RE:Points Raised
Doug you are so far out to lunch on #3 and your summary I will not even begin to argue it, have posted my opinion enough in the past.
something has to give!
of course it does and is, that something is high cost producers will disappear, be obliterated and we have seen the a few go so far with many more to come. even with the rebound we will see in oil prices.
I agree 100% that oil will rebound , it cant's stay this low forever. I believe we will probably see a tempory spike above where it will finally settle, which will be a lot lowere imho than a lot of people think. (my guess is in the 50-60 range but not for a while)
- usa inventories are at an 85 year high and still not falling yet. the chinese have been adding storage and filling it . so both usa and china have been buying and storing more oil than they consume during this glut. sooooooooooo with iran coming on producing more and when the storage is full, and so far more oil from previously started mega projects to come on this glut will be here for a while the way i see it.
HIgh cost producers are toast imho. and no matter how you cut it IAE is a high cost producer. there is no way stella would have been given the go ahead in this environment, or even with 50 buck oil for that matter imho.
kensho is one of the few who have figured out the possibilities when the rbl is up for renewal this spring. definitely available cash will be cut at a minimum. the max is the banks pulling the rbl with delek rubbing it's hands at the chance to grab iae by merely taking over the rbl and shareholders and senior note holders ending up with SFA.
cheers and better luck next time, ferret