Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

THE Price of Crude pt 14

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

Re: THE Price of Crude pt 14

Unread postby coffeeguyzz » Thu 12 Mar 2020, 01:02:46

Rocdoc

Don't know how closely you may follow the operational goings on in this LTO world, but the increasing attention being placed on Artificial Lift these past couple of years is starting to show improving results.

Gas lift is now the main AL in the Bakken with several new, innovative approaches showing real promise ... especially the 'tube within a tube' technique that brings injected gas all the way out to the toe to effect a sweeping type impact on the lateral.

New, enhanced valves in the vertical are optimizing results for liquid hydrocarbon recovery.
Compressors are increasingly natgas fueled and individual hardware pieces are regularly servicing multiple wellpads via small distribution lines.
So much produced gas is being used onsite, in fact, that the ND DMR folka have just introduced a 3rd reporting column for gas to distinguish amongst produced/flared/sold product.

Although the much anticipated EOR results from Liberty are shaping up to be less than stellar, the ongoing huff and puff efforts from other operators and other plays bode well for greatly incresed output from the 100,000+ horizontal wellbores currently in the ground.

Cowboyistan foevuh!
coffeeguyzz
Lignite
Lignite
 
Posts: 311
Joined: Mon 27 Oct 2014, 16:09:47

Re: THE Price of Crude pt 14

Unread postby bochen777 » Thu 12 Mar 2020, 10:07:15

coffeeguyzz wrote:Rocdoc

Don't know how closely you may follow the operational goings on in this LTO world, but the increasing attention being placed on Artificial Lift these past couple of years is starting to show improving results.

Gas lift is now the main AL in the Bakken with several new, innovative approaches showing real promise ... especially the 'tube within a tube' technique that brings injected gas all the way out to the toe to effect a sweeping type impact on the lateral.

New, enhanced valves in the vertical are optimizing results for liquid hydrocarbon recovery.
Compressors are increasingly natgas fueled and individual hardware pieces are regularly servicing multiple wellpads via small distribution lines.
So much produced gas is being used onsite, in fact, that the ND DMR folka have just introduced a 3rd reporting column for gas to distinguish amongst produced/flared/sold product.

Although the much anticipated EOR results from Liberty are shaping up to be less than stellar, the ongoing huff and puff efforts from other operators and other plays bode well for greatly incresed output from the 100,000+ horizontal wellbores currently in the ground.

Cowboyistan foevuh!



More and more it is obvious CIA did COVID to prepare America for WAR against China... East vs West.. WWIIII

The virus is a joke, ACE2 means it is mild flu for white people...

THe whole soceity lockdown is to get the american people mentally prepared for wartime, during wartime all the luxuries go away

this is the big weening...

they are even using crisis actors grade A like Hanx this time.... and Apple cofounder, etc... its a campaign of disinfo to force underlining behavior changes in the american public to prep them for war, US against EU and ASIA



there is not enough resoruces to go around


it has been decided

american first means america against the world
bochen777
Lignite
Lignite
 
Posts: 240
Joined: Sun 18 Dec 2016, 13:01:22

Re: THE Price of Crude pt 14

Unread postby mmasters » Thu 12 Mar 2020, 10:44:23

GHung wrote:
mmasters wrote: .......... I think when the Coronavirus peaks in another month we will have our overreaction in oil. ...........


What makes you think Covid-19 will peak in another month?

Just a guess that the warmer weather will put a damper on it (going into spring) but I could be wrong. I also think a vaccine is possible in the next few months.

I'm fairly confident about the media hysteria peaking in about another month and the overreaction in oil.
User avatar
mmasters
Intermediate Crude
Intermediate Crude
 
Posts: 2215
Joined: Sun 16 Apr 2006, 03:00:00
Location: Mid-Atlantic

Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Thu 12 Mar 2020, 15:14:26

JuanP wrote:"Oil price crash: 50% of US shale could go bankrupt."
https://oilprice.com/Energy/Crude-Oil/O ... ews+Update)
But I believe there will be no shortage of idiots willing to buy their assets for pennies on the dollar and start a new shale boom. It probably will never be the same, but those plays are not played out, and there is a sucker born every minute in the USA. Same as it always was!

So in your mind, the price of oil will NEVER return to anything close to, say, $50?

In the real world, over time, overall global demand isn't going away any time soon. (Though it will fade over the coming decades for transport, as a trend). And the economic laws of supply and demand aren't going away either.

The oil and oil production assets may move from weak hands to strong hands, but they're not going away.

COVID-19, will pass, at least as far as being a crises, within a couple years or so -- nasty and deadly as it might be in the mean time. (It might well end up being a new strain of common flu, like bird flue, with it being part of the annual vaccination mix, but clearly that's not a crisis).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 8510
Joined: Sat 27 Jun 2009, 21:26:42

Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Thu 12 Mar 2020, 15:19:11

bochen777 wrote:More and more it is obvious CIA did COVID to prepare America for WAR against China... East vs West.. WWIIII

The virus is a joke, ACE2 means it is mild flu for white people...

THe whole soceity lockdown is to get the american people mentally prepared for wartime, during wartime all the luxuries go away

So what are you, a nine year old in mommy's basement?

How many deaths in the US before it becomes "serious"? How many deaths globally? How many intensive care cases (which implies risk of death or SERIOUS long term medical consequences)?

Why not get a life?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 8510
Joined: Sat 27 Jun 2009, 21:26:42

Re: THE Price of Crude pt 14

Unread postby bochen777 » Thu 12 Mar 2020, 15:21:15

Outcast_Searcher wrote:
bochen777 wrote:More and more it is obvious CIA did COVID to prepare America for WAR against China... East vs West.. WWIIII

The virus is a joke, ACE2 means it is mild flu for white people...

THe whole soceity lockdown is to get the american people mentally prepared for wartime, during wartime all the luxuries go away

So what are you, a nine year old in mommy's basement?

How many deaths in the US before it becomes "serious"? How many deaths globally? How many intensive care cases (which implies risk of death or SERIOUS long term medical consequences)?

Why not get a life?



In our state of Texas we have 3500+ car fatalities every year alone. just one state, just car deaths. per year, every year. all the years.

The US death of COVID is under 50 right now...

Give me a break.


WTC7 911 and Pearl Harber the US was willing to false flag many thousands of lives for its geopolitical objectives


please.....
bochen777
Lignite
Lignite
 
Posts: 240
Joined: Sun 18 Dec 2016, 13:01:22

Re: THE Price of Crude pt 14

Unread postby Darian S » Sun 15 Mar 2020, 02:13:25

rockdoc123 wrote:
Field operating cost for much of the tight unconventional sits somewhere below $10/bbl. These wells are generally completed in such a manner that well intervention is only necessary when there is downhole tool failure, casing collapse of perforation plugging from migrated fines. That is by no way a universal event in wells so the costs to keep “lifting” are simply electricity costs and surface maintenance costs with respect to wellheads and gathering lines.

If everyone stops drilling (which they won’t until such time as hedges disappear) then there will be a relatively quick fall in production of wells drilled in the past 2 years whereas those drilled previously will continue to tick along at current rates due to the typical two-stage decline production profile recognized in these wells. This will result probably in about a 20% decrease in US production which will be healthy for world prices.

As I have said several times before the industry has needed some consolidation for a long time. Too many small players at the fringe who are barely eking out a living. This is the best opportunity for consolidation to happen. Generally, that is a much better outcome for small companies who have suffered through the double whammy of lower prices over the past couple of years and a new oil price war than Chapter 11 restructuring. Consolidation is healthy for the industry and needs to happen.

Wells might cost 10$ to operate, but the debt used to create them needs to be paid. I also assume that might be cost for the machinery running not counting 6 figure salaries, nor the payments for the machinery which may be on loans(don't know). Or else why would there be something like 90~% in the red shouldn't they be swimming in profit, or are the debt payments so high?

Outcast_Searcher wrote:

In the real world, over time, overall global demand isn't going away any time soon. (Though it will fade over the coming decades for transport, as a trend). And the economic laws of supply and demand aren't going away either.

The oil and oil production assets may move from weak hands to strong hands, but they're not going away. .


Law of supply and demand don't work that well for resources that are the foundation of the global economy. If prices go up too high for oil there is demand collapse which affects the entire economy. Prices also need to go higher and higher over time because the cost of harder and harder to get unconventional sources becomes necessary. At the same time very low prices make producers unable to subsist, so production is reduced.

Neither low nor high prices work, and what happens eventually is global economic contraction if not collapse. Rationing occurs as only the resources up to a certain cost of extracting can actually be financially viable, due to a limit in the price consumers are able to tolerate.
Darian S
Peat
Peat
 
Posts: 114
Joined: Mon 29 Feb 2016, 16:47:02

Re: THE Price of Crude pt 14

Unread postby rockdoc123 » Sun 15 Mar 2020, 12:12:47

Wells might cost 10$ to operate, but the debt used to create them needs to be paid. I also assume that might be cost for the machinery running not counting 6 figure salaries, nor the payments for the machinery which may be on loans(don't know). Or else why would there be something like 90~% in the red shouldn't they be swimming in profit, or are the debt payments so high?


when a company like Rystad looks at breakeven for individual companies rather than the industry as a whole that takes into account the payments on loans. It is a complete misunderstanding to think that companies have been loading up on debt over the past couple of years. Growth using debt was a model that companies used several years ago so they could grow quickly which is what their market mandate was. After the 2014 price correction bank debt pretty much dried up and companies began to live within their cashflow by selling properties not core to their business or leveraging out interest on their various wells. Not a lot of increase in debt, indeed many of the companies spend a lot of time decreasing their total debt load.
Note that field operating costs include everything (electricity for pumps, diesel for engines, salaries etc). Most public companies have partners in their various operations so the operator allocates office overhead and salaries on a percentage basis to producing wells and that becomes part of field operating costs.

If prices go up too high for oil there is demand collapse which affects the entire economy. Prices also need to go higher and higher over time because the cost of harder and harder to get unconventional sources becomes necessary


and yet oil prices remained above $100/bbl for about 3 years from 2011 on and during that time period demand increased. We actually have never tested a level of oil price that has unequivocally resulted in demand destruction.

And the idea that prices must rise because somehow the costs for unconventional are increasing is a myth perpetrated by a number of folks who never bother to look at the data. The costs for all unconventionals on a boe basis have been steadily dropping. Companies become more efficient, technology improves. I remember when the company I was with drilled our first horizontal frack in the Marcellus.....$10 MM for a 700 m horizontal section with two stages of frack. Now companies are drilling wells with several thousand metres of horizontal section, up to 24 stages of frack for D&C costs averaging around $7MM.
User avatar
rockdoc123
Expert
Expert
 
Posts: 7669
Joined: Mon 16 May 2005, 03:00:00

Re: THE Price of Crude pt 14

Unread postby onlooker » Sun 15 Mar 2020, 19:54:31

Oil threatening to break below the $30 dollar mark.
"We are mortal beings doomed to die
User avatar
onlooker
Fission
Fission
 
Posts: 10954
Joined: Sun 10 Nov 2013, 13:49:04
Location: NY, USA

Re: THE Price of Crude pt 14

Unread postby mmasters » Sun 15 Mar 2020, 19:58:34

onlooker wrote:Oil threatening to break below the $30 dollar mark.

There will be a small glut soon, I think it will break 20 in a few weeks.
User avatar
mmasters
Intermediate Crude
Intermediate Crude
 
Posts: 2215
Joined: Sun 16 Apr 2006, 03:00:00
Location: Mid-Atlantic

Re: THE Price of Crude pt 14

Unread postby Darian S » Sun 15 Mar 2020, 23:57:38

rockdoc123 wrote:and yet oil prices remained above $100/bbl for about 3 years from 2011 on and during that time period demand increased. We actually have never tested a level of oil price that has unequivocally resulted in demand destruction.

The government has been basically printing money out of thin air, Obama's recovery was one of the slowest recoveries ever. Yet the price not only collapsed but even after collapse recovery was still slow.

As for other countries, I'm pretty sure people in china were unlike to be paying as much as we do for oil with their meager salaries.
And the idea that prices must rise because somehow the costs for unconventional are increasing is a myth perpetrated by a number of folks who never bother to look at the data. The costs for all unconventionals on a boe basis have been steadily dropping. Companies become more efficient, technology improves. I remember when the company I was with drilled our first horizontal frack in the Marcellus.....$10 MM for a 700 m horizontal section with two stages of frack. Now companies are drilling wells with several thousand metres of horizontal section, up to 24 stages of frack for D&C costs averaging around $7MM.

At first you poked the ground with a cane and oil flowed like water at high rates for decades. Now you need sand water chemicals etc think even explosives and yet only get a few years of high production.

Also the production drop numbers I've seen for shale seem similar to what I saw for natural gas. And natural gas well was said produced half of all gas it would ever produce within the first five years and then a trickle for a few decades. Won't it be similar for shale oil?
Darian S
Peat
Peat
 
Posts: 114
Joined: Mon 29 Feb 2016, 16:47:02

Re: THE Price of Crude pt 14

Unread postby tita » Mon 16 Mar 2020, 05:02:46

rockdoc123 wrote:After the 2014 price correction bank debt pretty much dried up and companies began to live within their cashflow by selling properties not core to their business or leveraging out interest on their various wells. Not a lot of increase in debt, indeed many of the companies spend a lot of time decreasing their total debt load.


It's true for wide range of operators that slashed capex and expansion, and lived within cashflow until better times. A good example is Withing, which basically try to survived and pretty much reduced debt while keeping output flat.

But expansion happened in the Permian, and I just can't believe that the operators could do it without massive debt increase. A pretty good example is Centennial, which doesn't hedge and is pretty much done know. But large operators like Exxon also invested in the Permian and they almost tripled their interest expense between 2015 and 2019.

So, what happens now? Today, WTI will break the $30, there is no way it won't happen. The US is shutting down, and oil consumption will take a hit.
User avatar
tita
Coal
Coal
 
Posts: 412
Joined: Fri 10 Jun 2005, 03:00:00

Re: THE Price of Crude pt 14

Unread postby dolanbaker » Mon 16 Mar 2020, 07:43:11

mmasters wrote:
onlooker wrote:Oil threatening to break below the $30 dollar mark.

There will be a small glut soon, I think it will break 20 in a few weeks.

With Europe going into lockdown, it'll be more than a small glut.
Religion is regarded by the common people as true, by the wise as false, and by rulers as useful.:Anonymous
Our whole economy is based on planned obsolescence.
Planned obsolescence, one of the largest contributors to the man made element of climate change, but the one least discussed: dolanbaker
User avatar
dolanbaker
Intermediate Crude
Intermediate Crude
 
Posts: 3758
Joined: Wed 14 Apr 2010, 10:38:47
Location: Éire

Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Mon 16 Mar 2020, 07:58:07

All of these travel restrictions will severely depress oil demand for the next few months to a year but when people come out of their homes and go back to work that demand will surge back to near what it was last quarter. All the consumables you used up while at home will be replaced and all the work that did not get done while you were at home will be waiting for you and you will need oil to get that work done and to carry all those groceries home. Oil investors can see that future coming and will place their bets accordingly.
User avatar
vtsnowedin
Fission
Fission
 
Posts: 11105
Joined: Fri 11 Jul 2008, 03:00:00

Re: THE Price of Crude pt 14

Unread postby onlooker » Mon 16 Mar 2020, 10:14:12

WTI oil price dipped below $30. How low will it get?
"We are mortal beings doomed to die
User avatar
onlooker
Fission
Fission
 
Posts: 10954
Joined: Sun 10 Nov 2013, 13:49:04
Location: NY, USA

Re: THE Price of Crude pt 14

Unread postby shortonoil » Mon 16 Mar 2020, 10:58:20

The oil industry will have to be bailed out. This economy can not run without oil. We need oil more than we do new fighter jets. The Middle East will be reduced to the UAE and Kuwait. The Saudis are toast.

The end of the oil age is arriving a decade early thanks to a Chinese bug.
User avatar
shortonoil
False ETP Prophet
False ETP Prophet
 
Posts: 7093
Joined: Thu 02 Dec 2004, 04:00:00
Location: VA USA

Re: THE Price of Crude pt 14

Unread postby sparky » Mon 16 Mar 2020, 11:59:57

.
Let's run a quick check
Venezuela , Iran production has been suppressed
Iraq and lybia have intermittent disruption
there is about what ? 4 millions barrels in excess
sloshing on the market !
The market price is the price of the cheapest tanker load plus transport and insurance

30$ is not too far from it

There could be political manipulation in plus or minus but around 30$ is the reality until

Canadian sands bite the dust ( irony )
Shale run out of money
Depletion erode global production
Demand rebalanced itself at some level

Some points to keep in mind
R&D is dead ,
reworking of fields is going to be minimal
technical and legislation on vehicles propulsion is an ongoing question mark
User avatar
sparky
Intermediate Crude
Intermediate Crude
 
Posts: 3502
Joined: Mon 09 Apr 2007, 03:00:00
Location: Sydney , OZ

Re: THE Price of Crude pt 14

Unread postby rockdoc123 » Mon 16 Mar 2020, 12:15:16

The oil industry will have to be bailed out. This economy can not run without oil. We need oil more than we do new fighter jets. The Middle East will be reduced to the UAE and Kuwait. The Saudis are toast.


exactly how are we running out of oil? The Saudis just flooded the market which means in March supply is at an all-time high.
The Saudis are toast? What have you been smoking? The reserves were audited and they have at current production rates about 65 years of proven reserves left. They have a lifting cost for current spare capacity of $5/bbl. Is oil at $5/bbl now? No, it is at $20. The Saudi gov't last week asked all of its various departments to come back with 25% cuts to their current budgets and currently the total SA debt is quite low.
User avatar
rockdoc123
Expert
Expert
 
Posts: 7669
Joined: Mon 16 May 2005, 03:00:00

Re: THE Price of Crude pt 14

Unread postby Darian S » Mon 16 Mar 2020, 16:39:00

rockdoc123 wrote:
The oil industry will have to be bailed out. This economy can not run without oil. We need oil more than we do new fighter jets. The Middle East will be reduced to the UAE and Kuwait. The Saudis are toast.


exactly how are we running out of oil? The Saudis just flooded the market which means in March supply is at an all-time high.
The Saudis are toast? What have you been smoking? The reserves were audited and they have at current production rates about 65 years of proven reserves left. They have a lifting cost for current spare capacity of $5/bbl. Is oil at $5/bbl now? No, it is at $20. The Saudi gov't last week asked all of its various departments to come back with 25% cuts to their current budgets and currently the total SA debt is quite low.

independent external audit or internal audit?

Also it is not a a matter of running out it is a matter of production eventually not being able to increase significantly.
Darian S
Peat
Peat
 
Posts: 114
Joined: Mon 29 Feb 2016, 16:47:02

Re: THE Price of Crude pt 14

Unread postby rockdoc123 » Mon 16 Mar 2020, 23:24:28

independent external audit or internal audit?


Jayzus....where have you been. The Saudis had DeGolyer and MacNaugton and Gaffney Cline audit there reserves for the bond they issued last year and then D&M further detailed the audit results in the IPO that Aramco launched late last year. These numbers confirm the numbers Aramco/Saudi Arabia had been talking about for a number of years.

Also it is not a a matter of running out it is a matter of production eventually not being able to increase significantly.


did you bother to read Shortonoils post? Apparently not because that was not what he was claiming. Are you arguing that somehow the market isn't currently flooded with more oil than we know what to do with?
User avatar
rockdoc123
Expert
Expert
 
Posts: 7669
Joined: Mon 16 May 2005, 03:00:00

PreviousNext

Return to Peak Oil Discussion

Who is online

Users browsing this forum: Baduila and 32 guests