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Bloomberg: shale slowing. Third wave of shale coming.

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3 minutes ago, Jabbar said:
19 minutes ago, ceo_energemsier said:

The U.S. could see its crude oil exports nearly double by 2022, according to energy research firm Rystad Energy.

 

Again, it depends on how we handle ourselves. The "kids" are drinking the Koolaide, even if it's laced with socialist and progressive poison. I'm trying to divest some oil and gas because my own daughter thinks it's evil . . . and she's one of the sensible ones, making a good living as a lawyer. I tell you, this EV thing, subsidized for so long, and the opposition to fossil fuels, are real concerns. Hell, I'm in oil and gas up to my armpits and I'm becoming worried that, a) there is almost no advertising from oil and gas, touting their accomplishments, b) there is, as I alluded to above, almost no effort to show a better face. The oil and gas industry has always been reckless. When I was fifteen years old I signed on as a mule working on a rig all night. By summer's end, I had worked up to the Kelly rig. The driller got so drunk one night that his rhythm became erratic. I went to check on him. He was stumbling about. I called the supervisor, told him about it. He drove out from Sayre, fired me, put on a pair of coveralls and took over my post. I learned my lesson. Now there are all sorts of drug tests, etc, but I can tell you that the basic personality hasn't changed a whit! In both the Bakken (where I have interests) and in Texas and Oklahoma (where I have interests), flaring of NG is going on for far too long. In Colorado (where I have interests), it is not. In fact, while Highway 278 (I think that's its number) is called the "Highway of Death" between Pecos and Carlsbad, with about a half-dozen fatalities a month, Colorado has most of its frack water piped in and its wastewater piped out--that's in the big Noble Field that's going in. I'm not a big proponent of what's going on in Colorado in general--they've shot themselves in the foot and got mine along the way--but man they have it right on the way to cut road deaths and keep the landscape pristine: Weld county looks like it did before the Niobrara/Codel boom, except for a few standpipes, and the antelope population on the Wells Ranch has doubled! Now maybe you can't have it both ways: regulate the hell out of it and also make money. I think you can. We in the shale business have become our own worst enemies: the natural price of oil should be about $75. It doesn't make any difference how much oil we export, if we can't make a buck. And there will be a time when the Occidentals of the world can't make as much money either, because these big sweet spots where the IP surge is 5800 blls/d (their most recent big well) are becoming scarce. Soon we're onto Tier-2 properties locked into Tier-1 prices. We're giving away the creme d'la creme at bargain basement prices, and then we're going to have to wallow out an absolute deluge of bankruptcies that didn't have to happen, letting lithium battery cars and solar and wind knock the living crap out of us as we try to produce these mediocre frack rocks into some sort of profit. Your title, the third wave, may be more accurate than you thought, Jabber, but in a negative way--this may be the end. I'm in a dyspeptic mood, so excuse me, but if we don't do this right, a perfectly viable energy machine may go the way of the dinosaur that spawned it.

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5 minutes ago, Jabbar said:

I give up. 

See ya

Yes stick to the topic, we are talking about LTO yield and therefore exports of LTO (crude oil) not refined products!

You want to talk LTO yield from hydro fracturing then , get into the technical details, technology will unlock more yields over time, rock formations remain the same, you can develop and evolve techs to overcome rock formations and rock quality to a various degrees of success (and failure) .

There will come a time when some companies will have yields of 30-35%, then you go re-frac, that will be the new boom! again it depends on the prevailing oil prices and costs of doing that.

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(edited)

11 minutes ago, ceo_energemsier said:

over time, rock formations remain the same,

 

WRONG AGAIN

ROCK FORMATIONS CHANGE OVER TIME.  

TIGHT OIL IS APPROX 50MILLION YEARS OLD.

OVER TIME , SAY ANOTHER 150 MILLION YEARS AND YOU HAVE CONVENTIONAL OIL.

YOU STAND CORRECTED .     again.

Also oil field yields does not = exports.  

Your U.S. Shale producers have been increasing oilfield yield for 10 years.  Exports accelerating last 2 years.

ceo, if you would like me to start a discussion on U.S. oil exports I would happily oblige. Let me know mate. 

 

Edited by Jabbar
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7 minutes ago, Jabbar said:

WRONG AGAIN

ROCK FORMATIONS CHANGE OVER TIME.  

TIGHT OIL IS APPROX 50MILLION YEARS OLD.

OVER TIME , SAY ANOTHER 150 MILLION YEARS AND YOU HAVE CONVENTIONAL OIL.

YOU STAND CORRECTED .     again.

Also oil field yields does not = exports.  

Your U.S. Shale producers have been increasing oilfield yield for 10 years.  Exports accelerating last 2 years.

ceo, if you would like me to start a discussion on U.S. oil exports I would happily oblige. Let me know mate. 

 

yawn!!!

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There is such a thing as an oil window. When oil hasn't been held constantly at a certain pressure and temperature, it is kerogen, which is basically immature (teenage) oil, kerosine. On the other hand, when oil has been under too much pressure, or at too high a temperature, or for too long, it gets overcooked and is worthless thin oil. It's true that rock changes, but over millions of years. This rock in the Permian, the Bakken, Eagle Ford isn't going anywhere: it exists within what is known as the craton, forming a stable nucleus of the earth's heartland. 

For the record--and I know that a lot of shale-haters read and post in this forum--I happen to believe that recovery from the shale will continue to improve. Some parts of the shale fields are going to be more amenable to this than others. For example, while it gets almost no mention, the Bakken rock, especially the deeper Three Forks, fractures well and the pressure sink is less a problem (mainly because it is held in place by natural anticlines). I also think it's only a matter of time before reverberation fractures are induced in some of that rock--a phenomenon that is already happening in parts of Mountrail County. Fracking is being tailored to the rock. I wouldn't be the least bit surprised to learn that recovery reaches 35%. The great news is that a refrack job is about $2M. About 60% of those wells are amenable to refracking, and then you have a brand new oil well. I'm not a cheerleader, but a realist, and this is only one part of the puzzle affecting global oil markets. 

I have a feeling that the mideast is about to blow up. It will be nice, for a change, to have alternatives to sheer panic.

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(edited)

2 hours ago, Gerry Maddoux said:

I have a feeling that the mideast is about to blow up. It will be nice

Won't be nice for those that live there.  Thanks.

Unfortunately you might be right. 

Trump will probably park an aircraft carrier of the coast of Israel and tell all hands off.  Then let the rest of Middle East go at it.

Seems like the President is tired of the burden of keeping police in the Middle East when nobody helps.

Obama signed a coalition of the willing re Syria.  All Europe signed on but reneged when asked to participate.  Europe left it up to U.S.  to do all the fighting, pay all the bills.

I think U.S. useless allies are the reason the President left Syria.  He asked Europe to deal with their citizens that joined ISIS and we're captured.  Europe laughed and said no to Trump.

Looks like they will now get them back whether they want them or not.

China has been building in Iran for years. China now leading  partner in Iraq, overtaking Exxon. Russia biggest supporter of Iran. Russia THE partner of Kurds in Northern Iraq oil fields.  Russia has courted Haftar in Libya. China and Russia are courting Saudi Arabia and UAE. The U.S. spends hundreds of Billions a year while Russia and China harvest the benefits. 

My opinion Middle East oil countries can't be trusted now. Oil prices have put them under extreme stress and not getting better. All friendships and alliances can't be depended on, it's a matter of survival. 

If only Russia, China, U.S., Europe and Mideast countries worked together we could build a great future for Mideast.  

But regard to discussion topic U.S. LTO yield should average minimal 16% to 18% by 2023.

 

Edited by Jabbar
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52 minutes ago, Gerry Maddoux said:

I have a feeling that the mideast is about to blow up. It will be nice, for a change, to have alternatives to sheer panic.

 

14 minutes ago, Jabbar said:

Won't be nice for those that live there.  Thanks.

 

 

This post is to illustrate to the rest that you are prone to take things out of context. I have some choice things to say about people like you but unfortunately Mr. Kirkman would kick me off the site if I said them here. Read it! I said, "It will be nice, for a change, to have alternatives to sheer panic." Damn it! You are not a very pleasant person. And the heck with it, I hereby retire from trying to learn and offer whatever I know, only to have people like you, sir, try to twist it into something I would never say.

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15 hours ago, cbrasher1 said:

It's getting close to end of year, budgets exhausted, election year coming and so forth.  Oxy has not slowed down, we are on 6 or 7 frac jobs around Pecos north off 285 on up to north of Orla and they are all going to one location after another, even started fracing some Anadarko locations...After this one we go back south 285, then Orla and to Midland.  Not sure on costs or their breakevens, but they are hammering it down.  May not be very topic related just reporting what one company mentioned is doing from the patch.

crasher 2 questions. 

1. After the anadarko buyout is the combined company still drilling the same number of wells and using the same number of grace teams a before combo ?  Or is their a pause at anadarko portion ? 

2. OXY has been a leader in producing yield from a given reservoir.  Do you know what yield they are getting now ?

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1 hour ago, Jabbar said:

crasher 2 questions. 

1. After the anadarko buyout is the combined company still drilling the same number of wells and using the same number of grace teams a before combo ?  Or is their a pause at anadarko portion ? 

2. OXY has been a leader in producing yield from a given reservoir.  Do you know what yield they are getting now ?

1.  they are still drilling same amount probably, I know they are about to drill 50+ wells around Big Spring.  As far as Anadarko portion, Oxy is going to frac locations and overseeing work while transitioning Anadarko employees at Anadarko frac sites how they do things, safety, etc.

2.  I am not sure on that part of your question, but they are fracing like crazy right now

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Well, this thread has been an eye opener’

Yes, the permeability and porosity of the rock may change over the course of millions of years...but is that actually relevant to the conversation?

Technology again appears to be the savior of LTO, yet not one person has been able to describe this miraculous new technology! They sound like snake oil salesmen.

If you are going to invest in LTO based on some new, unseen technologies, you have more faith than I.

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So has any producer drilled and set off large explosions to break up the rock before drilling and fracking. 

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What are you talking about?

Setting of explosions before drilling...to break up what rock?

Your question, as written, doesn’t make sense.

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(edited)

3 hours ago, Douglas Buckland said:

Well, this thread has been an eye opener’

Yes, the permeability and porosity of the rock may change over the course of millions of years...but is that actually relevant to the conversation?

Technology again appears to be the savior of LTO, yet not one person has been able to describe this miraculous new technology! They sound like snake oil salesmen.

If you are going to invest in LTO based on some new, unseen technologies, you have more faith than I.

3 hours ago, Douglas Buckland said:

Well, this thread has been an eye opener’

Yes, the permeability and porosity of the rock may change over the course of millions of years...but is that actually relevant to the conversation?

Technology again appears to be the savior of LTO, yet not one person has been able to describe this miraculous new technology! They sound like snake oil salesmen.

 

Douglas,

My comments re rock changes over time was sarcasm. Don't you recognise sarcasm ?

ceo posts many informative and useful article on the oil industry. I look forward to ceo's posts.  Just post them under appropriate headline.

Likewise, Gerry has a great deal to offer and has great hands on knowledge of the oil industry (like yourself) I guess I became a little frustrated with yet another (off topic) disertation on flaring. 

ceo (like yourself) was posting off topic. I started this discussion to talk about the Bloomberg article that highlighted Conoco's successful 20% yield. Then like always you show up berating me about decline rates.  Another off topic.  

EVERYONE KNOWS ABOUT THE SHALE DECLINE RATES.  ITS THE NATURE OF SHALE INDUSTRY.

I should have been ready for your attacks. After all I started a discussion on '"Chinese Shadow Financing" and on it you post about over supply of oil now but what are you going to do when it dries up ? 

If I don't agree with your opinion you critisize spelling due to crazy spell autocheck or make fun of my name.

Nobody is saying LTO is the only oil source of the future.  From your CV  it looks like you had a long rewarding career in the oil industry.  Good for you.  

I don't know what happened but you obviously have a fixation, an intense hatred and animus toward LTO/Shale.  It must be something related to your career or investments. I hope venting your hostile feelings has a cathartic affect for you.

Apparently I STRONGLY DISAGREE with you regarding Shale oil.  It's alright to have opposing opinions. No need to get hostile.

There are decades , not years, of highly productive U.S. Shale production yet to come. The U.S. Shale Industry is transitioning. Read the Bloomberg article . The transition to the Third Wave is thoroughly explained.  It uses the anology where Shale is now transitioning to the Adult stage.  It will help you grasp the concept.

Do you think Conoco is lying. Do you think the engineers at Chevron, Conoco, Exxon, British Petroleum, Occidental, etc are all stupid hacks. Tell them they are wasting their time and money on Shale.  

You are way smarter then me.  So if you and ceo energizer want to trash shale or talk about exports or even American politics you may take over this discussion board on yield.  It's all your.  Go crazy.  See ya.

P.S. : I don't poof reed my posts so I apollopgize in adfance for any misspelled woords.

Edited by Jabbar

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I have a much simpler solution. I will not reply to your posts, and you refrain from responding to mine...problem solved!

PS: I have never ridiculed your name.

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6 hours ago, Gerry Maddoux said:

This post is to illustrate to the rest that you are prone to take things out of context. I have some choice things to say about people like you but unfortunately Mr. Kirkman would kick me off the site if I said them here. Read it! I said, "It will be nice, for a change, to have alternatives to sheer panic." Damn it! You are not a very pleasant person. And the heck with it, I hereby retire from trying to learn and offer whatever I know, only to have people like you, sir, try to twist it into something I would never say.

Nooooooooo  ♥️

And PS - @Tom Kirkman  would agree with you. I guarantee it. 

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2 hours ago, Douglas Buckland said:

Well, this thread has been an eye opener’

Yes, the permeability and porosity of the rock may change over the course of millions of years...but is that actually relevant to the conversation?

Technology again appears to be the savior of LTO, yet not one person has been able to describe this miraculous new technology! They sound like snake oil salesmen.

If you are going to invest in LTO based on some new, unseen technologies, you have more faith than I.

 

14 hours ago, Douglas Buckland said:

You obviously have no grounding in geology, drilling or petroleum engineering.

I was likely drilling wells all over the planet while you were still in high school and I have a degree in petroleum engineering from the CSM.

If your reservoir rock is tight, eventually, regardless of what you do, your production will plummet in each well.

In the case of LTO, it is not only ‘drill, pump, drill again’. You have to perform expensive multistage fracs as well. You’d better hope that your production covers these costs and allows you, at a minimum, to service your debt.

Another issue is where are you going to drill next? Logically you have already drilled the most attractive targets.

But heck, you seem to know more than I do so I’ll just keep quiet...

Hi Doug,

So maybe the reason no one can cite new advanced technology is because they're not trying to sell it... I have, as far as i personally can tell, absolutely nothing to gain by convincing you that shale will last... in fact, the more people who doubt shale the cheaper companies I have an interest in can pick up land and make more money - so perhaps I should shut my mouth and let everyone continue to doubt...

But here's the facts as I see them (the ones I can discuss publicly anyway)

When drilling small pads that each have their own facilities, LTO is expensive. Grouping massive amounts of long lateral wells on a pad, and strategically clustering pads, can dramatically lower cost per well, improve production per well, and get more wells from the same equipment and crews. Pulling this back to shared facilities lowers capital costs to build these facilities and operational costs to maintain these facilities. Automating these facilities allows lower opex and higher throughput with no additional changes. Big players are also seen as lower risk, so can get capital at lower rates. Significant synergies and efficiencies - and no new technologies needed.

 

On top of all this, there are technologies for 1)improving drilling performance, 2)decreasing cost of drilling, 3)decreasing days per frack, 4)decreasing cost per frack, 5)improving frack 'results' (sorry, vague, I know) 6)improved lift techniques, and 7)improved refrack methods. These are all technologies that are either proven and in various stages of deployment, or shown promising pilots and are now being tested further. And these are just the ones I'm aware of, in my limited scope, I'm sure other companies that I don't work with are doing more of their own (or different methods to achieve these same things)

Again, none of these technologies are for sale and I can't discuss any more detail on any of them than what's above... which is why I rarely post on this topic. Yes, as you said, this is an anonymous internet forum, i could say anything. You can believe what you'd like. I'm just trying to caution people against dismissing this too quickly... might take a hard second look and see what things might be a threat to your business model, what things can you adapt to, and which can you actually leverage? 

Nothing is certain, in this industry or others, but I'm very bullish on LTO because of the knowledge I have, and technology I'm helping develop and deploy.

Best wishes to you and yours!

Night y'all!

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Otis,

I am not pro or anti-LTO. What I cannot stomach, and this is NOT directed at you, is the LTO ‘cheerleaders’ who will not acknowledge the fact that LTO has limitations simply based on the flow characteristics of the rock itself and the inherent nature of the industry.

Specifically, fluid will not flow easily in this rock - it is tight. Regardless of how much you fracture this rock, the parent rock feeding the fractures is still tight and will eventually control the flow into the fractures, then into the wellbore. This is the root cause of the drastic decline curves. Yes, fracturing increases the initial production and pushes the decline curve farther back, but it is still going to happen. 

We have been hearing about this mystical ‘new technology’ which is going to resolve these issues, yet I have not seen any emerging new technology! This eventually seems to be a tool to snare investors, not a reality.

Why do people have an issue with someone saying that the sweet spots have already been drilled? This is common in the oil business. Why would you drill the less attractive targets first? This being the case, each incremental well SHOULD be less productive.

Has the sibling well issue been resolved?

I am not for or against LTO, but I approach the issue from an engineering standpoint.

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(edited)

I have no idea about any of this but it all sounds good.

I am moving on.

Good day   :) 

Edited by DayTrader
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(edited)

40 minutes ago, Douglas Buckland said:

Specifically, fluid will not flow easily in this rock - it is tight. Regardless of how much you fracture this rock, the parent rock feeding the fractures is still tight and will eventually control the flow into the fractures, then into the wellbore. This is the root cause of the drastic decline curves. Yes, fracturing increases the initial production and pushes the decline curve farther back, but it is still going to happen. 

From an engineering standpoint, I tend to agree. Of course, different geology will yield different results, but the whole point of fracturing tight rock is to induce that communication. 

This is the reason operators have been experimenting with tighter and tighter well spacing - outside of the fractures, the rest of a tight reservoir is basically inaccessible. 

Perhaps there is some crazy technology I don't know about yet, but it's hard for me to even begin to fathom how, physically, permeability issues can be overcome to a point where significantly higher yields would be expected.

It seems like most of the improvements now are being made by cutting cost for services, longer laterals, cheaper proppant, etc.  I've used some microproppants that were supposed to increase overall recovery, but I don't think results there were great. A couple wells later the same operator was using microproppants as diverters. 

Re-fracs look promising to me. I've been involved in some that were incredibly successful in the Haynesville. After a well is produced for long enough, the pore pressure is reduced in the areas that have been produced. This change in pressure can shift the next frac to propagate in a slightly different direction, accessing more of the tight reservoir. The success of these refracts speaks to the inability for the original frac to communicate with a large portion of the reservoir.

As for magic that will change any of this.....I hope someone amazes me. I just don't see how the physics of it will allow for any large improvements. If anyone has knowledge of some groundbreaking technology, I sure would like to hear about it.

Edited by PE Scott
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,’ but the whole point of fracturing tight rock is to induce thatcommunication. 
 

True, but originally fracturing was developed for tight sandstones or similar geology, with much higher permeabilities than this shale ‘tombstone’ There, fracturing basically opened up a much greater surface area than the wellbore to allow fluids to enter. 
 

This is the same mentality in the LTO game, increased surface area for flow, but when the permeability is so abysmal that it takes an inordinate amount of time for oil to enter the fractures once the original ‘fractured’ (for lack of a better term) oil is produced, the results are poor and you see the ‘falling off a cliff’ decline curves.

Hydraulic fracturing has been around for decades and was adopted by the LTO operators as there is no other tool available.

Re-fracs may get you another ‘jolt’ of production, but eventually the lack of permeability will bite you in the butt -again.

Frac’ing does absolutely nothing to increase the communication between the pore spaces in the source rock.

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8 hours ago, Otis11 said:

When drilling small pads that each have their own facilities, LTO is expensive. Grouping massive amounts of long lateral wells on a pad, and strategically clustering pads, can dramatically lower cost per well, improve production per well, and get more wells from the same equipment and crews. Pulling this back to shared facilities lowers capital costs to build these facilities and operational costs to maintain these facilities. Automating these facilities allows lower opex and higher throughput with no additional changes. Big players are also seen as lower risk, so can get capital at lower rates. Significant synergies and efficiencies - and no new technologies needed.

^bingo... 

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Technology takes over tight oil

As the shale business matures, its wildcatter mentality is being replaced by artificial intelligence

A WTI crude price rangebound in the $50-$60/bl band means profitability is under pressure across the US shale business, which faces far higher ongoing opex than operators of conventional resources. WTI at $100/bl can support a fragmented market of hundreds of participants but lower prices require savings to be squeezed from economies of scale and the innovative application of new technology. 

 

Disappointing returns have largely locked small players out of capital markets and the recent trend is solidly towards consolidation, with the majors becoming increasingly interested in taking stakes when they are available at the right price. Occidental, which purchased Anadarko and kept its US shale assets, is at the forefront of these shifting dynamics as it operates the largest number of shale wells, 25,000, and participates in a further 100,000. 

While the specifics of geography, scale, total acreage and the supply chain are all important factors, “technology and datasets provide a whole host of things to make it work from a returns perspective,” says Oscar Brown, senior vice president, strategy, business development and integrated supply at Occidental.

The firm’s proprietary technology, Oxy Drilling Dynamics, is being applied to the wells it gained from its acquisition. “A lot of the real-time decisions made by the driller are becoming automated. It takes the bias out. It is the whole workstream that is different, not just the technology,” says Brown.

“One thing that is hard to do in any area—certainly in unconventionals—is to know where your [drill] bit is. The bits are under a lot of temperature pressure and that is hard on the sensors. We take the visible data from across the face and our geo-mechanic understanding of the different layers of rocks and run all that into algorithms, and then test it against our database and the real world.”

Scraping the barrel

The spectacular growth rates of 2013 are unlikely to be repeated so the focus has shifted to extracting more from each well. The challenge of extracting 1.5mn bl/d oe in 2013 from the big-three US shale basins—Eagle Ford, Bakken and Permian—is entirely different to extracting 7mn bl/d oe in 2019, notes Greg Leveille, chief technology officer at US independent ConocoPhillips. “When you look at what is behind that enormous growth, it is really a lot of engineering and science.”

While he estimates that recovery factors for unconventional liquids are 5-10pc and natural gas 10-20pc, “at Eagle Ford, our single biggest asset, we're getting a 20pc recovery factor from a liquids-rich play,” says Leveille. “We have been able to do that by looking at the completion design, the spacing and stacking of the wells—so-called parent-child relationships—and how we use refrack as a tool.”

“It is an incredible opportunity because, if you can find ways to develop automation or artificial intelligence to improve the costs of an unconventional well, you can apply it to literally thousands or tens of thousands of wells” Leveille, ConocoPhillips

“If you do the right things” in parent-child wells the reserve numbers do not change, he adds. “A lot of that has to do with innovation and technology advancements… as you are in-filling the development of your field you can get not only excellent production volumes from your new wells but actually increase the volumes in the old wells.”

Steadily increasing international oil company (IOC) involvement “certainly” signals maturity and capital discipline, says David Turk, head of the strategic initiatives office at the IEA. “There has been phenomenal technological progress,” adding that “there are areas of technology being explored right now that could be quite impactful”, but Turk would be surprised if the pace of technological progress can be maintained.

“Certainly, [enhanced oil recovery] is interesting and refracking is an area where we are getting interesting numbers. Digitalisation is impacting a lot of parts of oil and energy—whether it's AI-enabled horizontal drilling or using other tools and techniques—especially when the IOCs get involved.”

Digital enhancement

Plateauing productivity rates are reportedly prevalent across the shale sector but certain operators are breaking out of the constraints. “We are still seeing a lot of improvements year-on-year,” according to ConocoPhillips’ Leveille. 

“The ones we are really excited about have to do with digitalisation impacting the way we drill wells. It is an incredible opportunity because, if you can find ways to develop automation or artificial intelligence to improve the costs of an unconventional well, you can apply it to literally thousands or tens of thousands of wells. It is a big, big prize. We are looking at automated drilling and a lot of other things for how we run the oil patch.” 

The industry is drilling tens of thousands of wells a year in the US so the task has multiplied in complexity. “You cannot run those fields the same way you would have run them in the past, which was very focused on manpower. We see an enormous amount of automation coming and reducing both capital and operating costs is going to be impactful. We are still finding ways to increase productivity.”

The environmental impact of unconventional oil and gas production have been tracked for a decade. “Over time, the performance of the industry and state regulators has significantly improved. Induced seismicity was a huge issue a few years ago,” says Robert Kleinberg, senior research scholar at the center on global energy policy at Columbia University.

He notes that US-based National Academy of Sciences research detailed how engineering controls and monitoring can significantly reduce seismicity. “That was implemented by the industry and state regulators working together and now that problem is largely in the rear-view mirror,” says Kleinberg.

While the shale boom has transformed the US into the world’s largest producer, the practice is notable by its absence elsewhere in the world, despite some similarly attractive geological formations. “In the US we have 9,000 producers, all of which operate on relatively small margins, have small leases and generally—except Occidental and ConocoPhillips—have small resource bases,” says Kleinberg. 

“In the rest of the world, the industry is dominated by IOCs and [national oil companies] with large inventories of fossil fuel resources. They will always exploit the cheapest resources first and, ex-US, tight oil and shale gas are not the cheapest resources in their inventories.”

Shale technology still has a long way to develop and it is going to require a lot more integration, engineering and data science, according to Leveille “That is going to set the playing field for companies which have the size and scale to bring all types of expertise to bear. This year, we are seeing a big differentiation between the companies with both good acreage and capabilities and other companies that do not have all these elements. I am not surprised rig counts are going down—from our perspective that reflects the future of the industry.”

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Okay, I have read these posts and it's the equivalent of being a Democrat or a Republican, in terms of beliefs and skepticism. If I have any use whatsoever for this forum, it's to be a historian from a land-based perspective. For the record, I love deepwater drilling and think the large forever wells that are coming will be in deepwater. But I was born in the heartland. And I grew up hearing these stories. Way back in the early thirties an old guy named George Failing (from Enid, Oklahoma, the birthplace of another star, Harold Hamm) mated a primitive drilling rig to the backend of his old Ford truck, connecting it to the drive train using a power takeoff. When he lowered the bit to the ground, no matter how hard he tried, the bit chewed into the ground at a slant. I imagine George pulled oil out from under some neighbor's leases, but he really achieved fame when he drilled a slant hole to snuff out an oilwell fire near Comroe, Texas. This was the beginning of horizontal drilling. In the seventies, we had first the oil embargo, with the Jimmy Carter meltdown, calling it the moral equivalent of war, and then, with everyone hoping for nuclear, we had Three Mile Island . . . and that boluxed nuclear. In the eighties, our utility companies were starved for natural gas. It wasn't coming from deepwater. An old Greek immigrant with a name so difficult that he just changed it to George P. Mitchell started Mitchell 
Energy. He was the CEO but brought in his two sons. Every year, George would go off the rails about getting natural gas out of what he called "Tombstone Rock." His own son thought he was fixated, if not downright demented, and tried to get him kicked off the board. George went down the hall, nursing a cup of coffee, to piss and moan with his geologist, a guy named Nick Somebody. He suggested they try to push some gel foal down the hole and break up some fissures. The United State Government was so desperate to get enough Natural Gas to run the utility companies and heat houses that they gave him a subsidy (sound familiar?), which failed. But then Nick came up with slickwater and it worked like a charm. At age 80, George P. Mitchell sold out to Devon, for a hefty amount of change. The Barnett Field resulted. Haynesville was a copycat. It wasn't long before that other Enid native, Harold Hamm, went looking for some cheap leases over Tombstone Rock. Lo and behold, when he used his new stuff--guar gum--he pulled out some IP flushes of oil that were astounding. We've gone on to running the drill bit from a GPS joystick, collecting guage reports remotely, etc. Initial recovery was 5%. It's up to about 20% and climbing. You're right, Doug, in that this is never going to replace deepwater drilling into massive collections of mature oil. However, and I remain intransigent on this point, the drilling into Tombstone Rock gave us some security: a) warmth, b) the ability to switch from coal-burning utility plants to Natural Gas, c) the ability to withstand what would otherwise have been horrific oil price shocks, d) yet another piece of the energy puzzle. In other words, history may well look back on this as a laughable phenomenon, or as a bridge to something else, but just as I know nuclear guys who can't figure out for the life of them why we haven't gone nuclear--which is clean--I now know, from this forum, at least one man who believes strongly and seemingly solely on deepwater as a source of oil and gas. I'm not after you, trying to pick a fight, but merely to point out that there was a large gap in history when the leader of the free world--the United States of America--was basically held hostage by a primitive tribal family that just happened to be located in the Middle East. Indeed, in 1945, FDR met with King Saud on a destroyer parked right in the big-assed middle of the Suez Canal. The old king was crippled--from fighting for his purloined lands. FDR gifted him with a DC3, which didn't mean much to the king, but also with one of his wheelchairs, which meant a great deal. FDR asked for a place in the Palestine to put 10,000 displaced Jews. King Saud demurred. FDR then offered to trade protection for first dibs on the oil that Texaco and Chevron had found. The old king agreed. This is the history. I am heavily invested in tight oil and gas, because I grew up in its midst and watched it evolve. I can't swim, never wanted to work on a deepwater rig, but I do appreciate that they are yin and yang. We are at this dispositive point in history because energy is teamwork: when one part couldn't cut it, another could, and so forth. Me? I think we're about to see a tremendous resurgence in oil recovery in the GOM. Down there they have methane mounds that seep gas and on which saprophytic bacteria have grown--it's not a place that hasn't been long exposed to methane so we're not going to kill off the world. But the other me feels that while I can't prove a bit of it, since recovery from fracking Tombstone Rock has gone up from 5% to 20% in the space of twenty years, we're likely to go up some more. I may be wrong. Elizabeth Warren could win the Oval Office and put an end to fracking tomorrow. If she does, the world will turn into a cold place in the winter, a hot one in the summer, global climate change won't change the direction it is taking, and we'll all go broke. I've given you a bit of history and looked into the future much like Alice of Wonderland. I'm old. It's my right. And I'm in love with the lore of George Failing, and Mr. Mitchell, and all of those I know something about. I don't know enough about deepwater, or lithium, or EV's to even comment, other than to say that if I ever put my skinny ass down inside an EV, I hope God gives me the wisdom to remove it forthwith.

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(edited)

@Gerry Maddoux , if I've told you once I've told you 1000 times.

Can we have a little more detail please? 

Enough of these short quippy answers. 

Edited by DayTrader
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23 hours ago, Gerry Maddoux said:

This post is to illustrate to the rest that you are prone to take things out of context. I have some choice things to say about people like you but unfortunately Mr. Kirkman would kick me off the site if I said them here. Read it! I said, "It will be nice, for a change, to have alternatives to sheer panic." Damn it! You are not a very pleasant person. And the heck with it, I hereby retire from trying to learn and offer whatever I know, only to have people like you, sir, try to twist it into something I would never say.

 

16 hours ago, DayTrader said:

Nooooooooo  ♥️

And PS - @Tom Kirkman  would agree with you. I guarantee it. 

I have never kicked anyone off this site, with the exception of those pesky spammers who try to flood this forum with spam.  Most recently it was persistent China spammers with wall of text Mandarin spam about IELTS and English examinations.  Spammers are not posters, they are spammers, and are banned as quickly as any moderator spots them.  Real effing nuisances.

I freely admit I have gotten pretty annoyed at a few posters here (e.g. Red) who were later banned by Oil Price staff for their own persistent, abusive behavior.  (Remember those Ethanol threads?) 

In the past I have quietly recommended via private messages to Oil Price staff moderators to consider banning specific posters that I see as unrelentingly disruptive and abusive to this forum, but I have never banned any non-spammers on this forum.  The harshest action I have ever taken as a moderator is to give a 1 or 2 day temoporary time out to posters who have lost their temper and continued to become increasingly abusive even after I provide a gentle, public warning to calm down.

Side note, every single member that I have suggested to Oil Price staff to be considered for banning, were eventually banned by Oil Price staff, due to their own abusive comments.  It was their own doing, not mine.  I cut my teeth years ago as a moderator on the old Oilpro forum, and am already familiar with the indications that someone is self-destructing in their own persistent, abusive comments.

But banning members I do not do, I leave that to Oil Price staff.  I am simply a volunteer moderator.

As regards what @Gerry Maddoux said, nope, I am not kicking anyone off for stating their their opinion.  As a moderator, whether or not I agree or disagree is 100% irrelevant.  I encourage dissent, and I have been a Freedom of Speech activist for decades.

I appreciate both Gerry's views and @Jabbar's views.  In my view, both Gerry and Jabbar tend to post intelligent, thought-provoking comments.  Obviously their views are far different, but that is a good thing, not a bad thing.  Echo chambers are boring.

And yes, @DayTrader is correct, I agree with Jabbar's comment above.  Bang on for the most part, in my opinion. 

 

 

For info, I am mostly offline for a few weeks, getting ready to move to the U.S. next week.  Hevkuva lotta stuff to wrap up and get ready to move.  Should be mostly settled in by early November.

 

 

Please feel free to run with pointy scissors on the forum, but please keep the pointy bits pointed at the ground and not at other people's eyes.

 

===========================

P.S.  Since my comment here is directed mostly about Freedom of Speech, and censorship, and banning, ....  China's crackdown on Western Freedom of Speech should be worrying the piss out of Westerners, but amazingly, the MSM is complicit in bowing down and worshiping the Xi China money machine.

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< sigh >  Alerting about Western censorship gets censored:

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In my view, 'Freedom of Speech' means allowing and encouraging and protecting speech by others that most people disagree with and find offensive.

Being "offended" is mostly bullshit.  If you can't handle words or ideas that disagree with your own opinions, then you probably suck at real life.  Or not, your mileage may vary.

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