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Peak Permian means Global Peak Oil will happen in 2020

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

Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Sat 25 Nov 2017, 15:00:33

OPEC admits that unconventional oil from tight oil shale in the USA is here to stay

OPEC-Concedes-That-US-Shale-Wont-Die

In the 2016 version ... OPEC predicted that North American shale would decline from 4.9 million barrels per day (mb/d) in 2015 to just 4.1 mb/d in 2017....Low prices would have successfully halted shale in its tracks, ending one of the most dramatic growth stories the world of oil has ever seen.

But a year later, OPEC is conceding that a different reality could be playing out. The 2017 ... predicts North American shale output rises from 5.1 mb/d in 2017 to a massive 7.5 mb/d by 2021 and 8.7 mb/d in 2025. The 2021 figure is a whopping 56 percent higher than last year’s forecast.


IMHO the new OPECE world oil outlook is no more accurate then their past view. Yes, US shale oil may output may grow a bit more, but the Bakken has already peaked, and some insiders are predicting the Permian Basin may peak in a few more years.

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It can't go up forever, can it? It has to peak sometime.........

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby coffeeguyzz » Sat 25 Nov 2017, 16:15:06

Just did some checking on the Bakken production numbers late 2014/early 2015 when the decline kicked in.
Should be interesting what this coming late spring/summer numbers show.

At the trough, ND ATW pricing was under $32/barrel ... pre DAPL.
Last week, it was about $49 and probably 5 to 8 bucks higher today.

The EIA Bakken region includes the poorly producing Montana, which can skew things somewhat.
There are almost 1,500 wells temporarily shut in in the North Dakota Bakken/Three Forks.

Wouldn't surprise me to see a new high this summer if pricing holds.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Thu 30 Nov 2017, 19:19:33

coffeeguyzz wrote:
The EIA Bakken region includes the poorly producing Montana, which can skew things somewhat.
There are almost 1,500 wells temporarily shut in in the North Dakota Bakken/Three Forks.


The Bakken is the Bakken. Some areas are better and some are worse.

coffeeguyzz wrote:Wouldn't surprise me to see a new high this summer if pricing holds.


Possibly. But its also possible that most of the better and more productive parts of the Bakken have already been drilled, making it more and more difficult to greatly increase production from current levels.

In fact, a peak in Bakken production ca. 2015 was predicted by a number of analysts, including SRC and Jean Laherrere. So far it looks like they were right.

death-bakken-field-has-begun-big-trouble-us

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby rockdoc123 » Thu 30 Nov 2017, 20:51:18

Possibly. But its also possible that most of the better and more productive parts of the Bakken have already been drilled, making it more and more difficult to greatly increase production from current levels.

In fact, a peak in Bakken production ca. 2015 was predicted by a number of analysts, including SRC and Jean Laherrere. So far it looks like they were right.


With regards to shale production, a simple plot of production does not tell the story. You need to look at wells drilled and separate out legacy production from new production. The rapid rise is based on the large number of wells drilled when oil prices were high for a considerable length of time. Each of those wells has an initial period of flush production that declines in a hyperbolic fashion rapidly for the first 36 months or so and after that flattens out to a very slow exponential decline. So the decrease in production is almost certainly more a consequence of lack of drilling as the price dropped in 2014. If prices rose high enough it is entirely possible that activity could pick up to the point where a new peak was reached. This wouldn't be the case if all of the potential Bakken had been drilled which we know isn't the case.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Fri 01 Dec 2017, 01:00:50

rockdoc123 wrote: the decrease in production is almost certainly more a consequence of lack of drilling as the price dropped in 2014. If prices rose high enough it is entirely possible that activity could pick up to the point where a new peak was reached. This wouldn't be the case if all of the potential Bakken had been drilled which we know isn't the case.


Of course. Thats exactly what I said.

However, the Bakken is not isotropic---some parts are more productive then others.

AND the best parts have been developed first.

Thats means that at some point the most productive areas will be tapped out and production will shift to less productive areas. At that point it will not be possible to maintain the same level of production that was reached in the past. When that happens the Bakken will have "peaked."

Of course it is possible that the decrease in production reflects lower oil prices. HOWEVER, the same low oil prices are paid for oil from the Permian Basin, and production there has NOT decreased so this effect doesn't actually seem very important.

This suggests the Permian Basin has NOT peaked, while the Bakken appears to have peaked.

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby rockdoc123 » Fri 01 Dec 2017, 10:33:04

Of course it is possible that the decrease in production reflects lower oil prices. HOWEVER, the same low oil prices are paid for oil from the Permian Basin, and production there has NOT decreased so this effect doesn't actually seem very important.


you need to take into account the differing economics of the two plays. The break even calculated by Rystad for the Permian basin is much lower than for the Bakken. There are a number of reasons for that but one is the presence of stacked pay. In any event activity goes where the most net returns can be made, hence drilling activity has been the most active in the Permian basin.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Tanada » Fri 01 Dec 2017, 10:39:07

Plantagenet wrote:
rockdoc123 wrote: the decrease in production is almost certainly more a consequence of lack of drilling as the price dropped in 2014. If prices rose high enough it is entirely possible that activity could pick up to the point where a new peak was reached. This wouldn't be the case if all of the potential Bakken had been drilled which we know isn't the case.


Of course. Thats exactly what I said.

However, the Bakken is not isotropic---some parts are more productive then others.

AND the best parts have been developed first.

Thats means that at some point the most productive areas will be tapped out and production will shift to less productive areas. At that point it will not be possible to maintain the same level of production that was reached in the past. When that happens the Bakken will have "peaked."

Of course it is possible that the decrease in production reflects lower oil prices. HOWEVER, the same low oil prices are paid for oil from the Permian Basin, and production there has NOT decreased so this effect doesn't actually seem very important.

This suggests the Permian Basin has NOT peaked, while the Bakken appears to have peaked.

Cheers!


Not necessarily the case because as sweet spots to drill run out the price of WTI is liable to rise which in turn means a greater number of wells can be drilled at a profit. Some of these additional wells will still be sweet spots but some will be hum drum average spots. Unless we get another short term bubble this will mean a transition from sweet to average and a moderately growing oil contract price month over month as the years pass. Ultimately all the known sweet spots will be in the productive phase but by that time prices should be high enough to sustain robust drilling in the average spots. While not as profitable as a sweet spot drilling three average wells instead of one super sweet well should produce the same volume of oil once the first year of extreme decline has passed, and it seems probable in my limited understanding that 5 years post drilling the average legacy wells are likely to be producing more than the single super sweet spot legacy well is producing after that same interval.

The effect of this will be much like the post 2015 short term peak when shale production did not continue to crash as so many had predicted. The long tail of these wells as moderate producers or stripper producers makes for a stable higher than before fracking total for the USA. Maintaining that higher than before gradual decline also mean that if a new sweet area of the Bakkan gets drilled where the lessors were expecting just average production it may still be enough to push the grand total up to a new higher peak, at least for the first few years after prices resume the $80/bbl band where they sat from 2010-2014.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby AdamB » Fri 01 Dec 2017, 12:45:04

Plantagenet wrote:
rockdoc123 wrote: the decrease in production is almost certainly more a consequence of lack of drilling as the price dropped in 2014. If prices rose high enough it is entirely possible that activity could pick up to the point where a new peak was reached. This wouldn't be the case if all of the potential Bakken had been drilled which we know isn't the case.


Of course. Thats exactly what I said.

However, the Bakken is not isotropic---some parts are more productive then others.


Exactly the same as the Wolfcamp benches in the Midland and Delaware Basins. And the word generally used by industry folks is heterogeneous, not isotropic.

Plantagenet wrote:AND the best parts have been developed first.


AND they weren't held by production, thereby interfering with the natural progression of leasing up a new area. Like the Wolfcamp in the Midland, where most of it is held by production, and as Pioneer happily explains, therefore there is no rush to do something quickly, rather taking the time to study what needs to happen, experiment, and then develop it exactly as the manufacturing model of resource development suggests.

Art Berman is going to hate this one even worse than he did the Haynesville.

Plantagenet wrote:This suggests the Permian Basin has NOT peaked, while the Bakken appears to have peaked.

Cheers!


The good news being that we know now that any singular peak is irrelevant, because now we must consider how many more might be possible, because of various factors not limited to price, geology, technology, etc etc.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby coffeeguyzz » Fri 01 Dec 2017, 16:02:47

Tanada
You pretty much nailed the interplay of pricing and the size of a play that can be profitably developed.
Two other major components - at least - also apply, namely the cost of D&C and the recoverable percentage of existing hydrocarbons.

A few years back, a Bakken well would take 50 or so days to be drilled, the rig broken down, moved, re rigged up, and another well started.
Today, in that same timeframe, 5 or 6 wells can easily be drilled.
Likewise, the frac water and produced water are handled by pipe, not truck.
These are but a few changes in a very few years that now allow Bakken operators to claim sub 5 million bucks do D&C a single well ... down from $8/10 million.

The 90% oil currently remaining will not stay underground.
When EOR efforts are successfully implemented, the Bakken will produce for many decades to come.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Outcast_Searcher » Fri 01 Dec 2017, 16:09:18

coffeeguyzz wrote:The 90% oil currently remaining will not stay underground.
When EOR efforts are successfully implemented, the Bakken will produce for many decades to come.

Don't tell short and his acolytes that. They'll call you names and spew nonsense at you, like the global economy will collapse any minute now, so we're all doomed regardless.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Fri 01 Dec 2017, 18:23:45

AdamB wrote: the word .... is heterogeneous, not isotropic.


Please check a dictionary before you post more nonsense.

The words "heterogenous" and "isotropic" are antonyms.

Its nonsensical to say that the word heterogeneous should be used instead of isotropic, when the words have opposite meanings.

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Fri 01 Dec 2017, 18:39:57

coffeeguyzz wrote:The 90% oil currently remaining will not stay underground.
When EOR efforts are successfully implemented, the Bakken will produce for many decades to come.


Of course.

But that has nothing to do with whether or not oil production from the Bakken has peaked.

The definition of peak oil is the point of MAXIMUM oil production rate.

The actual production rate data shows the Bakken peaked back in 2015, with production falling every year since then.

For comparison, oil production rates in the Permian Basin continue to increase year over year. This shows the Permian Basin hasn't peaked yet.

I understand you are predicting that higher oil prices will someday reverse the decline in oil production at the Bakken, and result in a new peak in the future. That is theoretically possible, but oil price has already more than doubled from the low of $26 bbl it hit in January 2016, but oil production in the Bakken hasn't risen even after the price of oil doubled. This suggests the decrease in oil production rate from the Bakken has less to do with the price of oil and more to do with geologic factors.

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby rockdoc123 » Fri 01 Dec 2017, 20:52:47

I understand you are predicting that higher oil prices will someday reverse the decline in oil production at the Bakken, and result in a new peak in the future. That is theoretically possible, but oil price has already more than doubled from the low of $26 bbl it hit in January 2016, but oil production in the Bakken hasn't risen even after the price of oil doubled. This suggests the decrease in oil production rate from the Bakken has less to do with the price of oil and more to do with geologic factors.


not true for a couple of reasons. The Bakken is somewhat more mature than what it was 5 years ago, as a consequence it takes a higher price to yield decent economics. Oil companies don't rush out to drill the minute a play or prospect passes the break even cost. Instead they wait to make sure that price is sustainable and when they see a clear way to a reasonable return they begin drilling again. The North Sea is a classic example of this. The first peak could be said to be driven by the big fields that were relatively easy to find and economic given the price and the fiscal terms. The second peak was created by the fiscal terms being softened considerably such that what was considered uneconomic before suddenly became low hanging fruit. Hence the drilling activity, more albeit smaller discoveries and the second peak.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Subjectivist » Fri 01 Dec 2017, 21:08:07

Seems to me your peak bakken rediction is premature. Drilling scheduals are developed over much longer periods than six months. Bakken peaked in mid 2015 and prices bounced ff the bottom in January 2016, a period of just six months. Then prices bounced around the $40/bbl mark for the 2016 yearly average. Prices are provably going to average around the $50/bbl mark this year, but that is a far cry from the $80+/bbl that was supporting drilling in 2010-2014. Heck t the beginning of December 2014 oil was still selling for 75/bbl and that is what kept drilling going in first half 2015 that pushed up the Bakken peak.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby ROCKMAN » Fri 01 Dec 2017, 21:33:09

Sub - So true. Some folks still have difficulty mentally factoring the different lag times in the various phases of the dynamics. Especially when controlling factors change quickly.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby rockdoc123 » Fri 01 Dec 2017, 22:13:07

but the other thing everyone has a hard time understanding is how fast things change in this industry. The swing from low prices to higher and higher prices has often been very quick. Raymond James is predicting that based on their assessment of supply/demand prices could be anywhere from 20 - 50% higher than current strip in 2018. All it takes is something to happen in the Middle East that stops or slows down production and wham....Bobs your uncle. Then everyone in West Texas will be scrambling around to find a rig, most of which have been mothballed or salvaged for parts and we will be right back in the thick of things. Been there, done that, too many times.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby AdamB » Fri 01 Dec 2017, 23:38:07

Plantagenet wrote:
AdamB wrote: the word .... is heterogeneous, not isotropic.


Please check a dictionary before you post more nonsense.

The words "heterogenous" and "isotropic" are antonyms.

Its nonsensical to say that the word heterogeneous should be used instead of isotropic, when the words have opposite meanings.


Please read more carefully, and try not to quote me out of context. Here is what I said.

And the word generally used by industry folks is heterogeneous, not isotropic.


Never in my career has a single geologist ever said "gee, the reason those wells are different is because of how isotropic they are!!". Not once. But hundreds, if not thousands of times, they HAVE said "the heterogeneity of this reservoir isn't going to lend itself to predicting individual well results", or words to those effect.

And I don't care if you picked a word that is an antonym to the word used by the petroleum geologists, it isn't my fault that not only are you unfamiliar with some basic petroleum geology vocabulary, but don't know much about stripper wells, fall for any peak oil that comes along without a seconds hesitation, and can't even be bothered to learn what or who "discovers" particular formations.

Cheers! :lol:
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Sat 02 Dec 2017, 01:05:19

AdamB wrote:
Never in my career has a single geologist ever said "gee, the reason those wells are different is because of how isotropic they are!!". Not once.


You are a bit of a thickie, aren't you. I get that you don't understand what the words mean---I get that----but why don't you just look up the words?

Now you don't understand the word "isotropic." I've already explained this word to you once. But you still don't get it.

Soooo---Do I have to do it again?

I guess so......OK, here we go.

Once again, you are posting nonsense.

You obviously still don't know what the word "isotropic" means even after I explained it to you.

It doesn't mean heterogeneous. It doesn't mean different.

The word isotropic means substances that have similar physical properties throughout the body of the material. In geology it used to describe rocks or minerals with similar properties.

And now lets consider your silly claim that geologists don't use the word "isotropic". All I can say is you are a bit of a thickie. Geologists, biologists, physicists, engineers and material scientists all frequently use that term. I'm a scientist and I use that term. Its a common scientific term. For instance, the wikipedia article on the term "isotropy" defines the word "isotropic" this way:

In the study of mechanical properties of materials, "isotropic" means having identical values of a property in all directions. This definition is also used in geology and mineralogy.

WIKI: Isotropy

Now lets look more closely at the exact usage you don't understand, i.e. the use of the word Isotropic to describe oil production from oil bearing formations.

Have you heard of the Schlumberger Corporation? Do you know what they do? Probably not, so I'll have to explain that to you as well. Schlumberger is the leading company doing well logging. In other words, Schlumberger is in the business of describing the characteristics of rocks that produce petroleum.

If anyone knows what the proper terms are to describe oil bearing formations it would be Schlumberger, right?

Got it so far?

OK, lets check out Schlumberger's "OILFIELD GLOSSARY" where they define the terms they use to describe the rocks in oilfields.

What do we find?

Oh LOOK, you thickie. There it is. Its the word "isotropic"---and its being used exactly as I used the word, and exactly as I defined it for you. I said the Bakken formation was not isotropic.....

And how how does Schlumberger define an "isotropic formation?"

Schlumberger says:

isotropic formation

1. n. [Well Testing]
A type of formation whose rock properties are the same in all directions. Although this never actually occurs, fluid flow in rocks approximates this situation closely enough to consider certain formations isotropic.
Antonyms: anisotropic formation

isotropic_formation

Do you get it now, you thickie?

This is what---the third time in the last two weeks you've struggled to understand a word I used? I strongly suggest you look up the words you don't know in a dictionary before posting about words you don't know.

And after I explain something to you once, please read my explanation closely and try to understand the explanation the first time. Your inability to understand what various words and terms mean even after they are explained to you is ridiculous.

Even though you are a bit of a thickie, you should at least be able to use a dictionary. SHEESH

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby spike » Sat 02 Dec 2017, 07:55:26

bakken.PNG
Actual Bakken production
bakken.PNG (17.78 KiB) Viewed 1205 times

Actual Bakken production as opposed to Laherrere projection.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Subjectivist » Sat 02 Dec 2017, 09:31:03

spike wrote:
bakken.PNG

Actual Bakken production as opposed to Laherrere projection.


So things are up 100,000/bbl/d more or less, no plummeting into the abyss as some people nsist they mst be!

Hey at the rate they have been going up looks like they will beat the 2015 peak before the end of 2018 even if prices don’t go any higher than where they are the last few months. That increase is like the tortise, slow and steady wins the race.
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