You're listening to the Oil and Gas This Week podcast with Mark LaCour and Jake Corley.

This is the show for busy oil pros who quickly want to keep their finger on the pulse of the industry.

What's going on, guys?

Welcome back to another episode of Oil and Gas this week. You're listening to episode 188. And like a lot of episodes, this is the first Friday Q&A, so it is the first Friday of the month. You guys ask questions and we try to answer them. So what's going on, Mark? What's going on is when a total accidentally have this one out and release when it actually is the first Friday, which we never do. Hey, Jake, have you upgraded to Mojave yet, Apple OSX? I don't think it's Mojave. It's Catalina. I'm sorry. You're right. It is Catalina. But have you upgraded? I have not because it bricked my wife's computer. Yeah, I had issues with it too. And the thing I'm a slight disappointed is I usually don't have problems with Apple upgrades or Apple products at all. And it was a bit disappointing. So I actually had to restore my machine from Time Capsule and then install it the second time and it worked well. But, you know, come on Apple, a little bit more quality control before you release something. Yeah, absolutely. I think it's kind of ridiculous for a company of that size. And the other day, the app store, the iTunes store, iTunes music, all that was down for about six to eight hours, which I think is also kind of ridiculous for a company of that size. I do like they split up, they got rid of a separate app now on the desktop for podcasts and for music and for TV. That needed to have happened because iTunes just got too clunky. Yeah, it had too many. There was too many features, kind of jam packed into one app. Yeah. So anyway, I'm sure nobody wrote in a question about Apple's software upgrade. So what questions do we have, Jake? All right. We got a lot of questions this month. So let's just dive right in. So we've got a question from Preet, from Calgary.

I'll tell you guys, love the show. This is the first show I've started listening to when I was introduced to podcast two years ago and I've been hooked ever since. Well, thank you for listening. Appreciate it. The question is that I recently heard an interview with the author of the book Saudi America

that talks about the faults of the energy industry and fracking.

Have you read this book or have any thoughts on this?

And they put a link to the book in Saudi America, that talks about the faults of the energy industry and fracking. Have you

read this book or have any thoughts on this? And they put a link to the book in there as well. So both of us have actually read this book. I read it last month. I think it was a great read. Mark, do you want to start off? And then I'll pick it up. Yeah. So I actually also read it too, which I think this is the first time he might ask us about a book and we both actually read it. Not super fan of the book. And they don't do much bashing about fracking. What she really talks about is the business model is not legit and that it's not a long-term game. It's more of a short-term game and the future of it's very unclear. A lot of people out there, a lot of very smart people out there would agree with her about that. I don't agree with that. Jake and I probably getting that for a little bit further down the road. And then she does bash us a little bit as far as a country as U.S. is not being caught with the rest of the world as far as renewables. I don't really have an opinion on that one way or the other energy's energy and whatever our mix is is going to be different with other countries mixes and that will change every month as to go through time. But if you're in the long gas entry, it's actually a worthwhile read because she gives you a different point of view than a lot of people were talking about the shell filled just a couple of years ago. Yeah, absolutely. So to guess answer this question shortly, I'm not a super fan of the author of the book, which is Bethany McLean. She's written a few things. I'm not, I don't really agree with all of her stance on a lot of things that she talks about publicly. I also don't follow her super religiously, so I don't know necessarily all of her stances on everything, but just the few that I've heard I don't necessarily agree with. Saudi America, I thought was a good book in terms of documenting kind of the Shale boom.

Particularly, they follow the story of Aubrey McClendon, who was the famed godfather of Shale,

or one of them kind of popularized it and helped kind of make show what it is today.

And if you're not familiar with Aubrey McClendon, he was the CEO

co-founder of Chesapeake Energy, which is still a huge company today, worth a lot less now than it was then. This is a very broad question. So I'm trying to hone in on on which part to actually tackle here. Shale as a business model, I believe it's extremely broken, looking at tons and tons of data. When I'm not podcasting,

that's what I spend a lot of my time doing with one of our teams. We're going through and looking

at a lot of the type curves for pretty much every shale basin in the U.S. currently.

And there's a huge issue with the capital structure in shale. And I'll kind of leave it at that.

It doesn't mean the wells are necessarily bad. It just means that once the money flows from the wellhead, there's not a little returns that are passed on to the investors. And so, you know, as an industry, I think the top 20 frackers in the U.S. burned through 280 billion more than they've made over the past 10 years. And so Wall Street is beginning to wonder, when are we going to get paid? You know, when are we going to make our money? When do we make

our money back? And it's, it's, oh, well, higher prices are coming. Oh, well, we're getting better at the process of shale. How much more time do you absolutely need? And it's not to say that the wells are bad. It's not to say that this is a shale is going to be completely over. There's going to be a

major restructuring. There's a lot of things that are going to happen in the industry that are

absolutely essential that are that are necessary. As we talked about numerous times over the past few episodes, there's going to be a significant amount of bankruptcies and more mergers, more acquisitions, but it's all for the greater good. Shale's not going anywhere, but shale in its current form is not sustainable.

It is not sustainable without major injections of cash. And when that cash dries up, you don't

only have many options, especially when you've got a significant amount of outstanding debt.

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