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Non-Tech : Kirk's Market Thoughts
COHR 191.72+0.2%Dec 26 9:30 AM EST
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To: the longhorn who wrote (9987)6/22/2020 10:18:14 AM
From: robert b furman1 Recommendation

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the longhorn

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Hi Kirk and Longhorn,

Listening to the XOM investor 2020 conference, XOM is utilizing a "CUBE" fracing design. It sets up 7 drilling rigs in line. As the long laterals run out 360 degrees and at different depth levels (to minimize parent /child well drilling losses) they dig natural gas pipelines, crude oil pipelines, fiber optic cable and water recycling pipelines along these rigs.

This technique applies when contiguous leases allow the development of large areas (specifically the Delaware area of the Permian).

As we see bankruptcies impact the smaller oil companies and their leases, I suspect the higher valuable leases will be those that are contiguous with both XOM and CVX large land holdings.

Both XOM and CVX claim their margins can be over 20% with WTI at $35.00 a barrel.

We'll see soon enough as hedges are expiring and the drop on crude's price will quit being hedged.
n
The old boom bust cycle is about to make shale oil even cheaper.

For those companies with strong balance sheets, my bet is shale oil leases will get snapped up at pennies on the dollar. Oil field equipment auctions have proven that there certainly is enough equipment out there to drill and frac for a long time.

XOM says they have enough reserves in the Permian, to provide oil for their US refineries and plastics plants that extend out past 2040 including exports. XOM alone almost exports more oil to Mexico that Pemex develops.

Bob
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