Author Topic: Peak Permian oil output is closer than you think, investor says  (Read 804 times)

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Offline thackney

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Peak Permian oil output is closer than you think, investor says
« on: January 15, 2020, 06:31:24 pm »
Peak Permian oil output is closer than you think, investor says
https://www.chron.com/business/energy/article/Peak-Permian-Oil-Output-Is-Closer-Than-You-Think-14976770.php
January 15, 2020

Such is the extent of the shakeout in the U.S. shale industry that Permian Basin oil production is closer to peaking than many forecasts suggest, according to one energy investor.

Adam Waterous, who runs Waterous Energy Fund, regards the sector’s financial position as unsustainable after years of disappointing returns for investors and negative free cash flow. With capital markets now largely shunning shale producers, the impact will begin to show in oil and natural gas output from the largest U.S. oil patch, he said.

“We think we are at or near peak Permian” production, Waterous said last week in an interview. “The North American oil market has been grossly overcapitalized, which is not sustainable.”

Predicting peak Permian output for 2020 isn’t a mainstream view. There’s plenty of debate about how much production growth in the West Texas and New Mexico patch may slow this year as shale drillers slash capital spending, but the consensus is that supplies will rise, albeit at a slower pace. Tai Liu, an analyst at BloombergNEF, said in a report Tuesday that the pessimism may be overdone. Such considerations have global ramifications, as the U.S. is expected to account for a large portion of worldwide supply growth this year....

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Offline IsailedawayfromFR

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Re: Peak Permian oil output is closer than you think, investor says
« Reply #1 on: January 15, 2020, 08:43:45 pm »
Peak Permian oil output is closer than you think, investor says
https://www.chron.com/business/energy/article/Peak-Permian-Oil-Output-Is-Closer-Than-You-Think-14976770.php
January 15, 2020

Such is the extent of the shakeout in the U.S. shale industry that Permian Basin oil production is closer to peaking than many forecasts suggest, according to one energy investor.

Adam Waterous, who runs Waterous Energy Fund, regards the sector’s financial position as unsustainable after years of disappointing returns for investors and negative free cash flow. With capital markets now largely shunning shale producers, the impact will begin to show in oil and natural gas output from the largest U.S. oil patch, he said.

“We think we are at or near peak Permian” production, Waterous said last week in an interview. “The North American oil market has been grossly overcapitalized, which is not sustainable.”

Predicting peak Permian output for 2020 isn’t a mainstream view. There’s plenty of debate about how much production growth in the West Texas and New Mexico patch may slow this year as shale drillers slash capital spending, but the consensus is that supplies will rise, albeit at a slower pace. Tai Liu, an analyst at BloombergNEF, said in a report Tuesday that the pessimism may be overdone. Such considerations have global ramifications, as the U.S. is expected to account for a large portion of worldwide supply growth this year....
it is called the laws of economics combined with the inability of most investors to grasp the technical vacuum of producing high production targets in a limited amount of unconventional zones.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington