2014-03-07

2014 March 7

The Master Resource Report 2014-03-07

Walmart’s new super truck

Walmart unveiled its latest effort to keep the goods flowing to their thousands of stores as fuel price climb. The video below shows off the new Walmart Advanced Vehicle Experience truck.

The new concept (that means it may never actually make it to the road)  Walmart Advanced Vehicle Experience truck will be 20 percent more aerodynamic than our current trucks and have a micro-turbine hybrid powertrain that can run on diesel, natural gas, biodiesel and probably other fuels still to be developed.

Art Berman interview

Oilprice.com: Almost on a daily basis we have figures thrown at us to demonstrate how the shale boom is only getting started. Mostly recently, there are statements to the effect that Texas shale formations will produce up to one-third of the global oil supply over the next 10 years. Is there another story behind these figures?

Arthur Berman: First, we have to distinguish between shale gas and liquids plays. On the gas side, all shale gas plays except the Marcellus are in decline or flat. The growth of US supply rests solely on the Marcellus and it is unlikely that its growth can continue at present rates. On the oil side, the Bakken has a considerable commercial area that is perhaps only one-third developed so we see Bakken production continuing for several years before peaking. The Eagle Ford also has significant commercial area but is showing signs that production may be flattening. Nevertheless, we see 5 or so more years of continuing Eagle Ford production activity before peaking. The EIA has is about right for the liquids plays–slower increases until later in the decade, and then decline.

The idea that Texas shales will produce one-third of global oil supply is preposterous. The Eagle Ford and the Bakken comprise 80% of all the US liquids growth. The Permian basin has notable oil reserves left but mostly from very small accumulations and low-rate wells. EOG CEO Bill Thomas said the same thing about 10 days ago on EOG’s earnings call. There have been some truly outrageous claims made by some executives about the Permian basin in recent months that I suspect have their general counsels looking for a defibrillator.

More……

 

Note: Currently clients and advisors at Ravenna Capital Management do not hold positions in Walmart.