"U.S. Shale Drillers Begin Re-Fracking Existing Wells" by Irina Slav at OILPRICE.COM

[Tom Nolan + 2,443]

U.S. Shale Drillers Begin Re-Fracking Existing Wells

By Irina Slav - Jun 27, 2022, 8:00 AM CDT

• Oil well re-fracking is on the rise in the United States.
• Re-fracking of existing shale wells can cost up to 40 percent less than drilling a new well.
• Re-fracking could also help U.S. shale drillers boost their cash flow further.

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Oil well re-fracking is on the rise in the United States as shale producers seek to boost production without making significant investments in new wells, Reuters has reported.

Re-fracking appears to be a way to reconcile shareholder insistence on higher returns and calls from the federal government to increase oil production at a time of tight supply, which has led to higher prices for both crude oil and refined products, chiefly fuels.

According to the report, re-fracking of existing shale wells can cost up to 40 percent less than drilling a new well. It can also double or triple the output of an existing well, one fracking industry executive told Reuters.

Economy has become important for shale drillers despite much higher benchmark oil prices because of widespread shortages of equipment, workforce, and raw materials that have increased production costs. These are up about 20 percent from a year ago, according to Callon Petroleum, a Texas-based company, as cited by Reuters.

Re-fracking could also help U.S. shale drillers boost their cash flow further, which would make their shareholders even happier than higher dividends.

According to a recent report by Saudi bank Al Rahji Capital, cash per well for U.S. shale producers rose to $34 per barrel in the first quarter of this year, from $23 per barrel in the last quarter of 2021.

This is still much lower than the $51 per barrel that shale drillers got in the first quarter of 2020, the report noted, but added that it is still “providing enough cushion to boost the production levels amid higher oil prices.”

U.S. crude oil prices have gained some 40 percent over the past 12 months, but domestic oil production remains about a million barrels daily below the record 12.8 million bpd the U.S. produced in early 2020.

By Irina Slav for Oilprice.com

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https://oilprice.com/Energy/Crude-Oil/US-Shale-Drillers-Begin-Re-Fracking-Existing-Wells.html

[TailingsPond + 671]

If the drillers had faith in their industry they would be investing in longer term projects.  Any increase in production from re-fracking old wells is not going to last very long. 

"Oil well re-fracking is on the rise in the United States as shale producers seek to boost production without making significant investments"

If you refuse to invest long-term in your own industry what does that say?

 

[Tom Nolan + 2,443]

18 hours ago, TailingsPond said:

If you refuse to invest long-term in your own industry what does that say?

Oil companies like Pioneer recognize the agenda...it is an agenda to dupe people and nations into the Climate Change CO2 narrative...and governments are increasingly creating policies which definitely undermine long term investments.  Because the public is hypnotized by the MASS FORMATION of the CO2 narrative, these type of weird climate change policies will become more prolific...until the populace is subjugated unwittingly by their own ignorance.

 

[Blackbag99 + 20]

It has very little to do with increasing shareholder returns.Most shareholders haven't had any returns over the past 10 years, as frackers have made cumulative losses over that period.

Bondholders want Shale producers to repay their bonds or they aren't going to be able to refinance.

Demand for products over the last 4 weeks is -0.1%. With the return of flights, not a very impressive number. 1m of that product demand is exports, so a very unimpressive number. With domestic production growing at 8.1%, it is only low inventory levels and geopolitics that is keeping the oil price high. And that won't last for ever!