I was thinking today or tomorrow for the 10Q, and most interest for me is the LOE for the quarter, when December is done we will have a better idea of a steady state costs for our analysis and modeling imo.
There is some good insight in that directors cut link you posted, one standout for me is the paragraph:
"Drilling permit activity decreased sharply from July to August then remained steady August through October as operators continued to position themselves for low 2016 price scenarios. Operators have a significant permit inventory should a return to the drilling price point occur in the next 12 months."
At the moment and foreseeable future I think it more likely (as you mentioned last week) that prices will stay around the $45 wti +/- $3. My reasoning is if prices were to jump then there is sufficient existing capacity in the US to increase production which would increase supply and the good companies have also now had sufficient time to plan their response to any price changes which would also add to supply. There are also some other non US discoveries occurring and I guess these will also need to be factored into the supply/demand equation.
For me low OP is good as it has focused attention on fundamentals and also ensures that a greater emphasis is placed on commercial risk of total activities which long term should benefit the existing producers that have cleaned up their balance sheets and can tough out a difficult period. Probably the same applies to us O&G investors as well as whilst at times fundamentally things can look good, sentiment seems to drive SP and atm we have probably been in the wrong sector for returns as interesting as it is. One day I suspect things will turn and we should be better placed to put this work and lessons learnt to good use so not all bad.
Cheers
