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Best article about oil energy's collapse

Discussions about the economic and financial ramifications of PEAK OIL

Re: Best article about oil energy's collapse

Unread postby Outcast_Searcher » Sun 09 Apr 2017, 19:09:02

Observerbrb wrote:"You can ignore reality, but you cannot ignore the consequences of ignoring reality."

So you see that ignoring economics doesn't work then? Congratulations. That's a big part of the ETP's problem, by the way.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Best article about oil energy's collapse

Unread postby taw » Sun 09 Apr 2017, 23:37:19

Guys, you seem to think short is trying to make money selling individual copies of the ETP paper on this site to umm ... you.
I don't thinks so. That's gotta be the hardest way to make a buck I ever heard of.
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Re: Best article about oil energy's collapse

Unread postby Observerbrb » Mon 10 Apr 2017, 06:14:40

Outcast_Searcher wrote:
Observerbrb wrote:"You can ignore reality, but you cannot ignore the consequences of ignoring reality."

So you see that ignoring economics doesn't work then? Congratulations.


Are you talking about this?

Image

Or maybe about the following chart?

Image

We will see soon

Image

After all, if US grows at 0.5% YoY with 50$ oil, it will grow at 3% with 90$ oil??!!
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Re: Best article about oil energy's collapse

Unread postby Rockoil » Mon 10 Apr 2017, 16:40:49

Today, the wholesale price of gasoline (RBOB) is $1.70 per gallon or $71 per barrel. If the refinery buys its raw material for $50 per barrel its gross margin is $21 per barrel or $0.50 per gallon.

The ETP is garbage.


Marmico,
Your calculation is based on that one barrel crude going into the refinery delivers one barrel gasoline out. But that's not what Short is saying. He says it took 1.63 barrels of crude in refinery input, in 2016, to deliver 1.0 barrel gasoline refinery output. In which case the calculation should be, using your pricing figures :

1,63 x $50 per barrel = $81.50 (input)
wholesale gasoline per barrel = $71 per barrel (output) which gives a loss of 10.50 per barrel gasoline produced.

The EIA numbers support this:

Refinery Net Production
https://www.eia.gov/dnav/pet/pet_pnp_re ... mbbl_m.htm
Refinery & Blender Net Input
https://www.eia.gov/dnav/pet/pet_pnp_in ... mbbl_m.htm
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Re: Best article about oil energy's collapse

Unread postby ROCKMAN » Mon 10 Apr 2017, 17:19:44

Rockoil - "He says it took 1.63 barrels of crude in refinery input, in 2016, to deliver 1.0 barrel gasoline refinery output". I'm guessing you aren't aware that typically a bbl of oil contains only about 20% to 30% of that volume as gasoline chains. IOW it can take 4 bbls of crude oil to fractionate out 1 bbl of gasoline. And just in case you aren't aware the refineries don't throw away the rest of those hydrocarbon chains...like the diesel fraction. LOL.

I don't like being harsh but there are dozens of links on the web that cover oil refining in terms simple enough for a teenager to comprehend. You might want to check out some of them instead of relying on just what one person might post here...including the Rockman. LOL.
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Re: Best article about oil energy's collapse

Unread postby marmico » Mon 10 Apr 2017, 18:52:40

Image

Image
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Re: Best article about oil energy's collapse

Unread postby ROCKMAN » Sat 29 Apr 2017, 12:41:49

Always interesting to hear "experts" explain why selling fossil fuel assets (like $16 BILLION worth) in a depressed price market (for both oil and NG) is good for a pubco's long term health.

"Deal Of The Month: ConocoPhillips Cuts Gas Profile in $3B San Juan Sale

"Analysts say anything that makes an asset less gas-focused is ultimately a positive as ConocoPhillips sells off San Juan assets to Hilcorp Energy affiliate.
ConocoPhillips’ sale of its San Juan Basin gas assets to a Hilcorp Energy affiliate is a smart move, say analysts who recently reduced their forecast for U.S. gas prices.

"ConcoPhillips announced in mid-April its decision to divest roughly 1.3 million acres in northern New Mexico and southern Colorado assets for $2.7 billion, plus up to $300 million in contingency payments. The net book value for the assets was $5.9 billion at the end of 2016, according to Barclays’ analysts."

"Deal Of The Month: ConocoPhillips Cuts Gas Profile in $3B San Juan Sale

by Deon Daugherty|Rigzone Staff|Friday, April 28, 2017


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Deal Of The Month: ConocoPhillips Cuts Gas Profile in $3B San Juan Sale
Analysts say anything that makes an asset less gas-focused is ultimately a positive as ConocoPhillips sells off San Juan assets to Hilcorp Energy affiliate.
ConocoPhillips’ sale of its San Juan Basin gas assets to a Hilcorp Energy affiliate is a smart move, say analysts who recently reduced their forecast for U.S. gas prices.

ConcoPhillips (NYSE: COP) announced in mid-April its decision to divest roughly 1.3 million acres in northern New Mexico and southern Colorado assets for $2.7 billion, plus up to $300 million in contingency payments. The net book value for the assets was $5.9 billion at the end of 2016, according to Barclays’ analysts.

The selling price is consistent with analysts’ sale projections. Barclays had forecast a price on San Juan between $2.5 and $3.5 billion, or between $20,000 and $30,000 per barrel of oil equivalent (boe).

Barclays expects COP to close at least one more transaction this year, probably the company’s North Texas gas assets in the Panhandle and Barnett Shale, which produced 33 million barrels of oil equivalent per day (boepd) in 2016.

“Bearing in mind our recently reduced U.S. gas price forecast of $2.75 per Mcf, our perspective is that anything that makes the asset base less gassy is ultimately a good thing,” Raymond James analysts said.

At this level of activity, the analysts said COP should meet its buyback and debt reduction targets. And at $50 to $55 per barrel Brent prices through 2019, COP may offer a cash return close to 7 percent with production growth up to 3 percent for the next three years.

“This alternative value proposition should compete quite attractively versus other mega majors,” Barclays said in an April 13 equity research report.

"In conjunction with COP’s March sale of Canadian oil sands assets, the company is on track to divest more than $16 billion in assets this year, said Ryan Lance, COP CEO, in a statement."

BTW does Jeff Hildebrandt (Mr. Hilcorp) know what he's doing with this acquisition? Here's his pedigree: He's the 73rd richest person in the U.S. with a net worth of $5.9 billion, Forbes reports. And remember he was just a staff hand for ExxonMobil about 25 years ago. And didn't inherit his wealth: built it by buying oil/NG low and selling them high.

We know that this latest display of employee perks is not the first. In 2010, each of Hilcorp’s 700 employees at the time received a $50,000 bonus toward a new car in a program designed to reward workers for doubling the company’s value, production rate and reserves over five years.

Hildebrand — who started Hilcorp in 1989 after a career at Exxon — made a pretty penny when he sold Eagle Ford Shale acreage that he originally bought for $100 million to Marathon Oil for $1.8 billion in 2011.
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Re: Best article about oil energy's collapse

Unread postby ROCKMAN » Sat 29 Apr 2017, 14:33:10

And another pubco selling assets in a price depressed market. And notice this is the second time for these properties. What we call a "second round" divestiture. Typically when the market first drops out on a commodity the gap between seller and buyer is the widest. Often the seller hangs on hoping for a quick recovery while they buyer fears a continuing decline in value. But after 2 or 3 years of a fairly static situation more sale closings begin to happen:

Reuters - BHP Billiton has put its Fayetteville shale gas assets in the United States back on the block. It first tried to sell the Fayetteville assets more than two years ago, having made the shale gas investment in 2011 before writing it down by $2.8 billion a year later after gas prices dropped. But it shelved the idea of a sale in February 2015, saying at the time it planned to "maximise value" of the assets. BHP valued the business at $919 million at the end of 2016, according to its annual accounts.

Within the petroleum business, BHP has long made it clear it intends to focus on liquid products in the United States, a more lucrative business than dry gas"

Apparent that was before it invested $BILLIONS in a NG play. LOL. So the largest transfer of fossil fuel wealth in history continues. Yes: some companies continue to take a hit while others acquire reserves at a price lower they've been able to for at least 10 years.

The worst of times and the best of times. As pointed out above Hildebrand made tens of $billions buying reserves in price depressed markets. Who knows: in 10 years he may move from #73 to #23 richest in the US. LOL.
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Re: Best article about oil energy's collapse

Unread postby Outcast_Searcher » Sat 29 Apr 2017, 14:45:07

Observerbrb wrote:After all, if US grows at 0.5% YoY with 50$ oil, it will grow at 3% with 90$ oil??!!

If the US only grows at 0.5% YOY over time (say a few years, so it's actually a trend), according to CREDIBLE sources, be sure and get back to us.

Meanwhile, people are buying gas guzzling EXPENSIVE sedans and SUV's and pickups, and new cars overall in near record numbers in the US, for multiple years now. So how does that equate to them not being able to "afford oil products"?

Why could they afford them just fine in 2010-2014, with the average price of oil close to $90?

Why does the global consumption of oil grow EVERY year except 2009 in recent times, if people can't afford to buy it?

Making short term economic doomer projections and being constantly wrong, each and every time, year after year makes you less than credible, whether you can see that or not.

...

By the way, long term, due to global BAU growth, AGW, etc. I'm a pessimist. But that doesn't translate to ignoring all the mainstream economic data out there and going tinfoil on short term doomerism all the time, IMO.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Best article about oil energy's collapse

Unread postby asg70 » Sun 30 Apr 2017, 11:37:22

Outcast_Searcher wrote:By the way, long term, due to global BAU growth, AGW, etc. I'm a pessimist. But that doesn't translate to ignoring all the mainstream economic data out there and going tinfoil on short term doomerism all the time, IMO.


That sentiment above is the very definition of a rational and moderate position, something in all-too short-supply here.

It's simply not possible to power a daily discussion on a forum about peak-oil without feeling tempted to over-dramatize the short-term risks. It's human nature not to constantly hand-wring about something that may not impact us for a few years or more. The net result is what you see here, which is sort of a back and forth volley between moderates and a few remaining perma-doomers.

I also think this drives the perma-doomers into a lot of strawmanning as well, mischaracterizing moderates as cornucopians. This again revolves around the fallacy that if you don't think the world is going to end tomorrow then it must mean you never think it never will. In other words, the only way to prove you take a problem seriously is to project a constant state of existential dread over it. Well, obviously that's not the healthiest outlook, hence casualties such as Mike Ruppert.

BOLD PREDICTIONS
-Billions are on the verge of starvation as the lockdown continues. (yoshua, 5/20/20)

HALL OF SHAME:
-Short welched on a bet and should be shunned.
-Frequent-flyers should not cry crocodile-tears over climate-change.
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