No Way, Jose. Yes, Way. Way Overpaid -- September 1, 2020

I track the "WTI beatdown" at the sidebar at the right.

Re-posting:

They must be reading the blog: I talked about this from the very beginning and then mentioned it again, just last week. Now, over at Reuters, moving into the Permian was a fool's errand -- overpriced deals and unwanted assets. This will drive a stand-alone post:

Overall, Permian basin purchases accounted for nearly a third of the 2016-2019 deals, Ernst and Young said. In the Permian, over 80 deals were done in which exploration and production companies (E&Ps) paid over $10,000 an acre, according to industry information provider Enverus.

“The current price environment is in no way sufficient for a large number of E&Ps in the medium-term,” said Artem Abramov, Rystad Energy’s head of shale research.

Different formulas can be used to evaluate deals, but analysts said Concho Resources Inc’s March 2018 purchase of RSP Permian was one of the costliest. The $9.5 billion deal implied a $75,504 purchase price per acre.

Diamondback Energy Inc’s 2018 purchase of Energen came out to a $54,977 per-acre price, but from a price-per-barrel metric, it was the most expensive Permian deal, according to Wood MacKenzie, at an average Brent price of more than $77 a barrel.

The EIA dashboards are illuminating.

• EIA pdf, Bakken: https://www.eia.gov/petroleum/drilling/pdf/bakken.pdf
• EIA, pdf, Permian: https://www.eia.gov/petroleum/drilling/pdf/permian.pdf
• EIA, pdf, Eagle Ford: https://www.eia.gov/petroleum/drilling/pdf/eagleford.pdf

Saudi foreign exchange reserves data for July, 2020, should be posted this week, link here.  

The market: analysts are withdrawing their targets. Uncharted territory. Unlimited Fed liquidity. Global economy improving.