Res Ipsa wrote: ↑Tue Jun 28, 2022 4:27 pm
Binger wrote: ↑Tue Jun 28, 2022 4:25 pm
Hysterical. LMFAO!
I am going to keep this one forever: "not drilling despite the high market price of oil".
This wins a prize, Res.
You don't understand supply and demand, do you?
I understand supply and demand very well, do you? I also understand corporate finance and capital project finance for the oilpatch with specific experience in oilfield services, exploration and production and refining, do you? I also understand the difference between drilling and producing, do you? I have been on many drilling rigs and on many offshore platforms. I have financed construction of jackups, semisubmersibles and drillships. The co-founder of my company was a CFO for two offshore drilling companies. I published an offshore drilling monthly with the data for every publicly owned offshore drilling rig in the world. So yeah, when someone who says "not drilling despite the high market price of oil" I get to laugh my ass off because of the absolute absurdity of the comment.
I have also worked closely with the seismic companies, onshore and offshore. As an investor, I have shorted them and been long the stocks. One of the factors in those investments is leaseholds, including expirations.
And, just for fun, I have also financed Boots & Coots. Have fun with that one. God bless John Wayne and Red Adair.
Regarding supply and demand... there is obviously more to it than the price at the pump or the price of crude. One must factor in strategic reserves being sold or replenished, futures, exploration costs, adjacent leases, shipping and transportation and trading risks that can bankrupt banks, funds and companies. Drilling is a small fraction of the capital requirements for exploration and drilling has a limited role in production. Drilling is a function of the exploration budget, not production. But, go on... I am listening.
Drilling is the driver for FUTURE production and it is the best statistical indicator which is why it is tracked so closely. It indicates what can and will happen way down the road. When we kill off capital projects and exploration it has little to no effect today. THAT is the straw man or red fish or whatever the hell you want to call it.