Good morning; here's what the Oilman has for you today:

• Shale Stocks Rally

• Unprecedented Strike Looms Over North Sea Oil

• Tweet of the Day

Shale Stocks Rally

All it took was a WSJ report about Exxon’s potential takeover interest in Pioneer Natural Resources, and shale stocks are soaring.

Pioneer itself jumped by 5.8% Monday, and the rest of the shale gang booked smaller gains, pushing the S&P 500 Energy Index 0.7% higher.

What does it all mean, darling?

Well, it means the industry, as the ol’ Oilman recently said, is ripe for consolidation.

It also means that there is skepticism among investors. Otherwise, the stock gains would have been a lot fatter.

One other thing that the market’s reaction might mean is that there is some concern about the future of shale.

Per Bloomberg, “Output is slowing as some of the most productive drilling areas become less fruitful, making acquisitions the main growth engine in regions including the oil-rich Permian Basin of West Texas and New Mexico.”

You don’t say…?

Shale’s days are numbered...

But there’s still plenty of them left. The U.S. shale patch will continue producing for decades yet.

It just won’t be as cheap.

Remember the early days of the shale boom? Well, not the very earliest ones but the days after the industry figured out how to frack cheaply and efficiently?

Everyone was on a drilling binge. Everyone. And for some reason, some people assumed it would last forever.

Because, you know, shale reservoirs never run out.

What a shocker that they do run out, and they do it faster than conventional reservoirs.

This is why well productivity is falling—and in the Permian of all places.

That’s why consolidation in the shale patch makes the most sense. It will keep costs manageable.

It’s survival of the fittest at its finest.

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Unprecedented Strike Looms Over North Sea Oil

More than a thousand offshore oil workers in the UK are gearing up for a two-day strike that will shut down dozens of platforms.

The strikers demand better pay and working conditions.

So, what else is new?

The UK has been hit by a wave of industrial action, with some of the more crippling strikes among healthcare and transport staff.

An oil workers’ strike will cripple oil and gas production in one of the largest producing regions in Europe.

Why now? Take a guess.

“Oil and gas companies in the offshore sector are enjoying record windfall profits,” said a rep of Unite, the biggest offshore workers’ union in the UK.

Of course, it’s the windfall profits.

And “corporate greed”…

“There’s no question that contractors and operators can easily afford to give Unite members a decent pay rise. The scale of corporate greed in the offshore sector has to be challenged.”

Oil and gas in the crosshairs

Ever since oil and gas majors—and minors—began reporting record profits, hackles have been going up among activists, governments, and now workers’ unions.

• Governments slapped windfall profit taxes on the big earners.

• Activists got louder in their demands for companies to share the cash.

• Workers are now demanding better pay.

To be fair, workers are the ones with the best reason to want a share of the record money.

What an irony that a halt of oil and gas production in the North Sea will only push prices higher...

...and make more profits for the most hated industry in the world.

Around the Global Patch

🇸🇪 “Traces of explosives”…a Nord Stream probe update.
🇧🇷 Worldbank funding a study for Brazilian carbon capture and natural gas storage.
🇪🇺 European natural gas futures speculating on EU’s next winter.

Tweet of the Day

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