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Richard Zeits  

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  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    Hi Cal,

    It's been both. A massive amount of equity issuance has occurred in the past twelve months, which is essentially investment at corporate level. In addition, an even larger amount of bank debt has been termed out via public bond placements.

    In parallel, I also a decent amount of investment via private equity directly into drilling still flowing. But it is nothing compared to three-five years ago when tens of billions of JV money was coming from abroad via very lucrative carried deals of all sorts. That market got completely re-priced.
    Jul 15, 2015. 05:23 AM | 3 Likes Like |Link to Comment
  • Diamondback Energy: The Lower Spraberry Shale Success [View article]
    Hi Dirk,

    Thank you for the link, I look forward to reading.
    Jul 14, 2015. 05:24 PM | Likes Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    Krishnamppersad,

    I think of causality as inverse here. The price of financial instruments has the ability to move a lot faster than physical production. So the way I think about it, it's that price fluctuates around the supply/demand balance.

    In other words, if there is a fear that supply is falling short, price may spike. If, on the other hand, there is a fear of a glut, the price falls. The difference, however, as I argued above, is that the definition of "stimulative price" is a moving target.

    So I don't think that the shales can avert a price spike if an imbalance develops (and it always does), but the shales can certainly deliver significant volumes over a relatively short period of time to match demand, as long as the stimulus is there. Therefore, a strong increase in oil price may not be durable, and the market will plan accordingly via futures prices.
    Jul 14, 2015. 04:22 PM | 3 Likes Like |Link to Comment
  • Diamondback Energy: The Lower Spraberry Shale Success [View article]
    Hi dunn.aaron,

    I will try to discuss VNOM in another post.
    Jul 14, 2015. 04:10 PM | 1 Like Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    Hi Blacktower,

    Certainly not to be ruled out - oil is a massive industry with relatively long turn-around times. If supply begins to lag and prices move well above marginal cost, it would still take some time for a supply response to develop. Again using nat gas for analogy, Henry Hub was trading well above $5/MMBtu less than 18 months ago, even though, arguably, much less stimulus would be sufficient for steady growth.
    Jul 14, 2015. 03:12 PM | 1 Like Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    PG Guy,

    I must have been thinking of the Haynesville when typing, thank you for pointing out. Certainly perish - Louisiana will prosper. :)
    Jul 14, 2015. 01:22 PM | 1 Like Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    Hi Mike,

    Agreed. The Permian is an enormous source of future supply. And "getting bigger" with every new announcement.
    Jul 14, 2015. 01:17 PM | 4 Likes Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    Fracjob,

    Thank you for reading and for the kind word.
    Jul 14, 2015. 01:16 PM | 1 Like Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    Alexander Alekhine,

    I am certainly not suggesting that oil price does not or will not fluctuate widely.

    Price has a dual role: selling price and stimulus signal. If there is a temporary shortage of supply, a signal to the industry is needed for an expansion.

    My point is, however, that the threshold for the stimulus has dropped and is continuing to decline due to the success of oil shales. A parallel with gas: $10+ was the stimulus price seven years ago, whereas $4 was almost unthinkable. Now, some analysts may argue that $4 would be excessive as stimulus.
    Jul 14, 2015. 01:10 PM | 2 Likes Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    Esekla,

    My point was that first, there is no such thing as equilibrium price in commodities and second, five dollars is simply a rounding error. So trying to be overly precise here is probably not a particularly productive exercise.
    Jul 14, 2015. 12:38 PM | 3 Likes Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    Flipper,

    Good point. And that is what the industry has been doing, wisely. Every other operator appears to have issued equity in the past twelve months.
    Jul 14, 2015. 12:35 PM | 1 Like Like |Link to Comment
  • Oklahoma Earthquakes: A Tort Threat To Oil & Gas Operators And Investors [View article]
    Twobits714,

    Miss Lime, Shelf Woodford and some other plays in that area produce a lot of water, although they are not "dewatering" plays like the CBM, for example.

    Both CHK and SD likely have little or moderate exposure, it appears, if nothing bad happens. Again, I cannot overemphasize more, this situation appears to be mostly about the "risk of a future event" (i.e., something that has not happened yet and is uncertain in terms of possible outcomes).
    Jul 13, 2015. 01:04 PM | Likes Like |Link to Comment
  • Oklahoma Earthquakes: A Tort Threat To Oil & Gas Operators And Investors [View article]
    bbob68,

    I agree on that. The industry has a massive footprint and, therefore, inevitably interacts with the environment. We all wish there was a Ghavar field still sitting untapped somewhere in the U.S. Many environmental concerns would fall away.
    Jul 13, 2015. 11:45 AM | 1 Like Like |Link to Comment
  • Oklahoma Earthquakes: A Tort Threat To Oil & Gas Operators And Investors [View article]
    Twobits714,

    Indeed, the Hunton and the Mississippian are two different formations. There are several plays associated with each of these formations that vary by area and structural position within the formation.

    It obviously does not matter where the water comes from - it needs to be disposed.
    Jul 13, 2015. 09:10 AM | 1 Like Like |Link to Comment
  • Oklahoma Earthquakes: A Tort Threat To Oil & Gas Operators And Investors [View article]
    Jakefama,

    I am sorry if the article left you confused. To clarify, the article is indeed all about saltwater disposal wells. Water disposal is a process of injecting water in a formation (typically the Arbuckle or below, in this specific case), often using pressure.

    Here's how EPA, for example, defines an injection well:

    "An Injection Well is a device that places fluid deep underground into porous rock formations, such as sandstone or limestone, or into or below the shallow soil layer. These fluids may be water, wastewater, brine (salt water), or water mixed with chemicals."

    I am a bit surprised, however, that you brought up water injection "to maintain reservoir pressure" in the context of Miss Lime in north-central Oklahoma. Actually, believe it or not, there are pilots of this type that the industry is experimenting with in various tight plays, but those projects a still very few and considered esoteric.

    Really you must be confusing Miss Lime with something like the Arab-D zone in that other little field, where saltwater injection into the producing zone is indeed part of the production process aimed at both maintaining pressure and enhancing recovery. Well, there is a little difference between the Miss Solid and Ghavar's Arab D - they call it permeability.
    Jul 13, 2015. 08:40 AM | 2 Likes Like |Link to Comment
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