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Running Out of Runway
Last year OPEC, Russia, and 10 other non-OPEC producing nations agreed to cut back production, effective January 1, 2017. The express purpose was to bring down global crude oil inventories to the 5 year average level. The unstated, but real, purpose was to restore oil prices. The original agreement was to stay in effect for… Read More
The Long Road to Rebalancing
“Oil Voice” recently featured an article by Art Berman entitled “OPEC Production Cuts and The Long Road to Market Balance”. Berman makes a convincing case for how far the international oil market is from equilibrium. Thus far, OPEC and its collaborators have been surprisingly conscientious in adhering to production quotas and have removed approximately 1.8… Read More
M&A Record
“Rigone” reports that a study by PwC (Price Waterhouse Coopers) found that oil field M&A (Merger and Acquisition) activity reached a record level in the first quarter of 2017. Driven by Donald Trump’s agenda, an agreement by OPEC and other producing nations to cut back on production, and relative price stability, 53 deals were transacted… Read More
Surplus or Shortage?
“Rigzone” reports that before the shale revolution predicting oil supplies was much easier. Investment bankers, oil companies, consultants, etc. could look at current production, new projects in the pipeline, and factor in variables such as political risk in oil producing nations and get a pretty good idea as to future supplies. Conventional projects typically involved… Read More
Permian Land Swaps
Innovation and creative thinking helped fuel the shale revolution. Now “Rigzone” reports that one of these innovations, horizontal drilling, is giving rise to another, land swaps. Within the Permian Basin of West Texas and Southeast New Mexico, shale operators have developed a barter system to maximize return on investment and ultimate oil recoveries. As is… Read More
