Permian in for Prosperous and Bright Future

[Wombat + 1,028]

17 hours ago, ceo_energemsier said:

FYI:

___________________

 

LNG Terminal to Nearly Double Middle East Import Capacity

 

(Bloomberg) -- Kuwait aims to open what will be the Middle East’s largest import terminal for liquefied natural gas in March, according to two people familiar with the project.

The Al-Zour plant will allow Kuwait to receive 22 million tons of LNG (about 31 billion cubic meters) a year, almost doubling the region’s capacity.

The LNG market is expected to grow quickly in the next few decades as countries shift from oil and coal to cleaner energy. The global trade in LNG will probably increase to more than 1,000 bcm annually by 2035 from roughly 425 bcm today, according to BP Plc.

Kuwait is one of the world’s biggest oil exporters, shipping almost 2 million barrels a day, but pumps relatively little gas. The OPEC member produced 18.4 bcm of gas in 2019 and consumed 23.5 bcm, BP said in a report. It was the Middle East’s biggest importer last year and the 14th globally, according to data compiled by Bloomberg.

The Arab nation will use less than one-third of Al-Zour’s capacity until at least 2030, Bloomberg NEF calculates.

Contract Decision

The government is yet to decide whether it will keep a vessel currently used to receive LNG -- a floating storage and re-gasification unit called Golar Igloo with a capacity of 5.8 million tons per a year -- after the new terminal starts, said one of the people, who asked not to be named as they’re not authorized to speak to media.

Kuwait Integrated Petroleum Industries Co., a unit of state energy firm Kuwait Petroleum Corp., is responsible for selecting a company to operate and maintain Al-Zour for five years, and may make a decision in the coming weeks, said one of the people. Greek gas-grid operator Desfa SA is the only company to have submitted an offer, the person said.

South Korea’s Hyundai Engineering & Construction Co. and Korea Gas Corp. won a $2.9 billion contract to build the terminal in 2016.

KPC, Desfa, Hyundai E&C and Korea Gas didn’t immediately respond to requests for comment.

In the meantime, the United Arab Emirates have just gone big on solar and nuclear:

https://www.euronews.com/2020/09/04/uae-s-barakah-nuclear-energy-plant-connects-to-national-grid-accelerates-power-plans

https://edition.cnn.com/videos/style/2019/04/25/mbr-solar-park-dubai-desert-global-gateway-mxb-lon-orig.cnn

Then there is this:

https://oilprice.com/Energy/Energy-General/UAEs-Latest-Natural-Gas-Discovery-Is-A-Gamechanger.html

Looks like they plan on building LNG import terminals with the intention of converting them to export terminals down the track, like Egypt has done. Everyone in the oil industry seems to be banking on gas to replace oil?

As for Kuwait, I am guessing they will use most of that gas to back up their own solar industry.

Their biggest project has just been cancelled due to lack of funding thanks to effects of covid but give it 3 years...

https://www.saudigulfprojects.com/2020/07/kuwait-cancels-1-5gw-al-dabdaba-solar-pv-power-project/

As I say, there seems to be a competition between nuclear and gas when it comes to backing up wind or solar? Ditto with batteries versus pumped hydro in some countries. Personally, I think the more renewables PLUS nuclear and CCGT plus batteries and hydro, the better. Geothermal is starting to get a mention too. Tidal and wave power are useful in some areas too. Add them all up, and you can see why coal is about to fall fast? Next on the list is oil thanks to the increasing number of EV's. No wonder the oil industry is pinning it's hopes on LNG?

[ronwagn + 6,290]

On 9/15/2020 at 9:13 PM, Boat said:

Make all the money you want with no flaring, no exports beyond energy independence. That still leaves a huge market for FF in the US. 
Don’t fight water testing, embrace and enhance it. Capture carbon and bury it while using as much wind and solar as possible. 
I think this is a reasonable approach to FF’s future. 
Like oil should be required to pay for old oil field restoration the wind and solar industry need to figure in recycling costs as these technologies roll over every 3 decades. 
46% of Americans make $30,000 and under. Who pays the healthcare for the 7 mbpd in petroleum exports beyond energy independance polluting our air. 
 

People have to make a living to support their own families. Paying for green energy entrepreneurs only causes price inflation and destroys the scenery we all love. Natural gas is the most economical and cleanest solution overall. The biggest drummers for wind and solar are those in the business one way or the other. The global warming crowd have not proven their point to those who pay the bills and want to make their own choices. 

[ronwagn + 6,290]

On 9/17/2020 at 6:31 AM, Wombat said:

In the meantime, the United Arab Emirates have just gone big on solar and nuclear:

https://www.euronews.com/2020/09/04/uae-s-barakah-nuclear-energy-plant-connects-to-national-grid-accelerates-power-plans

https://edition.cnn.com/videos/style/2019/04/25/mbr-solar-park-dubai-desert-global-gateway-mxb-lon-orig.cnn

Then there is this:

https://oilprice.com/Energy/Energy-General/UAEs-Latest-Natural-Gas-Discovery-Is-A-Gamechanger.html

Looks like they plan on building LNG import terminals with the intention of converting them to export terminals down the track, like Egypt has done. Everyone in the oil industry seems to be banking on gas to replace oil?

As for Kuwait, I am guessing they will use most of that gas to back up their own solar industry.

Their biggest project has just been cancelled due to lack of funding thanks to effects of covid but give it 3 years...

https://www.saudigulfprojects.com/2020/07/kuwait-cancels-1-5gw-al-dabdaba-solar-pv-power-project/

As I say, there seems to be a competition between nuclear and gas when it comes to backing up wind or solar? Ditto with batteries versus pumped hydro in some countries. Personally, I think the more renewables PLUS nuclear and CCGT plus batteries and hydro, the better. Geothermal is starting to get a mention too. Tidal and wave power are useful in some areas too. Add them all up, and you can see why coal is about to fall fast? Next on the list is oil thanks to the increasing number of EV's. No wonder the oil industry is pinning it's hopes on LNG?

What about the growth of ICE vehicles and the need for gasoline or diesel in the Third World? I doubt that electric vehicles will do well there due to sketchy electrical availability and the initial cost of the vehicles. 

[ronwagn + 6,290]

On 9/15/2020 at 9:13 PM, Boat said:

Make all the money you want with no flaring, no exports beyond energy independence. That still leaves a huge market for FF in the US. 
Don’t fight water testing, embrace and enhance it. Capture carbon and bury it while using as much wind and solar as possible. 
I think this is a reasonable approach to FF’s future. 
Like oil should be required to pay for old oil field restoration the wind and solar industry need to figure in recycling costs as these technologies roll over every 3 decades. 
46% of Americans make $30,000 and under. Who pays the healthcare for the 7 mbpd in petroleum exports beyond energy independance polluting our air. 
 

America has clean air overall. The best thing we could do for cleaner air in the polluted areas is to use natural gas and electric powered vehicles. The electricity would come mainly from natural gas aided by renewables. Natural gas is very clean compared to coal, gasoline, and diesel. I would say it is comparable with renewables over the lifespan including manufacture and disposal of old equipment. 

[ronwagn + 6,290]

On 9/16/2020 at 12:30 AM, Wombat said:

The CO2 Ward. Not trying to convince you of that, know I never will  The main thing is that most governments actually listen to their planetary scientists, so the question is just how quickly they will act. In the article below, BP paints a grim picture for coal, gas, and oil:

https://www.abc.net.au/news/2020-09-16/government-gas-plans-overlook-the-root-cause-of-the-problem/12666784?section=business

To quote: "only under the business-as-usual scenario does gas use rise significantly". 

My best guesstimate is that coal and oil have already peaked, gas will peak in 3-5 years. I do not see how Permian (or even future Australian LNG plants), can compete with the new gas supplies that are about to come from the Mediteranean, Africa, Russia, Qatar, Iran and Saudi Arabia? In each case, the costs are lower due to either weak currencies, better (lower-cost) resources, or proximity, and then there are Chinese Geopolitical interests. I can see literally trillions worth of stranded assets by the end of the decade. I think many big oil companies still have their heads in the sand and are in denial, despite the fact that covid has just given them a taste of what is to come? Of course, some oil companies (BP and Shell), are already making the transition to renewables, which will give the likes of Exxon and Chevron some breathing room, but I still don't see how they will be able to turn a profit unless they cut back on their capex as well. This "build it and they will come" approach has whiskers on it IMHO.

How about Third World growth in ICE vehicles including natural gas use? Chemical growth is moving to the U.S. also. Oil and natural gas are both great feedstocks. Natural gas is still replacing coal despite the renewables help. Electricity needs will keep natural gas flowing in advanced countries while Asia sticks to coal while our greenies look the other way and twiddle their thumbs.

[ronwagn + 6,290]

On 9/15/2020 at 10:25 PM, Enthalpic said:

 

You hate rare earth element usage for batteries but like catalytic converters for ICE cars.

Suck a tailpipe of a diesel truck if you think it is so clean - FYI it's not (PM, VOCs, etc.).

 

 

Clean diesel. A known carcinogen and recently started a huge fire near my brother in Banning, CA.

https://globalnews.ca/news/7248644/california-wildfire-diesel-truck/

Edited September 18, 2020 by ronwagn
reference

[ronwagn + 6,290]

On 9/16/2020 at 1:39 PM, Dan Warnick said:

Take a bite out of a windmill, or a solar panel and let us know how that goes........

See. Just for fun. Not the norm of course.🤣

 

Edited September 18, 2020 by ronwagn
addition

[ronwagn + 6,290]

On 9/16/2020 at 2:06 PM, Dan Warnick said:

It's good and bad.  I'll be running for office next term.  Expect many more answers like this rather clever one.

Although, if I run for Democrat office, I may be inclined to say all fire is bad.  I'll need to see which way the windmills are blowing at that time.

Maybe Biden will have a book out. He is the biggest political weathervane ever. Just stay three feet from the girls and boys and women and men and whatever in between.

https://www.google.com/search?q=inappropriate+joe+biden+pictures&sxsrf=ALeKk02CUDORhuP7m6SZb-zMdWtd2EVRAA:1600450709591&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjB35nAn_PrAhVZbc0KHaqDAIcQ_AUoAXoECAsQAw&biw=1600&bih=789#imgrc=FlP6FfYCN8YsgM

[ronwagn + 6,290]

On 9/16/2020 at 3:53 PM, Enthalpic said:

You understand why they make up lies about me here. 

Nobody wants to think the Canadian-against-trump has a better life than them so they resort to lies.

https://en.wikipedia.org/wiki/Cognitive_dissonance

You may have a better life four months of the year but I will take where I live the rest of the seasons. There is a reason that the population of Canada clings to the southern border. 

[Enthalpic + 1,496]

43 minutes ago, ronwagn said:

You may have a better life four months of the year but I will take where I live the rest of the seasons. There is a reason that the population of Canada clings to the southern border. 

Our weather isn't that bad (19C / 66F and sunny right now), but yeah, January and February I generally need a break and head south.

With heated parking the cold isn't that hard to deal with but near constant darkness gets to be a drag.

I have a few nutty friends that actually prefer winter, they are big into Nordic skiing.

[ronwagn + 6,290]

4 minutes ago, Enthalpic said:

Our weather isn't that bad (19C / 66F and sunny right now), but yeah, January and February I generally need a break and head south.

With heated parking the cold isn't that hard to deal with but near constant darkness gets to be a drag.

I have a few nutty friends that actually prefer winter, they are big into Nordic skiing.

Our winters are comparatively mild but we try to go to Southern California awhile in the Winter. We are still hoping to drive through Canada to Calgary and Banff etc. then down into Montana to visit a relative.  We make large loops around the country. One goal is to see all the Canadian Provinces. We have been to British Columbia twice, Ontario, Quebec, The Yukon on an Alaska cruise. If I were rich I would love to live somewhere in coastal B.C. or Washington. The fog might get to me though. 

[ronwagn + 6,290]

On 9/16/2020 at 4:10 PM, Enthalpic said:

Fires are annoying, and forest should be better managed.

Forests are carbon neutral over the long term. Any released carbon was captured by the trees in the past, and will be recaputured again when they regrow.

California grows and exports a lot of food people actually like to eat (not corn or animal feed).  Do not wish I'll on them unless you want to pay more for your salad.

 

 

California produces more agricultural products than any other state. During the big drought the state did not allow the farm wells to be used freely while letting the Stockton Delta flow into the ocean. Fish more important than the farmers. They had to haul water in for their homes and there was a lot of economic disruption. There was talk of another large irrigation tunnel to take water from the Sacramento River down to Los Angeles and the valley farmers. I don't know if that was completely dropped. California doesn't have any money. They can't even get their fast train as far as Bakersfield. The cost TRIPLED. The whole thing has been a nightmare. Now the fires. My wife and I lived in Bakersfield for seven years and met there. The Bakersfield Country Music helped. The pollution never seemed as bad as Los Angeles to me. It was hotter though. We enjoyed it, but we moved on to greener pastures. 

[ronwagn + 6,290]

On 9/16/2020 at 5:08 PM, ceo_energemsier said:

I am glad I have a few hi-tech greenhouses that enable me to grow just about everything year round here in the cold and freeze zone, in winter. I get fresh corn , sweet and hot chiles and peppers, tomatoes, eggplants, cucumbers etc for Thanks Giving and Christmas. Usually I come back to the freezer zone for these two holidays to enjoy the snow from inside. I even get tropical fruits from dwarf varieties.

I was going to suggest greenhouses. Is it economical to grow them in greenhouses or more of an expensive hobby?  Nothing like your home grown fruit and vegetables. We do some canning so have some year round.  My greenhouse was unmanageable in the wind. I will have to lay a slab next time. 

[Enthalpic + 1,496]

35 minutes ago, ronwagn said:

California produces more agricultural products than any other state. During the big drought the state did not allow the farm wells to be used freely while letting the Stockton Delta flow into the ocean.

They sold the water rights to Saudi Arabia...

https://www.theguardian.com/us-news/2019/mar/25/california-water-drought-scarce-saudi-arabia

[ronwagn + 6,290]

1 hour ago, Enthalpic said:

They sold the water rights to Saudi Arabia...

https://www.theguardian.com/us-news/2019/mar/25/california-water-drought-scarce-saudi-arabia

That is a great article. Thank you. I have no problem with the exports and would prefer to see agriculture have more water than water that is wasted in the metropolitan areas. I think they should have a fair price for a basic amount and a higher price for large estates. During the drought appropriate landscaping became popular and even a necessity. 

The forest fires and scrub brush fires are proof that the precipitation is adequate to grow some things. Maybe we could find something like the cactus the Indians ate. They also used Peyote as a hallucinogen. 

https://en.wikipedia.org/wiki/List_of_edible_cacti#:~:text= List of edible cacti 1 Acanthocereus,9 Harrisia martinii 10 H. pomanensis More

https://www.zamnesia.com/content/517-peyote-seeds-grow-your-own-cactus

[Dan Warnick + 6,100]

6 hours ago, ronwagn said:

What about the growth of ICE vehicles and the need for gasoline or diesel in the Third World? I doubt that electric vehicles will do well there due to sketchy electrical availability and the initial cost of the vehicles. 

ALL infrastructure is fragile in the 3rd world with some countries doing a better job and some countries still at the stage of unpaved roads, no sewage systems and spotty electrical coverage ruling the day.  Anything expensive, or anything that requires first development of other expensive infrastructure upgrades doesn't stand much chance of making light of day.

[Dan Warnick + 6,100]

6 hours ago, ronwagn said:

How about Third World growth in ICE vehicles including natural gas use? Chemical growth is moving to the U.S. also. Oil and natural gas are both great feedstocks. Natural gas is still replacing coal despite the renewables help. Electricity needs will keep natural gas flowing in advanced countries while Asia sticks to coal while our greenies look the other way and twiddle their thumbs.

Natural gas makes perfect sense in the 3rd world.  Cars and trucks are easily converted, the gas is cheap to purchase and transport and no major draw on the electric grid are needed.  Go Gas!!

[Dan Warnick + 6,100]

5 hours ago, ronwagn said:

See. Just for fun. Not the norm of course.🤣

 

Funny.  But not real in any sense of the word.  If you look at how afterburners work on jets, you will quickly learn that the gas to make that flame thrower must be introduced just forward of the exhaust outlet.  The heat produced would also turn those tailpipes black or other colors evidencing high heat and, finally, that back quarter panel would need a substantial heat guard on it or else you'd quickly see bubbling paint and burning.  Fun though, and easy to do for a short term project.

[Dan Warnick + 6,100]

5 hours ago, ronwagn said:

Maybe Biden will have a book out. He is the biggest political weathervane ever. Just stay three feet from the girls and boys and women and men and whatever in between.

https://www.google.com/search?q=inappropriate+joe+biden+pictures&sxsrf=ALeKk02CUDORhuP7m6SZb-zMdWtd2EVRAA:1600450709591&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjB35nAn_PrAhVZbc0KHaqDAIcQ_AUoAXoECAsQAw&biw=1600&bih=789#imgrc=FlP6FfYCN8YsgM

Ghost writer Hillary Clinton.   

[0R0 + 6,251]

On 9/16/2020 at 4:55 PM, Strangelovesurfing said:

Seems it would be less expensive to make a pipeline from Qatar or UAE.

The pipeline is more expensive and it also ties you to a particular supplier, another supplier requires an additional pipeline. Same issue Merkel glossed over when she picked Nord Stream 2 over new LNG capacity.

[0R0 + 6,251]

On 9/16/2020 at 4:59 PM, Boat said:

So Trump is in charge of the federal forrest in California. Is that correct? Did he propose spending billions cleaning forrests from dead waste or waste money on the military, giving tax breaks to the rich when we have exploding deficits or build an unneeded wall? Priorities have consequences. Sony Perdue the former Red governor of Georgia is in charge of the Dept  of Agriculture and our forrests. That boy is an airhead like Sara Palin and Michael Bachmann who attract similar airheads. 
 

The clean up produces cash from selling wood for lumber and pulp and scrub for biomass energy etc. No budget required, just get rid of the bureaucrats and send them off to hack the undergrowth on Federal forests. Stop the pollution of the world with counterproductive environmentalists.

[Strangelovesurfing + 737]

16 minutes ago, 0R0 said:

No budget required, just get rid of the bureaucrats and send them off to hack the undergrowth on Federal forests.

What a wonderful world...

[Tomasz + 1,608]

Of course Permian future is rather bright because its for sure the best shale oil deposit

But generally I suggest to read this summary if we want to talk about general perspective of US shale oil and associated shale gas anno domini 2020

 

I do not want to announce any collapse in oil production, but undoubtedly oil production and related gas will be significantly lower than at the end of last year.

https://www.worldoil.com/news/2020/9/21/us-drilling-total-for-2020-will-be-lowest-in-more-than-80-years?utm_source=hootsuite&utm_medium=&utm_term=&utm_content=&utm_campaign=

Quote

 

U.S. drilling total for 2020 will be lowest in more than 80 years

By KURT ABRAHAM, EDITOR-IN-CHIEF on 9/21/2020

 

click to enlarge

At World Oil, we have finished compiling the 2020 mid-year forecast update for drilling and production. On the drilling side, we now can tell you, our readers, that if this forecast is realized, the U.S. total for the year will definitely be the lowest since before 1940. Indeed, it could go back considerably further than the 1930s. One can see the history of U.S. drilling, as shown in the accompanying chart, all the way back to 1859.

The historical basis. But first, operators will have to drill at a pace lower than those of 1933 and 1931, when well totals of 12,170 and 11,716, respectively, were tallied. The fact that we are looking at a level potentially below these two years—below 11,000 wells—is quite historical, albeit remarkably negative. And consider the fact that just last year, we estimate that somewhat over 22,000 wells were drilled, and in 2018, the number is estimated at approximately 25,000. By the same token, it wasn’t but six years ago, in 2014, that the U.S. well total was 45,535. There has not been an annual total above 30,000 since then.

Trends behind the performance. This year’s trend toward a total that may be below 11,000 should come as no surprise to anyone, who has been following oil market trends since early February. In the seven months that have followed, the U.S. market has been hit by a record, quick, oil demand reduction prompted by the coronavirus pandemic; the Saudi-Russian dispute over production quotas that exacerbated the effect of the demand reduction; operators’ quick response to low prices that ensued, including shutting-in wells and reducing or halting drilling; and a slower-than-expected recovery from the pandemic in the U.S. economy.

Operator responses to low prices and demand. To be more specific about operator activity, World Oil has received dozens of survey responses from producers, which have cut back their drilling from first-quarter 2020 levels, not just substantially but actually quite drastically. A number of companies said that in the second half of the year, they are drilling half, or less than half, of the number of wells that they drilled in the first half. So, imagine that an operator might have drilled 100 wells in the first half and will only drill 40 in the second half. Or maybe a firm drilled 65 wells in the first half and plans only 20 in the second half. These figures are NOT any one company’s actual numbers, but they are representative of the types of data that we have been receiving.

Furthermore, one should remember that 2019 was not the greatest drilling year to begin with, and first-quarter drilling by most operators was roughly on a par with that year’s pace. But since then, drilling has gone off the cliff. There were substantial reductions during second-quarter 2020, including some companies that went on a drilling hiatus. These reductions have been carried through, into the third quarter, with a few that are even deeper than in the second quarter. We expect a mild pick-up in U.S. drilling during the fourth quarter, and our forecast has that expectation baked into it. So, if that pickup does not occur, then the final 2020 number will be even lower, accordingly.

Regional effects. To no one’s surprise, the greatest effects of the drilling trough are being felt in the various U.S. shale plays, such as the Permian, Eagle Ford, Bakken and Niobrara, where oil activity has been dominant. However, while they have experienced double-digit declines in drilling, the gas prone Marcellus, Haynesville and Utica (which does have an oil component) shales have not experienced reductions in the magnitude of the oil-prone plays. And there are a few bright spots in some of the more minor states, where traditional, vertical, sometimes-shallow oil activity is more prevalent and will actually have minor increases.

World Oil will release its final, official mid-year forecast (including the expected U.S. drilling total) in the September issue, which will be out shortly.

 

 

Edited September 22, 2020 by Tomasz

[ceo_energemsier + 1,818]

3 hours ago, Tomasz said:

Of course Permian future is rather bright because its for sure the best shale oil deposit

But generally I suggest to read this summary if we want to talk about general perspective of US shale oil and associated shale gas anno domini 2020

 

I do not want to announce any collapse in oil production, but undoubtedly oil production and related gas will be significantly lower than at the end of last year.

https://www.worldoil.com/news/2020/9/21/us-drilling-total-for-2020-will-be-lowest-in-more-than-80-years?utm_source=hootsuite&utm_medium=&utm_term=&utm_content=&utm_campaign=

 

A real surprise finding?

Common sense not to let the price keep crashing over and over again during the demand destruction period caused by COVID. Fewer wells mean , lower US production, therefore, the glut drying up in the US and around the world. Companies know where to drill when the prices have stabilised in a range that will be sustainable and profitable.

 

 

[Coffeeguyzz + 454]

ceo

People are apt to be surprised 12 to 18 months out at what will emerge from lower cost US shale plays.

Just as the steep downturn in 2014/15 prompted a ferocious level of innovation  and adaption, numerous incremental advances continue to be employed in the field with little fanfare.

XTO has 2 wells in the Bakken (Bear Creek field) that each utilized over 800,000 thousand barrels of water for the completions.

One has over 400,000 bbls first year, second 470,000 barrels production and is still flowing (no Artificial Lift). The newer HVFR products are enabling long term underground fluid retention which is greatly boosting hydrocarbon flow towards the wellbore.

This clearly indicates that the engineers have successfully  controlled the frac geometry around these 10,000 foot laterals to the extent almost 1 million barrels of water has opened up and scoured WAY more of the rock volume without horizontal or vertical break through.

That is an amazing leap forward in the use of far field (and near wellbore) diversion, pump volume and pressure controls, and precise real time monitoring.

Not only will XTO continue to apply these methods to the Bakken, but adaption and adoption to other plays will be attempted ... tailored, as always, to the uber heterogeneous nature of the rock.

 

This 'merger' of Liberty and Schlumberger completion services will undoubtedly be found to have its purpose tied into the successful introduction of pressure exchange cartridges from a company called Energy Recovery.

Long story short, ER has unsuccessfully tried to introduce a 12 cartridge completion missile called the Vorteq so as to nearly eliminate wear and tear on the expensive displacement pumps pumping highly corrosive frac fluids.

With ER now claiming that individual cartridges can and do work, (Liberty and Schlumberger have worked closely with ER), the anticipated rollout of this hardware should cut costs of completions down significantly.

Going forward, companies may use smaller, cheaper centrifugal pumps by which the high pressure can be applied to the lower-pressured frac fluid. 

 

Furthermore, the deployment of natgas fueled electric frac fleets continues apace.

Providing a fuel savings of ~$250/$300 thousand per well, legacy operators (cough, Haliburton, cough) are in a vulnerable position.

 

In a somewhat related matter - that is, lower costs for unconventional production going forward - the recent news about EQT possibly acquiring XTO's 800,000 leased acreage and over 350 producing wells for $750 million will be a watershed event if it comes to pass. (Sounds like EQT released the info to pressure XTO to act).

Buying 350 producing gas wells at $2 million per - acreage and a pipeline interest thrown in -  is a complete steal by any standard. The fact that land swapping may ensue (contiguous acreage is worth its weight in gold in the Appalachian Basin), virtually guarantees viable production at sub $2/mmbtu ... just as Seneca/NFG has claimed when it 'stole' SWEPI's north central Pennsylvania properties awhile back.

 

The global and domestic competitors, the alternative industries fighting low cost US oil and gas, the Pearl Clutchers who forsee doom and gloom around every corner will AGAIN be stunned at the incredible tenacity, the resilience of these ever so tough upstream operating companies.