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SIPES-HOUSTON CHAPTER NEWSLETTER
OCTOBER 2016
How To Be A Successful Independent
David L. Connolly
$50/BO, $3/MCF
Russia vs. Saudi Arabia
Record Find in Alaska
Canada Loses $10 Billion
OPEC Lost $1 Trillion
SIPES-Houston Newsletter | October 2016
Sipes Houston Chapter 5535 Memorial Drive
Suite F 654 Houston, Texas 77007
Tel: 713-651-1639 Fax: 713-951-9659
www.sipeshouston.org email: [email protected]
Chapter Officers 2016
Chapter Chair James Mertz (281) 205-8140 [email protected]
Chair Elect Russell Hamman (713) 526-7417 [email protected]
Past Chair Jay Moffitt (713) -750-9485 x 104 [email protected]
Secretary Barry Rava (713) 621-7282 [email protected]
Treasurer David Wood (281) 549-2376x101 [email protected]
Website Chair Danny Matranga (512) 484-6385 [email protected] Technical Program Chair Michael Steed (281) 404-9490 [email protected]
Continuing Education Chair Bill Bippus (281) 364-1881 [email protected] Hospitality Chair Chris Atherton (713) 861-1866 [email protected]
Public Relations Chair Jeff Lund (713) 275-1664 [email protected]
Membership Chair(s) Chip Betz (713) 658-8096 x 17 [email protected] Newsletter Chair Jeff Allen (713) 302-5131 [email protected]
Deal Buyers List Chair Bill Smith (713) 650-3060 [email protected]
Political Affairs Chair Ross Davis (713) 658-3131 [email protected]
Sponsor Coordinator Christine Milliner (562) 881-6326 [email protected]
National Directors Ralph Daigle (National Presi-dent) (281) 292-6859 [email protected] Mike Jones (713) 654-0080 [email protected]
Office Manager B. K. Buongiorno (713) 651-1639 [email protected]
In This Issue Letter From The Editor 1 Jeff Allen
October Luncheon 2
Battle Of Production 3
Caelus Arctic Discovery 4
Calendar 5
Merrill Lynch Update 6
OPEC Lost $1 Trillion 6
How to be a Successful Independent 7
September Luncheon Review 9 Barry Rava
Board Meeting 10
Pop Quiz 10
The Billion Barrel Swindle 11
GCS SPEM 12
SIPES Oil Price Prediction 13
Canada Will Lose $10 Billion 13
Luncheon Menu 14
SIPES Houston Book Recommendation 14
On the cover: This is the view through the Chisos Mountains in Big Bend National Park. Photo courtesy of Katie Lawrence, onlyinyourstate.com Email your cover photos to: [email protected]
1 SIPES-Houston Newsletter | October 2016
Oil has breached $50/BO and gas has breached $3/MCF. Saudi Arabia
has agreed to lower 1% of its production. The US had a record draw
down on supply. Hurricane Matthew helped send prices higher on fears
of market disruption. A lot has happened in this months of September
and October. There is plenty of evidence to start thinking with opti-
mism as we reach the end of the year. Keep your eyes on the conflicts
in the Middle East, Russian activity in the market, and the US Election,
all three will have an impact on the market moving into 2017.
The Continued Education Seminar on November 3rd (page 4) focuses
on how to be an independent. The Independents’ Party is a gathering
of independent oil men and women from around Houston celebrating
our unique industry. Both of these events are good options for net-
working, especially if you are recently independent.
See you at the luncheon,
Jeff Allen
IMPORTANT: the Petroleum Club has a new rule concerning food – if
you don’t specify your special-needs meal before the luncheon you will
be charged an extra $20. We don’t want anyone to be charged extra so
please take the time to contact BK for your special meal needs well
ahead of time.
LE T T ER F R O M T H E ED I T O R
Abstract Most hydrocarbon producing basins of the world are dominated by vertical hy-drocarbon migration. This hydrocarbon migration is often directly detected in the seismic record as zones of vertically aligned, chaotic, low energy data, called “gas chimneys”, although they are often associated with oil migration. Chimneys are frequently observed in relationship to producing oil and gas fields. This relation-ship, however, has not been systemati-cally documented, and hydrocarbon mi-gration in the geo-pressured interval be-low the reservoir is particularly over-looked. To address this issue dGB is com-piling an Atlas of chimney occurrences associated with known fields and dry holes, using 3D seismic data. Examples from both the onshore and offshore, Gulf of Mexico will be discussed. The morphology of chimneys directly above the reservoir provides clues to the top seal integrity. Work in the North Sea (Heggland, 2013) over 100 structural traps shows that traps overlain by gas clouds have a high probability of success, while traps with point sourced or fault related top seal leakage have a higher chance of being breached or having lim-ited hydrocarbon column heights. Traps with chimneys on the flanks of the struc-ture will often have hydrocarbon column heights corresponding to this spill point. In basins, dominated by vertical hydro-carbon charge, the morphology of verti-cal chimneys directly beneath the reser-voir may provide clues to the effective-ness of hydrocarbon charge. Traps can be classified for charge effectiveness based on the abundance of chimneys in direct communication with the reservoir body. These classifications can then be a guide-line for risking untested structures. The diffuse nature of chimneys makes
them problematic to map with 3D or 2D seismic data. Thus a method was devel-oped to highlight and visualize these gas chimneys in normally processed seismic data (Meldahl et al., 2001). Gas chimneys are detected using a supervised neural network trained on reliable examples of gas chimneys. Not all chimneys, detected by neural network training, are related to hydrocarbon migration. Thus the result-ant chimneys must be validated based on a set of criteria (Connolly et al., 2013). By detecting and mapping these chimneys, we can determine their origin (in a known or suspected source rock interval), their morphology, and how they are linked to known or suspected reservoirs. An Atlas of chimney occurrences over known oil and gas fields (or discoveries) and dry holes in 3D seismic data is being compiled, using this chimney detection methodology. Highlights of this atlas will be shown with examples from both the onshore and offshore, Gulf of Mexico. The Atlas is intended to provide useful analogs for hydrocarbon charge and seal assessment in various geologic settings
worldwide.
Biography David Connolly is currently the Chief Ge-ologist with dGB Earth Sciences, and SIPES member. His paper on "Using gas chimney detection to assess HC charge and top seal effectiveness, off shore Na-mibia" received the Louis Cagniard Award as top poster at the 2016 EAGE conven-tion. His paper on "Detection of expulsion from source rock" was recognized by SEG as a top paper in 2015. He is co-editor of the AAPG / SEG Geophysical Studies #16 "Hydrocarbon seepage from source to surface". He has over 30 years of explora-tion experience previously with Getty / Texaco.
DETECTION OF VERTICAL HYDROCARBON MIGRATION PATHWAYS IN
SEICMIC DATA
OC TO BER S IPES LU N CH EO N
Date: Thursday, Oct 20th
Place: Petroleum Club
1201 Louisiana St.
Time: Social 11:15
Lunch 11:45
Luncheon registration deadline
is Noon, Tuesday Oct 18th
$30 for Members and Affiliates
$35 for guests and non-
members
Additional $5 for walk-ups
No-shows will be billed.
Call, fax, or e-mail your reserva-
tion to the SIPES-Houston Office.
You can sign up online at
www.sipeshouston.org.
2 SIPES-Houston Newsletter | October 2016
DAVID L. CONNOLLY
BATTLE OF PRODUCTION. RUSSIA VS SAUDI ARABIA
3 SIPES-Houston Newsletter | October 2016
The price of oil dropped substantially on Tuesday morning after Igor Sechin, the president and chair-man of Russia's state oil company, said he saw no reason for an immediate freeze or cut in oil production.
Crude-oil prices on Monday had risen to their best levels of the year after Russian President Vladimir Putin said he hoped the OPEC cartel of oil-producing countries reached an agreement over production limits.
"Russia is ready to join the joint measures to cap production and is calling for other oil exporters to join," Putin said while speaking at an energy congress in Istanbul, according to Reu-ters.
Speaking with Reuters at the same conference, however, Sechin — often referred to as "Russia's Darth Vader" and once dubbed the "world's scariest man" — questioned why he would take part in a cut and said Rosneft would not cut or freeze oil pro-duction as part of any possible agreement with OPEC, of which Russia is not a member.
When asked on the sidelines of the conference in Turkey about the potential for a freeze or a cut, Sechin said, "Why should we do it?"
When asked on the sidelines of the conference in Turkey about the potential for a freeze or a cut, Sechin said, "Why should we do it?"
Sechin also cast doubt on whether some members of OPEC would even be willing to join in with a cut. "Try to answer this question yourself," he said. "Would Iran, Saudi Arabia, or Vene-zuela cut their production?"
Sechin is one of Putin's closest allies, but his comments are al-most the opposite of what Russia's president said on Monday, suggesting potential conflicts in Russia's official stance on oil.
His words caused oil to slip a little off its best levels from Mon-day, with both major benchmarks lower by about 1% on Tues-day. The slide was made even worse after new data from the International Energy Agency showed that production reached its highest level, clearly showing the scale of the challenge fac-ing OPEC as it tries to boost prices.
Saudi Arabia’s deputy crown prince sent his energy minister to an OPEC meeting last month with a difficult mission: Make a deal with rival Iran but don’t compromise the kingdom’s ability to fight for oil-market share, people familiar with the matter said.
The directive was a departure for Deputy Crown Prince Mo-hammed bin Salman, the powerful 31-year-old son of King Salman who is prosecuting Saudi Arabia’s war in Yemen against Iran-backed rebels. Prince Mohammed scuttled previ-ous attempts at oil-production deals with the Organization of the Petroleum Exporting Countries this year as Saudi Arabia worried about Iran’s rising output following the end of West-ern sanctions.
The agreement struck in Algiers last week would slash 1% to 2% of the 14-nation cartel’s 33.2 million barrels a day of pro-duction, the first time OPEC has agreed to limit output in eight years. Oil prices have surged, with U.S. crude prices breaking $50 a barrel on Thursday for the first time since late June, up over 13% since the Sept. 28 OPEC deal.
But the OPEC deal took oil-market observers by surprise after two years of indecision from the cartel. Analysts said it raised the question of whether Saudi Arabia was reversing its policy of fighting for market share in the era of low crude prices.
Prince Mohammed didn’t authorize a sea change in Saudi Arabia’s market-share strategy. While Saudi Arabia will take on the bulk of OPEC’s proposed cuts, slashing up to 400,000 barrels a day by the end of the year, the kingdom was plan-ning to make those cuts anyway, the people said.
Meanwhile, Iran agreed to a still-undefined cap on its produc-tion for the first time. Other OPEC members agreed to cut as well, in amounts still to be determined. The OPEC deal “is not really a change in the Saudi oil strategy or a big compromise on the Saudis’ part,” said a Saudi oil-industry official. “The kingdom would still be able to meet all of its customers’ demand comfortably at these levels and without losing market share.”
CAELUS CLAIMS ARTIC OIL DISCOVERY
4 SIPES-Houston Newsletter | October 2016
Caelus Energy Alaska said Tuesday it has made a "world-class" oil discovery that, if estimates prove true, could be one of the largest finds ever in Alas-ka. The Smith Bay site, in shallow waters about 50 miles southeast of Barrow, could "provide 200,000 barrels per day of light, highly mobile oil," the company said in a press release Tuesday. If correct, that production level would make the field more prolific than ConocoPhillips' Alpine unit, which began production in 2000 and reached a production peak of 139,000 barrels in 2007. The statement also notes that flow-tests, a step in ver-ifying a well's capabilities, were not conducted "due to seasonal time constraints." It said, howev-er, "extensive sidewall coring and subsequent lab analyses confirm the presence of reservoir-quality sandstones containing light oil." David Houseknecht, one of the region's foremost geologists and project chief for the U.S. Geological Survey's Energy Resources Program for Alaska, said Caelus' announcement comes in a little-explored rock for-mation with potential to support large oil deposits. He said the company could certainly be sitting on a large find, based on the work done so far, includ-ing seismic mapping showing the extent of the reservoir, and two wells drilled about 5 miles apart that show the thickness of pay zones containing oil. Houseknecht said in 1990, ARCO Alaska – prede-cessor of ConocoPhillips –announced a 1 billion barrel oil discovery called Kuvlum, offshore from the Arctic National Wildlife Refuge. "That's never been developed and one reason is that when they drilled two more wells they found, 'Whoops, the reservoir is not quite what we expected it to be based on the first well,' " he said. "So I don't want to denigrate this press release because it sounds great, but you have to have a certain amount of caution, at least I do, working at the USGS." The company said its discovery comes after two wells were drilled early this year, and after it conducted 3-D seismic explo-ration across 126 square miles. "Caelus estimates the oil in place under the current leasehold to be 6 billion barrels," the statement said. "Furthermore, the Smith Bay fan complex may contain upwards of 10 billion barrels of oil in place when the adjoining acreage is included." The recovery rates, if correct, would put the field's estimated oil potential between 1.8 billion barrels and 4 billion barrels. Gov. Bill Walker and the Legislature altered the oil-tax system this year, including placing a sunset on the "new oil" desig-nation, limiting it to a 7-year window. New oil – generally from fields that began producing in 2008 – will not begin to pay a production tax until Slope oil prices reach $73 a barrel, according to an analysis in February by Ken Alper, director of the Alaska Tax Division. The Walker administration is currently discussing additional changes to limit tax benefits to be consid-ered during the next legislative session starting in January. Walker called the Caelus announcement "good news" for Alas-ka. "My administration will continue to work with the industry to identify new development opportunities in Alaska's oil and gas sector, and provide appropriate investment incentives given our current fiscal climate," he said, without providing additional detail.
5 SIPES-Houston Newsletter | October 2016
EVENTS
October 2016 Sun Mon Tue Wed Thu Fri Sat
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 Luncheon
GDL Open
House
21 22
23 24 25 26 Update in
Egyptology
27 28 29
30 31 3 SIPES CES,
How to be Suc-
cessful
The decline of new oil and gas investments means the current oil glut’s days are numbered, according to a new report from Merrill Lynch.
“Our analysis shows that the price elasticity of global oil supply is persistent over time, suggesting a multi-year output crunch ahead for both groups,” Bank of America’s investments wing ex-plained, adding that it had found a double-digit drop in new ven-tures in members and non-members of the Organization of Petro-leum Exporting Countries.
Since the initial oil price drop in 2014, OPEC countries have en-gaged in a war over market share, which led members to ramp up production even as prices struggled to recover.
“Global oil spare production capacity has dropped on rising OPEC output, and 2020 Brent and WTI crude oil prices have dropped, partly on fears that the cartel will keep growing its market share,” the report said.
Merrill Lynch’s analysts also found that the effects of fluctuating prices on demand fade as volatility becomes long term. A $15 per barrel price decrease sustained over 15 years will increase demand by only 1.7 million bpd total – or 110,000 barrels per year.
“Our estimates imply that it makes little sense for OPEC to invest aggressively to grow production from this point onward,” they said. “We believe OPEC revenue will likely be higher if no addition-al investments are made.”
OPEC members are scheduled to hold an informal meeting in Al-giers this Wednesday to discuss the terms of an output freeze to revive the chronically low price of oil.
Energy markets have been particularly volatile leading up to the meeting, with OPEC’s most cash-poor countries hoping for an ex-traordinary summit to be called during or after the unofficial meeting to finalize the terms of freeze deal.
By Zainab Calcuttawala
6 SIPES-Houston Newsletter | October 2016
MERRILL LYNCH UPDATE OPEC LOST $1 TRILLION Due to the slump in oil prices, OPEC producers have lost more than US$1 trillion in revenues over the past three years, OPEC Secretary General Mohammad Barkindo has told reporters in Washington DC.
Investments in the oil industry shrank more than 26 percent last year and are projected to drop by another 22 percent this year, Barkindo said on the sidelines of meetings of the International Monetary Fund (IMF) and the World Bank in the U.S. capital.
The estimates for 2017 are also “looking very bleak,” Nigeria’s The Nation quoted Barkindo as saying. For the first time in recent memory, OPEC is not only facing three years in a row of low crude prices, but also declining capex, especially in the upstream business, according to the OPEC official.
Most experts, analysts and agencies, including the IMF and the World Bank, failed to predict correctly how long it would take the market to rebalance, Barkindo noted.
OPEC’s decision to curb production “will go a long way in stimulating stock drawdown”, Barkindo said in late September after the organiza-tion had reached a deal-to-make-a-deal on output. Barkindo admitted that the overhang was still huge, and the market had not been re-balancing as fast as the cartel’s producers had wanted.
OPEC may have agreed in principal that it would seek to limit produc-tion to a range of between 32.5 million barrels per day and 33 million bpd, but the market is still guessing which member is cutting (if at all) how much, and speculation and rhetoric are rampant.
This week it will be Istanbul’s turn to be the stage for OPEC-related news, comments, hints, and speculation, as OPEC and non-OPEC members hold informal meetings there. A series of other meetings are slated to take place between now and the official meeting in Vienna on November 30, when recommendations on production limits per OPEC member are expected to be reviewed.
If OPEC doesn’t manage to increase oil prices through the proposed deal, OPEC’s revenue losses may continue to mount.
By Tsvetana Paraskova
7 SIPES-Houston Newsletter | October 2016
HOW TO BE A SUCCESSFUL INDEPENDENT REGISTER HERE
When: Thursday, Nov. 3rd, 2016, 8am-5pm
Where: Live Oak Auditorium, Suite 125, 1990 Post Oak Blvd
REGISTER HERE
Presentations & Tentative Schedule: (Subject to Change)
8:30-9:00
Getting Started in Acquiring or Evaluating Assets: Assembling Teams, Fi-nancing Options, Acquiring the Right Property (Bill Fairhurst, Riverford Re-sources)
9:00-9:30 Upstream A&D Market Trends: Chris Atherton (EnergyNet)
9:30-10:00 Break
10:00-10:15 Becoming a Successful Independent in Three Easy Steps:( Mark Gregg, Kiwi Energy, Ltd.)
10:15-10:45 Important Legal Advice for Independents: Individuals & Small Compa-nies, Part I (Charles Knobloch & Walter H. ‘Tracy’ Walne III ; Arnold Knoblock & Saunders, LLP)
10:45-11:15 Important Legal Advice for Independents: Individuals & Small Compa-
nies, Part II( Charles Knobloch & Walter H. ‘Tracy’ Walne III)
11:15-11:45 Important Legal Advice for Independents, Part II Small Compa-
nies: (Charles Knobloch)
11:45-12:30 Lunch
12:30-1:00 Zero to $50 Million in One Year; How to Start, Fund, and Build a Private
Equity Energy Company, (Jory Pacht; Altair Resources, LLC)
1:00-1:30 TX State Obligations, well operation, orphaned wells, well abandonment,
(James Harcourt P. G, TXRRC)
1:30-2:00 Five things needed for closing your financing deal (Phillip Dunning, DrillingInfo)
2:00-2:15 Break
2:15-2:45 Financing options, 500k to 20MM, finance comparisons (Stuart Rexroe, Bluerock Energy Partners)
2:45-3:15 Financing your project? Title and speaker TBD
3:15-3:45 Insights to Success, (Phil Martin, New Century Exploration)
3:45-4:15 Building Companies - 6 in 12 years (TBD)
4:15-5:00 Starting as an independent (Deborah Sacrey, Auburn Energy)
SIPESHOUSTON.ORG If you are not yet registered as a member on the site
please do so ASAP. You can now pay your national and local dues online. If
you have not paid them please do so ASAP. For events and announcements please visit the website.
Attendance confirmation and payment for luncheons can be done through the website.
Many growing pains with the website have now been
resolved and will continue to be fixed. Any questions or issues with the website can be directed
8 SIPES-Houston Newsletter | October 2016
9 SIPES-Houston Newsletter | October 2016
SEPTEMBER LUNCHEON REVIEW BY BARRY RAVA
Speaker, Dr. John Anderson
The July luncheon lecture was by Dr. John Anderson, the Maurice
Ewing Professor of Oceanography at Rice University. He spoke
about the evolution of the northwestern Gulf of Mexico and its
implications for hydrocarbon exploration in a talk entitled: “Late
Quaternary Strat Evolution: Limits of Strat Models.” The talk fo-
cused on using the well-documented Quaternary stratigraphic
record to understand how variations in sea level, climate affect
sediment supply and its manifest stratigraphic architecture.
The Quaternary contains a complete cycle from the beginning to
the end of a sea level rise and fall so that how river systems react
to these changes can be studied. Dr. Anderson discussed the Sab-
ine, Brazos, Colorado, Guadalupe, Nueces and Rio Grande sys-
tems and how these smaller depositional systems were more
greatly affected by sea level changes than a larger system, such
as the Mississippi. A series of cross sections and seismic lines
were discussed and used to illustrate how subsidence varies
across the basin and controls the formation of the embayment.
Sea level was approximately 5 meters higher than it is today and
it fell about 120 meters from it’s last high stand. Several hundred
cores were examined and hundreds of radio carbon dating points
were made and incorporated into the study. The best chronos-
tratigraphic control was found to be oxygen isotopes.
In conclusion: As seal level fell the small rivers filled in the water height above their deltas and then prograded into the basin. The best place for sand is probably on top of clinoforms seen on seis-mic data at the head of the delta slope rather than basin floor fans. During a transgressive period wave action moves strata landward.
BO A R D MEE T I N G , B A R R Y R A V A POP QUIZ !
10 SIPES-Houston Newsletter | October 2016
The monthly board meeting proceeded in a businesslike man-ner this month, and in keeping with the tight ship the current administration runs, the meeting took only 50 minutes, thank you to James Mertz, the current President. These are a few highlights for the membership. There are three new candidates for Membership in Septem-ber: Gary Jones and Arlin Howles are applying for Full Mem-bership and Kelly Hazlip is applying for Limited Membership.
Bar sponsorship was not covered this month. There was a cash bar at the luncheon. Please give Chris Atherton a call at (713)
861-1866 if you or someone you know might be interested in a sponsorship.
The Continuing Education committee, headed by Bill Bippus is putting together a great seminar, as seen on page 7. Discus-sions regarding hand-outs and course materials revolved around paper versus memory sticks. Sponsorships and under-writing are being sought; if you know of someone that might be interested in sponsoring this event please contact Russell Hamman. Several former cash sponsors are willing to donate services or software via a raffle, but cash sponsors are still sought. The Treasury continues to be in good shape, but is being re-
duced each month. Luncheons are barely breaking even and
have been absent wine sponsors for the last two months. Dis-
cussions concerning raising luncheon costs and annual dues
(both expenditures being amongst the lowest as compared to
many local professional societies) consumed about half the
meeting time. The decision was to raise the cost of member-
ship, luncheons and pre-paid luncheons beginning in January
2017. Prices will be updated and formally announced once
meeting minutes are approved.
Please email your answer to the editor,
Quiz
Who is Mr. 5%? And why is he important to our indus-try? Hint, if you have read The Prize, by Yergin, you will know.
Winner of the September Pop Quiz is a tie between Jim Tucker and James Mertz.
In my mistake, I realized there can be two answers. The answer can either be James Hutton and his Theory of Uniformitarianism or William Smith, the man who made the first geologic map.
11 SIPES-Houston Newsletter | October 2016
THE BILLION BO SWINDLE: 80% OF US OIL IS UNACCOUNTED-FOR U.S. crude oil storage is filling up with unaccounted-for oil. There is a lot more oil in storage than the amount that can be accounted for by domestic pro-duction and imports.
That’s a big problem since oil prices move up or down based on the U.S. crude oil storage report. Oil stocks in inventory represent surplus supply. Increas-ing or decreasing inventory levels generally push prices lower or higher because they indicate trends toward longer term over-supply or under-supply.
Inventory levels have reached record highs since the oil-price collapse in 2014. This surplus supply is a major factor keeping oil prices low.
Current inventories are 45 million barrels higher than 2015 levels, which were more than 100 million barrels higher than the average from 2010 through 2014 (Figure 1). Until the present surplus is reduced by almost 150 million barrels down to the 2010-2014 average, there is little technical possibility of a sus-tained oil-price recovery. U.S. inventories are critical because stock levels are published every week by the U.S. EIA (Energy Information Administration). The IEA (International Energy Agency) publishes OECD inventories, but that data is only published monthly and it measures liquids but not crude oil. It also largely parallels U.S. stock levels that account for almost half of its volume. Inventories for the rest of the world are more speculative.
Domestic production and net imports account for crude oil supply, and refinery inputs account for the volume of oil that is refined into petroleum prod-ucts. If there is a surplus, it should show up as an addition to inventory and a deficit, as a withdrawal from inventory.
But that’s not how it works because EIA uses an adjustment in order to balance the books
In several of his Sherlock Holmes mystery stories, Arthur Conan-Doyle wrote, “When you have eliminated the impossible, what-ever remains, however improbable, must be the truth.” We have not eliminated any impossible explanations. We have, however, eliminated the three most improbable explanations for unaccounted-for oil. The truth—however improbable—is that invento-ries are probably much lower than what is reported.
Read the entire article by Arthur Berman by clicking on one of the images above.
12 SIPES-Houston Newsletter | October 2016
13 SIPES-Houston Newsletter | October 2016
SIPES OIL PRICE PREDICTION CANADA’S OIL INDUSTRY TO LOSE $10B Attention SIPES members!
You will have until September 29th to email your pre-diction for the price of WTI Oil at the end of the year (Dec 31st).
Email: [email protected]
What do you think the price of WTI will be on Dec.
31st?
Canada’s oil extraction industry is on track to post a second con-secutive year of shortfalls — to the tune of $10 billion — on the back of ongoing revenue woes, combined with a slower than anticipated cost cutting response, a local think-tank said Tues-day.
According to the Conference Board of Canada’s latest outlook for the industry, the crude sector’s losing streak will last about three years, from the last quarter of 2014 through to the second quarter of 2017.
The report also estimates that profit margins will hit record lows this year to a negative 19% and that while they will improve from 2017 onwards to roughly 4% in 2020, return to profitability remains uncertain.
In terms of production, the board expects it to contract slightly this year for the first time since the 2008 global financial down-turn.
When it comes to investment in the sector, the think-tank is not positive either. It says that only last year producer slashed to $25 billion in expenditure and that the cutbacks expected to continue this year and next. From 2014 to 2017, industry invest-ment will have been cut by an estimated $38 billion, it noted.
14 SIPES-Houston Newsletter | October 2016
OCTOBER LUNCHEON MENU SIPES HOUSTON RECOMMENDED BOOOK
Simon Winchester examines the legendary annihilation in 1883 of the volcano-island of Krakatoa, which was followed by an immense tsunami that killed nearly forty thousand people. The effects of the immense waves were felt as far away as France. Barometers in Bogotá and Washington, D.C., went haywire. Bodies were washed up in Zanzibar. The sound of the island's destruction was heard in Australia and India and on islands thousands of miles away. Most significant of all -- in view of to-day's new political climate -- the eruption helped to trigger in Java a wave of murderous anti-Western militancy among funda-mentalist Muslims, one of the first outbreaks of Islamic-inspired killings anywhere. Krakatoa gives us an entirely new perspective on this fascinating and iconic event.
*Presentation of food may differ.
SIPES Houston Chapter, 5535 Memorial Drive, Suite F654, Houston, Texas 77007 Tel: 713-651-1639 Fax: 713-951-9659 www.sipeshouston.org e-mail: [email protected]
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