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Economics vs. ETP

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Economics vs. ETP

Unread postby vtsnowedin » Fri 08 Dec 2017, 06:24:26

radon1 wrote:
onlooker wrote:From what I have heard, the running average for the WTI price is STILL running below the Etp MAP.


Which running average? The one over the last couple hundred years? It is probably pretty close to zero all the time, so yeah, it is running below almost everything.

The one they chart is the 52 week average of weekly close of WTI (NASDAC I believe).
Each week where WTI is above $55 brings that line closer to the MAP line but it is all meaningless as no great event will happen when this fictional line is crossed.
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Re: Economics vs. ETP

Unread postby marmico » Fri 08 Dec 2017, 07:10:42

you do realize the ETP is modeling world oil output of which the US only produces about 10% of the daily total.


Firstly, are you serious? The only thermodynamic thingie that the ETP models is a 2008 Oklahoma well. The ETP Weasel ran out of EIA data almost 10 years ago.

https://www.eia.gov/dnav/pet/pet_crd_welldep_s1_a.htm

Have the ETPers taken up the collection plate so that the ETP Weasel can pay kublikhan $1250 on the 2017 wager? The ETP Weasel was arithmetically eliminated 3 weeks ago, unless you doomtards think that the WTI price might be negative between now and calendar year end.

Secondly, if you paid any attention to the ETP MAP data set you would realize that it refers to a maximum price (page 33) and the maximum price is beginning of the calendar year (page 17). In other words, the January 1, 2018 WTI price of $41.16 is a discontinuity relative to January 1, 2017 WTI price of $54.18 for 52 week moving average purposes unless the declining ETP MAP line (your blue dashed line) is drawn through the magenta dot prices.

Loren Soman, SumYunGai, futilist, whatever drew the proper ETP MAP line 15 months ago.

On that basis, the ETP MAP has been broken on a daily basis since late July, 2017.
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Re: Economics vs. ETP

Unread postby shortonoil » Fri 08 Dec 2017, 09:50:12

According to the Ernst & Young US oil and gas reserves study for 2017 Oil replacement rates were 128% excluding revisions (P1 dropped to lower category as a consequence of price) for 2016.



you do realize the ETP is modeling world oil output of which the US only produces about 10% of the daily total.


you do realize that the 128% they are talking about was all shale oil. A substance with decline rates 100 times faster than the conventional fields the US was built with. It is an industry that has never turned a positive free cash flow. It is an industry were every well drilled is a stripper in five years, and an industry that will never repay the capital that it took to build it. 128% of nothing is still nothing!
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Re: Economics vs. ETP

Unread postby rockdoc123 » Fri 08 Dec 2017, 10:39:56

you do realize that the 128% they are talking about was all shale oil. A substance with decline rates 100 times faster than the conventional fields the US was built with. It is an industry that has never turned a positive free cash flow. It is an industry were every well drilled is a stripper in five years, and an industry that will never repay the capital that it took to build it. 128% of nothing is still nothing


The fast decline rates in shales last no more than 36 months (hyperbolic decline) after which the wells enter into a long period of exponential decline. These wells payout (i.e. all the capex invested) in the first year generally which is one of the reasons they are attractive. From that point on they keep producing and keep churning out cash. As to never turning positive free cash flow once again, I need to point out that you and the other idiot here who has a blog site do not understand oil and gas company financials nor how to properly read a balance sheet. When you remove all non-cash accounting items most of the shale players are generating positive cash flows and have been for the past two years and before the price crash. Never repay the capital? What do you not understand about payout in one years time?

It never ceases to amaze me how someone with no background in the oil and gas industry feels comfortable pointing out that the hundreds of oil and gas executives, Board members, and investors who have been making this business work for decades apparently don’t understand they aren’t making any money and that it is all a losing proposition. Apparently, you seem to think you are brighter than all of these folks many of whom have become extremely wealthy through their petroleum-related businesses and also have probably contributed to society several fold more times than you through bringing petroleum products to a populace in need and helping to improve the overall standard of living.
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Re: Economics vs. ETP

Unread postby rockdoc123 » Fri 08 Dec 2017, 10:51:11

you do realize the ETP is modeling world oil output of which the US only produces about 10% of the daily total.


The E&Y study is focused on US producers but because many of them are the likes of Exxon and Shell who don't always report segregated financials to the level needed for the study purposes reserve replacement from outside of the US is included.

As well in the study, E&Y points out that although it is focussed on the US there are similar replacement rates globally.

You can see this for yourself by going to the BP Statistical Review. In 1980 global R/P (reserves replacement measured in years based on produced reserves and reserves replacing those) was 29 years in 2005 it was 46 years and in 2016 it was 51 years. You do not get this pattern unless you are more than completely replacing produced reserves.
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Re: Economics vs. ETP

Unread postby marmico » Fri 08 Dec 2017, 12:50:10

Year end 2015 US proved oil reserves declined year over year. The level is about the same as in 1975. The 2016 EIA data should be published shortly.

https://www.eia.gov/dnav/pet/pet_crd_cplc_dcu_NUS_a.htm

https://www.eia.gov/naturalgas/crudeoil ... serves.pdf
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Re: Economics vs. ETP

Unread postby rockdoc123 » Fri 08 Dec 2017, 13:07:21

Year end 2015 US proved oil reserves declined year over year. The level is about the same as in 1975. The 2016 EIA data should be published shortly.


most of that was from reserve revisions. BP already published the global study which includes 2016 reserves which are up. The point is that production is being replaced. Historically since 1980 it has been replaced year on year with the exception of 2 years, on of which is 2015 (again due to revisions).
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Re: Economics vs. ETP

Unread postby Outcast_Searcher » Fri 08 Dec 2017, 13:08:10

marmico wrote:Year end 2015 US proved oil reserves declined year over year. The level is about the same as in 1975. The 2016 EIA data should be published shortly.

https://www.eia.gov/dnav/pet/pet_crd_cplc_dcu_NUS_a.htm

https://www.eia.gov/naturalgas/crudeoil ... serves.pdf

To be clear, I'm claiming reserve replacement is adequate over the long run.

It wouldn't surprise me if we've seen a big drop overall in the past few years, spurred by low oil prices, on average during that time. That's noise. Since globally, people can CLEARLY afford oil products with oil below $100 regardless of how many times ETPers claim they can't (without any evidence), if signs of impending shortages truly arise, higher prices will allow plenty more E&P, as needed.
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Re: Economics vs. ETP

Unread postby marmico » Fri 08 Dec 2017, 13:30:16

most of that was from reserve revisions.


Of course. Proven reserves are price sensitive. December 2015 year end WTI was ~$37. Assuming a 2017 year end price of ~$57 WTI, I would expect 2017 reserves to be higher than those in 2015.
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Re: Economics vs. ETP

Unread postby Outcast_Searcher » Fri 08 Dec 2017, 13:55:36

marmico wrote:
most of that was from reserve revisions.


Of course. Proven reserves are price sensitive. December 2015 year end WTI was ~$37. Assuming a 2017 year end price of ~$57 WTI, I would expect 2017 reserves to be higher than those in 2015.

If all the resources were recalculated frequently, say every year end, then sure. (i.e. reported reserves at time X, with time delays, might be quite a ways from actual reserves at current price X).

But given how the oil resources are reported for places like Middle Eastern OPEC countries, unless I'm missing something, that doesn't happen.

It seems to be more of a piecemeal approach.
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Re: Economics vs. ETP

Unread postby Outcast_Searcher » Fri 08 Dec 2017, 13:59:30

StarvingLion wrote:
Outcast_Searcher wrote:
shortonoil wrote:Reserves are not being replaced, and water cut is increasing. If you can't figure out where that is leading to you need to go back to your game of Pickup Sticks at the local funny farm.

Saying the same thing endlessly, without credible backing, coupled with your habit of name calling in the style of a 5 year old whenever you're losing an argument makes your reference to the funny farm especially ironic.


Kinda like Outcast_Searcher rambles on endlessly about the hoax of "Green" Energy with no credibility

2016 statistics, from:

https://blog.energybrainpool.com/en/pow ... eneration/

Coal 64%
Gas and other thermal 8%
Nuclear 3.5%
Hydro 19%
Wind 4%
Solar 1%

So in your world, energy sources are 100% static?

Ever hear of the EIA? The IEA? Inside EV's? BP? etc?

Go ahead, show me all the credible sources that show that solar, wind, etc. green energy sources have NOT increased by a large percentage over the previous decade.

And show me all the CREDIBLE sources of how such green energy sources are projected not to increase substantially over the coming decade.

You can't. Go away. The adults are talking here.
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Re: Economics vs. ETP

Unread postby onlooker » Fri 08 Dec 2017, 14:33:25

Outcast and others remain in their fantasy world. Good article here about the diverse considerable limitations of Renewable energy
http://nov79.com/renw.html
You can ignore reality but not its consequences
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Re: Economics vs. ETP

Unread postby ROCKMAN » Fri 08 Dec 2017, 15:08:26

Outcast - The SEC once used the closing oil price on 31 December for reserve determination. Changed a few years ago. Now it uses an average price determined I think monthly. I'm sure Doc can offer details. But the SEC reserve determination only applies to US publicly traded companies. Neither private US companies nor any international companies have their reserves independently audited as US publicly traded companies as far as I know. IOW they are free claim half of what they estimate or 3X as much and no one is in a position to dispute their numbers. They can provide you with maps, production numbers, etc. and you have no way to confirm the accuracy. You're certainly free to not believe them but you have no FACTS available to prove them liars. For I instance I can write an article claiming my horizontal redevelopment project has added 5 million bbls of proven reserves. You can't prove me a liar. And since I work with a private company and claim confidentiality of my trade secrets I don't have to prove sh*t to you.

Nothing personal, buddy. Just good business. LOL.
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Re: Economics vs. ETP

Unread postby Outcast_Searcher » Fri 08 Dec 2017, 15:28:17

ROCKMAN wrote:Outcast - The SEC once used the closing oil price on 31 December for reserve determination. Changed a few years ago. Now it uses an average price determined I think monthly. I'm sure Doc can offer details. But the SEC reserve determination only applies to US publicly traded companies. Neither private US companies nor any international companies have their reserves independently audited as US publicly traded companies as far as I know. IOW they are free claim half of what they estimate or 3X as much and no one is in a position to dispute their numbers. They can provide you with maps, production numbers, etc. and you have no way to confirm the accuracy. You're certainly free to not believe them but you have no FACTS available to prove them liars. For I instance I can write an article claiming my horizontal redevelopment project has added 5 million bbls of proven reserves. You can't prove me a liar. And since I work with a private company and claim confidentiality of my trade secrets I don't have to prove sh*t to you.

Nothing personal, buddy. Just good business. LOL.

Thanks for the info and the perspective, Rockman.

The reason I brought that up was the silly season estimate numbers which have been used by the Middle Eastern OPEC countries for decades, where politics, desire to maximize countries' production quotas, etc. seem to have at least as much weight as following production trends, geology, etc. (at least, to this layman).

Your insight pretty much confirms what I'd thought the risk might be, in terms of such numbers.

Of course, this is pretty much true of industry in general. For example, Musk tells investers what (we hope) he believes re production estimates. Not only does he not have any accountability re being remotely close to correct -- he doesn't even have to disclose monthly production to let investors benchmark actual progress against marketing claims.
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Re: Economics vs. ETP

Unread postby Outcast_Searcher » Fri 08 Dec 2017, 15:33:19

StarvingLion wrote:Outcast_Searchers Fantasy World is not coming to fruition. And never will.

The mindless, eternal pathetic bleat of the fast crash doomer. Nothing ever changes. Nor will it ever. Because I refuse to believe it is so. Because I don't want it to.

Your signal to noise ratio is consistently just about zero. Congrats.
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Re: Economics vs. ETP

Unread postby Outcast_Searcher » Fri 08 Dec 2017, 15:43:10

onlooker wrote:Outcast and others remain in their fantasy world. Good article here about the diverse considerable limitations of Renewable energy
http://nov79.com/renw.html

Yes. All green energy devices are pure fantasy. None exist. None are being produced. Nothing ever changes.

And what color is the sky in your world?

https://insideevs.com/monthly-plug-in-sales-scorecard/

Notice the trend in every month for the graph. But none of that can be true because DOOM!

If the predictions of your ilk came true more than, say, 1% of the time, you just might have more credibility. However, that would require you to look at the world and admit that things the MSM reports on actually HAPPEN now and again -- even when they don't fit the meme of constant doom in our face.

And we can't have THAT at any price, now can we? :roll:


By the way, you should check your sources out just a bit. The home page for your source (link at the bottom of the page link you provided), has link number three for pure AGW denialist garbage. That's right: QUOTE: "Global Warming contrived through fake science".

So what does that say about the rest of the nonsense this source posts on their anti-science screed blog?

I'll leave it to you to reason that out. But hey, thanks for playing.
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Re: Economics vs. ETP

Unread postby ROCKMAN » Fri 08 Dec 2017, 16:17:06

Outcast - "...seem to have at least as much weight as following production trends, geology, etc. (at least, to this layman)." And to just beat that dead horse one more time: neither the laymen or the pros have the data. You and I have no way of knowing how much oil is coming out of every Saudi well. Hell, we can't even verify how many wells the KSA has. Hell, how much oil has India reported it has produced that was really Iranian oil produced during the so called embargo? Hell, the most powerful military on the planet couldn't stop ISIS from moving millions of bbls to Turkey and we were free to bomb the sh*t out of them. LOL.

At least in this country if I claim to have drilled X hz wells in that Texas field you can confirm it from the public data base. Likewise with the amount of oil produced. But not the geology or details of how I drilled or completed those wells. I'm not required to provide the Texas Rail Road Commission with that data. Almost no other country has such a publicly available AND VERIFIED data base.
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Re: Economics vs. ETP

Unread postby rockdoc123 » Fri 08 Dec 2017, 16:41:12

The SEC once used the closing oil price on 31 December for reserve determination. Changed a few years ago. Now it uses an average price determined I think monthly. I'm sure Doc can offer details. But the SEC reserve determination only applies to US publicly traded companies. Neither private US companies nor any international companies have their reserves independently audited as US publicly traded companies as far as I know.


It is now the average price over the year. Hurt like hell in 2015...a bit better in 2016 and likely much of the downgrade P1 reserves from 2015 will be recovered to full status in 2017.

SEC does capture a lot of international production simply because there are a number of large international oil and gas companies that trade on the NYSE. So all of the reserves, production, finances of Exxon or Shell or Chevron are audited and reported to the SEC regardless of their location. There are identical rules in Canada (Financial Instrument 51-101) and the UK with regards to reserve reporting and I believe also in Australia. When Aramco does it's IPO whether it is listed in the US or London it will also have to provide audited reserves to the regulatory body. In places like Indonesia, Malyasia, Egypt, Sudan, etc all companies are required to report production to the National Oil Company or the regulatory body. Without this it would be impossible to calculate out taxes or cost recovery. Even in places like Louisiana and Texas I believe that production is well tracked even for the private companies otherwise calculation of severance taxes would be impossible.
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Re: Economics vs. ETP

Unread postby vtsnowedin » Fri 08 Dec 2017, 17:15:25

I think all this argument about replacing reserves is a crock of S### !^. Not withstanding the industries ways of accounting their future prospects. (somebody set the rules and they have to go by them) nobody has ever replaced a reserve once they have pumped out a field. When they say they have replaced reserves all they are saying is that they have found a place and secured the rights to drill in a as yet unexploited area so they know where they will be drilling next year or next decade. That did not create that oil or change the total number of barrels that will in the end be pumped out of the ground.
When oil gets to $300 to $500 a barrel a lot of has been fields today will have a new life as they squeeze out every last drop from them, and all the accounting of their reserves will have to be revised.
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Re: Economics vs. ETP

Unread postby onlooker » Fri 08 Dec 2017, 17:28:58

Within this Forbes article, you will find that 2017 graph
https://www.forbes.com/sites/rrapier/20 ... d8ebe124f0
You can ignore reality but not its consequences
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