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NewsUS shale explorers quickly shed their business at a bargain price

US shale explorers quickly shed their business at a bargain price

The new, highly publicized US shale boom has recently been tested as demand for equipment plummets, as has customer demand for raw materials. This is an ominous sign that drilling in the shale energy regions of the United States has stalled. This, in turn, means that stagnation has set in, followed by inevitable ruin.

The Financial Times reports that Texas-based auctioneer Kruse Asset Management will auction two idle rigs worth $40 million and $30 million built in 2019 next week. Their starting rates are surprising – just 12.9 and 2.3 million, respectively. And this is just one of many similar auction lots. Anyway, the cost of ready-to-use housing sets has been reduced.

There’s no reason for them to be so cheap, but there’s just no demand for them, no one needs them, because it’s not a business worth investing in anymore. worth investing.

Dan Kruse, managing director of Kruse Asset Management, told the FT.

According to Baker Hughes, the number of oil and natural gas rigs in the United States has fallen 6% since the start of the year to a total of 731 units. The current numbers are a far cry from the roughly 2,000 rigs that were operating in mid-2014 at the height of the shale boom.

However, the worst thing is that not only the oil business is failing, but also the gas business, which, it seems, should thrive against the backdrop of the incredible need for EU for this type of fuel when moving away from Russian Federation raw materials. But last week the number of facilities operating on blue fuel extraction fell by 16, or up to 10% – the biggest weekly drop since 2016. Inflation and Commodities Cheaper prices continue to hamper efforts by US shale producers to rapidly increase production.

It’s no surprise that, anticipating the collapse, shale companies are shedding the once profitable business, quickly reselling it before it’s too late, at least at bargain prices.

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