Okay, you actually do understand things.
I mentioned WTI because it is specifically not regional. Meaning all WTI does have to come from West Texas, but you understood that, clearly, indicated from your other comments.
Here’s the thing. I despise talk of “huge amounts” and “a great deal” and “large shipments”. I want to see 30K bpd quoted. I want to see 35% recovery rates, or even 45% recovery rates quoted. I want to see API grades assigned to the *liquid*.
And I very specifically do not want to see 150K barrels of oil equivalent per day. You can’t put oil equivalent into a refinery and get gasoline out.
I am suspicious of Chesapeake’s verbage over the past month celebrating Ohio. You have to dig for hours to find ANYONE who will offer an estimate of BARRELS OF CRUDE PER DAY expected. They’ll tell you about cubic feet per day of gas. They’ll tell you how much liquids may be there. They will not say a word about expected production rate of oil.
Why? Because oil pays for these plays. Shale gas is dying under the relentless weight of inadequate profit. These shale gas plays are paying for themselves with the few hundred barrels of CRUDE per day that come up at $100/barrel. The $4 natgas doesn’t pay for them.
Chesapeake will hype and then shop those leases around. Watch.
does NOT have to come from West Texas . . . typo
Yeah I see you also pay attention.
CHK has already stated that they are shopping for a JV partner in teh Utica (just as they have already done w/ Statoil, CNOOC, etc. in the Marcellus, Niobrara, Barnett, Eagle Ford).
And no question CEO is a promoter, and he is promoting the Utica. But service companies I know back up his optimism.
The problem with specificity on BOPD and recovery rates is that it is so damn early in the the life of the play. Hell the Eagle Ford was originally thought to be a gas play, and now oil is driving everything (as you stated). And you can’t really know what you have until you see the production decline curve (called a type curve) over many years.
Bottom line for me: this is the most exciting time for domestic energy in my 30 year career, and it’s all due to hydraulic fracturing advances. I don’t mean to sound like Aubrey on Mad Money, but this is game-changing.