*Happy Dance* ... U.S. Shale Oil Slowdown

(edited)

4 hours ago, Rodent said:

US rigs down 25. Herd of cats on the way to being herded. 

Over on west side of Pecos to central Reeves county along the I-10 corridor seems to be getting the downfall rigs. Saw yesterday by Balmorhea and north on highway 17 several new rigs in place waiting to go up. Since they seem to be drilling new wells without pipelines and storing in vast tanks till pipelines  get added (Photo1).Photo3 is on site with photo 1. That photo is west of Ft. Stockton 18 miles south side interstate 10. It's been untouched since last Sept. when I was here.   Trucking the oil and wastewater to a Waste Management well right along interstate 10 in between the 2 towns (approx. 35 miles.) The other injection site burned to the ground last Sept. The charred remains still there. Here is a couple photos yesterday. Sorry if blurry. Was sand blasted with 45 mph winds. Photo2 is new new NG plant on hiway 17 Phooff of interstate 10 few miles.

Edit: What I forgot to mention is these uncompleted wells number in 1000's. Several hundred miles on my new Trike around the area and I can attest too many too count. This "one" well is just an example. Some don't even have tanks and the gauges are at zero meaning well is shut in till completion crew comes in. Last photo is the pit where all is recirculated and cuttings are stored. Notice  the goo? That is about 4 inches of oil scum. So tells me this is probably a producer well when they get around too it. 

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Edited by Old-Ruffneck
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21 hours ago, Tom Kirkman said:

Agreed, information about completions would be more useful than rig counts.

Unfortunately, the reason rig counts are closely tracked is they are easy to track.  DUCs, and completions, not so much.  Getting accurate information about rig counts is not difficult.  But go ahead and try to find an accurate count of DUCs... good luck.  Last estimate I saw was around 7,000 DUCs.

Tom the EIA puts out a great report every month called, Drilling Productivity Report. On the right hand side of the page there is a spreadsheet going back to 2013 showing drilled wells, completions and DUCT’s by month. 

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On 1/6/2019 at 10:40 PM, Tom Kirkman said:

The U.S. Shale Oil industry is hammering itself.  I can't really stop an industry from picking uup a hammer and repeatedly smashing itself in the foot.

Once the pipeline bottleneck gets resolved even more, the hammer-smash-own-foot business model will likely accelerate, further widening the gap between WTI and Brent.

Flaring of gas is simply wasteful.  I wouldn't mind seeing firmer legislation enacted to curtail this waste of perfectly good hydrocarbons.

Stiff non-flaring rules would get some of the smaller companies out of the business. If they can't use best practices they should find another line of work. I really don't know if the larger companies are any less guilty, however. 

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7 hours ago, ronwagn said:

Stiff non-flaring rules would get some of the smaller companies out of the business. If they can't use best practices they should find another line of work. I really don't know if the larger companies are any less guilty, however. 

There are flares for a reason. They aren't just burning off excess gas. In the event of a hiccup with H2S gas it is burned off immediately. Or you'd rather see more oil-field related deaths? I agree there could be a better way, my preferred choice would make small but quality boiler system with generator and as flares burns, creates 'lectricity. Now I am no genius by any means but 24/7 flaring I believe it could work. But remember what the flares intended purpose is for. Safety of workers and refinery. Read on H2s gas. Very deadly and ever present from Artesia/Loco Hills, NM to Andrews,TX down to McCamey,TX to Balmorhea, TX.

It is part of the process of Natural Gas production, and legislating morality doesn't work. In December the plants in West Texas were paying .15c cf to help get rid of the excess'. Flaring sometimes is the cost effective way to get rid of. If your sitting behind a desk in say Boston it is easy to say we should do this/that. Practicality and common sense prevails. Just like them wind generators that eye pollute the beauty of this country down here. It's been proven that the cost to generate electricity per cost of each unit and infrastructure takes 15 years or so to pay for themselves. If it wasn't for the gov'ment giving credits you'd never see em spinning. They spin till required amount mandated by law is bought then shut down and no spin. Ain't America great!!! Let's mandate them flares too, they are a real pollution source!! Mt. St. Hellen is still puking out obnoxious fumes than most the cars in US. Let's figure a way to make the lefties put a catalytic converter on that. Rant over

 

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On 1/19/2019 at 5:17 AM, AcK said:

Would love to hear how OPEC got its math wrong. Below is my math (2017 data basis IEA), rest basis OPEC data released yesterday. Are we missing the fact that Iran/Venezuela (not part of OPEC cuts) are already down like 1.5mbd+ in aggregate. OPEC production will be down 1mbd in aggregate in 1HCY19 over 2017 with the announced cuts. Another 1mbd and we might as well start talking US$100 crude. Maybe demand is not as strong and maybe OPEC does indeed need to do more, but 1mbd incremental cut??

oilprice exhibit.jpg

 

I may misunderstand the graph,  but it doesn't seem to me that OPEC is making such a big cut,  and the USA has simply stepped up and took that share of the market to match,  so i do not see how this graph leads to $100 price per barrel.

Am i missing something..? 

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(edited)

22 hours ago, Old-Ruffneck said:

Over on west side of Pecos to central Reeves county along the I-10 corridor seems to be getting the downfall rigs. Saw yesterday by Balmorhea and north on highway 17 several new rigs in place waiting to go up. Since they seem to be drilling new wells without pipelines and storing in vast tanks till pipelines  get added (Photo1).Photo3 is on site with photo 1. That photo is west of Ft. Stockton 18 miles south side interstate 10. It's been untouched since last Sept. when I was here.   Trucking the oil and wastewater to a Waste Management well right along interstate 10 in between the 2 towns (approx. 35 miles.) The other injection site burned to the ground last Sept. The charred remains still there. Here is a couple photos yesterday. Sorry if blurry. Was sand blasted with 45 mph winds. Photo2 is new new NG plant on hiway 17 Phooff of interstate 10 few miles.

Edit: What I forgot to mention is these uncompleted wells number in 1000's. Several hundred miles on my new Trike around the area and I can attest too many too count. This "one" well is just an example. Some don't even have tanks and the gauges are at zero meaning well is shut in till completion crew comes in. Last photo is the pit where all is recirculated and cuttings are stored. Notice  the goo? That is about 4 inches of oil scum. So tells me this is probably a producer well when they get around too it. 

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So you are stating that they are digging wells and capping them off,  and moving on to dig more..  And that some of the wells they have pumped,  have the oil stored locally, due to cost of transport,  or for a "rainy day"..?

So they are drilling as many wells now as they can,  for QUICK use in the future if necessary...  Is that the case ?

Edited by Illurion

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5 minutes ago, Illurion said:

I may misunderstand the graph,  but it doesn't seem to me that OPEC is making such a big cut,  and the USA has simply stepped up and took that share of the market to match,  so i do not see how this graph leads to $100 price per barrel.

Am i missing something..? 

Nope, just as Iran showing 0 in the cut. Bet they are pumping +3.5. Mexico is already ramping up production, Venezuela also will will be. 

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2 minutes ago, Old-Ruffneck said:

Nope, just as Iran showing 0 in the cut. Bet they are pumping +3.5. Mexico is already ramping up production, Venezuela also will will be. 

I am glad you joined...

It is a lot more fun reading what you write.

More "on the ground" information...

We see lots of data.....

But what it means is sometimes unclear...

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14 minutes ago, Illurion said:

I may misunderstand the graph,  but it doesn't seem to me that OPEC is making such a big cut,  and the USA has simply stepped up and took that share of the market to match,  so i do not see how this graph leads to $100 price per barrel.

Am i missing something..? 

I think that you are describing the reality of the situation accurately. Proving, of course, that you are smarter than the OPEC officials.

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3 minutes ago, Illurion said:

So you are stating that they are digging wells and capping them off,  and moving on to dig more..  And that some of the wells that have pumped,  have the oil stored locally, due to cost of transport,  or for a "rainy day"..?

So they are drilling as many wells now as they can,  for QUICK use in the future if necessary...  Is that the case ?

No, what I am saying on those wells that are drilled and waiting for completion are numbered in the thousands. And that is just taking few side dirt roads where they drilled some months back. The big tanks store waste water and oil, by way of separation tanks. There is a lot of frac'd wells ready for completion but not enough manpower or materials to finish well off. And no reason to get in a big hurry till more pipelines come on line. And there is a Sh*t load of them getting laid. 

Well near Monahans take about 9 days to drill, set casing and frac. As Tom said earlier, shoooooting the right foot then going on to the left foot. 

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3 minutes ago, William Edwards said:

I think that you are describing the reality of the situation accurately. Proving, of course, that you are smarter than the OPEC officials.

I wish i was smarter...

After all,  they are rich,  and i am poor...

What money i had,  i lost when my heart failed,  and my employer screwed me and let me go,  and canceled all of my insurances,  and legally got away with it...

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3 minutes ago, Illurion said:

I wish i was smarter...

After all,  they are rich,  and i am poor...

What money i had,  i lost when my heart failed,  and my employer screwed me and let me go,  and canceled all of my insurances,  and legally got away with it...

My observation is that "luck", not "smart" is the deciding factor on "rich".

You have had some tough breaks, indeed. But your words reveal an inner strength and determination that, along with your intelligence, allow you to continue to contribute to society. You are to be admired! 

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(edited)

13 minutes ago, Old-Ruffneck said:

No, what I am saying on those wells that are drilled and waiting for completion are numbered in the thousands. And that is just taking few side dirt roads where they drilled some months back. The big tanks store waste water and oil, by way of separation tanks. There is a lot of frac'd wells ready for completion but not enough manpower or materials to finish well off. And no reason to get in a big hurry till more pipelines come on line. And there is a Sh*t load of them getting laid. 

Well near Monahans take about 9 days to drill, set casing and frac. As Tom said earlier, shoooooting the right foot then going on to the left foot. 

Ok...  then this leads back to Toms question of why did they drill all of these wells that are waiting for completion....

Is it for a rainy day ?

Are they doing it now because the people and the tools are available,  so put them to work doing something,  even if it is "make-work"...?

In other words,  get as much done as you can NOW while the industry is "hot",   knowing that once people are laid off,  and equipment is sold off or disposed of,  or degraded,   that it would far more time consuming and expensive to rehire, and retool, and start from scratch in order for them to drill those same wells in the future,  instead of now ?

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4 minutes ago, William Edwards said:

My observation is that "luck", not "smart" is the deciding factor on "rich".

You have had some tough breaks, indeed. But your words reveal an inner strength and determination that, along with your intelligence, allow you to continue to contribute to society. You are to be admired! 

Thanks for the compliment...

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5 minutes ago, Illurion said:

I wish i was smarter...

After all,  they are rich,  and i am poor...

What money i had,  i lost when my heart failed,  and my employer screwed me and let me go,  and canceled all of my insurances,  and legally got away with it...

 

5 minutes ago, Illurion said:

I wish i was smarter...

After all,  they are rich,  and i am poor...

What money i had,  i lost when my heart failed,  and my employer screwed me and let me go,  and canceled all of my insurances,  and legally got away with it...

Well, intelligence will get you so far in life, I found my emloyees with common sense much more attractive as an attribute than a college grad. that's think they know all. And Rich and Poor is a just tag ppl use. Some of the Richest men in this country have no class. They are just wealthy by way having a lot of wealth. Poor folks I can relate too better than rich folks. 

Todays ride will be up into NM via back roads. Loving, Nm is 3 hour each way. I know there is a flurry of activity still going on there. My new neighbor is a welder/pusher for small company working on NG plant near Coyanosa, Tx. If one was to judge the economy by how many new RV parks there is here in West Texas, it would blow the mind. 5 yrs ago Ft Stockton had 2 small parks 20 or less, 1 medium one 50 space and not all full, and one large 100 space. Now there is about 25 rv parks and almost all are full up with oil field workers. Times are good for today lol.

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13 minutes ago, Illurion said:

Ok...  then this leads back to Toms question of why did they drill all of these wells that are waiting for completion....

Is it for a rainy day ?

Are they doing it now because the people and the tools are available,  so put them to work doing something,  even if it is "make-work"...?

In other words,  get as much done as you can NOW while the industry is "hot",   knowing that once people are laid off,  and equipment is sold off or disposed of,  or degraded,   that it would far more time consuming and expensive to rehire, and retool, and start from scratch in order for them to drill those same wells in the future,  instead of now ?

No, not for rainy day. Takeaway (pipeline) infrastructure not in place yet. Many small lines run, but the real issue is several main 36" and larger to the gulf need to be run. That is the issue or WTI would be ramped up even more. There is in place to easily pump 4.5-5.0mbd.

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4 minutes ago, Old-Ruffneck said:

No, not for rainy day. Takeaway (pipeline) infrastructure not in place yet. Many small lines run, but the real issue is several main 36" and larger to the gulf need to be run. That is the issue or WTI would be ramped up even more. There is in place to easily pump 4.5-5.0mbd.

So,  you are saying it is all about the lack of pipelines and other transport....?

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37 minutes ago, Old-Ruffneck said:

If one was to judge the economy by how many new RV parks there is here in West Texas, it would blow the mind. 5 yrs ago Ft Stockton had 2 small parks 20 or less, 1 medium one 50 space and not all full, and one large 100 space. Now there is about 25 rv parks and almost all are full up with oil field workers. Times are good for today lol.

One of my Neighbors Grandson,  about 20 years old,  went to Texas last year looking to get into the oil business.

His Grandfather told me just before Christmas that the boy DID GET HIRED working on a drill rig crew.

The Grandfather was actually even MORE excited that the boy had found a GIRLFRIEND in Texas too......

If successful,  he could soon be a Great-Grandfather..... 9_9

I assume the boy lives in one of the RV's that you are talking about.....

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42 minutes ago, Old-Ruffneck said:

Todays ride will be up into NM via back roads. Loving, Nm is 3 hour each way. 

Well enjoy the trip...

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4 minutes ago, Illurion said:

So,  you are saying it is all about the lack of pipelines and other transport....?

Absolutely!! Dilling and frackin' faster than takeaway. As I said before on diff thread. when I was working for crappy drilling co. we were north of Andrews Tx and we were drilling 11960 feet per hole in proven field. Every 8 days we were "spudding" in. That was in 83, the rigs of today take less man power to operate and are much faster to 8 to 10k feet. Directional drilling is a fine art and they've improved vastly so wells don't cost what they used to back in early 80's. When Reagan did the windfall profits tax the drilling industry got essentially killed. Went from "contract" drilling to "by the foot". Most operators went belly up. Every drilling company I worked for back then is not in existence now. 

Hittin' the road, 

me.ride.jpg

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I am a physician who has spent most of my life saving children's lives. My colleagues referred to me as a specialist in the last 15 minutes of life with the goal of always giving my best effort to convert that 15 minutes into 70+ years. 

I have always had a very strong interest in all sources of energy, including fossil fuels, nuclear, hydroelectric, wind, our sun, and  even interstellar effects on earth's climate. Open to and interested in all scientific data and points of view.

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1 hour ago, Illurion said:

I may misunderstand the graph,  but it doesn't seem to me that OPEC is making such a big cut,  and the USA has simply stepped up and took that share of the market to match,  so i do not see how this graph leads to $100 price per barrel.

Am i missing something..? 

You are right it doesnt - my point was in response to the view that OPEC should have cut more (2mbd versus 1mbd ex-Russia announced). OPEC is just bringing 2019E production back to 2017 levels - adjusted for Iran and Venezuela (where production has gone down massively for very different reasons). Incremental demand (1.5mbd/annum) is being met by other countries (US primarily). Point being if OPEC cuts another 1mbd (over an above the cut already announced for Jan), then we are talking crude at US$100.

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On 1/18/2019 at 4:45 PM, Tom Kirkman said:

Excellent questions.

Before I shoot my mouth off and offer my take on answers to these questions, anyone else want to take a crack at answering?

Looks like you will have to do the needful. Yet to see an answer to my questions. Tx in advance.

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2 minutes ago, AcK said:

You are right it doesnt - my point was in response to the view that OPEC should have cut more (2mbd versus 1mbd ex-Russia announced). OPEC is just bringing 2019E production back to 2017 levels - adjusted for Iran and Venezuela (where production has gone down massively for very different reasons). Incremental demand (1.5mbd/annum) is being met by other countries (US primarily). Point being if OPEC cuts another 1mbd (over an above the cut already announced for Jan), then we are talking crude at US$100.

You are still neglecting the pertinent point. The data suggest that incremental demand (1.5 MB/D/Yr) is being over-met, not just met, by about a million barrels a day. That increment must be relinquished by OPEC if an oversupply situation is to be avoided. And how does the industry force OPEC to shut in a million barrels a day that they do not wish to give up? By undercutting the price.

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3 minutes ago, bmp344@gmail.com said:

I am a physician who has spent most of my life saving children's lives. My colleagues referred to me as a specialist in the last 15 minutes of life with the goal of always giving my best effort to convert that 15 minutes into 70+ years. 

I have always had a very strong interest in all sources of energy, including fossil fuels, nuclear, hydroelectric, wind, our sun, and  even interstellar effects on earth's climate. Open to and interested in all scientific data and points of view.

Down here In West Texas Solar now smokin' Wind generated power.  Truth be told, Yellowstone has enough heatsource close to surface, a power plant could be erected and power the nation. But then that defeats all other industries and it's all about money. Greed is still king around the world.

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