Newfield Energy will merge with Encana. As usual everyone is touting this as a win-win. In fact, it is another sign of how sick these companies really are. Don\u2019t be fooled. They are not making a return on the huge chunks of money they are spending. It is the oil equivalent of kiting checks. You drill more wells to get an income stream going to cover the bills from those last money losers. This is a SCOOP company and the \u201cscoop\u201d is that they are not making a profit.\u00a0 Encana, for their part, hopes to merge and use the assets of both to entice new money to invest in even more money losing projects.\u00a0 $70 oil won\u2019t save them, nor will $80 oil so long as 80% of the production from these so-called \u201coil wells\u201d is natural gas selling for $2 or so per MCF, when the pipeline isn\u2019t so full it cannot take any more gas.<\/p>\n
https:\/\/www.wsj.com\/articles\/encana-to-buy-newfield-exploration-in-a-stock-swap-1541071712<\/a><\/p>\n Beware any company that touts their \u201coil-equivalent\u201d reserves because that simply means they are converting their \u201cgas\u201d to \u201coil\u201d via the BTU content NOT the price.\u00a0 By BTU, the energy in an MCF of gas is equal to about one-tenth or one-twelfths that of a barrel of oil. But the ratio of PRICE between oil and gas is 20 to 25 to 1.<\/p>\n These wells then produce huge quantities of salt water, which costs more and more to dispose of as the well ages and prices increase with each new earthquake reducing the capacity of the disposal industry.<\/p>\n Newfield-Encana merger is a symptom of a sick industry, not a healthy one. The \u201ctrades\u201d like Oil & Gas Investor<\/strong> continue to tout this as great news but the truth is Wall Street gets to make fees from these companies when they are created, when they finance, when they sell, and when the go bankrupt. The managers of these companies get huge golden parachutes. The investors? They get screwed. The mineral owners? They get cheated\u2026<\/p>\n","protected":false},"excerpt":{"rendered":" Newfield Energy will merge with Encana. As usual everyone is touting this as a win-win. In fact, it is another sign of how sick these companies really are. Don\u2019t be fooled. They are not making a return on the huge chunks of money they are spending. It is the oil equivalent of kiting checks. You drill more wells\u2026 Read More »<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-579","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/posts\/579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/comments?post=579"}],"version-history":[{"count":1,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/posts\/579\/revisions"}],"predecessor-version":[{"id":580,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/posts\/579\/revisions\/580"}],"wp:attachment":[{"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/media?parent=579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/categories?post=579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/tags?post=579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}