other and most came out ok.

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You are probably right. Talking to the older folks in my office during the 80s they told me that the business has always been cyclical. Usually it amounted to hiring freezes and not a lot else, hence the interesting age groupings one would see in the oil biz. The 80s were definitely a different sort of downturn.

So from an investing standpoint what looks attractive now? I am looking at the european companies that have broad asset bases. Am I right in a ssuming the companies that aren't focused solely on onshore North America will fare better. Any thoughts on the future performance of RDS, BP, BG Group, or Statoil? Also, how will lower oil prices affect LNG companies?

I would wait for oil prices to come back and show some stability. Harder to buy on the way down and make money than buy on the way up and make money IMO.

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I would wait for oil prices to come back and show some stability. Harder to buy on the way down and make money than buy on the way up and make money IMO.

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How about an ONG ETF?

I'm buying HAL CWEI CQP SDRL and ATW

I've been short HK and GDP. I got out of those today. I think the sharp moves down are basically over. Now look for companies that can pick up others or that could be acquired.

XOM didn't have layoffs in 2008 but annual raise was crappy but better than losing a job

Oil collapses and today news report about ISIS taking over some city and U.S. Preparing for attacks. Good timing

Oil up over 3% today

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Oil collapses and today news report about ISIS taking over some city and U.S. Preparing for attacks. Good timing

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aaaaaand we're almost back at 70. I'm going to put on a black and white scarf and leave some backpacks around the Pasadena area and we'll be golden



I'M JUST KIDDING

I'm not a "chartist", but today could just be a "dead cat bounce". Anytime oil has a big move up or down, you can count on it to correct in the next day or two. When it fell from $147 in '08, I remember it had a 1 day bounce of +$18 around the $100 level. Of course it continued to fall until it bottomed in the $30s.

I can't see this "bust" lasting longer than '08-'09 unless the middle east really ramps up production. Most of the U.S. shale production will fall sharply once drilling slows. The Permian horizontal shale wells have 30-40% decline rates and those reserves and production won't be getting replaced at sub-$70 prices.

In any event, it's always a good idea to live well within your means if you're in a cyclical industry like oil and gas. Don't finance depreciating assets and try to maintain 50+% equity in your home because that equity can get wiped out in a couple of years if oil stays down.

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I know things have changed drastically wth the 'shale revolution', but didn't we see this all play out (much more drastic change) from 2008-2010 or so? Didn't oil go from about $140 to $40 seemingly overnight? And didn't we recover in a huge way up through about 6 months ago?

It hurts now, and it makes me literally sick to my stomach to open my 'investment' accounts, but haven't we done this before, recently? I remember owning EOG stock at about 80, then pissing my pants when it was 40ish or something like that, then being elated when I sold it for even, then kicking myselft when it went to 200+ (pre split).

I'm in midstream/downstream projects, and we haven't slowed down a bit.

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The difference to me, at least from a high level, is that today's price swings seem somewhat rooted in supply/demand fundamentals.

08-09 had a lot of speculation impacting the price drop.

agree, in '08-'09 there were larger global economic impacts across multiple sectors.

I'm calling today as the bottom. I got in midday to the companies I mentioned above. I think this bounce is the regression back to the mean. I think the technically oversold will start marching back.

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I'm calling today as the bottom. I got in midday to the companies I mentioned above. I think this bounce is the regression back to the mean. I think the technically oversold will start marching back.

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4th quarter and 1st quarter earnings will be bad for most E&Ps

Today was the start of a relief rally. But we haven't come close to the ultimate lows. Bear markets take a long time to resolve. The entire commodity "supercycle" has come to an end.

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I'm calling today as the bottom. I got in midday to the companies I mentioned above. I think this bounce is the regression back to the mean. I think the technically oversold will start marching back.

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Personally I think you got back in too soon. I see this as only being a slight bounce back right now. I still think WTI will go below $65/bbl by the end of the year with Brent being about +$2.50.

We will see. I'm playing with house money. I called the HK flop back in July an so I have room for variance. I also don't mind the long term DRIP and DCA over the next 10-15 years.

I will probably hold what I bought into the mid 70's and sell. That will be a 40-50% HPR IMO. Then I will sell, sit in cash and see what the technicians show. I trade on technicals and right now they are screaming oversold.

I think that just pushes oil to go to basket vs only USD.

Have done pretty well on our first home here in Houston since buying it a year and a half ago. Should we sell and hunker down in an apt for a couple years??? Man im tryin to get into tha '079 ya feel me?

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Have done pretty well on our first home here in Houston since buying it a year and a half ago. Should we sell and hunker down in an apt for a coupe years???

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It hurts now, and it makes me literally sick to my stomach to open my 'investment' accounts, but haven't we done this before, recently?

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It doesn't make much sense for someone working in O&G to specifically buy or overweight energy stocks. Diversify your investments and sector risk. Energy stocks only represent a fraction of the S&P 500, which hasn't felt the impact of oil's decline, as other stocks such as the airline and retail sector have benefited from lower energy prices.

Long-term I do not see O&G as a great investment (20-30 year horizon). It's a stop-gap energy solution which will be impacted by changes in transportation over the coming decades, and the industry will get squeezed from lower demand and higher supply due to technological advancements.

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It hurts now, and it makes me literally sick to my stomach to open my 'investment' accounts, but haven't we done this before, recently?

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It doesn't make much sense for someone working in O&G to specifically buy or overweight energy stocks. Diversify your investments and sector risk. Energy stocks only represent a fraction of the S&P 500, which hasn't felt the impact of oil's decline, as other stocks such as the airline and retail sector have benefited from lower energy prices.

Long-term I do not see O&G as a great investment (20-30 year horizon). It's a stop-gap energy solution which will be impacted by changes in transportation over the coming decades, and the industry will get squeezed from lower demand and higher supply due to technological advancements.

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I might agree with you on oil but disagree with you on natural gas

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Long-term I do not see O&G as a great investment (20-30 year horizon). It's a stop-gap energy solution which will be impacted by changes in transportation over the coming decades, and the industry will get squeezed from lower demand and higher supply due to technological advancements.

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The smart investments are going further downstream in LNG and infrastructure. The smart PE firms are buying their stakes in regulated distribution pipelines and anticipating exportation of natural gas. With more coal plants coming offline, power generation will require more natural gas power plants. If you are hellbent in investing your money in energy, look to companies with a portfolio that includes transmission pipelines and their associated storage or processing facilities. Be wary of oil and look towards NGLs and dry gas distribution networks.

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Long-term I do not see O&G as a great investment (20-30 year horizon). It's a stop-gap energy solution which will be impacted by changes in transportation over the coming decades, and the industry will get squeezed from lower demand and higher supply due to technological advancements.

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I think you are grossly underestimating the speed and cost of implementation of alternative fuels and the enormous long term demand growth generated by China and India, which will be mainly focused on oil and gas.

Not to mention the current massive investment into gas technologies whether that is LNG, gas fired plants or vehicle fleets. Gas consumption as means of energy generation is increasing and there is nothing on the horizon to reverse this trend. I would say that nuclear is the only viable option, but that's too hard to sell people/politicans on.

My point, 20-30 years is nothing to worry about. Quite frankly, theories like this have been around for decades and we are where we are.

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The smart investments are going further downstream in LNG and infrastructure. The smart PE firms are buying their stakes in regulated distribution pipelines and anticipating exportation of natural gas. With more coal plants coming offline, power generation will require more natural gas power plants. If you are hellbent in investing your money in energy, look to companies with a portfolio that includes transmission pipelines and their associated storage or processing facilities. Be wary of oil and look towards NGLs and dry gas distribution networks.

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Gotta agree with this.

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The smart investments are going further downstream in LNG and infrastructure. The smart PE firms are buying their stakes in regulated distribution pipelines and anticipating exportation of natural gas. With more coal plants coming offline, power generation will require more natural gas power plants. If you are hellbent in investing your money in energy, look to companies with a portfolio that includes transmission pipelines and their associated storage or processing facilities. Be wary of oil and look towards NGLs and dry gas distribution networks.

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Gotta agree with this.

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I agree with this too.