Happy New Year's Eve -- Don't Be On The Road After 11:00 P.M. Local Time -- December 31, 2015

The good news: 2015 is pretty much behind us. The bad news: 2016 will be even rougher. 

Active rigs:

	12/31/2015	12/31/2014	12/31/2013	12/31/2012	12/31/2011
Active Rigs	61	170	187	183	197

RBN Energy: the top ten RBN posts this past year.

For the past three years in this year-end blog we have attempted to identify the common themes that permeate the blog hit parade.  Way back in 2013, our theme was surplus.  In that year energy markets came to terms with the fact that natural gas, NGLs and some grades of crude oil would be oversupplied for many years to come.  

The next year, oversupply hit home, and the focus turned to demand – trying to figure out where all those hydrocarbons are going to go.  The theme for 2015 was clearly price.  Prices for all our favorite energy commodities – crude oil, NGLs and natural gas melted down, and now the market is dealing with the consequences of that meltdown.

Given where we are today, we have put some thought into what is likely to be the theme for 2016, which is something we do for our Prognostications blog that will be posted on Monday. 

Here’s a preview.  This year we decided to break with tradition and select two, opposing themes for the year – commitment and cash.   The conflict between these two themes is what we believe 2016 will be all about: (a) commitments already made to use things, build things and pay for things, and (b) the cash (or lack thereof) to pay for those commitments.  In the good ole days of high prices and growing production, lots of commitments were made – take-or-pay obligations to use pipelines, processing plants, docks, terminals – you name it. 

Commitments to build assets were secured.  Management teams committed themselves to their financial backers to develop businesses.  Now the underpinnings of those commitments – attractive prices and ample volumes – are in the rear view mirror.   But someone must still pay for the commitments made and assets built.  Unfortunately, there is much less cash available to do so.  Product revenues have been cut in half, volumes flowing through assets with fee-based revenues are flat to down, and energy capital markets have tightened significantly.  As the financial stress implied by the conflict between commitment and cash works its way through 2016 energy markets, somebody is going to be left holding the proverbial bag. 

The only question is who.

Our first blog of the New Year on January 4th will explore that question and much more in The Top Ten Energy Prognostications for 2015 – Year of the Monkey.  Yup, there is a lot more monkey business coming to energy markets.