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America is Speeding To A Red Light


If you are a shale oil cheerleader, and there is still a bunch of them around; you need to stop what you're doing and immediately get some help. If you are a full time internet predictor of all things shalely, and chose to ignore economics and finances, it's too late for you. In your need for relevance you forgot that oil and gas extraction is a business in our great nation, not social media entertainment, and the business has to be profitable to succeed.


Shale oil well productivity has plateaued and is not getting any better; the technology bullshit is no longer working. Decline rates of existing wells are accelerating and it's pretty much a gimme now that estimated ultimate recoveries are grossly exaggerated. Shale oil basins are getting gassier and associated natural gas prices, representing typically 40% of the revenue stream from a shale oil well, are going down, down, down. Capital to fund this party is fleeing the building and the debt boogie man has arriveth...and will not leaveth.


If you are working in the shale oil or shale gas business, I'm sorry, hand, but you should have been paying attention. Growth thru use of debt, particularly when the assets you are "growing" decline 83% the first 32 months of shelf life, is artificial and therefore not sustainable. You were on shaky ground from the get go; I hope you saved a lot of money.



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