Why is the US oil industry sitting on a stockpile of unused drilling license?

[justoneman]

which has nothing to do with the fact that you're trying really hard to convince us all that the oil industry (I guess all over the world) is too stupid to find more oil or up production.

what you should do is add more oil stocks to your portfolio. they will make a mint during this era.

It has everything to do with US increased oil productipn. Are you bothered by $4.60 gasoline?

 

[CaughtInThe]

It has everything to do with US increased oil productipn. Are you bothered by $4.60 gasoline?

You can continue to try to change the subject but what you've done is try to convince all of us here that oil companies, I guess around the world, are so ignorant that they can't find oil or up production.

Nobody's falling for that bullshit. Or I should say no one with a brain is falling for that bullshit.

 

[Chase Morgan]

Oh my, oil just slipped into a BEAR MARKET...

https://www.marketwatch.com/story/o...early-14-year-highs-11647360885?mod=home-page

Many pathetic little righties will be so, so very sad...

 

[CaughtInThe]

Oh my, oil just slipped into a BEAR MARKET...

https://www.marketwatch.com/story/o...early-14-year-highs-11647360885?mod=home-page

Many pathetic little righties will be so, so very sad...

interesting

 

[justoneman]

Oh my, oil just slipped into a BEAR MARKET...

https://www.marketwatch.com/story/o...early-14-year-highs-11647360885?mod=home-page

Many pathetic little righties will be so, so very sad...

Bear market. It's on stock grouping not a market. All it is is correction to the spike. Oil is still right in line with the pricing upward trend.

 

[Tbird19482]

The American tax payer is getting screwed by not selling new land leases. That is less revenue. Biden's policies are hurting us in every direction.

Can you or anybody answer a question for me?
Isn't there oil on private land?
it seems everybody is so up set about Biden suspending the granting of leases on Federal land that the courts overruled almost as fast as He signed the EO what about the 98.2% of the state of TX and the 98.2% of OK that are not Federal lands , isn't there any oil on all that land?
of all those EO's that Biden signed about the only ones left that are still in effect are the ban on Drilling in National wild life preserves and stopping the construction of the XL extension
SO again isn't there any oil on any land except Federal lands?
from the way everybody is crying about Biden suspending the granting of leases of federal lands it doesn't sound like it
Have a nice day

 

[Integrityrespec]

The UAE has agreed to open the spigot......apparently in response to Biden's request. Guess Fox neglected to report it.

U.A.E. Pushes for Increased OPEC Oil Production Amid Russian War on Ukraine

The move marks a departure for the Persian Gulf producer after months of standing with Saudi Arabia and Russia.

www.wsj.com

Oil Prices Down After UAE Pledges to Increase Production

An OPEC production increase represents the best chance of quickly restoring normal oil prices.

nationalinterest.org

We will see how much production increases. This sounds more like there may be some increase by some countries. Why doesn't Joe forget his war on fossil fuels and start telling US companies to pump more and not worry about his stupid promise to kill the oil industry?

 

[Integrityrespec]

Can you or anybody answer a question for me?
Isn't there oil on private land?
it seems everybody is so up set about Biden suspending the granting of leases on Federal land that the courts overruled almost as fast as He signed the EO what about the 98.2% of the state of TX and the 98.2% of OK that are not Federal lands , isn't there any oil on all that land?
of all those EO's that Biden signed about the only ones left that are still in effect are the ban on Drilling in National wild life preserves and stopping the construction of the XL extension
SO again isn't there any oil on any land except Federal lands?
from the way everybody is crying about Biden suspending the granting of leases of federal lands it doesn't sound like it
Have a nice day

Production depends on lots of factors. Leases, permit, exploration, drilling, shipping, refining. Cutting oil leases and slowing the issuing of permits to actually drill are what is harming the production at the current time. That is added in to the promise by Biden to kill the industry. Why would they spend money to invest in more drilling on the short term to help Joe when they know he will repay them with more restrictions as soon as this problem is over? Joe caused this, the oil companies don't want to bail him out and you can't blame them.

 

[mrjurrs]

It's not like they don't use some leases and make gobs of money.

So when they lie and say that it's about money it's not about money because they would make more money.

So all you guys that think that government is the problem, turn your focus to the oil companies. There are the ones balking. They didn't do it under the Trump administration and they're still not doing it under the Biden administration.

They have tons of leases. They simply don't use them.

Increasing supply will diminish their per barrel profit margin. They're true Americans, unless they can make a penny more of of us.

 

[Callen]

We will see how much production increases. This sounds more like there may be some increase by some countries. Why doesn't Joe forget his war on fossil fuels and start telling US companies to pump more and not worry about his stupid promise to kill the oil industry?

Do you suggest he uses the DFA to force them? They can resume additional drilling whenever they want to but they don't want to use their money that way. They want to buy back shares and increase shareholder value.

 

[Callen]

Production depends on lots of factors. Leases, permit, exploration, drilling, shipping, refining. Cutting oil leases and slowing the issuing of permits to actually drill are what is harming the production at the current time. That is added in to the promise by Biden to kill the industry. Why would they spend money to invest in more drilling on the short term to help Joe when they know he will repay them with more restrictions as soon as this problem is over? Joe caused this, the oil companies don't want to bail him out and you can't blame them.

Not true. Do some real homework and stop listening to right wing talking points.

 

[Integrityrespec]

Increasing supply will diminish their per barrel profit margin. They're true Americans, unless they can make a penny more of of us.

And what is Biden? He doesn't act like a true American. He'd rather buy oil from Putin, let Putin use his pipeline and cancel the US pipeline and make it harder and more expensive for US companies to drill. He did reduce the number of leases, from 37,000 to 9,000 that were available. BTW, a lease doesn't mean there is any oil in the ground there, they have to have a permit to drill to explore to see if there is anything there. Also, the not so true american Joe, is dealing with Venezuela for oil, Iran for oil, and letting Russia be the lead negotiator in the new Iran JCPOA. Not to mention the fact that the leader of the free world, Joe Biden is standing by and letting women and children be murdered and cities leveled while he plays footsie with Putin.
He criticizes the oil companies, he has criticized the Saudis and UAE and then went begging for oil. Joe Biden is a real turd.

 

[diz]

Can you explain to the audience the difference between a LEASE on federal land and a PERMIT on federal land?

Sure, I thought I had explained this a few times already. A lease is an option to drill. A contract between the owner of the mineral rights and the oil company.

On federal lands generally the owner of the mineral rights is the federal government. On private lands the owner of the mineral rights may or may not be the surface owner. It’s not unusual in state like TX with along history of oil and gas development for the mineral rights to have been separated from the surface land rights at some point in the past.

So, if an oil company has some interest in drilling an area it may secure a lease or even an option to lease. A least typically pays a “lease bonus” or upfront cash payment and and if a well is drilled a “royalty” which is a percent of the value of the oil and gas produced to the owner of the minerals. You may get a 4 or 5 year lease period sometimes with an option to renew with an additional payment.

Once you have a lease, you may or may not decide to get a permit to drill on the lease. A permit generally requires a specific well plan (e.g., we’re going to drill to this depth and this many lateral feet, etc.) It is generally issued by some state federal agency what ensure the plan is compliant with all the relevant laws. In some cases to drill a well you may need more than one permit (like a land use permit from the locality, and a drilling permit from the state), and of course the pipelines, treating and processing assets you will rely upon need their relevant permits from their relevant agencies too.

Anyway, a permit requires a more specific plan than a lease, and a lease is necessary to get a permit, but even once a well is permitted it is not necessarily drilled. Everything, including the price of the oil and gas and the capital all needs to come together to support the well economics. Sometimes permits are taken in hopes the rest will work out and it doesn’t. Keep in mind a permit is in the thousands or tens of thousand of dollars to obtain and a well may be as much as $10 million to drill and frack. Companies generally pursue leases and permits to keep an inventory on hand but only drill as much as their capital budget (and individual well economic analysis) allows.

But the truth of this should be obvious: any federal, state or local government or regulatory effort to restrict leases and permits and/or the ability to raise capital will all other things being equal result in less domestic supply. The only case where this is not true is when they do something like ban fracking in Vermont where there is essentially no oil anyway. But banning fracking in New York or California or federal lands in New Mexico or Texas clearly and obviously eliminates some prospects that some company otherwise would have leased, permitted and eventually drilled. You don’t get more supply of something by limiting the ability to supply that thing or making it more expensive. This is true of anything, not just oil and gas.

 

[BlueTex]

Sure, I thought I had explained this a few times already. A lease is an option to drill. A contract between the owner of the mineral rights and the oil company.

On federal lands generally the owner of the mineral rights is the federal government. On private lands the owner of the mineral rights may or may not be the surface owner. It’s not unusual in state like TX with along history of oil and gas development for the mineral rights to have been separated from the surface land rights at some point in the past.

So, if an oil company has some interest in drilling an area it may secure a lease or even an option to lease. A least typically pays a “lease bonus” or upfront cash payment and and if a well is drilled a “royalty” which is a percent of the value of the oil and gas produced to the owner of the minerals. You may get a 4 or 5 year lease period sometimes with an option to renew with an additional payment.

Once you have a lease, you may or may not decide to get a permit to drill on the lease. A permit generally requires a specific well plan (e.g., we’re going to drill to this depth and this many lateral feet, etc.) It is generally issued by some state federal agency what ensure the plan is compliant with all the relevant laws. In some cases to drill a well you may need more than one permit (like a land use permit from the locality, and a drilling permit from the state), and of course the pipelines, treating and processing assets you will rely upon need their relevant permits from their relevant agencies too.

Anyway, a permit requires a more specific plan than a lease, and a lease is necessary to get a permit, but even once a well is permitted it is not necessarily drilled. Everything, including the price of the oil and gas and the capital all needs to come together to support the well economics. Sometimes permits are taken in hopes the rest will work out and it doesn’t. Keep in mind a permit is in the thousands or tens of thousand of dollars to obtain and a well may be as much as $10 million to drill and frack. Companies generally pursue leases and permits to keep an inventory on hand but only drill as much as their capital budget (and individual well economic analysis) allows.

But the truth of this should be obvious: any federal, state or local government or regulatory effort to restrict leases and permits and/or the ability to raise capital will all other things being equal result in less domestic supply. The only case where this is not true is when they do something like ban fracking in Vermont where there is essentially no oil anyway. But banning fracking in New York or California or federal lands in New Mexico or Texas clearly and obviously eliminates some prospects that some company otherwise would have leased, permitted and eventually drilled. You don’t get more supply of something by limiting the ability to supply that thing or making it more expensive. This is true of anything, not just oil and gas.

And why are royalties on federal lands so low?

 

[diz]

which has nothing to do with the fact that you're trying really hard to convince us all that the oil industry (I guess all over the world) is too stupid to find more oil or up production.

what you should do is add more oil stocks to your portfolio. they will make a mint during this era.

Yes, this is one of the consequences of the Democrats limiting the ability to add new oil supply. When supply gets tight companies with existing wells (and Putin) make much more money.

People like you who have probably been advocating policies that inhibit domestic development should feel somewhat responsible. The oil companies, at least some of them anyway, would have liked to get more leases and would have liked to drill more wells. But Democrats stopped them.

 

[justoneman]

And why are royalties on federal lands so low?

View attachment 67380369

Clearly none of these federal lands exist in California, Colorado, Montana, New Mexico, North Dakota, Oklahoma, Texas, Utah, Wyoming since they are listed in your chart as all much higher percentages. Clearly there is something fishy about your chart.

 

[CaughtInThe]

Yes, this is one of the consequences of the Democrats limiting the ability to add new oil supply. When supply gets tight companies with existing wells (and Putin) make much more money.

People like you who have probably been advocating policies that inhibit domestic development should feel somewhat responsible. The oil companies, at least some of them anyway, would have liked to get more leases and would have liked to drill more wells. But Democrats stopped them.

dude, it's not gonna work. you can't convince people that the oil industry is a bunch of idiots that don't know how to find/pump oil or increase/decrease production.

 

[diz]

And why are royalties on federal lands so low?

View attachment 67380369

I believe the leases on federal lands are set by law whereas on private lands they are negotiated.

In really good prospect areas like the Permian the right to drill is very valuable so royalties tend to get bid up. If you are trying to negotiate a royalty on goat pasture you will get exactly 0.0%.

The Feds auction off their leases in periodic lease sales. At least when Biden is not ignoring the law to cancel them. If you think their royalties are so attractive I suggest you show up at an auction and outbid everyone else. Indeed, if a federal lease is highly prospective I would expect them to capture a very high lease bonus in the lease auction, which would be higher if the royalty is lower and vice versa. In other words, if they raise the royalty people would bid less for the lease.

Anyway, these statistics are not necessarily “apples to apples”. The processes and other terms are different.

But if you’re convinced federal leases are such an awesome deal nothing prevents you from showing up at a lease sale and putting your money where your bullshit argument is. The feds are good about conducting a fair process anyway. When Biden isn’t illegally shutting down the process by fiat anyway.

 

[diz]

dude, it's not gonna work. you can't convince people that the oil industry is a bunch of idiots that don't know how to find/pump oil or increase/decrease production.

Well, nothing you have said convinces me oil companies are bigger idiots than their critics on the left when it comes to oil and gas development. I tend to be highly convinced of the exact opposite the more you talk. But if you think you’ve got it figured out nothing stops you from taking leases and getting in on the action. I’d be happy to sell you some leases if you like. I suggest you starting someplace like Vermont where the idiot oil companies are least likely to get in your way and enlightened Democrat policies will pave the way to reasonable development. I bet a super genius like yourself could lease most of the state before anyone was on to your master plan. Then you can not drill those leases and watch the profits roll in.

Cause if there’s anything we’ve learned in this thread from internet geniuses such as yourself it’s that Democrats don’t hamper oil and gas development, and there’s big profits to be made in paying for leases and not drilling them.

 

[CaughtInThe]

Well, nothing you have said convinces me oil companies are bigger idiots than their critics on the left when it comes to oil and gas development. I tend to be highly convinced of the exact opposite the more you talk. But if you think you’ve got it figured out nothing stops you from taking leases and getting in on the action. I’d be happy to sell you some leases if you like. I suggest you starting someplace like Vermont where the idiot oil companies are least likely to get in your way and enlightened Democrat policies will pave the way to reasonable development. I bet a super genius like yourself could lease most of the state before anyone was on to your master plan. Then you can not drill those leases and watch the profits roll in.

Cause if there’s anything we’ve learned in this thread from internet geniuses such as yourself it’s that Democrats don’t hamper oil and gas development, and there’s big profits to be made in paying for leases and not drilling them.

Again, you can keep on trying to convince people that the oil companies are idiots and don't know where the oil is and don't know where to drill and can't up or lower their production but anyone with a brain is not going to buy that BS.

We all see that you're simply trying to shift the blame away from them as they make gobs during this crisis.

 

[BlueTex]

Clearly none of these federal lands exist in California, Colorado, Montana, New Mexico, North Dakota, Oklahoma, Texas, Utah, Wyoming since they are listed in your chart as all much higher percentages. Clearly there is something fishy about your chart.

The chart shows three types of royalties: royalties for STATE land, royalties for PRIVATE land and royalties for FEDERAL land..

 

[BlueTex]

I believe the leases on federal lands are set by law whereas on private lands they are negotiated.

In really good prospect areas like the Permian the right to drill is very valuable so royalties tend to get bid up. If you are trying to negotiate a royalty on goat pasture you will get exactly 0.0%.

The Feds auction off their leases in periodic lease sales. At least when Biden is not ignoring the law to cancel them. If you think their royalties are so attractive I suggest you show up at an auction and outbid everyone else. Indeed, if a federal lease is highly prospective I would expect them to capture a very high lease bonus in the lease auction, which would be higher if the royalty is lower and vice versa. In other words, if they raise the royalty people would bid less for the lease.

Anyway, these statistics are not necessarily “apples to apples”. The processes and other terms are different.

But if you’re convinced federal leases are such an awesome deal nothing prevents you from showing up at a lease sale and putting your money where your bullshit argument is. The feds are good about conducting a fair process anyway. When Biden isn’t illegally shutting down the process by fiat anyway.

LMAO.. There are three types of royalties: royalties for STATE land, royalties for PRIVATE land and royalties for FEDERAL land.. There is NO a question which type of land has the lowest royalties.

 

[mrjurrs]

And what is Biden? He doesn't act like a true American. He'd rather buy oil from Putin, let Putin use his pipeline and cancel the US pipeline and make it harder and more expensive for US companies to drill. He did reduce the number of leases, from 37,000 to 9,000 that were available. BTW, a lease doesn't mean there is any oil in the ground there, they have to have a permit to drill to explore to see if there is anything there. Also, the not so true american Joe, is dealing with Venezuela for oil, Iran for oil, and letting Russia be the lead negotiator in the new Iran JCPOA. Not to mention the fact that the leader of the free world, Joe Biden is standing by and letting women and children be murdered and cities leveled while he plays footsie with Putin.
He criticizes the oil companies, he has criticized the Saudis and UAE and then went begging for oil. Joe Biden is a real turd.

Well that's an inaccurate description of the current situation.

 

[diz]

LMAO.. There are three types of royalties: royalties for STATE land, royalties for PRIVATE land and royalties for FEDERAL land.. There is NO a question which type of land has the lowest royalties.

It really seems pointless to explain things to you. I detect no honest intention on your part to become better educated and informed.

 

[BlueTex]

It really seems pointless to explain things to you. I detect no honest intention on your part to become better educated and informed.

Is the chart an honest depiction of the royalty rates in federal, state and private lands?