The companies that own the leases to USA natural resources don't know what they are doing. The country puts faith in the people receiving leases that they are doing it right and now this shows exactly how remiss the CEOs are with those leases.
May 4 (Reuters) - In an attempt to increaseproductivity, (click here) shale oil drillers in the United States have begun moving rigs to more productive areas of the Permian and Eagle Ford basins, analysts at Goldman Sachs said.
Data from oil services firm Baker Hughes Inc showed on Friday that the fall in U.S. oil rig count slowed last week, suggesting the collapse in drilling may be coming to an end as prices recover. "The county level rig data is showing potential signs of high grading with rig increases in some of the more productive counties of the Permian and Eagle Ford plays, despite the aggregate rig count still declining," analysts at Goldman Sachs said in a weekly report. The observation comes after the analysts in the past several weeks have said the rig data showed little evidence of high grading....
This is not what I would expect from a well managed company. The CEOs in the oil sector simply put holes in the group and if there is a trickle coming up from who knows how deep or where with horizontal fracking that is called a well. What are the inspections saying on these drilling enterprises. Obviously, the production in the USA in this sector is very poorly managed. So, what are the inspectors finding in the way of viable wells. Anything? Anything means the well is producing? Aren't there records to validate the companies are actually utilizing leases of public lands well?
This sector is in a sorry state if they didn't see the price collapse coming and now they have to decide which wells actually pay their own way. Which wells are causing a deficit balance for it's use and which wells are producing a profit. Amazing. They don't know what they are doing and they don't care about the land, the people or what is expected from a lease with the USA.
Leases are provided because the people of the USA have needs, NOT THE GLOBAL ECONOMY. Private industry is allowed to seek profits in their service to the people from these leases. These companies never bothered to decide whether they were productive wells. The companies are not reliable in handling USA natural resources and cause too many problems.
The USA doesn't make money from shipping our natural resources abroad. The petroleum industry makes money from shipping the USA's natural resources abroad. This isn't like a manufacturing sector that actually produces good from raw materials and then are sold abroad. The petroleum industry takes our finite natural resources and makes a profit from selling them overseas. That should never occur. I realize there are some loopholes and why the Texas ports are coveted by the industry to boost profits supposedly; but, the regulations state countries that are allies and have a need can apply for a permit to bring USA natural resources to their country.
The country's natural resources is not a Wall Street toy. It is the natural resources of the United States of American and they belong to the people of this country. If the USA doesn't have use for them then there are suppose to be leases sold. What is more simple than that?
If the lessees are found to be negligent in the use of the public lands, there should be a complaint filed against them by inspectors and/or the public. simply putting holes in the ground in hopes of finding some oil or natural gas is not competent practice and the company should not continue the lease.
It is always a surprise when gross mismanagement of our public lands makes it to the surface and the people finally hear of it. Sometimes it is articles such as this or sometimes it is burning rigs in the Gulf of Mexico, but, it the surprises never end. Spills, unemployment and tanking oil prices are all part of the excitement of leasing lands to incompetents.
There is a name for the phenomena occurring with the petroleum industry in the USA. It is called "Dutch Disease."
Dutch disease
Named after the negative effects of the North Sea oil boom on industrial production in The Netherlands, this phenomenon occurs when resource booms cause real exchange rates to rise and labor and capital to migrate to the booming sector. This results in higher costs and reduced competitiveness for domestically produced goods and services, effectively ‘‘crowding out’’ previously productive sectors.
The companies went to North Dakota and began to drill for oil. Many people followed them. I witnessed it from articles written about the migration of not just labor but oil rigs as well. The companies indiscriminately drilled for oil. There were leaks in the pipelines because there was so much oil there was no way of knowing there was a leak. A farmer discovered it when he went to plow his fields in early spring.
There was such a glut of oil being pushed into trains, pipelines and trucks the entire infrastructure of the USA and Canada for that matter became stressed in a way it never had before. All of a sudden there were no rail capacity to move grain or any other commodity normally transported by rail. The grain elevators had to move their commodities by barge on the Great Lakes. If that wasn't enough of an insult to the USA's economy, now we witness an industry that never bothered to police itself in regard to production and profit.
So, the collapse of the oil prices were two fold. The glut pushed the prices down and then the arrogance of the petroleum industry showed up when their operations weren't producing enough to overcome the losses they were sustaining.
The industry is a menace across this planet and they prove every day what an unwitting people and economy the USA actually is.
The USA better decide how the currency of the country is being effected by these morons. While the 'assets' add to the buoyancy of the USA dollar, the actual mismanagement of those assets may prove detrimental in time.
Moral to the FACTS: "Don't devalue the dollar anytime soon."
And.
The railroads SHOULD NOT spend any significant monies on more rail cars to expand services to the country. The petroleum industry does not have reliable production at all. Not to the extent it demands returning rail tracks back into service or new cars are best for the current demand. Don't go there. Purchase new and better and safer rail cars, but, the petroleum industry's demand is not a sustainable path.
Railroads need to watch their balance sheets with these companies. Don't over extend any credit to an uncertain industry.
May 4 (Reuters) - In an attempt to increaseproductivity, (click here) shale oil drillers in the United States have begun moving rigs to more productive areas of the Permian and Eagle Ford basins, analysts at Goldman Sachs said.
Data from oil services firm Baker Hughes Inc showed on Friday that the fall in U.S. oil rig count slowed last week, suggesting the collapse in drilling may be coming to an end as prices recover. "The county level rig data is showing potential signs of high grading with rig increases in some of the more productive counties of the Permian and Eagle Ford plays, despite the aggregate rig count still declining," analysts at Goldman Sachs said in a weekly report. The observation comes after the analysts in the past several weeks have said the rig data showed little evidence of high grading....
This is not what I would expect from a well managed company. The CEOs in the oil sector simply put holes in the group and if there is a trickle coming up from who knows how deep or where with horizontal fracking that is called a well. What are the inspections saying on these drilling enterprises. Obviously, the production in the USA in this sector is very poorly managed. So, what are the inspectors finding in the way of viable wells. Anything? Anything means the well is producing? Aren't there records to validate the companies are actually utilizing leases of public lands well?
This sector is in a sorry state if they didn't see the price collapse coming and now they have to decide which wells actually pay their own way. Which wells are causing a deficit balance for it's use and which wells are producing a profit. Amazing. They don't know what they are doing and they don't care about the land, the people or what is expected from a lease with the USA.
Leases are provided because the people of the USA have needs, NOT THE GLOBAL ECONOMY. Private industry is allowed to seek profits in their service to the people from these leases. These companies never bothered to decide whether they were productive wells. The companies are not reliable in handling USA natural resources and cause too many problems.
The USA doesn't make money from shipping our natural resources abroad. The petroleum industry makes money from shipping the USA's natural resources abroad. This isn't like a manufacturing sector that actually produces good from raw materials and then are sold abroad. The petroleum industry takes our finite natural resources and makes a profit from selling them overseas. That should never occur. I realize there are some loopholes and why the Texas ports are coveted by the industry to boost profits supposedly; but, the regulations state countries that are allies and have a need can apply for a permit to bring USA natural resources to their country.
The country's natural resources is not a Wall Street toy. It is the natural resources of the United States of American and they belong to the people of this country. If the USA doesn't have use for them then there are suppose to be leases sold. What is more simple than that?
If the lessees are found to be negligent in the use of the public lands, there should be a complaint filed against them by inspectors and/or the public. simply putting holes in the ground in hopes of finding some oil or natural gas is not competent practice and the company should not continue the lease.
It is always a surprise when gross mismanagement of our public lands makes it to the surface and the people finally hear of it. Sometimes it is articles such as this or sometimes it is burning rigs in the Gulf of Mexico, but, it the surprises never end. Spills, unemployment and tanking oil prices are all part of the excitement of leasing lands to incompetents.
There is a name for the phenomena occurring with the petroleum industry in the USA. It is called "Dutch Disease."
Dutch disease
Named after the negative effects of the North Sea oil boom on industrial production in The Netherlands, this phenomenon occurs when resource booms cause real exchange rates to rise and labor and capital to migrate to the booming sector. This results in higher costs and reduced competitiveness for domestically produced goods and services, effectively ‘‘crowding out’’ previously productive sectors.
The companies went to North Dakota and began to drill for oil. Many people followed them. I witnessed it from articles written about the migration of not just labor but oil rigs as well. The companies indiscriminately drilled for oil. There were leaks in the pipelines because there was so much oil there was no way of knowing there was a leak. A farmer discovered it when he went to plow his fields in early spring.
There was such a glut of oil being pushed into trains, pipelines and trucks the entire infrastructure of the USA and Canada for that matter became stressed in a way it never had before. All of a sudden there were no rail capacity to move grain or any other commodity normally transported by rail. The grain elevators had to move their commodities by barge on the Great Lakes. If that wasn't enough of an insult to the USA's economy, now we witness an industry that never bothered to police itself in regard to production and profit.
So, the collapse of the oil prices were two fold. The glut pushed the prices down and then the arrogance of the petroleum industry showed up when their operations weren't producing enough to overcome the losses they were sustaining.
The industry is a menace across this planet and they prove every day what an unwitting people and economy the USA actually is.
The USA better decide how the currency of the country is being effected by these morons. While the 'assets' add to the buoyancy of the USA dollar, the actual mismanagement of those assets may prove detrimental in time.
Moral to the FACTS: "Don't devalue the dollar anytime soon."
And.
The railroads SHOULD NOT spend any significant monies on more rail cars to expand services to the country. The petroleum industry does not have reliable production at all. Not to the extent it demands returning rail tracks back into service or new cars are best for the current demand. Don't go there. Purchase new and better and safer rail cars, but, the petroleum industry's demand is not a sustainable path.
Railroads need to watch their balance sheets with these companies. Don't over extend any credit to an uncertain industry.
