[Ok-sus] "Shakeout Threatens Shale Patch as Frackers Go for Broke"
bob at bobwaldrop.net
Tue May 27 22:35:56 UTC 2014
The devolution in the oil bidness continues.
Think “Energy Returned on Energy Invested”. News media don’t write in those terms, they always focus on the money, but the money is simply reporting the energy situation: the energy return on our energy invested is plummeting.
Bob Waldrop, OkieCity
Subject: [ASPO-talk] "Shakeout Threatens Shale Patch as Frackers Go for Broke"
By Asjylyn Loder May 27, 2014 6:23 AM CT
The U.S. shale patch is facing a shakeout as drillers struggle to keep pace with the relentless spending needed to get oil and gas out of the ground.
Shale debt has almost doubled over the last four years while revenue has gained just 5.6 percent, according to a Bloomberg News analysis of 61 shale drillers. A dozen of those wildcatters are spending at least 10 percent of their sales on interest compared with Exxon Mobil Corp.’s 0.1 percent.
“The list of companies that are financially stressed is considerable,” said Benjamin Dell, managing partner of Kimmeridge Energy, a New York-based alternative asset manager focused on energy. “Not everyone is going to survive. We’ve seen it before.”
Some investors are already bailing out. On May 23, Loews Corp. (L) <http://www.bloomberg.com/quote/L:US> , the holding company run by New York <http://topics.bloomberg.com/new-york/> ’s Tisch family, said it is weighing the sale of HighMount Exploration & Production LLC, its oil and natural gas subsidiary, at a loss.
HighMount lost $20 million in the first three months of the year, after being unprofitable in 2013 and 2012, Loews said it its financial reports. As with much of the industry, HighMount has shifted its focus to oil after natural gas prices <http://topics.bloomberg.com/gas-prices/> plunged and has struggled to find sites worth developing, company records show...
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