Energy Prospectus

Let's start a new thread.

First take a hard look at the EIA "Drilling Productivity Report": http://www.eia.gov/petroleum/drilling/#tabs-summary-2

Now remember this: The seven regions shown in the Drilling Productivity Report + Oklahoma's SCOOP/STACK play are the ONLY regions that have generated significant production growth in the U.S. for the last few years. They only produce about half of our production. Outside of these areas there is almost no drilling activity today and they are on steady decline.

In 2009 the EIA over-estimated production and under-estimated demand during the first half of that year. They never really admitted that their forecast models were flawed; they just went back and "adjusted" their previous forecasts. It looks to me like they are doing it again. Read this article:
http://oilprice.com/Energy/Energy-Gener ... kness.html

Yes, a lot of our growth portfolio companies are increasing production guidance. That's because they are good companies that have a lot of low-risk development drilling locations and growth locked in. This is exactly why I selected them for our "Growth" portfolios.

There are a lot of privately owned wells and wells owned by crappy companies that are on decline.

dan, this report on wll supports your stand-------

What Whiting's Guidance Suggests About Where U.S. Production Is Headed

Aug. 6, 2015 11:38 AM ET | About: Whiting Petroleum Corporation (WLL)

Summary
•Despite what has been repeated regularly in the media in recent months, rig counts do matter.
•As the EIA weekly numbers continue to move from estimations based on growth trends to the reality of actual production a decline in U.S. production is going to become evident.
•Walking through Whiting Petroleum's most recent guidance shows how a typical U.S. shale producer will have declining production in the second half of this year.

http://seekingalpha.com/article/3408106 ... e&uprof=46

There is ZERO chance that the wells being drilled and completed with ~650 active rigs during the 2nd half of this year can replace the production of the wells drilled and completed by 1,600 rigs in the 2nd half of 2014. Just do the math in your head.

Production from horizontal shale wells declines by AT LEAST 50% within a year after completion.

Operators are getting better results with longer laterals and by using a lot more sand, but they aren't that much better.

Now consider the production decline of the hundreds of thousands of wells completed before 2014.