tag:blogger.com,1999:blog-1149283829854298377.post570170648971482097..comments2024-03-28T00:16:36.326-05:00Comments on The Million Dollar Way (The Bakken Oil Blog): Rigs Matter -- January 9, 2021Bruce Oksolhttp://www.blogger.com/profile/10952652803684625738noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-1149283829854298377.post-3548591464108753042021-01-12T10:14:26.846-06:002021-01-12T10:14:26.846-06:00As the dude would say, "that's just like ...As the dude would say, "that's just like your opinion, man." <br /><br />LOL. Bruce Oksolhttps://www.blogger.com/profile/10952652803684625738noreply@blogger.comtag:blogger.com,1999:blog-1149283829854298377.post-15931671922655907962021-01-12T10:04:36.425-06:002021-01-12T10:04:36.425-06:00It's not smarts per se. Just risk and luck. ...It's not smarts per se. Just risk and luck. You can go spot and have it work out, when prices drop. But you look stupid if service costs skyrocket and you're not locked in. <br /><br />It's a lot like hedging. There is no "free money". You take a bet and take a risk. You can go wrong either way.<br /><br />Oh...and buyibng out contracts is a very normal risk (drilling, midstream, etc.) Just like having to abondon leases and never drill them. Happens every bust. Just another normal risk of doing business. Not a "smarts" issue.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1149283829854298377.post-74481768246404378322021-01-09T16:35:47.514-06:002021-01-09T16:35:47.514-06:00Interesting. Thank you. My hunch: operators are a ...Interesting. Thank you. My hunch: operators are a lot smarter these days. Bruce Oksolhttps://www.blogger.com/profile/10952652803684625738noreply@blogger.comtag:blogger.com,1999:blog-1149283829854298377.post-71774377903176557832021-01-09T16:24:17.356-06:002021-01-09T16:24:17.356-06:00ack in the wild Bakken days of 2008/09 when Crude ...ack in the wild Bakken days of 2008/09 when Crude prices whipsawed back and forth then down, Fidelity Exp. ( the MDU oil unit ) paid a big chunk of Money to buy out a drilling contract they had in effect. donUnknownhttps://www.blogger.com/profile/03174077320039378669noreply@blogger.comtag:blogger.com,1999:blog-1149283829854298377.post-13640477564218060902021-01-09T15:51:44.979-06:002021-01-09T15:51:44.979-06:00Interesting about 2 - 3 year contracts. Doesn'...Interesting about 2 - 3 year contracts. Doesn't give them a lot of quarter-to-quarter flexibility. I know the shale producers have a yearly CAPEX plan but my hunch is they watch quarter-to-quarter very closely whether to add a rig or not. Bruce Oksolhttps://www.blogger.com/profile/10952652803684625738noreply@blogger.comtag:blogger.com,1999:blog-1149283829854298377.post-16113482768503068412021-01-09T15:34:17.989-06:002021-01-09T15:34:17.989-06:00Thank you. I appreciate that. What surprised me wa...Thank you. I appreciate that. What surprised me was that Saudi seemed to telegraph their intentions some time ago. On another note, one wonders to what degree "money in the bank" affected their decision. If they can produce as much oil as they need to produce to meet demand but with fewer rigs, a smart move. Bruce Oksolhttps://www.blogger.com/profile/10952652803684625738noreply@blogger.comtag:blogger.com,1999:blog-1149283829854298377.post-74179995327307176062021-01-09T13:51:15.327-06:002021-01-09T13:51:15.327-06:00They tend to do 2-3 year contracts, often on the c...They tend to do 2-3 year contracts, often on the calendar year. Thus not surprising to see a big change show in JAN. It's really based on decisions a half year ago to let several contracts lapse.<br /><br />Also, they only seem to need 3-60 rigs to do 10 MM bopd. I'd say that is pretty good. US needs needs 400+ to do the same.Anonymousnoreply@blogger.com