Shale Oil Fiasco

[D Coyne + 305]

8 hours ago, Jabbar said:

Yea, right. 

Call it whatever you want , bottom line is for a given section or acreage thru the use of techologicsl advancements, efficiencies and processes Conoco (others follow) will double # barrels yield.

If you don't believe Conoco fine. Find something better to do with your time.  Unless you're getting paid to trash shale ?

At least you don't have a visceral hatred for shale because it ruined your life like others. 

Go to Conoco website.

Shale haters are all about statistics and white lies 

Buy the way Brokerage Merrill Lynch just named there #1 Best stock pick for 2020 as EXXON based on their aggressive investment in Permian to ramping up production (current 300k/day) to over 1 million barrels/day by 2023,  as well as their investment in Guyana that has added over 6 Billion to their reserves and will start production at 120,000 barrels/day next month and grow to over 750,000 barrels/day by 2025.

" No shale cheerleader can name one technology , wah, wah wah "😪

I do agree with the "Never Shalers"  the World is Flat 

LOL

Jabbar,

Nowhere in the Conoco presentation do they suggest they will double the EUR from today's level, there is one slide where they claim that EUR might increase by 10% in the Eagle Ford (though often these pilot projects prove less effective than stated in investor presentations.)

Just because a claim is made about the future does not mean it will be realized, just look back at older investor presentations (from say 2016 and 2017) on pilot projects and expected outcomes, and then notice that in current presentations they don't talk about those pilot projects anymore because the expectations were not realized (aka the projects were a failure.)  Happens about 80% of the time.

I believe these claims when the data supports it and not before.

That is the difference between shale cheerleaders (who believe every forward looking statement in investor presentations and others who realize that forward looking statements are wrong perhaps 90% of the time.

Edited December 12, 2019 by D Coyne

[wrs + 893]

19 hours ago, James Gautreau said:

Again, this chart is only showing the production for 2017, 2018, and 2019.  Each color represents the production added each year.  For example, the 7,636 wells brought online in these top four fields in 2017 peaked at 2,769,316 bopd in December and then declined to 727,795 bopd by August 2019.  Thus, 2017’s shale oil production lost 2 million barrels per day in 20 months.

The 9,953 wells added in 2018 had peak production in December at 3,818,141 bopd and declined to 1,828,641 bopd by August 2019. What took 2017’s production 20 months to lose 2 million barrels per day, only took eight months for 2018’s production to lose the same amount.

This is the nasty side-effect of the COMPOUNDED ANNUAL DECLINE RATE.

 

Here is the whole article. 

https://srsroccoreport.com/the-u-s-shale-industry-hit-a-brick-wall-in-2019/

 

Written by total idiots that know nothing about the oil business and have no idea what the numbers mean.

Edited December 12, 2019 by wrs

[jjj + 26]

21 hours ago, Joseph Hall said:

Let me help everyone here out – in a few very short years the world’s entire fossil fuels industry will be out of business.

Yep, a few very short years.

Solar, wind and battery storage is running wild around the globe. Every day the percentage of energy derived from them goes up and up and up. Every day the percentage derived from fossil fuels goes down, down, down. There’s no stopping that trend.

Tesla is selling hundreds of thousands of EVs with millions more on the way. The other major car manufactures are right behind them. In a few years the thought to owning an ICE vehicle will seem odd - like buying a typewriter or going to Blockbuster video.

The world’s “Kodak moment” is rapidly approaching.  In 1999 Kodak had a market cap of $44 billion – today it’s worthless. This will be the story of Exxon-Mobil, the entire fracking industry and any other entity tied to the fossil fuels industry.

One day in the not so distant future the whole oil, coal and gas industry is going to topple over. Coal is already gone. Oil only subsidized by a desperate Saudi Arabia(who sees the writing on the wall), and NG will soon follow.

The age of fossil fuels is over. The age of renewable energy is here. That’s all there is to it…
 

Joseph,

I am sure I am wasting my time as this is your only post but in case you are still following this...

If you are correct, which I don't believe, and we fully replace the ICE and energy production with Wind and Solar the demand for fossil fuels does not go away. Fossil fuel is really the wrong name it is used in most everything we have in modern life not as a fuel but as a raw material. Tonight when you eat dinner look around every piece of plastic is made from fossil fuels, yes they are working on replacing oil in plastic but they haven't done it yet. In addition to the plastic:

- look at your wife most of her make up came from O&G, 

-Look at your clothes a large percentage is most likely made from O&G.

-Did you cook dinner in non-stick cookware if so made from O&G.

-When you drove home from work did you happen to drive on any Asphalt if so made from O&G.

-Do you a fruit or vegetable purchased from the store? It is coated with wax which is from O&G. And if it is not niche grown it was fertilized with O&G fertilizer.

-On your drive home I expect you used something with rubber tires, made from O&G.

-I hope you washed your hands before dinner. If so most soaps and detergents are made from O&G.

-The refrigerator you got the food out of is insulated. The insulation is made from O&G.

-By the way the solar panel that supplied the power to run your light made from O&G

 

Jay.

[Guest]

DING

[Jan van Eck + 7,558]

There are - what? - two billion internal combustion engines out there on the globe?  Does anyone seriously think they are all going to be scrapped in favor of - what? - electric motors?  In some "Kodak moment"?     Nah.  No chance.

[James Gautreau + 86]

38 minutes ago, Jan van Eck said:

There are - what? - two billion internal combustion engines out there on the globe?  Does anyone seriously think they are all going to be scrapped in favor of - what? - electric motors?  In some "Kodak moment"?     Nah.  No chance.

The "Kodak moment" is off an article that circulated about 3 or 4 years ago. It told the tale of an interview with Kodak the year digital cameras came out and her asking if Kodak was worried. They stated they were not. That year digital cameras were rounding error in total sales. 8 years later film cameras were a rounding error. The article went on to suggest that because EV's have 20 moving parts and ICE's have 200 that EV's would be 10 times more reliable and hence over time far cheaper, and people would flock to them. He claimed in 8 years we would all be in self-driving EV's. Not even close to being true. 

[Jan van Eck + 7,558]

8 minutes ago, James Gautreau said:

The "Kodak moment" is off an article that circulated about 3 or 4 years ago. It told the tale of an interview with Kodak the year digital cameras came out and her asking if Kodak was worried.

Ironically, it was Kodak that first developed the digital camera in-house in their research labs.   management thought it would go nowhere.  Oh, well. 

[Jan van Eck + 7,558]

9 minutes ago, James Gautreau said:

because EV's have 20 moving parts and ICE's have 200 that EV's would be 10 times more reliable and hence over time far cheaper,

the problem from the consumer point of view is that these folks specifically Tesla control the replacement parts, which are either not available or hugely expensive.  For example the drive motors for the Tesla re all proprietary, there is no motor that you can go buy down at the NAPA store.  if yours burns out, then you have to go beg for another from Tesla, and they have no particular desire to sell you one, as they need theirs for their own new production.  If Tesla sells you that motor, it will cost you $6,000.   Installation extra.  And that is the story for the entire car.   Who needs that?  Are the buyers thinking this through? 

If you buy some fancy hybrid with a fancy transmission and something breaks in there, who is going to fix it?   the guy down at the local garage?  No chance. 

Those EVs are not the panacea they are touted to be. 

[Jabbar + 465]

3 hours ago, D Coyne said:

Jabbar,

Nowhere in the Conoco presentation do they suggest they will double the EUR from today's level, there is one slide where they claim that EUR might increase by 10% in the Eagle Ford (though often these pilot projects prove less effective than stated in investor presentations.)

Just because a claim is made about the future does not mean it will be realized, just look back at older investor presentations (from say 2016 and 2017) on pilot projects and expected outcomes, and then notice that in current presentations they don't talk about those pilot projects anymore because the expectations were not realized (aka the projects were a failure.)  Happens about 80% of the time.

I believe these claims when the data supports it and not before.

That is the difference between shale cheerleaders (who believe every forward looking statement in investor presentations and others who realize that forward looking statements are wrong perhaps 90% of the time.

Conoco Chief Technology Officer Greg Reveille May 2019 on technology.  

"Getting 20% recovery now"

This was May.  As he says it used to take years to introduce new technology .  .  .  .  now takes months.

https://www.bloomberg.com/news/videos/2019-05-17/conoco-s-cto-we-are-drilling-more-wells-spending-less-video

Can't discuss technology with a closed minded "NeverShaler" . 

 

 

Edited December 12, 2019 by Jabbar

[Guest]

Guys this thread is f**king hilarious seriously. Let me see if with my complete lack of knowledge of oil or shale I can paraphrase this whole thing. Ok so Doug and James and obvious oil guys are anti shale and wants to see these infamous technologies. As far as I'm aware and I may be wrong they have not been presented. This is literally pro shale guys v anti shale guys now debating round and round.

Guy A says ''well the production figures are this much'', then Guy B says ''well that won't last'', A says ''no trust me, check out these stats'', B says ''those stats are shit, check out my stats'', A says ''nah, you're not taking into account X'', B says ''X is bullshit anyway coz of Y, check out these graphs'', A says ''those graphs don't take Z into account, watch this presentation'', B says ''that presentation distorts the facts'', A says ''what about these figures then?'', B says ''those figures are written by morons who don't have a clue'', A says ''what are these new technologies anyway?'', B says ''what technologies?'' ... 

Do none of you see that none of it matters as we will all be fossil fuel free in a couple of years? Duh. Sort it out jeez.

Edited December 12, 2019 by Guest

[jjj + 26]

9 minutes ago, James Gautreau said:

The "Kodak moment" is off an article that circulated about 3 or 4 years ago. It told the tale of an interview with Kodak the year digital cameras came out and her asking if Kodak was worried. They stated they were not. That year digital cameras were rounding error in total sales. 8 years later film cameras were a rounding error. The article went on to suggest that because EV's have 20 moving parts and ICE's have 200 that EV's would be 10 times more reliable and hence over time far cheaper, and people would flock to them. He claimed in 8 years we would all be in self-driving EV's. Not even close to being true. 

The thing that most people don't seem to understand is that the electric motor has been a superior motor since the 1800's. The first cars were all designed as electric but the cars were switched to ICE. The "Kodak' moment has nothing do to with the motor part it is the energy source part and it is not yet there. Liquid fuels just have so many advantages from energy density to very fast refuel times. That is the part that has yet to mature enough to seriously challenge ICE. 

[James Gautreau + 86]

5 minutes ago, jjj said:

The thing that most people don't seem to understand is that the electric motor has been a superior motor since the 1800's. The first cars were all designed as electric but the cars were switched to ICE. The "Kodak' moment has nothing do to with the motor part it is the energy source part and it is not yet there. Liquid fuels just have so many advantages from energy density to very fast refuel times. That is the part that has yet to mature enough to seriously challenge ICE. 

The article was based on some company in Las Vegas that had a fleet of Tesla that went back and forth to LA 24/7. They put a million miles on these cars in a couple of years and had no problems, just changed tires and that was it. Not even brakes. 

[James Gautreau + 86]

8 minutes ago, DayTrader said:

Guys this thread is f**king hilarious seriously. Let me see if with my complete lack of knowledge of oil or shale I can paraphrase this whole thing. Ok so Doug and James and obvious oil guys are anti shale and wants to see these infamous technologies. As far as I'm aware and I may be wrong they have not been presented. This is literally pro shale guys v anti shale guys now debating round and round.

Guy A says ''well the production figures are this much'', then Guy B says ''well that won't last'', A says ''no trust me, check out these stats'', B says ''those stats are shit, check out my stats'', A says ''nah, you're not taking into account X'', B says ''X is bullshit anyway coz of Y, check out these graphs'', A says ''those graphs don't take Z into account, watch this presentation'', B says ''that presentation distorts the facts'', A says ''what about these figures then?'', B says ''those figures are written by morons who don't have a clue'', A says ''what are these new technologies anyway?'', B says ''what technologies?'' ... 

Do none of you see that none of it matters as we will all be fossil fuel free in a couple of years? Duh. Sort it out jeez.

It's about investing, when to go long, when to go short. You look for an edge or different view. It's how it's done.

[Ward Smith + 6,615]

9 hours ago, remake it said:

80 years after 1935 is 2015 and clearly gold's inflation adjusted price had not trebled as was originally spelled out despite your protestations and this is relevant because what you failed to do was adjust the $3/bbl lifting price for inflation on sound principles.

The longer your run on sentences run, the more I know you've blown a transistor. 

Doesn't 1980 fit in between 1935 and 2015? Why yes, yes it does, quite neatly in fact. $2574 buckwheat, from your own graph! 

What's it like to be so ignorant? I'm really curious. I can drink a lot of alcohol and kill a lot of brain cells but I can't even get into the same zip code as your lack of intellect, even too drunk to type. 

Meanwhile, because kicking your little CPU brain when you're down is so much fun, gold is not a commodity! 

Quote

The main problem with gold is that, unlike other commodities, it does not get used up. Once gold is mined, it stays with you. A barrel of oil is turned into gas and other products that are expended. Grains are consumed. Gold, on the other hand, is turned into jewelry, used in art, stored in ingots in vaults, and given to a variety of other uses. Still, regardless of gold's final destination, its chemical composition is such that the precious metal cannot be used up.

Because of this, the supply/demand argument that can be made for commodities like oil, copper, grains, etc, doesn't hold for gold.

You lose, again, as always

[Rob Plant + 2,756]

3 minutes ago, Ward Smith said:

The longer your run on sentences run, the more I know you've blown a transistor. 

Doesn't 1980 fit in between 1935 and 2015? Why yes, yes it does, quite neatly in fact. $2574 buckwheat, from your own graph! 

What's it like to be so ignorant? I'm really curious. I can drink a lot of alcohol and kill a lot of brain cells but I can't even get into the same zip code as your lack of intellect, even too drunk to type. 

Absolute quality! pissing my pants laughing at that.🤣

[Rob Kramer + 696]

Plus prematurely scrapped cars just serve to keep other cars on the road longer . 

Oops that was a reply after JAN that I forgot to send now looks irrelevant. 

Edited December 12, 2019 by Rob Kramer
Sent late

[Guest]

6 minutes ago, James Gautreau said:

It's about investing, when to go long, when to go short. You look for an edge or different view. It's how it's done.

Fair enough James, I trade oil a lot and am a day trader. Was just joking as this thread is hilarious. It's not just about investing though in fairness, the purpose of the thread at all I assume was to see how feasibly long the shale industry will last, that was Doug's point. Not when to long or short, but I hear you. 

[James Gautreau + 86]

10 minutes ago, DayTrader said:

Fair enough James, I trade oil a lot and am a day trader. Was just joking as this thread is hilarious. It's not just about investing though in fairness, the purpose of the thread at all I assume was to see how feasibly long the shale industry will last, that was Doug's point. Not when to long or short, but I hear you. 

Why else would you care? 

[Rob Kramer + 696]

58 minutes ago, Jabbar said:

Conoco Chief Technology Officer Greg Reveille May 2019 on technology.  

"Getting 20% recovery now"

This was May.  As he says it used to take years to introduce new technology .  .  .  .  now takes months.

https://www.bloomberg.com/news/videos/2019-05-17/conoco-s-cto-we-are-drilling-more-wells-spending-less-video

Can't discuss technology with a closed minded "NeverShaler" . 

 

 

Just takes months .... as in MAY to DEC ... have they updated the latest "Technology" .... sorry just adding fuel to the fire. 

 

Edited December 12, 2019 by Rob Kramer
Soon it will just take days ?

[Rob Kramer + 696]

21 minutes ago, DayTrader said:

Fair enough James, I trade oil a lot and am a day trader. Was just joking as this thread is hilarious. It's not just about investing though in fairness, the purpose of the thread at all I assume was to see how feasibly long the shale industry will last, that was Doug's point. Not when to long or short, but I hear you. 

Its gonna take another 6 months to know. The next DUC count will only be a glimpse of the next month (as rigs could come back and reverse the decline . I think that is only possible with high oil prices) ... so in the meantime enjoy the show lol

Edited December 12, 2019 by Rob Kramer
Grammar (if I had any)

[Guest]

7 minutes ago, James Gautreau said:

Why else would you care? 

So do you only care about something if you have personally invested in it? I'm pretty sure Doug didn't start the thread because he has some interest in investing in it. If he did he would be shorting the hell out of it all.

Anyway, meh, this thread weird enough mate without us having a discussion in middle of it. 

1 minute ago, Rob Kramer said:

so in the meantime enjoy the show lol

Haha cheers for heads up but trade such short term timeframes this is all just hilarious waffle mate. I care where things will be a few hours later. Months? Pff, couldn't care less lol.

Edited December 12, 2019 by Guest

[PE Scott + 563]

1 hour ago, Jan van Eck said:

the problem from the consumer point of view is that these folks specifically Tesla control the replacement parts, which are either not available or hugely expensive.  For example the drive motors for the Tesla re all proprietary, there is no motor that you can go buy down at the NAPA store.  if yours burns out, then you have to go beg for another from Tesla, and they have no particular desire to sell you one, as they need theirs for their own new production.  If Tesla sells you that motor, it will cost you $6,000.   Installation extra.  And that is the story for the entire car.   Who needs that?  Are the buyers thinking this through? 

If you buy some fancy hybrid with a fancy transmission and something breaks in there, who is going to fix it?   the guy down at the local garage?  No chance. 

Those EVs are not the panacea they are touted to be. 

My I Pace drive battery failed a couple days ago. It wont charge but I was still able to drive it to the dealership in the remaining charge. They called me yesterday and said the battery would be replaced under warranty. I asked what the bill would be for the battery replacement if I didnt have warranty.......$60,000. 

I wish I was exaggerating. I had under 9k miles on the car. It fried my wall charger too, so that's another $600 to replace. 

I'm all about EV's, but people need to be practical. They just aren't less expensive by any measure yet without heavy subsidies and warranty repairs. Not saying they cant get there, but they have a long road ahead of them still.

[James Gautreau + 86]

18 minutes ago, Rob Kramer said:

Its gonna take another 6 months to know and the next DUC count will only be a glimpse as rigs could come back and reverse the decline (I think only possible with high oil prices) ... so in the meantime enjoy the show lol

I disagree. Decline rates are so high they will overwhelm any attempts to keep production flat, let alone growing. The new wells are done so fast they won't comeback until $150 oil if ever. If you have to drill 4 or 5 wells to find 1 good well that is now defined as 200,000 barrels EUR, than you need $250 - $300 oil to make it work. Just to offset 2018 decline 250,000 bpd per month you need 400 DUC's -700 bpd  X 400 or 280,000, and that is just for one year. Take all the other years and you're probably double that or 500,000 or 600,000 bpd per month. So headed into next year you'll have to do  500 - 1000 DUC's a month. 7500 DUC's don't seem like many then. And that number is growing fffffast, I'm guessing it'll be 1,000,000 bpd per month by summer. That's  why when the decline starts it will be breathtaking. They have set this up beautifully, because 99% of people do not know this train is coming down the mountain. 

Edited December 12, 2019 by James Gautreau

[PE Scott + 563]

55 minutes ago, DayTrader said:

Guy A says ''well the production figures are this much'', then Guy B says ''well that won't last'', A says ''no trust me, check out these stats'', B says ''those stats are shit, check out my stats'', A says ''nah, you're not taking into account X'', B says ''X is bullshit anyway coz of Y, check out these graphs'', A says ''those graphs don't take Z into account, watch this presentation'', B says ''that presentation distorts the facts'', A says ''what about these figures then?'', B says ''those figures are written by morons who don't have a clue'', A says ''what are these new technologies anyway?'', B says ''what technologies?'' ... 

Can I chime in as "Guy C" - pro frac but also pro reality?

I agree with Doug in the sense that I haven't seen any technology that substantially and consistently improved the EUR in wells when normalized for length, etc. As technology goes, please correct me if I'm wrong @Douglas Buckland, I think he's trying to illustrate that it hasnt changed the physics or overall recoverable oil on an individual well. Look at a technology meant to do this, like MicroScout from Halliburton, and find something that's actually made a big difference. I cant name anything and I'm a completion engineer......maybe I'm just bad at my job. As far as microscout goes.....it was 300 mesh sand meant to prop micro fractures and increase EUR by some significant percentage as a result of greater propped frac length. Most recently, I found it works better as a diverter if dropped in high concentration.......if you understand what I'm talking about....you'll know why this is not intended. 

However, theres more to making these wells economically viable than EUR. The biggest focus now, in my opinion, isn't trying to recover a greater percentage of oil from each well but rather trying to cut the completion cost wherever they can. I have seen stage cost drop from $80k to around $20k. The stages are nearly the same length and with the same amount or more proppant, but the chemicals and fluid volumes have dropped dramatically. The chemicals being used, like HVFR, are a fraction of the cost of running guar based gels. Every single person and piece of equipment on the surface is being optimized for efficiency. Average time between wells on a zipper is less than 15 minutes when things are running smoothly. It's not uncommon to complete 12 or more stages in 24 hours these days. That's lightning fast for plug and perf operations. That's where the technology has benefited the shale field though. It's not about higher production, it's about lower completion cost and a higher completion frequency. 

Now, I'm not saying operators aren't still trying to optimize their production and get every last drop they can.....I just haven't seen any big changes in that arena in a long long time and it seems like the production data supports that opinion.

All that being said, I can't foresee the next "big thing". There might be something out there I've never heard of or considered that will turn this whole argument on its head with it's obvious advantages. Please someone let me know as I would like to make money off of it.

[Guest]

3 minutes ago, PE Scott said:

Can I chime in as "Guy C" - pro frac but also pro reality?

No!! A or B buddy, sort it out, there is no place for fence sitters here. You are A.