RE:RE:RE:COMPANIES CAN BE PROFITABLE AT $50 OILJnewsted wrote: ProfCornelius wrote:
##################Good post thanks! I'm sick of the sycophants on here!
Easiest way to get on ignore lists. quoting HR2.
And "companies" being profitable is not the same as individual wells being profitable. Permian plays still lost boat loads of money in Q2 even if a handful of them can make money off wells. There are salaries, debts and interest that need to be paid and they still can't do it at these prices. Also, Permian is a very slow growth tight oil play. There will be no signifcant growth in US production until the Eagle Ford and Bakken are all ramping up, which they still did not with oil over $50. Not all Eagle Ford players have prime assets like BTE, most of them have much higher break-evens on their locations.
Guys can get all excited about the rig count increasing but they do not understand that it is still nowhere close to offsetting the production declines due to decline rates. There has been a trillion dollars cut from capital spending amongst oil and gas companies. There is no money to put back in the ground to start new wells. In order to offset the decline rates of wells, companies need to keep starting new wells. With the largest capital spending cuts in the history of the sector, no money is being spent on new well starts. That is why production will continue to decline, despite rigs coming back online. US production is already down 1 million barrels year over year. Not sure why people are ignoring this extremely important fact. Production is declining, demand is increasing. Only one direction the price can go mid-long term. Get over it shorts. You are done. It's possibly to make a couple pennies here and there in the short term but the worst is over and oil has bottomed. Get over it and move on.