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Good News About Oil Company Bankruptcies

Discussions about the economic and financial ramifications of PEAK OIL

Re: Good News About Oil Company Bankruptcies

Unread postby Outcast_Searcher » Mon 11 Sep 2017, 14:05:46

coffeeguyzz wrote:Whiting just sold off off their holdings on the Fort Berthold reservation in efforts to keep afloat.

Despite a lot of 'waiting for the end' for these operators, assets holding billions of barrels of oil, hundreds of trillions of cubic feet of gas, still have value under the right conditions.
Defining "right" seems to be an ongoing exercise.

Absolutely right. Speaking of energy assets generally:

At the end of the day, the assets will still be there. When and if the technology and pricing structure looks like a "good" play for ECONOMIC recovery -- then stronger financial hands will acquire the assets (or be patiently holding the assets), and then those assets will be produced. (Assuming regulations permit. But if they're needed badly enough, regulations almost certainly can be compromised on to allow production).

The idea that a single bust cycle in a boom and bust (volatile) industry is the end of the world because some (or many) marginal players may go bankrupt is beyond silly.

Apparently with the world flush with oil, the trend for viable green energy and viable batteries coming on strong, economic catastrophe is the "play of the day" for the short term hard crash doomer crowd to get attention.
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Re: Good News About Oil Company Bankruptcies

Unread postby Yoshua » Mon 11 Sep 2017, 14:51:14

When deniers about our predicament start to talk about batteries, then even I get scared. All batteries in the world combined can power the world for 4 minutes.

Do you ever stop to think about how much energy the global economy actually consumes?

How much energy is used to just produce batteries?
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Re: Good News About Oil Company Bankruptcies

Unread postby shortonoil » Mon 11 Sep 2017, 15:03:44

At the end of the day, the assets will still be there.


The reserves that are being extracted, and which aren't being replaced are not going to magically refill. Such suggestions are absurdly ridiculous! There are no magic flying carpets, Peter Pan's, or Sugar Plum Fairies. Sorry to burst your bubble.
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Re: Good News About Oil Company Bankruptcies

Unread postby rockdoc123 » Mon 11 Sep 2017, 15:44:50

The reserves that are being extracted, and which aren't being replaced are not going to magically refill. Such suggestions are absurdly ridiculous!


I just posted upthread a response to the last time you claimed reserves weren't being replaced. Basically,
rockdoc123 wrote:
They are not replacing their reserves, and can't replace them for less than about $60/ barrel, so they are going out of business.


Here we go again. How many times do you have to be corrected on this nonsense? Do you actually think by repeating it, again and again, it will make it true?

The 2017 E&Y study notes that from 2012 to 2016 the three year rolling average for proved reserve acquisition costs was $7.80/bbl, substantially below average oil price. F&D excluding revisions averaged $15.98/bbl over the same period. On a three-year rolling average produced reserve replacement rates for the top 50 companies based on US production excluding revisions was 158% and on a five-year average it was 190%. E&Y note that although these numbers reflect US reserves that

On a global basis, most of the integrateds in our study experienced a reserve replacement rate above 100%.


And more telling was the reserve replacement story from the independents.

Independents continued to lead the pack, with a 2016 F&D rate excluding revisions of 187%, though this was somewhat tempered from the 239% they experienced in 2015. By contrast to the integrateds, Parsley Energy and RSP Permian posted F&D rates, excluding revisions, of 720% and 608% respectively, the largest of the companies in the study; however, notably their production volumes were near 10 million barrels. Large independents improved to 134% on the same basis, up from 110% in 2015. Chesapeake Energy led this peer group with F&D excluding revisions of 486%, followed by Marathon Oil at 398% and Antero Resources at 372%


With less than 5 years of developed, and producing reserves remaining they don't have long before the bond, and equity holders realize what is taking place, and remove the present management through the courts


More horsepucky. In their year end summary, Exxon Mobil as an example stated that under current production rates they have a reserve life of 13 years.
The BP annual energy report looks at a bigger picture and what they point out is that in 2016 global R/P ratio was 50 years (R/P representing number of years of reserves left under current production rates) and for North America it was 32 years. The Middle East has a 70 year R/P and Latin America has a 120 year R/P. So once again you are full of it.
you are full of BS on that point.
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Re: Good News About Oil Company Bankruptcies

Unread postby coffeeguyzz » Mon 11 Sep 2017, 16:07:12

Regarding reserves, there are three recent operational components (at least), involving unconventional development that barely get a mention, namely diversion techniques, microproppants, and controlled flowback.
Without getting too technical, these techniques have greatly increased early life production.

Combined with the extreme speed and precision these past 2 years, the economic area in these plays continues to expand.

Regarding renewables, keep an eye on South Australia in the coming months. Their embrace of wind and roof top solar may produce an epic PR disaster if/when blackouts occur.
The opponents of renewables are cranking up the criticisms right now.

Gail Tverberg had a lengthy post recently on the poor economics of this stuff, highly accentuated as percentage of use increases.
I don't think many of the sun/wind advocates have a comprehensive grasp of the logistics and economics involved.

Might prove to be a lot more daunting than one might be led to believe.
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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Mon 11 Sep 2017, 17:54:51

Coffee - Though not very knowledgeable on the Aussi grids the reports I've indicate their biggest problem is a lack of regional coordination like ERCOT provides in Texas. Along the same line some utilities, including NG suppliers, lack regulations to prevent some gaming of the system that has provided some nice profits with the price paid by other regions with blackouts.

If wind and solar are of guestionable economic value then this sort of poor national grid management and regulation will only make the situation worse.
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Re: Good News About Oil Company Bankruptcies

Unread postby coffeeguyzz » Mon 11 Sep 2017, 19:13:57

Rock

Although I've been following the Aussie situation, especially South Australia, I'm far from expert on the situation as there are so many components involved.
The states seem to have great leeway on how they conduct their internal affairs, but there is a connection to the national government as well, and the partisan politicking is fierce.
Semi-bottom line is the SA and Victorian state governments have jettisoned thermal (coal) for wind and sun.
Big problem is they need more juice on hot days (summer starts soon) than renewables can provide.
Should be interesting to see what develops.
BTW, New England is in somewhat similar shape the next few winters as very cold days will offer insufficient gas for electricity generation.
The renewable advocates may not appreciate the vulnerable position they are in right now.
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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Tue 12 Sep 2017, 00:20:58

Coffee - "the SA and Victorian state governments have jettisoned thermal (coal) for wind and sun." And thus the contrast between them and Texas/ERCOT. If our wind has to shut down (as some did thanks to Hurricane Harvey ERCOT just pulls in more power from fossil fuels...which we haven't "jettisoned". And on some occasions the opposite has worked: during one polar vortex it knowcked out 2 major NG fired plants. The same bad weather also maxed out our wind power and for a short time provided 45% of the entire state's electricity demand. Had it not there would have been blackouts in areas with a lot of folks suffering with temps well below freezing.

Which mutes the complaints by some that wind/solar cannot always provide 100% of demand. That's not relevent when there are other sources ready to back up the alts. So while it would be a "perfect solution" if wind/solar could provide all of the Texas electricity demand our consumers are very happy with our "good solution" that provides almost 15% of the consumption for the state that consumes about 2X as much electricity as the #2 state. While 15% doesn't sound a lot consider it in terms of Btu's and $'s.
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