Show Notes:

Welcome to the hottakeoftheday podcast.  I’m your host David Ramsden-Wood.  Got to tell you, I’m excited about this and not just because of that intro music.  The support of everyone in 2019 and the growth of the hottakeoftheday- it just felt like there was a lot to explore in more than in 1300 characters a day on LinkedIn.

Today is the first podcast, we are recording January 1^st 2020 and we are saying hello to a new decade.

In the show notes and the post today, I show a graph of oil price since Jan 1, 2010…. It’s fair to say the 10s were a tale of two decades for the energy industry., the first half, the half where we were coming out of the global financial crisis, money was cheap, HZ wells had just started for oil in the Bakken and shortly after, the Eagleford, and the great land rush was on. 

Debt.  Only industry that worked.  Built up huge balance sheets.

Second half really became a crisis of balance sheets, and we did a series on that in November.  A lot of people

The topics for the 2020 look ahead:

Mergers and equity acquisitions.

Let’s differentiate the OXY-APC deal from the Callon-Carrizo deal from the PDC and SRC deal and talk about each of them.  There was a Bloomberg article yesterday by Rachel Adams-Heard that analyzed the relative lack of deals.  On the one hand, buysiders want consolidation, on the other hand management teams don’t want to part with their company for a “low price”. 

But…..I’m really worried about natgas prices.

Did a series on Natgas in December.  Improvements in productivity but huge resource in the Marcellus and the Haynesville really saw productivity improvements in 2017/2018.

There is just too much of it. <$2/mcf avg. is possible

Oil production declines in the US should support prices that average in the low $60s

Peak oil production in the US series.  I want to dig into this concept more starting with the definitions: peak oil is related to price…. But SA has a 53 year reserve life index.  To be on par with the other IOCs, that would be 17 which means they could produce 30 MMBO/d based on the reserves to be at a “right sized” RLI.  We are the marginal bbl.  Pre shale growth… Opec managed price far tighter.  US filled the gap and drove prices (with opecs help)

Rigs and DUCs. I think rigs bottom out at 620 as companies maintain a good completion clip to convert DUCs to cash and fix the balance sheet

The U.S. election is going to put our industry in focus. It’s up to us to represent it.

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