re: Oil And Gas Executives Say It's Not Joe Biden Holding Back Domestic Production

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Investors worry that Joe Biden and the Democrats could step in at any time and totally destroy their investment.

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No, they dont. They worry about the historical price of crude oil, which is shite, as seen in my previous post. I get 90% of the people on this board are super lovey dovey with trump and by default hate biden, but he isnt to blame for lack of investment in oil and gas and if youve paid attention to the industry for even a second the last 7 years you might have a clue of this

BS

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You can literally see the price per barrel of oil going up continuously right after the election. What a coincidence.

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The very loud minority screaming that all was lost and oil would skyrocket after losing the election probably did it’s part too

Lots of contributing factors

And guess what, the Keystone pipeline hurt the Canadians more than anyone. Believe me I know. I was up there for 7 years building an oil sands project that was supposed to utilize the Keystone pipeline. Talk about F your cost of supply when you transition from pipeline to trucking to get your product to market.

Of course they say this. They know Uncle Joe will hammer their industry even more if they criticize him publicly .

1&4 and 3&5 are the same thing.

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No, they dont. They worry about the historical price of crude oil, which is shite, as seen in my previous post.

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It always amazes me how oblivious this Louisiana-centric board is whenever oil prices come up. It’s like people have been living under a rock for the past 8 years. 3 weeks of >$100 oil don’t make up for 8 years of pain in the industry.

A couple of comments in the OP’s survey link that sum up the point pretty well:

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Discipline continues to dominate the industry. Shareholders and lenders continue to demand a return on capital, and until it becomes unavoidably obvious that high energy prices will sustain, there will be no exploration spending.

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In this upcycle, investors have made it clear they wanted to see discipline from all players. So far, E&Ps for the most are exhibiting capital discipline. A significant part of E&P capital spending growth this year (2022 versus 2021) will be consumed by cost inflation as the cost for all inputs continues to increase against a backdrop of supply-chain challenges and limited incremental equipment being reactivated (due to fiscal constraints and manpower challenges within oilfield services and related suppliers).

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The probability distribution of prices is now more weighted toward lower prices for several reasons. First, at some point, the Russia–Ukraine war may cause demand destruction. Second, renewed city shutdowns in China indicate that COVID-19 could cause another recession in conjunction with the impacts of the Russia–Ukraine war. Third, a return to “normalcy” without precautionary buying due to the Russia–Ukraine war will remove some of the added demand that has fueled higher oil prices over the past several months.

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In other words, there is a ton of price risk/uncertainty right now. Oil might continue to climb. But it could also crash again in the near future. Hence the word discipline. Nobody wants to be the one left holding the bag during the next downturn. So O&G companies are taking profits and focusing on low-risk investments. It’s going to take sustained $100+ oil (meaning months if not years) for capital investment to go back to pre-2014 levels.

So yes, ESG and regulatory issues make a difference - as reflected by the survey responses/comments on those topics. But that’s not what these execs are talking about when they refer to “pressure to maintain capital discipline.”

Wall Street also made a shift 3-4 years ago to wanting free cash flow over market share. That’s also leading to greater capital discipline

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Instead, it’s a lack of enthusiasm from investors.

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We are one stupid arse fricking country.