Fracking Bubble Coming?

Random Blog

Just this week, one of America's biggest agricultural lenders, the Netherlands-based Rabobank, announced that it would no longer lend money to companies that invest in shale gas extraction (nor to farmers worldwide who lease their land to these drillers).

Hmmmm... Rabobank?

Source

Norwegian pension fund and insurer Storebrand says it has excluded an additional 19 coal and oil sands companies from its investment portfolio and Holland-based Rabobank told Dutch newspaper Trouw it will no longer lend money to companies involved in shale gas extraction, or make loans to farmers who rent their land to shale gas extraction companies.

Ok...

Source

First, the oil-and-gas producer filed a notice with the Securities and Exchange Commission that its first-quarter report was coming late. Moments later, Chesapeake said that it may delay or alter plans to sell some assets so it won’t endanger compliance with the conditions set out by creditors. The embattled Oklahoma City company has outlined a plan, well under way, to raise between $11.5 billion and $14 billion through asset sales and other deals to plug a budget hole and trim debt.

Is this a sign for the future of fracking?

What do you think ATS?

reply to post by onequestion


Hmmmm very interesting at the midst of an possible oil crisis from Syria and plus it goes against the idea that America will be the new oil exporter of the world

reply to post by starwarsisreal


Its a confidence game and i think they are pretending that natural gas is the new oil when i think something else is happening behind the scenes.

Time will tell.

reply to post by onequestion

The Reality is that the so-called shale revolution is nothing more than a bubble, driven by record levels of drilling, speculative lease & flip practices on the part of shale energy companies, fee-driven promotion by the same investment banks that fomented the housing bubble, and by unsustainably low natural gas prices. Geological and economic constraints – not to mention the very serious environmental and health impacts of drilling – mean that shale gas and shale oil (tight oil) are far from the solution to our energy woes.

shalebubble.org...

reply to post by Deetermined


Nice, thanks havent seen that one before.

onequestion

What do you think ATS?

edit on 29-8-2013 by onequestion because: (no reason given)

I think they are not being honest about their reason. I have no idea what the real reason is. PR perhaps.

reply to post by Blaine91555


Considering that a lot of states as well as other countries are banning fracking altogether, I'm wondering how much they're learning about what it's doing to the environment. Namely, the states who noticed a decrease in earthquakes when they stopped fracking. I know there were reports about the number of increased earthquakes taking place in Arkansas and Oklahoma in the last two years in areas where fracking was taking place.

In the US whether or not it is a "Bubble" would depend on what land is opened for drilling.

Many area's have huge untapped reserves that would now be highly profitable. Depends on who is in power next I think.

reply to post by Deetermined


Wrong Forum for that. I'm speaking to the financial aspects of this topic.

reply to post by Blaine91555


My explanation was to show why investors may be getting out without telling us the whole story.

reply to post by Deetermined


Sorry, you are right. My bad. Trying to post, read and do work at the same time.

That's pretty much what I meant by PR. That is likely it.

I don't see the current Administration in the US taking any action based one the Fracking controversy, they are just opposed to the industry in general.

I'm sure this is aimed at their local market somehow.

reply to post by onequestion


No, this is just about making investment plays. Below is some info from an email I got via a local EDC:

An Oil War on U.S. Soil

By Keith Kohl | Friday, August 16th, 2013

Keith Kohl

There's a three-way battle under way for the U.S. energy crown...

And we have front-row seats to the action.

With oil hovering around $107 per barrel yesterday afternoon, this trio of oil plays is worth nearly $2.5 billion per day.

Just how important are they to the U.S. oil industry? Well, together they account for three out of every ten barrels of crude oil produced on American soil each day (hence the $2.5 billion payday at current crude prices).

When we're talking about this much money at stake, it's impossible not to have a little friendly competition... However, the contest among the top U.S. shale plays feels more like a barroom brawl.

The Shale Scuffle

Although stories of tight oil plays containing huge resources are popping up all over the media these days, there is a caveat: All that oil is worthless unless we can produce it.

Otherwise, it'll sit underground long after we've left this earth.

And to complicate matters even more, producing this oil is not as simple as horizontal drilling and hydraulic fracturing.

The factors in economically extracting the crude oil can differ dramatically from one formation to the next.

Consider that it took George Mitchell over 20 years to perfect his technique in the Barnett Shale. When he did, he created a huge amount of wealth for a new generation of execs and individual investors alike.

In some areas, drillers simply haven't found the right formula yet.

I wouldn't worry too much. They will eventually.

Until they do, the real money will continue to be made in the places responsible for boosting U.S. oil production to over 7.3 million barrels per day.

As you can probably guess, only one of these can claim the energy crown...

One Oilfield to Rule them All

Over the last five years, much of the spotlight on the U.S. oil industry has been focused on two particular areas: the Bakken and Eagle Ford Shales.

(I'll confess my attention has been focused on these areas recently, simply because of the sheer growth we're seeing.)

And yet, neither of these two shale formations holds a candle to the one lying in West Texas...

Last week, I mentioned a company that was outperforming Big Oil by a considerable margin.

This company happens to control nearly a million acres in what could potentially be the biggest shale play in the world: the Spraberry-Wolfcamp Shale located in the Permian Basin.

Are the 50 billion barrels of oil equivalent believed to be recoverable from the play for real?

Remember, it's all about whether or not we can extract that oil...

You should know that West Texas is an area that's accustomed to getting oil out of the ground.

Between January and May this year, roughly 886,115 barrels per day were produced in the Permian Basin, or 12% of every drop of oil produced in the United States.

That puts it ahead of the Bakken — and far ahead of the Eagle Ford Shale.

And if you want to know just how important the Spraberry oilfield is to the Permian Basin, consider this: It's one of the only fields in the area boosting production.

spraberry 8-15

That's hardly a drop in the bucket, dear reader. And I have a feeling the future will be even brighter for companies with skin in the game...

What's more, there's a truce on the horizon in this war for supremacy of U.S. oil production.

It all revolves around Cushing, Oklahoma.

Truce Ahead?

If we can pin down one fact weighing heavily on the Texas oil industry, it's the supply glut at a major oil hub in Cushing, Oklahoma.

Cushing is the settlement point for the U.S. benchmark crude, Western Texas Intermediate.

Having a huge oil hub so close to them, you can imagine how irate Texas producers became when crude from North Dakota started flowing in, creating a rather large bottleneck...

Now that Bakken crude is starting to flow in all directions, a truce may finally be in sight, as the glut in Cushing begins to ease.

reply to post by onequestion


My prior response was regarding Chesapeake.

I believe with them, however, it may have more to do with slowly yielded investments, or unyielded investments (developing the fields still).

But oil companies rise and fall. All the time.

The current crop of windfalls in the Permian shales will be companies most of you have never heard of. And their techniques may make them the giants of tomorrow.

reply to post by bigfatfurrytexan


Interesting....

I'm going to have to take some extra time to read through your first post and look into it more because this is a new topic im exploring.

Maybe Rabobank has lost confidence in the U.S. economy and they don`t want to jeopardize the pension funds by lending money to americans who won`t be able to pay back the loans?

reply to post by onequestion


LOL, if you untangle the web of the shell corporations who operate a lot of these deals, you will be legendary.

It is interesting to see how it all works. I talk to a lot of the folks working in the Cline Shale right now. The money is unbelievable. Drillers making $300k and above per year to run a rig. 18 year old morons making $25 and hour to work 12 hour days on the rig. All they do is get in trouble with that kind of money at that age.

The slogan goes, "'F', Fight, or Trip Pipe" (use your imagination). Its what they do. Roughnecks are an interesting breed of folk, for sure.