OPEC+ Expects Large Oil Glut In Early 2022

[Adam Varga + 123]

OPEC+ expects the global oil market to show a worse-than-previously expected surplus in the first quarter of 2022, according to an internal report seen by Reuters, which could give the group another reason to pause monthly supply additions.

OPEC+ now expects a surplus of 2 million barrels per day (bpd) in January, 3.4 million bpd in February, and 3.8 million bpd in March, the report seen by Reuters shows.

https://oilprice.com/Energy/Crude-Oil/OPEC-Expects-Large-Oil-Glut-In-Early-2022.html 

Edited December 1, 2021 by Adam Varga

[Starschy + 211]

I don't believe that. 3 Million Barrel would be a seven fold increase since August 2021. I mean not more than 1 Mio Barrel per day till April 2022.

[Starschy + 211]

According official Russen sources will Russia will increase in January 2022 about 109000 Bpd.

Therefore we can put that 3 Mio Bpd to the Trash as Russia is the second largest Country in Opec+

[Tomasz + 1,608]

Real OPEC+ spare capacity is not 4,8 milion barrels but rather about 2 millions.

Yesterday russian official said that without additional drilling they are max out for the time being.

Even with addtional drilling they are permanently max out at about 11,50 milion barrels. Even with shale drilling in Russia in about 10 years at about 12 milions maximum according to Oxford Institute for Energy Studies report.

[notsonice + 1,255]

24 minutes ago, Tomasz said:

Real OPEC+ spare capacity is not 4,8 milion barrels but rather about 2 millions.

Yesterday russian official said that without additional drilling they are max out for the time being.

Even with addtional drilling they are permanently max out at about 11,50 milion barrels. Even with shale drilling in Russia in about 10 years at about 12 milions maximum according to Oxford Institute for Energy Studies report.

the OPEC report is a report on total global supply , not just among OPEC +

[Tomasz + 1,608]

Yup but this is gonna be 

1 milion from US shale 

1 milion from russian oil

So Russia is max out at increasing about 0,5-0,6 but not 1 milion

And US shale is no longer drill baby drill  mode (to bankrupcy)

Quote

 

US shale spending to jump 19% in 2022 but remain ~80% of pre-Covid levels. Bakken spending to increase 19%, Permian 17%, Appalachia 15% and Haynesville 10%. --Rystad Energy

Furthermorer Reinvestment rates in the US hit historic lows in Q3 shaping record free cash flow.

 

 

[notsonice + 1,255]

7 minutes ago, Tomasz said:

Yup but this is gonna be 

1 milion from US shale 

1 milion from russian oil

So Russia is max out at increasing about 0,5-0,6 but not 1 milion

And US shale is no longer drill baby drill  mode (to bankrupcy)

 

And US shale is no longer drill baby drill  mode (to bankrupcy) ????

mega land packages are being put together in the oil patches in the US. Consolidation of smaller leases is happening in the background and the route to success is paved with efficiencies. Less holes in the ground , much longer laterals and less pad sites with greater production. US shale is not the same as it was 2 years ago or 4 or 6 etc. I would not be surprised if US production tops 13 million a day at the end of 2023 with only 600 oil  rigs working. I doubt if you will ever see more than 650 oil rigs working in the US ever again . The fracking world is still doing more with less everyday. At $60 WTI US will make 13 million a day at the end of 2023

 

 

[notsonice + 1,255]

This is were the surplus in  oil in the US will come from

 

• Author Starr Spencer
• Editor Gary Gentile
• Commodity Natural Gas,  Oil

 

Lower returns/foot while more hydrocarbons/well

Breakeven price decreases with longer laterals

Could become industry standard in future

Houston — At a time when squeezing out more oil and gas for less money is a priority for upstream producers, longer laterals are giving a competitive edge in unconventional basins in the US, producing more hydrocarbons per foot drilled.

 

 

Laterals – the horizontal portion of a well, – have become longer and longer in the last 15 years. Drilling out 15,000 feet, or nearly three miles horizontally reduces the number of wells companies need to drill to achieve their production goals, and does it at increasingly lower costs.

As producers keep a tight rein on capital expenses to boost cash flows, they have found it unnecessary, for instance, to drill two wells to 6,000 vertical foot depths, and then take the well sideways for one mile, when a single vertical well can be drilled with a horizontal leg extending two or three miles.

That saves drilling time, cuts surface equipment requirements and cuts downtime to move rigs and crews.

"In the US shale industry, everything is based on dollars per foot," Neil Bird, product director for drilling equipment and information provider Enteq, said. "It's boe economics, really."

Improved breakevens

According to Daryl Koo, head of oil asset intelligence for energy consultancy Enverus, in the core Delaware Basin Wolfcamp-A formation, the breakeven WTI price of a well decreases from $38/b to $34.50/b when going from 5,000 foot to 10,000 foot laterals.

"Though we didn't model a 15,000-foot case given it's still an emerging design, I'd expect the breakeven price to further decrease to around $31-$33/b, assuming no major issues with production or cost performance," Koo said.

Upstream operators during Q1 conference calls viewed the incremental economics favorably – especially at current WTI prices well above $60/b.

Comstock CEO Miles Jay Allison said his company has drilled wells to 13,000 feet-plus earlier this year but plans to drill even further out.

"If we can extend our average well to 13,000- to 15,000 feet ... the economics make a lot more sense," Allison said during the company's Q1 conference call. "We don't see a lot of issues in the drilling of it, and we've been able to complete these pretty consistently."

John Lambuth, executive vice president-exploration for Cimarex Energy, said his company intends to launch a three-mile development "soon" in Culberson County, West Texas, and is looking at several areas in the Anadarko Basin similarly for three-mile developments.

Cimarex believes the incremental production uplift received would be "much more beneficial" than the associated costs, Lambuth said.

Occidental Petroleum CEO Vicki Hollub said her company has drilled "one or two" 15,000-foot laterals, although the company has racked up numbers of laterals greater than 10,000 feet.

"It really depends on the reservoir and ... your full infill development plan, how you intend to complete it and what kind of artificial lift you intend to use," Hollub said.

Laterals of 15,000 feet could become as common in a few years as 10,000 footers are today, some experts say.

"In a lot of applications, 20,000 feet will become the norm as well," Enteq's Bird said. "The technology will evolve to make sure it can be consistently delivered."

Diminishing returns

Production and cost data from major plays like the Permian and Bakken suggest technical challenges of 15,000 foot laterals are largely overcome and horizontals around that length are the preferred development strategy, experts say.

But even as more oil and gas is procured per well with plus-sized laterals, output increases come at diminishing returns, Rene Santos, manager of North American supply for S&P Global Platts Analytics, said.

Using a hypothetical example, Santos explained that between a 7,000 foot and a 10,000 foot lateral, the production increase might be around 400 b/d of oil or 0.133 b/d per each additional foot drilled.

However, the increased production from taking a lateral to 13,0000 feet versus 10,000 feet may be only about 275 b/d or 0.092 b/d per each additional foot.

"The 13,000 foot lateral is more economical than a 10,000 foot lateral, but you get less incremental production for each additional foot drilled," Santos said.

One potential solution is drilling multilateral wells – more than one lateral for each single well – and fracking each of the laterals, he added. While some companies have experimented with this technology it appears to be in the early stages.

Acreage constraints

Lack of "blocky" acreage is one of the biggest constraints to longer laterals – companies may simply not have enough contiguous lands to extend wells out for three miles or so.

In other cases, a geological formation into which super laterals are drilled may simply "pinch out" as its productive geology thins. And sometimes, regulatory surface constraints may limit the ability to drill additional footage.

Also, "operators may have difficulties keeping long-lateral wells within the target zone if it is thin and the subsurface varies greatly within a short distance, [which would] reduce well productivity and economics," Enverus said in an email. "Maintaining stimulation effectiveness at the toe of the well can also be challenging at extreme lengths" of 15,000 feet and longer.

"Longer" laterals initially referred to wells 6,000-7,000 feet instead of 3,000-4,000 feet. Later, companies judiciously extended laterals to a now-typical 9,000-10,000 feet. But companies have experimented with longer laterals, and in the last few years industry began extending horizontals out to 15,000 feet.

In 2017 Eclipse Resources, an Appalachian upstream operator, drilled a 3.7-mile lateral well called Great Scott, besting its own previous 3.5-mile record.

Later that year, ExxonMobil drilled a much-heralded lateral also over three miles in the Bakken Shale of North Dakota. Both companies made headlines at the time and set the stage for companies to longer lateral lengths.

In fact, executives for Pioneer Natural Resources suggested one motive for the company's back-to-back acquisitions earlier this year of Parsley Energy and DoublePoint Energy was procuring the adjacent land tracts to be able to drill longer wells.

Pioneer has not yet assessed all its newly acquired acreage from the two transactions, so longer laterals may begin later in 2021 and "more likely" in 2022, Rich Dealy, Pioneer's president and chief operating officer, said.

"That's something we have to continue to do over ... the next few months," Dealy said. "We surround all that acreage."

 

 

[Ecocharger + 1,477]

17 hours ago, notsonice said:

This is were the surplus in  oil in the US will come from

 

• Author Starr Spencer
• Editor Gary Gentile
• Commodity Natural Gas,  Oil

 

Lower returns/foot while more hydrocarbons/well

Breakeven price decreases with longer laterals

Could become industry standard in future

Houston — At a time when squeezing out more oil and gas for less money is a priority for upstream producers, longer laterals are giving a competitive edge in unconventional basins in the US, producing more hydrocarbons per foot drilled.

 

 

Laterals – the horizontal portion of a well, – have become longer and longer in the last 15 years. Drilling out 15,000 feet, or nearly three miles horizontally reduces the number of wells companies need to drill to achieve their production goals, and does it at increasingly lower costs.

As producers keep a tight rein on capital expenses to boost cash flows, they have found it unnecessary, for instance, to drill two wells to 6,000 vertical foot depths, and then take the well sideways for one mile, when a single vertical well can be drilled with a horizontal leg extending two or three miles.

That saves drilling time, cuts surface equipment requirements and cuts downtime to move rigs and crews.

"In the US shale industry, everything is based on dollars per foot," Neil Bird, product director for drilling equipment and information provider Enteq, said. "It's boe economics, really."

Improved breakevens

According to Daryl Koo, head of oil asset intelligence for energy consultancy Enverus, in the core Delaware Basin Wolfcamp-A formation, the breakeven WTI price of a well decreases from $38/b to $34.50/b when going from 5,000 foot to 10,000 foot laterals.

"Though we didn't model a 15,000-foot case given it's still an emerging design, I'd expect the breakeven price to further decrease to around $31-$33/b, assuming no major issues with production or cost performance," Koo said.

Upstream operators during Q1 conference calls viewed the incremental economics favorably – especially at current WTI prices well above $60/b.

Comstock CEO Miles Jay Allison said his company has drilled wells to 13,000 feet-plus earlier this year but plans to drill even further out.

"If we can extend our average well to 13,000- to 15,000 feet ... the economics make a lot more sense," Allison said during the company's Q1 conference call. "We don't see a lot of issues in the drilling of it, and we've been able to complete these pretty consistently."

John Lambuth, executive vice president-exploration for Cimarex Energy, said his company intends to launch a three-mile development "soon" in Culberson County, West Texas, and is looking at several areas in the Anadarko Basin similarly for three-mile developments.

Cimarex believes the incremental production uplift received would be "much more beneficial" than the associated costs, Lambuth said.

Occidental Petroleum CEO Vicki Hollub said her company has drilled "one or two" 15,000-foot laterals, although the company has racked up numbers of laterals greater than 10,000 feet.

"It really depends on the reservoir and ... your full infill development plan, how you intend to complete it and what kind of artificial lift you intend to use," Hollub said.

Laterals of 15,000 feet could become as common in a few years as 10,000 footers are today, some experts say.

"In a lot of applications, 20,000 feet will become the norm as well," Enteq's Bird said. "The technology will evolve to make sure it can be consistently delivered."

Diminishing returns

Production and cost data from major plays like the Permian and Bakken suggest technical challenges of 15,000 foot laterals are largely overcome and horizontals around that length are the preferred development strategy, experts say.

But even as more oil and gas is procured per well with plus-sized laterals, output increases come at diminishing returns, Rene Santos, manager of North American supply for S&P Global Platts Analytics, said.

Using a hypothetical example, Santos explained that between a 7,000 foot and a 10,000 foot lateral, the production increase might be around 400 b/d of oil or 0.133 b/d per each additional foot drilled.

However, the increased production from taking a lateral to 13,0000 feet versus 10,000 feet may be only about 275 b/d or 0.092 b/d per each additional foot.

"The 13,000 foot lateral is more economical than a 10,000 foot lateral, but you get less incremental production for each additional foot drilled," Santos said.

One potential solution is drilling multilateral wells – more than one lateral for each single well – and fracking each of the laterals, he added. While some companies have experimented with this technology it appears to be in the early stages.

Acreage constraints

Lack of "blocky" acreage is one of the biggest constraints to longer laterals – companies may simply not have enough contiguous lands to extend wells out for three miles or so.

In other cases, a geological formation into which super laterals are drilled may simply "pinch out" as its productive geology thins. And sometimes, regulatory surface constraints may limit the ability to drill additional footage.

Also, "operators may have difficulties keeping long-lateral wells within the target zone if it is thin and the subsurface varies greatly within a short distance, [which would] reduce well productivity and economics," Enverus said in an email. "Maintaining stimulation effectiveness at the toe of the well can also be challenging at extreme lengths" of 15,000 feet and longer.

"Longer" laterals initially referred to wells 6,000-7,000 feet instead of 3,000-4,000 feet. Later, companies judiciously extended laterals to a now-typical 9,000-10,000 feet. But companies have experimented with longer laterals, and in the last few years industry began extending horizontals out to 15,000 feet.

In 2017 Eclipse Resources, an Appalachian upstream operator, drilled a 3.7-mile lateral well called Great Scott, besting its own previous 3.5-mile record.

Later that year, ExxonMobil drilled a much-heralded lateral also over three miles in the Bakken Shale of North Dakota. Both companies made headlines at the time and set the stage for companies to longer lateral lengths.

In fact, executives for Pioneer Natural Resources suggested one motive for the company's back-to-back acquisitions earlier this year of Parsley Energy and DoublePoint Energy was procuring the adjacent land tracts to be able to drill longer wells.

Pioneer has not yet assessed all its newly acquired acreage from the two transactions, so longer laterals may begin later in 2021 and "more likely" in 2022, Rich Dealy, Pioneer's president and chief operating officer, said.

"That's something we have to continue to do over ... the next few months," Dealy said. "We surround all that acreage."

 

 

Won't mean a thing if Biden & Co. place crippling "climate" oil taxes on output, and investors are forced to avoid fossil fuel investments. What are you talking about?

Edited December 3, 2021 by Ecocharger

[notsonice + 1,255]

11 minutes ago, Ecocharger said:

Won't mean a thing if Biden & Co. place crippling "climate" oil taxes on output, and investors are forced to avoid fossil fuel investments. What are you talking about?

you babbling bs again I see. Can you read???  Oil output while rise in the US due to 15000 footer longer laterals and multi laterals off of single wells and finally leases are much much larger in size due to consolidation in the business. Investors??? Cash rich majors are running the show

[Starschy + 211]

19 hours ago, notsonice said:

the OPEC report is a report on total global supply , not just among OPEC +

All three large Russian Companies Gazprom, Rosneft, Lukoil have large Research Departements. Russians are very conservative. One Rosneft Oilfield was discovered end of 1980. But the real start was in 2009. After legal Cases etc. Till 2035 they have enough sources and large ones will start 2028 like Vostok in the North. And if they wish they could buy Iran Oil for very cheap prices.