Interesting stuff ... but I would not agree with1. "currently...

Interesting stuff ... but I would not agree with
1. "currently unknown amount of demand destruction resulting from the coronavirus".

I mean he is "technically correct" ... don't know the precise amount down to the Bbl ... but you only have to look at China imports to get some of the approximates and make the extrapolation. Sure its hard to pin point actual destruction due to coronavirus, so that's why the notional estimates as to how its affecting global GDP growth and that is highly correlated to oil demand. I see estimates of >3M just for China in Q1/20. Will it rebound in Q2. I don't think so. Will it rebound in 2021 probably ... but when is the better question and by how much (any permanent damage to economies ... probably). I disagree that Coronavirus is a "transient 1 or 2 Qtr event".

2. "US shale is dying"

IMO that's way off base to label "shale is dying" across all companies that have shale investments .... even some of the pure plays. EOG is not dying ... even at <$40 WTI. We can of course dig the graves for LONE, SNDE, PVAC, ESTE, ....were oil to remain at <$40. No way EOG, PXD, CXO, MRO, and then real giants such as COP, XOM, CVX, OXY who have massive shale production (intentionally). I bet 80% of shale production is covered by just 10 companies (8 of which I named).

I am looking at it differently though. It doesn't matter to me whether or not the "Permian is declining" and the US being the global "swing producer". So what. XOM is choosing to make the cut due to oversupply and while 60,000 bopd is 4-5 times a SNDE is it insignificant to XOM. This is part of the reason for the giant difference in performance between XLE and XOP (apart from market weighting and equal weighting). It's the quality of the companies. So companies like Shell, BP, CVX, XOM are indeed at ridiculous free cash flow yields (which I am buying into). And also there are no "National Oil Companies" in the US. Those State Run enterprises are entirely different animals.

I do agree wholeheartedly on the sustainable aspect of oil price ... but markets don't care about individual companies survival or not ... so right now they all get tossed out and the weakest die. The E&P industry is unsustainable at this oil price and stocks have completely disconnected to price of oil at present. But think back to Iron Ore and Coal. Same thing IMO.

Markets can remain irrational longer than companies can remain solvent and and investors can remain patient.

So remaining patient is SNDE means what?
SNDE drilling no wells for how long? When was the last well drilled and production hedged? By default the company is shrinking (production) and cashflow (because new hedges are lower). All I'm saying is just looking at those production curves begins to highlight the problem with "patience".

EN's answer to a caller was to use all the FCF to buy back stock (at all time low) .... essentially "privatise" ... don't pay a dividend and don't drill as neither is being valued by the market. So what is SNDE MC ... ~$60M at this $7.5/sh ... if SNDE didn't D&C a single well they would be private by the end of the year right???