• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 59 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 days Cheaper prices due to renewables - forget it
  • 5 days e-cars not selling
  • 6 days If hydrogen is the answer, you're asking the wrong question
  • 6 days How Far Have We Really Gotten With Alternative Energy
  • 6 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

More Info

$40 Oil Will Bring Value In Oil Stocks

In my last column, I tried to draw a few long range conclusions about U.S. production of shale oil, using the terrific graphics from Enno Peters of Shaleprofile.com. In this column, I promised to focus on the kind of Oil Company you’d want to be invested in, based on those conclusions. If you haven’t seen those representations of shale production from the Bakken shale play and the Eagle Ford, I invite you to take a look at them again.

 

(Click to enlarge)

 

(Click to enlarge)

The fantastic color coding of the chart not only makes clear the total production of oil, but also when each part of that production was initiated, and how efficient the wells from each year have proven to be.

One fundamental idea is that as each year goes by, a percentage of production must be re-initiated in order for total production to remain the same and a logically greater percentage in order to increase production, as has happened in every year except this one.

I know this is obvious, but it bears repeating, and these charts scream out: Oil wells cost money to drill and inevitably run dry. They need to be constantly replaced with fresh drilling to maintain output. Those drilling and maintenance costs sometimes overwhelm the returns of the oil being sold, as is the case this year and the previous two, and sometimes the returns greatly outpace the costs, as was the case before the bust in 2014. We know that most of the…




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News