[dcoyne78]

Yes...all EFS and all hz. Those numbers are for wells actually put on production in the stated time frames.

Thanks. I don't have access to drillinginfo but when I use the RRC database it gives me say 1000 oil wells on the schedule, but usually about 20 % of the wells have either stopped producing or have not started to produce so that their output is zero. My question is, are all of those EFS wells producing or just some of them. Also does my estimate of about 3100 wells producing in the EFS in June sound about right. You gave me how many have come online in the last 12 months, but I don't know how many there were 12 months ago, my guess is about 1600.

DC

[ROCKMAN]

DC - During May 2013 there were 3291 oil wells producing from the EFS and 769 gas wells. As strange as it seems only 4 wells were producing oil from the EFS during May 2012. Hard to believe but that's what DI says

[Oily Stuff]

DC, as to well costs I do not have definitive data either. Who does, really? Getting the truth out of these shale dudes is almost like getting reserve estimates out of Iran. But as I am reminded time and time again by the medical profession here, tight oil folks don't misspeak the truth. I will leave it up to you to decide if the "rhetoric" about declining well costs made by public companies end up being true over coming years. All I can tell you from my observations of the shale play here in S. Texas and my experiences as someone who drills and completes wells, and writes the checks himself, is that generally speaking costs go up, not down. The time these shale dudes can save sliding a rig around on the same pad is not going to offset the inflationary costs of steel, cement, etc. etc. etc. over coming years. IMDAO a typical shale well in S. Texas costs 6-7 million dollars, without problems, and that's just about impossible in the oilfield, no problems. I have heard of costs upwards of 14 million, but nothing below 7.

Again, with my opinions properly qualified above, the fresh water situation in S. Texas may eventually slow the EF feeding frenzy to a crawl. I suppose it is simply human nature, faith based optimism, that prevents people from caring about usable water to tight oil production ratios. Its not a problem in N. Dakota, down here it is. All I can say is hold on to your cowboy hats.

Using your 10 year EUR's for the EF wells you have looked at, which I agree with, and 100 dollar gross oil, 60 dollar net oil to the working interest, the economics for these EF wells suck. It may barely work for 10-12 of the biggest players in the EF but they walk a very thin catline. If it takes 4-5 years to get 6-7 million dollars back in their big pockets, and then all they can count on is 7% annual rate of return on their initial investment, over the next 5-8 years, goodonthem. I'll pass, thanks. If folks think there are no risks associated with tight oil development, close your eyes, take a deep breath and remember the price of crude oil dropped 100 dollars a barrel less than 5 years ago.

The poster child for tight oil development in S. Texas guts their wells from the get go and within one year they are going on rod lift. For all the sucker rods that publically traded company will end up running over the next 5 years in S. Texas you could build a sucker rod chain link fence around all of California (tee, hee). Please, all kidding aside, trying to rod lift a low fluid entry well with a down hole pump hung off in a horizontal radius at 11,000 feet is the beginning of the end. Re-frac'ing? Gimme a break. That adds 2.5-3.3 million MORE dollars to well costs. What does it say if within 3 years of initial completion companies are already re-frac'ing?

There are 35 EF shale wells in my area of operations. I guess 8 might pay back drilling and completion costs before they get the 'ol cement tombstone. I use to want an EF well for Christmas, now I'd rather have another horse. You can generally count on them.

Here is another link regarding drilling time per active rig running in the EF: http://eaglefordshale.com/news/did-you- ... r-quarter/
Please consider the self promoting source but it implies 4000 wells per year. Actually TRRC data for 2012 was close to that; lets wait and see how 2013 ends up. From what I can see those shale dudes are drilling and getting those wells into the tanks now with 4 months. Frac'ing delays are getting much better. I agree with the other oil man on this thread, I do not believe that we, Texas, can put anymore rigs into this shale play than what we have right now. We could not support them with qualified personal and besides, I don't actually believe anybody wants to step any further out on the limb than they already are with building more stuff for the EF. I hear the same rumors, rigs are having a harder time finding the work, sitting much longer between wells, that sort of thing. That may be a tiny little bit due to rig efficiency but the B team is not picking those rigs up so fast anymore to drill flank stuff.

Thru May of 2013 there were 4,060 wells producing 685,814 bbls. of liquids out of the EF; that comes straight from the TRRC's mouth. http://www.rrc.state.tx.us/eagleford/Ea ... uction.pdf
http://www.rrc.state.tx.us/eagleford/Ea ... uction.pdf

The TRRC as you know is 2 months behind on its releasing of production data. That's the way it has been since the 1930's. I think they are so overwhelmed with processing of completion data for new EF wells they may be 3-4 months behind on that. I am not sure how wells are reported by the Commission when the completion package sits in a big pile for 4 months. There are ways for tight oil producers to get oil moved off lease before completion data is processed at the TRRC and that oil is not formally reported by the TRRC until the completion forms are complete. I am sure that is a lot of volume. I think for the most part everyone can get its oil off location immediately. I don't think infrastructure holds up oil, not down here. Gas maybe, but they'll just flare it. For sure nobody is saving completed wells to bring on later, not at this price level. Not public companies. Instincts suggest to me they want to start flow back on these wells straight away, after frac'ing, but then I have heard of "resting" the well before flow back. I don't know what that is about.

So, news on Forbes, Seeking Alpha and that crazy stock guy on CNBC that production in the EF is approaching a million barrels per day is a little out in front of itself. As fast it is coming in the front door, a lot is going out the back. In a really sweet area south of my operations there are a few wells with 75% decline rates...the first year! Its terrific, all that production, but hoochie mama the costs and the decline rates are astronomical. But we know that, sorry. I need to stop.

Thanks again DC for sharing your work in the Bakken. And thanks to PO for the soap box I can teeter on now and then.

[dcoyne78]

Thanks again DC for sharing your work in the Bakken. And thanks to PO for the soap box I can teeter on now and then.

Oilystuff,

Your welcome. I appreciate hearing from those producing oil in the real world. Obviously I lack real world knowledge of the industry which you provide.

DC

[ROCKMAN]

DC – This makes more sense. The filters on DrillingInfo are clumsy with respect to identifying what wells are producing at a single point in time. But this is what I’ve figured out: During May 2012 there were 1869 EFS wells classified as oil and 430 classified as gas/condensate. The numbers I gave you for May 2013 would represent those wells plus the ones added since May 2012 and those that have stopped producing since then.

[Pops]

I don't actually believe anybody wants to step any further out on the limb than they already are with building more stuff for the EF. I hear the same rumors, rigs are having a harder time finding the work, sitting much longer between wells, that sort of thing. That may be a tiny little bit due to rig efficiency but the B team is not picking those rigs up so fast anymore to drill flank stuff.

Looks like the rumors you hear may be right.

[Oily Stuff]

Hi, Pops; that's a good graph. About the frac water concerns I have, from your own cool site: http://peakoil.com/enviroment/a-texan-t ... l-no-water

I think there has been some effort by smart folks to estimate the number of wells that will ultimately be drilled throughout both primary shale trends, up north and down south, based on available space. That may be a mistake as the sweeter spots in the Bakken and the Eagle Ford seem to be more or less delineated now and outside the sweet spots and carpet bombing done by the biggest of the big players, (the A team), other shale wells are not economic, not even at plus 100 dollar oil prices. That is my observation, and by the way I believe Berman as categorically stated that outside the sweet spots perhaps 75% of shale wells will not be economical, too.

So the A team is "boasting" about better rig efficiency and being able to drill the same wells with fewer rigs, that's why they are turning some loose. The B team I believe is realizing unsweetened spots are not barn burners, cannot spit out the cash flow for these size companies to stay on the drilling hamster wheel, and are not picking those rigs up like they were 18 months ago. I am seeing more and more iron sitting in yards. Lots of previously leased acreage is being let go. Therefore this wild idea of 40,000 wells in the EF, for instance, is as RM said, may be "wishful thinking." Big time wishful thinking.

A question: Is America and the representatives it elects to govern it, keen enough on the notion of peak oil production, of rising demand and declining conventional oil production and the plight that we are in, to overlook its concerns over frac'ing, real or imagined, and allow the tight oil business to carry on, no matter what? It seems to me a precarious position these shale dudes are in; a few more bad studies, like arsenic in groundwater in the Barnet Shale (likely drought related?), another year or so of severe drought here in S. Texas...is America willing to overlook the "price" of unconventional resources?

I guess as long as bad stuff does not happen in peoples own back yard, who cares, right? Just gimme the oil. And make it cheap, boys.

[Oily Stuff]

http://www.peakfish.com/wp-content/uplo ... 0-2013.png

[dcoyne78]

Oilystuff wrote:

So, news on Forbes, Seeking Alpha and that crazy stock guy on CNBC that production in the EF is approaching a million barrels per day is a little out in front of itself.

The numbers from the RRC are usually not very accurate until we go 24 to 36 months back in time, the EIA data for C+C match perfectly with RRC statewide C+C data 3 years ago (May 2010) and gradually shift lower than EIA estimates (RRC 99 % of EIA in May 2011, 96% in May 2012, and 75 % in May 2013). If we adjust Eagle Ford output to account for this discrepancy. May 2013 output of C+C for the Eagle Ford was 929 kb/d when this adjustment is made so the networks may be correct on this point.

This assumes the RRC proportion of Eagle Ford to Statewide output (36 %) is unaffected by the adjustment.

I will update my scenarios to account for this new data.

DC

[Oily Stuff]

No, sir.

The Texas Railroad Commission can account for every barrel moved off any lease in Texas, almost the minute it occurs. These shale dudes cannot sit on hundreds of barrels of oil while their wells make hundreds of barrels per day. It is not physically possible, they have to move it off lease. When that happens, the TRRC knows about. They are 2 months behind on that reporting and maybe 4 total on reporting tested barrels before completion information gets processed. The numbers may get adjusted slightly over time due to reporting errors and processing delays, etc. but the numbers from the TRRC are accurate and they are the ONLY numbers you should use, period. If they are a few months behind, so what, really? Its the EIA making the adjustments over time, not the TRRC.

Respectfully, DC, where do you think the EIA gets its data if not from the TRRC? We don't report jack to the EIA here in Texas and if you spill a barrel in a tank battery firewall, the TRRC knows about it literally within 48 hours. Barrels of oil in Texas are like dollars at a bank, try walking out the door with one and you are dead meat.

If what you are saying is true, these EIA boys are unbelievable guessers.

Forgive me, the same company running the EIA is also managing our country's budget also. Last time I looked we were big time over drawn; I have no faith in the EIA predicting my country's energy future, sorry. I don't know what the lag is in N. Dakota but anyone wanting to evaluate the EF in Texas needs simply to resign itself to being 2-3 months behind on actual data. Its a mess, I know, because in that same 3 months existing production has also declined 20%.

Its a fluid situation, this tight oil stuff. Here today, gone tomorrow.

[John_A]

If what you are saying is true, these EIA boys are unbelievable guessers.

Not necessarily. The same kind of simple time series analysis used to project production forward to a peak would work pretty well in data environments where the rate of change from month to month is relatively small.

Forgive me, the same company running the EIA is also managing our country's budget also. Last time I looked we were big time over drawn; I have no faith in the EIA predicting my country's energy future, sorry.

But they do tend to be the best game in town, doing just the sort of price/economic/well size/decline rate bottoms up analysis that the industry folks here have said is the best way to do this kind of work. Certainly ASPO went to their shop, supposedly collected all their models and whatnot, and haven't said a peep about it since...if it was wrong, they would be screaming it from the rooftops in their effort to be taken more seriously in their own time series data fitting exercises. Their silence is deafening.

[dcoyne78]

Oily stuff,

Check out image at dc78image called rrceia2.png.

Also print out a statewide production query from the rec and then do it again in 6 months you will see how much the number change. Eia samples data from large companies and estimates the rest based on past data. It gives a much better estimate for recent production than data available at rec website.

Dc

[dcoyne78]

Trying To use.a cell Phone. Rec should be rrc in previous post.
DC

[Oily Stuff]

Sorry, guys; ain't buying it. If the EIA gets data from big tight oil companies in Texas that's the first time in 60 years I have ever heard of that. That is to say EOG voluntarily gives its production information for June to the federal government before it does the TRRC? And then the TRRC adjusts to EIA data down the road?

No way, Jose.

If we are trying to get the facts about tight oil, why guess based on previous best guesses and hope for a reasonable margin of error? That's all anybody is doing in this shale, guessing. I thought we were after the facts.

[rockdoc123]

the production data for all of the publicly traded companies is reported quarterly to the SEC.
These numbers are audited so are probably as close to reality as possible.

[ROCKMAN]

Doc - on a lease by lease basis? I've seen gross numbers but not the details available from the TRRC.

[Oily Stuff]

Blimey Rockdoc, who cares about what a public company reports to the SEC 3 months after the fact (I am sure its probably actually 6 months after the fact). I believe the topic of debate is who has a better handle on barrels of oil actually produced and sold in Texas; the Texas Railroad Commission or the EIA, and whose data to rely on when evaluating the merits of tight oil resources? Now the SEC knows more about the actual barrels of oil produced in Texas than the TRRC too...because it audits public companies, and the TRRC doesn't, I guess.

I must be operating oil wells in a different Texas.

Tell you what, Doc; why don't you explain to DC the accounting/reporting path for oil and natural gas production in Texas, who knows what first, the TRRC or the EIA or the SEC or the FBI. And while you are at it, draw me a picture, one of them flow charts with the little squares in it, in crayon, so I can understand it. Not too complicated now, you know how dumb I B bout them high dolla public companies.

Tank, ye.

[dcoyne78]

Hi Oilystuff,
I am sure the RRC knows about all the barrels of oil produced in Texas, the problem is that the data that they report is not very good. It is more than 2 or three months, the data for C+C tends to be underreported for 12 to 18 months. The EIA gets information on production reported to them by the largest oil producers and uses this sample to estimate production. For example let’s say 80 % C+C output comes from 25 oil companies, EIA asks those 25 companies to report C+C output for the previous month and uses those reports to estimate total output.
I pulled a report last November from both the RRC and EIA and did the same yesterday and created the following chart based on the data.



As can be seen from the chart there has been little change in the EIA estimate over the past 8 months, but the RRC estimate has changed quite a bit. Eventually the RRC reports the correct amounts, but their initial estimates are quite low and get better slowly over the course of many months.
I will continue to update this every few months and I invite you to print out the RRC data monthly to see how it changes, I could be wrong but I have been following this for a year and I am convinced this is a correct assessment.

DC

[dcoyne78]

Doc - on a lease by lease basis? I've seen gross numbers but not the details available from the TRRC.

Hi Rockman,

The current question is about total C+C output in Texas, so I guess someone could gather all the quarterly reports to see if the RRC or EIA numbers match the quarterly reports better. The RRC seems to take a long time gathering all the data and reporting it on their website. Have you ever noticed how the statewide numbers for C+C change over time? That is if 2 MMb/d was reported in July 2013 for May 2013 monthly output, by July 2014 the number reported is likely to increase to maybe 2.5 MMb/d? If not, I invite you to print out a report for statewide C+C today and then do the same in 8 or 12 months and see how good the initial estimates were. The early RRC estimates are pretty bad (for 6 to 18 months).

DC

[dcoyne78]

Sorry, guys; ain't buying it. If the EIA gets data from big tight oil companies in Texas that's the first time in 60 years I have ever heard of that.
...
That's all anybody is doing in this shale, guessing. I thought we were after the facts.

http://www.eia.gov/survey/form/eia_813/instructions.pdf

Crude oil producers who carry or store 1000 barrels or more per month must report to the EIA on form 813. We are looking for the facts, estimates are all we have in reality and we are looking for the best estimates. If you compare North Dakota data with EIA data it matches very well, the RRC does a very poor job of reporting crude data by comparison.

DC