US SHALE In A Deep State Anxiety

 US Shale In A State Of “Deep Anxiety”, Survey Signals Capex Collapse Imminent by Tyler Durden Thu, 09/26/2019 –

Fracking site Permian basin

The financial stress sweeping over the U.S. shale sector has led to a sharp contraction in activity.Oil and gas activity in Texas and parts of New Mexico declined in the third quarter, with the  Dallas Fed ™ business activity index reporting a reading of -7.4, down from -0.6 in the second quarter.

A negative reading signals contraction  while a positive reading indicates expansion. Falling deeper into negative territory indicates that shale drillers in the Permian further cut drilling activity over the last three months. A slowdown in drilling is an even larger problem for oilfield services companies, who provide the equipment, manpower and drilling services that oil companies need. A producer may be able to do more with less, but that falls on the service providers, who have been hit hard.  

the Fed said that infrastructure bottlenecks and labor shortages were the top constraint on their growth.The more intriguing part of the Dallas Fed survey comes in the comments section, which includes statements submitted anonymously by oil and gas executives. Since they are anonymous, the executives are very candid,  offering an unvarnished window into sentiment in the sector.And the mood is decidedly grim.The downbeat comments cover a range of topics, including market volatility, reduced access to capital, trade war concerns, operational problems, and complaints about environmentalists. Below is a sampling.

First on lack of capital: The capital market has dried up for small E&P companies.Unless there is a material pullback, the environment is static around $55 per barrel and, even if your business is rock solid at this price, the capital markets aren’t functioning well, so its hard to move off of the stuck or static outlook It seems no one has any money for oil and gas projects. Lack of Wall Street participation in oil is very apparent.

On operational and cost problems:Many oil shale projects are failing to meet production projections Further cost declines will not be forthcoming. The industry is admitting what independents who drilled with industry partners early on figured out: You cannot make money drilling at this price structure. An ongoing drilling program consumes all your returns and continues to require new money.We are seeing increased costs in supplies, and vendors are attributing the increases to tariffs. Over $130 billion of junk status bonds are coming due after 2020 over a two-year period for those that got in the treadmill drilling business, with wells that decline 70 percent in the first year.

On the slowdown in drilling and production:U.S. oil production is about to fall significantly. The rig count has declined dramatically from one year ago (down 170 rigs), and our customers are not completing wells in order to save cash flow. This all equals a big shift down. companies have pulled back on spending and continue to pressure service company prices. I expect there will be a number of insolvent companies looking for help in the next six months

And on pressure from environmentalists: Relating to proposed carbon taxes: “That would kill the independent arena of the U.S. domestic oil industry that just vaulted America to the world #1 oil producer spot. And people would be willing to sacrifice that contribution to the U.S. trade balance [and] domestic employment, as well as tax payments to states? It’s a sad testimonial to the decline of the American educational system! Protestors are so rude and ugly toward oil and gas but, yet, they want our money. Protestors do not have a solution to replace oil and gas in New Mexico. There are few, if any, upbeat comments about the state of play in the shale sector in the survey. To be sure, none of this means that the collapse of the industry is just around the corner. In fact, Rystad Energy put out commentary,  downplaying the financial predicament for the industry. “In a nutshell, we do not believe the recent bankruptcies that have beset a number of shale players are indicative of an industry-wide epidemic,  Alisa Lukash, a senior analyst on Rystad Energy’s North American Shale team, said.

However, it’s hard to ignore the deep sense of despair from more than a few shale executives. And as Rystad noted, the top 40 shale companies have $100 billion in debt, coming due over the next seven years, which will likely force a reckoning in the sector.

Commentary: Elaine Cimino

 $100 billion in debt coming due over the next seven years! 

(gosh I wonder why??? lol . . . )   lack of capital: 

  • “The capital market has dried up for small E&P companies.”
  • “Unless there is a material pullback, the environment is static around $55 per barrel and, even if your business is rock solid at this price, the capital markets aren’t functioning well, so it’s hard to move off of the ”stuck” or “static” outlook.”
  • “It seems no one has any money for oil and gas projects. Lack of Wall Street participation in oil is very apparent.”

Do you think this might have to do with the liquidity crisis in the big banks as of late?

BTW those protesting Fossil fuel do have alternatives those alternatives are being stopped by corruption of campaign donations that allow alternatives views to be being blacklisted.

There is air quality permit for cement factory in Rio rancho Estates

I responded to ask where this was located in Rio rancho Estates.

I asked for the administrative record and map and email communications for the construction of roads for the fracking industry on the taxpayers dime.

Here is a copy of a letter I sent in response to NMED telling me that is will be 15 days for them to respond when much of the public commenting period is over.

Letter in response: (let me tell you if you are not outraged you are not paying attention)

Dear _________,
You are stating that, NMED, cannot respond to my request to find out exactly where the site is until after the commenting period or at least 10-15 days into the commenting period to approve the air emissions permit because of an inadequate public notice?

Residents in Sandoval County have been fighting sand and gravel emissions in Placitas for years now.

Are we collateral damage?

I cannot find the information or access it because would not come up on google earth, GPS, should there not be a map? —- and then Until after the public commenting period?
Can you provide a map?

Also, the WQB permit 1682 had many of the same issues! (brine Wells) There is a pattern here. I wonder if I ask other groups what we would find? Are they are also having the same issues?

The NMED needs to stop Fast-tracking and “streamline” the permitting process, with such a lack of transparency, it amounts to running over our communities.

Does AG Balderas really believe that if we say no, that our communities have the burden to sue? Is this transparency in government without giving adequate notice or study to determine impacts and facts?

Not only has the state agency exhibited gross negligence in the approval of contaminated radium water that has made us downwinders.

Now the state is putting the nail in our coffins with cement factory emissions, was there any concern or consideration of the climate emergency?

NMED is fast tracking permits before we know where the site is located and to study of what the impacts will be to over 740 homes, at least in Rio rancho Estates. That is according to County records. There are 1000’s of more homes with potential impacts downwind.

NMED Bureau's are fast-tracking for road buildout for the oil and gas industry and running over the citizens and residents for industry.

It’s all connected and rolled out in a disjointed dispersed method, there is no Master plan, only that of oil and gas industry to ruin our water and air.

Elaine Cimino
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3 weeks ago

Common Ground Community Trust

All of this!

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“ALL OF THIS! "Aren't arabs terrified? Aren't Iraqis terrified? Don't Arab Iraqi women weep when their children die?...What fools we are to think war is just an interesting channel 4 news item" 🗣 LISTEN TO THIS 😭💔
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4 weeks ago

Common Ground Community Trust

'Bill Gates is continuing the work of Monsanto', Vandana Shiva tells FRANCE 24 ... See MoreSee Less

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