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non-conventional oil

Discussions of conventional and alternative energy production technologies.

Re: non-conventional oil

Unread postby rockdoc123 » Sun 03 Sep 2017, 19:18:36

Would you loan them money?


This is just more classic…."I don’t understand what balance sheet entries mean but I can circle the negative income number as it will create a lot of hand wringing".

Beyond stupid. Lets look at the numbers

Total Revenues of 662 MM, OPEX and CAPEX were a total of 211 MM with G&A amounting to 39 MM. That amounts to EBITDA of 412 MM. The large negative operating income number they get excited about is entirely due to DD&A of 396 MM and impairments on reserves of 123 MM. These are paper losses and in no way contribute to the money in/money out the company experiences over each year. So the 73 MM in interest expense amounts to 18% of their actual cashflow. That is somewhat high as most companies seek to have carrying costs below 10% but a $3/bbl increase in average price of oil over the next twelve months would get them there.

Better yet Continental Resources 2nd quarter report is noting cash neutrality (expenditures matching income) at $45/bbl, they have increased total production and will exit at 24% to 30% higher production year on year.

So given a lender receives around 6% return why wouldn’t someone (i.e. an investment bank) loan them money? At this point there appears to be little danger of them not paying or even not meeting quarterly ceiling tests.
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Re: non-conventional oil

Unread postby AdamB » Mon 04 Sep 2017, 12:22:26

ROCKMAN wrote:Doc - And here's the problem with that poster being used for classification: The Greta Sand (32% porosity and 1+ DARCY perm) I'm redeveloping with horizontal wells that ARE NOT frac'd has a gravity of 22 API. Not a terribly heavy oil but with such a high viscosity it has a flow character more similar to a 11 API. Which is why there's about 40 million bbls of oil left in the reservoir. It should have a very strong bottom water drive but it doesn't thanks to the oil mobility problem. BTW 28 million bbls of oil was recovered by vertical wells with plain vanilla conventional completions. But recovered that oil very slowly.

So how would you classify it?


Run of the mill heavy oil development. Nothing unconventional about the oil (heavy), or the reservoir (non tight). This is why the entire concept of what is "unconventional" is such a distraction, it is all based on personal perspective. Those who were developing shale wells using multi-stage slick water fracturing in the 80's think it is ridiculous to pretend it is unconventional. The oil and gas developed isn't, shale has been recognized by geologists as shale since before anyone here was born, and hydraulic fracturing and horizontal drilling are about the same. "Unconventional means 1 of 2 things....either you read something in the newspaper and the ignorant journalists are looking for a label on something they don't understand to explain perfectly normal oil field cycles of development, or even an industry professional with zero experience sees techniques they have never used and therefore, because they are unfamiliar with it, it is somehow "unconventional".

It is poppycock, and matters only because those who use it are demonstrated either ignorance or myopia.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: non-conventional oil

Unread postby AdamB » Mon 04 Sep 2017, 12:27:30

ROCKMAN wrote:Adam - True: in my geologic would there are reservoirs as you describe: sandstone, etc.


In YOUR geologic world? I can pick up the phone and get any one of several USGS geologists on the phone, and they would describe their geologic work the same way. They use the word "continuous" for what I would describe as "resource plays", and while we might be talking about the same things, at least those who throw these words around understand the wishy washy nature of it. But the damn amateurs get involved and pretty soon my mother is asking me my opinion on these "unconventional" things that have made her gas prices so cheap, and will they stay that way. She read it in a newspaper after all.

Rockman wrote:And oil is oil regardless of it gravity, permeability of the reservoir, etc.


Of course it is. Now cue the peaker moron who is going to say "unconventional oil" somewhere in the next 5 minutes...well...they would if folks on this website talked about oil anymore, but they don't. A consequence of peak oil having turned out to be a dud.

Rockman wrote:The only time we use conventional/unconventional is to describe the completion method used. IOW there's no confusion when we communicate.


And I was "conventionally" completing shale wells using multi stage slick water fracks in the 80's. Did I miss something new that is now "unconventional"?
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Re: non-conventional oil

Unread postby AdamB » Mon 04 Sep 2017, 12:29:39

shortonoil wrote:https://srsroccoreport.com/trouble-financing-its-debt-massive-decline-rates-pushes-u-s-shale-oil-industry-closer-towards-bankruptcy/

Would you loan them money?


Who, Steve the Gold Bug at your faux reference blog? No, I wouldn't loan Steve any money, he is so ignorant that he asked this gang of keystone cops called the Hill Group to comment on the USGS assessment of the Wolfcamp last fall....like you ask someone who can't run a spreadsheet and does even understand oil field units to comment on the work of geoscientists.
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Re: non-conventional oil

Unread postby asg70 » Mon 04 Sep 2017, 12:31:49

Do you guys really want to shape your world view around a guy who doesn't know how to spell the word Santa Claus--and who, when called on his ignorance, doubled-down and never capitulated to his mistake? Intellectual, he is not.
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Re: non-conventional oil

Unread postby pstarr » Mon 04 Sep 2017, 14:15:20

Cog wrote:
shortonoil wrote:https://srsroccoreport.com/trouble-financing-its-debt-massive-decline-rates-pushes-u-s-shale-oil-industry-closer-towards-bankruptcy/

Would you loan them money?


I'm pretty sure I wouldn't loan YOU money. Sounds like just another call for donations shorty. ETP report not selling well? :lol:

My goal is to reach 500 PATRON SUPPORTERS. Currently, the SRSrocco Report has 108 Patrons now!!! Thank you very much for those who became new Patron supporters as well as members on the SRSrocco Report site.

so all of a sudden capitalism is no good? you need to keep your stories straight, Cog. That the shale industry is broke, should be obvious to even a commie like yourself lol
Haven't you heard? I'm a doomer!
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Re: non-conventional oil

Unread postby spike » Wed 06 Sep 2017, 05:19:44

When I started, "unconventional" was used broadly to mean "currently unrecoverable" including "deep" water fields, more than 500 feet. There is a difference between production methods with conventional reservoirs and continuous deposits (shale), and for heavy/tar oil, chemistry is different.
But it all comes out as gasoline, and you can't differentiate the source.
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Re: non-conventional oil

Unread postby AdamB » Wed 06 Sep 2017, 08:46:23

spike wrote:When I started, "unconventional" was used broadly to mean "currently unrecoverable" including "deep" water fields, more than 500 feet.


And Colin Campbell was lumping "polar" oil in there as well, but notice, you reference a TIME when this word meant something. Prior to wild spread establishment of use of mud systems and the rotary table, fields like Ghawar or Prudhoe would have been "unconventional". Water bearing formations and depth being a bit hard on cable tool rig drilling.

I am quite a bit happier with the word "currently unrecoverable" because it means something, and doesn't require reconfiguring the geologic world, or making up words that only mean "gee I only found it yesterday, therefore it must be so unconventional!"

spike wrote: There is a difference between production methods with conventional reservoirs and continuous deposits (shale), and for heavy/tar oil, chemistry is different.
But it all comes out as gasoline, and you can't differentiate the source.


Peakers walk into the trap of "if the source matters all that much, why don't they sell it that way at the gas stations" trap all the time. "Sorry my good gas station attendant, I don't want any of that cheaper and nasty derived from tar sands gasoline, I'll pay more for the same product derived from only the best and most conventional light sweet Arabian Light based crude for my fine German performance sedan thank you very much".

A chemical engineer can make the consumers desired product out of light sweet, heavy sour, tar sands, shale derived, hydrate derived, shale gas derived natural gas, so who cares what gets put into the manufacturing facility, what matters is what comes out.
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Re: non-conventional oil

Unread postby spike » Thu 07 Sep 2017, 04:21:05

I once argued that auto production had peaked, using data for sedans. SUVs are unconventional after all. :)
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Re: non-conventional oil

Unread postby ROCKMAN » Thu 07 Sep 2017, 13:32:48

Spike - Thanks for the clarification.
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Re: non-conventional oil

Unread postby AdamB » Thu 07 Sep 2017, 22:31:57

spike wrote:I once argued that auto production had peaked, using data for sedans. SUVs are unconventional after all. :)


And the next cycle of unconventional cars...EVs!
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Re: non-conventional oil

Unread postby Cliffhanger1983 » Fri 08 Sep 2017, 18:56:43

In times of plenty, we are generous beings. We expand our horizons, we give charitably to noble causes, we try to see that just about everyone is housed and fed. In times of safety, we can provide medical care and social support for almost everyone. But when things get scarce, people get ugly. They dehumanize people who are not like themselves, and convince themselves that they’re superior, so that they don’t feel guilt when they have the resources to survive and others don’t. They believe they’re better so that they feel justified taking down other people in their fight for survival. As things get scarce, and it becomes clear that we can’t save everyone, expect the world to tear itself apart fighting for the last scraps of whatever is left.
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Re: non-conventional oil

Unread postby AdamB » Fri 08 Sep 2017, 19:44:48

Cliffhanger1983 wrote:In times of plenty, we are generous beings. We expand our horizons, we give charitably to noble causes, we try to see that just about everyone is housed and fed. In times of safety, we can provide medical care and social support for almost everyone. But when things get scarce, people get ugly.


Nothing in there about "non-conventional" oil Cliffy, you miss the part of this thread where it isn't the doomer porn you are so enthusiastic about?

Although to be honest, even your mental wanderings about when things get scarce, people get ugly..

(contradicted here because it turns out, you are wrong again)

https://www.scientificamerican.com/arti ... -together/

are better than your lousy peak oil links and made up quotes from important people.


Cliffhanger1983 wrote: They dehumanize people who are not like themselves, and convince themselves that they’re superior, so that they don’t feel guilt when they have the resources to survive and others don’t. They believe they’re better so that they feel justified taking down other people in their fight for survival. As things get scarce, and it becomes clear that we can’t save everyone, expect the world to tear itself apart fighting for the last scraps of whatever is left.


Scientific America disagrees with you. Not a surprise that you don't know much about the reality of these things, doomer zealots are mostly all like that.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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