Amazon.Com Now Has One-Hour Delivery In Dallas -- March 27, 2015; "Bull Crap"

Two Amazon fulfillment (distribution) centers recently completed in the DFW area.

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2017 For Sure; Maybe As Early As 2016

Regular readers know that I have been saying over and over that investors in the oil and gas industry should see an exciting 2017, if not an exciting 2016.

Apparently I'm not in the minority. Rigzone is reporting:

Drilling activity across the global oil and gas industry could return to 2014 levels next year, according to a new report from research firm Wood Mackenzie.

Wood Mac said Thursday that although the oil and gas industry is currently responding to the low oil price environment, with exploration budget cuts in 2015 expected to average 30 percent, drilling activity in 2016 is set to recover as many explorers seize their chance to drill at lower costs.

In its report "Upstream Cost Deflation: How Much Could Costs of Exploration Fall?", Wood Mackenzie noted that the industry is now addressing a longstanding cost inflation issue.

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Jumping On The Bandwagon

Yahoo!Finance is jumping on the bandwagon -- how US frackers plan to beat OPEC:

Gary Evans, CEO of Houston-based energy firm Magnum Hunter Resources, has a blunt message for OPEC oil ministers hoping to force down prices and drive American competitors out of business. “OPEC is making a huge mistake,” he says. “We made a lot of money with oil at $100 (per barrel), and we’ll become more efficient and make a lot of money at $50.”

For now, the U.S. energy industry is reeling from oil prices that have plummeted from about $105 a barrel last summer to $50 or so now. The profits and stock prices of energy firms are plunging, with job losses beginning to mount. The global supply of oil has outstripped demand for several reasons, but a big one is the unexpected move by Saudi Arabia—lead member of the OPEC oil cartel—to keep pumping oil amid the glut, a change from its usual practice of curtailing production during soft spells to boost prices. Many analysts believe the Saudis are deliberately undercutting their new competitors in North America, who have been producing record amounts of oil thanks to new hydraulic fracturing technology, or fracking.

The Saudis are right when it comes to costs: Extracting so-called tight oil from shale deposits in America is considerably more expensive than Saudi Arabia’s own drilling costs, which by some estimates is as low as $10 per barrel. What the Saudis may not have counted on, however, is extreme cost-cutting underway at many drillers, which is making them far more efficient and pushing down the price at which they can turn a profit. The Saudis’ market-share move could even backfire, as U.S. frackers become more efficient competitors. “We will figure out how to operate in a lower price environment,” Evans says. “Anybody who thinks our costs are too high – that’s absolute bull crap.”

Much more at the link.

For newbies, just one example: when I first started blogging about the Bakken in 2007, it routinely took 45 - 60 days to drill one well and then they fracked it with 14 stages, and maybe 1 million lbs of proppant. Now, they drill these wells in less than 15 days (in as few as 9 - 10 days) and then routinely frack with 36 stages and over 4 million lbs of proppant. The drilling costs have come way down; fracking is now the big cost. 

And that's not "bull crap."