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Shale Oil: Running to Stay In Place

Discuss research and forecasts regarding hydrocarbon depletion.

Re: Shale Oil: Running to Stay In Place

Unread postby pstarr » Wed 30 Aug 2017, 14:03:03

Cash only, rock? Like a loanshark?
Haven't you heard? I'm a doomer!
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Re: Shale Oil: Running to Stay In Place

Unread postby shortonoil » Wed 30 Aug 2017, 14:55:22

The shale industry has never had a positive cash flow from its production, and has never turned a profit.


What a load of bollicks. The latest E&Y study on the top 50 companies indicates that statement is incorrect.


Are you talking about these companies? They even figured out how to turn a profit; stop trying to replace their reserves. Cut a $1 trillion out of Capex. Of course that means that they are going out of business, but the next quarters conference call will be happy tales, and the managements bonuses will be OK for another quarter. They definitely know how to prioritize.

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Re: Shale Oil: Running to Stay In Place

Unread postby rockdoc123 » Wed 30 Aug 2017, 16:38:33

Are you talking about these companies? They even figured out how to turn a profit; stop trying to replace their reserves. Cut a $1 trillion out of Capex. Of course that means that they are going out of business, but the next quarters conference call will be happy tales, and the managements bonuses will be OK for another quarter. They definitely know how to prioritize.


once again you post a document with no reference, so no idea how the numbers were calculated nor what is included. The E&Y study is detailed, garnered from company SEC filings which makes it easy to analyze.

EOG, a true shale player had 2016 revenues of 5,259 MM US, Production costs of 1,917 MM US, exploration expense of 126 MM US which results in pre-tax cash based income of 3,216 MM before taxes and 2,801 MM after taxes. It is only when you add in DD&A and impairments which are paper adjustments (and impairments are temporary) that they end up with a negative result of operations.

Pioneer another pure shale player had 2016 revenues of 3,108 MM US, production costs of 717 MM US, exploration expenses of 119 MM and G&A etc of 304 MM resulting in cash based income of 1,968 MM before tax and 1,563 MM after tax. Again it is only after you add in the paper adjustments of DD&A and reserve write downs (impairments) that you end up with a negative result of operations.

The only other pure shale player in your list is Southwestern and in 2016 they had a cash based results of operations of 574 MM

As I’ve said before when you look at your own home budget do you add in the depreciation on your vehicle or the change in the value of your home? Of course not. All you look at is your revenues from employment and investments minus your costs. That is the same as the cash based view of these companies and is appropriate in determining whether they are going concerns.

Not replacing their reserves you say? Horseshit.

In 2016 EOG replaced 183% of its produced reserves and 194% when revisions are excluded, Pioneer 128% of its reserves and 253 % when revisions were excluded.

For the top 50 companies, oil production replacement rates for the last 5 years have been 142% and 190% if revisions are ignored.
As an example, the company everyone likes to hate CHK started the year with 497 MMB and ended the year with 625 MMB, a 25% increase.

But don't let the facts stop you from posting random documents off the internet
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Re: Shale Oil: Running to Stay In Place

Unread postby coffeeguyzz » Wed 30 Aug 2017, 18:05:55

Don't know how many (if any) folks who frequent this site keep a close eye on production from unconventional wells, but some type of 'quiet revolution' seems to have been underway these past 18 months or so.

Besides the high grading and increasing length of laterals, both the diversion processes and microproppant use - along with restricted choking - are having significant impact on well production. (Check out Enno's Bakken profiles).
The operators are uniformly quiet about what is occurring, but the CEO of Core said that a doubling or more reservoir stimulation is possible with microproppant use, along with much slower decline.
Something is definitely going on to increase output per well.
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Re: Shale Oil: Running to Stay In Place

Unread postby ROCKMAN » Wed 30 Aug 2017, 18:15:11

Doc, Doc, Doc - Why are you trying to confuse the discussion with facts? You have no right to try to destroy the childish biased OPINIONS of others. You are obvious doing the work of the Devil...AKA ExxonMobil. LOL.
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Re: Shale Oil: Running to Stay In Place

Unread postby rockdoc123 » Wed 30 Aug 2017, 19:42:06

Something is definitely going on to increase output per well.


I think it is a combination of the longer laterals with more fracks which translates directly into greater flow into the well bore at lower drawdown and the fact companies are concentrating in the absolute best spots.
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Re: Shale Oil: Running to Stay In Place

Unread postby coffeeguyzz » Wed 30 Aug 2017, 22:40:38

Doc

Bakken lateral length has been about 9,500' or so for years.
Appalachian Basin lateral length is increasing a bit, but the production numbers are way high for the 15/20% extra iron.

No, something else is going on.
Few years back, Whiting was evaluating 3 versus 5 perf clusters per 350' long stage.
Now, stages are regularly 150/200 foot long wth clusters as close as 15 to 30 feet apart.
The only way this could be accomplished is by effectively employing both near wellbore and far field diversion material.
This would allow VERY extensive rubbilizing while reducing both stress shadowing and controlling half length of frac.

This 200/400 mesh microproppant is fairly recent stuff and the CEO of Core Lab says it will double area of stimulation as it scours tiny fissures and enables 100 mesh to enter and prop.
This is where all the extra sand is going.

In addition, the complexity of these microscopic fissures means the oil has a long way to travel to reach the wellbore, so the decline curve will flatten.
So he says.
All I know is that the initial output from Bakken and AB wells is WAY up (Check shaleprofiledotcom) and the drop off is not occurring nearly as sharply as years gone by.
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Re: Shale Oil: Running to Stay In Place

Unread postby ROCKMAN » Thu 31 Aug 2017, 10:48:46

coffee - You guys keep throwing out that techno babble like Doc and trying to confuse our armchair warriors here that know it's all still a scam. Shame on you!!!

OTOH trying to teach a pig to roller skate only frustrates you and pisses the pig off. LOL.
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Re: Shale Oil: Running to Stay In Place

Unread postby coffeeguyzz » Thu 31 Aug 2017, 11:07:54

RM

Hope you and yours are faring as well as possible with all the events happening down your way.
Glad to see you are able to post.

There seems to be something going on with the completion process that may involve increasing formation pressure with new fracs.

Bruce Oksol, on his milliondollarway site, has been tracking the Bakken for years on practically a well by well basis. (He is a Williston native, retired military).
He coined the term 'halo effect' years ago to describe the big jump in production from parent wells (older) when child wells (newer) were frac'd.
This may be playing a role, but the extensive downtime in older wells pre new fracs, along with repressurization with water to protect from frac hit damage by new fracturing may be involved in this significant uptick in new output along with older wells producing much more.

I do not know what to make of it but these newer Bakken wells are now regularly producing 100k/150k barrels oil first few months online.

The AB wells? 3 Bcf first 6 months, 15 MMcfd for a year is becoming routine.
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