How many drilling sites are left in the Permian?

[DanilKa + 443]

while parent-child interaction between offset wells is the thing, Permian is a stacked play with multiple drilling targets (wine-rack) - keep it in mind. Spraberry x3 (upper, middle, lower), Wolfcamp x3 (upper, middle and lower), Cline; all up to 4000ft in Midland basin.Wolfcamp x3 and Bone Spring x3 in Delaware; ~2000ft

It may depress oil price longer that we could stay solvent, I'm afraid:)

Bullish case for Permian - Pioneer slides. View from the other side - Steve St. Angelo's post  and  @Mike Shellman excellent salmon article.

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Edited April 24, 2019 by DanilKa

[Mike Shellman + 548]

7 hours ago, DanilKa said:

It may depress oil price longer that we could stay solvent, I'm afraid:)

Yes, lots of room to wiggle in the Permian Basin, lots of wells to be drilled, lots of CAPEX requiring lots of trees to be cut down to print lots of money, lots of wasted, flared gas and lots of frac source water. Lots. And lots of exports to a whole lot of unfriendly countries in the world. China, for instance, who is ignoring US imposed sanctions on Iran. Borrow baby borrow, drill baby drill !!  

[AcK + 50]

On 4/20/2019 at 5:28 PM, Jan van Eck said:

Since that was my statement, I would respond.  Please note that that includes oil to be obtained from conversion of coal, of all grades, the technology of which is mature.  Germany ran the entire Wehrmacht and Luftwaffe on lube oils and fuels made from coal.  Are such fuels expensive?  But of course. How about oil-sands oils?  Re they likely to be expensive?  But of course.  That said, that does not mean that those oils are not out there, to be tapped (eventually) and used for whatever society decides to use it for, including lube oil and plastics. 

The point I make  (and made) is that the supply is there, not that it would be available at today's costing levels. And I stand by that assessment.  You do likely have 500 years' worth.   But you will have to pay for it. 

 

On 4/20/2019 at 6:46 AM, Old-Ruffneck said:

https://seekingalpha.com/news/3415135-permians-delaware-basin-2x-bigger-midland-usgs-survey-says

This article is from 12/8/18. The Permian alone is 86,000 sq miles and there is a lot of newer discoveries that are in some time get drilled. Some is easy, some not worth drilling at even 65.00bbl. Some more not even at 110.00bbl. Technology is getting better at discovering oil but on the mechanical side to get out of the ground, even todays modern rigs still best left in the ground. So no real answer to how many wells will be drilled in the next 3-4 year. Rig counts are dropping, I think 485 rigs operating in the whole Permian. Not for the lack of oil, but lending practices over the last 6 years+ has made a volatile predicament. A helluva lot of operators owe hundreds of millions of interest payments alone and you can't borrowing on promissory notes. The crash of 2013-2014 was a very fast forgotten lesson. @Tom Kirkmancan probably gather actual numbers, but even at 65.00 lenders are getting skittish.

Sorry but I am still finding it hard to get a handle on the oil reserves (Conventional/Shale) in US. Let us not get into the coal-to-oil tech debate since we dont know whether the tech is ready and at what price is it viable. The 2017 data mentioned in the TomKirkman presentation seems basis 2017 WTI price (average around US$50) but looks like we are on a structurally higher price trajectory (US$60+ WTI). My understanding is P1 reserves are decided basis what is both technically and "economically" recoverable.

Does nobody has any sense of this number for US right now??

[Old-Ruffneck + 1,239]

8 hours ago, AcK said:

 

Sorry but I am still finding it hard to get a handle on the oil reserves (Conventional/Shale) in US. Let us not get into the coal-to-oil tech debate since we dont know whether the tech is ready and at what price is it viable. The 2017 data mentioned in the TomKirkman presentation seems basis 2017 WTI price (average around US$50) but looks like we are on a structurally higher price trajectory (US$60+ WTI). My understanding is P1 reserves are decided basis what is both technically and "economically" recoverable.

Does nobody has any sense of this number for US right now??

Total recovery shale guesstimate is somewhere between 18-24billion out of all the shale plays. That would be easy viable . Just a guess

USGS says Permian alone at 40billion but half that isn't easily extracted. Google it and read some. Some is true/some not so true. 

Edited April 25, 2019 by Old-Ruffneck

[Tom Kirkman + 8,860]

9 hours ago, AcK said:

My understanding is P1 reserves are decided basis what is both technically and "economically" recoverable.

https://community.oilprice.com/topic/3219-mike-shellmans-musings-on-cartoon-of-the-week/?tab=comments#comment-20462

Under the category of “Reserves”, 3Ps are defined as follows:

Proved Reserves: Reserves with 90% certainty of commercial extraction

Probable Reserves: Reserves with 50% certainty of commercial extraction

Possible Reserves: Reserves with 10% certainty of commercial extraction.

[AcK + 50]

8 hours ago, Tom Kirkman said:

https://community.oilprice.com/topic/3219-mike-shellmans-musings-on-cartoon-of-the-week/?tab=comments#comment-20462

Under the category of “Reserves”, 3Ps are defined as follows:

Proved Reserves: Reserves with 90% certainty of commercial extraction

Probable Reserves: Reserves with 50% certainty of commercial extraction

Possible Reserves: Reserves with 10% certainty of commercial extraction.

Thanks Tom, this is helpful.

Have been reading up on the reserves piece a bit. A useful resource for everyone's benefit below, although EIA is very leisurely in publishing this (2018 data wont be available till Nov-19!). The figure on Page 17 is quite interesting...

https://www.eia.gov/naturalgas/crudeoilreserves/pdf/usreserves.pdf

By the looks of it (40bn P1 reserves, 4bn annual production), US seems to run out of oil in 10 years. But new discoveries keep coming through (especially in Permian) and P2/P3 reserves keep getting confirmed (shifted to P1). So seems quite hard to say when will the Shale/ Permian (growth) will play out fully. Trends suggest another 3-4 years for sure (especially at US$60 WTI) but could be longer.

2 cents...