Posted on 08/01/2016 10:08:35 AM PDT by Hojczyk
The Saudi-led Gulf states have certainly succeeded in killing off a string of global mega-projects in deep waters. Investment in upstream exploration from 2014 to 2020 will be $1.8 trillion less than previously assumed, according to consultants IHS. But this is a bitter victory at best.
North America's hydraulic trackers are cutting costs so fast that most can now produce at prices far below levels needed to fund the Saudi welfare state and its military machine, or to cover Opec budget deficits.
Scott Sheffield, the outgoing chief of Pioneer Natural Resources, threw down the gauntlet last week - with some poetic licence - claiming that his pre-tax production costs in the Permian Basin of West Texas have fallen to $2.25 a barrel.
"Definitely we can compete with anything that Saudi Arabia has. We have the best rock," he said. Revolutionary improvements in drilling technology and data analytics that have changed the cost calculus faster than almost anybody thought possible.
The 'decline rate' of production over the first four months of each well was 90pc a decade ago for US frackers. This dropped to 31pc in 2012. It is now 18pc. Drillers have learned how to extract more.
Mr Sheffield said the Permian is as bountiful as the giant Ghawar field in Saudi Arabia and can expand from 2m to 5m barrels a day even if the price of oil never rises above $55.
(Excerpt) Read more at telegraph.co.uk ...
Time to jettison the Saudis as allies. They are are evil corrupting influence on US politics and society.
Their “oil” is no longer needed.
I think they’re declaring victory too early. WTI down around $40 now. That price will continue to weaken the Bakken producers.
And stop them from funding projects building hundreds of mosques here.
and there you have it- capitalism to the rescue!!!!!!!!!!!!!!!!!!!!!!!
Don’t worry, Saudi masters: Zero and Hildabeast will ride to your rescue with more crippling regulations on US producers.
save for later
To the democrats, Texans are more fearful enemies than wahhabis.
They built a mosque in Seoul, of all places, just prior to the time I was stationed in Korea.
http://english.visitkorea.or.kr/enu/ATR/SI_EN_3_1_1_1.jsp?cid=1702328
Couple of countries like Venezuela that are in big trouble over the cheap oil. Saudis don`t care as long as shale companies are destroyed.They will change hands and go on.Saudis are terrified of the future and all the US shale.They would rather see loser countries like Venezuela destroyed than give up on trying to destroy US shale.If Saudis fail,USA won`t be a good client of theirs as far as expensive oil prices go..China has Venezuela oil ,Russia has its own oil and US has shale.
Just in time for Obama to take credit for the reduction in prices. Of course that 7.00 per gallon gas Obama wanted goes right down the memory hole.
All the while being cheered on by the Bush family...
Don’t reference the Bushes ever again.
They are horrible people who have done irreparable harm to our country.
They are not conservatives. Heck, they aren’t even public servants.
They would to America what Jeb did to Terri Schiavo if it made them a buck.
So yeah, you made me mad!
Now there's a mental image ...
Fracking 2.0 will bring costs down to between $% and $20/bbl. http://www.nextbigfuture.com/2016/01/technological-progress-in-big-data.html
We’re not at the end of this shale era, we’re at the very beginning.
Oh, and JUST the Green River shale formation (mostly in Colorado) has RECOVERABLE reserves of 3 times what the Saudis have. http://www.nextbigfuture.com/2011/08/progress-to-unlocking-over-800-billion.html
Buh, bye Saudis!! It hasn’t been nice, and don’t let the door hit you in the ass on the way out.
Uh, “Fracking 2.0 will bring costs down to between $5 and $20/bbl.”
Sticky caps keys will kill you every time.
I have been arguing essentially this since fracking became a word. The price of oil had to get very high before the initial investment in a technology that had long been known could be justified. Once that initial investment was made the cost of the new production had to decline and keep declining. The Sauds flooding the world with cheap oil was a doomed project. They would have made more over time had they let American production determine their own price because the decline would have been much slower. By slashing the price (maintaining or raising production) they simply got themselves to the basement of price much sooner and could not enjoy the declining but still higher revenue of a sliding price. Instead they pushed the price off the cliff and got to the bottom immediately from whence they will not recover barring a Clinton presidency that outlaws hydrocarbons production.
The Sauds cannot destroy US shale. Its not like the old days where a well, when turned off, was an expensive proposition to re-open. Nowadays it is more like turning the spigot handle.
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