Read on Twitter
Thread on the life cycle of shale
- The shale oil revolution started when oil prices were $75+
- You drill wherever at high prices
- When prices collapse, you move to the core, write down expensive stuff & brag about declining costs & higher productivity. Investors got fooled!
- The shale oil revolution started when oil prices were $75+
- You drill wherever at high prices
- When prices collapse, you move to the core, write down expensive stuff & brag about declining costs & higher productivity. Investors got fooled!
- At low prices, what matters is the operating costs, not the full cycle costs. You survive. But now you have new money from investors. You start drilling...
- In the second market collapse, investors are angry, there is no core to move to. No new investors: Capital starvation!
- In the second market collapse, investors are angry, there is no core to move to. No new investors: Capital starvation!
- The only way to attract new investors is to show a decline in costs and higher productivity. No more core. Technology is almost maxed out! what do you do?
- You merge with another company that has lower cost than and higher productivity! Bingo!
- You merge with another company that has lower cost than and higher productivity! Bingo!
- or you merge with a company where the synergy is high and save on whatever is duplicated.
- Here is the problem: No more core. No more new investors. Mergers and acquisitions to reduce costs and increase productivity are done. What would you do in the third plunge? #OOTT
- Here is the problem: No more core. No more new investors. Mergers and acquisitions to reduce costs and increase productivity are done. What would you do in the third plunge? #OOTT
