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Shale matters

FabianBjornseth
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Re: Shale matters

#232421

Postby FabianBjornseth » June 27th, 2019, 10:09 pm

https://www.bnnbloomberg.ca/early-shale-optimist-sees-another-decade-of-u-s-supply-growth-1.1278549

Output from shale including crude oil, condensate and natural gas liquids could climb to as high as 25 million barrels a day...

...Rystad’s optimism is also based on a recent study he’s done on the so-called parent-child interference issue, a concern that drilling a new well too close to an older one will reduce pressure in the original and cut output. While the results were mixed, overall the study showed that companies can stack wells more densely, creating enough drilling locations to support 10 to 15 more years of output growth, he said.


Seems Rystad is sticking to their previous assessment, that any growth in oil demand in the next decade will be matched by an increased supply from US shale oil. The majors appear to have similar forecasts based on the moves they've made over the last 12 months. The numbers are almost unbelievable, but then what we have today seemed unbelievable just a few years ago.

FabianBjornseth
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Re: Shale matters

#241590

Postby FabianBjornseth » August 4th, 2019, 9:53 am

https://www.rystadenergy.com/newsevents ... d-heights/

Some market participants argue that the average well performance in the Permian is already declining, based on speculations of depletion of core inventory, as well as a growing share of child wells and well spacing challenges.

“After careful analysis, we do not find sufficient evidence in the data to support these speculations. We conclude that the average new production per well in the basin matches the all-time highs seen in early 2019, despite depletion concerns,” says Artem Abramov, head of shale research at Rystad Energy.


To me, this analysis seems to lack some fundamental parameters. Yes, average initial productivity may be at an all time high, not correcting for tighter frac spacing or high-grading of targets. That tells you nothing of how the wells will decline over 12 months, or how these big infill producers are affecting the existing wellstock. This does nothing to ease my concerns for the most bullish shale oil predictions into the 2020's.

dspp
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Re: Shale matters

#241806

Postby dspp » August 5th, 2019, 10:58 am

I have been noting falling rig counts for a while now. Checking Berman:

June 12 deck : http://www.artberman.com/wp-content/upl ... 2-2019.pdf

June 26 deck : http://www.artberman.com/wp-content/upl ... 6-2019.pdf

July deck : http://www.artberman.com/wp-content/upl ... 4-2019.pdf


In the July slide 9 my recollection of rig counts was in fact correct. However June slide 7 indicates gas supply rising. Something odd is going on, most likely either individual wells becoming more productive, or well preferentially targetting gas vs oil (which seems unlikely). Looking at your link Rystad say horizontal section length is increasing for the better wells, drilled by the more savvy & well-funded players (who presumably are keen to show their newly purchased assets were a good move). But as you say decline rates may also be higher

July slide 3 is the regular slide, and it shows pricing in the sweet spot in the middle. Trump is on a roll trying to find his sweet spot between pandering to redneck 'bash China' voters and not tipping US into a recession, and keeping oil prices low. Every time he bullies the Fed into easing monetary policy he then ups the ante on China tariffs. You'd think the Fed would have learnt by now ! A lot of global macro indicators are edging towards bad times being ahead, and industrial contraction (or decelleration) depresses oil price which in turn depresses shale activity.

June 26 slide 11 shows DUC stock flattening. And slide 12 shows about half the shale boys were cash flow positive. Since cash is king and interest rates are now falling that implies more shale wells will be coming for a while.

My instincts are that Berman's dumbass call in July slide 10 is more right than the US EIA. But if money is at 0% and if the political environment favours shale under a second term Trump then maybe the US EIA are correct.

Are we at - or near - peak US shale ?

Spasmodicus put up some relevant points in his [#225706 Postby spasmodicus » May 31st, 2019, 9:02 am].

hmmmm......

- dspp

dspp
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Re: Shale matters

#245863

Postby dspp » August 20th, 2019, 9:58 pm

"The UK’s underground shale gas reserves may deliver only a fraction of the gas promised by fracking firms and government ministers, according to a study.

Research by the University of Nottingham found that early estimates may have exaggerated the UK’s shale reserves up to sixfold."


https://www.theguardian.com/business/20 ... imed-study

Now there's a surprise. And that's before they get real about accessibility & cost issues in a UK context.

- dspp

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Re: Shale matters

#247098

Postby dspp » August 26th, 2019, 4:13 pm

"The 2.9-magnitude quake, recorded near Cuadrilla’s site near Blackpool on Monday morning, is believed to be the biggest fracking-related tremor seen in Britain."

"Yet the 2.9-magnitude tremor, which startled residents at 8.30am on Monday, is by far the largest recorded at the site and is bigger than the 2.3-magnitude quake that brought fracking to a halt in 2011."

"A resident of Lytham St Annes said there was a “very loud rumbling” and the “whole house shook, picture fell off a shelf” and that it was “quite scary”.

Another person posted on social media: “I heard a loud rumble then the house literally shook. Scary stuff”."


https://www.theguardian.com/environment ... -blackpool

Given this sort of evidence, it seems unlikely shale fracking in the UK is going to proceed in a large scale manner.

regards, dspp

dspp
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Re: Shale matters

#251008

Postby dspp » September 11th, 2019, 12:13 pm

DUNC analysis bt US IEA

https://www.eia.gov/todayinenergy/detail.php?id=41253

"Ultimately, the amount of time that a well remains drilled but uncompleted has little effect on its initial production, according to analysis"

dspp
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Re: Shale matters

#251303

Postby dspp » September 12th, 2019, 9:36 am

U.S. oil and gas employment has started to fall as producers and service companies respond to the sharp decline in prices since the fourth quarter of 2018.
.....
as the inventory of drilled but uncompleted wells falls, it is likely completions will also turn down in the second half of 2019 and into 2020.

Fewer well completions should translate into decelerating growth in oil production, marking the end of the second frenzied U.S. shale oil boom.

The first shale oil boom lasted from 2012 until the middle of 2014. The second boom began in late 2016 or early 2017 and lasted through 2018.

Experience suggests it takes around 3-4 months for a fall in oil prices to translate into a lower rig count and around 9-12 months to turn into lower production.

The downturn in oil prices since October 2018 should start to translate into much slower, or even negative, growth in oil production in the third or fourth quarter of 2019 and beyond into 2020......


https://uk.reuters.com/article/us-usa-s ... KKCN1VW239


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