Hundreds of thousands of long fracked horizontal wells have resulted in an overproduction of oil and gas, causing prices to decline.
Drilling wells too close to each other reduces the amount of oil and gas produced by the parent and all child wells. Production forecasts were based on tight well spacing.
Oil and gas company valuations used to be based on proven and producing reserves. Now they are based on potential drilling locations, which include "probable" and "possible" reserves.
Companies focused on growth rather than profits, which lead to drilling uneconomic wells and taking on large amounts of debt.
Rather than playing long game, companies have a defined exit strategy, leading to a pump-and-dump mentality.
Petroleum and reservoir engineers used to make drilling decisions, and lenders only financed what their experts deemed as economic projects.
Lenders, particularly those in the North East, have been burned by investing in oil and gas without conducting proper due diligence and because of forecast errors.
Oil and gas is a cyclic industry. Over 100 companies have filed bankruptcy in the past year, and many more will follow before this downturn is over.
With the price of oil declining and operators practically giving gas away, I decided to sell before the bottom falls out.J. Cruz
I am on a fixed income, and the sale of these minerals will help me secure stable housing. My children will be okay if even if they don't inherit these minerals.S. Owens
My oil wells have been producing for decades and the reserves are almost depleted. Once the wells are plugged, the value will be significantly lower. I'd rather cash out now.R. Robertson
I inherited mineral rights, but don't want to be involved with fracking and fossil fuels. I would prefer to support renewable energy and do my part to reverse climate change.P. Harris