RE:RE:EIA LOL!You are right Kavern on pretty impressive past growth in production but, you are now looking increasingly wrong on continued growth.
Already EIA is cutting both production forecast in its weekly estimates and yearly. Why? Are these pipeline companies laying tons of pipes wrong?
I have along with others mentioned stagnation in productivity. This is not only in EIA reports but, also in companies financials. They have reached optimal level for length, sand, number of fracs, etc.
Then you have the child vs parent issue or well contamination. That gets you into true number of Tier 1 vs Tier 2 wells.
So this is field fundamentals or per well profitability.
On the finance side, the blood stream for all these go-go drill baby crazy operators is now gone or equity capital along with debt supply. If it was true that profitability was so great at $50-60 WTI, they would have no problem finding lots of money to drill every corner of Texas and New Mexico. Something is wrong here.
The rig count is declining. Schlumberger has also told us for months that completion is on its way down too.
If price goes back up above $60, I think that they will suffer from the same fate that we have up here or disbelief. Investors will remain cautious because they have been burned too many times. There is nothing like a flat or declining share price in the face of what looks like boom time to force people to rethink their plans.
Then comes the Exxon and Chevron with their recent grand plan to double their Permian production by around 2023 but, already investors are pushing back and with good reason. These guys are the last ones to join the gold rush. They actually always seem last to join and first ones to get out or right at the bottom. I recall this Exxon natural gas acquisition of XTO or right at the top when Chesapeake Energy (should be renamed Chase-A-Peak?) was doing great!
If these guys did not have downstream operations or did not operate in third world countries where they had no competition after giving enough to local governments they would have been out of business a long time ago.