The U.S. Shale Oil Industry is in serious trouble

Posted by Ed 10 mths ago

The U.S. Shale Oil Industry is in serious trouble, even without the negative impacts of the global contagion


While it’s no secret that shale oil wells suffer high decline rates, what is taking place in the country’s largest oil field is quite alarming. The rate at which shale oil production is declining in the Permian should worry investors.


In just three months, Permian shale oil production from 2019 declined a stunning 23%. Thus, if no new wells were added in 2020, the Permian region would have lost 23% of its oil production… IN THREE MONTHS!!   


US shale industry braces for wave of bankruptcies

Fracking pioneer Chesapeake Energy files for bankruptcy

US shale producer Extraction files for bankruptcy

U.S. shale company Whiting becomes first major bankruptcy

haynes and boone, llp oil patch bankruptcy

Blackstone shale oil venture Gavilan Resources files

Shale Driller Chisholm Files for Chapter 11 Bankruptcy

Since shale produces roughly 10% of the global supply of oil, one might suggest there is a silver lining in this demand destruction:   No V-Shaped Recovery for Airlines 

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Ed 10 mths ago
Delta’s Passenger Revenue -94%. How it Plans to Stay Alive till “Demand Returns.” Confirms United’s Warning About Newly Waning Demand
Then there were the revenues, with a breath-taking plunge:
Passenger revenue – which last year was 90% of total revenues – collapsed by 94% year-over-year to just $678 million.
Its highly profitable business cabin and other premium sales (usually over 1/3 of total revenues): -95%.
Revenues, domestic flights -93%; Atlantic -97%; Latin America -98%; Pacific -95%.
Cargo revenue: -42% to just $108 million.
“Other revenues” (loyalty programs, its own refinery, etc.): -31% to $682 million.
Total revenues: -88%, to $1.47 billion, from $12.5 billion a year ago
Delta will be burning 95% less fuel.... 

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Ed 10 mths ago - Shale boss says US has passed peak oil
America's energy dominance could be coming to an end as the country's shale industry is experiencing steep production declines. Rarely do we hear President Trump these days touting shale jobs and production output, mostly because the industry has entered a bust cycle.

Matt Gallagher, CEO of Parsley Energy, a top 20 producer in Texas, spoke recently with the Financial Times and said crude output of 12 or 13 million barrels per day is over:

"I don't think I'll see 13m [barrels a day] again in my lifetime.

"It is really dejecting, because drilling our first well in 2009 we saw the wave of energy independence at our fingertips for the US, and it was very rewarding . . . to be a part of it," Gallagher,37, said.
Since shale production is in a steep decline, it is perhaps fortuitous that many thousands of commercial aircraft are no longer flying.  Otherwise the price of oil might be headed north of $200 per barrel.... 

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