Read it carefully. These are not good numbers.
Rules for reading past oil hype:
1) When “oil equivalent” gets injected into the text, red lights and sirens should go off. They are celebrating 2 billion barrels of oil equivalent. That’s likely to be mostly natural gas — because that’s why the phrase appears, to conceal that the output is not oil.
2) When you see 50,000 barrels noted in months or years, grab your calculator. They said 50K in 90 days. That’s only 550 barrels per day. 550 bpd ain’t gonna fix anything.
3) When you see this -— “As of August 2012, 45 rigs were active – four more than in 2011.”, our hype alarm should be at full volume. If the players only added 4 rigs in a full year, they ain’t really expecting much.
An FYI tidbit, rig count in these shale plays are HUGELY important only at first. In the Bakken right now, wells are drilled in 22 days. But the fracking process takes over 100 days. So the rigs can drill like crazy and essentially accumulate unfracked holes like an inventory, awaiting the fracking equipment. So if you pour in rigs for a year or so you can accumulate lots of holes and then pull the rigs out and wait for the frackers to run out of holes. The EIA hasn’t caught up with this year — they are still quoting shale production per rig, and that’s somewhat a useless stat for shales.
It’s kind of hard to pour in rigs if they’re not there. The Eagleford and the Cline shale here in TX has put allot of pressure on available drilling rigs. I’ve got a 12 well package I’d planned to start last month but a rig is still unavailable. We need more drilling rigs capable of going over 10,000 ft.
This article, and your summary, seem to be different than this article:
http://www.freerepublic.com/focus/f-news/3080788/posts
I live in this area, and they are drilling like crazy.
But, without official numbers, the setups are taking much longer than 22 days. But when they finish, they are quite the setup.
Finally, I knew they were after natural gas.