stock market was up today...

#10,151
#10,151
NorthDallas40 said:
Don’t disagree Ras. But frack’ed wells from what I understand are easier to turn on and off was more the point. Once their new owners have a business case to turn the well back on they will do so. Whereas the KoS and Russians will just keep pumping.
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That is my understanding. Maybe 2-3 months from idle to production.
 
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#10,153
#10,153
Here's Why 2/3rds Of US Oil & Gas Companies May Not Exist A Year From Now

For example, a simple analysis of the 96 companies in the US Integrated Oil & Gas companies, E&P companies, Drilling, Equipment & Services sub-industries shows that 67% of these firms have total liabilities in excess of equity as of their latest reporting period. That would be strike one in any situation, but with oil prices about 80% below the price that prevailed at the beginning of the year, the ability of these companies to meet debt payments or pay suppliers is further brought into question.
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#10,154
#10,154
Rasputin_Vol said:
Here's Why 2/3rds Of US Oil & Gas Companies May Not Exist A Year From Now
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I would think that those companies have a lot of fully depreciated equipment on their books that have years of economic value remaining, so it may not he unusual or critical to have liabilities greater than the book equity. I'm not familiar with the GAAP of depleting leased assets (oil wells) but the same situation might be occurring with those assets... a leased well could be very productive and is carried as a capitalized lease with little book value that has a much higher FMV. I guess it depends on whether the cost recovery is accounted for based on the volume pumped or the term (months/years) of the lease (especially if there are renewal options at fixed, predetermined rates). I don't know how they structure leases. Perhaps lease payments are based on production volume, in which case if so... nevermind.
 
#10,155
#10,155
Rasputin_Vol said:
They were drilling at a loss. In normal situations, the oil wouldn't have been economically feasible to drill. Once all of this clears up, we will see just how much shale production we will have at these sub-$60 price levels. Only a few can get away with that.
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It's been south of $60 a majority of the last five years.
 
#10,156
#10,156
Velo Vol said:
It's been south of $60 a majority of the last five years.
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Drilling and pumping are separate steps in the process. I'd like to know more about the lease arrangements with the owners of the land or rights owners. Price per barrel is a lot more relevant after the hole has been drilled.

Seems like a lot of the small operators have been shady businesses. But maybe I'm just biased due to some of the companies that have operated out of Knoxville.
 
#10,157
#10,157
Thunder Good-Oil said:
Drilling and pumping are separate steps in the process. I'd like to know more about the lease arrangements with the owners of the land or rights owners. Price per barrel is a lot more relevant after the hole has been drilled.

Seems like a lot of the small operators have been shady businesses. But maybe I'm just biased due to some of the companies that have operated out of Knoxville.
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???

I wasn't aware that anyone drilled anywhere near Knoxville.
 
#10,158
#10,158
Velo Vol said:
???

I wasn't aware that anyone drilled anywhere near Knoxville.
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Actually there is fossil fuel all around the surrounding area, but companies headquartered here can extract anywhere. But the shady operators have probably been more coal and downstream oil. Miller Energy was upstream though.
 
#10,160
#10,160
Actually it seems like the SOP of drillers, extractors, and explorers is to be in constant motion with their organizational structures. Not really that big a deal IMO if they fail. Private equity would just come in, grab the assets, and recapitalize the operations.

It is a fascinating industry. I'd like to know a lot more about how the business operates. Global footprint and players. Affects everybody. Finite inventory that's currently being valued as infinite. Enormous wealth created. Boom and bust commodities.
 
#10,162
#10,162
Thunder Good-Oil said:
Actually there is fossil fuel all around the surrounding area, but companies headquartered here can extract anywhere. But the shady operators have probably been more coal and downstream oil. Miller Energy was upstream though.
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I don't recall seeing any oil wells in the area.

Found an article from 2004.

Oil in Tennessee? Some folks keep on looking / Prospectors have to fight through rock

There are good reasons major oil companies have steered clear of Tennessee. About 215 million years ago, under the heat and pressure of a continental collision, the rocks in northern Tennessee began to bend. When they broke -- in a series of long, jagged, parallel lines -- oil and gas migrated from deep in the earth into cracks and folds in the rocks. Prospectors in Tennessee spend lifetimes tracing the patterns of ancient breakage; they call it "chasing fractures."

If there is a reliable scientific way of predicting where oil will be in this terrain, no one has discovered it, said state geologist Ronald Zurawski. Drilling is shallow and cheap in Tennessee, compared with Texas or Oklahoma, but the biggest discoveries have topped out at 1,000 barrels a day, a payoff too small to attract large companies. Using a vast array of predictive techniques, independent prospectors strike oil about 20 percent of the time --roughly the same rate of success as completely random drilling, Zurawski said.

As a result, the oil business in Tennessee has retained a frontier quality. It's not unusual to hear of oil wells drilled on the advice of dowsers or dream interpreters; every year, a Texan television repairman shows up to search for oil with a tool that resembles a copper bicycle handle with a car antenna on one end and a spring on the other. A 78-year-old Baptist preacher approached a Helenwood driller this spring with specific instructions from God.

"The Lord woke me up," said Herman Faddis, now a leaseholder in a new drilling operation, Divine Energy LLC. "He spoke to me in a small, still voice, and said, 'I want to send you to talk to these oil people.'
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#10,163
#10,163
#10,164
#10,164
Thunder Good-Oil said:
I've heard that the main reason that Knoxville developed so much on the west side and so little in east Knox County is because dirt's too rocky by far on the east side. There are wells in Morgan County and Cookeville (or Crossville), both areas are west of Knoxville. Fentress County as well.
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Cities almost always develop toward the nearest big city. There are none to the east. Nashville is to the west.
 
#10,166
#10,166
1972 Grad said:
Cities almost always develop toward the nearest big city. There are none to the east. Nashville is to the west.
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Hmmm... I don't know, but I'm leaning more along the lines of what Thunder is saying. Not only from my personal experience but also from a story I heard where Cass Walker was trying to get a perc test to pass on some property he was trying to develop near Seymour or somewhere and he ended up dynamiting or blasting holes in the ground at various places. I think it ended up getting passed from what I remember. Point being that it might be possible that development in the eastern part was hindered because of the rocky terrain.
 
#10,168
#10,168
Velo Vol said:
I don't know the reason for Knoxville but rocky soil seems more plausible than this.
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Morristown grows toward Knoxville. Knoxville grows toward Nashville and Chattanooga, along I-40. Greeneville grows toward Johnson City on 11-E. Johnson City grows toward Bristol and Kingsport. The main roads generally go toward the next big city, and the growth occurs there.
 
#10,169
#10,169
1972 Grad said:
Morristown grows toward Knoxville. Knoxville grows toward Nashville and Chattanooga, along I-40. Greeneville grows toward Johnson City on 11-E. Johnson City grows toward Bristol and Kingsport. The main roads generally go toward the next big city, and the growth occurs there.
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Depends when we're talking about, but the same roads going west also go east, so the highways alone don't explain why one side versus the other.
 
#10,170
#10,170
Velo Vol said:
Depends when we're talking about, but the same roads going west also go east, so the highways alone don't explain why one side versus the other.
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Sure it does. Even though the highway goes both ways, the development primarily goes one way, and that is toward the next big city.
 
#10,171
#10,171
1972 Grad said:
Sure it does. Even though the highway goes both ways, the development primarily goes one way, and that is toward the next big city.
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Yes, cities grow along interstates, and yes, I-40 happens to go to Nashville. But the two are not linked.

I live in West Knoxville and it has nothing to do with being closer to Nashville. I've not been to Nashville in years.
 
#10,172
#10,172
Velo Vol said:
I don't recall seeing any oil wells in the area.

Found an article from 2004.

Oil in Tennessee? Some folks keep on looking / Prospectors have to fight through rock
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I don't know anything about oil, but I used to work with a guy that had some property up near Jamestown and he had a few natural gas wells on it. He didn't own the wells but got royalties for the gas as well as all of the gas he ever wanted. He had a small cabin on the property and used the free gas to power a generator and for heat and hot water.
 
#10,173
#10,173
1972 Grad said:
Sure it does. Even though the highway goes both ways, the development primarily goes one way, and that is toward the next big city.
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Knoxville grew where developers found affordable land that they could build on. If access to a big city was the primary reason, Knoxville should be round since Knoxville is the closest city. Residential development also occurs within reasonable driving distance to where jobs are located. It's too expensive to put up big plants, warehouses, commercial, and office space not far from downtown on the east side. Knoxville money also is centered around the 2 or 4 lakes (FL/Tellico and WB/MH) navigable to the Gulf of Mexico and downtown. The density pattern of Knox County doesn't drop to near nothing to the east because it's a 5-10 minute longer drive to Nashville.
 
#10,174
#10,174
Towns also grew around train routes and stops. In the 19th century I think there were 2 main lines approaching from the west/NW and they continued to the NE and south. Development occurred in Bearden, Campbell Station, Concord, Downtown, and Mascot. It still hasn't filled in between downtown and Mascot. Nearly everything between the first 4 has been developed.

Edit: actually I'm not sure that Campbell Station was a railroad stop or a place to water your horse. I'm not familiar with the location of the actual spot. Concord was definitely built around the train route. The footprint of the Bearden Depot is between Sherwin-Williams on Baum Drive and CB Church. Just west of the Northshore underpass on the south side of the tracks. Southern and L&N depots are still standing in downtown Knoxville.
 
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#10,175
#10,175
Thunder Good-Oil said:
Knoxville grew where developers found affordable land that they could build on. If access to a big city was the primary reason, Knoxville should be round since Knoxville is the closest city. Residential development also occurs within reasonable driving distance to where jobs are located. It's too expensive to put up big plants, warehouses, commercial, and office space not far from downtown on the east side. Knoxville money also is centered around the 2 or 4 lakes (FL/Tellico and WB/MH) navigable to the Gulf of Mexico and downtown. The density pattern of Knox County doesn't drop to near nothing to the east because it's a 5-10 minute longer drive to Nashville.
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Why would it be round? There aren't big cities in every direction.
 
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