Oilfield guys... y’all hangin in there?

[TheHammer]

Agreed. This one feels different than the others I've been through with guys actually curtailing production. Problem is you KNOW as soon as one operator feels it's time to get after it again, most of their peers will do the same. I believe this will be the case until major consolidation occurs on the E&P side as the players with weak balance sheets have to keep some money coming in.

Shale is the biggest Ponzi scheme in the world.

HOPEFULLY they learned their lesson, but greed is a powerful drug.

[kyle1974]

We never learn our lesson. That’s the whole reason prices didn’t climb fast the last time. Everyone jumps the gun and floods the market. We may never learn, but slow and steady is the answer not jumping right back into “drill baby drill.”

who gets to participate and who doesn't?

it was like the CEO of Parsley saying that Texas RRC should regulate/limit oil production.... what's stopping him from doing it on behalf of Parsley's production?

to Mzurovec - I don't see shale as a ponzi scheme, it's been known for 15 years that shale wells have a higher break-even than conventional production. We've produced billions and billions of barrels for years out of shale. It's not a scam, it's just not profitable at $50 a bbl.

I think the biggest ponzi scheme is the 401K based on public traded companies that demands never ending constant growth, and has people putting money into mutual funds, hedged on the bet that you're going to gain value year after year. that's what has led to an unrealistic expectation by "investors" that putting money into the stock market is guaranteed success.

[txwhitetail]

There’s no doubt it’s all investor driven. Shale can’t really operate like it should when investors want home run headlines.


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[mzurovec]

who gets to participate and who doesn't?

to Mzurovec - I don't see shale as a ponzi scheme, it's been known for 15 years that shale wells have a higher break-even than conventional production. We've produced billions and billions of barrels for years out of shale. It's not a scam, it's just not profitable at $50 a bbl.

I guess I should have been more specific before making a broad statement like that. The Ponzi Scheme comment comes from the following scenario that has played out time and again:

New Shale Company has found premium acreage at a bargain price.
NSC gets investors to go in on it. Shale is hot and man those wells can flow!
Acreage is so-so as it turns out and NSC isn't nearly as good at D&C as they thought. Break even prices are closer to that $50-$60 and not the $30 that was pitched.
NSC Board and Investors get nervous that their home run investment isn't going to make the gravy they once thought.
NSC Board and Investors do another round of equity raising.
Some of this equity goes back to NSC Board and original investors.
NSC lacks cash on balance sheet and wells are too close together. Things are getting sticky!
NSC continues to produce as much oil as possible for each new well that comes on, well lifetime be danged to try and fix that.
These gushers are a short term fix for a bad long term investment when operated this way, but from the outside looking in they're great! Look, they initially flowed 1500 BOPD (without consideration that these will drop to less than 100 BOPD within 12 months)! Look at all that free cash coming in! Shale baby!!
NSC knows they might be in trouble long term, but it is easy to sell to new investors for them to expand their D&C program, even if in good faith they realize they should produce at a lower initial rate for the long term integrity of the well.
NSC IPOs and all of us suckers buy in! Look at all that new cash coming in... with a significant portion of that going back to the Board and original investors...Bonuses!!
With all this new money and these gang buster wells (that decline dramatically over the next 12 months), NSC has to keep drilling and completing as fast as they can selling as much oil as possible to cover debt obligations...
This goes on until a bust or somebody calls their bluff.

Sounds an awful lot like a Ponzi Scheme to me. Albeit nowhere nearly as perfectly executed as the Home Cosmetics dealers we all know and love!!


The big boys with good acreage and a level head do not operate in this manner, but there are plenty of publicly traded companies out there that have lived this. They are paying for it now, and with the consolidation that is coming maybe this will become less common, and help avoid the insane boom-bust cycle that we all know.

It's a hell of a ride!!

MZ

[TheHammer]

who gets to participate and who doesn't?

it was like the CEO of Parsley saying that Texas RRC should regulate/limit oil production.... what's stopping him from doing it on behalf of Parsley's production?

to Mzurovec - I don't see shale as a ponzi scheme, it's been known for 15 years that shale wells have a higher break-even than conventional production. We've produced billions and billions of barrels for years out of shale. It's not a scam, it's just not profitable at $50 a bbl.

I think the biggest ponzi scheme is the 401K based on public traded companies that demands never ending constant growth, and has people putting money into mutual funds, hedged on the bet that you're going to gain value year after year. that's what has led to an unrealistic expectation by "investors" that putting money into the stock market is guaranteed success.

Anyone that wants too.

In the long run it would be in the best interest of everyone involved to limit their own rig count to a certain number until oil hit $60. Flooding the market with already drilled wells, but haven’t been fracked just continuously shoots their self in the foot. Not saying it should be regulated by any certain entity at all, I’m a believer in free market. But I do think the oil companies should take it upon themselves to let the price rise this time.

[LlanoHunter10]

Not a good sight to see. A full load of Riser Piping taken from the well. Sure wish we were bringing this out instead of back to the yard. Plug and abandoned well.

[BowOnly81]

Yep, still working but two 15% pay cuts over the last 3 months hurt. Still paying bills tho so. Good luck guys.

[Tejas Wildlife]

We are working offshore but still had cut in rates on April 1st. Pretty danged poor joke if you ask me! I am blessed beyond measure to have this job!!

[Muddy Bud]

Nothing for us yet, but I hear a good cut is on the way.

[Tejas Wildlife]

Hey Muddy

Nothing for us yet, but I hear a good cut is on the way.

You on the NGT2 now? I am on URSA an that drillship is just south of us. Stay well man.

[Muddy Bud]

Yeah, on the Globetrotter II.

[Hix]

I have only had 11 days off since the ‘Rona scare, working 14 nights now, get 7 off next week then going back on days, same rig. I’m blessed for sure.
No cut on my dayrate yet either. I bet if oil keeps creeping up we will add a rig.
We’re running 3 rigs, of the whopping 11 total in the State of Oklahoma.


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[txwhitetail]

I have only had 11 days off since the ‘Rona scare, working 14 nights now, get 7 off next week then going back on days, same rig. I’m blessed for sure.
No cut on my dayrate yet either. I bet if oil keeps creeping up we will add a rig.
We’re running 3 rigs, of the whopping 11 total in the State of Oklahoma.


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What kind of pics do you have of the company owner??? Lol


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[BlackoutRam2500]

I have only had 11 days off since the ‘Rona scare, working 14 nights now, get 7 off next week then going back on days, same rig. I’m blessed for sure.
No cut on my dayrate yet either. I bet if oil keeps creeping up we will add a rig.
We’re running 3 rigs, of the whopping 11 total in the State of Oklahoma.


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^^^That is a blessing for sure. I'm hearing things might start coming back online for those at the house by 4th quarter.


Packing my truck now to go start my new gig as a site manager for windmill construction. Y'all throw up a prayer or two for me because this is the first time I've done anything outside of oil in over a decade.

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[tpack]

We are all going to 32 hours next week to prevent another layoff. Hopefully in the 8 to 12 weeks things will pick up enough just to get back to 40 hours. I am just happy to still be working.