WTI below $82. Ghostly Warnings of a Bust? (Houston, Dallas: 2015, leasing)

[Philip T]

Originally Posted by KathrynAragon

Yes, I've been through both of those crashes - living right here in Texas. The first one was a lot worse than the second one, by the way. We survived both. Our stocks have fully recovered from the 2008 one (we recovered from the 80's one many years ago by the way).

My husband has worked steadily in oil and gas for the past 35 years. Even in the worst downturns, he's never been laid off and never missed a beat. I'm not saying it couldn't happen but it hasn't yet. That being said, he doesn't work locally and hasn't for many years. Like he always says, we can't move to where the oil and gas work is or we'd be moving every two years. So we stay put and he travels. It works for us but it's not for everyone.

My husband is sort of a pessimist actually because he knows how things can ebb and flow in oil and gas. He's not particularly worried about the situation right now. I take my cues from him because he's been right every time in the past. We could be in for a rough ride but I think we'll be fine in the long run.

Agreed.

Traveling and flexibility = survival.

Did the same for years -- home stays fixed, work moves.

Now I stay mostly Texas since the kids are up and in school.

Actually I "shop" by schedule and location rather than price as far as work goes, now.

I think your husband's pessimism is reasonable and a due caution -- lot of "doomers" related to Oil.

If you ever want an interesting read in that regard, this was written by a former Top Shell Oil Planner -- How to cover the Best Case, Worse Case, and Changed Case. His concept is about like your husband's -- the Changed Case is the most likely, and you need to flexible to meet it.

The Art of the Long View: Planning for the Future in an Uncertain World

http://www.amazon.com/The-Art-Long-V.../dp/0385267320

[Philosophizer]

All I know is that there is plenty of room for service companies to come down on their pricing when it comes to fracking wells. I know the equipment is expensive and companies are trying to recoup the money they invested in purchasing all the pumps, but you wouldn't believe the margins we had on the chemicals we charged to operators.

[KathrynAragon]

Originally Posted by Philip T

Agreed.

Traveling and flexibility = survival.

Did the same for years -- home stays fixed, work moves.

Now I stay mostly Texas since the kids are up and in school.

Actually I "shop" by schedule and location rather than price as far as work goes, now.

I think your husband's pessimism is reasonable and a due caution -- lot of "doomers" related to Oil.

If you ever want an interesting read in that regard, this was written by a former Top Shell Oil Planner -- How to cover the Best Case, Worse Case, and Changed Case. His concept is about like your husband's -- the Changed Case is the most likely, and you need to flexible to meet it.

The Art of the Long View: Planning for the Future in an Uncertain World

http://www.amazon.com/The-Art-Long-V.../dp/0385267320

Hey, thanks - I'm reading the reviews on that book right now. Just got off the phone with my husband and we actually discussed this topic and this thread by the way. He is pretty nonplussed - but not because we are immune to downturns, but because downturns are INEVITABLE and the important thing is, as you know, having the luxury of flexibility.

Are you a consultant? That's what my husband does and he also shops by schedule, first and foremost. He doesn't care what the monthly pay would be if the schedule is not to our liking.

It's an interesting field. The money invested in it never ceases to amaze me.

[augiedogie]

Having followed the oil business for almost 30 years, I've learned a few things. First, prices change, up and down, so get used to it. Oversupply tends to bring the price down. Just like the stock market, when prices start falling they fall fast and usually bottom out fast. When this happens, the drilling activity slows, sometimes to a trickle. When this happens, the oversupply gradually goes away. Why? Because wells have a lifespan. They pump the most amount of oil when they first go into production and then gradually diminish. So, this is happening to all the wells that are pumping. Some well owners might even stop pumping or drastically reduce it. Some wells that are drilled and successful, might be capped, and not be put into production until the price goes up again. Gradually, the oversupply disappears, and the prices start to rise again.

So I've learned, don't panic with oil.Oversupplies will gradually dry up, .The price will eventually come back when they can make money drilling, and the drilling activity will go up again.

This down turn in price will probably be short. Most of the wells they are drilling now in the shale, diminish in productivity faster.

[Philip T]

Originally Posted by KathrynAragon

Hey, thanks - I'm reading the reviews on that book right now. Just got off the phone with my husband and we actually discussed this topic and this thread by the way. He is pretty nonplussed - but not because we are immune to downturns, but because downturns are INEVITABLE and the important thing is, as you know, having the luxury of flexibility.

Are you a consultant? That's what my husband does and he also shops by schedule, first and foremost. He doesn't care what the monthly pay would be if the schedule is not to our liking.

It's an interesting field. The money invested in it never ceases to amaze me.

Electrical. Power-type and Instrument and Controls. So I work across Oil, Petro-Chem, Power Generation (more so on that before the Really Big Guys went bankrupt. ) even some Renewable -- Even wound up putting Solar Panels on Oil Wells in some places. no joke -- during the "Recovery.gov" days, we could get grants for anything renewable.

Presently doing water projects -- Frack water, etc. have BIG Clean Up issues.

But yeah, all about the same as far as consulting goes. I sometimes have brokers, or get signed on direct as an Owner's Rep, or with the Engineers of Record, or as a Site Engineer for a Contractor. The projects run their course, have their budget, and then . . . . on to the next . . . . or a little bit longer break time.

You are correct about the money thrown around. Do not even ask about the first number -- just how many zeros. Used to be folks thought it was all an Energy Issue. That is where the EROEI (Energy Returned on Energy Invested) concepts came from. It is not an Energy Issue. It is all about the money. Seems you can throw A LOT of cheap Electrical Energy down the hole to get some More Valued Oil Energy out.

[Austinite101]

Originally Posted by augiedogie

Having followed the oil business for almost 30 years, I've learned a few things. First, prices change, up and down, so get used to it. Oversupply tends to bring the price down. Just like the stock market, when prices start falling they fall fast and usually bottom out fast. When this happens, the drilling activity slows, sometimes to a trickle. When this happens, the oversupply gradually goes away. Why? Because wells have a lifespan. They pump the most amount of oil when they first go into production and then gradually diminish. So, this is happening to all the wells that are pumping. Some well owners might even stop pumping or drastically reduce it. Some wells that are drilled and successful, might be capped, and not be put into production until the price goes up again. Gradually, the oversupply disappears, and the prices start to rise again.

So I've learned, don't panic with oil.Oversupplies will gradually dry up, .The price will eventually come back when they can make money drilling, and the drilling activity will go up again.

This down turn in price will probably be short. Most of the wells they are drilling now in the shale, diminish in productivity faster.

It's not just supply and demand in this case. OPEC is purposely trying to choke off the U.S shale boom because it sees an existential threat.

It's literally a game of who can hold their breath longer now.

[Mark Senior]

But oil, 65 and falling, just saying...

[KathrynAragon]

Not panicking here, not by a long shot. Oil goes up, it goes down, it will go up again. So far so good on this end - no sign of trouble.

[Mark Senior]

Just mainly referring to all the "manic" hiring and growth in Midland Odessa, surely that would come to a halt, if oil prices stayed low or lower for a "certain" amount of time...

[texdav]

All it will mean long run is the large companies with both up stream and down stream survive. Some in regions without pipelines that have already started selling at discount at source even now will likely be gone. China needs 360K barrels more a day even in slowdown ;so glut won't last as sources dry up. I am going to enjoy it while it last.