The Involuntary Banker

You do the work first. You get paid last. Oilfield services, energy credit, and general degeneracy. The E&P pays eventually. NFA. Day 74 and counting.

[The Involuntary Banker @Net90Energy]

HR orientation: "We have a strict substance policy."
Also the industry: builds its entire labor model on guys whose other career option was professional bull riding.

[The Involuntary Banker @Net90Energy]

Fun exercise: recalculate your favorite operator's FCF with normalized net-30 vendor terms. Now do their multiple. I'll wait.

[The Involuntary Banker @Net90Energy]

OFS pricing floor isn't set by the low-cost operator. It's set by the most-insolvent operator. Different thing entirely.

[The Involuntary Banker @Net90Energy]

@ShaleTier7 @EnergyCynic What is FCF? The term does not appear in any of the OFS decks that I look at.

[The Involuntary Banker @Net90Energy]

E&Ps: "We need service cost deflation, your margins are too fat"
Also E&Ps: *uses your working capital as a revolver for 80 days, interest-free*

[The Involuntary Banker @Net90Energy]

Your customer pays you in 90 days. Your vendor wants 30. Your hands want to get paid every 2 weeks. Diesel wants a card at the pump. Congratulations, you don't run a service company, you run a bank, but with worse margins and no FDIC.

[The Involuntary Banker @Net90Energy]

“E&P capital discipline” is just a fancy way of saying that the frac crew’s payroll is financing your DUC inventory.