Get yourselves some oil today. Everyone is doing it. The lads over at EMES worked a conference room yesterday and basically told them “hey folks, it doesn’t matter what the price of oil is anymore. We have customers with so much money, they’d be glad to pay us for sand to get oil that they will lose money on.”
Believe me, I am long SLCA and would love to buy every single share down here, if I knew there were companies out there who didn’t care about the price of oil. But in the real world, these little shit companies are going to get their faces punched in and lunch eaten by the majors. They were barely profitable at $100 crude; how the fuck will they survive at $65? It’s laughable at how stupid they think we are.
The whole $65 crude hasn’t settled into the minds of these execs yet. They believe the expediency of the move warrants a sharp reflex move higher and that everything is going to be okay. We saw the same sort of laissez faire attitude with the banks in ’08. I want to see oil execs panic, firing people, defunding projects, trimming the fat. The companies who keep their heads in the sand, before long, will be buried in it.
Today’s tape is better than yesterday’s. The breadth is respectable at 70% and everything but my GPRO is working. What can I say, I am cursed.
Nevertheless, some of my other holdings are picking up the slack and I am up a little bit for the day.
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I work in the industry and am hearing firsthand that hiring freezes have already begun at Anadarko. Production cuts are forthcoming.
It is good to see the Fly in a better mood. The worm will turn
USD phony rally
“the move warrants a sharp reflex move higher and that everything is going to be okay.”
That’s what 2013 & 2014 have taught us, right? The stock market snaps back from all declines and rallies higher, so oil prices must do the same, right? So many people are buying into these oil companies that have sold off hard over the past few weeks with this mentality while I’m sitting by waiting to see which junior E&P company will go bankrupt first.
Obama mentioned a ‘tectonic shift’ in reference to the mideast. CNBC put up a ‘breaking news’ blurb that read “teutonic” shift.
Seriously, CNBC, aren’t you embarrassed? Has the left leaning biz-news station become a depot for the illiterate?
Dedicated to the geniuses at CNBC:
“Blazing Saddles Teutonic Twat”
https://www.youtube.com/watch?v=66gc54bZd6Q
“The companies who keep their heads in the sand, before long, will be buried in it.” What a beautiful sentence for the fracking services companies.
GPRO AND YELP ARE dead
if I met you irl I would kill you
Fly is dead spot on. I talked to an oil exec yesterday. He thinks oil eventually goes back to $90-100.
lol. oil is not the S&P 500. There will be no v-shape
Most oil execs have their heads in the sand. New well permits were down 40% last month. That’s a big fucking deal as Uncle Joe Biden would say. 40% percent! That’s called a crash in drilling activity.
If your specifically talking about sand frac suppliers then your wrong in your assumptions. Drilling the well is expensive, and that is where we will see a big slowdown. However, a re-fracking boom will occur, as they start to concentrate efforts on improving fracturing techniques which will make companies question whether it makes more sense to spend money drilling a new well or re-frack an existing well.
And what is the key component to refracking an existing well……..SAND….and lots of it. And then there’s refracked, tri-fracked, quad-fracked.
Think I might Quad Frack the wife tonight!!
The deperverting of the oil price is not over yet, though that of the bigger oil stocks may be.
My first trade on dis laptop in myes cell was the breakout in $TRAK…and it’s ripping my bitches. Ise got this sheet.
Sheet, here come a cowboy…gotta fly.
Fly – i think the key here is that, and this varies company by company naturally, key oil producers who are in the sweet spot (ie, EOG) are still profitable. hclp put out a report showing that 85% of their customers were in oilfields providing IRRs of 37%+ at 80 brent and 4 nat gas… obviously below those leverls now, but if crude can bounce back and hold 75, the story IMO is very much alive.
mega caps get too big and layered with bureaucracy to get stuff accomplished. so they let the little companies build cool new things and processes. Once they’re about to take off, you put the squeeze on and the mega’s kill and eat ’em up.