Saudi Arabia-Iran Conflict Could be a Flashpoint (Oryxsa.com)

Chris Faulkner, CEO of Breitling Energy, often dubbed in the media as the “frackmaster” because of his staunch support of hydraulic fracturing, is warning of panic in the Texas oilfields, as the oil price plummets. He predicts the US fracking boom will end if oil stays in the 30s, and a return to conventional drilling which can be sustained even if the price drops to just $20 a barrel.

“It’s looking ugly,” he said. “It looks like a double-handle technical pattern with a trading range below $35, and the bottom now really is only psychological. $30? Below? We’re into prices not seen since 98/99.”
He postulates a scenario where we could be headed toward more parity between supply and demand.

“The latest escalation between Saudi Arabia and Iran dates back a while, but has been flared most recently by the Iranian sanctions discussions, primarily advanced by our President Obama. These tensions are two fold – Iran’s unquenchable thirst to participate in international commerce again, including oil flow, versus Saudi Arabia’s intense desire to prevent them.

“However, what is going on is not an “event.” It may be a precursor to an event, but minus an event, I don’t think it’s going to affect oil prices much at this point.”

“What we do have impending is a reduction in spare capacity. The world is consuming about 96 million barrels of oil per day, and supply is ahead of that by about 750,000 barrels. If the US reduced by 500,000 barrels by this spring, which I think is very possible, then we’ve almost eliminated all the spare which puts us on very thin margin with such tensions building in the Middle East.

“After the fracking revolution took off, we grew production in the US by about 500,000 barrels per day for three years straight, and we’re still producing 9.22 million barrels per day. But if that drops by 500,000 barrels as I expect, then we have indeed become the swing producer by default.

“I’m mostly bullish on oil prices going into 2016, at least back toward 50. But it will be a slow climb – by mid-year perhaps – with the WTI/Brent spread still tight as it is now.”
He doesn’t see a lifting on the US export ban affecting things greatly.

“I just don’t see us exporting a little oil moving the needle on prices or supply. All the oil is in the system already, now it can just move around more efficiently to the refineries that are ready for it today.”

“As far as Iran’s oil coming to market, their only buyer right now is China, who has been snatching it at a discount. Nobody else needs their oil, so I don’t think it’s going to have as big an impact as all the gloom and doomers think. With the economic news from China that rattled the market recently, I don’t see demand increasing any time soon.”

“The bottom line is the Saudi/Iran conflict could be a flashpoint but until there’s something that affects supply, it’s not going to drive oil prices. However, US production decreases will, and the conflict puts us in a position of possibly reading parity between supply and demand and once traders embrace that, it very likely could move prices upward.

“But like we say with gasoline prices – they tend to float up like a feather and drop like a rock. We’ve already had oil prices drop like a rock, and from a producer’s perspective, right now we’d be happy as could be if they’d begin floating up like a feather.”

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US shale outlook in focus at Abu Dhabi forum (TradeArabia.com)

5-1-Chris-FaulknerThe outlook for US shale this year and beyond, which has been thrust into the forefront of world affairs in light of crisis in China and the Middle East, will be discussed at a forum in Abu Dhabi, UAE, this week.

Breitling Energy Corporation chairman and chief executive officer Chris Faulkner will speak at the seventh Gulf Intelligence UAE Energy Forum will take place on January 12.

He will join the Platts Global editorial director of oil Dave Ernsberger, for the first breakout session, discussing these new major international developments of 2016 and how they will affect world oil markets.

“There has been a significant axis shift globally in just a few short days of 2016. I thought we would be discussing the dynamics of $40 dollar oil and now, virtually overnight, we have China’s economy crashing and the Middle East on the edge of conflict,” said Faulkner.

“All of this will have ripple effects and oil has been taking a gut punch. This is an amazing time to be in the Middle East and speaking to such a prestigious group of colleagues,” he said.

The forum is being hosted by The Gulf Intelligence, a leader in knowledge exchange and networking between stakeholders in energy, healthcare, banking and finance across the Gulf region and is a subsidiary of Platts, a division of McGraw Hill Financial. –

Source: TradeArabia News Service

The Saudi Arabia-Iran Conflict Will Not Move the Needle on Oil Prices Much (Gulfnews.com)

The rising tension among Saudi Arabia and Iran, two Middle East countries who are major producers of crude oil, could push prices down even further amid the prolonged oil glut and uncertainty of their conflict, but have remained unchanged so far.

The persistent oil global surplus remains a significant issue among their squabble as the markets reacted slowly when prices of oil on Monday briefly rose higher than $38 a barrel, but withdrew back down to $36 a barrel on Tuesday. On Sunday, Saudi Arabia declared it would end all their ties with Iran.

Oil prices are expected to sink even lower with the lifting of the sanctions imposed on Iran since the added supply will only overwhelm an “already oversupplied market,” said Tony Starkey, an energy analysis manager for Bentek Energy, the Denver- based unit of Platts, an energy and metals data provider. The latest tensions between the two countries could change that outlook and have the “potential to stir up violence and conflict that could disrupt oil trade routes and supply, which would be bullish for prices,” he said.

The “dust-up” between the Saudi Arabia and Iran should not have much of an impact, but it has generated doubt, said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University’s Cox School of Business in Dallas.

“Unless those two countries go to war or try to disrupt each other’s oil flow I can’t imagine it will have much of an impact on oil prices down the road,” he said.

Prices at gas pumps across the country are averaging $2.00 a gallon in many states, according to Gasbuddy.com. The lowest price is in Missouri where gasoline prices are $1.70 a gallon and the highest price is in California at $2.89 a gallon.

The Energy Information Administration, the independent statistical arm of the Department of Energy based in Washington, D.C., estimates that gasoline will average $2.36 per gallon in 2016.

Prices could see an even steeper drop if both countries attempt to undermine each other by ramping up and “producing as much oil as they can,” Weinstein said.

“Obviously, the Saudis can produce oil at a fiscal loss much longer than the Iranians can, but I don’t know if they will pursue that strategy or not,” he added.

The outcome in a break in diplomatic relations could be difficult to predict since Saudi Arabia produces 9 million barrels a day and is the number one oil producing country with 10% of the overall global production followed by the U.S. which produces 9%, he said.

The global surplus of 2 million to 2.5 million excess barrels of oil means consumers will not have to be concerned about prices reversing its course anytime soon.

“We will have bargain basement gasoline prices for the next couple of years,” Weinstein said. “It’s hard to envision oil rising above $2.50 a gallon for the next couple of years.”

The unease in the Middle East will increase volatility in pricing only for the short-term because of the ambiguity, said Rob Thummel, a portfolio manager with Tortoise Capital in Leawood, Kansas which has $13.5 billion under management invested in energy stocks.

“Oil prices are delicate and the margin error is low since there is no geopolitical risk premium built into the price, but it depends on how much the conflict escalates,” he said.

With a 30-day supply of crude oil, inventories are high and the conflict should “blow over,” Thummel said. The production of oil in the Middle East is not impacted even if tensions are higher for a short period. If production rises, consumers will benefit and see another drop in gasoline prices, he said.

“It will be great for consumers because gasoline prices will remain at $2.00 a gallon for a while,” Thummel said.

The latest escalation is not an “event” and will not move the needle on prices even if it is a precursor to one, said Chris Faulkner, CEO of Breitling Energy, a Dallas oil and gas exploration and production company.

A reduction in the reserves of oil is imminent since the world is consuming about 96 million barrels of oil per day and the amount of the supply is ahead of that by 750,000 barrels, he said. If the US reduces the amount by 500,000 barrels by this spring, then we have almost “eliminated all the spare which puts us on very thin margin with such tensions building in the Middle East,” Faulkner said.

Faulkner is “mostly” bullish on oil prices going into 2016 and heading into the $50 territory although the upswing will be a slow climb and may not occur until the middle of the year with the “WTI/Brent spread still tight as it is now,” he said.

The bottom-line on the Saudi Arabia/Iran conflict is that it could wind up being a “flash point but until there’s something that affects supply, it’s not going to drive oil prices more than what you saw Monday,” Faulkner said.

“We like to say with gasoline prices – they tend to float up like a feather and drop like a rock,” he said. “We’ve already had oil prices drop like a rock and from a producer’s perspective and right now we would be as happy as could be if they would begin floating up like a feather.”

Article Author: Ellen Chang,  Mainstreet

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Oil price outlook to dominate Energy Forum

chris-faulkner-wall-street-journalAbu Dhabi: Drop in oil prices and other developments in the energy sector like Opec policy and its impact on shale drillers is expected to dominate discussions at the 7th Gulf Intelligence Energy Forum in Abu Dhabi on Tuesday.

Oil prices have dropped by more than 60 per cent since June 2014 as production outpaces demand. From a peak of $115 per barrel, Brent, the global benchmark fell to less $35 (Dh128.5) this week as oil glut persists in the market.

The policy of Organisation of the Petroleum Exporting Countries (Opec)’s to defend its market share and let prices fall in a bid to push higher-cost rivals such as US shale oil explorers out of the market has proven costly and slow to bear fruits.

While US output has fallen 4.1% from its June peak of 9.6 million barrels a day, Opec members lost about $500 billion in revenue last year, according to the International Energy Agency (IEA).

“The Saudi objective to tap down US shale has already had its impact, and from here, there’s not much more affect they can have — the Saudis should accept the fact that is not going to change,” said Chris Faulkner, chief executive officer of Dallas-based shale driller Breitling Energy Corp.

“Shale has been more than validated, and once oil prices go back up to around $70, output in the US will pick up briskly,” added Faulkner, who will give The 2016 International Outlook Lecture at the energy forum.

Opec led by Saudi Arabia did not cut oil production to prop up prices at the groups’ annual meeting on December 4. The organisation which pumps about 40 per cent of the world’s oil expects its crude to rise to $70 per barrel by 2020 and to $90 by 2040.

Suhail Mohammad Al Mazroui, Minister of Energy, UAE, Shahid Khaqan Abbasi, Federal Minister for Petroleum & Natural Resources, Pakistan, Dr Emmanuel Ibe Kachikwu, Minister of State for Petroleum Resources, Nigeria and Opec President, Musabbeh Al Kaabi, CEO, Mubadala Petroleum, Talmiz Ahmad, India’s former Ambassador to Saudi Arabia, Oman and the UAE among others are expected to attend

Article Author: Fareed Rahman, Gulf News

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Gasoline Prices to Hit Six-Year Low, Could Dip Further As Oil Glut Persists

The decline in crude oil prices will persist as the extended global oil glut has pushed them to six-year lows.

Crude oil prices have not only hit all-time lows in 2015, but the downward pressure continues and could stretch out into 2016 as the issue with the oversupply has not dissipated, said Chris Faulkner, CEO of Breitling Energy, a Dallas oil and gas exploration and production company.

“The question I get asked every day is if the prices can go lower and the answer is unequivocally ‘yes,’” he said.

The surplus of crude oil in the market will force gasoline prices to dip even lower and could easily decline by another “10 cents or so coming in the very near term,” Faulkner said.

The pressure for prices to continue a declining trajectory is strong because refineries must take advantage of the cheap feedstock prices in the market to produce even more gasoline in the next month as prices historically rise in February.

“Refineries shut down temporarily for seasonal maintenance and blends switch over, which flush out gasoline overstock and prices begin to rise,” he said.

Since current market demands have met their peak, gasoline prices will “average less than the 2015 number and remain under $2.40 for the yearly average due to continued depressed oil prices,” Faulkner said.

“When we look at crude oil prices, we think the average remains range bound through April 2016 and we see some increase occurring in the last three quarters with the 2016 average at roughly $45 a barrel,” he said.

The outlook for oil prices is not favorable, as consumption rates are not expected to rise rapidly.

“We are in a new era of oil prices and should expect oil to remain under $65 through the end of this decade,” Faulkner said.

Prices at gas pumps across the country are averaging $2.00 a gallon in many states, according to Gasbuddy.com. The lowest price is in Missouri where gasoline prices are $1.76 a gallon. Running the gamut, prices are at $1.80 a gallon in Texas, $2.27 in New York and as high as $2.74 in Hawaii.

Low oil prices will remain as OPEC producers indicated they would continue their policy of “defending market share” at the last meeting and some of Iran’s oil could hit the market as early as mid-2016, adding further pressure on prices, said Timothy Hess, a lead analyst for the Energy Information Administration, the independent statistical arm of the Department of Energy based in Washington, D.C.

Cheaper gas prices have been a boon to American households who saved $650 to $700 this year, he said. Adding to their overall savings, consumers who rely on natural gas to heat their homes will pay 13% less this year compared to last winter as those prices have also declined and warmer weather is predicted.

The EIA estimates that gasoline in the fourth quarter will decline to average $2.04 per gallon in December 2015 and $2.36 per gallon in 2016. The increase in global oil inventories of 1.3 million barrels per day in November added to the downward pressure on North Sea Brent crude oil prices, which was $44 per barrel in November, a $4 per barrel decrease from October.

Brent crude oil prices will average $53 per barrel in 2015 and $56 per barrel in 2016, the EIA forecasts. The West Texas Intermediate (WTI) crude oil prices will average $4 per barrel lower than the Brent price in 2015 and $5 per barrel lower in 2016.

Production of U.S. crude oil declined by about 60,000 per barrels a day in November compared with October, the EIA said. Crude oil production is excepted to decrease even more through the third quarter 2016 before growth resumes late in 2016.

The continuation of depressed gas prices is an advantage for consumers, but the negative impact of oil companies filing for bankruptcies and laying off thousands of employees could soon outweigh the benefits of households increasing their disposable income, said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University’s Cox School of Business in Dallas. At least 20 more companies are predicted to file for bankruptcy in 2016, which trickles down to affect growth in other sectors such a manufacturing, construction and housing.

Predicting the bottom of the decline is becoming more difficult as “one of America’s biggest industries in 32 states is taking it on the chin,” he said. “The oil and gas industry has twice the impact on economic growth now than it had a decade ago. The contraction of the energy sector is retarding economic growth with capital spending down double digit percentages as projects are deferred.”

The lack of an increase in demand and the extended period of low commodity prices do not make it easy to determine “where the bottom is,” Weinstein said. “A year ago $60 was the floor and I didn’t think we would see $40 oil.”

The surplus in oil is not going away anytime soon, he predicts since “America has more oil and gas than we know what to with.”

“The whole planet is drowning in oil,” Weinstein added.

Article Author: Ellen Chang

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The Fracking Truth Author Chris Faulkner

Oil Executive: Why America Should Not Export Its Oil Now

The Fracking Truth Author Chris FaulknerCongress has finally put the oil export ban on the table, wrapped up in a burrito of pork-laden spending that will cost tax payers nearly $1 trillion, and that’s just over the next 10 months. From $400 million for a new FBI headquarters to tax breaks for racehorses, film productions and NASCAR tracks, this bill bellies pork up to new heights.

However, a key component of the bilateral proposal comes at precisely the wrong time. Congressional Republicans, well funded by big oil, have been looking for the opportunity to slip removing the crude export ban into just the right bill.

Now is not the time to be putting our domestic oil on the international market, and we have Saudi Arabia to thank for showing us so.

Just over a year ago, Saudi Arabia virtually declared war on US shale, precipitated from its distaste of losing market share, to its abhorrence with President Obama’s infatuation with archenemy Iran. In doing so, it admitted American shale had a very high competitive value, and wanted to stomp it down, or completely tap it out.

What American lawmakers should be focused on now is taking the gift Saudi Arabia has given us, and turning it into the ultimate political weapon of OPECs demise. Since the cartel was formed in September, 1960 in Baghdad, America has been subject to its increasing influence on world oil prices. In 2015, OPEC as an organization with any kind of influence on world oil prices is dying. Now, America could literally finish it off, and in the same stroke, establish itself as the new dominant oil power player.

How? It would require political leadership, and that seems to be more scarce in Washington, D.C. today than a heard of swine.

Here is a plan that would permanently disband OPEC:

  1. The United States would join with Canada and Mexico (Canada has the world’s third-largest oil reserves) and create a North American Energy Federation.
  2. Invite the lesser OPEC producing members of Nigeria, Angola, Algeria, Venezuela and Ecuador to join. These countries already know that Saudi has abandoned them for its own agenda. Just two days after the last OPEC meeting, Nigeria and Angola announced their own plan to pursue other producing nations to attempt a production cut to take some supply off the market. These nations would be quite vulnerable to break ranks with OPEC.
  3. Next, in Nixonesque-style, use WTI as the benchmark for the Federation and set the price at $75.
  4. Federation nations would alienate themselves from imports from Saudi, Kuwait, Iran, Iraq, Qatar and the UAE, sending those countries scrambling to sell the oil they already have on tankers and in pipes.

What would happen with this broad stroke is the United States would leverage our shale asset to our own strategic advantage. Instantly, rigs would begin moving again. Fracking units would mobilize to some of the estimated 3,000 wells that have been drilled but not completed. Jobs in the oilfield would once again come into high demand and thousands of American families could once again enjoy high-income salaries. Canada’s Tar Sands would begin production, fueling the now-stagnant Albertan economy. The OPEC “lesser” nations would instantly double their revenue, and potentially avoid likely future credit defaults under current prices. While gasoline prices would go up some, it would still settle near the inflation adjusted historic average of $2.50 per gallon.

And, most importantly, OPEC would be officially dead. Disbanded and left scrambling to sell its cheap oil into remaining over-saturated markets, while the new Federation has all the oil it needs at a price everyone could live with. Once stable, then the price control could be relaxed and return to a free-market trade but on a new supply and demand metric.

This is a plan that would benefit America strategically, and would be the catalyst to finally wean this great nation from the chokehold of foreign oil. This is precisely why we should not be selling our oil abroad at this critical time. The great concern is how easily Congress agreed to excessive spending at a time when fiscal restraint should be paramount. To think that there would be such visionary leadership on Capitol Hill today would be overly optimistic. Yet, we could be so close to true energy independence, and all it would take is courage and vision.

Written by: Chris Faulkner, CEO and Chairman of Breitling Energy Corporation (BECC) based in Dallas, Texas.

Faulkner: Why Friday’s OPEC Meeting Will Be Insignificant, Like OPEC Itself

Here is the proposed agenda for Friday’s OPEC meeting in Vienna:

10:00 – Convene
Noon – Adjourn
16:00 – Hold a press conference

That’s it. Oh, and probably plenty of forged smiles and photo ops before, during and after. However, if we could somehow peel the curtain back and see the real picture, things are not at all as rosy as it may seem.

I’d give anything to be a waiter at that 4-hour lunch.

For one, the disarray inside the Saudi Kingdom since King Abdullah’s death last January has been widely publicized, at least the part that is publicly known. Cabinet shifts and swooning around the aging and sometimes mentally foggy King Salman has created internal chaos up and down Erga’s gold and marble lined corridors.

There’s also the rift between the OPEC haves and the have-not’s. More specifically, Venezuela, Ecuador, Algeria, Angola, Nigeria in one corner versus Saudi Arabia, UAE, Qatar, and Kuwait in the other. Iran, Iraq and Libya could care less. Indonesia is the new kid and just glad to be back in the room.

The lesser OPEC member nations are on the ropes financially. The cash-fat nations are draining reserves at unexpected levels, but can last years before reaching truly critical levels. When they pull into Vienna this time, they could probably care less it’s on a virtual credit card, of sorts.

Speaking of Iran, the latest defiance appears to be an effort to open up 50 new projects to foreign ventures, with projections of up to one million barrels per day added to the already saturated global crude market. It will be interesting to see how many American based companies line up to pounce on those hot prospects.

As for Russia, they’re on the sidelines this week, at least as far as this discussion goes. There will be an official meeting between Soviet and OPEC higher ups, but it won’t be until mid-December, so they continue pumping and competing, primarily for European and Asian market share.

Many are not expecting any changes to production Friday, but I think they will actually raise their daily quota to 31 million barrels, taking Indonesia’s production into account. However, as we have seen for the last year, it’s basically quota-schmota anyway. The number Saudi pushed so hard in 2011 to establish has been as elastic as a rubber band. Although stated at 30.3 million barrels per day, current OPEC production approaches 32 million barrels, and once Iranian sanctions are lifted, that number goes up more.

Just think what oil prices would do if they actually held to the quota, which is exactly the point. There is no cartel. No agreement. No enforcement, management or group compliance.

Which brings us back to this week’s “meeting.” OPEC is losing their significance faster than their cash. Saudi has lost control once again. Iraq is unmanageable and will pump as much as it can. Iran has made its intentions very clear for next year. Libya is unpredictable and their volume basically doesn’t really count. Indonesia is another bit player and their production is already factored into world supply, so there’s another non-event.

It doesn’t appear Venezuela, Ecuador and the other smaller countries will ever exert enough pressure to sway the Shia Crescent to hear their futile pleas. That leaves us about where we have been for a year now. A “cartel” of (soon to be thirteen) nations that gets together twice a year to smile, take pictures, enjoy a decadent lunch and then go back home to do whatever they want.

OPEC has basically become a social club (or perhaps not-so-social club lately).

Until global demand increases or one of the lesser nations tips into insolvency, the only other catalyst on the horizon to positively affect oil prices might be more unrest in the region, which as we saw over the last two weeks could be one headline away.

Meanwhile, oil is likely to re-test the August lows. Where it goes from there is truly anyone’s guess.

Written by: Chris Faulkner, Breitling Energy CEO, Chairman and author of “The Fracking Truth: America’s Energy Revolution”

Faulkner: Backroom Politics Killed the Keystone XL – What the Media Didn’t Report

Senator John Hoeven (R, ND) appeared on Fox News last week and in about 45 seconds chronicled the timeline of the Keystone XL pipeline’s demise that hasn’t shown up on any other media, to no surprise of this author.

According to Senator Hoeven (following personal conversations with the Canadian Government and Trans Canada), the events leading up to the Keystone XL pipeline’s demise were strange, unethical to say the least, if not illegal. Since it hasn’t shown up anywhere else, here is how the Senator chronicled the pipeline’s final hours.

Friday, October 30 – The US State Department contacted Trans Canada asking if they would withdraw the contract. Confused, Trans Canada said no.

Then the State Department next asked if they would “pause” the request, and send a press release accordingly.

Monday, November 2 – Trans Canada sent a formal request to the Administration to “delay” the ongoing review of the pipeline. This was instantly interpreted as kicking the can past the November 2016 election. Little did anyone know of the conversations three days prior.

Tuesday, November 3 – White House Press Secretary Josh Earnest rejected the request to delay, saying the President intended to rule on the Keystone by the end of his presidency and called TransCanada’s request “unusual.”

Mid-Week – Trans Canada received an official letter from the White House rejecting the request to delay the review.

Friday, November 6 – President Obama, in a staged announcement just before noon, with Vice President Biden to his right and Secretary Kerry on his left, announcing that Secretary Kerry had informed him the 7-year long State Department review was now complete and it concluded that the Keystone XL pipeline “would not serve the national interest of the United States. I agree with that decision,” the President said.

And that’s how the Keystone died.

Senator Hoeven said the President’s actions were “all political, not following the law or the regulation as you’re supposed to do.”

For the sake of national defense, reduced reliance on Middle Eastern oil and for ongoing relations with our closest ally in the world, last week was one of our darkest moments. Not that the pipeline is completely dead, it could quickly revive if we put the right people in place next year, but the way this came down was sloppy, underhanded, obviously manipulated. There was certainly no integrity in the maneuverings from either the State Department or the White House.

If the American public knew (or cared) they would be horrified. Or, perhaps after 7 years of this, many may have become oblivious to the word Keystone. This was especially revolting because Senator Hoeven had been talking to both sides in Canada and simply repeated what they claimed happened. It’s not like he made this up for no reason.

Had the pipeline been approved seven years ago, it would be complete and oil would be flowing from Canada, through North Dakota, to the Gulf Coast. It would have contributed to our national defense and helped further wean us from Saudi’s grip.

Now, we will have none of that, at least for a while.

Written by: Chris Faulkner, Breitling Energy CEO, Chairman and author of “The Fracking Truth: America’s Energy Revolution”

OPEC’s December Meeting Will Have To Address Financial Woes

OPEC’s dominos keep falling with nary a hint of a budge from the policy that sent oil prices tumbling last year, and now, OPEC’s internal discord is at its highest level since 2011. That’s when the 12-member cartel bickered all year before Saudi Arabia obviously played their strong card, forcing their 30.3 million barrel per day output plan. Unfortunately, the quota still stands, but really it doesn’t, because none of the members adhere to it.

Saudi got hit in the face with a brutal slap last week when Standard and Poor’s downgraded the country’s sovereign debt due to low oil prices. Judging from Saudi’s quick reaction, blasting S&P for “rushing to judgment,” the news apparently came as a surprise and was obviously unwelcome. The ripple effect could lead to gradual re-pricing at lower levels.

When OPEC convenes December 4 in Vienna, not only will Indonesia take a seat at the table, but there will likely be more behind the scene scowls rather than smiles this time around. Considering how each (current) member nation is lining up, it appears to be more of a David and Goliath battle between the haves and the have-not’s.

Saudi Arabia, the United Arab Emirates, Qatar and Kuwait are all on the side of continuing status-quo, obviously allowing the financial chips to fall as they will, relying on their mammoth war chests to weather their self-created storm.

Iran, Venezuela, Nigeria and Algeria are all clamoring for a price floor somewhere in the $70s and a return to a quota more reminiscent of the 1980’s, when a number had more meaning than it does today.

Ecuator, Angola, Libya and Iraq are quieter about the situation, but obviously would relish higher prices and any attempt to take production off the market. Libya seems to be the only member who periodically contributes to lower production when rebel fighting affects oil fields and ports, as it did again this week with the closing of the Zueitina Port, threatening most of its 430,000 barrel per day shipments.

Although not an OPEC member, Egypt’s financial woes continue, as the nation reported burning through $16 billion of financing it received from its Gulf supporters. With only $12 billion remaining in surplus, at the current burn rate, observers are wondering if an Egyptian default could be around the corner, and whether its Gulf allies can provide more, given their own dismal outlooks.

Next, enter Russia and their new post-Soviet high output of nearly 11 million barrels of oil per day. Obviously, Vladimir Putin believes the best way to make more money is to oversupply the market, not the opposite.

This is almost like a runaway train to nowhere. Every man for himself. The Saudi objective to tap down US shale has already had its impact, and from here, there’s not much more affect they can have. Shale has been more than validated, and once prices go back up around $70, output in the US will pick up briskly. Saudi should accept the fact that is not going to change.

The best solution, if there is a diplomatic one, would be for OPEC and Russia to agree to throttle production a small amount, sending prices back into the mid-seventies. That could be done virtually overnight. Simply an announcement would move the market dramatically. If OPEC would simply hold to its 2011 quota and Russia would return to its previous output of approximately 10 million barrels per day, that would remove nearly 2 million barrels of daily supply, certainly enough to move the market.

Instead, Saudi Arabia has virtually single-handedly positioned half of OPEC on the brink of financial disaster, they are spending cash that took them decades to amass and seem determined not to make the one move that could return oil prices to a level that works well for everyone.

It just makes no sense, and appears to be getting worse.

Written by: Chris Faulkner, Breitling Energy CEO, Chairman and author of “The Fracking Truth: America’s Energy Revolution”

Breitling Energy Corporation Announces Spud of Sellers ‘60’ #1 Well

 Breitling Energy Corporation Announces Spud of Sellers ‘60’ #1 Well Dallas, TX – October 1, 2015 – Breitling Energy Corporation (OTCBB:BECC) (the “Company”) announces drilling operations on its fourth well under the previously announced Farmout Agreement in the Permian Basin of West Texas. The Sellers ‘60’ #1 spud on September 21, 2015 and is currently drilling through approximately 3,000 feet. The well is targeting a total depth of approximately 9,000 vertical feet in early October under normal field operations.

The Company anticipates intersecting similar pay zones as its other three wells on the acreage: the #1 Hoppe ‘63’, the Parramore #1 and the Sellers ‘66’ #1, all of which were drilled to a similar depth in 2014 and early 2015. Potential pay zones anticipated include the Albaugh and Middle Wolfcamp, Triple M Credo, Cisco sands, Strawn Lime and the Cline shale.  

“According to Baker Hughes, there were 838 rigs drilling in North America and 250 are in the Permian Basin. I’m proud that one of those belongs to Breitling Energy,” said Chris Faulkner, Company Chairman and CEO. “We firmly believe in the future of American shale, and there’s no better place to be, in our opinion, than the Permian. The economics work for us at today’s price levels so we’re drilling.”

The Company is still on track to drill eight wells on its Permian Basin lease to earnnout the total acreage under the Farmout Agreement. Based on the results of the initial eight wells, the Company may opt to drill out the acreage using the most successful wells to guide its future drilling locations.

View Breitling Energy’s Corporate Presentation here .
 

FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements, including information about management’s view of the Company’s future expectations, plans and prospects. In particular, when used in the preceding discussion, the words “believes,” “expects,” “intends,” “plans,” “anticipates,” or “may,” and similar conditional expressions are intended to identify forward-looking statements. Any statements made in this press release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of the Company, its subsidiaries and concepts to be materially different than those expressed or implied in such statements. Unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included in this press release are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company undertakes no obligation to update these statements after the date of this press release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for or released by the Company.

 

ABOUT BREITLING ENERGY CORPORATION
Breitling Energy Corporation is a growing U.S. energy company based in Dallas, Texas, engaged in the exploration and development of high-probability, lower risk onshore oil and gas properties. The Company’s dual-focused growth strategy primarily relies on leveraging management’s technical and operations expertise to grow through the drill-bit, while also growing its base of non-operating working interests and royalty interests. Breitling Energy’s oil and gas operations are focused primarily in the Permian Basin of Texas and the Mississippi oil window of southern Kansas and northern Oklahoma, with non-operating investments in Texas, North Dakota, Oklahoma and Mississippi. Breitling Energy Corporation is traded over the counter under the ticker symbol: BECC. Additional information is available at www.breitlingenergy.com.

CONTACT:

Thomas Miller, VP of Communications, Breitling Energy, 214-716-2600
Gil Steedley, VP of Capital Markets, Breitling Energy, 214-716-2600

 

SOURCE Breitling Energy Corporation

Has the oil and gas slump hit bottom? Analysts take a ‘wait and see’ approach

After 29 straight weeks of declines, the rig count for U.S. oil and gas operations has gone up for two weeks in a row.

While the reversal is offering some hope the industry’s downturn since last November has finally hit bottom, energy analysts aren’t ready to start popping champagne corks.

“There are just too many variables that can take it higher or lower,” said Tom Petrie, chairman of Petrie Partners, a Denver-based investment banking firm that offers financial advice to the oil and gas industry. “It takes more than a few rigs being put back on to give me conviction that we couldn’t just see a little pause and then another trip down.”

The closely watched rig count for oil and gas fields was up by one Friday in the weekly survey by the Houston-based oil field service company Baker Hughes, inching up from 862 to 863. That came after Baker Hughes reported a net plus of three the previous week.

Oil rigs alone were up five last Friday and 12 the week before.

That snapped a 29-week losing streak, dating back to the decision by the Organization Petroleum Exporting Countries last Thanksgiving to not cut crude production.

OPEC’s decision kept the supply of worldwide oil pumping, resulting in a dramatic drop in global oil and gasoline prices which in turn led North American producers to lose money, cut back production and lay off thousands of employees.

OPEC’s move was interpreted — at least in part — as a way to significantly hurt U.S. shale producers, whose hydraulic fracturing and horizontal drilling techniques challenged Persian Gulf oil giants such as Saudi Arabia for worldwide market share.

While the move into positive territory for rig counts the past two weeks has been small, it’s led some analysts to think the worst may be over for North American producers.

Morgan Stanley Research analyst Ole Slorer got Wall Street buzzing Thursday after releasing a report citing the U.S. rig count reversal as a sign the global oil market may be stabilizing:

Has the oil slump hit bottom

That could mean, the report said, that the long-term price of Brent crude — the widely accepted international price — will reach $90 a barrel. Brent futures were trading at $58.76 on Friday.

“From here, we see a very attractive risk-reward on a 6-9 month view,” Slorer’s report to investors said, adding that “green shoots (are) becoming visible.”

That would be welcome news for the oil and gas industry in the United States.

“We think the worst of the danger is behind us,” said Chris Faulkner, CEO of Breitling Energy, pointing out that since the oil crunch hit nearly eight months ago, U.S. shale companies have become more efficient and are now well-positioned to make money even though oil prices are lower.

“Production numbers are up and Saudi Arabia is not winning the game,” Faulkner said.

While U.S. rig counts were up one on Friday, the number in Canada was up 30.

Dan Steffens, energy analyst and president of the Houston-based Energy Prospectus Group, said the oil slump “probably has bottomed out,” but doesn’t expect to see North American producers suddenly going back to drilling lots of wells right away.

“All these big companies have set their capital budgets at the first of the year,” Steffens told Watchdog.org. “They don’t change that budget unless there’s some sort of drastic change in commodity prices. They’re pretty much locked in.”

Petrie said there are simply too many factors on the economic and geopolitical scene to make him confident enough to declare the worst is over.

“I could come up with scenarios that this is the case, (but) I could come up with plenty of others where this is just a head fake,” Petrie said in a telephone interview.

Part of the uncertainty revolves around a potential nuclear deal with Iran, a member of OPEC that has seen its oil production slashed in recent years due to economic sanctions.

But if a deal is finalized, Iran will insist on getting those sanctions lifted quickly. Should that happen, more downward pressure would be applied on keeping oil prices low.

“We’d have to factor in another million barrels a day coming on over the next year,” Petrie said. “Not immediately, but they have 30 million (barrels) in storage. If they can get an agreement they can start selling some of that oil. If you’re thinking about stepping up your drilling … you’re not going to act on it until they see what happens with Iran.”

Other potential wild cards include last week’s meltdown in the Chinese stock market and the debt crisis in Greece, although Steffens downplays their importance.

“This dip in the Chinese market,” Steffens said, “well, stocks don’t use oil and gas. Cars do. I don’t see that being a big thing. And I sure don’t see this deal with Greece as a big crush in (oil) demand anywhere. They’re such a small part of the European economy.”

Emerging markets investment guru Mark Mobius pronounced Thursday that “China is still growing at a good pace,” an encouraging sign for oil and gas producers who want to keep seeing demand from the world’s second-largest economy growing.

“Mobius may be right, but that doesn’t mean it’s up, up and away from here,” Petrie said. “That’s why you’re getting a mealy mouthed answer from me because I feel mealy mouthed about it.”

Written by: Rob Nikolewski, National Energy Correspondent for Watchdog.org

View Full Article Here

Iranian Sanctions Could Have a Devastating Impact; Not Just With Uranium

The elastic Iranian nuclear sanctions deadline has passed once again with the umpteenth extension.  Like to so many other agenda-driven initiatives the past six years, the Administration’s spotlight is now focused on welcoming Iran back into the global marketplace, at a price, and it appears nothing will deter this, like nothing stopped so many other self-initiated programs throughout this presidency.

A recent headline pretty much sums up not only the negotiations, but the pattern through which this President has been forcing his agenda:  “What Happens In Vienna Stays In Vienna.”  Didn’t we just see something similar during the Pacific trade talks?  Now, John Kerry sits behind airtight doors with a virtual blank-check mandate to make this deal happen, whenever; however.

Iran Sanctions Will Have Devastating AffectWhat has happened to America?

One outcome of the negotiations, aside from Iran being able to openly resume their nuclear program, will be millions of barrels of Iranian oil flooding an already over-saturated world crude market.  This could have disastrous consequences.

We recently witnessed a Black Monday in oil prices, as a single-day 8-percent drop left markets reeling.  A triad of bad news seemed to tip the scales downward, likely in a move that may not reverse quickly.  In addition Greece imploding and Chinese stocks crashing, reports of a possible sanctions agreement also plagued nervous commodity trading pits.

President Obama has shown no strategic regard for America’s energy policy.  Putting Iran in a position to dump oil on the market will be bad for the entire ecosystem.  Thanks to America’s renaissance due to hydraulic fracturing, the world has more than enough oil to meet current and future demands.  Middle Eastern countries are hemorrhaging cash from low oil prices.  Smaller producing nations who don’t have financial stockpiles could face future defaults if prices don’t stabilize soon.  American producers who don’t have margins at $50 oil could finally succumb to this latest downturn.  Russia’s economy continues to flounder, as anything below at least $100 means pain for Putin.

Iran cannot be trusted with nuclear weapons.  Period.  Even the strangest of bedfellows, Saudi Arabia and Israel, agree on that.  Nor can it be trusted that whatever agreement is finally reached will actually be enforced.  History tells us that.

While it appears we are on the doorstep of allowing yet another rogue nation restored trade and diplomatic status, this deal could have immediate and potentially catastrophic consequences on the energy sector.

Written by: Chris Faulkner, CEO of Breitling Energy Corporation and author of the recent book, “The Fracking Truth.” He is also the producer of the documentary, “Breaking Free: The Shale Rock Revolution.”