US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again

[Douglas Buckland + 6,308]

I believe it! Would you return to an industry that has laid you off, at least once, and told you to keep the faith and hangout on standby for 10 years?

Plus no young guys or gals getting into the pipeline.

Forget ‘the Big Crew Change’, there is no crew left to change, and no crew on deck to take their place.

Let’s see the traders and shale oil revivalists factor that nugget of information into their equations!

[James Regan + 1,776]

1 hour ago, Douglas Buckland said:

Working the annular regulator during stripping operations is not something covered on ANY kill sheet. For the life of me, I cannot conceive of any situation when you would be stripping OUT of the hole during a kill operation! If you took a kick while tripping (pipe off bottom), you would try to strip back INTO the hole! If things are really bad, you use the Volumetric Method to kill the well.

Me neither and I am trying to rack my brains as to why we were stripping out, the main issue in stripping out of the hole is the leading edge of the tool joint at the pin end its not designed for stripping, due to the sharper edge stripping out causes damage to the packing element by cutting into it.

I will try to go back in the hard-drive (memory) and figure out what happened it was a long time ago in the Ivory Coast on the Ocean Liberator.

[ralfy + 55]

Another source states that shale drillers had been looking at break-even prices of $60 to $90.

https://www.forbes.com/sites/arielcohen/2020/03/10/russia-targets-us-shale-with-oil-price-war/

 

 

[James Regan + 1,776]

19 minutes ago, ralfy said:

Another source states that shale drillers had been looking at break-even prices of $60 to $90.

https://www.forbes.com/sites/arielcohen/2020/03/10/russia-targets-us-shale-with-oil-price-war/

 

 

Not convinced on the break evens, but one thing you can take to the bank the pinch is being felt across the whole spectrum, as I have said IMO many times there was never any "spat" between the Kremlin and House of Saud, this has been on the drawing board for a while. Putin sent many signals of his discontent with what Uncle Sam was doing, receiving tariffs etc just threw gasoline on the fire. Shooting a winged DUC was made easier. While leveraged to the hilt it was the perfect time to have that "spat" but the Black Swan appeared and only accelerated the pain.

Dont Blink...

Edited April 8, 2020 by James Regan

[0R0 + 6,251]

15 hours ago, Douglas Buckland said:

I believe it! Would you return to an industry that has laid you off, at least once, and told you to keep the faith and hangout on standby for 10 years?

Plus no young guys or gals getting into the pipeline.

Forget ‘the Big Crew Change’, there is no crew left to change, and no crew on deck to take their place.

Let’s see the traders and shale oil revivalists factor that nugget of information into their equations!

Let us point out that you yourself and many of your shale side colleagues will still be around in the next upcycle. If they pay well enough would you not go back to work?

[0R0 + 6,251]

9 hours ago, ralfy said:

Another source states that shale drillers had been looking at break-even prices of $60 to $90.

https://www.forbes.com/sites/arielcohen/2020/03/10/russia-targets-us-shale-with-oil-price-war/

 

 

Not for the last half of the decade. The breakevens the EIA estimates are median production volume at $30 the figure is quoted in the article. Considering the low current cost of rigs and crews and materials, costs are likely 20-25% lower than they were at the start of the year. And futures prices up the calendar are well over $30 so I would say at least 1/2 the shale patch has reason to continue drilling. If they are not doing so, it is not because of the current market but because of other issues like financing, which is in critical condition.  

[John Foote + 1,135]

On 4/5/2020 at 6:27 PM, BenFranklin'sSpectacles said:

IWhat, exactly, is tit-for-tat? 

I just about have a academic masters in negotiations. 

The Harvard School likes to preach Principled Negotiations, and yes, I am a disciple and a fan. But PN is restricted in it's optimization to folks who essentially will play by the rules. 

In folks that don't what the negotiations folks selling success don't like to say, over time tit-for-tat works, and you don't need Kissenger-esq genius to do it (doesn't read so, but sarcastic).  Tit for tat wins and wins and wins again over time. Principled works better, but demands a set of shared values ethics, mutual interests in success, or at least a way of enforcing failures.

This is why principle negotiations is a bad with with the CCP. They'll just keep breaking the rules and you are on to the next good deal that doesn't work.

Tit for tat however works well, because they bloody your nose, you bloody theirs. But you have to have the will and willingness to take, and give, a punch. But you have be consistent with tit-for-tat. If you employ it off and on, you tend to lose.

[ralfy + 55]

5 hours ago, 0R0 said:

Not for the last half of the decade. The breakevens the EIA estimates are median production volume at $30 the figure is quoted in the article. Considering the low current cost of rigs and crews and materials, costs are likely 20-25% lower than they were at the start of the year. And futures prices up the calendar are well over $30 so I would say at least 1/2 the shale patch has reason to continue drilling. If they are not doing so, it is not because of the current market but because of other issues like financing, which is in critical condition.  

Those financing issues didn't go away, which is why the same EIA also forecast a decline:

https://fortune.com/2020/03/10/oil-price-plunge-permian-basin-shale-debt/

and overall a peak similar to that of conventional production:

https://www.spglobal.com/platts/en/market-insights/videos/market-movers-asia/040620-opec-meeting-oil-production-covid-coronavirus

That's probably because drillers are correct in assuming that breakevens are much higher.

 

[Douglas Buckland + 6,308]

5 hours ago, 0R0 said:

Let us point out that you yourself and many of your shale side colleagues will still be around in the next upcycle. If they pay well enough would you not go back to work?

Well, it sort of depends on when the next upcycle is, doesn’t it? I’ll be 60 in May. It also depends on the industry attitude towards hiring the older folks with the experience or will it put it’s trust in technology alone.

To be honest, I’d go back just to have fun, they really wouldn’t have to ‘pay well enough’, just reasonable.

[BenFranklin'sSpectacles + 762]

On 4/7/2020 at 9:22 PM, Douglas Buckland said:

There are no fully automated rigs. The drilling operation is not the same as an assembly line. No two wells are the same. You need experienced people in the loop. People sitting in a control room may be able to run production operations, but to date, have never been able to run a rig.

So no, automation would not alleviate the labor shortage.

I read that back in 2016, they were implementing rigs that reduced manpower from 20/rig down to 5/rig.  Did every company switch to the new rigs?  Are we certain they aren't further reducing that?  Are they making new rigs that are more productive with the same number of people? 

[Boat + 1,315]

Go to u-tube....shale cowboys, fracking under Trump.

 

Of course we know it happened under Obama but hey since when did the right score correctly.

Its all about the rise of fracking tech in rock. Ya know oil was kinda an afterthought. It started chasing mainly gas. 

Edited April 10, 2020 by Boat

[Douglas Buckland + 6,308]

3 hours ago, BenFranklin'sSpectacles said:

I read that back in 2016, they were implementing rigs that reduced manpower from 20/rig down to 5/rig.  Did every company switch to the new rigs?  Are we certain they aren't further reducing that?  Are they making new rigs that are more productive with the same number of people? 

I can’t speak for the land rigs in the US as I haven’t worked there since around ‘88, but where I have been working internationally, it seems that due to ‘safety’ and environmental mandates and the requirement to hire more locals, the number of people on rigs is increasing...which is actually detrimental to the safety initiative.

Perhaps someone in the shale patch can reply.

[cbrasher1 + 272]

2 hours ago, Douglas Buckland said:

I can’t speak for the land rigs in the US as I haven’t worked there since around ‘88, but where I have been working internationally, it seems that due to ‘safety’ and environmental mandates and the requirement to hire more locals, the number of people on rigs is increasing...which is actually detrimental to the safety initiative.

Perhaps someone in the shale patch can reply.

the crews I worked with on nabors and h&p was 6 rig hands per shift, directional driller, mud logger, shift company man and a tool pusher so 10 guys per shift roughly

[James Regan + 1,776]

4 minutes ago, cbrasher1 said:

the crews I worked with on nabors and h&p was 6 rig hands per shift, directional driller, mud logger, shift company man and a tool pusher so 10 guys per shift roughly

Thats a lean operation , do you guys crew up for rig moves?

[Douglas Buckland + 6,308]

56 minutes ago, cbrasher1 said:

the crews I worked with on nabors and h&p was 6 rig hands per shift, directional driller, mud logger, shift company man and a tool pusher so 10 guys per shift roughly

How many people were on the drill floor during normal drilling operations?

[cbrasher1 + 272]

58 minutes ago, James Regan said:

Thats a lean operation , do you guys crew up for rig moves?

nope...the shift guys would do everything along with the rig movers, crane operators

[cbrasher1 + 272]

8 minutes ago, Douglas Buckland said:

How many people were on the drill floor during normal drilling operations?

driller in the doghouse, 2 or 3 floorhands, derrick hand and one motorman

[Douglas Buckland + 6,308]

A motorman on the drillfloor? Was it an old compound rig?

The third roughneck should be extraneous.

[James Regan + 1,776]

1 minute ago, Douglas Buckland said:

A motorman on the drillfloor? Was it an old compound rig?

The third roughneck should be extraneous.

I would assume the motorman would be looking after power down below.

@cbrasher1 How long to take down a rig for a non skidding relocation and how long to rig back up, I imagine a lot of these rigs are now hydraulic?

[cbrasher1 + 272]

Just now, Douglas Buckland said:

A motorman on the drillfloor? Was it an old compound rig?

The third roughneck should be extraneous.

no, i was outlining the 6 guys working per shift, motorman was usually going around doing repairs, etc. on the ground, the third roughneck usually pressure washed the rig

[James Regan + 1,776]

1 minute ago, cbrasher1 said:

no, i was outlining the 6 guys working per shift, motorman was usually going around doing repairs, etc. on the ground, the third roughneck usually pressure washed the rig

Off topic your handle cbrasher do you ride a Honda Fireblade?

[cbrasher1 + 272]

13 minutes ago, James Regan said:

I would assume the motorman would be looking after power down below.

@cbrasher1 How long to take down a rig for a non skidding relocation and how long to rig back up, I imagine a lot of these rigs are now hydraulic?

actually breaking it down, diaconnecting everything and setting back up ready to drill at another location? 5-7 days, the h&p flexrigs not so long

[Douglas Buckland + 6,308]

21 minutes ago, cbrasher1 said:

no, i was outlining the 6 guys working per shift, motorman was usually going around doing repairs, etc. on the ground, the third roughneck usually pressure washed the rig

Their are different ways to man an onshore (dirt) rig, depending on the type of rig, complexity of the well to be drilled, services required, etc... There is no ‘minimum’ or ‘one size fits all’.

What I had been noticing, just before the slump began in 2014-2015, was an effort to ‘improve safety’ by putting more people on location; extra roughnecks and roustabouts, assistant mechanics and electricians, third party trainees, etc... We ended up doing less with more!

On heli-rigs, where there is minimal room on the drillfloor, this became a pain in the ass...and potentially dangerous.

[Douglas Buckland + 6,308]

7 hours ago, cbrasher1 said:

actually breaking it down, diaconnecting everything and setting back up ready to drill at another location? 5-7 days, the h&p flexrigs not so long

Not a significant rig move I’m guessing.

[Alfredo + 3]

I think Jafas should be more cautious in your ideas about the Middle East, Israel is part of the Middle East.
You in your opinions do not make a difference to the countries that make them up and you say treat them equally.
It is not good to generalize at all.