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Richard Zeits  

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  • U.S. Oil Export Ban: Are There Reasons Not To Repeal? [View article]
    Riverrat,

    "Low cost" is the key word. Are all the Trillions economically competitive?
    Mar 22, 2015. 09:33 PM | 2 Likes Like |Link to Comment
  • U.S. Oil Export Ban: Are There Reasons Not To Repeal? [View article]
    David de los Angeles,

    One can make a mile-long list of things that the U.S. consumes much more than it produces domestically (including t-shirts, sneakers, toys, PCs, and you can continue the list). But very few of those are subject to export ban. Logic?
    Mar 22, 2015. 09:23 PM | 15 Likes Like |Link to Comment
  • U.S. Oil Export Ban: Are There Reasons Not To Repeal? [View article]
    Option Calling,

    Thank you for bringing up EPD in this context. A highly relevant stock. I hope to cover in one of my subsequent notes.
    Mar 22, 2015. 08:40 PM | 1 Like Like |Link to Comment
  • U.S. Oil Export Ban: Are There Reasons Not To Repeal? [View article]
    Aricool,

    Terrific points, thank you.
    Mar 22, 2015. 08:39 PM | 1 Like Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Hi Alexander,

    A fair observation. I have about 300 publicly traded Energy stocks on my screen, which I am sure is far from being exhaustive. The sample in the article includes just 125 of those. So I am sure I have missed some relevant ones.

    Initially, the purpose of this list was to provide a simple tool that would give a quick, intuitive idea of the magnitude of this correction. So I did not try to make the list comprehensive. It is probably time to expand it. Will try in my next update.
    Mar 21, 2015. 03:03 PM | Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Chazsf,

    Thank you for pointing this out, terrific catch. I just checked the model and indeed one cell (dividend input link for Suncor) was corrupted. I submitted the change.
    Thank you again.
    Mar 19, 2015. 08:46 PM | 2 Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Mykie,

    This is a complex issue. I will try to bring for discussion some aspects in my next notes.
    Mar 19, 2015. 03:40 PM | 2 Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Mykie,

    That is correct, rig count and production have a time lag. Future production is obviously being lost but current production is still growing.
    Mar 19, 2015. 02:48 PM | Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Waxwing,

    A repeal of the ban may have a modest positive effect on North American prices, mostly in the form of a narrower WTI/Brent differential. Free exports would bring up the price that US producers receive for their growing stream of light sweet grades that are currently landlocked.

    On the other hand, the repeal cannot address (and one might argue, aggravates) the problem of global oversupply. For that bigger issue to be resolved, there are two polar scenarios: (1) prices fall lower quickly and balance is restored, quickly, via shut-ins, or (2) prices stay a somewhat higher but still depressed levels for longer - new investment will decline and that way reduce future supply.
    Mar 19, 2015. 02:06 PM | Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Mike,

    There are certain price levels when decisions become very economic.
    Mar 19, 2015. 01:43 PM | Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Mike,

    Heavy oil, EOR, tar sands are just some examples. I would keep in mind, however, that North America is just a small part of global supply. Just a thought, Russia produces over 10 million barrels a day and has very high taxes on oil.
    Mar 19, 2015. 01:12 PM | 1 Like Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Mykie,

    "...additional lost production would be more than what has already been lost..."

    Has any production been lost? If it has been, does not look very inspiring based on the inventory numbers. Please have a look:

    http://seekingalpha.co...
    Mar 19, 2015. 12:41 PM | Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Mykie,

    I would argue that for quick and significant shut-ins of existing production to occur, the price of oil would have to drop below $40-$35 per barrel. That would impact a significant portion of high-cost production (such as heavy oil water floods and steam floods, tar sands, production in certain remote locations or with high tax areas, such as Russia, just to give some examples). Operators would have to curtail existing production to avoid cash losses.

    Such curtailments would be temporary, of course. However, turning production off and on will temporarily reduce supply and give the market a chance to absorb the inventory glut. This appears to be the only mechanic that can quickly and reliably fix the oversupply problem and re-set the pricing regime for oil from constraining to stimulative.
    Mar 19, 2015. 11:43 AM | 4 Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Hi Mike,

    Just to be clear, I was referring to existing production (as opposed to new drilling). Production costs in the Bakken (which I would define for simplicity as LOE, gathering costs and production taxes) are typically less than $15 per barrel, assuming $40 per barrel. Even assuming local differentials of $12-$15, the decision to shut in production would be discretionary - not driven by negative operating cash flow - possibly all the way to ~$25-$30 per barrel (or even lower, given that some costs are fixed).

    There are may other categories of operators that will have to take their production off the market before most Bakken producers have to.
    Mar 19, 2015. 11:31 AM | 1 Like Like |Link to Comment
  • Crude Oil - Pressure Building Up [View article]
    Canadian Red Neck,

    Thank you for the great insight, that is my view as well.

    Shutting down an upgrader is an extreme measure. So if the price is around $40-$45 for WTI, operators may elect to run rather than shut down completely. What if the price drops to $35 and stays there for, let's say, two weeks? Investors and Boards may start asking questions.
    Mar 18, 2015. 05:12 PM | 4 Likes Like |Link to Comment
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