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Is This The Most Bullish News For Oil Since 2014?
Oilprice.com ^ | 25-02-2016 | Len

Posted on 02/25/2016 10:48:08 AM PST by bananaman22

Whiting Petroleum announced earnings on February 24, with probably the most bullish and shocking news to come to the oil patch since the crash started in June 2014.

It announced that it will not maintain any active rigs in the Bakken shale region in 2016 and also announced production cuts of 15-20 percent and a capital spending reduction of 80 percent.

The significance of this is that, contrary to popular belief, the so called breakeven points are not anywhere close to $30 when you take into account cap ex. That should be obvious enough, but the media and many analysts have consistently misrepresented this either due to ignorance or bias.

(Excerpt) Read more at oilprice.com ...


TOPICS: Business/Economy
KEYWORDS: bakken; fracking; oil; oilprices

1 posted on 02/25/2016 10:48:08 AM PST by bananaman22
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To: bananaman22

If the breakeven point is 30, then that explains why the OPEC nations lowered their price to $20

It is a TRADE WAR and we need to be fighting it.


2 posted on 02/25/2016 10:58:45 AM PST by Mr. K (Trump/Cruz 2016)
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To: bananaman22

Apparently the answer is NO:

“I don’t believe any of the expectations of a 2H16 economic rebound. If anything, things will decelerate further compared to the first quarter of 2016. Thus, some price recovery can be expected, but until governments around the world realize that loose monetary policy only temporarily boosts growth while making things worse by contributing to higher debt, prices can only rise so much. The real spark to prices will come when pro-growth polices get adopted.”


3 posted on 02/25/2016 11:24:18 AM PST by jonno (Having an opinion is not the same as having the answer...)
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To: bananaman22

We manufacture a piece of an offshore oil exploration system. Reduction of orders have starved our little company for a year and we just got a RFQ for 1000 pieces this AM. Lord have Mercy, perhaps this business is coming back.


4 posted on 02/25/2016 11:26:44 AM PST by afraidfortherepublic
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To: Mr. K

Levelling Saudi Arabia would be a good start.


5 posted on 02/25/2016 11:27:00 AM PST by Bulwyf
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To: Bulwyf

I would level them last...
Iran needs a boot in its ass first


6 posted on 02/25/2016 11:31:22 AM PST by Mr. K (Trump/Cruz 2016)
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To: Mr. K

The break even price depends on the quality of the basin (Permian being better than elsewhere, for example), the operator’s rock and acreage position in said basin (core acreage in said basin), and how efficient the operator is.

There are several that can eek by in the Permian at $30.

Not many, though.


7 posted on 02/25/2016 11:32:05 AM PST by MeanWestTexan (Beware Obama's Reichstag Fire.)
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To: Bulwyf

Oil would just flow to the surface then.

It’s a pressurized reservoir and relatively shallow.


8 posted on 02/25/2016 11:32:44 AM PST by MeanWestTexan (Beware Obama's Reichstag Fire.)
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To: bananaman22

I don’t know but oil in the $30 to $40 range pretty much makes solar, and wind totally useless.


9 posted on 02/25/2016 12:29:25 PM PST by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)
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To: Sam Gamgee

Not to mention a lot of other things.

However, with all the drilling stops, I wonder how long the price will stay low.


10 posted on 02/25/2016 12:38:42 PM PST by redgolum
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To: redgolum
Oil is just another proof against the “efficiency of the markets” view of the equity and commodity markets. Oil was wrongly priced at $140 just as much as it is the “wrong” price now in the 30s. It is just me, but I would shutter all my high risk operations such as in Nigeria and other crappy locations in the world.
11 posted on 02/25/2016 12:49:39 PM PST by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)
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To: bananaman22

The market price is the market price. OPEC cooked its own goose by extorting hgh prices. Those days are over, forever.


12 posted on 02/25/2016 12:53:19 PM PST by SeaHawkFan
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To: MeanWestTexan

Kill their infrastructure at the least. We can roll in later and build later ourselves. We need to take out their wallets.


13 posted on 02/25/2016 1:42:06 PM PST by Bulwyf
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To: Sam Gamgee

Natural gas is really what kills them.

Liquids are not used all that much for electrical generation outside of back-up or peak-use generation, and not even all that much there.


14 posted on 02/26/2016 9:58:17 AM PST by MeanWestTexan (Beware Obama's Reichstag Fire.)
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