Q2 Oil Pricing Results

Politics
1

TO ALL:

The following spreadsheet shows the relationship to my January oil price projection vs actual pricing.

As you can see, the Q1 WTI spot pricing closely follows the mid range projection that was made by me in January, 2015. The Q2 WTI pricing more approximates the High Range Average projected in January, 2015.

The Q2 SemCrude actual price paid in Q2 is between High and Mid Range Average for Q2 projection.

You might want to look at each months actual price paid to you each month and use that as a percentage of WTI or SemCrude pricing and use that factor to make a somewhat informed estimation of future revenue based on the below model. For myself, I use a 3 months moving average as to all the data. That gives a smoothing effect to the curve.

The Iran "deal" should not be a deal at all. At the least, it should be a treaty. Oil makes for strange bedfellows. I personally would not be in bed with Iran. Not since the Shaw was deposed. Iran NEEDS the economic sanctions lifted so that the central government can make handouts to keep the great unwashed at bay and keep their form of government. Otherwise there just might be another Arab Spring. I do not see how it is avoidable. How in the world can we negotiate with the only admitted state sponsor of terrorism against the West is beyond me.

If we deal with Iran and remove economic sanctions, then Iran oil will depress oil prices by a factor of up to 25%, in my opinion. Do not think for one second that Iran will throttle production to keep prices buoyant. It may be months before they get their production ramped up, but they will. They need the money too much to appease the masses.

I love America. I am just not happy with the direction that the government is going right now.

Buddy Cotten

Quarter 2015

Low Range Average

WTI

High Range Average

WTI

Mid Range Average

WTI

SemCrude Pricing

WTI

EIA Spot Price

WTI
Q1 2015 $36.47 $56.47 $47.47 $41.73 $48.49
Q2 2015 $38.01 $58.01 $48.84 $50.65 $57.84
Q3 2015 $40.38 $60.38 $51.00
Q4 2015 $42.28 $62.31 $52.83
2

Sadly, I believe you are correct. The price of oil and gas will be severely depressed as soon as Iran starts dumping on the world market.

The Saudis are still dumping because they need to maintain their welfare state. They cannot afford to not sell as long as there is the threat of ISIS. They need to buy the loyalty of their people. The lower the price goes, the more they have to sell.

The Iran deal not only sold out Israel, but the rest of the world. An atomic weapon is a totally inappropriate tool for a war against Israel. It would take out a good portion of the Middle East.

No, that bomb is intended for someone else. I am afraid it is you and I. Most nations want to live in peace and prosperity, but not the case with Iran. The Twelvers want to provoke a conflagration to promote the return of the hidden Iman. They seek martyrdom.

It was not only stupid, it was insane to allow Iran out of the carefully crafted box. But there is nothing we can do now but hope and pray.

What we can do, is not lease land for oil and gas production. If they drill your property, they will have to sell the product on a depressed market. It is better to leave this asset in the ground rather than sell it so cheaply. It will be exhausted soon enough.

The price may not recover in our life time, but we can leave it to our kids and grand kids.

3

One more little thing. I report to, among other people, the Chief Compliance Officer of a significant regional foundation.

If I EVER crafted an agreement that requires us to give 24 day notice of a compliance check, I would lose the representation the next day.

Best,

Buddy Cotten

4

I see the President made a per emptive strike prior to tomorrow’s Republican debate. He knew this deal with Iran will be subject to intense scrutiny. I am sorry, but I still feel it is a bad mistake to deal with people that chant “Death to America.” They are very clear about their intentions. We should be well aware of what this deal means to us.