Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

Monterey Shale

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Monterey Shale oil reserves cut by 96%

Unread postby ROCKMAN » Fri 23 May 2014, 16:51:43

Pops - "Am I wrong thinking this is the beginning of a sea change in how the world looks at shale". I'm not trying to flaunt the "I'm the old experienced geologist" mantra but it will sound like it. This isn't the answer to your question about the world view of shale resources...it's my personal view. Am I shocked and alarmed that the recovery has been so drastically reduced? Not in the least because I put no value on the original estimate. And I put no more value on the new number. It may one day proved to be that large...or even smaller. Don't know which it will be and really don't care.

It's not that the future recovery of X bbls isn't important (and obviously not nearly as important as the rate we'll produce the reserves) because it is critical. What isn't important in my very biased opinion is what anyone estimates those metrics to be. You know I've been hunting for oil/NG for almost 4 decades. But the vast majority of the projects I evaluated were generated by a coworker or a third party. And in probably 95%+ of the SUCCESSFUL wells drilled fewer reserves were developed than originally estimated. And those estimates were made with great more details and data base than those MS estimates...past and present. And then there's the reality that many of those prospects were dry holes with the reserve estimate reduced 100%.

If you've noticed I seldom argue about anyone's numbers because there' nothing to say except that there's rarely sufficient evidence to make even a foolish WAG let alone present any estimate as credible. There maybe be 600 million bbls of oil to recover from the MS with current tech and prices. But so what if that number is correct? It has no bearing on the future production rate from the MS and what impact that might or might no have on the US economy. But remember where my sh*ty attitude was first inspired: 39 years ago my first project at Mobil Oil was drilling the development wells in a new offshore GOM field. Those reserve estimates were based on thousands of miles of state of the art seismic that was analyzed by a very experienced team for three years and the information confirmed by two exploration wells drilled in the field. The estimate: 25 million bbls of oil and 120 bcf of NG.

And my results? Drilling as per the exploration geologists' maps my first 5 wells were drill holes that reduced the estimate from 25 million to 1 million bbls and from 125 bcf to 25 bcf. This is probably the worst fail in my four decades but far from being the only one. Just last weekend I perforated a thin NG reservoir in one of my La wells that had depleted the original completion. I told my boss why I thought it was a waste of money. But the partners in the well (most of whom have had little oil patch experience) kept aggregating him about it so he gave in. So last Saturday I shot the well and started flowing the NG into the sales line. And by Thursday the well stopped flowing because it was now depleted. Only cost $40,000 to shoot it so it didn't break the bank. But I could have put on one heck of a crawfish boil for that money. And no...I didn't get a pat on the back for making that correct call. In situations like that you just keep your mouth shut. "I told you so's" don't make the boss any happier when he's already pissed off. LOL. Sorta like p*ssy farts...some things are just not meant to be discussed.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11397
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Monterey Shale oil reserves cut by 96%

Unread postby Graeme » Fri 23 May 2014, 18:40:53

Write-down of two-thirds of US shale oil explodes fracking myth

Next month, the US Energy Information Administration (EIA) will publish a new estimate of US shale deposits set to deal a death-blow to industry hype about a new golden era of US energy independence by fracking unconventional oil and gas.

EIA officials told the Los Angeles Times that previous estimates of recoverable oil in the Monterey shale reserves in California of about 15.4 billion barrels were vastly overstated. The revised estimate, they said, will slash this amount by 96% to a puny 600 million barrels of oil.

The Monterey formation, previously believed to contain more than double the amount of oil estimated at the Bakken shale in North Dakota, and five times larger than the Eagle Ford shale in South Texas, was slated to add up to 2.8 million jobs by 2020 and boost government tax revenues by $24.6 billion a year.


theguardian
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Fusion
Fusion
 
Posts: 13258
Joined: Fri 04 Mar 2005, 04:00:00
Location: New Zealand

Re: Monterey Shale oil reserves cut by 96%

Unread postby Mesuge » Fri 23 May 2014, 21:39:44

Pops wrote:Just noticed this, an example of unfortunate press timing

Europe Has 28-Year Shale Gas Rebuff to Russia: Chart of the Day
By Ladka Bauerova and Radoslav Tomek May 19, 2014 5:00 PM CT
.


Definately CEE region sounding names of those propagandists.
That place is in panic now in the "elite circles" and asorted supporting apparatus, they are finally grasping the "freedom and democracy" was only odd 25years of artificial flirt with consumerism on steroids (for them and not so much in case of labor force on 1/5th of western EU wages), now it's back to classic power politics on the continent with Germany and Russia calling the shots, no overseas deux et machina protector.
User avatar
Mesuge
Heavy Crude
Heavy Crude
 
Posts: 1500
Joined: Tue 01 Nov 2005, 04:00:00
Location: Euro high horse bastard on the run

Re: Monterey Shale oil reserves cut by 96%

Unread postby ROCKMAN » Fri 23 May 2014, 22:06:27

M - But poorly designed propaganda in the eyes of anyone with a basic understanding. Unfortunately that leaves a very large portion of the population vulnerable. From this garbage can:

"The European Union has enough gas trapped in shale to free the bloc from reliance on Russian energy supplies for about 28 years if only the constituent countries are prepared to extract it." First, they refer to the volumes as "reserve" which they aren't even by the most liberal definition. They even have difficulty passing the numbers off as "resources" given how little testing has been done. And then there's the silly 28 year metric. Regardless how much NG reserves may be producible from European shales there's no reason to expect they would be able to be delivered at the rate of EU consumption for a 28 year continuous period. Even with the "great US shale gas" we don't deliver nearly enough from the shales to meet our domestic demand. In fact our domestic and unconventional NG production combined can satisfy our demand for X years. In reality it can't fully meet our demand for 24 hours: the US is still a net NG and LNG importer.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11397
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Monterey Shale oil reserves cut by 96%

Unread postby Newfie » Fri 23 May 2014, 23:03:21

Probably a stupid question but......how do you guys think this will play out in the markets? I think we hit 1900 today. Still gonna rise on the hopium bubble or is this gonna interject some reality?
User avatar
Newfie
Forum Moderator
Forum Moderator
 
Posts: 18458
Joined: Thu 15 Nov 2007, 04:00:00
Location: Between Canada and Carribean

Re: Monterey Shale oil reserves cut by 96%

Unread postby Mesuge » Sat 24 May 2014, 03:46:14

In a way you have to give them credit for duct taping the system for so long. The situation is quite ripe for massive 30-60% (or even worse) shakeout, but it could be postponed yet again for few more years. The problem now is this could be the "ultimate reset" so shorting stocks/housing bubble ala 2008 won't be honored later, brokerage houses going belly up, perhaps only minor section of the industrial stocks surviving and only in certificate form in direct ownership at that.

http://www.zerohedge.com/news/2014-05-2 ... ick?page=2

Anyway, I'd look for the broader realization of the shale scam going mainstream as possible trigger but that could be dragged onto 2015-2018, perhaps earlier 2015-16 for the effect of market wolfs sniffing the blood in advance, who knows, I'd bet the people at various systemic points are indeed terrified of the future anyway since 2000s, there is no way how to land this thing without major systemic dislocation. Boy, it will be epic: pension and SWF funds, bank accounts, brokerage portfolios, int. system for letters of credit, .. all wiped out..

Now the powerfull (mainly the energy owners and stuff producers) will attempt to pick it up from the floor, and immediately patch up some basic new system of int. trade but it will be definately different much less complex world order. So I do subscribe to the Seneca Cliff thing, postponment after postponment equals pressure buildup to the maximum and beyond and "one day" a hard reset.
User avatar
Mesuge
Heavy Crude
Heavy Crude
 
Posts: 1500
Joined: Tue 01 Nov 2005, 04:00:00
Location: Euro high horse bastard on the run

Re: Monterey Shale oil reserves cut by 96%

Unread postby Pops » Sat 24 May 2014, 07:11:57

ROCKMAN wrote:I put no value on the original estimate. .. It has no bearing on the future production rate from the MS and what impact that might or might no have on the US economy.

Thanks ROCK, I understand where you're coming from, doesn't matter if the oil is there an a graph, only if it's there when the tap opens.

I stumbled across this at WSJ Market Watch and thought, This Guy Feels Me!
Dream of U.S. energy independence was just revised away
Opinion: Most of the shale oil we were counting on doesn’t exist
...The hype about shale prospects are wedded to a Wall Street cheap capital machine that is showing clear signs of over-heating.

...For the U.S. as a whole, the Monterey write-down should squelch any talk of the U.S. needing to export any of its oil ..

Then I realised it was Chris Martenson, LOL. Still, it says everything I'm thinking about the KSAmerica mantra; Resurgent US manufacturing based on cheap oil that never appeared (and now perhaps it begins to dawn never will), the Diane Sawyer gusher: US Will Be Worlds Largest Exporter!! story; US vs RU heating the EU blather; Koch's Lift The Crude Oil Ban campaign, etc, etc.

Martenson wrote:Given how much hope and political posturing rested upon the shale oil miracle in the U.S., the Monterey write-down is one the biggest news developments on the wires right now.


I get the fact that the actual oilmen had walked away from the MS, even Occidental was hoping to spin off their MS property this year - ouch. But for the average investor and politician, I gotta think this has to be a worm that digs into their underlying assumptions. So in a strange way this is good news in my mind. I was skeptical all along and saw the Pie/Sky estimates as encouraging people to invest in the wrong direction. In particular California had already started counting their chickens and those chickens' chickens, down to the umpteenth generation, LOL - now perhaps they can get over that and start actually addressing the reality of lowered expectations.

It could be that this advances the technotopia dream of renewables replacing oil, and I guess that's OK as far as it goes, at least it leads somewhere. In a phrase I think "the only replacement is adjustment" but at least renewables get us thinking there is no more free lunch. So I look at this as a dash of realism in a sea of bubbly PR stock flufferisim.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
User avatar
Pops
Elite
Elite
 
Posts: 19746
Joined: Sat 03 Apr 2004, 04:00:00
Location: QuikSac for a 6-Pac

Re: Monterey Shale oil reserves cut by 96%

Unread postby ROCKMAN » Sat 24 May 2014, 09:20:39

Newbie - How will the stock markets react to reality? THANKS!!!! I love starting off the day with a good laugh. BTW just started watching "Republic of Doyle" and my wife has developed a hankering to visit Newfiland. Dog knows why. LOL.

Pops - Good points. I think it boils down to just one simple fact for these propagandists. Like I was just teasing our buddy Newbie. They can focus on the reality of the current situation (ignoring all the negatives) or focus on future (though unprovable) good times ahead. About the only time they refer to the current situation is by pointing out the increase in US and global oil production. But they also typically avoid mentioning the high oil prices that brought about this increase and the damage it has unlisted on the economies of the vast majority on countries.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11397
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Monterey Shale oil reserves cut by 96%

Unread postby Newfie » Sat 24 May 2014, 09:40:32

No TV so I've never seen the Republic.

But I've see plenty of oil support industry in St. John's and what tar sand remittances can do for a local economy where their only renewable resource (cod) was exploited beyond renewable.

I get that the markets work on fantasy, which is why I prefaced the question with "Maybe dumb".

So let me ask the question a different way. How will YOU be changing your investments based upon this news?

But then I need to ask yet another question.....how much faith to you out into the announcement? Since I'm a Newbie, you sage old farts should have a better idea on what is really there and not be taken in by the hype.

Or this whole discussion meaningless in the physical world because there is no science to it at all, it is all just hype, .13.8billion and 600million?

Does anyone here really have a clue? Other than the only thing we know is we are being lied to?

And if THAT is the case, well then the markets are actually doing a good job of reacting to the only thing they can, human emotion.
User avatar
Newfie
Forum Moderator
Forum Moderator
 
Posts: 18458
Joined: Thu 15 Nov 2007, 04:00:00
Location: Between Canada and Carribean

Re: Monterey Shale oil reserves cut by 96%

Unread postby ROCKMAN » Sat 24 May 2014, 10:00:27

Newfie newbie - "...the markets are actually doing a good job of reacting to the only thing they can, human emotion." IMHO that's exactly the situation. Just look at the MS situation alone. How is making investments to day based upon big increases in MS oil production that would be many years away even if there billions of bbls of recoverable oil to be had? IOW who is buying stock on that hype and planning to hold it for the next 5+ years? I would guess almost no one. All the oil hype (positive and negative) only effects short term positions which often have no relationship to the long term prospects IMHO.

And hell no...I don't hold any positions in oil stocks. That boat sailed one time ago.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11397
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Monterey Shale oil reserves cut by 96%

Unread postby Pops » Sat 24 May 2014, 10:39:34

In the real world of actual markets the results will be 2-fold I'd guess
Increasing the doubt that oil from tight shale is unlimited
increasing the PR pushing tight shale as unlimited

Maybe 3, if you include partisanship, which, depending who makes the rules will affect everything.

It is a strangely partisan thing in the US, environmentalists see unlimited oil as environmentally damaging (see Keystone XL protests) and believe some concoction of renewables will save the world. Socialists see big oil (think Kocks) as unmitigated evil and want them hurt no matter what, (see Keystone XL protests) even though oil is the source of all wealth that they want redistributed.

The right like profit.


So as it turns in my mind after a few days, I think things won't really change in the least.
.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
User avatar
Pops
Elite
Elite
 
Posts: 19746
Joined: Sat 03 Apr 2004, 04:00:00
Location: QuikSac for a 6-Pac

Re: Monterey Shale oil reserves cut by 96%

Unread postby westexas » Sat 24 May 2014, 11:04:50

Re: Occidental’s plan to spinoff California operations (interesting statistic about Venoco’s results).

Occidental Plan to Split off California Seen as Early (October, 2013)
http://www.bloomberg.com/news/2013-10-28/occidental-plan-to-split-off-california-seen-as-early.html

Chief Executive Officer Stephen Chazen, who began talking to investors and analysts in April about the possibility of turning Occidental’s California operations into a stand-alone company, is facing skepticism as the promise of tapping one of the biggest U.S. oil reservoirs has yet to be realized. While Chazen hasn’t made any specific proposal public, shareholders including Cambiar Investors LLC and Frost Investment Advisors LLC are questioning whether more patience is needed to realize the best value from a spinoff or initial public offering. . . .

Venoco Inc., which has 46,000 net acres in the Monterey, drilled 29 wells in the formation from 2010 to 2012 and as of June hadn’t seen any production, according to a company filing. It’s now reduced spending in the region. . . .

Since 2010, Occidental hasn’t been able to increase production there beyond an average 1 percent in any three-month period — far below the expectations of analysts such as Bank of America Corp.’s Doug Leggate, who said in 2011 that the company could be worth $200 a share once it realized all the benefits of its California assets.

A slow permitting process and high costs have held Occidental back from boosting production more rapidly, CEO Chazen has said. The company’s business in the state will generate free cash flow of $1 billion this year based on a $1.5 billion capital program. Occidental’s California operations can raise output by 5 to 8 percent a year while generating a rate of return higher than 20 percent, according to a company presentation in July.


Monterey Shale Is A Bust – Negative For Occidental Spin-Off And Other Implications (May 23, 2014)
http://seekingalpha.com/article/2235603-monterey-shale-is-a-bust-negative-for-occidental-spin-off-and-other-implications

Summary
• The EIA wrote down 96% of the estimated recoverable oil from the resource.
• This could negatively impact the anticipated spinoff of OXY’s California operations.
• Other companies are affected, including CHK’s acreage position and VQ’s LBO debt.
• Could in theory negatively affect California muni bonds.
westexas
Expert
Expert
 
Posts: 248
Joined: Tue 04 Jun 2013, 06:59:53

Re: Monterey Shale oil reserves cut by 96%

Unread postby ROCKMAN » Sat 24 May 2014, 12:13:59

In case some folks missed the westexas subtle point: Venoco is an independent energy company engaged in the acquisition, exploitation and development of oil and natural gas properties primarily in California. What I find a bit amusing is the first thing you see when you open their web site: "Venoco is concerned about the environment. We operate in areas with extensive environmental regulations such as in and around the Santa Barbara Channel as well as prime agricultural areas such as the Sacramento Basin."

So: Venoco drilled 29 wells in the Monterey Shale and as of June hadn’t seen any production. So you might wonder why a company would keep drilling after 10 or so failures. Easy answer: they are perhaps making an adequate living doing so. And there's nothing illegal about. A management team drilling wells (successful or not) for investors has the right to be compensated as well as get a piece of pie from successes that the investors paid 100% to drill. These are called "oil and NG promoters" and do their best in times/areas of high hype. Back in the 70's boom I watched one such promoter drill 18 very expensive dry holes in a row on behalf of a NG pipeline company (common easy meat in those days). Did not make a smile commercial completion. And how did the promoter do: the senior hands retired millionaires when they eventually rolled the company up.

I don't know if Venoco falls into that category but you know what they say when it walks, smells and sounds like a duck. The initial hype on the MS was the perfect hunting ground for a promoter.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11397
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Monterey Shale oil reserves cut by 96%

Unread postby ROCKMAN » Sat 24 May 2014, 14:33:34

Pstarr - I'm mentioned before in the oil patch web have a short hand term we use all the time for such projects allowing us to kip the details. We call them "money disposal wells". Similar to how we view salt water disposal wells. So perhaps some of those algae pond projects might be referred to as "money sinkholes"? Or maybe MWP's...Monetary Waste Pits". Hmm...just doesn't roll off the tongue.

I still recall bank in the 70's boom investors mailing checks off to buy a piece of a drilling project they found in the classified section of the WSJ. And then wondering why they didn't start getting revenue checks back in the mail. And the wondering why the telephone number of operator was no longer in service. As been said before: the most important element in a con is greed...of the mark.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11397
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Monterey Shale oil reserves cut by 96%

Unread postby Newfie » Sat 24 May 2014, 20:31:55

Unfortunately I think that works all too well for the greenies as well. In that case the "greed" is the personal desire to do good, or accumulate brownie points, whatever.
User avatar
Newfie
Forum Moderator
Forum Moderator
 
Posts: 18458
Joined: Thu 15 Nov 2007, 04:00:00
Location: Between Canada and Carribean

Re: Monterey Shale oil reserves cut by 96%

Unread postby rockdoc123 » Sat 24 May 2014, 22:40:36

So: Venoco drilled 29 wells in the Monterey Shale and as of June hadn’t seen any production. So you might wonder why a company would keep drilling after 10 or so failures. Easy answer: they are perhaps making an adequate living doing so. And there's nothing illegal about. A management team drilling wells (successful or not) for investors has the right to be compensated as well as get a piece of pie from successes that the investors paid 100% to drill. These are called "oil and NG promoters" and do their best in times/areas of high hype. Back in the 70's boom I watched one such promoter drill 18 very expensive dry holes in a row on behalf of a NG pipeline company (common easy meat in those days). Did not make a smile commercial completion. And how did the promoter do: the senior hands retired millionaires when they eventually rolled the company up.


so I have to call you out on this. There is almost no money available for "promoters" as you suggest for the past number of years, I know this quite well having been on the board of companies seeking money. There was a time when promoters did their thing, not anymore. Large private investment firms will back a management team in a project but usually they require that management team to front up anywhere as much as 10% of their total individual worth. No one is going to do that for a paltry salary. I was in this business for many years and I can say I never met anyone in all of the companies I met who did not believe their own story. They were not trying to bilk their investors, they actually believed they were right. As is the case in oil and gas exploration their is generally about 10% of them who are right. If you look at the management teams in most of these companies they are not folks who need the salary. They do it for the passion and of course for the huge upside if they are successful.

This is not a story about some shady engineers and geologist out there trying to bilk the public, this is a story about individuals whose vision was incorrect, as it has been in this business more often than not. Everyone likes to talk about the companies who were successful but are embarrassed to talk about those who weren't. There are way more of the latter than the former I'm afraid.

In this particular case...the Monterrey Shale. It has been producing for a long time. It is a complex reservoir...layered, not all shale and the shale that is there is young (i.e. has not been compacted for 100's of millions of years like the Marcellus). The shale reservoirs are all different, I can't think of any two that are identical. The hype here is the folks who talked about the vast potential of the entire play, not the company that was fixated on their own lands. They actually believed the possibility, for good or bad. I hardly believe they were setting up some kind of company where they could take money from unsophisticated investors.
User avatar
rockdoc123
Expert
Expert
 
Posts: 7685
Joined: Mon 16 May 2005, 03:00:00

Re: Monterey Shale oil reserves cut by 96%

Unread postby ROCKMAN » Sun 25 May 2014, 05:33:05

doc - my company has operated $400 million of drilling projects in the last 4 years and 95% of them were acquired from promoters. During that time I reviewed way more than 100 promoted deals. Our entire biz plan was based on doing such as opposed to generating prospects...didn't have time to wait. And every prospect had multiple partners who paid a promote.

Our biggest problem, when NG prices fell, was prospect flow from third parties. With the exception of my horizontal secondary recovery project everything we're drilling now was generated by a third we' re paying a promote to for participation rights. And we have a small partner on my project who is paying for a promoted interest.

And all of the dozens of Eagle Ford Shale wells I know something about have promoted partners. Chesapeake was one of the biggest promotors in the play. For a while lots of folks paying ridiculous promotes in order to share their "glory". LOL.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 11397
Joined: Tue 27 May 2008, 03:00:00
Location: TEXAS

Re: Monterey Shale oil reserves cut by 96%

Unread postby rockdoc123 » Sun 25 May 2014, 11:59:51

And all of the dozens of Eagle Ford Shale wells I know something about have promoted partners. Chesapeake was one of the biggest promotors in the play. For a while lots of folks paying ridiculous promotes in order to share their "glory". LO


There seems to be some healthy abuse of the English language in this discussion. You use the term "promote" both to describe someone presenting their plays in an optimistic light to the investment public and then in almost the same sentence use the same term to indicate someone paying a premium to participate in a particular play.

This premium is not limited to shale plays but is a common strategy for conventional plays around the world. Normally this happens where one company gets into a play early on, shoots seismic, perhaps drills a well or two but adds value. A party wanting to join that project would be expected to pay for that privilege and normally that is done through a leveraged farm-in arrangement whereby the farmee would perhaps pay all of the forward exploration costs and only receive say 50% of the hydrocarbons produced. The farmor stands to make a good profit if the play is successful but often so does the farmee. This has been common practice for decades around the world. Cash payments made to companies to enter a play are much less common, although you often see parties willing to pay for past exploration costs. Cash payments in the way of large signature bonuses used to be quite common but those are paid in competitive bids to governments (eg. Lasmo paid $400 MM for the priviledge of signing a contract in Venezuela back in the nineties; signature bonuses of $200 MM or higher were common in Kurdistan once they started to negotiate their own agreements).

Promoting a play is something else entirely. The word has some bad connotations from the abuse of some small cap investment bankers but in reality all it is is someone out trying to sell you on an idea. Do they show only the good stuff and not the bad stuff (of course), do they lie about information (if they are a public company this is illegal and monitored by the SEC, OSC or similar bodies in other jurisdictions).

My point is that companies are not in the business to make money from promoting a play. If they didn't believe in the play in the first place they wouldn't be there simply because the cost of failure is so great. If you are a public company promoting your play to the public with the hope of driving up share prices it'sa mugs game simply because as an insider you cannot trade those shares legally (blackouts and there is almost always something you know that the public doesn't so you are contrained). Perhaps you might get someone to come in and buy your company and you then can take advantage of the share price uplift but nobody is going to pay more than they have to and I've noted that prices paid for acquisitions over the past few years have been remarkably similar based on measures such as price paid versus cashflow per share, price paid versus flowing BOE, price paid versus NPV. That means that it is pretty hard to dupe someone into buying a dud.

They take advantage of leveraged farmins as it lowers their capital risk exposure but they actually don't make money from this strategy....they just save it. If they get a leveraged farmin that has a cash component attached it generally only goes a certain way to having paid off past costs.
User avatar
rockdoc123
Expert
Expert
 
Posts: 7685
Joined: Mon 16 May 2005, 03:00:00

PreviousNext

Return to Peak Oil Discussion

Who is online

Users browsing this forum: No registered users and 95 guests