It's been an interesting ride these last few weeks. Here is what I have learned.
1. Colombia is a great place to drill for oil and gas. The Llanos Basin has awesome reserve potential and infrastructure. Royalty rates range from 8% and linearly increase to 25% once you are making over 600,000 barrels of oil per day. 33% corporate tax rate and easy repatriation. Ex PDVESA folks and Canadians are getting rich there, and US independent players largely absent.
2. China making inroads in Argentina oil and gas. Why would they work in a shitty fiscal environment? I think they have learned from brother Hugo. Play to the despot's weaknesses. They loaned billions to him secured by future delivery of hydrocarbons, then sent in field techs and engineers to "help" them operate the fields as they get nationalized. Do you think China actually expects to get repaid on their debt? Hell no. They want the hydrocarbon. Guess what? No taxes or takings on debt repayment. Fiscal regime be damned. Are they thinking the Kirchener tag team has similar traits in Argentina?
3. Real potential winner in the Russia/US/China triangle is India. They emerge as the easy folks to do business with. Too much business between Russia and Iran and China and Iran to teeth up any UN sanctions. UN oversight is trumped if countries are doing billions of dollars of business with one another.
4. I heard a great talk from an unnamed GOM jack up operator. They are no longer going to be a GOM jack up operator. They are going to be a Global jack up operator. Previously happy with the GOM, they perceive the political risk of drilling in the US GOM as much to high today to expose their whole business. When asked when, in the global history of the oilpatch, an accident was met with such a devastating response as the moratorium, the answer was "Never. Which is why the US GOM is now considered politically unstable". Rational view from someone exposing 40-60k per day these days.
5. Frac costs have tripled in the last few months. God Damn It!
6. Spammers take over when I am away.
7. The latest Unconventional Heat Index shows the Eagle Ford still in the lead, with Niobrara and Granite Wash following closely behind.