04-10-2015, 07:49 AM
More likely the number of oil rigs has becomes less due to shutting down of non profitable ones. Since the cost of running those shale rigs are higher..
sent from my Galaxy Tab S
sent from my Galaxy Tab S
(03-10-2015, 11:42 PM)cfa Wrote: [ -> ]Can come friends help to explain what does it mean by '' oil rigs fall " ?
Thought oil rigs are oil drilling platforms , quantum fell because some oil rigs were scrapped or any other reason ?
Many thanks .
(04-10-2015, 08:14 PM)HitandRun Wrote: [ -> ](03-10-2015, 11:42 PM)cfa Wrote: [ -> ]Can come friends help to explain what does it mean by '' oil rigs fall " ?
Thought oil rigs are oil drilling platforms , quantum fell because some oil rigs were scrapped or any other reason ?
Many thanks .
Baker Hughes rig count data refers to active rigs, i.e. rigs on contract and drilling actively. If the rigs become inactive, they can just be idle but warm stacked or cold stacked/mothballed/decommissioned. If they are cold stacked, the crew will be laid off.
Typically, oil producing companies do not own drilling rigs per se, they will hire the rig and crew from the drillers to help them drill a hole in the ground.
Oil platforms are offshore structures that production, drilling or maintenance activities are carried out.
Thanks for this explanation
i think the more impt metric to monitor though, is the total oil production, which for the U.S. at least, has been constantly rising even now
even though oil rigs has been dropping, the drillers have been finding ways to cut costs to survive by making each well more productive
i have initiated a position in Chesapeake energy, the 2nd largest natural gas producer in US, and the 7th largest oil. I don't think the slump is going over anytime soon, but this slump may be a good thing for certain companies as it forces then to be more productive and cut waste.
for eg. Chesapeake energy has been drilling longer laterals and reducing distances between wells, with gd results thus far. So idling more wells doesn't cut production necessarily
the glut will be here to stay until the production drops (supply) or demand shoots up
(04-10-2015, 09:12 PM)GFG Wrote: [ -> ]Thanks for this explanation
i think the more impt metric to monitor though, is the total oil production, which for the U.S. at least, has been constantly rising even now
even though oil rigs has been dropping, the drillers have been finding ways to cut costs to survive by making each well more productive
i have initiated a position in Chesapeake energy, the 2nd largest natural gas producer in US, and the 7th largest oil. I don't think the slump is going over anytime soon, but this slump may be a good thing for certain companies as it forces then to be more productive and cut waste.
for eg. Chesapeake energy has been drilling longer laterals and reducing distances between wells, with gd results thus far. So idling more wells doesn't cut production necessarily
the glut will be here to stay until the production drops (supply) Or demand shoots up
(05-10-2015, 08:17 AM)HitandRun Wrote: [ -> ](04-10-2015, 09:12 PM)GFG Wrote: [ -> ]Thanks for this explanation
i think the more impt metric to monitor though, is the total oil production, which for the U.S. at least, has been constantly rising even now
even though oil rigs has been dropping, the drillers have been finding ways to cut costs to survive by making each well more productive
i have initiated a position in Chesapeake energy, the 2nd largest natural gas producer in US, and the 7th largest oil. I don't think the slump is going over anytime soon, but this slump may be a good thing for certain companies as it forces then to be more productive and cut waste.
for eg. Chesapeake energy has been drilling longer laterals and reducing distances between wells, with gd results thus far. So idling more wells doesn't cut production necessarily
the glut will be here to stay until the production drops (supply) Or demand shoots up
The caveat that I would like to raise is that the presentations / information provided by such E&P companies should be taken with a huge pinch of salt. My takeaway is that they tend to (A) overstate their well productivity (by giving you only the data from their best wells while conveniently neglecting to reflect the averages) and (B) understate or fudge the actual maintenance capex required to hold their production steady.
Incidentally, based on latest estimated data, oil production in US peaked in 2Q and has declined somewhat in 3Q.....
(06-10-2015, 10:36 PM)GFG Wrote: [ -> ]whoa. These are big accusations.
I went to check, here's for just 1 of the companies, chesapeake:
http://www.chk.com/media/news/press-rele...s+8+5+2015+
On that same site there're several other presentations for previous quarters as well.
On the contrary from what you said, for (A), they give ONLY average productivity numbers for each site, as well as a total average. There are no numbers for any 1 or 2 "top" wells. As far as i am aware of, nobody states gas or oil produced PER WELL. It's always an average, which makes sense. I am sure for these well followed large O&G producers, which have to give a public conference call every quarter for their results (the conference call can be listened via podcast by anyone via their websites, and is a 2 way call, that is, analysts can ask questions and expect answers), the management will be called out if they start talking about only a few wells, which is unheard of.
For (B), I am not sure if they understate or how they'd "fudge" the projected capex to keep running the well. I wont be able to tell just by looking at the financials.
Please do tell if you know any examples or evidence of how this is done