Darian S wrote:Dont shale wells drop like 90% production within a few years.
If this is production after drop and can be sustained could be something. If this is not and 2-3 years from now there will be 90% less coming out from these wells not seeing things all that rosy.
Currently, around 45% of LTO production comes from wells that came online in the last year, and 70% from wells that came online in the last 3 years.
Depletion is indeed fast, like 80% in the first three years... But then the depletion gets slower... 2011 production is still over 10% of its initial rate.
What is also impressive is how operators managed to get much higher initial rate than older wells. We talked a lot about sweet spots being drilled first... But using longer laterals and different proppants, they were able to get higher rates with half of the drillings made in 2013. This is why we can't compare the rig count today with the 2013 or 14.
There is anyway something that buggers me, and I will probably know the answer only in a few months. US production surged in the months from September to November in an astonishing way (+800 kb/d), much greater than what we could expect, even if we take account of the shale increase. I think it's probably a conjunction of several factors happening at the same time. Recovery of EFS from hurricanes, Bakken and Niorbara going through DUC wells, new pipeline for the Bakken, etc. Looking at the DPR from eia, september and october have the biggest increase in the history of LTO. There is also probably something with conventional production too.
I think it's quite clear that US production is not going to stall... Some (and also I) thought that EFS and Bakken were done... And it's not the case, they are also increasing, less than the Permian but anyway.