Without sufficient addition drilling, hydrofrac, etc, overall production declines. Some joke if you are not drilling wells, you are not in the oil business; if you are just keeping wells, you are going out of the oil business (eventually).
Posted on 01/27/2016 5:40:37 AM PST by thackney
Without sufficient addition drilling, hydrofrac, etc, overall production declines. Some joke if you are not drilling wells, you are not in the oil business; if you are just keeping wells, you are going out of the oil business (eventually).
Well
I’d sit on it
Price is too cheap now to drill now
Hell I wouldn’t even scoop it up bubbling through Jed Clampett dirt
Price of gas right now around here is around 1.40-1.60/gal which would be 24 cents a gallon in 1971 when I first drive with a permit in an old Cutlass
Vinyl top mind you
Today’s gas prices adjusted for inflation is half what it was in 1971
But the cost of drilling and shipping and processing is not cheaper
Got to be squeezing petro companies
But folks bitch when they get windfalls
Don’t let the central_va guy get to you. He is obviously confused, which is bad for our engineering profession if he truly is an engineer.
You make sense to me as a fellow freedom lover and oilman.
Just my flavor of windmills I guess.
a couple of points on this Bakken decline graph:
1. the bulk of Bakken wells drilled are now over three years old, so notice the limited decline they have, albeit at lower rates than during the first three years. This is keeping many in business as decline for all purposes is not much and production flattens.
2. speaking as a Bakken reserves engineer for years, the ‘10% thereafter’ has been debunked. Terminal decline rates used to book reserves to the SEC after about year 10 are at typically 5% but sometimes as low as 3%. this tail might last 50 years or more, and does not include adds like refraccing down the road.
But the last couple years of increases are new wells. Those increases are most of what we see in the declines that already started for the overall field. By next month it should be down 140 thousand barrels a day from the peak in June.
https://www.eia.gov/petroleum/drilling/pdf/bakken.pdf
Other shale field data available at:
https://www.eia.gov/petroleum/drilling/
The Eagleford is far worse, down over half a million barrels a dayin less than a year.
Yep, it will flatten out
The number of DUCs still out there makes it hard to predict, on top of the differences from previous price drops.
That makes overall production tough as one does not know when the drilled/uncompleted wells will come on; however, individual producers are relatively stable and not too difficult to predict.
And those many thousands of wells already producing are the stable base that will contribute the most of the production during the next several years.
Interesting comparison to gold prices
Gold became publicly traded gradually in mid 60s and totally legalized in 74 I think
Chart shows that
Which coincided with the oil embargo
The horse is long gone from the barn and you're telling me how much better off I'll be if blacksmiths selling horse shoes have more access to free markets elsewhere.
Sorry, even if by some miracle the horse returns to the barn, the owner isn't allowed to decide for himself when to shoe the horse, which horse shoes to use, or even who uses and rides the horse. Free market arguments do not apply no matter how often avoiding the consequences accrued over fifty years of buying ways around the US market are dressed up in free market disguises.
Evading the US internal market issues that restrain trade here doesn't have a market driven outcome for the internal US market one way or another. There's no way to assure anyone in the US that fuel prices will be lower just because oil producers and refiners participating in an international "free market" allows oil companies to lower their costs and makes good sense according to known free market theory.
You're the one hanging onto a false premise, the premise that anything to do with "Free Trade" or "free market" arguments apply for consumers and citizens within the US just because they help those who can afford to avoid dealing with the market restraints within the US and not be restrained by the same realities those who cannot buy their way around the internal system are.
You're making an, "all things being equal, in theory" argument, over and over, when all things are not equal. Avoid the messy details of the reality we all live in and all sorts of things can be championed as good for US citizens and the nation as a whole. Hey, with any luck at all the same thugs putting the coal industry out of business will be able to shut down the petroleum industry as well in a decade and since we're not going to deal with reality, won't that be nice !!! A blissful all natural world !!!
Unfortunately, we little folks can't avoid the reality that there's no free market here so how a free market benefits oil producers is in no way something that has a high probability of passing through to the US market. It does, though, make it easier for oil producers to lower their costs and increase their profits with no pressure on them to pass those lower costs through to the US market that artificially constrains consumption, dictates what products are made available to the consumer, and mandates the replacement of oil products with more expensive alternatives, and on, and on, . . .
But, making it good for the oil producers is a "free market" issue, not an argument against letting corporations continue to avoid the consequences of their own political actions over the past fifty years? Please, what benefits oil producers benefits oil producers, period. Whether they hire one more American citizen or pass one cent of savings through to the consumer is more dependent on the phase of the moon than on "free market" forces.
When there's free trade and free markets within the US, then talk to me about how in theory access to free markets on an international level benefits US citizens, US security, and US sovereignty.
You believe that forcing companies to spend hundreds of millions of dollars to modify refineries, to use a more expensive feedstock, to produce the same product already made, would lower prices?
It also just happens to be in the best interests of the producers themselves who, as of now, are just feeding the alligator in hopes they'll be the last one the alligator eats.
Anything else is back to that "all things being eual" canard you stick to.
Smaller markets have never equaled lower prices.
How one theoretically with regard to a single industry or commodity moves a few inches closer to an ideal free market solution while the government drives us forty miles an hour in the opposite direction is moot.
No matter how prices are impacted in theory, regulation and outright restraint of trade in the US by the same government producers curry favors from to move that few inches determines the price in the US market, not what the producing industry does or does not do to lower costs. Given that those lower costs of production passing through to the consumer is anathema to the powers that be, at best the producers make more profits. The consumer, "market" if you will, is not allowed to see the benefit of lower production and refining costs.
Therefore, allusions to history are of no more value than yelling "free market" as if that has any meaning to consumers for whom what oil producers provide is carefully exempted from the beneficial effects of a free market except when it absolutely cannot be avoided due to unforeseen events.
At such times, history shows that the internal US market is quickly once again isolated from the free market either directly by increased taxation of petroleum products or indirectly by increased regulation of the production process. Election years being a bit of an exception, but typically only an exception that benefits producers with tax breaks, increased access to external markets, a minor decrease in regulation, and so on.
It’s no secret the US is a black-gold mine of resources, but the political elites won’t have it.
The lower the price of energy, the easier it is for all US industry to compete. God forbid the price of energy gets so low those evil "smokestack industries" return or begin anew within the US. Their having a large work force it's in their best interest to train themselves and retain along with the attendant increase in the standard of living is exactly the "evil" that we're all supposed to be punished for.
Well said!
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