Oil <$60/barrel, time to buy stock

[mr lovah]

With oil below $60 a barrel, I think it's time to buy some stocks in oil companies (lease operators) and oil field service providers

My little bro just spent a few grand on oil field stocks and my dad just spent 50

Some companies I'll be looking at since I'm home from North Dakota on my days off per today through Jan 3rd:


oil companies:

-exxon mobil
-british petroleum
-encana
-whiting
-continental resources
-kodiak

*all major players in the bakken, three forks and tar sands formations that are major plays right now with very high overhead costs

oil field service providers:
-nabors
-unit
-haliburton
-baker hughes
-sanjel
-weatherford


I'll be consulting with my fidelity adviser and looking at companies that focus exclusively on drilling and possibly fracking before placing my bets...since drilling followed by fracking are the two most costly operations in well production

 

[Abiqua]

So what happens when it drops to $20 to reflect a more real world usage [dropping] like it was similarly from 86' to 2004?

Agree that fracking [as much as I would never ever invest in a technology, like this, I can make money without raping water supplies, sorry] can be set up much cheaper than conventional drilling. Much much cheaper, however, shale is exceedingly shorter on the life expenctancy, like 2 years average per site in Dakota/Montana. So if you are investing off of fixed/ sunk costs for 2015 [and some may have even went "long" till 2016, although not a majority], good luck, because after that, shale production has a real chance of dropping production towards FY2016, especially if the Saudi's keep pumping, which they will! Money sunk is money lost, so if the investment is already made, even with dropping barrel costs, eh, its done, reap and move on. After that, new costs for production are still reflective of a $100 per barrel break even point and it is not going to hit that for a while, if ever in the next decade? Seriously, Saudi's don't give a fuck and shale doesn't seem to have a solid footing, other than some development costs may decline over time and setting ups sights is quick in comparison to conventional ground/sea oil. Until prices rise, that outlook looks bleak, to say the least.....

 

[Red1966]

The Saudi's produce oil at a cost of $10.00 a barrel. They can keep pumping until everyone else can't meet their production costs and still make money. A risk to consider.

 

[OGEvilgenius]

I'd be wary as the Sauds are being used to wage economic warfare against Russia.

 

[mr lovah]

So what happens when it drops to $20 to reflect a more real world usage [dropping] like it was similarly from 86' to 2004?

Agree that fracking [as much as I would never ever invest in a technology, like this, I can make money without raping water supplies, sorry] can be set up much cheaper than conventional drilling. Much much cheaper, however, shale is exceedingly shorter on the life expenctancy, like 2 years average per site in Dakota/Montana. So if you are investing off of fixed/ sunk costs for 2015 [and some may have even went "long" till 2016, although not a majority], good luck, because after that, shale production has a real chance of dropping production towards FY2016, especially if the Saudi's keep pumping, which they will! Money sunk is money lost, so if the investment is already made, even with dropping barrel costs, eh, its done, reap and move on. After that, new costs for production are still reflective of a $100 per barrel break even point and it is not going to hit that for a while, if ever in the next decade? Seriously, Saudi's don't give a fuck and shale doesn't seem to have a solid footing, other than some development costs may decline over time and setting ups sights is quick in comparison to conventional ground/sea oil. Until prices rise, that outlook looks bleak, to say the least.....

I appreciate your opinion, however ignorant I think it is...reasons why I think you're ignorant:

-fracking ruins ground water. I suppose that's why surface casing utilizes a shoe and a liner inside the casing, cemented separately. Followed by state-mandated annual wireline CIT's and MSC's. Followed by centrifuge-filtering water to recycle for new fracks or disposing in wells 10's of thousands of feet below aquifers...

-two years average well life in ND/MT...I've personally drilled a good 50 bakken wells, all of which are producing right now and will continue for years if not decades

-the bakken alone has ~4 billion barrels of recoverable oil and that estimate, given over 5 years ago, has expanded.

-the cost of producing a bakken well has dropped significantly in recent years with the advent of technologies like better MWD tools, DWC rigs, zipper fracking, etc.


what exactly do you mean by "conventional drilling" and "conventional ground/sea oil"?

saudi is of a small handful of active plays remaining that utilize injection wells and don't require directional work. Sure, this significantly lowers their cost per barrel but WHEN the production slows down North/South America, Russia, China, will all revamp production.

We probably agree that investing in North American-focused drilling/fracking companies is a bigger gamble than investing in Global Oil companies, especially those involved more in transport and refinery

 

[Abiqua]

I appreciate your opinion, however ignorant I think it is...reasons why I think you're ignorant:

-fracking ruins ground water. I suppose that's why surface casing utilizes a shoe and a liner inside the casing, cemented separately. Followed by state-mandated annual wireline CIT's and MSC's. Followed by centrifuge-filtering water to recycle for new fracks or disposing in wells 10's of thousands of feet below aquifers...

-two years average well life in ND/MT...I've personally drilled a good 50 bakken wells, all of which are producing right now and will continue for years if not decades

-the bakken alone has ~4 billion barrels of recoverable oil and that estimate, given over 5 years ago, has expanded.

-the cost of producing a bakken well has dropped significantly in recent years with the advent of technologies like better MWD tools, DWC rigs, zipper fracking, etc.


what exactly do you mean by "conventional drilling" and "conventional ground/sea oil"?

saudi is of a small handful of active plays remaining that utilize injection wells and don't require directional work. Sure, this significantly lowers their cost per barrel but WHEN the production slows down North/South America, Russia, China, will all revamp production.

We probably agree that investing in North American-focused drilling/fracking companies is a bigger gamble than investing in Global Oil companies, especially those involved more in transport and refinery

Is it ignorant?

On average there are 2000-3000 wellheads coming online each year in the Bakken and each one is estimated to average around 500,000 barrels or so, total capacity. Within two years of production, those wells are producing less than 500 barrels a day, some say more like 200.

If you have such productive wells, why not invest in that company? Seems like they are well above the margins of the industry and the exception, not the rule.

There are ground water problems well documented all over, from Pennsylvania to Alberta, I could link for days, but honestly, conventional wells that are subject to injection also provide similar results, so it isn't just fracking by any means...

How do you check broken casing, thousands of feet down and guarantee that nothing happens, I bet on the chance, that you can't, with geology in mind.

I also agree that there is probably more oil out there in the Bakken and reserves will be updated, they have in reality, but they wan't to hold nuts in a vice on the high yield bond market.

Will Saudi drop their production? They seem to realize that oil usage is dropping globally. Do they realize that we are now at the point that oil is becoming another un-used mineral like vast amounts of remaining coal? So, if that is case, maybe they want to pump everything they can, as evidence by the Oil Minister's recent comments. Is it coincidence that China is stuffing their reserves while also closing two multi billion dollar pipelines with Russia that subverts the gold standard onto the yuan?
That maybe the real story, oil is going back to the gold standard, whether we like it or not and several players [BRICS] and China/Russia are making that leap. Saudi is still on the US Dollar and maybe they are realizing they are about to be screwed when the bond market takes eventual notice.....


And....I thought we are in the period of revamping? But yes I agree, global oil is probably less of gamble although I wouldn't want to be a bond trader at the moment, for any fiat devalue.

 

[mr lovah]

Is it ignorant?

On average there are 2000-3000 wellheads coming online each year in the Bakken and each one is estimated to average around 500,000 barrels or so, total capacity. Within two years of production, those wells are producing less than 500 barrels a day, some say more like 200.


If you have such productive wells, why not invest in that company? Seems like they are well above the margins of the industry and the exception, not the rule.

When I was with Cyclone, we (rig eight) were the highest payzone rig in the world for Continental Resources. The area we were drilling was in Epping, North Dakota...but to invest in Continental because of this alone would be a crap shoot.

There are ground water problems well documented all over, from Pennsylvania to Alberta, I could link for days, but honestly, conventional wells that are subject to injection also provide similar results, so it isn't just fracking by any means...

Yeah, agree to disagree...I'd rather stay on topic

How do you check broken casing, thousands of feet down and guarantee that nothing happens, I bet on the chance, that you can't, with geology in mind.

Wireline (an electric cord wrapped in plastic sheathing and armor). They use tools such as MSC (multiple sensory calipers), URS (Ultrasonic Radial Scanner), CCL (Casing Collar Locator) in tandem on a tool string. Using sensory calipers to determine the structural quality of the interior of the casing, sound to determine the quality of the cement bond between the casing and annulus/formation and a magnetic field on the CCL that verifies depth through depiction (on a graph called a log) every time the magnets flip like a light switch when passing the thicker steel collar between each ~30ft joint of casing

We conducted a "squeeze job" last week on a well where the wireline log had revealed a poor cement bond with the casing. We attach our wireline to a CCL to verify depth of the problem area and a one-foot perforation gun. Then explosives in the gun are detonated creating holes in the casing where concrete is pumped into the cavity.

I also agree that there is probably more oil out there in the Bakken and reserves will be updated, they have in reality, but they wan't to hold nuts in a vice on the high yield bond market.


Def plausible...I agree

Will Saudi drop their production? They seem to realize that oil usage is dropping globally. Do they realize that we are now at the point that oil is becoming another un-used mineral like vast amounts of remaining coal? So, if that is case, maybe they want to pump everything they can, as evidence by the Oil Minister's recent comments. Is it coincidence that China is stuffing their reserves while also closing two multi billion dollar pipelines with Russia that subverts the gold standard onto the yuan?
That maybe the real story, oil is going back to the gold standard, whether we like it or not and several players [BRICS] and China/Russia are making that leap. Saudi is still on the US Dollar and maybe they are realizing they are about to be screwed when the bond market takes eventual notice.....

Agreed with all of the above. Working in the bakken, I'm more attuned to shale production process/costs so further research into global plays and their risk considerations are needed before I invest any hard earned money


And....I thought we are in the period of revamping? But yes I agree, global oil is probably less of gamble although I wouldn't want to be a bond trader at the moment, for any fiat devalue.

 

[howsitgrowin420]

Yikes, I wouldn't buy that shit. You do know that the Saudi's are not going to cease production, right? That means continuing drops. Why? Well, the economy of places like Russia depends heavily on the price of oil. When the price of oil drops, their economy tanks. Remember Putin? Nobody wanted him, nobody likes him.....and this is how the puppeteers turn a people against the leader.

So, tank the price of oil by boosting supply and the economy of a place like Russia will fail and millions will be pushed into revolt - or at least demanding a change in leadership. However, if you don't want people to realize the fiasco is going on then I'd suggest things like: police killings to incite race wars, an international scandal involving a media conglomerate (this distracts everyone - E-tards included (e- entertainment).

Oh hey, who is really good at manipulating global economic measures when they are in power and who has orchestrated acts of mass public deception (MPD) in order to more freely allocate resources and/or increase their powers.....yep, the republicans are good at controlling the economy...golly, I wonder if low gas prices is the primary influence on American faith in its leadership.

Nope, oil is designed to make people like your brother lose money....Oil is a rich man's game and rich men usually don't have brothers that post on rollitup.

 

[bluerock]

With oil below $60 a barrel, I think it's time to buy some stocks in oil companies (lease operators) and oil field service providers

My little bro just spent a few grand on oil field stocks and my dad just spent 50

Is your little bro or dad particularly knowledgeable about macroeconomics? The very fact that they are buying would give me pause. In a global downturn - such as what is currently developing - oil could go much lower and stay there for longer than anybody now believes possible. It isn't just oil either: the bloomberg commodity index is falling...and there is no sign of a bottom. Falling commodity prices have been known to precede falling equity prices. The summer of 1929 is a good example of this.

That is not to say there won't be a solid-looking bounce in oil. I'd say that is coming shortly. However, IMO, the bottom in oil prices has yet to be reached. There isn't even any 'blood in the streets' yet.

Second mouse gets the cheese.

 

[mr lovah]

did you two dolts just hire a presidential speech writer to form your replies to my thread?

you both typed relatively long replies without actually saying anything

 

[howsitgrowin420]

did you two dolts just hire a presidential speech writer to form your replies to my thread?

you both typed relatively long replies without actually saying anything

I disagree and I counter that it was your inability to read and comprehend which led you to say that my reply was long without saying anything. Allow me to put it into a list format since paragraph form seems to have been lost on you. By the way, a presidential speech writer would lie to you, but then again you'd just turn the channel to FX and then say you were too busy to vote on election day.


1) don't buy oil because without a cease in production, the price will continue to drop.
2) production will not drop because this is a calculated effort to tank Putin.
3) your attention is being diverted by the hack attack on sony and the police killings (racial tension is a grand ole stand by of the....wait for it in number four)
4) the republican party is rallying for a directed effort to increase public approval ratings of congress/senate (again, this references why buying oil would be bad, the republicans need continuing price drops if the overall public perception is going to become favorable.
5) back to the original question, but I'll rephrase my answer since you missed it the first time. nope, don't buy oil, it's a rich man's game and people with just a little money to throw around will lose it.

Next time specify that you want uniformed answers like "yeah do it!" or "get rich bro!". Or, maybe you were looking for things like "wow, you have a fidelity advisor". What you were trying to accomplish by "my days off per today through jan 3rd" is beyond me "per today through" "per" is the word that someone uses when they think it sounds good and is a word that is completely out of place in your chosen forum. I'm sorry, I missed your pretentiousness in the first post and would not have gotten onto this phony thread to begin with, but since you opened the door, I do hope you receive your criticism well.

You wrote a lot of words to say "I'm going to talk to my fidelity advisor about it" Maybe you'll bring up what some people on Rollitup thought and sway his opinion. Yet you call me the dolt. Yes, buy your oil. Please, buy your oil. "I believe petroleum products are the future....what, with their limited supply, harm to the environment, and waning support from government, how could getting into oil at this stage in the game provide anything but profits." Yes, I'm the dolt, I'm the dolt. We haven't even touched on the fact that you are on a thread for marijuana yet talking about supporting companies who will undoubtedly do everything in their far reaching power to assure that prohibition remains in tact. Dolt, dolt, dolt.

 

[BarnBuster]

If the investment only represents a small portion of your entire portfolio, then investing in a single commodity while risky is an acceptable behavior. But then again, I was cautioned against investing too much in physical gold in the early 70’s. That worked out well for me. Good Luck!! Be sure to post back in Dec 2015 and let us know how you made out.

 

[mr lovah]

I disagree and I counter that it was your inability to read and comprehend which led you to say that my reply was long without saying anything. Allow me to put it into a list format since paragraph form seems to have been lost on you. By the way, a presidential speech writer would lie to you, but then again you'd just turn the channel to FX and then say you were too busy to vote on election day.


1) don't buy oil because without a cease in production, the price will continue to drop.

And according to you that cease will not ever come? According to you we are witnessing the real-time demise & overnight obsolescence of oil in favor of renewables?
2) production will not drop because this is a calculated effort to tank Putin.

Hilarious how you bring up media manipulations of "racial tensions" and the like...and then repeat like a parrot what you heard on one of the 3-4 major news networks regarding the putin/opec 'link.' Sorry schmuck... the oil industries relies more on REAL market forces but this is somehow lost on you
3) your attention is being diverted by the hack attack on sony and the police killings (racial tension is a grand ole stand by of the....wait for it in number four)

I listen to public radio on occasion and that's all...usually when I'm driving out to a well
4) the republican party is rallying for a directed effort to increase public approval ratings of congress/senate (again, this references why buying oil would be bad, the republicans need continuing price drops if the overall public perception is going to become favorable.

Blah Blah BLAH. Everybody talks about this. We're ALL well aware. Make a UNIQUE, RELEVANT and CONVINCING argument or shut the fuck up
5) back to the original question, but I'll rephrase my answer since you missed it the first time. nope, don't buy oil, it's a rich man's game and people with just a little money to throw around will lose it.

Oh really? Funny how many field consultants, engineers, directional drillers, casing company owners, etc. I know that you'd consider wealthy. All from oil. We also seem to understand market forces in our industry and can see the future before the couch potato (that'd be YOU) for example Haliburton's acquisition of Baker Hughes or Kodiak's buy outs

Next time specify that you want uniformed answers like "yeah do it!" or "get rich bro!". Or, maybe you were looking for things like "wow, you have a fidelity advisor". What you were trying to accomplish by "my days off per today through jan 3rd" is beyond me "per today through" "per" is the word that someone uses when they think it sounds good and is a word that is completely out of place in your chosen forum. I'm sorry, I missed your pretentiousness in the first post and would not have gotten onto this phony thread to begin with, but since you opened the door, I do hope you receive your criticism well.

Straw man and ad hom attacks lol
You wrote a lot of words to say "I'm going to talk to my fidelity advisor about it" Maybe you'll bring up what some people on Rollitup thought and sway his opinion. Yet you call me the dolt. Yes, buy your oil. Please, buy your oil. "I believe petroleum products are the future....what, with their limited supply, harm to the environment, and waning support from government, how could getting into oil at this stage in the game provide anything but profits." Yes, I'm the dolt, I'm the dolt. We haven't even touched on the fact that you are on a thread for marijuana yet talking about supporting companies who will undoubtedly do everything in their far reaching power to assure that prohibition remains in tact. Dolt, dolt, dolt.

Oil isn't the future, it's the absolute present. Oil recieves tremendous subsidies from gov't and is heavily taxed by gov't. Yes oil in a weed forum, wow I must be some kind of monster! Go cry yourself to sleep you dolt

 

[bluerock]

did you two dolts just hire a presidential speech writer to form your replies to my thread?

you both typed relatively long replies without actually saying anything

Dolt? Says the man who not only proposes to catch a falling knife, but is eager to do so because that is what his relatives are doing. I'll be back to comment when the price of oil bottoms. In the meantime, BUY IT ALL.

 

[mr lovah]

Dolt? Says the man who not only proposes to catch a falling knife, but is eager to do so because that is what his relatives are doing. I'll be back to comment when the price of oil bottoms. In the meantime, BUY IT ALL.

of course a dolt like you reads my thread and assumes like a dumb ass that I even knew my relatives had invested

 

[bluerock]

With oil below $60 a barrel, I think it's time to buy some stocks in oil companies (lease operators) and oil field service providers

My little bro just spent a few grand on oil field stocks and my dad just spent 50

What assumption? You plainly stated that your relatives are buying. Who is the dumbass? I guess the point of this post was not for you to ask for other opinions, but to seek validation for a decision that you have already made.

To reiterate: the commodity index is falling, and there is no sign of a bottom. Best odds of successful investment are achieved by buying on the way up, not on the way down. That's not even arguable.

 

[howsitgrowin420]

who called you a dolt to make you think it was so insulting? Dolt isn't even funny. Wasn't it a Simpson's thing? It was pretty trendy recently and you do sound like a guy who stays right up the Jones's asses.

What was the function of your original post? You did not want conflicting views. Why didn't you just go talk to your fidelity advisor in the first place? Are you so completely retarded that you would value the advice you get from this forum?

If people like you did not exist and breed, then the world would slowly get better.

Reading your response - to which you incorrectly replied for the format and made yourself look like even more of a brass ring toolbox - I can see that you are one of those people who should personally know the meaning of genocide. Unfortunately, you'll just produce functional retards until they select themselves out of existence....inefficient.

You are right, oil is not the future, it is the present....presently I'd say spend all of your money on oil so that in a few months you can be broke.....you better start voting democrat oil guy....oh hey, I didn't give you the satisfaction of even reading what you wrote as a response - you should call the authorities and complain.

 

[howsitgrowin420]

ok, ok, so I read a little bit..... So, you are saying that you are well aware of political manipulations to influence mass public opinion and yet you are still eager to participate in that world?

I know, I was surprised too, almost immediately after I said it I saw it on the news! I didn't really thing OPEC had much to do with it, but you are the self proclaimed leader of what we are supposed to know!

You are the problem with America. You are the reason your system will fail. Your greed. Your ability to look past the broad societal manipulations in favor of easy, short-term, promised gains. Why are you here? You are not one of us. You are an enemy. On the street, I would throw rocks at you. On the street, I would key your car. I would throw rocks in your machinery.

You are a sell out. Again, why are you here? Your friends hide in offices. Your friends hide behind corrupt institutions. Why do you think you have friends here? "hey guys, I support big oil, but I burn so please think I'm one of you." Going to get far by ripping on "couch potatoes?" After my degree, I saw that I could go sell out like you or I could grow MJ from home. When you are 65 you will begin to live the life that I started at 25. Better speculate correctly, you are trading the bulk of your life for those people. Reach high, if you don't grasp the ring it is your fault, the ring is there!

People I would consider rich? You probably think 150k per year is rich. Are you trying to be the most material of the horrid material bitches out there? Do you get a medal?

Again though, your shit is pretentious. Someone like me beats on someone like you every day. Someone like me gums up your system every day. Someone like me longs for the day that they will have a face-to-face confrontation with someone like you. Someone like me will steal all your food, kill you, and take your women when your oil fails. Good luck fucktard.

Yet through all of this, each of us maintains the belief that the other gives weight to anything said. You and I exist on such different levels - yes, buy your oil. Dolt?

 

[mudballs]

too late to get in on this. after it bottoms out profits will shrink.only way i would even think about an oil co. stock is if it paid quarterly or monthly dividends. im not even gonna bother looking for one either.gold was great buy in 90's at $700ish i think it was. i didn't pull the trigger and i kick myself everytime i open scottrade.

 

[bluerock]

too late to get in on this. after it bottoms out profits will shrink.only way i would even think about an oil co. stock is if it paid quarterly or monthly dividends. im not even gonna bother looking for one either.gold was great buy in 90's at $700ish i think it was. i didn't pull the trigger and i kick myself everytime i open scottrade.

Gold fell off a cliff in the late nineties and the associated stocks got clobbered. Then, it proceeded to put in a classic double bottom at just over $250 per ounce. That was the time to buy; however, with a few exceptions, it would have been better to buy actual gold instead of the gold miner stocks.