Just in time for Thanksgiving, Richard and John identify where “high calorie” wells are drilled and what the outlook is for those markets.
Where the Oilpatch Is Headed Outside North America
Richard and John discuss what recent declines in drilling activity outside North America appear to say about NOC intentions regarding future oil production capacity.
US Production Outlook
Richard and John present three scenarios for frac activity and US oil production for the coming year and discuss the implication for oil prices. Other topics addressed include:
How a sharp DUC drawdown just delays a collapse in US oil output to 2022
Migrating DUCs
Richard and John discuss what HAL’s Q3 results mean for US frac activity. Other topics discussed include:
What Bobcat Goldthwait, the wives of Henry VIII and invading Russia have in common
Straws in the Wind
Richard and John discuss what recent oil company mergers say about the outlook for E&P activity, supply chain consolidation and market share growth.
Thinking About Free Cash Flow
Richard and John discuss elements impacting free cash flow for US operators and how this will determine E&P capex and rig activity going forward. Specific topics addressed include:
“Haircut” given to spot oil prices when setting capex budgets
Royalties, production taxes and operating costs
% going for debt reduction and shareholder returns
What Caught Our Attention this Week
Richard and John discuss topics which caught their attention this week, including: Caterpillar’s acquisition of Weir; Saudi breakeven pricing; Q3 OFS earnings expectations; and progress on nuclear fusion.
Has America Gone Back To Work?
Anecdotal evidence from Richard’s current road trip suggests US economic activity is largely returning to normal and explains why the EIA has revised its estimates of Q4 US oil use significantly higher in recent months. Richard and John discuss how this would impact inventory drawdowns and oil prices.
Going, Going…
Schlumberger has begun to reduce its exposure to the North American oilpatch. Richard and John discuss how this process will likely result in consolidation of important segments of the NAM market. Other topics addressed include:
Does the possibility of a Biden administration impact the timing and/or success of this process?
Will competitors or customers object to market consolidation?
State of the Market: Renewables
Major oil companies are increasing their investment in renewable resources as they transform into btu-agnostic energy suppliers. Richard and John describe the US renewables market and discuss the outlook for this sector.