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Thread: Oil prices

  1. #176

    Default Re: Oil prices

    There are still start ups going on. Maybe they are ready to buy on the fears of others.

  2. #177

    Default Re: Oil prices

    Oil plunges as market fails to find bottom

    Oil futures fell sharply, failing to hold a rally for a second day and signaling traders that the selling is not over.

    Oil traded wildly in a big wide 8 percent intraday swing, the day ahead of the expiration of the January futures contract at the Nymex. West Texas Intermediate futures for January were up as much as 4 percent before turning lower, to settle down 4.2 percent at $54.11 per barrel, a fresh five-year low. Brent was trading below $60 after being up 4 percent earlier in the day

  3. Default Re: Oil prices

    WTI up $2.41 today, settling at $56.91

  4. #179

    Default Re: Oil prices


  5. #180

    Default Re: Oil prices

    Quote Originally Posted by blangtang View Post
    That is quite a slash

  6. Default Re: Oil prices

    Quote Originally Posted by Easy180 View Post
    That is quite a slash
    And you don't slash your budget nearly $2B just by shutting in wells....

  7. Default Re: Oil prices

    Quote Originally Posted by s00nr1 View Post
    And you don't slash your budget nearly $2B just by shutting in wells....
    No, you wouldn't ever slash your budget by shutting in wells. You "shut-in" wells, that have already been drilled and are producing, to stop production. Wells that are already producing provide cashflow to the company, shutting them in doesn't save money, it loses money.

    If you want to dramatically reduce your CAPEX budget, you reduce your highest expenditures by drilling fewer wells and putting major projects on hold. That is how CLR reduced their CAPEX budget. Their previous guidance on the $4.6 Billion budget was based on drilling 245 net wells in the Bakken at an average of $9.6 million per well and 105 in the SCOOP at $11 million per well with approx. 50 drilling rigs. The $2.7 million budget reduced the Bakken well count from 245 to 188 net wells and from 105 to 81 net wells in the SCOOP, reducing the rig count from 50 to 31. The reduction in wells alone would drop their budget between $700 Million and $1 Billion. Dropping nearly 20 rigs will substantially lower rig costs which will likely drop on the whole next year anyway along with the costs of completion services to adjust to lower oil prices. They will likely also stick to drilling the wells on the lower end of those average well costs and may lean toward drilling wells in which they have a lower working interest to help spread out the cost.

    I guess really my point is that if you are alluding to the fact that they will be substantially cutting jobs to reduce their CAPEX (not sure that's what you meant, but it seemed that way), that is not the case. CAPEX does not include employee salaries and wages, that is covered by OPEX(Operating Expenses). This press release gives guidance for their 2015 CAPEX budget, not OPEX. This will obviously affect the service company staff (due to the rig cuts and reduction in completion services) but that staff is not employed directly by CLR. At any rate, employee salaries are pretty low on the totem pole compared to all of the other ways they can reduce spending. As conservative as CLR has been in hiring, the slump in oil prices would have to be prolonged for a few years before they would have to start cutting back staff.

  8. Default Re: Oil prices

    Quote Originally Posted by PhiAlpha View Post
    I guess really my point is that if you are alluding to the fact that they will be substantially cutting jobs to reduce their CAPEX (not sure that's what you meant, but it seemed that way), that is not the case. CAPEX does not include employee salaries and wages, that is covered by OPEX(Operating Expenses). This press release gives guidance for their 2015 CAPEX budget, not OPEX. This will obviously affect the service company staff (due to the rig cuts and reduction in completion services) but that staff is not employed directly by CLR. At any rate, employee salaries are pretty low on the totem pole compared to all of the other ways they can reduce spending. As conservative as CLR has been in hiring, the slump in oil prices would have to be prolonged for a few years before they would have to start cutting back staff.
    You hit the nail on the head (and were correct in assuming CLR layoffs *was not* what I was hinting at). Perhaps I could have worded that a bit differently. Rather, I was hinting at the downstream effects such a CAPEX reduction at CLR (and elsewhere) will have, as my contacts on the service side of the industry are already looking at fairly substantial cutbacks for 2015 in terms of project employment.

  9. #184

    Default Re: Oil prices

    Quote Originally Posted by PhiAlpha View Post
    No, you wouldn't ever slash your budget by shutting in wells. You "shut-in" wells, that have already been drilled and are producing, to stop production. Wells that are already producing provide cashflow to the company, shutting them in doesn't save money, it loses money.

    If you want to dramatically reduce your CAPEX budget, you reduce your highest expenditures by drilling fewer wells and putting major projects on hold. That is how CLR reduced their CAPEX budget. Their previous guidance on the $4.6 Billion budget was based on drilling 245 net wells in the Bakken at an average of $9.6 million per well and 105 in the SCOOP at $11 million per well with approx. 50 drilling rigs. The $2.7 million budget reduced the Bakken well count from 245 to 188 net wells and from 105 to 81 net wells in the SCOOP, reducing the rig count from 50 to 31. The reduction in wells alone would drop their budget between $700 Million and $1 Billion. Dropping nearly 20 rigs will substantially lower rig costs which will likely drop on the whole next year anyway along with the costs of completion services to adjust to lower oil prices. They will likely also stick to drilling the wells on the lower end of those average well costs and may lean toward drilling wells in which they have a lower working interest to help spread out the cost.

    I guess really my point is that if you are alluding to the fact that they will be substantially cutting jobs to reduce their CAPEX (not sure that's what you meant, but it seemed that way), that is not the case. CAPEX does not include employee salaries and wages, that is covered by OPEX(Operating Expenses). This press release gives guidance for their 2015 CAPEX budget, not OPEX. This will obviously affect the service company staff (due to the rig cuts and reduction in completion services) but that staff is not employed directly by CLR. At any rate, employee salaries are pretty low on the totem pole compared to all of the other ways they can reduce spending. As conservative as CLR has been in hiring, the slump in oil prices would have to be prolonged for a few years before they would have to start cutting back staff.
    Soooooooo......are we panicking or no?

  10. #185

    Default Re: Oil prices

    Continental reduces planned drilling

    By: Journal Record Staff December 22, 2014

    OKLAHOMA CITY (JR) – Continental Resources on Monday announced a reduction in planned drilling because of lower oil prices.

    The revised 2015 nonacquisition capital expenditures budget totals $2.7 billion.

    “This revised budget prudently aligns our capital expenditures to lower commodity prices, targeting cash flow neutrality by midyear 2015,” said Harold G. Hamm, chairman and CEO of the Oklahoma City-based company. “This budget also maintains our financial flexibility and strong balance sheet while continuing to grow production in our core Bakken and SCOOP (South Central Oklahoma Oil Province) plays.

    Continental said it plans to decrease its current average operated rig count from 50 to 34 by the end of the first quarter and average 31 operated rigs for 2015. Allocation of operated rigs includes 16 in the SCOOP Woodford/Springer plays, 11 in the North Dakota Bakken and four in the Northwest Cana, where 50 percent of the costs applicable to the company’s interest is being carried by a joint venture partner.

    The revised 2015 budget is based on completing 81 net wells for the SCOOP Woodford/Springer plays with no change to previous estimated ultimate recovery targets.

    In the Bakken, Continental now expects to complete 188 net wells focused primarily in its core acreage, targeting an increased average estimated ultimate recovery of 800,000 barrels of oil equivalent per well.

    In the Northwest Cana play and other areas, Continental plans to complete 11 net wells. Completed well cost estimates are expected to average at least 15 percent less than 2014 averages as service costs adjust to lower commodity prices.

    Continental Resources Inc. reported third-quarter net income of $534 million, or $1.44 per diluted share, which was a substantial increase from $167 million from the third quarter of 2013.

    Continental also reported net production of 16.8 million barrels of oil during the third quarter, a 29-percent increase from a year earlier.

  11. Default Re: Oil prices

    Quote Originally Posted by gopokes88 View Post
    Soooooooo......are we panicking or no?
    No need to panic.

  12. Default Re: Oil prices

    Quote Originally Posted by PhiAlpha View Post
    I guess really my point is that if you are alluding to the fact that they will be substantially cutting jobs to reduce their CAPEX (not sure that's what you meant, but it seemed that way), that is not the case. CAPEX does not include employee salaries and wages, that is covered by OPEX(Operating Expenses). This press release gives guidance for their 2015 CAPEX budget, not OPEX. This will obviously affect the service company staff (due to the rig cuts and reduction in completion services) but that staff is not employed directly by CLR.
    Granted, my experience is with a different company in a different industry, but as a former CAPEX employee on a CAPEX project, there were a lot of OPEX employees shown the door when our project was cut. Just because a person is employed by a company doesn't mean they are paid for out of the OPEX budget.

  13. #188

    Default Re: Oil prices

    That's a major cut.

    This spring might be a good time to buy a boat or motorcycle, I got a feeling alot of things are going to be for sale.

  14. Default Re: Oil prices

    Quote Originally Posted by Just the facts View Post
    Granted, my experience is with a different company in a different industry, but as a former CAPEX employee on a CAPEX project, there were a lot of OPEX employees shown the door when our project was cut. Just because a person is employed by a company doesn't mean they are paid for out of the OPEX budget.
    I'm sure that could be the case at times, I am not an accountant and I was just speaking generally from my experience with E&P budgeting. My main point is that outside of contract employees with field service companies that support CLR's drilling, completion, etc operations, CLR's employees will likely not be affected by this. They've been very conservative in their approach to adding personnel, so unless things get really bad for a prolonged amount of time, they won't be cutting back on employees. Now Sandridge on the other hand may have some issues if things don't improve pretty quickly.

  15. Default Re: Oil prices

    Quote Originally Posted by gopokes88 View Post
    Soooooooo......are we panicking or no?
    YES, PANIC!!!!!!!!!!!!!!!!! Not yesterday, not tomorrow, PANIC NOW!!!!!!!!

  16. Default Re: Oil prices

    I guess we will all know soon enough.

  17. Default Re: Oil prices

    One of our councilmen here in Norman linked this today...

    Low oil prices are good for 42 states ? and bad for the other eight - Vox

    Taking into account the income losses for US oil companies, the net gain in US income will amount to $920 per year for each household. The average propensity to consume is around 90 percent, so the average US household could spend around an additional $825 per year.

    Because low-income households spend a greater percentage of their income on energy consumption, and are less likely to own stocks in oil companies, such households will see larger gains and spend more. High-income households will spend less. The overall effect should amount to a one-time increase in US GDP of about 0.7-1.0 percent.

  18. #193

    Default Re: Oil prices

    This will obviously affect the service company staff (due to the rig cuts and reduction in completion services) but that staff is not employed directly by CLR.
    I know people doing oil field services with a small company for Devon around Stillwater. The money tap was shut off and layoffs started a few weeks ago in his company.

  19. #194

    Default Re: Oil prices

    Quote Originally Posted by ylouder View Post
    This spring might be a good time to buy a boat or motorcycle, I got a feeling alot of things are going to be for sale.
    Quote Originally Posted by mkjeeves View Post
    I know people doing oil field services with a small company for Devon around Stillwater. The money tap was shut off and layoffs started a few weeks ago in his company.
    It's definitely going to be interesting, seeing what happens over the next 3-6 months in regards to possible layoffs/cuts. I don't have a definitive number or percentage of oil field services workers, that will be effected.....but I'm pretty sure its going to be tough to swallow for many families. And yes..it is tough for anyone to lose a job...but in this sector specifically, I think it will be tough for the large number of rural "country bumpkin" types who have been working in the oil field for the last 5-7 years, making $80,000- $100,000 a year, with no real skill set, or education that carries over to the real world. I think about areas like Elk City, Cushing, and Drumright where most of these guys will be forced to turn to minimum wage jobs in food services, or retail, or even warehouse, labor type positions in areas that already don't have much to offer in the way of these types of services anyways.

  20. #195

    Default Re: Oil prices

    There are a lot of people who commute from OKC to the oilfields. The ones I mentioned upthread are skilled tradesman, both live in the metro and commute to Stillwater or where ever they have an oil/gas project. I happened to run into one of them at a gas station at I-35 and HWY 51 while I was working on an energy related project in Stillwater for my company. That's not our core business but we'll feel the shrink if it goes on very long, like most everyone in the state.

  21. #196

    Default Re: Oil prices

    All I know is that I did a major double-take last week when I completely filled up my tank with premium fuel for $36. It's been costing me $70+ for so long that I had to re-check the receipt to make sure I hadn't just done a partial fill.

    I'd rather pay a bit more, though, and have our local economy remain prosperous. Hopefully we'll arrive at a happy medium. It's very interesting to read the opinions of those of you with inside knowledge of this industry.

  22. #197

    Default Re: Oil prices

    Saudi Oil Minister Will Not Cut Oil Production - Business Insider

    What would happen if gas got below a dollar a gallon... how bad would that hurt our economy here? I also suspect it would severely cripple green energy as well.

  23. #198

    Default Re: Oil prices

    Quote Originally Posted by turnpup View Post
    All I know is that I did a major double-take last week when I completely filled up my tank with premium fuel for $36. It's been costing me $70+ for so long that I had to re-check the receipt to make sure I hadn't just done a partial fill.

    I'd rather pay a bit more, though, and have our local economy remain prosperous. Hopefully we'll arrive at a happy medium. It's very interesting to read the opinions of those of you with inside knowledge of this industry.
    Weep not for the oil companies or big corporations but for yourself. Economy fluctuates from time to time...

    The Local economy will heal, make concessions and recover from their not so prosperous periods. Enjoy the low gas prices, put that money aside for now; oil companies will rebound--many are sitting on cash.

    April, 2011 Companies sit on huge reserves of cash | Marketplace.org

    October, 2012
    Companies Are Sitting on More Cash Than Ever Before

    October, 2014 Fed official: Big banks should clean up their acts - Oct. 20, 2014

    Don't kid yourself, big corporations are well-to-do or they wouldn't have distributed big bonuses.

  24. #199

    Default Re: Oil prices

    Informative article in the Dallas Morning News regarding following oil prices. Article states that Texas is not as dependent on oil as Oklahoma and Alaska are more dependent on this industry.


    As crude oil prices plummet, fortunes rise and fall | Dallas Morning News

  25. #200

    Default Re: Oil prices

    Quote Originally Posted by ylouder View Post
    That's a major cut.

    This spring might be a good time to buy a boat or motorcycle, I got a feeling alot of things are going to be for sale.
    Stay away from my boat!

    Actually thinking of selling it though if this stuff keeps up (or down).

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