ROCKMAN wrote:"Tell us how your company and owner wouldn't LOVE to have all that production Rockman". Actually we wouldn't...and haven't. The ROR isn't adequate for my owner which is why we've never played the shales.
Rockman wrote: I've never cared about how much oil/NG I produced for my company...just the profitability.
Rockman wrote:Had I had the capex behind me just before the shale boom started I would have bought every acre I could, drilled some seed wells, sold out and would be sitting on a nice warn island somewhere typing this message right now. LOL.
ROCKMAN wrote:So to summarize: of the 129 EFS wells that began producing in July 2014: 40 wells (31%) suffered a 100% decline rate per year. Actually it's higher since not all produced for the entire 12 months but I’ll let that slide: there were 4 wells that stopped producing after a month or so and only recovered less than 6,000 bo each. And the 89 wells still producing in July 2015: they have suffered a decline rate of 73%.
The first take-away is that those 350,000+ bo URR’s numbers that were tossed around a few years ago were complete BS. Especially when you consider how some folks have been touting the great improvements in technology/efficiencies in the last year or two. But even more important: thanks to the lag time between drilling and first production we saw an increase in EFS production during 1Q 2015. So in addition to the lack of increase in EFS production in the near future from the lower rig count: those wells during 1Q 2015 that boosted production will see a significant decline by 1Q 2016. The only good news is that wells drilled before 2014 are in their lower decline rate phase. The bad news: that decline is from rates significantly lower than when they first started producing.
As I said back when oil prices started to collapse and the cornies couldn’t give up their arguments: just wait until next fall...the data will eventually show the difference between hopium and reality. And now we have the data: much of the debate is over. And by the end of 2Q 2016 the arguments over how quickly the EFS production will decline will also be over assuming we don’t see significant increase in oil prices.
As always: data trumps theory
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