Richard and John review the time lag between a change in the spot price of oil and changes in rig count and frac activity and discover a surprising relationship.
The Risk of Selling Days
Richard and John discuss the impact on oil service companies whose services are priced per day when productivity soars and whose costs are incurred per foot drilled. Can long-established pricing practices change?
Consolidations and Divestitures
Richard and John discuss the outlook for consolidation and divestitures in the oil service sector. Specific topics addressed include:
Three factors driving divestment
Market segments most likely to see divestitures
The emergence of a new type of asset owner
Moneyball and the Oilpatch
Richard and John discuss baseball, football and how the relationship between US rig activity and spot oil prices has changed over the past six months.
The Pressure on Operators
Richard and John discuss the pressure being placed on oil & gas companies by some shareholders to reinvent themselves as “no carbon” energy suppliers. Topics addressed include:
Do oilcos have the skillset necessary to make the change being asked?
Will oilco shareholders accept a new business model and a different risk-return profile?
One area of agreement between oilcos and activists: technology as a solution to energy needs
Shake(spears)
Richard and John use familiar quotations from Shakespeare to describe current conditions in the US oilpatch. Consider it poetic analysis.
Global Oil Demand
Richard and John discuss the outlook for global oil demand in the coming year and the sensitivity of oil traders to the US-China trade dispute.
E-Frac Sensitivity to Natural Gas Prices
Richard and John discuss the capital and operating costs associated with E-Frac operations and estimate the price of natural gas at which E-Frac becomes uneconomic relative to conventional frac units.
Hitting the Brakes
Richard and John discuss the slowdown taking place in US oil production growth and what that means for global oil markets.
Mythical Beasts
How real is the “fracklog”? Richard and John identify the weaknesses in the EIA’s method for calculating drilled-but-uncompleted wells and what that means for the US oilpatch.