quote:

---

That well sounds like a huge dustercluck but I have to believe that it was more than 1 person's decision to drill with a potassium system vs OBM. It sounds like a cost/benefit analysis that they got way wrong to me, more than running scared from losing OBM. But you were there and I wasn't so you know better than me I guess.

---

Eagle Rock had 5 people in the drilling department including the vp. I got the privilege of meeting them all when I took my test to hire on. I was hired to go to Alabama but after I finished that well I went to work for Continetal. They had hired an outside firm to come in and review their drilling program and make some changes. They changed out everyone but the vp and geologist. We had two conference calls a day and 4 status reports. They spent all day tripping over dollars to pick up dimes. When the new guy came in he fired all but three of the field guys. The new guy was pretty sharp and easy to work for. I had assumed they would be doing good but my buddies that I told to buy stock remind me of how ****ty their stock was doing.

The scoop is a very challenging place to drill. It's very faulted, the wells walk on you constantly, you fight gas and lost circulation, and it eats bits. I came from the eagle ford making 4000' a day on average, to the scoop where 400' is a good day. I value that experience. But still prefer the eagle ford.

I know that nothing is definite in the world of O&G, but I've been reading quite a few articles and a lot of speculation points to WTI ~$55-60/bbl and Brent ~$60-65/bbl, even with the unrest in the ME, for the long term and foreseeable future. Their reasoning is the fact that BH's numbers showed only one rig reduction which was the lowest drop in the past 24wks. They believe that producers and drillers are comfortable for ~$60bbl (WTI) and would begin ramping up production.

What do y'all think?

Not sure about the oil price. I'm seeing data that shows supply is dropping harder than expected. Deal flow has practically come to a halt. I think the banks will have to show their cards on the next round of bank redeterminations. They've been holding back, kicking the can down the road and not wanting to expose the losers. Once one well regarded public company "pants'd" I feel a domino effect coming with all the bank letting out a collective deep breath. Hope I'm wrong but this appears to be a slow recovery.

quote:

---

Not sure about the oil price. I'm seeing data that shows supply is dropping harder than expected. Deal flow has practically come to a halt. I think the banks will have to show their cards on the next round of bank redeterminations. They've been holding back, kicking the can down the road and not wanting to expose the losers. Once one well regarded public company "pants'd" I feel a domino effect coming with all the bank letting out a collective deep breath. Hope I'm wrong but this appears to be a slow recovery.

---

Supply dropping harder than expected, demand rising more than expected (more than flat projections from IEA and the gang). Those fundamentals should point to a rising price. That could be stabilized with increasing porduction to reverse the drop in supply and keep up with the rise in demand, but if I get what you at e saying about the banks, there will not be easy money to drill. That sounds like a headwind to increase supply.

I could see price stabilizing at a reasonable level around $60, with a washout of poor operations. With bank write drowns, could see some easy deals for well run operators to pick up some assets on the cheap. Think about when Chesapeake was selling of assets a few years back, but expand that to every operator that has a poor balance sheet.

quote:

---

I know that nothing is definite in the world of O&G, but I've been reading quite a few articles and a lot of speculation points to WTI ~$55-60/bbl and Brent ~$60-65/bbl, even with the unrest in the ME, for the long term and foreseeable future. Their reasoning is the fact that BH's numbers showed only one rig reduction which was the lowest drop in the past 24wks. They believe that producers and drillers are comfortable for ~$60bbl (WTI) and would begin ramping up production.

What do y'all think?

---

I doubt we will see production "ramp up". We may have production stabilize, because $60 is enough to drill and maintain production levels but not grow. I think WTI would need to get closer to $70 for most operators to "ramp up" like we saw. It takes a lot of capital burn to grow production in these shale plays at a certain point.

Was out in West Texas last week and I base a lot of my thoughts on the oil price on activity. It looked like H&P had about 60 rigs in their yard there, but most businesses still seemed to be working and the parking lots are fairly full. There were a few closed buildings/ companies but I expected more.

I was there in '99 when we hit $8 oil that summer and that was devastation with almost no businesses open. This feels different like companies have really got their efficiency projects going strong and that a higher oil price is not necessary.

I get the feeling that most companies are comfortable where we are now and are trying to hold what they have.

I was thinking upper $60's by June/ July and $75 by end of year but I am not as confident now. Looks like $60 is where everybody is happy and if it holds companies will align and be profitable.

I don't see it getting any easier for us equipment suppliers.

quote:

---

I don't see it getting any easier for us equipment suppliers.

---

Are you V&M, Process, Surface Systems, OneSubsea, or Drilling?

XOM now trading at 12.78 PE and DY of 3.43%

The yield is very high for XOM and the PE is slightly on the high side. 20 Forward PE. These things are going down even more.

process

Don't be surprised to see some operators pick up rigs in the second half of this year.

quote:

---

Don't be surprised to see some operators pick up rigs in the second half of this year.

---

I'd be very surprised if anyone with a drilling program is still working within cash flow. They may be drilling due to leases/contracts or may be private equity backed.

Iraq to increase production by 26% to defend market share, worsening a somewhat diminishing glut. Interested in OPEC's response come next week.

quote:

---

Iraq to increase production by 26% to defend market share, worsening a somewhat diminishing glut. Interested in OPEC's response come next week.

---

Theyre about to be ISIS land anyway, we'll see how that forecast holds up.

quote:

---

quote:

---

Iraq to increase production by 26% to defend market share, worsening a somewhat diminishing glut. Interested in OPEC's response come next week.

---

Theyre about to be ISIS land anyway, we'll see how that forecast holds up.

---

ISIS is still a long way from Iraq's major oil fields. If they really do start do get close then the Iraqi government will have essentially failed. And in that case I would imagine that the semi-autonomous Kurds would claim the northern ones as their own, and Iran would probably swoop in to take control of the southern ones. And good luck to ISIS if they try to pick a fight with either of those two. They're both far from the disorganized, Quick to surrender type forces they've seen from Iraq and Syria.

The central oilfield outside Baghdad is the only one that I think might eventually fall under Isis control if they continue in their current path, not sure anybody would be up to the task of stopping them short of that.

Just my two cents.

Iraq will do what the U.S. tells it to do so not worried about their energy policy.

Iraq will do what the US tells it to do?

Hahhahahahhahahahha!!!!!!

Once the oil gets impacted, Iraq will do whatever we say or well do it for them

quote:

---

Once the oil gets impacted, Iraq will do whatever we say or well do it for them

---

They're a house of cards right now with little choice.

You are both completely wrong about Iraq.

We have very little leverage with their policy makers.

quote:

---

You are both completely wrong about Iraq.

We have very little leverage with their policy makers.

---

Except if they piss us off and we pull out completely. Iraq production goes bye bye. They know this.

Well, we've pretty much told them "good luck" with ISIS. . .

http://www.foxnews.com/politics/2015/05/28/white-house-isis-strategy/

Once ISIS takes Iraqi Kurdistan or Southern Iraq then we'll kick their ass. Until they get to the oil nobody cares. Isis can claim all of northwestern Iraq if they want.

Once ISIS got close to Mosel that's when we started caring. If they want Ramadi or Tikrit were not going to stop them.

AgLA,

Iraq is far more concerned with Iranian policy than US. Also, you are vastly underestimating the Shia if you believe that ISIS would have any hope of seiizng the southern fields and the terminals in basra.

We have leverage with the KRG, but not the central Iraqi government. Make no mistake, Iraq will produce as much as they possibly can, and the only country with the pull to change that is Iran, not the US.

Everyone's phones got cut off

Most analyists agree that any ME " crisis" premium is already factored into the current price. Years ago something from good case of hemmeroids in any ME tyrant to a full fledged war would cause significant price spikes but the market has largely tamed that input. Don't count on a flaming oilfield in Iraq to help raise the price in any significant amount.

What about one in Saudi started by Iran?

Flaming fields in Saudi would cause a catastrophic price increase.

Just got a random call to drill one well in Oklahoma, maybe. They can't decide if they are going to drill the well or not. Will know by July. Very odd call.

quote:

---

Just got a random call to drill one well in Oklahoma, maybe. They can't decide if they are going to drill the well or not. Will know by July. Very odd call.

---

There's 'ol in then thar hills I hear.

quote:

---

quote:

---

Just got a random call to drill one well in Oklahoma, maybe. They can't decide if they are going to drill the well or not. Will know by July. Very odd call.

---

There's 'ol in then thar hills I hear.

---

Ol at sixty bucks a barl!

Chasing Meramec?

Any rumors or predictions about tomorrow's meeting?