Evidently the frackers have run out of foreign suckers to subsidize the Shale Game. The WSJ has the scoop on foreign frackonomics. It’s no secret that the Shale Boom was financed by Mad Money. And some of the maddest money of all came from foreigners, including the Chinese. Whose investments turned Chesapeake into Chinapeake.
For Frackers, Days of Easy Money End
on January 2, 2014 at 6:00 pm
Foreign shale-drilling investment declined in 2013 compared with 2012. Shown, a pump jack in the Monterey Shale in California last year. Reuters
Oil and gas companies slash spending as foreign investment dries up
NEW YORK, NY — “Since 2008, deep-pocketed foreign investors have subsidized the U.S. energy boom, as oil and gas companies spent far more money on leasing and drilling than they made selling crude and natural gas. But the rivers of foreign cash are running dry for U.S. drillers. In 2013, international companies spent $3.4 billion for stakes in U.S. shale-rock formations, less than half of what they invested in 2012 and a tenth of their spending in 2011, according to data from IHS Herold, a research and consulting firm.
It is a sign of leaner times for the cash-hungry companies that have revived American energy output. The value of deals involving U.S. energy producers plunged 48% this year from 2012, to $47 billion, the first annual decline since 2008, according to an IHS report to be published Thursday.
So U.S. oil and gas producers have started to slash spending. ‘The days of easy money are over,’ said Amy Myers Jaffe, executive director of energy and sustainability at the University of California-Davis.
U.S. and Canadian producers are ‘returning to spending within their means,’ analysts at Sanford C. Bernstein wrote in a research note last week that analyzed spending patterns of 50 companies. Some of the biggest financiers of the shale boom don’t expect the major Asian and European firms to reopen the spigot any time soon.”
Daniel Gilbert, The Wall Street Journal
So some out-of-work shale shills have turned to simply importing foreigners directly. Skip the shale.
The Deborah explains all . .