U.S. Shale Output may Start Dropping Next Year

[Tom Kirkman + 8,860]

7 minutes ago, Gerry Maddoux said:

Truer words were never spoken! In wildcat (parent) wells drilled in sweet spots, LTO is profitable at quite low prices. However, when the infills (children) wells are drilled, very few are profitable at $50/bll. I know . . . I have lost money on a few. 

In general, for shale to keep on growing, WTI has to hit $60-65. That will result in wage inflation. Then the mark will have to be raised to $75.

In general, U.S. Shale Oil keeps shooting itself in the foot by overproducing in a saturated global market.   $55 WTI seems a self-imposed cap for now, until Shale Oil production gets scaled back a bit.

[footeab@yahoo.com + 2,131]

4 hours ago, D Coyne said:

Plugging in a car is not really very difficult, my 75 kWh pack goes about 300 miles when fully charged, plenty of range, the capacity might decrease to 80% after 200k on the odometer.  Drive car into garage, plug in, scheduled charge during low price periods timer built into car's software.  The Model 3 LR AWD is quite nice 0-60 about 4.2 sec.  Fun to drive,

Actually, last month, Tesla just published stats that super charging saves the battery and will give a Million kilometer range easily and home charging is the WORST solution and kills them.  They did not know why.  I published this link down in Renewables.... Penn State University found out why.  If you HEAT the batteries to roughly 60C and then charge at 6C!!!  and then immediately cool the batteries back down allows the MINIMUM time for lithium plating I do believe is what they said.... and it makes sense as chemical reactions roughly go by the 4th power of heat time TIME.  So, elevated temps over long time = bad, but short time and slightly HIGHER temps is better.   

In effect, the charging problem just got 100% solved, and by solving the problem created a whole host of new problems as now charging stations can "fill" a car in under 10 minutes, but requires an ungodly amount of current to do so which will place even larger burden on electric grid.  Likewise making this solution a home charging solution just became expensive/complex to implement which means the cheap home charging solution in my opinion is going goodbye and hello charging stations with elevated charging costs and ...... TAXES.  Lots of road taxes. 

In my opinion it is a done deal on electrification of the automobile in next 10 years.  Especially in Europe/China/India/SE Asia where they have almost no oil and driving distances are short/medium range.  Africa/America/s, Oz, Central Asia?  Nope. 

[Gerry Maddoux + 3,627]

There is one simple fact that no one has factored in, because one hasn't occurred during the "EV Revolution."

A recession from hell.

Do you remember the last one? Do you think we're in a Golden Age where another recession can't and won't happen?

I'm no pessimist but I am a student of history, so I realize that when the next recession hits, a great number of EV companies are going to go bankrupt. I strongly suspect Tesla will be one of them . . . because their solar enterprises are tied to EV. When you lose your job, and you're trying to put food on the table, and you're trying to pay the alimony and not lose the house, you're really not all that concerned with a little pollution. 

Not only that but the IMO-2020 is going to solve so much pollution that the rest of it almost doesn't matter. If they're telling the truth about the numbers, the 15 largest oceangoing freighters in the world emit more SOX than all 760 million cars on the planet. There are 60,000 ships. They're all going to either be decommissioned, install scrubbers, or switch from 3.5% sulfur bunker fuel to low (0.5%) sulfur diesel. If 15 shipping polluters are equivalent to all the cars, what about the other 59,850 vessels? Using the Duncan Halving System, I figure that takes care of the climate change right there--hell, we may make more ice next year on the polar caps than ever in history. 

China is cutting back dramatically on EV subsidies. I didn't know why so I asked a "China Hand." He said, "Well, the Chinese aren't stupid. They figure the maritime pollution will cure the whole thing." Not satisfied, I asked a guy from Hong Kong. He said the Chinese are running out of money for that sort of thing. I have no clue which one is right, but it doesn't matter: the Chinese are cutting subsidies for EV's (and dramatically). 

My strong suspicion is that we're going to have a collision of unseen forces: recession, debt, money trouble, cheap fossil fuel, a turnaround of global warming.

And then what, oh wise ones?

[Ward Smith + 6,615]

36 minutes ago, Gerry Maddoux said:

They're all going to either be decommissioned, install scrubbers, or switch from 3.5% sulfur bunker fuel to low (0.5%) sulfur diesel. If 15 shipping polluters are equivalent to all the cars, what about the other 59,850 vessels? Using the Duncan Halving System, I figure that takes care of the climate change right there--hell, we may make more ice next year on the polar caps than ever in history. 

The AGW religion doesn't really care about sulfur in global warming, it's all about CO2. 

That said, the sulfur dioxide hitting the ocean water has a vastly Greater effect than CO2 doing the same. 

[remake it + 288]

6 hours ago, Ward Smith said:

The AGW religion doesn't really care about sulfur in global warming, it's all about CO2. 

That said, the sulfur dioxide hitting the ocean water has a vastly Greater effect than CO2 doing the same. 

Looks like the blind are not just following the blind, they also want to lead the blind... so confusing.

[Marcin + 519]

14 hours ago, Tom Kirkman said:

In general, U.S. Shale Oil keeps shooting itself in the foot by overproducing in a saturated global market.   $55 WTI seems a self-imposed cap for now, until Shale Oil production gets scaled back a bit.

Think about the benefits that the world gets from US shale oil production. Without this 8 million bbl/d or even half of this output prices will shoot much higher, lets assume by 20$ per barrel. Paying 20$ less per barrel of imported oil is equal to over 7 billion $ bill per 1 million bbl/d. So EU with imports of 12 m benefits 84 billion, China with 10 million benefits 70, Japan with 4 has gain of 28 and South Korea with 2.8 gains 20 billion $. This has stimulating, beneficial effect on global economy. Low inflation is another gain.

[Rob Kramer + 696]

Ya during the last cdn election  I was blasting face book with inflation news because it was good  (low) due to :low fuel prices. Except the month  the 4.4c/L carbon tax on gas was installed. Cant wait for lack of pipelines and 11c/L in 21' .... yay liberals /facepalm 

[ceo_energemsier + 1,818]

Looks like XOM is going to be pouring a lot of $$$ into US shale.

 

Exxon steps up assets sales with sweeping $25 billion plan -

 

(Reuters) - Exxon Mobil <XOM.N> is accelerating its biggest asset sales in decades with plans to divest up to $25 billion of oil and gas fields in Europe, Asia and Africa as it sharpens its focus on a handful of mega projects at home and abroad, banking sources said.

The vast programme, which will see Exxon effectively quit its upstream oil and gas business in Europe, comes amid growing pressure from investors to free up cash for new developments in Guyana, Mozambique, Papua New Guinea and the United States.

In recent months, the Irving, Texas-based company has drawn up an extensive list of assets, spanning at least 11 countries, which it wants to sell. The list easily exceeds its current $15 billion disposal target for 2021, according to three banking sources with direct knowledge of the plans.

An Exxon spokeswoman said the company does not "comment on market rumours or speculation."

Exxon shares were trading 0.4% higher at 1448 GMT.

Exxon, the world's top listed energy company, has struck a number of deals in recent months including a $4.5 billion exit from Norway, and is also already offering assets in Australia, Nigeria, Malaysia.

The expanded plan will see Exxon sell out of operations in the British North Sea, Germany and Romania. In Europe, that would leave it with production in the Netherlands, where it holds a stake together with Royal Dutch Shell in the giant Groningen gas field which the government plans to shut down in 2022.

The plan would also see Exxon significantly pare back operations in Southeast Asia with the sale of its assets in Indonesia and Malaysia, the sources said.

In Africa, Exxon wants to sell its operations in Chad, Equatorial Guinea as well as parts of its Nigerian assets.

While Exxon is set to ramp up its spending sharply in the coming years to develop new oil and gas projects, most of its peers have more cautious spending plans due to an uncertain outlook for oil prices and growing pressure from investors to diversify away from fossil fuels towards renewables.

INVESTOR PRESSURE

Exxon responded more slowly to the 2014 oil price crash than some of its rivals that sharply cut spending, putting it under pressure from shareholders to reduce costs. Exxon's shares heavily underperformed relative to other Oil Majors over the past five years.

Unlike rivals such as Shell and BP, Exxon did not carry out major review of its portfolio in recent decades. BP sold over $65 billion of assets following the 2010 Deepwater Horizon spill in the Gulf of Mexico while Shell sold over $30 billion after acquiring rival BG Group in 2016.

But under Chief Executive Darren Woods, Exxon is set to sharply increase its spending in the coming years as it launches new, large oil and gas developments including in Guyana, Mozambique, Brazil, Papua New Guinea, the United States and possibly Qatar.

In its 2019 investor day, the company said it planned to boost its annual capital spending from $26 billion in 2018 to $30-$35 billion between 2021 and 2025.

Building up a war chest via asset sales could help allay concerns that Exxon will ramp up its debt levels to fund new projects, particularly with oil prices remaining stubbornly close to $60 a barrel.

Moody's Investor Service on Tuesday changed Exxon's outlook to negative from stable due to its negative free cash flow and anticipated use of debt to fund its future capital spending.

Moody's has forecast negative free cash flow of about $7 billion this year and $9 billion next year.

"The company's high level of growth capital investments cannot be funded with operating cash flow and asset sales at projected levels given ExxonMobil's substantial dividend payout, absent meaningfully higher commodity prices and earnings from downstream and chemicals," Moody's said.

 

 

[Ward Smith + 6,615]

7 hours ago, remake it said:

Looks like the blind are not just following the blind, they also want to lead the blind... so confusing.

Fortune cookie bromides plus snark, your algorithm defined

[Rob Kramer + 696]

They (Exxon) probably think if this is the hight of oil sell now for instant cash at peak cycle or if oil is going to go up start fracking like theres  no tomorrow and have a quickly growing short life cycle product . Personally I think oil will go up and that would make alot of these shale wells profitable. And when/if greenies and renewables are a threat they can dial spending at will. 

Edited November 21, 2019 by Rob Kramer
Put in big oil name .

[D Coyne + 305]

On 11/20/2019 at 9:00 PM, footeab@yahoo.com said:

Actually, last month, Tesla just published stats that super charging saves the battery and will give a Million kilometer range easily and home charging is the WORST solution and kills them.  They did not know why.  I published this link down in Renewables.... Penn State University found out why.  If you HEAT the batteries to roughly 60C and then charge at 6C!!!  and then immediately cool the batteries back down allows the MINIMUM time for lithium plating I do believe is what they said.... and it makes sense as chemical reactions roughly go by the 4th power of heat time TIME.  So, elevated temps over long time = bad, but short time and slightly HIGHER temps is better.   

In effect, the charging problem just got 100% solved, and by solving the problem created a whole host of new problems as now charging stations can "fill" a car in under 10 minutes, but requires an ungodly amount of current to do so which will place even larger burden on electric grid.  Likewise making this solution a home charging solution just became expensive/complex to implement which means the cheap home charging solution in my opinion is going goodbye and hello charging stations with elevated charging costs and ...... TAXES.  Lots of road taxes. 

In my opinion it is a done deal on electrification of the automobile in next 10 years.  Especially in Europe/China/India/SE Asia where they have almost no oil and driving distances are short/medium range.  Africa/America/s, Oz, Central Asia?  Nope. 

https://batteryuniversity.com/learn/article/how_to_charge_when_to_charge_table

 

[D Coyne + 305]

On 4/9/2019 at 9:12 PM, Old-Ruffneck said:

Exxon and Chevron have already posted break-evens on some of the new wells around Coyanosa  and Pecos sites. The economics of 2 years ago don't apply in todays drilling technics. Much lower now, and getting even lower. But you stated you know the economics quite a bit so I guess your in the business, and have other information that proves otherwise.

Old Ruffneck,

Often they tell us about their best wells, but it the performance of all the wells that matters.

See

https://shaleprofile.com/2019/11/21/permian-update-through-august-2019/

For the average producer the average 2018 well had cumulative output of 123 kb after 8 months (3800 wells), for CVX and XOM the average was 129 kb (350 wells) or about 5% higher than average.

The average Permian well breaks even at about $55/bo at the wellhead (that is the DCF is equal to the well cast at a 10% annual discount rate.)

[Tom Kirkman + 8,860]

1 hour ago, D Coyne said:

Old Ruffneck,

Often they tell us about their best wells, but it the performance of all the wells that matters.

See

https://shaleprofile.com/2019/11/21/permian-update-through-august-2019/

For the average producer the average 2018 well had cumulative output of 123 kb after 8 months (3800 wells), for CVX and XOM the average was 129 kb (350 wells) or about 5% higher than average.

The average Permian well breaks even at about $55/bo at the wellhead (that is the DCF is equal to the well cast at a 10% annual discount rate.)

See the 8 slides presented here.  Relevant to this thread.

https://www.linkedin.com/posts/shaleprofile_forecasting-production-decline-in-anadarko-ugcPost-6604747445605801984-0m1K