Ann: New Wet Gas Discovery at Varanus South-1, page-10

Invertedva ,

I agree with much of what you say but don't think US shale is a bubble .

US shalers have gone from zero to almost 10mm bbl/d in about 8 years . The expansion itself has consumed profits , i.e. they have been reinvested .

They should be able to maintain current production and access to LNG netback of the associated gas will help .

Look at oil and gas majors and they are playing a very dangerous game - maintaining a dividend by cutting back on R&D and exploration and using up legacy barrels typically from fields which were discovered 40 years ago which they are not replacing .

They are robbing the future to pay for the present and eventually are going to have to replace reserves - my guess is by acquisition .

Just as $100 oil caused over investment , the factors you mentioned will cause a cutback on investment which will cause price shocks in the mid term .

The mid caps you mentioned are outstanding companies .