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To: thackney

Most of the “pumps” are down now. When the price was $100 a barrel, most of them were running.


6 posted on 12/19/2014 5:50:39 AM PST by P-Marlowe (Saying that ISIL is not Islamic is like saying Obama is not an Idiot.)
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To: P-Marlowe

Hauling off the salt water gets to be more expensive than the revenue from the oil they produce. The more salt water per bbl they produce the sooner the salt water disposal cost exceeds the oil revenue. Eventually, the operator just runs the well enough each month to make a showing so he can hold the lease until things get better and he can afford to pump oil. The abandonment cost is so high they keep the wells limping along for as long as they can while they try to figure out how to get rid of them and make the abandonment someone else’s problem.

These stripper wells don’t make a whole lot of oil per each but there are a whole lot of them.

BTW, this article is mostly bull. For each rig that continues to run production will either remain the same for the wells that rig drills if it has reached plateau or slightly increase if it has not reached plateau. For each rig that goes down the rate from the sum of the wells it has drilled will decline at about 70% per year or so... very rough numbers each well is different and your mileage may vary. So, overall production will fall by 0.7 x 0.x (percent of rigs reduced). I expect that 20 to 50% of the rigs will be laid down by March if this price continues.... within 6 to 12 months production from shale will fall by about 14 to 35%. It is fun to bet with so little consequence isn’t it.


9 posted on 12/19/2014 7:48:26 AM PST by Sequoyah101 (Adversity does not build character so much as expose it.)
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