Barneyw, I really shouldn't need to explain why I post on DLS to...

Barneyw,

I really shouldn't need to explain why I post on DLS to you, but here goes. DLS is the only oiler I have traded since losing money on a Vietnamese onshore well drilled by a company called Anzoil in 1994. Funny thing is in those days there was no HC, barely any internet at all and fracturing holes was a technique of last resort. Unfortunately the fracking attempt they made on that hole in Vietnam killed the well and I did a lot of my money in the process and have avoided oilers ever since. To tell you the truth I started watching DLS in early 2014 when its revenue was sky rocketing and its share price was starting to make new highs. I liked it because of the big conventional story that shone through the company's revenues numbers at the time. The strange thing also is that I've never been a confident investor in the company and have really only made money trading bounces on its journey down. Fundamentally I know there is value in DLS as an investment proposition but I still have no real idea at what share price point that value will be hit leaving minimal downside risk and that is what is most frustrating about the company. The value of the company is measured against the oil price and that seems to be the problem in determining the optimal "investment" entry price. I suppose in an ideal world the answer is that the oil price can't fall lower than the highest global cost producers costs in an unconstrained supply and demand situation which totally satisfies present demand. The problem with oil is that its supply is totally constrained by global economic and political push/pull forces which next to impossible to untangle.

The assumptions I'm making presently, right or wrong, is that is not in the US's interest to see the price of oil fall much lower than what can keep their shale oil bubble inflated. Now who knows if manipulating the oil price is fully within the US's control, they seem to be good at manipulating the prices of most other assets. If it is not in their control, their bubble will end up bursting with possible devastating consequences for their entire financial market system and the price of oil will go up (the Saudi's in this scenario through patience will win). So there are two push factors for the oil price going forward in my opinion. 1) the need by the US to keep oil prices at levels which sustain what is essentially an unsustainable industry driven by a credit bubble and 2) a possible bursting of that bubble should they not be able to contain the fall in oil prices, which will lead to rising oil prices again as their credit creation ability gets chocked off and their oil production ability chokes along side it.

I continue my soft accumulation of DLS but am still leaving plenty of powder dry in case of further falls in the oil price and any accompanying market melt down. Long road ahead. I think I've learnt a few things since losing that money in Vietnam.

Eshmun