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I work for one of the offshore drilling company's we are still drilling. Most of the guys I know offshore are still drilling for now. Most of our projects cost are spread out over a 20 to 50 year life of the field, so a temporary drop in oil prices should have only a small affect on what we do. The land rig guys that can be shut down and restarted at the drop of a hat, they will and are feeling the pressure first.
My brother works for a Gulf of Mexico drilling company. They are using this period to overhaul several rigs and retire some marginally reliable ones. This has happened before, our break at the pump won't last much longer.
 

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Your boss's initials must be S.G. and you are on one of the "Blue boats" I have heard about your physco CEO and feel for you guys.
You are correct. I'm working getting my 3rd assistant engineer so I can go from supply boats to drill ships if I need to. With all the buy outs there seems to be only about 4 or 5 supply boat companies to choose from.

I appreciate your input because with our company it's hard to tell how accurately their reaction reflects the reality of the industry versus just being typical stuff from this place.
We live close enough to meet in the middle at Stix River to put some rounds down range by the way.
 

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Yes, more money in the pockets of the American consumer is always a bad thing, right?GI3

Americans are spending over $300 MILLION $s a day less on gas than they were 1 year ago.

If you work in the industry or are heavily invested in oil stocks you MIGHT think the sky is falling but for the rest of the American economy, low gas prices are a good thing.

And most industries, especially the oil industry, has always been cyclical.
This has happened before, over and over.
Just the nature of the industry.

As far as ethanol you will not see much fluctuation simply because it is mandated by law to be put in every gallon of gas, so even though the price of gas is down, gas usage may actually increase, thus the same amount or even more ethanol demand.

This will also keep feed prices for cattle high, thus high beef prices, but if gas stays low it will eventually bring down some other costs also.

You can find any article on the internet on any subject supporting any position on the face of the earth.

Sometimes you just have to use some simple logic and past experience as your guide.
 

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I work in Calgary Alberta in the oil and gas industry. There are several explanations for the Saudi's continuing to produce at a high rate despite the low cost they also get for their oil. One is to make American shale oil less profitable and shut it down, another to hurt Russia. The most plausible reason for it is that the Saudi's have always reduced their production when required while the rest of the Opec countries continued to produce at full capacity. Saudi Arabia was already holding back production. Most of these countries rely on oil production to fund their economies. At some point they will all realize selling product for little profit is not in their best interests and will reduce their production. It will turn around.

Canada does not need $80 bbl to make a profit on oil. The "OIL" sands are definitely effected by these low prices and certainly won't see as much development although some producers do not intend to cut back spending at this time. Companies with a great deal of debt will be unable to service it and will fail. Most of us will curtail our drilling activity unless we need to retain mineral rights or meet other contractual obligations. We can increase our production far cheaper by optimizing and recompleting existing wells. Interestingly enough the company I work for has its best play in North Dakota. We will put the bulk of our funds into that field as it has the most future development potential.

When you mention fracing (that's right no K as the word comes from the word fracture) I suspect what you are referring to is unconventional drilling. Fracing has been around a long time and is necessary in some geological formations to free hydrocarbons from the rock. It has only become a household word since horizontal wells with multi stage fracture treatments have been introduced in the last decade or so. Fracing on new wells is here to stay. There is much misinformation on the subject. The media does not feel the need to be correct when they report a story.

The low price of oil is a double edged sword in Canada. The masses like $4 gallon gas but as the industry is the biggest contributor to our economy the low price of gas will have little meaning to those who can't afford a car. An extra $1 per gallon will not effect most people all that much but unemployment will. In Canada half of the pump price is tax. Many government sponsored programs will be effected by lower prices. Many businesses will feel the crunch when there is less consumer spending.

The United States has certainly contributed a great deal to the technology in oil and gas. Being an entrepreneurial people who are prepared to take more risk than most you guys are truly leaders in the industry. There is however a big difference from producing liquids in West Texas to the Canadian North which is inaccessible 8 months of the year and -30 or colder during the rest of it. Don't underestimate other countries ability to compete with you.

President Obama is making a mistake not approving the Keystone XL pipeline. His claim is that it will create 2000 short term and 20 or so long term jobs. This man clearly does not understand how Capitalism works but how could he? Unlike our Prime Minister who is an economist president Obama was what exactly in his past career? The oil is already being shipped to the US by rail which if you are aware of last years rail disaster in Quebec poses a more serious risk to the environment and public safety.

Of the many "non profit" organizations working in Canada to stop both the Keystone and Kinimat pipelines all of them receive a great deal of their funding from sources outside Canada. The vast majority of this funding is sent to these groups through numbered companies owned by Americans who have a vested interest in stopping the pipelines. Names like Warren Buffet and Hewlett and Packard have been connected to this funding. Many of them have interests in the rail infrastructure used to deliver our "dirty" oil to your market. The Keystone pipeline would also pick up a large amount of US produced oil currently being shipped by rail. Someone should take Robert Redford and Neil Young to task for the BS they are spewing. The reality is that the oil sands are nature's biggest spill and oil has been leaking into the waterways for thousands of years. It is the biggest clean up effort ever undertaken and once the land is reclaimed it is returned to a better state than before production ever began.

Canada produces 2% of the CO2 emissions on this planet. We also have the largest county that requires a great deal of travel in an extremely cold climate. We use fuel to move and stay warm and it's not fair to compare us to small countries with moderate climates. For some reason we are the whipping boy of the international climate change crowd. Of course India and China who are the worst polluters on the planet get a walk being considered developing countries despite the fact they brag about being thousands of years old. They would also never accept any limits imposed on them. I respected the US decision not to ratify the Kyoto accord. This was no more than a UN plot to transfer funds to underdeveloped countries. It did nothing to solve climate change issues. Our current Conservative government has opted out of the agreement that was signed by the previous Liberal government.

If you are interested in finding out more about this, the research has been done by a woman named Vivian Krause, Google her name. I attended one of her seminars last year. You will find her on the internet although she has had her website cyber attacked on several occasions. As a result of her work the Canadian government has the Canada Revenue Agency investigating the non profit status of these organizations which are in effect lobby groups. In Canada a non profit can use funds to advertise negatively against industry. That is not the case for lobby groups.

Merry Christmas and may you all have a safe and happy holiday break.
 

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The recent passing of the US budget bill with the bail out for derivatives has me in particular nervous . Seems there are a whole lot of derivatives tied to the oil and gas markets . These low gas prices we enjoy now , we will pay dearly and cry for later
Here in Illinois near St Louis $1.949 tonight
 
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From what I've read, there was a lot of pressure placed on pols to pass this bill, especially from the banksters. Personal calls from both Jamie Dimon (JPM), and our very own "Dear Leader" who is owned by them, were made to any that were-hesitant-shall we say, to pass it. It did pass however, and placed us as the guarantors of the banksters gambling activities.

The other item that passed which has not gotten much attention is the elimination of the Volcker Rule in Dodd-Frank. The elimination of this rule continues to allow the banks to gamble with depositor monies, and also suspends mark to market.

The derivatives that are tied to the junk bonds in the oil space are primed to roll over, as the bonds are in the process of doing so now:

http://wolfstreet.com/2014/12/07/bloodbath-in-oil-patch-junk-bonds-leveraged-loans-defaults/

I don't know when the damage will be made public, if at all, as these trades are all OTC, and not cleared through the usual clearing houses, but it will come out eventually, probably when a counter party can't perform and is a SIFI (Systemically Important Financial Institution) requiring a bailout. Think Citi or JPM, as they are the two US banks with the most derivatives. Heck, it could be Deutsche Bank, as they have a derivative notional value three times the German GDP. Who knows. All that I do know is that when it does happen, it will be cataclysmic.
 
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As I predicted... gas prices are going up here... up by twenty plus cents just from last week alone... yet all the while crude oil/gas prices continue falling in other U.S. states.
 

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As I predicted... gas prices are going up here... up by twenty plus cents just from last week alone... yet all the while crude oil/gas prices continue falling in other U.S. states.
Huh??????? Is your State raising fuel tax add-ons? Dims in U.S. Congress and some in BO's WH want to do that, gobble up the U.S. motor fuel end-user's rare savings as it were. I don't like it. Saudi society, economy, military are afflicted with metastatic weaknesses at a time when ISIS is poised to strike. Global oil could spike back up in a heartbeat. Talk about an economic shock.
 
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Yes, KaliforniaStan (the World's leading habitat of lawyers) added a new fuel tax which drove up the gas price this past few days.
 

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Yes, KaliforniaStan (the World's leading habitat of lawyers) added a new fuel tax which drove up the gas price this past few days.
Just to clarify for everyone else.

The new "gas tax" is a penalty fee as a result of the new Cap and Trade program that was implemented in the last couple of years. Users of internal combustion engine vehicles are being penalized because we have too large of a carbon footprint for the coming Utopia.
 

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$1.85/gal Regular today in NWA. I read a while back this added tax you are suffering was a result of a bill Arnie signed in before he left...
 

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$1.85/gal Regular today in NWA. I read a while back this added tax you are suffering was a result of a bill Arnie signed in before he left...
yeah, it's CA AB 32
http://www.arb.ca.gov/cc/ab32/ab32.htm

Governor Moonbeam and CARB (California Air Resources Board) are also screwing us over...

http://atlas.eng.vmware.com/logs/0/0/2/0/9/0/2/6/6/8
http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm

Assemblyman Henry Perea (D-Douchenozzle) tried to delay it but our doom was inevitable.

http://blogs.sacbee.com/capitolalertlatest/2014/07/perea-bill-would-california-air-quality-standards.html
 
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Sorry, but I disagree. It IS a Kalifornia tax. Tax... fine... fee.. whatever you wish to call it (just like OsamaCare).... because it has no legal definition (nor legal justification for that matter)...it is flatly ILLEGAL (just like OsamaCare).

I think I'm going to sue this God awful state I'm in... sue it for Humanity purposes!
 

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Sorry, but I disagree. It IS a Kalifornia tax. Tax... fine... fee.. whatever you wish to call it (just like OsamaCare).... because it has no legal definition (nor legal justification for that matter)...it is flatly ILLEGAL (just like OsamaCare).

I think I'm going to sue this God awful state I'm in... sue it for Humanity purposes!
Yeah, I see your point but that's the new trend so the politicians can avoid calling it a "tax".

Don't bother suing the state...they're already broke thanks to unfunded pension liabilities.
 
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