[shortonoil]

Kuwait is receiving help from BP to give its giant Burgan oil field new life through EOR.

The real help that the Kuwait Oil Company (KOC) is receiving is coming from Schlumberger, and the use of their ACTive Q* CT real-time flow measurement service. The last stage in the life of a complex carbonate reservoir is acid injection. Its purpose is to improve injectivity to enhance sweep efficiency. Acid injection is usually started when 40 to 50% of OOIP has been extracted. Burgan has been receiving acid inject for almost a decade, Schlumberger's real-time flow measurement service is being used to improve the efficiency of the acid injection method with considerable effect. A 70% removal of OOIP is the maximum that can be expected even in these very high permeability formations.

To compensate for the 3% decline rate that they are seeing, KOC is planning on bringing 500,000 b/d additional production from several wells near Failaka Island, in the Persian Gulf. As reported by Bloomberg the company had already signed agreements with Shell and BP for the development of new E&P projects. They expect to drill their first wells there this year.

Like the Saudis, that also have a 3% decline rate, Kuwait must bring new fields on line to maintain production levels. The Saudis are planning on developing the recently discovered Jubah field, and Sahaban fields in the near future. In 2016 total Saudi production increased by 300,000 b/d from the Shaybah field, and the Khurais field where drilling in 2016 was intensive. The Shaybah field and the Khurais fields increased production by 550,000 b/d. Which indicates that the remainder of Saudis 130 fields declined y 250,000 b/d.

It can't be emphasized enough that when the water seam reaches the horizontal laterals of these already depleted fields that production will drop to near zero in very short order. Iraq is the only ME producer that appears to have the capacity to compensate, at least short term, for such an event. They may be able to bring another 2 mb/d online, but political problems in the country are inhibiting the scale of development that will be necessary

Bloomberg reported in March that the Iraqi oil ministry was in talks with ExxonMobil to develop Ratawi and Omar fields, in the southern province of Basra. Those two fields could add an additional 500,000 b/d to Iraq's production. Additionally, it was reported that the oil ministry soon will invite bids for the development of Dujail, Kumait and Rifaie fields, in southeastern Maysan province. Their production potential was not reported.

Whether, or not Iraq can develop its potential production capacity before other ME producers go into steep decline is questionable in such a highly unstable political arena.

[AdamB]

This tread is called Economics vs. Etp. But if the energy isn't there, the economy won't be there either.

The etp doesn't talk about the energy available to the economy. It uses some oil information to generate random lines, and leaves it at that.

The title of this post is a joke. etp has nothing to do with economics.

And you are ignorant if you think the etp discusses the energy available to the economy. It doesn't do that either, because it excludes a vast majority of energy available to said economy.

[shortonoil]

The etp doesn't talk about the energy available to the economy.

"A mind is a terrible thing to waste." Maybe they hadn't thought of that before you came along?

[dirtyharry]

CHK has been following their plan all along, got sent sideways a bit by the drop in price but still sticking to it. The plan all along was to acquire as much acreage as possible using debt. Then to drill as many wells as possible (given the timelines required) to prove up the best part of the acreage. Then to sell off the less attractive pieces of the acreage that they had acquired.

So by your direction CHK is not in the O&G business but in ^flipping^ real estate business ,because they have never made a penny in O&G and to cover up their losses they just ^flip^ real estate . What a business model

[rockdoc123]

Maybe you need to learn to read a financial report. Assuming you can actually read.

[shortonoil]

What a business model

"Sucker born every day; just enough to make a living"

W.C. would have been proud of them.

[Outcast_Searcher]

Maybe you need to learn to read a financial report. Assuming you can actually read.

Maybe you need to read Baduila's post above. Assuming you have a brain?

Thermodynamics is truth. Economics is a banksters magic trick, a slight of hand to justify and then extract the planet's natural capital. It serves to make the wealthy wealthier and the poor poorer.

Economics is a social science.

https://en.wikipedia.org/wiki/Definitions_of_economics

Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.[12]

You continue to appear more even more ignorant with nearly every (uninformed) post. Hints: you are on the internet. You can look things up. Definitions and math matter.

[dirtyharry]

Maybe you need to learn to read a financial report. Assuming you can actually read.

Yes ,I know how to read a financial report and CHK has never ever showed any GAAP profits from the O&G operations . Not to mention the fact that they have been pulled up authorities for financial and other operational transgressions . Even by manipulating figures between ^flipping^ real estate and O& G operations they never have shown a net GAAP profit . Every now and then they have to go in for restructuring etc to stave of bankruptcy . Wonder why their ex ceo died in a car accident, was it suicide or was it murder because he was going to spill the beans to the FED? Get real before reality hits you .

[rockdoc123]

Yes ,I know how to read a financial report and CHK has never ever showed any GAAP profits from the O&G operations . Not to mention the fact that they have been pulled up authorities for financial and other operational transgressions . Even by manipulating figures between ^flipping^ real estate and O& G operations they never have shown a net GAAP profit . Every now and then they have to go in for restructuring etc to stave of bankruptcy . Wonder why their ex ceo died in a car accident, was it suicide or was it murder because he was going to spill the beans to the FED? Get real before reality hits you .

Accounting principles require the inclusion of DD&A as well as reserve writedowns. As I have pointed out time and time again this has nothing whatsoever to do with the company being a going concern. It's cashflow on a cash basis is revenues minus expenses and that is it. DD&A is useful if someone is looking at buying a company and is worried about the current monetary value of equipment, buildings, plants etc. Reserve writedowns on an annual basis are a reflection of average price over the year and if that price rises the next year then those reserves are brought back into the fold (i.e. only Proven reserves are reported so anything that drops to Probable and then later returns to Proven due to price fluctuations creates a huge problem for those who do not understand petroleum accounting). Because both are recognized as accounting expenses they affect the tax burden of the company which is equally why companies report them. But they do not affect their year to year business. As I have said a few times when you do your annual home budget do you take into account the depreciation on your home or your car? Of course you don't they do not affect the yearly business which is cash revenues minus cash expenses. In the case of CHK when you ignore DD&A and reserve adjustments they showed a cash profit (as I have pointed out elsewhere).

And your ridiculous view on why CHK is selling land simply shows a lack of understanding of the business. In E&P the early mover is advantaged and the first company into a basin has an opportunity to acquire the most land. But without wells to base that acquisition on they need to have a very broad land capture. It isn't until they have drilled some wells that they can start to high grade the best acreage. So why would they keep all the acreage if it makes more sense to just drill on the core areas? They shouldn't as that is just wasting capital (i.e. they have drilling commitments). So either they walk on those leases or they monitize them, the latter making the most financial sense. There are always companies who are late to the play or are smaller who can do a better job of making money outside of the core areas (or believe they can) and that is who companies like CHK sell to. This methodology has been a part of the E&P business since the sixties.

[shortonoil]

It's all just part of CHK's brilliant plans

That graph is a going out of business plan. Scratch one Shale Gas revolution!

[rockdoc123]

That graph is a going out of business plan. Scratch one Shale Gas revolution!

when companies build their 5 year plans around their share price then maybe you can crow. The two are pretty much unrelated. There are many companies trading at ridiculous prices compared to their production and many that are underwhelming. What is hurting CHK and has been for some time is the debt although less than half of what it was 5 years ago is still at $9billion. Their plan has been to retire that debt on schedule (which they have been doing religiously). The big problem with the plan has been the last few years of decreased prices for both oil and shale (due to US success largely) which screws with the Enterprise Value to Debt Adjusted cashflow ratio that the markets look at. As price comes back up and they decrease the debt further then their share price will rise. Especially so if the rising price along with the planned continuing asset right sizing gives them additional capital to increase their drilling program.

As to predicting the failure of the shale gas revolution...it already happened dimwit. That is why the natural gas prices are so low there was too much success.

[dirtyharry]

Rock doc says ^As to predicting the failure of the shale gas revolution...it already happened dimwit. That is why the natural gas prices are so low there was too much success.^

So now it is ^What we loose in profits we make up in volume ^. A one way ticket to bankruptcy . If all companies had ^too much success^ like this the world would be full of billionaires .

[rockdoc123]

So now it is ^What we loose in profits we make up in volume ^. A one way ticket to bankruptcy . If all companies had ^too much success^ like this the world would be full of billionaires .

It always amazes me how arm chair quarterbacks with no background in the oil and gas industry have no problem claiming that all these companies who have been operating for years have been continuously losing money. How stupid do you think they are? All those multi-millionaire executives, their Board of Directors and billionaire major shareholders apparently do not know as much as you about the financial wherewithal of their companies. Apparently, they were happy to operate for the past several decades with never making any returns on their capital.

Once again, learn to read a balance sheet as it applies to non-cash items.

[rockdoc123]

PapaDoc likes to claim that economics drive the machine, whereas we say it net-energy that creates wealth

which pretty much demonstrates how stupid you really are. Please show us a specific example of net-energy having created wealth and how that company used an EROI calculation in their business plan.

So there is too much NG to make a profit. That is supposed to be good economics? It's not. NG is a byproduct of the unsustainable shale frenzy. It's drilled just like crude oil, with the same equipment. The American investor class hardly knows the difference, so we have a scarcity of crude, and an over-abundance of NG . . . leaking out of the last crude fractures. (It's why its flared in historically high levels). Some is trapped and sold by government decree, to reduce methane emissions. Artificial over-supply. Boom and Bust Boom and Bust Boom and . . . Bust

It is surprising since you have been here for over a decade that you don't actually understand what transpired. There was a time in the not too distant future where natural gas was spiking locally up to $10/Mcf in the winter. Shortages were predicted because there just wasn't enough natural gas being delivered to the US from Canada or the Gulf Coast offshore. Then came the shale boom. Prices over the next few years were high due to lack of supply and that drove the drilling frenzy in the US in the Marcellus, Eagleford etc. These projects were incredibly successful. Initial Drilling and Completion costs were more than halved in a period of 2 years and project synergies made for very healthy economics and hence much more gas. That success eliminated any worries of natural gas shortfalls in the cooling or heating months and gas storage began to fill up. The result of high supply is, of course, a demand response of lower prices which has happened. But those lower prices also generated cost cutting amongst the operators. As an example in 2017 Cabot Energy is estimating a netback of $1.60/Mcf. In 2016 Cabot was getting on average 26 BCF/well. That is a net return per well (money of the day) of $416 MM. There are other companies in other plays that aren't doing as well mainly due to access to the major natural gas markets but they take advantage of higher liquids content.
Natural gas is a clean, highly efficient fuel. It is the main source of heating for homes and businesses in Canada and is a source of direct energy for many drilling rigs both onshore and offshore.

[Outcast_Searcher]

It's all just part of CHK's brilliant plans

That graph is a going out of business plan. Scratch one Shale Gas revolution!

Except if you're going to rely on the graph of CHK (honestly) for the past several years, what you'll see is:

1). It was doing fine when oil prices were at the high plateau prior to the big drop starting in 2014.

2). It, like many companies involved in E&P of hydrocarbons, it got hit hard when the price of oil dropped dramatically in the early 2016 timeframe.

3). It's been roughly flat, overall, the past couple of years.

https://www.google.com/search?q=chk+sto ... e&ie=UTF-8

That looks to me like a chart of a company whose finances depend a lot on the long term price of oil (and NGL's), major components of CHK's primary business.

(You see, pstarr loves to try to distort things and twist things to make his side of arguments look stronger. So you should check on the chart of CHK since his chart conveniently leaves off the past couple of years or so to make things look as bad as possible. A tactic you should be familiar with, re your ignoring long term inflation to make your claim about it taking MANY hundred percent more BTU's to extract energy than it did 50 years ago, despite the facts, etc).

Now, neither you nor I nor anyone else knows for sure what the price of oil and other hydrocarbons will do in the next X years (though you'll claim otherwise, of course).

Clearly, if you DID know for sure how to predict the future price of crude oil, you'd have made a fortune trading oil futures already (instead of trying to make a living selling your ETP theory for $40ish (last time I looked) and calling people who disagree with you names like a 9 year old). Given that you are apparently welching on your bet on this site re the price of oil, I kind of doubt you've done that.

[dirtyharry]

[/quote] How stupid do you think they are? All those multi-millionaire executives, their Board of Directors and billionaire major shareholders apparently do not know as much as you about the financial wherewithal of their companies. Apparently, they were happy to operate for the past several decades with never making any returns on their capital.[quote]

How stupid these executives are ? No they are not stupid it is the shareholders and all those who provide the funds that are stupid . The executives are the smart guys . They are in the ^loot and scoot ^ business .By your thinking then Tesla ,Snapchat,Uber etc are also successes . By the way the opposite of ^Success^ is ^Failure ,then by your count since CHK is a success then Apple,Microsoft, Toyota,Google etc are failures . I suggest you hold a seminar and call all the CEO^s of these ^failures^ on how to be a success . They will be forever grateful .

[onlooker]

Outcast, you should stick to criticizing the Etp, because on the general points, you are the one looking like a stubborn 5 year old. It is obvious to anyone who has looked at Shale both oil and gas, that this is a temporary stop gap source. It has no long term legs. This is evident from both an EROEI basis and by the economically negative positions since they begun to produce substantially this decade. They have shown they cannot function without taking on huge debt loads.

You and others display your economic acumen routinely, well what company or Industry can subsist over the longer terms getting into ever greater Debt? You should know the answer is NONE. If you disagree, all of you are not as economically savvy as you portray

[Outcast_Searcher]

Outcast, you should stick to criticizing the Etp, because on the general points, you are the one looking like a stubborn 5 year old. It is obvious to anyone who has looked at Shale both oil and gas, that this is a temporary stop gap source. It has no long term legs. This is evident from both an EROEI basis and by the economically negative positions since they begun to produce substantially this decade. They have shown they cannot function without taking on huge debt loads.

You and others display your economic acumen routinely, well what company or Industry can subsist over the longer terms getting into ever greater Debt? You should know the answer is NONE. If you disagree, all of you are not as economically savvy as you portray

Do you every have ANYTHING to say except for the same meaningless doomer FUD? But I know, it's all your ilk has, so keep on mindlessly plugging.

[dirtyharry]

It's all just part of CHK's brilliant plans

That graph is a going out of business plan. Scratch one Shale Gas revolution!

Except if you're going to rely on the graph of CHK (honestly) for the past several years, what you'll see is:

1). It was doing fine when oil prices were at the high plateau prior to the big drop starting in 2014.

2). It, like many companies involved in E&P of hydrocarbons, it got hit hard when the price of oil dropped dramatically in the early 2016 timeframe.

3). It's been roughly flat, overall, the past couple of years.

https://www.google.com/search?q=chk+sto ... e&ie=UTF-8

That looks to me like a chart of a company whose finances depend a lot on the long term price of oil (and NGL's), major components of CHK's primary business.

(You see, pstarr loves to try to distort things and twist things to make his side of arguments look stronger. So you should check on the chart of CHK since his chart conveniently leaves off the past couple of years or so to make things look as bad as possible. A tactic you should be familiar with, re your ignoring long term inflation to make your claim about it taking MANY hundred percent more BTU's to extract energy than it did 50 years ago, despite the facts, etc).

Now, neither you nor I nor anyone else knows for sure what the price of oil and other hydrocarbons will do in the next X years (though you'll claim otherwise, of course).

Clearly, if you DID know for sure how to predict the future price of crude oil, you'd have made a fortune trading oil futures already (instead of trying to make a living selling your ETP theory for $40ish (last time I looked) and calling people who disagree with you names like a 9 year old). Given that you are apparently welching on your bet on this site re the price of oil, I kind of doubt you've done that.

Sorry searcher,you are so wrong .Below is Net Profit of CHK for the last 10 years:
2008 0.50B
2009 (5.85B)
2010 1.66B
2011 1.57B
2012 (0.94B)
2013 (0.47B)
2014 1.27B
2015 (14.86B)
2016 (4.93B)
2017 (0.24B) as on 30/9/2017
All others are as on the last day of the year .
Summary : They lost money in 6 out of the 10 years . Total profits 10 years 4.94 B .Total losses 10 years 27.29 Billion .
Net profit margin a pathetic average of 2.77% . Share price peak 40.545 in Jul 2008 trading today at 3.81 .A crash of 90%.
There is no way you can justify your defense of CHK .Interesting that even when oil was $147 in 2008 they made a measly 500 Million and in 2009 when the oil price started to decline they went to a loss of $5.85 B .
These shareholders cannot buy a pizza with this performance .
P.S : The bosses(the loot and scoot gang) of course are going to be eating Kobe beef steak and wash it down with a Moet and Chandon champagne

[rockdoc123]

When you look at the S&P 500, and see that 30% of its market cap is made of companies that have never turned a profit, or even had a year of positive cash flow there is very little question as to who are the stupid ones

It would be the ones who don't understand accounting principles and the difference between cash and non-cash items. Or those who get all of their financial opinions for suspect bloggers.