{"id":49024,"date":"2019-10-18T08:06:20","date_gmt":"2019-10-18T13:06:20","guid":{"rendered":"https:\/\/olduvai.ca\/?p=49024"},"modified":"2019-10-18T08:07:18","modified_gmt":"2019-10-18T13:07:18","slug":"the-warning-signs-are-flashing-for-u-s-shale","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=49024","title":{"rendered":"The Warning Signs Are Flashing for U.S. Shale"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/d32r1sh890xpii.cloudfront.net\/article\/718x300\/76c4e4ef2da4aa46f3dc6e83de7dce50.jpg\" alt=\"rig\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"http:\/\/The Warning Signs Are Flashing for U.S. Shale\">The Warning Signs Are Flashing for U.S. Shale<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">U.S. oil production growth has slammed on the breaks, as low prices and the loss of access to capital markets has forced a slowdown in drilling.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Third quarter earnings reports will soon start to trickle in. Three months ago, the shale industry saw&nbsp;<a href=\"https:\/\/oilprice.com\/Energy\/Energy-General\/Shale-Bleeds-Cash-Despite-Best-Quarter-In-Years.html\">improvement<\/a>&nbsp;in some of the headline cash flow figures, but the second quarter results also revealed some&nbsp;<a href=\"https:\/\/oilprice.com\/Energy\/Energy-General\/Energy-The-Worst-Performing-Sector-Last-Decade.html\">deeper concerns<\/a>&nbsp;about drilling operations and raised questions about the longevity of an&nbsp;<a href=\"https:\/\/oilprice.com\/Energy\/Energy-General\/Time-Is-Almost-Up-For-US-Shale.html\">unprofitable<\/a>&nbsp;oil boom.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The problem for the shale industry is that, if anything, the outlook has only become gloomier since. Oil prices have languished and investors have grown more skeptical.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ahead of third quarter earnings, some analysts downgraded several prominent shale drillers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Imperial Capital analyst Irene Haas issued a&nbsp;<a href=\"https:\/\/thefly.com\/thestreet\/realmoney\/index.php\/XOGid2976537\/XOG-Extraction-Oil-downgraded-to-Underperform-from-Outperform-at-Imperial-Capital\" target=\"_blank\" rel=\"noreferrer noopener\">double downgrade<\/a>&nbsp;this week to Extraction Oil &amp; Gas, a Colorado shale driller. Imperial Capital cut the company\u2019s outlook to Underperform from Outperform, and lowered its price target to just $2 per share from $7. Extraction saw its share price plunge by 9 percent at one point during trading on Thursday before recovering some losses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Irene Haas says that Extraction\u2019s production is likely to be flat during the third quarter due to unplanned outages on the Western Gas system. More importantly, Haas says that Extraction\u2019s business model is \u201cfundamentally more risky, compared to other DJ Basin peers.\u201d Haas also raised concerns about Extraction\u2019s near-term fortunes, noting that the company \u201cmight not be equipped to weather additional commodity prices downdraft or operational upsets, planned or unplanned.\u201d\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meanwhile, SunTrust cut Concho Resources to Hold from Buy, pointing to the company\u2019s efforts to rein in \u201cinflated well costs.\u201d The move also comes in the wake of Concho\u2019s high-profile announcement over the summer, in which it admitted that its densely-packed 23-well \u201cDominator\u201d project\u00a0<a href=\"https:\/\/oilprice.com\/Energy\/Energy-General\/Oil-Price-Correction-Triggers-Shale-Meltdown.html\">produced poor results<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Warning Signs Are Flashing for U.S. Shale U.S. oil production growth has slammed on the breaks, as low prices and the loss of access to capital markets has forced a slowdown in drilling. Third quarter earnings reports will soon start to trickle in. Three months ago, the shale industry saw&nbsp;improvement&nbsp;in some of the headline [&hellip;]<\/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":[6010,23083,827,1474,1358],"class_list":["post-49024","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-nick-cunningham","tag-oil-price-com","tag-united-states","tag-us-oil-production","tag-us-shale"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49024","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=49024"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49024\/revisions"}],"predecessor-version":[{"id":49026,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49024\/revisions\/49026"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=49024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=49024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=49024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}