And there was much rejoicing in the land.... Gas Prices

[KBScobravert]

racetrack on wednesday, filled up for 2.16

Your welcome

[Baba Ganoush]

Your welcome

His welcome?

[Ruffdaddy]

At least we are still frac'ing...well we were until Wireline's crane got hit by lightning 30 minutes ago.

Supposedly we have contracts on 19 more wells all within a half mile from each other here in Oklahoma. The new thing though is zipper fracs and one pad for multiple sets if wells. Anything to cut the operating expenses. As long as we can stay busy, I am okay with it. Zippers just mean zero time between stages and making every move on the pad count.

Fracing will continue for some time. With as big of a frackog as we have, and operators actively working to keep it at a certain level...you should be good.

[Strychnine]

"We've seen instances where some customers have, at least for now, backed off of plans for reactivations in the second half of 2015. Secondly, some customers believe it's reasonable to assume that the current U.S. land rig count may not be sustainable with WTI oil priced in the $40s...

You saw the rig count begin to flatten and you began to see more discussions regarding rigs in the spot market. But in this pricing environment [$40s], I just don't think you're going to see that. In fact, I think you could see the rig count pull back some...

If you recall in the last round of earnings calls, there were some that were expecting a 200-rig increase by the end of the year, and we said we just didn't see that. We couldn't see how that could happen. Now we weren't at that time of course, expecting oil to pull back into the $40s. I mean, the reality is I think if you went out and surveyed 10 different E&P operators, you would get a pretty wide range of expectation on pricing, and I think a lot of folks are thinking oil prices are going to be lower as opposed to moving higher."

- John Lindsay, CEO of H&P


(H&P are the #1 land driller in the US, nearly double the #2 on the list in both footage drilled and well starts)

[Strychnine]

Hercules Offshore Files Bankruptcy With Plan to Convert Debt

Hercules Offshore Inc., owner of the largest fleet of shallow-water drilling rigs in the Gulf of Mexico, filed for bankruptcy with a plan to be taken over by senior creditors.

The company said it planned to use the bankruptcy process to implement a proposal, announced in July, to cut $1.2 billion in debt. The plan calls for investors to trade their senior notes for almost 97 percent of Hercules’s equity.

Offshore rigs get stacked too... these are a few Hercules jackups off of Port Fouchon, LA

[Strychnine]

Random stuff:
These are the results of a study my team did for a report we had to write on the future of WTI prices. Using 55 years of historical pricing and a simulation similar to a Monte Carlo method we predicted WTI prices for the next 10 years. We assigned probabilities and price impacts to seven different variables over the next decade and our model was very close to the EIA short-term prediction.

I won't bore you with the behind the scenes stuff but the seven influencing factors were war in the middle east, another recession, OPEC (or an OPEC like group) consolidating power again, Iranian oil hitting the market, frac/servicing technology/efficiency improvements, sizable weather impacts (eg. large hurricane seasons), and terrorist activity in unexpected regions.



Our results tend to fall in line with many projections that have been floated over the past 6 months.

[Ruffdaddy]

What can you do with this data from a sales standpoint? Ive never been exposed to that side of things.

It seems like the variance is waaaaaaaaaaaaaaaaay too high to use anything but average. Also, your low isnt low enough...haha.

[Strychnine]

What can you do with this data from a sales standpoint? Ive never been exposed to that side of things.

Diversify your product lines or downsize your workforce to cut expenses, I suppose. (this was a school thing, not a work thing)

It seems like the variance is waaaaaaaaaaaaaaaaay too high to use anything but average. Also, your low isnt low enough...haha.

Yeah, that's kind of the point - to demonstrate that we could build a model capable of spitting out results somewhat similar to what large agencies produce (and hopefully show that we're not retards even though we had much less time and far fewer resources). Take a look at the NYMEX 95% confidence interval for WTI and you'll see a similar spread just over the next 18 months. But you're right, our low was probably not low enough

Our top line rises a bit fast. The latest pricing info we used was June 2015 before the most recent drop to ~$40/bbl.

[slow99]

Monte Carlo method

How many iterations?

[no4njnk]

$1.99 at the QT in Terrell

[Ruffdaddy]

Diversify your product lines or downsize your workforce to cut expenses, I suppose. (this was a school thing, not a work thing)




Yeah, that's kind of the point - to demonstrate that we could build a model capable of spitting out results somewhat similar to what large agencies produce (and hopefully show that we're not retards even though we had much less time and far fewer resources). Take a look at the NYMEX 95% confidence interval for WTI and you'll see a similar spread just over the next 18 months. But you're right, our low was probably not low enough

Our top line rises a bit fast. The latest pricing info we used was June 2015 before the most recent drop to ~$40/bbl.

I think youre getting at my concern... i truly believe most oil price predictions are BS. And any data set that has a spread greater in magnitude than the average is actually an admission that you purely dont know so its time to cast a broad net to make sure youve caught it all...thats how all those predictions are. "Yeah we predict somewhere between t boone and ***insert famous oil bear here***"

You cant make a decision off of a prediction like that, so its all just pretty charts.

Sorry...vent over...lol

[Strychnine]

How many iterations?

Not enough? Comparing it to a Monte Carlo might be wrong... feel free to correct me. I did most of the market history part of it, potential drivers, etc, and our finance heavy teammate handled most of the actual simulation.

An iteration of the macro accomplished two calculations. First, the lognormal distribution calculation provided a random oil price forecast base for the next ten years. Then, using a random number generator, each variable ran its own calculation off this base to get its own future projection for ten years. The results of each iteration were then copy and pasted into a separate column before the next iteration was performed. This process repeated 120 times. Once the simulation was complete, we took the largest, smallest and average price of each variable. Finally, we then took the largest, smallest and average price of the seven variables to give us our final future projection of oil prices for the next ten years

[Ruffdaddy]

Also...word is canada is planning their drilling at $45/bbl. If they can profit from that...surely texas can run at $40ish and most likely North Dakota.

If thats the case...get ready for long term lows. Weve gotta tap the texas and ND hotspots before theres even a concern.

[Ruffdaddy]

Guess -7

[Ruffdaddy]

Barely got that off in time!