Oh and you're right, CHK has sold a total of only $11B in assets – it only said it was going to sell $14B worth...
And I believed them, LOL!
Cumulative Marcellus Shale production data were available from Pennsylvania and West Virginia for irregular time periods. These data were evaluated using a probabilistic analysis, but the quality of the data at the time of the assessment was considered not sufficient for the construction of individual well Estimated Ultimate Recovery (EUR) distributions. This probabilistic study was presented at the Petroleum Technology Transfer Council (PTTC) Conference held in Morgantown, W. Va., in March of 2011 (T. Cook, pers. comm., 2011).
Over the past ten years, the USGS has developed a series of EUR distributions for more than 20 shale-gas assessment units (fig. . This family of EUR distributions illustrates the total experience to date in the United States for estimated ultimate recoveries from shale-gas reservoirs. For each Marcellus AU being assessed, the geologist determines which distribution or set of distributions most nearly approximates the potential EUR distribution of the assessment units. This determination of the most appropriate EUR distribution was done along with the analysis of production data from Pennsylvania and West Virginia.
Total recovery per cell (BCFG): The geologists interpret a distribution for EUR. For example, in the Interior Marcellus AU, the EUR distribution was determined using production analogs from other assessed shale-gas reservoirs as a guide (fig. , following an analysis of the West Virginia and Pennsylvania data. The minimum EUR is 0.02 BCFG (standard for all gas assessments), the median EUR is 0.8 BCFG, and the maximum EUR is 12 BCFG, with a calculated mean of 1.15 BCFG.
rockdoc123 wrote:The question for most of these companies is what makes more sense investing say $200 MM to get a 20% IRR at a chance of success of around 95% versus investing say $20 MM to get a 20% IRR at a chance of success of around 20%. If you have access to the capital (which the big shale players do) then the answer is pretty obvious, you take the low risk bet. Being a capital intensive business it is also important that costs are controlled as that is what speaks to return margins.
The economic analysis in this paper is by the way quite flawed. You can not mix up a bunch of wells that have different drill depths, number of fracs, type of fracs etc and quote one well cost. The $10 MM number is high and is more like what is associated with the deeper wells in other plays. The breakeven costs he comes up with of $80 - $90/bbl are quite a bit higher than the industry has been talking about. As an example Bernstein Research not that long ago quoted a value of $55 - $70/bbl as breakeven for the Bakken.
But that isn't how it turned out at all, shale production did not collapse overnight to pre 2008 levels of production, even though the average oil price last year was only $43/bbl. Even expert Rockdoc123 didn't predict the production could stay so high for so long at such a low price.
pstarr wrote:Shale is quite simply a ponzi scheme, and should be shut down by the Las Vegas Gaming Commission.
pstarr wrote:Shale is quite simply a ponzi scheme, and should be shut down by the Las Vegas Gaming Commission.
shortonoil wrote:The big outfits are starting to bale on the shale miracle. Shale, ultra deep water, bitumen, and high sulfur extra heavy are going to be the first to go. Just like we projected 5 years ago.
http://www.zerohedge.com/news/2017-08-2 ... ale-assets
http://www.thehillsgroup.org
shortonoil wrote:The big outfits are starting to bale on the shale miracle. Shale, ultra deep water, bitumen, and high sulfur extra heavy are going to be the first to go. Just like we projected 5 years ago.
http://www.zerohedge.com/news/2017-08-2 ... ale-assets
Predicting a bust in the oil patch after a price boom doesn't exactly make you the new Nostradamus. LMFAO!
The shale industry has never had a positive cash flow from its production, and has never turned a profit.
It has existed on the monetary policy of the FED; ZIRP and massive liquidity injections. When that ends so also will the shale industry.
Shale is not a substitute for conventional crude because it takes 3 to 5 barrels of conventional to process one barrel of shale. Its API gravity is too high to be processed without the blending of conventional. Every refinery in the world is set up to process about 33° crude. The light ends just don't cut it by themselves.
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