Zombie Drillers – small dead animals

A Halloween Horror Story For Oil Markets: Bankrupt oil companies that continue to drill…

10 Replies to “Zombie Drillers”

Lenders were too greedy and took a hit. Shutting down bankrupt companies isn’t going to help anyone as oil is readily produced at current prices. Pipelines and decreased imports is what the North American economy needs.

Quite right, but more than that. The article is abysmally stupid as it stands. All businesses when going bankrupt run out the string through ‘going out of business’ sales and the like. The Chapter 11 provisions about which McDonald wails are the same ones used to avert bankruptcy by a host of US financial institutions in 2008. They were the same provisions used to bail out General Motors in 2008. For some, they averted ruin then, and for some bankrupt oil companies, they will avert ruin now. Is McDonald telling us he opposes all bankruptcy law that allows a distressed company to get its affairs in order? Or is he just opposed to distressed oil companies? In the case of GM, given the respective size of company activity, GM was and is essentially a retirement plan with a sideline in car manufacturing.
The difference is that financial institutions produce nothing in terms of goods; oil companies do. Also note that my comment here is NOT a justification for Chapter 11 provisions. This is about a dimwit finance professor who seems to want law applied on a discriminatory basis.

Despite my own healthy investments in oil … I have to say that on a global scale, I say BRAVO to zombie drillers ! Why ? Because their continued drilling and production is having the exact opposite effect expected and desired by Saudi Arabia who has maximized their output with the intent of destroying the oil shale production. And as a further bonus … the massive flood of oil into the marketplace is a daily mockery of all the “peak oil” retards who said we would “run out of oil” by the year 2000. Hello ? Jimmy Carter? Al Gore?

“The bankrupt firms are producing roughly 1 million bpd of oil – about the same level of production they had before bankruptcy. Those zombie firms represent around 5 percent of U.S. production ”
One or both of these numbers are dead wrong. They imply a U.S. production of 20 million bpd, which is well over double the actual number.

To agree with everyone else – why would a well stop producing because of bankruptcy. Assuredly the marginal cost of production is considerably less than the revenue from production. If the wells were auctioned in a bankruptcy sale, they likely wouldn’t miss a minute of production. Does this guy have one iota of business education?

Your comments are inconsistent with what ‘peak oil’ is actually about.
http://peakoil.com/what-is-peak-oil
It didn’t make claims that ‘we would “run out of oil” by the year 2000.’

John … I’m pretty sure Kenji knows full well what “peak Oil” means…the question is do, suzuk and Gore know..?/ Likely they do, but tend to exploit LIV with innuendo suggesting it is in fact the “end of Oil” ….most typical of ideologuges, scumbags AKA New Democrats and Liberals.
I am loving the fact that Saudi is Hurting…this whole deal is back firing in their arrogant faces….looks totally good on them. Couple more years and maybe Saudi Aramco will be seeking creditor protection….followed immediately by a revolution to depose the Family Saud as they will not be able to fulfill their “welfare” obligations to their citizens….99% of whom are well paid by the Govt and do ZERO Work..