No Need to Outrun the Bear, Just YouWe all know the story. Two hikers out together being chased by a grizly. The first hiker stops, takes off his back pack and boots and puts on his trainers and shorts. The second hiker asks why he is doing this, he can't possibly outrun the bear. The first hiker replies 'I don't need to outrun the bear, I just need to outrun you'.
Points:
1. Russia and several OPEC countries including the Saudi's cannot withstand this for another year, their deficits are just too large. But they know they don't have to the carnage is already starting and will gather pace into the Spring.
2. Many medium and small producers will go bust this year. Before the dark hand of insolvency can take hold of Ithaca many other producers will have gone down before Ithaca is even under threat. Then all these insolvencies would have to occur without signifciant impact upon the oil price for Ithaca to be at risk - it is just not going to happen.
3. I am not suggesting that Ithaca is risk free, far from it, but the oil price will take care of itself, the next milestone is a positive update from Petrofac later this month.
Doug