Posted on 11/14/2014 2:28:23 AM PST by TigerLikesRooster
Gas has decoupled from oil. Still the historical ratio is much higher than it was before still in oil’s favor.
I agree, the technology is there regarding shale production...the point is at what cost?
IMO, NG is the place to be right now, liquids have some head wind.
Interesting. But even combined with Baker Hughes, they are still smaller than Schlumberger.
Schlumberger, which is valued at $122 billion on Thursday, nearly twice the value of Baker Hughes and Halliburton combined.
http://fuelfix.com/blog/2014/11/13/halliburton-baker-hughes-shares-soar-on-merger-report/
The NSA just wanted to get in a plug for itself.
Maybe the price of oil in barrels is slipping but it sure as hell is not “slipping” very fast at the pumps. Price increases go up at more rapid rates that they decline. For example, any increase is usually around $0.05/gallon but when it “drops”, only around $0.01 gallon.
Odumbo has got to be fuming since he is not getting his $8.00/gallon prices as he wanted.
I have read where the breakeven price for fracking is about $58.00/barrel.
Here in southern DE, gasoline in $2.899/gal.
It is at least 15 cents a gallon too high, since RBOB gas is at about $2.12 and I add 60 cents a gallon for the profit, logistics and taxes. Should be about $2.73/gallon.
We’ll see if it goes down today.
They mentioned on Fox business that the merger could be held up because of anti trust laws? If they will be still smaller than Schlumberger, I am not sure how they could hold up the deal.
Keep in mind, even though the price of oil goes down. The tax/gallon stays exactly the same. So as a percentage of the total, the tax goes up as the price goes down.
So, as the price of oil comes down, the price at the pump does not go down in exact proportion, because you still have to add that $.33(I think)federal/gallon and your respective State tax/gallon.
Also, the retailer typically does not lower their price until they get that NEW fuel in their tank that they receive at the new wholesale price. Plus, they are really only competing with the other stations within a mile or two of their location.
We produce 8.6 MMBPD of crude oil
...................
U.S. crude production climbed above 9 million barrels a day last week for the first time in at least 31 years because of the shale boom.
Output rose 1 percent to 9.06 million barrels a day, the most since at least January 1983, when the weekly data series from the Energy Information Administration began. The EIA has monthly data going back to 1920 and that shows production is at the highest level since February 1986.
“Gas has decoupled from oil. Still the historical ratio is much higher than it was before still in oil’s favor.
I agree, the technology is there regarding shale production...the point is at what cost?
IMO, NG is the place to be right now, liquids have some head wind.
“
the vastness of the unconventional gas in place guarantees hundreds, yes hundreds, of years of enjoying production.
It is not the cost that is the problem, it is the price.
Right now, gas prices are insufficient in this country to justify new developments.
That will change when liquids become more scarce. The dirty little secret is that liquids flow very poorly through the type of rock that are unconventionals. consequently, only a very few reservoirs can enjoy an acceptable return such as the Bakken or Eagleford.
Gas on the other hand, flows 100x easier. and there is much much more gas in place to extract.
So get ready for lots of cheap gas for many years.
The Eagle Ford Shale will make an estimated 1.65 million barrels of oil per day in December, an increase of about 36 percent in the last year, according to a new report from the U.S. Energy Information Administration.
The South Texas field has roughly doubled production over the last two years.
Last December, the Eagle Ford produced around 1.2 million daily barrels, according to EIA data.
In December 2012, it pumped around 848,000 daily barrels.
The EIA measure includes both crude oil and other liquid hydrocarbons. Despite a drop in crude oil prices, production is still increasing across U.S. shale fields.
The Permain Basin in West Texas and eastern New Mexico continues to produce more oil than any other U.S. field: an anticipated 1.85 million barrels in December, up from about 1.43 million barrels daily the same month last year.
The Bakken Shale in North Dakota will make 1.22 million barrels daily in December, up from 960,682 the same month last year.
http://fuelfix.com/blog/2014/11/12/eia-eagle-ford-to-make-1-65-million-barrels-daily-in-december/
Keep in mind, total company size involves a lot of international assets and work. But in a specific area like well cementing services in the US, they may be forced to sell off a portion due to a very large percentage of the US market in that service.
My 8.6 MMBPD was also from EIA.gov.
http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm
Under their monthly production data, August is the latest available. Since I was comparing it to other data, it seemed appropriate to compare data from the same month.
Nice to see it continues to rise.
Yeah, we will manage.
Low prices will damage some companies. The growth rate will slow down. And I don’t expect the price to remain below $75 for a long time. (”long” a nice generic description)
Some folks with too much debt, dependent on +$90/bbl to pay their bills will sell some assets. Some folks that took smaller risks, grew at a slow pace, will get a better deal on those assets, than they could buy 6 months ago.
Not enough reason to bring in the Feds to start picking winners and losers.
Nice to see it continues to rise.
...............
But with falling prices the EIA’s prediction of a top in production of 9.5 million barrels @ day next year —looks looks to be more accurate than the optimistic numbers I was proposing.
And following oil prices down are
-Russian ruble
-Canadian Dollar
-Australian dollar
-gold
-silver
(relative to the US dollar)
Recent strength of the dollar is part of the oil price fall.
Priced in Gold, the oil value drop has been less.
http://pricedingold.com/charts/Crude-2006.pdf
Operators Might Make Eagle Ford’s Sweet Spot A Cavity In Five Years
http://eaglefordforum.com/forum/topics/operators-might-make-eagle-ford-s-sweet-spot-a-cavity-in-five
November 3, 2014
With more than 10,000 wells drilled in a dozen countries, the industry has concentrated 80% of all wells in seven economic counties. Gonzales, Karnes and DeWitt counties, Texas, come out best, on average, according to a report by Bob Brackett, senior analyst, Bernstein Research.
The core of the Eagle Ford is fully identified and Brackett’s calculations even say when it will begin to decline.
At a rate of 4,000 wells a year and assuming 60-acre spacing, the industry consumes 0.24 million acres a year. At that pace, the current sweet spot will be consumed in the next four to five years. The less economic prime area of the shale has closer to 18 years of inventory remaining.
However, the economics of wells are driven by peak rate, liquids content, and decline curve.
“Examining a single variable is misleading,” Brackett said.
Eagle Ford production should peak at about 4 million barrels of oil equivalent per day (boe/d) in 2021, Brackett said. That includes 2.4 million barrels per day (bbl/d) of liquids and 9.5 billion cubic feet equivalent per day (Bcfe/d) of wet gas.
Then, the wells the number of new wells drilled per year will begin declining.
Excerpted, more at link
The Eagle Ford Shale will make an estimated 1.65 million barrels of oil per day in December,
in 2021, Brackett said. That includes 2.4 million barrels per day (bbl/d) of liquids
.................
So a bit higher in eagle ford even with lower prices.
Estimates are likely pretty firm in the baaken too.
But estimates are not firm in the permian.
Lower prices will slow down the growth in all of them over time.
I think if prices held at $75, we would still see growth in all of them, just slower growth than we did at $100.
there’s three parts to the reason for falling oil prices.
1.)rising dollar
2.)lower estimates of world economic growth.
3.) rising oil production mostly in the USA but also elsewhere.
The dollar is going to keep rising.
But lower oil prices will spark faster economic growth worldwide while curbing production growth.
I don’t know how long it takes for lower oil prices to feed back into stronger world economies. Maybe several quarters. Maybe a year or more. I have not seen studies on that.
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