Counting Rigs is a "Fools Errand"

(edited)

Oil Rigs dropped 2 1/2 % (20 Rigs) from this time last year.

Oil Production increased 20% (to 12.2 mbd) from this time last year.

I rest my case.

One more thing:

Look at Shale producer Roan

They have about 200,000 acres in prime Oklahoma basins. 

They just started implementing and testing (Q4 '18) new technology.  Others posted tech below.

Starting in Feb they stopped all rigs/drilling because new technology produced far superior results.  It is worth it to them to standardize and implement new operations before continue to drill  idling a half dozen rigs.

THAT SAME PAUSE IS HAPPENING ALL OVER SHALE BASINS AS PRODUCERS CATCH UP TO TECHNOLOGY LEADERS. 

I predict major increase in production second half of 2019.

some majors will take out Roan soon. 

some already made offers

Edited by Falcon
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6 hours ago, Falcon said:

Oil Rigs dropped 2 1/2 % (20 Rigs) from this time last year.

Oil Production increased 20% (12.2 mbd) from this time last year.

I rest my case.

Curious to know how the DUC well completions are playing into the increased production. Anyone with hard numbers to show this?

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5 hours ago, Old-Ruffneck said:

Curious to know how the DUC well completions are playing into the increased production. Anyone with hard numbers to show this?

There is an excel file by the name "DUC data" on right-hand side of this page.

https://www.eia.gov/petroleum/drilling/

Hint the to previous gentlemen also - if you are at all bothered by your ignorance.

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(edited)

On 4/29/2019 at 3:43 AM, AcK said:

 excel file by the name "DUC data

Rig Counters are a true indication of a "Ham & Egger"

Edited by Falcon

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On 4/28/2019 at 3:28 PM, Falcon said:

Oil Rigs dropped 2 1/2 % (20 Rigs) from this time last year.

Oil Production increased 20% (to 12.2 mbd) from this time last year.

I rest my case.

Isn't the rig count a leading indicator?

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(edited)

Rig counts can help decipher certain aspects to a certain degree, but due to the improved and specialized rigs under contracts and available for drilling and completing , a lot more is achieved with less, therefore more production with fewer rigs, not to exclude the efficiencies gained in use and application of sub surface geotech data for well locations, just a few factors and better completions etc. Newer "walking" rigs capable of drilling more wells without having to be dismantled , moved and reassembled, taking less downtime, less man hours, single pad multi well drilling and completion techs  and procedures , increasing production volumes to as  much as 18,000-26,000bpd from a single pad.

Edited by ceo_energemsier
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3 minutes ago, ceo_energemsier said:

Rig counts can help decipher certain aspects to a certain degree, but due to the improved and specialized rigs under contracts and available for drilling and completing , a lot more is achieved with less, therefore more production with fewer rigs, not to exclude the efficiencies gained in use and application of sub surface geotech data for well locations, just a few factors and better completions etc.

Rigs are now much better than even 5 years ago on start to finish a well. So rig counts while still important aren't the whole big picture as in the old straight down shot of yesteryear. I would suspect in another 5+ years your going to see more precise methods of extractions. 

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11 minutes ago, Old-Ruffneck said:

Rigs are now much better than even 5 years ago on start to finish a well. So rig counts while still important aren't the whole big picture as in the old straight down shot of yesteryear. I would suspect in another 5+ years your going to see more precise methods of extractions. 

Yes , exactly. Everything is now done from the control room on the rig itself, all the new tech capabilities , real time monitoring of the temps/pressure etc of the well, bit and pipe conditions, direction, depth, fluid flows, precision directional drilling, geo-steering based on real time geo well logging data, etc leads to precision drilling and drilling all the way into the pay zones/formations and into the sweet spots or clusters .

 

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(edited)

15 minutes ago, ceo_energemsier said:

Yes , exactly. Everything is now done from the control room on the rig itself, all the new tech capabilities , real time monitoring of the temps/pressure etc of the well, bit and pipe conditions, direction, depth, fluid flows, precision directional drilling, geo-steering based on real time geo well logging data, etc leads to precision drilling and drilling all the way into the pay zones/formations and into the sweet spots or clusters .

 

I am still a firm believer of 18mbd in 5 years. We have the technology to build a fast stronger man (oooops, that be 6m dollar man hehehe).

Some don't believe we can achieve this in such a short order but I disagree. With current drilling practices and all the DUC wells needed completed I think I am not too far off. Or maybe I really lost my mind?? Too many doobies? hehe

Edited by Old-Ruffneck
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(edited)

On 4/29/2019 at 7:41 PM, Old-Ruffneck said:

I am still a firm believer of 18mbd in 5 years. We have the technology to .

From 12 to 18 might be s little aggressive. I agree it will be major increase. Gulf of Mexico presently produces 1.7 mbd.  It is just starting to heat up. Will go to 4 mbd a lot faster than most realize.

Edited by Falcon

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6 minutes ago, Falcon said:

From 12 to 18 might be s little aggressive. I agree it will be major increase. Gulf of Mexico presently produces 1.7 mbd.  It is just starting to heat up. Will go to 4 mbd a lot faster than most realize.

Time will tell, but several more holes in the gulf and the race is on. Well pressure of the BP rig that collapsed was standing at 16k psi. When it was capped it was still 13.4k psi. They said 50-60mbd escaped. Bet it was more. In all 5million barrels or 21 million gallons of sweet crude got out. Many holes will produce that volume. In the next couple years watch the rise just from gulf. By the way, where did all that oil go? Sure didn't make the environmental impact the "greenies" said. And a lot of people got paid for a disaster that fizzled out. Some might bacteria in the gulf. I wouldn't recommend swimming in. 😉

On shore, I am hopeful that not just the Permian increases by couple million in the next few years. The Bakken and Eagle are also ripe for this new tech. I want to see USA oil independent and selling more on the market. KSA and most of Middle East would like to see us cease to exist. IMHO

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I can follow the argument that more efficient rigs would drive the overall rig count down in these LTO plays, but this ignores the 'fluid dynamics' present in these fields.

In the LTO arena the old game of drill an exploration well, drill an appraisal well, drill development wells, end the drilling campaign and go into production is no longer relevent - if you are trying to reach and maintain a production plateau.

When your decline curves are so drastic that your per well production essentially 'falls off a cliff' within two years of initial production, you have no other option except to continuously drill to maintain, let alone increase, your production level. The idea of a drilling 'campaign' goes out the window.

In this scenario the rig count should continually increase as well as the demand for tubulars, third party services and qualified people to keep everything running.

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On 4/30/2019 at 4:40 AM, Old-Ruffneck said:

Rigs are now much better than even 5 years ago on start to finish a well. So rig counts while still important aren't the whole big picture as in the old straight down shot of yesteryear. I would suspect in another 5+ years your going to see more precise methods of extractions. 

Agreed - and data supports you on this. 2018 Shale oil production increase (Jan-to-Dec, or yoy) was much higher than 2014, despite lower number of rigs. But the trend we are discussing is not only 5 years (long term) but also last 6 months, when oil rig count has fallen materially. Rig tech has not transformed in last 6 months, to best of my knowledge (there is continuous improvement that shows up over time). So the basic disagreement with which this post started still remains, IMHO...

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