Energy in Depth Called Out For Inaccuracies

By -
Deborah Rogers is one of Energy in Depth's primary targets in their industry PR campaign.  She has repeatedly called out the shale gas boom as a Ponzi scheme which is going to collapse in on itself, which has led to some stinging criticism from the industry.  Energy in Depth in particular has not been shy about calling Rogers out, with statements like this one:
She’s a goat farmer, cheese maker, former model and committed anti-natural gas activist who chooses to present  herself as an independent economic expert.  Her message simply sells better that way.
Rogers recently responded to a series of articles Energy in Depth published which were designed to debunk her comments on shale development.  Here is an excerpt:
EID mistake #6: “…even if a natural gas play is in production decline, it does not necessarily mean the play is over..it simply means the well development rate is not keeping up with current production declines…so where is that treadmill?”
DR:  Dr. Cline is clearly unaware that he just defined the drilling treadmill.
Well development rate is not keeping up with current production declines. These companies have to keep up prolific and continuous drilling (i.e. Dr. Cline’s “well development rate”) in order to keep production from falling (i.e. Dr. Cline’s “production decline”). If you have little to no cash on your balance sheet and very high debt then production is how you meet debt service. If you stop drilling, production falls and so does cash flow and hence it becomes difficult to meet debt service. This is not a difficult concept to grasp.
But I should like to thank EID again for their admission that well development rates are not keeping up with current production declines.
Read the rest of the article here, which enumerates several more instances of what Rogers calls mistakes by EID in their reporting on her presentations.  Rogers also does well in adding a few zingers of her own:
I feel compelled to address one last statement by Dr. Cline and EID. It is as follows: “I don’t know of anyone that could have predicted this price collapse…”
This is an astonishing statement!
Are we to understand that Dr. Cline and his colleagues at EID had absolutely no inkling that prices were collapsing?
Current supply is four times greater than current demand. The rest of us have been aware of oversupply in the natural gas market for years now. It is an unfortunate fact that if you glut a market with supply, prices ALWAYS go down.
It must be noted that even as long ago as 2009 several shale companies announced production cuts in an attempt to shore up declining prices in natural gas. Production cuts, however, never materialized in any meaningful way due to high levels of debt and the price has continued to erode for the last three years. It is very curious indeed that EID was wholly unaware of such price declines.
And yet, perhaps it is not so curious after all. Given the myriad mistakes which Chesapeake Energy made in its public filings with the State of Pennsylvania recently, it is perhaps not so surprising that an entity funded by Chesapeake Energy might also make many, many mistakes.

Connect with us on Facebook and Twitter!

Popular posts from this blog

Fracktivist in Dimock Releases Carefully Edited Video, Refuses to Release the Rest

By -
Image
From Energy in Depth: There is something very strange going on along Carter Road, in Dimock, Pennsylvania, and I’m not speaking of natural gas, methane migration, contamination, litigation or even the extensive water testing there by the EPA and others.  No, I’m talking about a new “Watergate” conspiracy, complete with 18 minutes of missing tape (well, video, actually). It seems the ever-present Green Party member and  naturist   Vera Scroggins  (a/k/a  Vera Duerga ) has posted a video of Craig Sautner meeting with the EPA.  Mysteriously, the video is but 14 seconds in length, cutting off conversation in what is obviously mid-stream.  It raises a question Craig Sautner, like  Ronald Reagan in Kings Row , might have asked, “Where’s the rest of me?’  Carter Road, isn’t Kings Row, of course, (at least not until you arrive at  the mansion Scott Ely, one of the Dimock litigants, is building with his royalty money ), but there appears to be...
Read more

The Second Largest Oil and Gas Merger - Cabot and Cimarex

By -
Image
       Due to investor pressure, the U.S shale drillers are being pushed to improve financial and operational performance after a few years of poor returns. Even though the industry has improved its numbers, when compared to last year, investors still want more to be done for them to earn more money.      That's why two mid-tier shale drillers, Cabot and Climarex, have decided to merge in order to eliminate $100 million in annual costs, which means more money for the investors. This all-stock transaction is valued at about $7.4 billion, which is relatively high for the oil and gas sector.      The new entity will be renamed and the headquarters located in Houston, Texas. Cabot shareholders will own 49.5 percent of the new entity, and Climarex the rest.       The Cimarex-Cabot merger will address the investor's demand for a higher amount of returning cash. The initial plan is to pay a 50-cent-per-share special dividen...
Read more

Do You Know The History of Fracking?

By -
Image
  In 2018, 59% of total oil production in the U.S came from hydraulic fracking, which means it accounted for more than two-thirds of domestically manufactured gas. By 2024, fracking will reach an astounding $68 billion market value! Of course, fracking is not a new drilling method as you can trace it back hundreds of years. That's why we want to consider the history of hydraulic fracturing (fracking). We will be stating historical facts about it and focusing on the major historical occurrences that have influenced modern-day fracking. Pre-Fracking Days The idea of fracking started back in 1862 when Edward A.L. Roberts (Civil War veteran) witnessed Confederate soldiers exploding artillery rounds into a canal that obstructed a battlefield. At the time, Edward A.L. Roberts called it superincumbent fluid tamping. On April 26th, 1865, Edward A.L. Roberts began experimenting with exploding torpedoes, which consisted of lowering a torpedo containing an amount of powder from fifteen to tw...
Read more