http://peakoilbarrel.com/debt-oil-price-bakken-red-queen/
It should be clear that
1. lower oil prices will see the PDP value of reserves fall (as expected)
2. the "close-out" of derivatives will be someone "wins" and someone "looses" ......
3. lots of "forecast wells" WONT get drilled (ie production from USA "shale miracle" will start to fall in 6-9 months time....
4. Banks will be much less willing to lend ..........
Given the quantum of the fall in oil prices - there is (very) likley to be "blow-ups" in the industry .......
it also suggests "there is NO FLOOR" ........
IMHO - this is a liquadation event - and the only "safe" way to play - is to stand aside, and let the carnage unfold ....let the dust settle .......and if/when a company raises capital - you will be in a much safer place to invest .....just my opinion !
Also to add to that,this makes eor much more risky and harder to get financing deals imo
That said,it only takes a war in the middle east to turn oil prices around,but in the short term financing will become very hard for minnows like Eor
Spec oilers atm are as attractive as a bobcat driver from Karajongs head,not very!
