Tag Archives: #TheFrackers

Shale Producers Not Bowing To OPEC

Gualalupe Pass Drilling Rig

Introduction…Even though our President has chosen to bow to foreign dignitaries, so far our U.S. shale producers have not bowed to OPEC.

Saudi Arabia’s attack… When Saudi Arabia launched a global oil-price war last year, many assumed that America’s high-cost shale producers would be the first to retreat.

American companies were quick to idle drilling rigs and lay off workers, but U.S. onshore oil production has gone up since last fall, not down.

As oil minister from OPEC counties met last week, they were grappling with the fact that the world’s new swing producer is different animal from traditional competition.

The new swing producers…Shale producers have more in common with technology start-ups in Silicon Valley than big, often state-controlled, integrated oil companies that dominate the global oil markets.  They are much smaller, more nimble, take more risks and are more tied to the ebb and flow of the capital markets.

One consultant who often speaks with Saudi officials says, “they were surprised at how fast oil prices fell and how resilient shale producers were.”

U.S. Producers are different…In an industry dominated by behemoths, the U.S. oil industry stands out due to fragmentation.  It takes 77 companies to generate 77% of the American crude oil and related liquids.  Combined, this is more production than the world’s 20 largest producers, according to Rystad Energy, a consulting firm.  Only Canada and the U.K. are similarly fragmented.

In contrast, in Russia there are four companies, China three, Brazil one.  In Saudi Arabia, Iran, Mexico, and Kuwait, one state owned company controls 100% of total output.

In conclusion...If you think big government controlled companies are the best way to produce crude oil, then most of the Middle East, Russia,  and China agree.  On the other hand, if you think free enterprise and the American Spirit is the best way to produce crude oil, then Texas, U.S., Canada, and U.K. would agree with you.

If you are inclined to venture into projects that produce current cash flow as compared to future capital gains, drop me a note.
Sources: “Shale Upends OPEC Bloc Party,” Wall Street Journal by Greg Ip. Saefong, June 4, 2015

U.S. DOE To Invest $32 Million In Solar Jobs

solarenergy  Indiana Solar Energy System

Introduction…The U.S. Department of Energy (DOE) is trying to move the market to solar, green energy.

Department of Energy’s intentions…DOE is setting aside $32 million to promote new jobs in research in the effort to accelerate the transition to cleaner energy.  Part of the money, $12 million, wil be to train other professionals in related fields such as real estate,  insurance, finance, and fire and safety.

Currently, there are more jobs in installing solar panels than jobs in the coal industry.  But, the abundance of cheap natural gas as a result of Fracking has reduced the demand for coal, not solar energy.

The Government’s solar track record…Our taxpayer $500 million support of the now bankrupt California startup Solundra embarrassed the Obama administration.  We all want clean energy.  But, the problem with solar is that the sun does not shine 24 hours a day and you can’t store electricity.  So, we always need a second energy source, greatly increasing the consumers’ cost of energy.

In conclusion…It seems to me that the DOE has not produced one barrel of oil or one kilowatt of electricty.  Maybe they should stick to regulations.

Bill Moist

BillBioPhoto

Bill Moist is President & Founder of Professional Equities, Inc., a funder of real estate; oil and gas; business projects; and trains others to take advantage of Crowdfunding. Mr. Moist is professional lecturer at , Graduate Business Schools and professional organizations. In addition, he is Texas Real Estate Broker, Certified Public Account (ret), Master of Science real estate tax expert, and Investor/Developer with 70+ successful projects. He can be reached on LinkedIn, billmoist.com, and billmoist.ws

Sources: “U.S. Energy Department To Invest $32 Million In Solar Jobs,” OilPrice by Andy Tully, May 28, 2015

The Russians Are Coming, The Russians Are Coming

Screen Shot 2015-03-19 at 3.50.00 PM

Introduction…Well, not all of the Russians are comping to Texas. But, one Russian billionaire, Roman Abramovich, who just invested $15 million in new fracking technology is here.  So, why would Abramovich invest in technology after Vladimir Putin, President of Russia, denounced it publicly?

Previous Anti-Frackers?...When the anti-fracking campaign started to heat up late last year in Denton, Texas—the heart of the shale revolution—conspiracy theories were spread within the pro-fracking community that the Russians were behind the whole thing. <!–There’s more!–>The logic was that the American shale revolution threatened Russia’s market share.  In a recent press conference Putin became visibly angry when the question of Fracking was asked as to its impact on Russia.

Clean Plasma Fracking Technology… Roman Abramovich has invested $15 million in Houston-based Propell Technologies Group, Inc. (OTC:PROP) and its new fracking technology from wholly owned subsidiary Novas Energy. Significantly, this new enhanced oil recovery (EOR) technology enables ‘clean’ hydraulic micro/nano fracturing of oil reservoirs—that is, without water, without polluting chemicals and without earthquakes.

According to Propell, the Plasma Pulse patented downhole tool creates a controlled plasma arc within a vertical well, generating a tremendous amount of heat for a fraction of a second. The subsequent high-speed hydraulic impulse wave emitted is strong enough to remove any clogged sedimentation from the perforation zone without damaging steel. The series of impulse waves/vibrations also penetrate deep into the reservoir causing nano fractures in the matrix which increase reservoir permeability for up to a year per treatment.

It may or may not be a coincidence that Propell’s Plasma Pulse Technology is licensed from Novas Energy, a venture capital-backed Russian energy technology company.

There is also another Russian element to this: PPT has been very successfully employed in Russian injector wells. This is perhaps the most significant aspect to consider. Russia does not have draconian fracking regulations pressuring companies to use environmentally friendly technology. Instead, they are using PPT to improve enhanced oil recovery (EOR) and reduce production costs.

Where Is Abramovich Going With This Investment?… This will not merely be a $15 million investment,” said one source close to the deal. “You have to read between the lines here. Abramovich doesn’t do anything small. He’ll get the infrastructure in place and then look to acquire a significant position in the US oil sector at today’s fire sale prices. We’ll probably be looking at hundreds of millions in investment at the end of the day.”

I n Conclusion...What an irony that a Russian billionaire is investing in clean Fracking technology that started in Texas?  We have already seen Chinese money move into Texas oil patch.  This very well could mean we will see more Russian money coming to Texas.

P.S.  While the Putin was apposed to U.S. Fracking, it could be another Russian who helps remove the environmental concerns over Fracking.
Sources: “Roman Abramovich Invests $15M In New US Fracking Technology,” OilPrice.com by By James Stafford, February 24, 2015