mOngy, I had a long bath after some pretty pathetic but tiring...

mOngy,
I had a long bath after some pretty pathetic but tiring whitebaiting. I thought about Senex and the world economy.

I thought about:
1. VPE getting to 44 cents under Kopcheff and that was before they did the deal with Stuart Petroleum and all the finds since. Plus 2 of the biggest Aussie gas deals that I have witnessed and are poised to supply gas to Gladstone and international offshore markets.
2. The price of oil. And how Obama and the Saudi's have set about destroying the Russian economy. Either that or the Saudi's are sick of the other Opec members taking market share off them. It has happened before.
3. The USA shale oil revolution which has been mediarised to the extent that hardly anyone realises that at $85/barrel this is a marginal operation particularly when first year depletion rates can be as high as 80% in year 1. There will be a lot of shale oil producers sh..... bricks at the moment.
4. BHP asking for a discontinuity between gas and oil linked prices. A bit of a worry but I was heartened to hear that this is decades away.
5. Middle East Turmoil. So far so good but a week of violence could jeopardise a whole lot of supply issues which could send the price of oil rocketing. There are increasing problems in Libya, Egypt, Yemen, Iraq, Syria and a host of other countries.
6. China's admittance that coal is killing them. Google some pictures. I played golf there. You could not see the green on a par 5. They have introduced new tariffs and are into gas in a big way. This is one of Senex's strengths. This is what Senex is all about. In 2-3 years time Senex's revenue will be mostly gas. At international prices.
7. Conventional oil peaked in 2005. To meet increased demand the world has relied on shale gas,shale gas liquids and shale oil. All such products are subject to high cost of production and rapid depletion.
8. The economies of the world. Not looking good but I was heartened by China increasing their oil imports in September. Up 9.4 % over August. That is significant.

Tomorrow I will paint the pool with the assistance of my daughter's Spanish boyfriend ( who speaks no English ). And tomorrow night we are all going to see the James Brown movie. " I Feel Good."

The world needs oil over $85/barrel and a whole heap of gas to replace coal.

Hopefully we have seen a bottom but you never know.