If we do not get ma bounce in WTI by January 2016, it looks real bad for this industry
At some point, OPEC will have to cut production (hopefully)
I live in South Texas and am hearing the same thing from a lot of oil people. I believe that the banks value their customers (E&P companies) in October and then decide whether to loan/cut back on loans based on the value of the proven oil reserves used as collateral.
Sub $50 will not last long and crude is a coiled spring waiting to pop up just like last March
This was taken from the CLB press release today:
As previously discussed, the Company believes that operating margins bottomed in the first quarter of 2015 and that revenues likely bottomed during the second quarter of 2015. The Company continues to anticipate a "V-shaped" worldwide activity recovery as global demand for hydrocarbon-based energy continues to improve and as worldwide crude-oil supply has plateaued and will likely fall in the second half of 2015. The Company believes U.S. production will continue to fall from its peak rate in April 2015 and could fall by over 500,000 barrels of oil per day from that peak rate by year-end 2015. Internationally, second half 2015 crude oil production rates are also likely to decline in Europe, Russia, China, South America, and Africa.
At current North American activity levels, Core predicts 2016 production levels to be lower year over year, creating a tight crude oil supply market and leading to increased crude prices and industry activity levels worldwide.
I would settle for $.75 in 2016. NE can easily pay the dividend this year and I believe that mgmt. wants to pay the dividend
I know that the posters on this board don't like you. Hey, I did not like selling Vale at a loss, but the truth is that you were right and Vale has continued to go down since you turned negative on the industry and the company.
Please promise to post when you are turning positive on iron ore. By the way, BHP is very negative as well
I am holding a lot of shares. Still believe that Picken's forecast of $70+ is good. The IEA numbers were distorted due to an increase in imported oil. Except for that, there would have been a 1 million reduction.
Very few make money at $50 WTI pricing. I believe that the banks normally review their customer's asset values in October. At $50 crude, you can bet that the banks won't be eager to loan more to levered customers.
This is an unnerving time for drillers and I don't expect them to be in favor until H2 2016 or maybe later unless there is an exogenous event that causes an oil spike
This is from Credit Suisse:
Noble (NE) – 7/30 (AMC) – Expect Revenue and Costs To Drive a Beat
1. Earnings – Based on FSRs Q2 utilization looks real good. Our revenue estimate
is 3% above the Street (CS 95% efficiency) – it could be better. Our OPEX is ~1%
below Consensus and 1% above the midpoint of guidance ($325-340M). NE
OPEX was ~10% lower than guidance last quarter owing to better efficiency and
cost savings. We expect NE to put up a good Q2 beating the Street.
2. Floater Update – NE remains one of the better positioned drillers in this market
with 83% floater coverage for the rest of the year and 60% in 2016 (excludes
Homer Ferrington which is cold stacked). All NE eyes remain on the Adkins.
While the rig was able to win short-term work in the GoM (rig working until
August), post a 45-day regulatory inspection scheduled for 3Q15 the rig has no
work lined up. However, there is some Q4 GoM work that the Adkins could win.
22 July 2015
Offshore Drillers 3
3. Near Term Floater Needs. Later this year NE has the Amos Runner (4G Semi)
rolling off contract in the GoM and the Clyde Boudreaux (5G) rolling off contract in
Australia – we think the Boudreaux has a better chance of winning some work
given its location. Also the Max Smith remains idle but is bidding on work in India
(expect this to be a knife fight). The Jim Day (6G Semi) also rolls off in January.
4. Jackup Update – NE has 88% jackup coverage for the rest of the year and 67%
in 2016. The Newbuild Sam Hartley continues to look for its maiden voyage and is
available for work next month. The Regina Allen rolls off contract in September in
the NSea (just won a 3 month job) and the Charles Copeland rolls off contract in
September in Saudi Arabia. Channel checks indicate that the Middle East
continues one of the better places to hide out for OFS companies, hence we
expect the Copeland to be extended.
5. Dividend Thoughts. We expect NE to remain committed to its dividend near
term. While the stock is yielding 11% (not a good sign) NE continues to generate
solid cash flows on the back of its backlog. NE should fund its dividend with a
31% payout of Q2 OCF; however in 2016 the payout goes to 41%. Without a
recovery we expect NE to walk down the dividend later this year/early next year.
I agree that the 10:30am EST IEA production report will move the market, but the Cushing inventory build has already hurt. If the IEA production shows an uptick, we will probably close under $50.
These low prices can't be good for a lot of high debt shale producers
I sold off 1/2 of my holdings and made enough so that my remaining holdings are paid for. I quit posting because I got tired of the needless prattling of both longs and shorts.
It seems to me that the only thing that matters to the share price is the successful and timely launch of Triferic.
RMTI is a high beta stock and moves a lot. If Rob C. comes through, we go up. If he misses the launch, we go down.
I hope to see $20 in 2015.
good luck to all
I hope that you are correct.
Additionally, I have been reading several articles questioning the accuracy of the IEA numbers. Some authors believe that production is over stated and demand is understated.
Go look at a chart for BTU, one of the largest coal companies in the world. It dropped from $70+ in 2011 to $1 today. Sometimes, it is smart to sell before shares go even lower
I am betting on WTI being $65+ by January. I have a big stake in XOP and NE