Providence Resources - Fracklog - Totally agree with Hyponotoad1. There...

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14:21 24/07/2015

Totally agree with Hyponotoad1. There were 1650 rigs last year drilling in USA and now circa 630 rigs. The talk of increased efficiencies is clearly nonsense as fracking requires continuous drilling which requires continuing finance. To be true the cost of drilling the wells would want to have dropped 50% at least and the production would want to almost limitless. So as ETF hedges drop off and as the price of oil hovers at 50 dollars a barrel and as banks reassess their credit lines to these Fracking companies in October we are likely to see the real story. Also believe that like Hyponotoad1 someone is cooking the books. Believe that these Frackers along with their Wall Street Buddies have a lot of interest in telling porky pies to the market. Coupled with this we see very little being said about the natural decline rates in conventional oil fields of circa 5-6% per year. This means that even if OPEC keep their production at present record levels of 33M barrels of Oil added to USA 9.1m-9.5m we still have a decline rate per annum of circa 3m barrels of oil. Do not believe that with capex slashed we will be able to make up for these reductions given present price of oil. Also we hear about demand. Demand has more or less increased every year for the last 20 years. Even in recession it is rising. There are greater numbers of people requiring energy. This year deman up over 1M barrels per day and next year anywhere from 1.1m to 1.6m according to EIA estimates. Thus who will provide this OIL. Falling production from Frackers. declining Nigeria. decling Libia. Struggling Russia. Iran produces approx. 2.6M Barrels in Total. It exports in black market about 1m. It says it could increase total production within a year of sanctions being lifted to 3.6m barrels. This is dubious. But even if true would not make up for the extra oil demand let alone the Oil declines we are likely to see from Natural Production decline and falling Shale, Canadian tar, Gulf of mexico etc.. Also Iran will require billions to develop its fields. Who will provide this money. With the threat of sanctions being reimposed should Iran not be seen to be complying with the Nuclear Accord who would take the risk of a major investment. Also what are the conditions for companies that invest in Iran i.e taxes etc. If they are similar to those offered by Gulf states then they are not very rewarding

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