Why are scientists important? Why are accurate climate predictions necessary to be heeded by government? Why are scientists the best indication of the future?
Rhetoric, cronies profits are not the moral ways of democracy.
December 12, 2015
By Bloomberg
In an instant, Chesapeake Energy Corp. (click here) will erase the equivalent of 1.1 billion barrels of oil from its books.
Rhetoric, cronies profits are not the moral ways of democracy.
December 12, 2015By Bloomberg
In an instant, Chesapeake Energy Corp. (click here) will erase the equivalent of 1.1 billion barrels of oil from its books.
Across the American shale patch, companies are being forced to square their reported oil reserves with hard economic reality. After lobbying for rules that let them claim their vast underground potential at the start of the boom, they must now acknowledge what their investors already know: many prospective wells would lose money with oil hovering below $40 a barrel....
...Companies such as Chesapeake, founded by fracking pioneer Aubrey McClendon, pushed the Securities and Exchange Commission for an accounting change in 2009 that made it easier to claim reserves from wells that wouldn’t be drilled for years. Inventories almost doubled and investors poured money into the shale boom, enticed by near-bottomless prospects.
But the rule has a catch. It requires that the undrilled wells be profitable at a price determined by an SEC formula, and they must be drilled within five years....
Time is up, prices are down, and the rule is about to wipe out billions of barrels of shale drillers’ reserves. The reckoning is coming in the next few months, when the companies report 2015 figures.
“There was too much optimism built into their forecasts,” said David Hughes, a fellow at the Post Carbon Institute and formerly a scientist with the Geological Survey of Canada. “It was a great game while it lasted.”
The rule change will cut Chesapeake’s inventory by 45 percent, regulatory filings show. Chesapeake’s additional discoveries and expansions will offset some of its revisions, the company said in a third-quarter regulatory filing. Gordon Pennoyer, a spokesman for Oklahoma City-based Chesapeake, declined to comment further....
