5 thoughts on “WSJ Permian Overview Video

  1. thanks TPLTblogger, that was good refresher. Mostly I wanted to give a big thanks for the website which help keep me up to date with the current fiasco. You do us a great service. I do appreciate your efforts.

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  2. Talked to a pretty senior high yield sales guy yesterday and he mentioned that the usual buyers don’t have a lot of interest in O&G lately, especially the distressed situations which are often chapter 22s that barely got out of 2015 alive. He is of the sentiment that the fracking boom was made possible by low interest rates and quantitative easing and he has his doubts that it is viable long-term when oil isn’t near $100. Made me a little nervous as a holder of TPL. What does everyone else think?

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    • EH,
      I have read similar reports and that opinion is not new. I am by no means an expert here, but in this guessing game my feelings are that fracking as a group does boom and bust. Probably strongly related to both cost of capital and price of oil. However I think the situation for any specific outfit is a bit less clear as any slowdown in production could boost oil prices for those remaining. I also think that Majors have taken a larger interest in the Permian and they have the resources to take a longer more sustainable view than the smaller outfits. The royalty structure of the Trust is IMO a good model in this world. BTW, we are still in a pretty low interest rate world and the risks to the down side seems as likely as going higher. Overall, I still think TPL is in a good position.

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