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THE Natural Gas Thread (merged)

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

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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Sun 11 Dec 2016, 21:21:21

Doc - Another true story... I was a partner in ee well. An Austin Chalk NG well in Texas. A local farmer was stealing NG since he "hot tapped" (splice into a flowing pipeline) into the buried line. The engineer couldn't figure where he was losing gas. Finally put some dye into the line at the wellhead and pressured up. The farmer had run his line to his rice drier. By pressuring up the burners flared up and burned down his drier. Drove down to the well and raised hell with the engineer. Not smart especially since the well was on the lease of one of his relatives. Essentially stealing some of his family's royalty monies. And everevern worse: the ernghineer was a cousin to the county deputy sheriff.
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Re: THE Natural Gas Thread (merged)

Unread postby AdamB » Sun 11 Dec 2016, 22:11:48

ROCKMAN wrote:Doc - Another true story... I was a partner in ee well. An Austin Chalk NG well in Texas. A local farmer was stealing NG since he "hot tapped" (splice into a flowing pipeline) into the buried line. The engineer couldn't figure where he was losing gas. Finally put some dye into the line at the wellhead and pressured up. The farmer had run his line to his rice drier. By pressuring up the burners flared up and burned down his drier. Drove down to the well and raised hell with the engineer. Not smart especially since the well was on the lease of one of his relatives. Essentially stealing some of his family's royalty monies. And everevern worse: the ernghineer was a cousin to the county deputy sheriff.


At least he didn't use a gun on anyone. I had a landowner that shot a hole in the gasline, disconnected the first 2 compression couplings that first the utility and then the company installed, and held off the crew with a gun that I sent out with a backhoe to fix the thing and bury it. The cops arrive, I get them to cuff the guy and him in the back of the cop car while the guys fix and bury the line, and then cited for causing a disturbance.

Get this, the guy fights the citation in court, everyone gets a subpoena, spend the afternoon in court, and the beauty of it was that after it was all said and done, the judge goes bananas on the guy, changes his fine to the maximum and throws full court costs for wasting everyone's time. Neatest result from any court determination that I've ever been involved in.
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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Mon 12 Dec 2016, 12:11:33

Wondering off thread but what the hell...slow news day on NG. So about armed locals:

I've known only one geologist ever shot in the field. He was working in Mississippi for a couple of months. Started screwing so local gal. One day drove to her house in the country but stopped down the road when he saw a bunch of motorcycles in front. Knew her biker boyfriend had been in jail. So he started to back around and heard a thud. Bullet went thru the driver's door and nicked him in the leg.

Apparently the boyfriend made parole early. LOL. I've been confronted by upset land owners or hunters more then once. Always gave my standard answer: "Yes sir, leaving now". Have a good day."
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Re: US Natural Gas production starting the decline

Unread postby GoghGoner » Wed 21 Dec 2016, 07:28:57

GoghGoner wrote:
GoghGoner wrote:Well, the EIA released a new forecast. Their monthly data has showed a decrease in the last two months, however, their annual forecast looks flat for a few months and then back to growth. Natural gas futures are showing increasing prices through next winter (over $3 next winter) so investors are betting that the supply/demand picture is tightening.

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The EIA finally realized that 2016 production would be less than 2015! Glad I didn't believe them. Predicting a nice increase in 2017. Guess what -- it is not going to happen. From the STEO today:

Natural gas marketed production fell from 79.7 billion cubic feet per day (Bcf/d) in September 2015 to 76.5 Bcf/d in July 2016. EIA expects marketed natural gas production to average 77.5 Bcf/d in 2016, a decrease of 1.6% from the 2015 level, which would be the first annual decline since 2005. Forecast production increases by 3.7 Bcf/d in 2017.


After not being accurate with their 2016 predictions, the EIA now expects Marcellus production to start growing this month. Once again, I don't see it -- as the rig count grows (and the drillers have only added 6 rigs in the region), the initial production rate will fall. I don't think the EIA believes that, yet. They will. To raise production in Marcellus we would need to see an explosion in rig counts.

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Re: US Natural Gas production starting the decline

Unread postby Tanada » Wed 21 Dec 2016, 07:59:33

GoghGoner wrote:After not being accurate with their 2016 predictions, the EIA now expects Marcellus production to start growing this month. Once again, I don't see it -- as the rig count grows (and the drillers have only added 6 rigs in the region), the initial production rate will fall. I don't think the EIA believes that, yet. They will. To raise production in Marcellus we would need to see an explosion in rig counts.

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How many rigs do you think it will take to balance new supply against he depletion curve of the wells older than say 3 years when they are in the long slow decline phase?
I should be able to change a diaper, plan an invasion, butcher a hog, design a building, write, balance accounts, build a wall, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, pitch manure, program a computer, cook, fight efficiently, die gallantly. Specialization is for insects.
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Re: THE Natural Gas Thread (merged)

Unread postby GoghGoner » Wed 21 Dec 2016, 09:25:20

If you take Barnett as an example, older wells will decline about 10% per year. My suspicion on Marcellus is that the decline rate would be higher -- the bigger they are the harder they fall.

http://energyevidence.blogspot.com/2016/05/shale-gas-decline-case-barnett-shale.html

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Haynesville rig count was around 50 and that region showed a very slow decline.

https://www.eia.gov/petroleum/drilling/pdf/haynesville.pdf
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Re: THE Natural Gas Thread (merged)

Unread postby GoghGoner » Wed 21 Dec 2016, 09:34:39

Marcellus was running 80+ rigs before 2015 and now the region is at 40. The low was 21 at the beginning of August. The sweetest spots have been drilled and the companies milked them to survive this downturn. As they expand, it will be into less efficient sites.
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Re: THE Natural Gas Thread (merged)

Unread postby Tanada » Wed 21 Dec 2016, 11:37:57

Decline rates stay at 10 percent long term? That would mean after the three year rapid decline the wells would only remain useful for another 7 years or less?

So if 80+ was leading to an increase but 40 is leading to a decline I will mentally split the difference and say 60 might produce a steady state production level for the Marcellus formation. That number will have to gradually grow over time as less and less sweet spots are remaining in the potential drilling leases.
I should be able to change a diaper, plan an invasion, butcher a hog, design a building, write, balance accounts, build a wall, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, pitch manure, program a computer, cook, fight efficiently, die gallantly. Specialization is for insects.
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Re: THE Natural Gas Thread (merged)

Unread postby coffeeguyzz » Wed 21 Dec 2016, 19:10:42

I do not know how closely you gentlemen follow the goings on in the Appalachian Basin, but to think the supply may taper/decline due to the amount of Gas In Place is highly questionable.
These past few months, several 3 to five wells per pad were drilled and brought online that showed extraordinary production numbers.
There are currently a half dozen Pennsylvania wells flowing over 20MMcfd with three dozen total above 15 MMcfd.
One well from Cabot, the King D 4 flowed 34 MMcfd in September with monthly output exceeding 1 Bcf.
Over in Ohio's Utica, Ascent brought online the 4 well Cravat pad that cum'd almost 6 1/2 Bcf its first three months.
The decline rates of these wells should in no way be compared to the Barnett's as there are significant differences.

Sweet spots being drilled out?
Apparently EQT may think otherwise as they just announced, in addition to 119 Marcellus wells planned in 2017, 81 Upper Devonian wells will also be co-developed on the same Marcellus pads.
The UD wells are showing greatly increased output from Wrightstone Energy's 2015 study postulating 100 Tcf recoverable from these numerous, shallower horizons (Rhinestreet, Middlesex, Genesee, Burket, amongst them).
In addition, EQT plans on 7 so called Deep Utica wells (12,000'+) as their exploration program continues at a highly moderated pace due, primarily, to excess product on the market.
While 3.5 to 5 Bcf EUR per 1,000' of lateral may seem like a preposterously high figure, production records from a few of the successful Deep Utica wells may validate this projection.
The productive footprint of the Utica continues to expand with successful Utica wells in Tioga, Potter, and McKean counties.

There are many, many decades ahead of highly prolific output from the Appalachian Basin.
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Re: THE Natural Gas Thread (merged)

Unread postby GoghGoner » Thu 22 Dec 2016, 13:44:32

Barnett has plenty of gas-in-place but there ain't nobody drilling there. I can look at the financials of CHK, COG, RRC, etc... and tell these companies aren't doing well. They were running up debt before the price collapse. I don't understand why so many investors fell for tidbits like you just threw out. I think the tightening policy of the FED could have huge implications for how many of these companies are viable. Plenty of sucker money left out there to grab and they have to suck investors in since these companies cannot fund their own drilling.
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Re: THE Natural Gas Thread (merged)

Unread postby GoghGoner » Thu 29 Dec 2016, 10:41:24

Quite a drawdown! Where is all of that Marcellus production? LOL!

Weather forecasts turns colder after next week, if we see a couple of arctic blasts, hold on to your hats.

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Re: THE Natural Gas Thread (merged)

Unread postby coffeeguyzz » Thu 29 Dec 2016, 22:32:06

Where is all that Marcellus production? Last I checked, PA, WV, OH.
Take away pipelines are close to being maxxed out, but, you are 100% correct, GG, that the coming weeks may be brutal for pricing /supply for consumers, especially New England with little over 4 1/2 Bcfd entering the region via pipeline.
The spot price at the Algonquin citygate and, I believe, Tetco M6 NY could skyrocket if there is an extended cold snap.
Next winter may be worse as there will be fewer coal burners available for backup.
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Re: THE Natural Gas Thread (merged)

Unread postby vtsnowedin » Fri 30 Dec 2016, 10:44:18

coffeeguyzz wrote:Next winter may be worse as there will be fewer coal burners available for backup.

Is that a given considering the incoming Trump administration?
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Re: THE Natural Gas Thread (merged)

Unread postby AdamB » Fri 30 Dec 2016, 12:15:59

GoghGoner wrote:Quite a drawdown! Where is all of that Marcellus production? LOL!

Weather forecasts turns colder after next week, if we see a couple of arctic blasts, hold on to your hats.

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Don't worry about the Marcellus. It will be saved by the Obama administration and the EPA, just as the EIA says. And all because of this....

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US LTO development might not have enough global demand growth to keep it growing in the US, but that is NOT the case for natural gas here in the US. Pincushion the Appalachian basin industry will, both the Utica and Marcellus. Make the Barnett look like kiddie play in Texas, ultimately.
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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Fri 30 Dec 2016, 12:34:18

vt - "Is that a given considering the incoming Trump administration?". I would assume so since I believe the caffeine fiend was referring to coal fired plants that have been decommissioned and wouldn't be available regardless of who the POTUS might be. By speaking of burning coal: are you aware that more US coal was produced in one year under President Obama then any other POTUS in history?

And speaking of NG prices/supplies sometimes the problem isn't the amount available in storage but insufficient pipeline capacity to make deliveries to the end users. I recall during a past winter when New England got hit really hard and they couldn't get NG to Boston fast enough so a local utility bought a couple of tanker loads of LNG from the spot market for around $22/MCF. Way above the price of pipeline supplies. Same problem with propane in another very cold snap: lots of propane in storage but not enough delivery trucks to get it to home owners before they ran out.

Many get pissed off when the "just in time" systems fail. Typically the same folks who don't want to pay for additional infrastructure that's not used very often.
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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Fri 30 Dec 2016, 12:57:52

Marcellus Shale update: during 2016 production has remained flat through out the entire year. The huge increasing surge hit a wall at the end of 2015. But all things considered still holding its own especially given the rig count has dropped from its high of 145 in 2012 to the current 45.

http://www.eia.gov/petroleum/drilling/#tabs-summary-2
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Re: THE Natural Gas Thread (merged)

Unread postby vtsnowedin » Fri 30 Dec 2016, 14:53:35

ROCKMAN wrote:vt - "Is that a given considering the incoming Trump administration?". I would assume so since I believe the caffeine fiend was referring to coal fired plants that have been decommissioned and wouldn't be available regardless of who the POTUS might be. By speaking of burning coal: are you aware that more US coal was produced in one year under President Obama then any other POTUS in history?

And speaking of NG prices/supplies sometimes the problem isn't the amount available in storage but insufficient pipeline capacity to make deliveries to the end users. I recall during a past winter when New England got hit really hard and they couldn't get NG to Boston fast enough so a local utility bought a couple of tanker loads of LNG from the spot market for around $22/MCF. Way above the price of pipeline supplies. Same problem with propane in another very cold snap: lots of propane in storage but not enough delivery trucks to get it to home owners before they ran out.

Many get pissed off when the "just in time" systems fail. Typically the same folks who don't want to pay for additional infrastructure that's not used very often.

Yes but I was thinking of those coal plants running this winter that have not yet begun the decommissioning process. Some of those were going to close this summer for no other reason then Obama's EPA wanted them closed.
If I was the owner of one of those I would not take any point of no return actions until I had a firm read on the next administrations policies.
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Re: THE Natural Gas Thread (merged)

Unread postby coffeeguyzz » Fri 30 Dec 2016, 17:48:25

Vts
At this point it is the economics more than the politics.
The huge, old, Brayton Point coal burner is definitely closing this coming spring.
Problem is, the 8/9 months of highest electric useage (300-400 Mw days) occur when natgas and nuclear can pretty much handle it, and do it more efficiently with the gas plants cranking up and down during the day.
At least one of the coal burners in NH is up for sale, I believe, but no one wants to buy it.
The Pilgrim nuclear plant will be around two more winters after this one when it, also, is scheduled to be decommissioned.
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Re: THE Natural Gas Thread (merged)

Unread postby coffeeguyzz » Fri 30 Dec 2016, 17:55:16

Rock
Enno Peters just released an update on the Pennsylvania Marcellus on his site shaleprofile..com.
He does great work and added some enhancements this time around including cumulative productions for the wells shown in grahic display.
While I am pretty familiar with the numbers, it is still impressive to see about 150 wells with cums above 9 Bcf after just a few years online.
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Re: THE Natural Gas Thread (merged)

Unread postby ROCKMAN » Fri 30 Dec 2016, 18:33:12

Coffee - If you look at the Marcellus section of the link I posted what's impressive is how the productivity per newer wells has increased significantly. I suspect it's as much or more due to improved methodology then just culling out the poorer prospects. And still waiting for more pipelines to open up the market. While production has been flat for the entire year the MS is far from dying IMHO.
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