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re: Is there going to be another retraction in oil prices?
Posted on 3/18/16 at 9:28 am to GREENHEAD22
Posted on 3/18/16 at 9:28 am to GREENHEAD22
Greenhead; go listen to the Abraxas petroleum earnings call. $AXAS. You really only need to listen to the first 15 min or so. They are a small company with assets in the Bakken and Permian. He basically said that they have a few DUC's that are just waiting for oil to be at the right price aka $50+.
I feel that this is a point where you start seeing completions ramp up on all these DUC's. This mean you'll start seeing more oil coming back to the market and we'll see a similar pattern to last year.
I feel that this is a point where you start seeing completions ramp up on all these DUC's. This mean you'll start seeing more oil coming back to the market and we'll see a similar pattern to last year.
4
Posted on 3/18/16 at 9:36 am to b-rab2
I don't think we get higher than $45 before US storage stops building. Once US storage builds stop for about 3-4 consecutive weeks that will be a sign to me that oil prices can find some stability. I would look for the market to edge back towards $30-$35 unless some of the excess supply can clear. Bankruptcies could help reign in more capex from some of the shale drillers that caused this glut. They are painful but necessary to clear the market out and rebalance. Linn looks like it could be a trigger for others on the edge to capitulate.
Posted on 3/18/16 at 11:19 am to b-rab2
quote:
I feel that this is a point where you start seeing completions ramp up on all these DUC's. This mean you'll start seeing more oil coming back to the market and we'll see a similar pattern to last year.
People are already completing DUC's IMO. Go look at the new bbl/rig coming on line compared to a year ago. Its doubled, in my opinion this is because they are already completing DUC's but aren't drilling as much. Lots of compaines are still hedged into 2016 so they will keep producing.
Posted on 3/18/16 at 11:46 am to b-rab2
Posted on 3/18/16 at 1:33 pm to b-rab2
If they need $50 WTI or Brent, they're going to have issues in my estimation. Off shore rigs with 80% fixed costs are breaking even, after royalties, at $35. That is a smaller exploration company with cost of interest. A larger producer should be making money almost down to the $20's.
Some frakers can make money in the $20's.
Some frakers can make money in the $20's.
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