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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: JimisJim who wrote (190670)5/17/2015 8:32:27 PM
From: MIRU1 Recommendation

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CommanderCricket

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US shale oil industry never made money:

Maybe the key is in the nature of the business -- Costs are front-end loaded and revenue is back-end loaded. So if you want decent growth, naturally you have to borrow money which makes spending outstrip revenue and profit. "companies are outspending cash flow ". The real problem is that when you are drilling wells with a rapid early decline curve you have to complete more wells every year and that can't go on forever. The positive side of the picture is that "resource plays" have very little exploration risk.
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