cajunaggie08 said:

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Same over here in my corner too. I don't blame anyone for not ramping up new projects. We're 2 years removed from negative prices. Offshore projects take years and years of planning and are meant for long term returns. No one has the confidence that these prices will stick around Its still a hard sell to convince people to sink the capex needed to take advantage of high prices when its fresh in everyone's mind just how fast the Saudi's and OPEC can tank the price to maintain market share.

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Its kind of a chicken and the egg situation. If there aren't going to be new projects and capex expenditures then it'll keep supply low and the price will stay high. But if everyone increases production then it'll drop the price.

Not sure if this is the right thread, but I was messing with some data last night to see how much the consumer is really being hit by prices at the pump. Interestingly, we aren't very much above the two-decade average.
Demand destruction from commuters is probably not likely at these levels.

Worst of 2008: AWE of ~$608 and ~$62 to fill up 15 gallons
March of 2022: AWE of ~$919 and ~$63 to fill up 15 gallons

BiochemAg97 said:

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shiphunt said:

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Not sure if this is the right thread, but I was messing with some data last night to see how much the consumer is really being hit by prices at the pump. Interestingly, we aren't very much above the two-decade average.
Demand destruction from commuters is probably not likely at these levels.

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I'd also be interested in a cost per 100 miles type analysis. Fuel efficient has increased since 2008 so either that same 15 gal tank gets more miles or the tank is smaller.

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What truck are you driving????

Goose06 said:

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Curious what Jen Psaki is referring to with the 9,000 leases oil companies aren't drilling? Did she mean permits? Are these New Mexico BLM permits people get years in advance just in case the BLM were to decide they don't want to issue drilling permits anymore?

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Pretty much. Or permits for wells that company decided not to drill. Or company decided to drill longer lateral and made a new permit. The shorter lateral permit is obsolete, but still on the books.

9,000 permits is phony number.

Of course it is, psaki gave it.

Impossible.

Just big business greed...only way to explain....big business hates people and wants to destroy our economy....

I didn't listen to anything Psaki said, just commenting on what has been said/quoted above.

Based on what I can find in public data, there are currently 28,876 permits across the lower-48. Without taking a much deeper dive into the data, I'm not sure how many fall on federal/BLM, BIA, state or fee leases, but I think it falls in the "reasonable" category if she was talking about ~9,000 permits falling on federal/BLM acreage.

Now, let's talk about a state like Wyoming, which represents ~7,000 of the total permits, as an example of what the "permits" actually mean for some of these states. Full disclosure that Wyoming's permitting process has changed (and is continuing to evolve), but the original permitting process (which a lot of the existing permits were filed under) essentially provided the filer of the permit the exclusive rights to operate the well.

Not to name any companies in particular (although you could probably take a guess at a few of them), but large companies obviously used this to their advantage and would apply for permits in formations that may show potential but that they had no plans to actually drill any time in the immediate future. At the end of the day, these companies were trying to protect themselves from others coming in and drilling a well in a prospective interval (if that company got a permit, they had the right to drill). And yet, this heavily skewed the permit count of the state; there are numerous examples of a section with ~16 permits in the Niobrara, 8 in the Turner/Frontier, 8 in the Mowry, 4 in the Parkman, etc., few of which had any intent of being drilled anytime in the near future or at the spacing implied by the permits. Again, they were filed so no one else came in and drilled under them or stole operator rights.

Permitting varies widely from state to state and on lease type (fee/state/federal) and I am no expert. I just wanted to provide one example of why the total permits number may be accurate but isn't necessarily representative of any intent to drill.

Another example of why a permit count can be misleading is, if the permit process is cheap, some operators use it to guise their intentional plans (let's permit the crap out of several formations in an area to try to hide what our actual intentions are and what we are actually looking to test). Similarly, if a company is looking to divest their assets, they may look to permit some wells to present/solidify a story that their booked opportunities are economically sound and if they don't get the value they are "worth" that they are ready to drill those permits.

Just my two cents on the topic but, again, I didn't listen to any of the comments she made.

Just realized this thread is still going strong at $120/oil. One day long ago I wished it would have died when the business was better (circa '18) but I'm so glad it's survived! One of my go-to places for great info…

Oxy floated an offer to pay back debt early and it was accepted by the bondholders. The debt was positioned as first in line to be paid out in case of Oxy's bankruptcy.

Oxy is positioning itself to use this run up in prices as an opportunity to pay down their debt obligations. Which they have a ton after buying out Anadarko. By extension this is a tacit admission that for the 2.5B they had laying around, it was better used to reduce debt than go increase production. Which if they see that OFS costs and lead times aren't going to give them good returns, that probably wasn't a bad idea.

Also, I see this is a sign that Oxy plans to pay out Warren Buffet in cash in the future instead of issuing and further diluting its stock. As Buffet gave them cash at 8% rates, and stated if it couldn't be paid out in cash that he accepts Oxy stock.

Goose06 said:

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Curious what Jen Psaki is referring to with the 9,000 leases oil companies aren't drilling? Did she mean permits? Are these New Mexico BLM permits people get years in advance just in case the BLM were to decide they don't want to issue drilling permits anymore?

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I'm not going to pretend that I've kept careful track of everything Psaki says and validated to have a strong Bayesian prior in place for evaluating the truthfulness of her statements. My sources of information are such that selection bias is certainly a factor.

But she's been blatantly wrong or dishonest on enough things that I don't consider it worth listening to what she says. She's an unaccountable mouthpiece whose sole purpose is political advantage, not information or honesty.