by ROCKMAN » Fri 10 Apr 2015, 13:40:57
OK…I’ll toy with it a little bit:
“Goldman Sachs knows what is going on” I suspect they are more knowledgeable then their statements seem to indicate. IOW they have opinions about the dynamics they don’t care to share with the public because doing so doesn’t serve their self-interest.
“The "non-productive rigs" are the first to go.’ I have no idea what a non-productive rig is so I’ll pass.
“Fracking has not gotten exponentially more efficient...” No…it hasn’t if one means improving by the power of 10. But they have reduced drilling time in the EFS from around 35 days per well to 12 days. Very nice but not “exponential” as I view that term.
“The Baker Hughes rig count has become irrelevant.” The posting of the rig count by BHI has never been relevant. OTOH the number of rigs drilling at any point in time has been very relevant. Was that a trick statement? LOL.
“Shale wells have a productive life of only a few years.” Hundreds of EFS wells have only produced for a few years before being abandoned. OTOH thousands have produced for much longer. OTOOH who gives a f*ck how long a shale well produces? What’s important is how much oil a shale well is producing. And the fact is that the majority of oil any shale well produces comes out in just the first few years.
“You can turn shale on and off.” Shale formations don’t have an on/off switch. OTOH a well producing any reservoir can have its production rate reduced. On fact, production can be completely shut in and the rate dropped to zero if the operator chooses to do so.
“OPEC is done.” OPEC will continue to exist as long as there are two members left in the organization.
“American shale producers are the new swing producers.” Depends on what sort of definition one chooses for “swing producer”. A common definition: Swing producer is a supplier or a close oligopolistic group of suppliers of any commodity, controlling its global deposits and possessing large spare production capacity. With almost no exception none of the existing shale wells have any spare capacity to bring on: they are already producing at max rate. New wells could be drilled but that's not the common understanding of a swing producer IMHO. In fact, some argue that only production that can be ramped up with in 30 should be classified as excess capacity.
“A deal with Iran will lower prices” maybe…maybe not. All depends on what else is going on in the dynamics. And that assumes they will really be a deal that lift the ATTEMPTED restrictions. Despite the “sanctions” Iran has been selling oil.
