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

[Strychnine]

So just a recap. What was the rig count 18 months ago?

July 2014 - 1876

[Baron Von Crowder]

I bought diesel of $1.59!

[David]

Diesel will be $1.30 here by the end of next week.

[Strychnine]

Just throwing this out there also:

Yesterday Obama decided to propose an $10/bbl tax.

Obama Proposes $10 Per Barrel Fee On Oil Companies

President Barack Obama will submit a budget request to Congress next week that includes a requirement for oil companies to pay a $10 fee to the federal government for every barrel of oil they produce, the White House said Thursday. That's 33% of the current price per barrel.


The administration claims the fee could bring in up to $32 billion in new federal revenue per year and would be allocated to highway infrastructure and research for cleaner vehicles as part of President Obama's 21st Century Clean Transportation System." The proposal has virtually no chance of becoming law, however, as the Republican-dominated legislature has vowed to stop it in its tracks.

Jeff Zients, director of the Obama administration's national economic council, told reporters that the fee would be paid by oil companies, but they would inevitably pass it along to American consumers. He said the fee would be levied on domestically produced and imported oil, but not on US oil exports, in order to ensure a "level playing field" for US producers in the global market.

Reaction from industry representatives and congressional Republicans was swift and immediate.

"dead on arrival" "A $10 tax for every barrel of oil produced would raise energy prices- hurting poor Americans the most...President Obama is still on a mission to destroy a major backbone of the US economy...As this lame duck president knows, it's dead on arrival in Congress..."

"Don't know where to start. Dumbest idea ever?" And, "Obama's $35 billion/year oil tax would bankrupt O&G industry. Oh, wait. That may be the point." Finally, "Obama's idea of raising taxes and making the oil companies pay for it? Sounds like Trump and the Mexican..."

“The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America’s emergence as a global energy leader.”

"From day one of President Obama's administration, he has waged open warfare on American energy — and his radical policies have cost jobs while increasing costs on hard-working families. Washington spending is already too high, and the best way to create more jobs and get our economy back on track is by cutting taxes and controlling spending."

"The administration is claiming the purpose of this tax is to raise revenue for some grand transportation plan, but it’s really about taxing the energy they don’t like to make President Obama’s favored energy sources and companies more profitable,"

One of the only bright spots in President Obama's anemic economy has been the jobs created by the oil and natural gas production industry, which has grown despite his policies...It is no surprise his lack of leadership and petty partisanship would try to extinguish that economic contributor as well." Adding, "Frankly, I'm unsure why the president bothers to continue to send a budget to Congress...He never submits one that balances — and even his own party members have not only voted against it but voted against it unanimously."

would be laughable if it didn't illustrate just how much he's lost touch with reality over the last seven years. While his plan might be applauded by environmentalists and big-city liberals, it would be a nightmare for working families...This proposal would effectively double the gas tax — at a time when Arkansas families are enjoying more affordable gas prices. Worse, that tax would unfairly target people in rural states like ours who use more gasoline.

[cobrajet69]

^ golf clap


David

[Broncojohnny]

According to Bloomturd there still has been no real decrease in production. But you can see by the price action in the last two weeks that as soon as there is the speculators are going to drive share prices up very quickly. I have size able bets on COP, NOV and XOM now. We will see what happens.

[Ruffdaddy]

According to Bloomturd there still has been no real decrease in production. But you can see by the price action in the last two weeks that as soon as there is the speculators are going to drive share prices up very quickly. I have size able bets on COP, NOV and XOM now. We will see what happens.

Hopefully you picked up that NOV after the earnings were released this week and subsequent drop in price....

[The King]

Interesting to see that there is a rig operating at the site along I-20 at Village Creek again.

[SBFORDTECH]

Only down 30 this week. I guess it could be worse...

[Broncojohnny]

According to some scuttlebutt I heard, Chesapeake BK is imminent....

[Strychnine]

According to some scuttlebutt I heard, Chesapeake BK is imminent....

They're denying it, of course.

"Chesapeake Energy Corporation stated today that Kirkland & Ellis LLP has served as one of Chesapeake's counsel since 2010 and continues to advise the company as it seeks to further strengthen its balance sheet following its recent debt exchange. Chesapeake currently has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders."

But supposedly they've been doing some things over the past few months that were making people suspicious.


This was Monday morning:

Chesapeake Stock Falls 50% On Bankruptcy Rumor, But Management Denies Chatter

Chesapeake Energy lost half its value Monday after a report by Debtwire that the company recently hired restructuring attorneys from Kirkland & Ellis to discuss "balance sheet solutions" in restructuring its $9.8 billion debt load. Chesapeake then issued a statement denying that it's pursuing bankruptcy.

During the first 30 minutes of trading, the plunge triggered three circuit-breaker halts. The sell-off, which totaled just over 50% today on the rumor, extended Chesapeake’s 12-month loss to around 93%. The plunge erased $838 million in market value in the first hour of trading Monday morning:




Once trading resumed following management's denial of the bankruptcy chatter, CHK's share price bounced:




$9.8 Billion Debt Load

With a debt load eight times larger than its market cap, as Bloomberg noted, CHK has been engaged in a strategy to get leaner and more efficient amid the price downturn. Headcount reductions, investment cuts, and project deferrals are among the actions the company has taken.

In January, Standard & Poor’s downgraded Chesapeake’s credit-rating to "CCC+" with a negative outlook based on assumptions that O&G prices will stay low. S&P said at the time that CHK's debt leverage is unsustainable.

In late 2015, the company rolled out an exchange offer across all 10 tranches of its unsecured bonds. Debtwire reports that this was "directed at delevering its balance sheet and addressing the near-term maturities by exchanging them at a discount into new 8% second lien notes. While the exchange succeeded in cutting total debt by USD 1.4bn to USD 10.4bn, the results were lackluster as only 24% (USD 780m face amount) of holders of nearer-dated bonds maturing through 2019 tendered, while the majority of acceptances (USD 3.8bn) came from holders of longer-dated notes."

The sources told Debtwire that as of 30 September, CHK had total liquidity of $5.75 billion, consisting of $1.76 billion of unrestricted cash, and "full availability on its USD 4bn first lien revolver due 2019. Going forward, the company could use that liquidity to fund the 15 March maturity of its USD 476m 3.25% unsecured notes."

[Torinoman]

didn't oil bounce like 10pts today?

[no4njnk]

I am speaking with a drilling company on Wednesday, should be an interesting call.

[Ruffdaddy]

Weird shit is happening for sure...

[SBFORDTECH]

didn't oil bounce like 10pts today?

Yes, but only because we lost 30 rigs and speculators are counting on a production decrease because of it.