• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 15 minutes WTI @ 67.50, charts show $62.50 next
  • 12 hours The EU Loses The Principles On Which It Was Built
  • 3 hours Starvation, horror in Venezuela
  • 5 hours Saudi Fund Wants to Take Tesla Private?
  • 20 hours Crude Price going to $62.50
  • 7 hours Why hydrogen economics does not work
  • 4 hours Tesla Faces 3 Lawsuits Over “Funding Secured” Tweet
  • 4 hours Again Google: Brazil May Probe Google Over Its Cell Phone System
  • 2 days Anyone Worried About the Lira Dragging EVERYTHING Else Down?
  • 17 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 1 day Chinese EV Startup Nio Files for $1.8 billion IPO
  • 2 days Oil prices---Tug of War: Sanctions vs. Trade War
  • 2 days Correlation does not equal causation, but they do tend to tango on occasion
  • 2 days Russia retaliate: Our Response to U.S. Sanctions Will Be Precise And Painful
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

Trending Discussions

Shale Lemmings Retreat As Price Recovery Stalls

Oil

If we could make up one bankable investment rule for oil stocks for the past three years – it would be to note precisely what oil companies are planning for and then plan on the opposite happening.

Oil companies were sure that the oil collapse of 2014 was surely temporary, waiting more than 6 months to make extreme capex cuts and idle 1000 rigs. Their slow acceptance of the oil bust assured that 2015 would be a horrible year for oil stocks.

In 2016, they came en masse to their senses, cutting capex on average nearly 70 percent and began selling assets to protect cash flow and dividends.

Those assets were sold at pennies on the dollar as oil hovered near to $30 a barrel.

2016 was nearly as bad for oil stocks as 2015 was.

Too many oil companies survived these horrible business blunders. Together, oil companies determined that 2017 was going to be THE YEAR of recovering oil prices, and again budgeted for a new blast of exploration spending that sub-$60 oil could not justify.

CEO Al Walker of Anadarko Petroleum had this to say on his recent conference call, explaining his horrible quarter:

The biggest problem our industry faces today is you guys. You don’t reward capital efficiency, you reward growth. When you guys stop rewarding growth and reward capital efficiency, guess what — and the share prices react, people will stop chasing growth for growth’s sake. As long as investors continue to invest in companies with…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions





Oilprice - The No. 1 Source for Oil & Energy News