Category: quotes

“This week, Georgetown University’s board voted to sell off its investments in coal, and Norway’s sovereign wealth fund, the largest pool of investment money in the world, announced it would do the same…Divestment won’t move Exxon Mobil directly — that’s impossible; the company is dug in, and someone else will simply buy the stock when it’s sold. But divestment will undercut the industry’s political power…Divestment is one tool to change the zeitgeist, so that the day arrives more quickly when the richest and most powerful can no longer mock renewable energy and play down climate change.”
 
–Bill McKibben, distinguished scholar at Middlebury College, founder of the group 350.org (in the Washington Post)

“From Capitol Hill to the Motor City, marble statehouses to mud strewn shale plays, lawmakers, policy wonks and industry leaders repeatedly invoke U.S. government energy forecasts to call for more drilling, more fracking and more nuclear plants. These predictions are made by the Energy Information Administration. They are ostensibly apolitical, certified with a federal seal of approval and are ripe fodder for the journalists, analysts and government agencies responsible for painting a picture of the country’s energy future. But in truth, some experts say, we’d have better luck calling Miss Cleo [than using EIA forecasts].” 
 
–Alan Newhauser, US News & World Report [Note: Miss Cleo is an American psychic]

“Multinationals like Halliburton, Schlumberger, and Weatherford have shed tens of thousands of skilled workers that have centuries of combined experience. If history is our guide – and it’s a good guide—most of these people will find employment in other industries and never return, even when the text message, “When can u come back to work?” flashes on their mobiles… To be sure, workforce and equipment can be built up again in the future, but it will take time and money. What wounded service company is likely to invest in new parts and hire back people unless they are convinced that activity is going to be sustained?” 
 
Peter Tertzakian – chief energy economist and managing director, ARC Financial

“Despite Europe’s desire to loosen its reliance on Russian gas, the shale revolution has turned out to be a dud. Difficult geological conditions, fierce environmental opposition, cumbersome regulations and a bloody war in Ukraine have conspired to quash investors’ enthusiasm and wear down their patience. The collapse of oil prices to less than $50 a barrel in March was the final straw because the cost of much of Europe’s gas, including Russian imports, is linked to crude.” 
 
Bloomberg News 5-12-15

“The large oil frackers have spent $80 billion more than they have received from selling oil. Wall Street greased those skids by underwriting debt and equity securities that allowed them to garner billions in fees. The banks are clearly incentivized to enable the frack addicts. What’s less obvious is whether investors are furnished a clear analysis of the returns these companies actually generate. 
 
“As oil prices rose, it seemed like the frackers should have been drowning in cash. But none of them generated excess cash flow, not even when oil was at $100 a barrel. In fact, the opposite was true. 
 
“Recently, oil prices have declined. Because the frackers have less revenue, they’ve been forced to cut Capex. Though they will continue to spend more dollars than they take in, production is no longer growing.  A business that burns cash and doesn’t grow isn’t worth anything. 
 
“On the $36 of revenues per BOE [barrel of oil equivalent], Pioneer [Pioneer Natural Resources] spends about $14 on field operating expenses and another $6 on corporate expenses. Subtract the historical $28 of Capex, and Pioneer loses $12 for every BOE it develops. That’s like using $50 bills to counterfeit $20s.” 
 
All of the above is from a recent presentation by David Einhorn, cofounder of Greenlight Capital

“The U.S. oil production decline has begun. It is not because of decreased rig count. It is because cash flow at current oil prices is too low to complete most wells being drilled…The decrease in well completions provides additional evidence that the true break-even price for tight oil plays is between $75 and $85 per barrel.” 
 
Art Berman, independent consulting geologist

“What’s happening is that we [drillers in the Marcellus shale] continue to get better and Continue Reading

Quote of the Week “Due to further degradation of the security situation in the vicinity Continue Reading

“With oil prices at about half their summer 2014 level, will the investment continue to Continue Reading

“We think 1,000-1,200 [U.S. oil] rigs will keep production steady. With 800 rigs [now], we Continue Reading

“It’s disappointing that American Petroleum Institute continues to look for reasons not to engage in Continue Reading

The rise in the Saudi Aramco oil rig count had been evolving over a long Continue Reading

[Advocating for U.S. oil exports] “It is time to build policies that reflect our newfound Continue Reading

“Is there a black swan that we don’t know about which will come by 2050 Continue Reading

“The fiscal position of Venezuela will suffer the most from the decline in world oil Continue Reading

[Following up on last week’s Quote”]  “Goldman Sachs doesn’t seem to be cluing in to Continue Reading

“Maybe a month ago was the first time that I ever saw the price really Continue Reading

“The decline in the U.S. rig count likely remains well short of the level required Continue Reading

“The U.S. growth story has been central to the oil market story.  In a few Continue Reading

“The problem is that the US shale sector in aggregate is still not free cash-flow Continue Reading

“We spent a lot of money to go out and drill and use new technologies Continue Reading

“You can never have an agreement whereby everybody cuts production. We can’t trust all OPEC Continue Reading

“Sweet crude from the Bakken fetched less than $32 per barrel on Jan 6, and Continue Reading

“Saudi Arabia and their allies have been very clear about not giving up market share.  It’s Continue Reading

“If prices go down, we are going to cut back to save our wealth—which is oil in the ground.  I’ve seen this six or seven times.  We have ample liquidity, our total revolver available, no near-term debt, a lean organization with just 1,100 people, production of 200,000 barrels per day, and a low-cost, high-margin operation.  We’re going to navigate right through it.”  

—   Bravado from Harold Hamm, CEO Continental Resource.