As a group, ROE for publicly-traded US operators rose to a five-year high in Q4 2018, as production increased and cost per barrel held steady. But the overall results were skewed by the good performance of the largest operators, as smaller firms remain under pressure to cut spending. Richard and John discuss how the financial health of US operators resembles the problems faced by the EU in stimulating its economy.
Richard and John discuss why “leading edge” completion designs appear to be stabilizing, while proppant use per lateral foot is still on the rise. Learn why the trends aren’t tethered.
A listener’s question leads into a discussion of the seasonality of global oil demand and other types of oilfield activity.
Both the broader macro-economic situation (global oil demand growth, US shale output, Iranian sanctions, etc.) and spot oil prices are beginning to resemble conditions as of the mid-2018. Will oil prices repeat the Q4 2018 price drop? Richard and John discuss factors they believe will be key for oil prices going forward. Also, as oilfield M&A heats up, Richard and John contrast and compare the oil service supply chains of Oxy and Anadarko.
This week, Richard and John discuss how either rising oil prices or higher well costs will test operators’ new-found spending discipline moving forward.
Richard and John discuss possible winners and losers from Chevron’s just-announced acquisition of Anadarko as well as operational and cost information from Saudi Aramco’s recent bond offering.
The combination of ever-higher gas output with ever-lower gas prices leaves many gas producers experiencing “profitless prosperity”, but Richard and John discuss what rising gas production means in terms of growth opportunities for the gas compression sector.
Using the Oilfield Investor Workbook, Richard and John identify the revenue impact on Schlumberger if oil prices were to reach $80 within the next two years. They also contrast and compare the impact of $80 oil on revenue growth for various market segments.
Based on their OMR (Oilfield Market Report) dataset, Richard and John identify the oilfield segments that have done the best (and worst!) job of achieving revenue growth per unit of volatility over the past decade.
Richard and John describe how the price impact of US shale oil production is similar to the discovery of Aztec gold and the development of the colonial tobacco industry. The guys also show how shale oil is currently saving consumers $80/bbl.