{"id":16359,"date":"2016-01-12T13:03:32","date_gmt":"2016-01-12T18:03:32","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16359"},"modified":"2016-01-12T13:03:32","modified_gmt":"2016-01-12T18:03:32","slug":"as-rig-count-plunges-has-u-s-oil-reached-its-capitulation-point","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16359","title":{"rendered":"As Rig Count Plunges, Has U.S. Oil Reached Its Capitulation Point?"},"content":{"rendered":"

As Rig Count Plunges, Has U.S. Oil Reached Its Capitulation Point?<\/a><\/h3>\n
<\/div>\n
\n
\n
The big drop in rig count for the week that ended last Friday points to capitulation by U.S. shale drillers.<\/div>\n
\n

The total land rig count fell by 37 rigs and the horizontal rig count fell by 30 rigs (Figure 1).<\/p>\n

\"\"<\/a><\/p>\n

Figure 1.<\/strong>\u00a0U.S. shale play horizontal rig count. Source: Baker Hughes & Labyrinth Consulting Services, Inc.<\/em><\/p>\n

(Click image to enlarge)<\/p>\n

That\u2019s the biggest drop since March 2015 and it suggests that drillers are out of cash. Until now, companies have been rationing dwindling funds from secondary share and bond offerings as well as equity capital.<\/p>\n

Related:\u00a0Rig Count: Capitulation?<\/strong><\/a><\/p>\n

But those sources largely dried up after October when WTI futures prices began their fall from nearly $50 per barrel to their present value of $32.50 per barrel. Investors have finally stopped believing the claims by\u00a0Daniel Yergin<\/a>\u00a0and\u00a0Andy Hall<\/a>\u00a0that prices would rebound, and started paying attention to the reality that\u00a0I have been pointing out<\/a>\u00a0since\u00a0May 2015.<\/a><\/p>\n

If companies must finally pay for new wells out of cash flow, we might expect drilling to plummet in 2016 because tight oil companies have been spending other people\u2019s money to pay for half their drilling as late as the third quarter of this year (Figure 2).<\/p>\n

\n
\n
$80 Oil By June \u2013 Do NOT Be Fooled By The Mainstream Media<\/strong><\/a><\/p>\n

The current market turmoil has created a once in a generation opportunity for savvy energy investors.
\nWhilst the mainstream media prints scare stories of oil prices falling through the floor smart investors are setting up their next winning oil plays.<\/p>\n

Click here for more info on successful oil investing<\/strong><\/a><\/div>\n<\/div>\n<\/div>\n

\"\"<\/a><\/p>\n

Figure 2.<\/strong>\u00a0Third quarter 2015 tight oil-weighted exploration and production company negative cash flow. Source: Google Finance & Labyrinth Consulting Services, Inc.<\/em><\/p>\n

(Click image to enlarge)<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

As Rig Count Plunges, Has U.S. Oil Reached Its Capitulation Point? The big drop in rig count for the week that ended last Friday points to capitulation by U.S. shale drillers. The total land rig count fell by 37 rigs and the horizontal rig count fell by 30 rigs (Figure 1). Figure 1.\u00a0U.S. shale play […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[2434,5332,2531,846],"class_list":["post-16359","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-arthur-berman","tag-oilprice-com","tag-us-rig-count","tag-us-shale-oil"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16359"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16359\/revisions"}],"predecessor-version":[{"id":16360,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16359\/revisions\/16360"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}