Posted on 09/17/2015 5:29:54 AM PDT by thackney
The flow of crude from what had been the country’s fastest-growing oil and gas regions, like Texas’ Eagle Ford shale, is declining rapidly, according to new data released by the federal government this week.
The Energy Information Administration reports that across the country’s seven largest shale deposits oil production is expected to fall to 5.2 million barrels a day next month, the sixth consecutive month of decline and a six percent drop since April.
The fall marks a dramatic turnaround for a U.S. oil industry that had almost doubled its production since 2010. Through the use of advanced hydraulic fracturing and horizontal drilling techniques, drillers had accessed deposits long known by geologists but thought too difficult and expensive to drill.
But the revitalization of the country’s oil sector flooded the world market. Combined with a struggling Chinese economy and steady production out of the Middle East, oil is now selling for less than half what it did in the summer of 2014.
Now drilling rigs are sitting idle and producers are actually opting not to turn on the wells they drill, letting the oil sit underground until prices improve. With the oil bust now approaching its one-year anniversary, oil and gas companies around Texas and the country are getting more and more nervous, said Larry Oldham, an energy investor in Midland.
“At some point the production is going to come off a whole lot harder than it has,” he said. “It’s going to get ugly. A lot of companies have been unable to re-hedge. They’ve been unable to lock in higher prices, so their cash flow is going to get worse.”
By and large, most forecasts predict U.S. oil production will continue declining through mid-2016....
(Excerpt) Read more at bizbeatblog.dallasnews.com ...
Something smells fishy...
Are you surprised that oil prices, which have reduced drilling for the past year, are finally showing up as reduced production?
The tight formations like shale fields drop in production fast. If they don't drill enough new wells, the total production drops.
Mark this for the next time OPEC brings us to our knees with an embargo.
Those "contributions" to the klintoon "Foundation" (Hillary's slush fund) and to their muzzie bro 0bama from all the arab countries have absolutely nothing to do with the 0bama/Clinton energy and Middle Eastern policies. /SARC
We should put tariffs on Saudi and Kuwati oil. We do fight all their wars for them so it is justified.
This would allow American workers to keep their jobs and weaken the muzzie stronghold.
You think we should make it more expensive to refine oil into gasoline and diesel in the US compared to other countries?
What do you think the long term impact of making it cheaper to import gasoline than refine oil in the US?
Importing less foreign goods and bringing back some of the manufacturing that has fled the United States would help but that would throw a wrench into the “global” thing, wouldn’t it?
Our PetroChem industry is in a strong growth phase at this time.
Also, it has become nearly as cheap to manufacture in the US as China.
U.S. Manufacturing costs are almost as low as China’s, and that’s a very big deal
http://www.freerepublic.com/focus/news/3305686/posts
JUNE 26, 2015
If we can keep government from strangling business, we would see more manufacturing domestically.
Will “re-fracking” existing wells have an impact on well production?
This is okay. Some companies will go bankrupt but aside from that WE HAVE RESERVES and thus freer hand to nuke Mecca and tell the Saudis and others to shape up or die.
Are you willing to pay $5 or $6 at the pump for that?
4
If production drops, the EPA or some other 0bummer posse is involved, and, 94million not working don’t drive much; that is a fact.
Our highways and bridges would be EVEN worse if all these folks were working as normal.
Demand for a lot of stuff is down, which becomes stagflation or deflation. Neither are good.
Personally, I tend to not listen to folks who say buying gold and silver is stupid.
> Something smells fishy...
A lotta investors have been griping and complaining about not making enough profits lately. Guess not being able to buy mansions and Bugattis is making them whiny so the industry cut production to elevate the price of oil again.
Rig count is in the 60s in the Williston Basin (Bakken/Three Forks), down from 218 at the high (in ND alone).
That means the production decline of the steep part of that curve will translate to a reduction in oil produced, at least for the wells in their first couple of years of production when all this started.
The new wells being drilled will not replace that, so a decline is inevitable.
Activity will resume when prices make it worthwhile.
Actual price per barrel (not counting production contracts signed earlier) here is about $30/barrel. Transport costs add another 9 to 11 dollars/barrel to the refinery cost. That isn't going to get the rigs in the air nor the personnel in the field.
I suggested that to Congressmen and my Senators back in the ‘80s. I also sent a letter to GHW Bush about it, and got a nice reply (likely based on zip code) thanking me for my interest in farm policy.
Typically yes. But multistage hydrofrac is very expensive. It may not even break even at today’s oil prices.
It is being done at some locations where the economics work, mostly older wells.
Producing less ourselves means importing more from other nations.
Doesn’t everyone understand Economics 101?
Supply and demand.
1. Low supply & high demand = cost $$$
2. High supply & low demand - Cost $
We were at 1 five years ago. Now we’re at 2.
One thing for sure, the pendulum swings, and equilibrium always wins.
The feds say we are at 5.1 percent unemployment yet 94M people are out of work. I thought we had about 310M people in the U.S. I ‘m just sayin’ the figures don’t add up though the libs buy it. I thought they were supposed to be educated. Guess they can’t do simple math.
Tight shale wells drop off fast. Yes. So, I’d rather our producers drop off production while prices are down.
If the first two years hold the greatest pop, then keep it in the ground and wait till prices go back up to cash it in.
The bigger producers might and should do this. Problem, of course, is that most wells need to be put into high production immediately in order to service the debt that created it.
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