Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Quick, somebody tell me again that most Shale fracking is profitable at $50/bbl! Or was it $25/bbl?
Based on just these real world numbers and ignoring the externalities seems like even at the $60/bbl we had in first half 2015 about half of the wells in the big fracking plays were not worth drilling, but what do I know? I am just some random voice on the Internet.
tita wrote:Since June, the oil rig count has increased by more than 100, and is around 432 now. This lead some analysts to think that these new rigs will increase production. But the fast depleting nature of tight oil means that we can't just put the equation "more rigs = increased production", because the decrease of legacy production must be first compensated before overall production is increased.
My question: At what level the rig count has to be to increase the production of tight oil?
When we look at the rig count, we see that it began to decrease seriously from dec 2014 to may 2015. Then, it stabilized around 650 till sept 2015, began another fall till may 2016 to 318. Since then, the count got back to 432.
Production peaked in april 2015 and was somewhat steady till september. Many wondered how it was possible for tight oil to sustain although rig count was half, and advances explanations about technology and other bullshit. In 2014, there was as much rigs in the US than all the rigs in the world. This was huge, and half of it (650) was still huge, but not enough to sustain production, because it decreased after sept 2015.
I think many analysts won't understand why the production will keep decreasing while rig count is increasing. Thanks to all the bullshit that have been said through 2015. We still need to double the actual rigs to increase production.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Tanada wrote:When they were using every rig they could get their hands on to drill production was constantly climbing because every month (or nearly) the rig count was higher than the previous month. This went on from early 2009 right through late 2014.
This makes it very complex to calculate just how much drilling it would take to stabilize the oil production rate from the shale formations. My guess, for whatever it might be worth, is more price dependent than number dependent. I think if we get sustained prices in the $60/bbl range drilling will about balance depletion, and if prices get much over $75/bbl drilling will expand enough to start increasing total supply again.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Every six months, oil and gas producers negotiate credit with banks based on the value of reserves in the ground. Through the latest round of talks in the fall, 34 companies had their available credit lines raised an average of about 5 per cent, or more than $1.3 billion, according to data compiled by Reuters.
The combined bank credit for the companies stood at $30.3 billion, compared with $28.9 billion at the end of spring 2016.
The industry’s available credit had been cut by 40 per cent over the past three reviews as it contended with a two-year price rout.
GoghGoner wrote:Always interesting to view rig counts vs. production.
Subjectivist wrote:Based on this graph drilling is going up almost as fast now as it was in 2010!
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