Shale Oil Fiasco

[D Coyne + 305]

36 minutes ago, Gerry Maddoux said:

Dennis, oil is limited. NG? I'm not so sure. When you look at these big offshore finds, they always seem to have an abundance of NG. The Vaca Meurto shale field possesses much thicker shale benches than anything we've ever seen before. It is a huge field and absolutely full of natural gas. I know you're not as keen on LNG as I am, but in my mind this is the fuel of the future . . . worldwide. 

And the elimination of sulfur oxides from maritime shipping is going to be--in my estimation--much, much bigger than anyone in the media has yet reported. With 90,000 oceangoing vessels heretofore burning 3.5% sulfur fuel, suddenly switching to 0.5%, this being checked by drone-sniffers in worldwide ports (where emissions can't be more than 0.1%), I think this epochal transition may be enough to . . . change the climate. I know, I know, that sounds silly and outlandish, but think of it, 90,000 cargo ships and tankers making such a tremendous change at one time. Some of those old ships will be trashed. Some will go to NG (LNG, usually). Compared to their previous pollution, we probably could have converted all vehicles on earth to electric and not have made 1/100th the change . . . this is almost too big a change to even calculate (if fact, they have admitted that it's massive, too large and complicated to calculate). 

I sincerely believe that we are on the wrong scent: oil is becoming a petrochemical feedstock while NG is becoming an LNG feedstock. LNG will rule the day. Just like maritime, the elimination of sulfur oxide from NG--especially when used in massive quantities--and the near-total elimination of coal (why burn high sulfur coal when LNG is just as cheap) will make a huge change in airstream pollutants.

Gerry,

It is not clear that LNG will be able to compete with cheaper alternatives, and yes the natural gas is not unlimited, the peak is farther off than C+C, but by 2035 we will likely see natural gas peak as well, I'd say 2030 to 2040 as the resource is less well researched so the projection is far cloudier.

[Gerry Maddoux + 3,627]

9 minutes ago, James Gautreau said:

To make money in the Permian you need $150 oil and $3 nat gas.

James, I just don't believe you're right. I'll be the first to admit that shale profits were wildly overestimated. However, there's a lot of good shale in the Permian. The parent-child deterioration is a real phenomenon, but that doesn't mean there will only be one prolific (parent) well per 1280-A spacing--you can't be a parent if you don't have any children, right? Instead of the dozen they all thought there would be, smaller families are going to become routine: maybe 4-6 children wells instead of a dozen. Machine learning is yielding a tremendous bank of knowledge about porosity that leads to pressure and volume sinks. Some pads will only put in two child wells, others six. 

I got hammered on this site just a few months ago because I had the audacity to say that $80-100 oil would a) allow most operators to make a handsome profit, and b) continued shale oil production would prevent damaging oil price spikes and also keep the economy going. Despite a good shellacking, I haven't changed my stance. 

Shale oil has transitioned from a feeding frenzy, a mania, to a calculated business model. A very flawed business model, to be sure, but a lot of that is because of tremendous loss of revenue due to the NG takeaway. That's going to be fixed, trust me. Damned if Chevron and Exxon are going to just sit there and lose money while the upstart Cheniere is gorging on easy pickings. $80 oil will do a lot. Some of those jobs are simply not coming back. Dirty water is increasingly either being cleaned up and put back down the hole or piped away--that's good and bad, the Highway of Death is becoming a little less dangerous, but a lot of good men were put out of well-paying jobs. Those jobs are being replaced by (many fewer) computer engineers, if you can call them that. We all knew that computers, and AI, were going to put us out of work.

At $100 oil you will see another drilling frenzy--that's just too high, too much of a shock to the system; it'll create huge volatility, up and down, busts and booms. I'll take $80 forever.

[D Coyne + 305]

27 minutes ago, Gerry Maddoux said:

You're the one with the models, so it's hard to argue with that, but . . .

Guyana: 14 massive oil finds. Yamel Peninsula just in the edge of the Kara Sea: 15 Bboe. Cyprus: 8 T cu. ft. gas.

I am impressed that we had an interlude, right after the crash in 2014, when no exploration took place. During the last two years, exploration has been both explosive and rewarding. Success  begets success. More and more looking will yield more reserves, don't you think? I'm not well informed on this, maybe the ocean floors--especially just offshore--have been isopach mapped.

Gerry,

They have looked and not found a lot,  beware boe, usually that is a way to make a find look bigger, might be a lot of natural gas and not much oil.

 

 

So 2016 to 2018 about 5 Gb discovered per year, we are producing about 25 Gb of conventional oil per year (I exclude extra heavy oil (API<10) and tight oil from conventional oil.)  So if we continue at this rate we have 20 Gb less each year of reserves, there's roughly 1200 Gb of conventional reserves, my math suggests in 60 years we are done, of course it lasts longer because output will peak, if peak happened in 10 years and we had a straight line decline, we would be out of oil in 110 years.

I am less optimistic we will find a lot of oil, my guess is discoveries and reserve growth will total about 300 Gb from 2018 to 2200 for World C+C.  We have been at this a long time, not a lot left to be discovered.

[wrs + 893]

41 minutes ago, James Gautreau said:

When this all started, no one knew anything. How long to drill laterals? How close to space the wells? How much oil coming out of each well? Decline rates? Decline rates of old wells vs new wells? How much oil is down there? Etc, etc, etc. Now we pretty much know everything. The bankers and investors now have a pretty good idea of what oil price will mean profitable wells and thus a profitable company. That is why oil workers are watching soap operas and not rough-necking. To make money in the Permian you need $150 oil and $3 nat gas. This year, if we're lucky, we'll hit 13 mbpd. I think by the end of next year we will have declined to 11 mbpd and the 450 million barrels in inventory will be down to 100 million, and there will go the glut, and thus will arrive scarcity. Then China and America will become equal in Saudi Arabia's eyes. The Great Tribulation will begin. 

How do you arrive at these numbers?  I think you are attempting to apply a decline rate that is not real to an aggregated number of wells to get to the 11mbpd number.  I saw that graph where you have picked one operator and compared the peak production which occurred in one month to the production in the 12th month.  I wouldn't make that comparison at all to arrive at decline rate and another thing is that first year production can be very lumpy.   

As I noted in a previous post, completions tend to interrupt production on nearby wells.  When the operator drills multiple wells on a pad they complete multiple wells at a time in order to get the best cost benefits from zipper fracs and whatever other cost saving measures are available for multiple well completions.  Assuming a three or four well pad then the completion time is roughly a month which interrupts the production of the nearby wells.  So zero production for a month sort of makes the decline rate look pretty bad.  I have come up with a different way of looking at the production and it's cumulative daily average production which looks like this.  In this case it produces a less pronounced peak and yet even still, the decline isn't uniform.  That is to say if you compute the rate assuming a uniform monthly decline rate using the peak and final daily average production, the expected final average production doesn't match the actual.  That means the model isn't consistent with the reality.  Dennis can address that but what I am saying is that much more data is required than one year or two years to estimate a decline rate for a single well much less 1000 wells.

 

Edited December 27, 2019 by wrs

[D Coyne + 305]

14 minutes ago, Gerry Maddoux said:

James, I just don't believe you're right. I'll be the first to admit that shale profits were wildly overestimated. However, there's a lot of good shale in the Permian. The parent-child deterioration is a real phenomenon, but that doesn't mean there will only be one prolific (parent) well per 1280-A spacing--you can't be a parent if you don't have any children, right? Instead of the dozen they all thought there would be, smaller families are going to become routine: maybe 4-6 children wells instead of a dozen. Machine learning is yielding a tremendous bank of knowledge about porosity that leads to pressure and volume sinks. Some pads will only put in two child wells, others six. 

I got hammered on this site just a few months ago because I had the audacity to say that $80-100 oil would a) allow most operators to make a handsome profit, and b) continued shale oil production would prevent damaging oil price spikes and also keep the economy going. Despite a good shellacking, I haven't changed my stance. 

Shale oil has transitioned from a feeding frenzy, a mania, to a calculated business model. A very flawed business model, to be sure, but a lot of that is because of tremendous loss of revenue due to the NG takeaway. That's going to be fixed, trust me. Damned if Chevron and Exxon are going to just sit there and lose money while the upstart Cheniere is gorging on easy pickings. $80 oil will do a lot. Some of those jobs are simply not coming back. Dirty water is increasingly either being cleaned up and put back down the hole or piped away--that's good and bad, the Highway of Death is becoming a little less dangerous, but a lot of good men were put out of well-paying jobs. Those jobs are being replaced by (many fewer) computer engineers, if you can call them that. We all knew that computers, and AI, were going to put us out of work.

At $100 oil you will see another drilling frenzy--that's just too high, too much of a shock to the system; it'll create huge volatility, up and down, busts and booms. I'll take $80 forever.

Gerry,

I tend to agree.  The reason tight oil output rose so quickly in 2018 was because oil prices rose (Brent went to $80/bo).

At Brent $75/bo or higher the average Permian well makes money, as natural gas pipelines get built and more natural gas is sold rather than vented or flared that also raises profits.

[D Coyne + 305]

32 minutes ago, wrs said:

How do you arrive at these numbers?  I think you are attempting to apply a decline rate that is not real to an aggregated number of wells to get to the 11mbpd number.  I saw that graph where you have picked one operator and compared the peak production which occurred in one month to the production in the 12th month.  I wouldn't make that comparison at all to arrive at decline rate and another thing is that first year production can be very lumpy.   

As I noted in a previous post, completions tend to interrupt production on nearby wells.  When the operator drills multiple wells on a pad they complete multiple wells at a time in order to get the best cost benefits from zipper fracs and whatever other cost saving measures are available for multiple well completions.  Assuming a three or four well pad then the completion time is roughly a month which interrupts the production of the nearby wells.  So zero production for a month sort of makes the decline rate look pretty bad.  I have come up with a different way of looking at the production and it's cumulative daily average production which looks like this.  In this case it produces a less pronounced peak and yet even still, the decline isn't uniform.  That is to say if you compute the rate assuming a uniform monthly decline rate using the peak and final daily average production, the expected final average production doesn't match the actual.  That means the model isn't consistent with the reality.  Dennis can address that but what I am saying is that much more data is required than one year or two years to estimate a decline rate for a single well much less 1000 wells.

 

WRS,

I just use the data I have, which is imperfect as I do not have average lateral length or proppant load information (and there are many other variables which I also do not have information on).  I have been fitting these well profiles since 2012 based on publicly available information.  Future well profiles for wells that have not yet been drilled cannot be estimated very accurately and I agree 2 years probably is not enough data for a very accurate estimate, but usually I can get pretty close.  For the permian basin the average well profile has not changed significantly from 2016 through 2019 (when normalized for lateral length), so one might assume that the well profile will not change for some period and eventually new well EUR may start to decrease.

See https://shaleprofile.com/2019/12/19/permian-update-through-september-2019/

Chart below has my estimate for the average 2019 Permian basin well profile. Note my vertical axis uses barrels per month rather than bpd, divide by 30.4 to convert.

 

Edited December 27, 2019 by D Coyne

[wrs + 893]

Is that a uniform simple exponential decline model?  My middle well up there, the hurley 1h recently produced 13,000 barrels in August followed by 9kbbl in September and 7k in October which is a major outlier on your chart there because that would be at month 37-40 and it's peak month back in Sep 16 was only 18k. That was a result of having child well completions in this past July.   Even the Scott 1h produced 7kbbl in October after the completion of a child well near it the previous month.  That will show up as an outlier on my graph and so I didn't include that data point. I am interested to see how the new completions affect the future production of the Scott 1h and 2h wells.  It appears to have helped rather than hindered.

Edited December 27, 2019 by wrs

[AcK + 50]

On 12/11/2019 at 9:25 PM, James Gautreau said:

2018 is the worst year ever for shale decline and ultimate recovery. 

https://srsroccoreport.com/more-than-50-of-the-mighty-permians-2018-oil-production-has-vaporized

Hey James,

Reading you with a lot of interest. But this dude has no clue - suggest not paying much attention to him.

Best,

[James Gautreau + 86]

1 hour ago, D Coyne said:

WRS,

I just use the data I have, which is imperfect as I do not have average lateral length or proppant load information (and there are many other variables which I also do not have information on).  I have been fitting these well profiles since 2012 based on publicly available information.  Future well profiles for wells that have not yet been drilled cannot be estimated very accurately and I agree 2 years probably is not enough data for a very accurate estimate, but usually I can get pretty close.  For the permian basin the average well profile has not changed significantly from 2016 through 2019 (when normalized for lateral length), so one might assume that the well profile will not change for some period and eventually new well EUR may start to decrease.

See https://shaleprofile.com/2019/12/19/permian-update-through-september-2019/

Chart below has my estimate for the average 2019 Permian basin well profile. Note my vertical axis uses barrels per month rather than bpd, divide by 30.4 to convert.

 

I am using this:

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

 

In it he states:

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.

If 2019 continues with trend or slows a little, let's say you lose 2 million barrels per day in 4 months. Those 4 months will start in 2020. So by May 2020, decline rates will exceed new 4 basin production by around a factor of 2, or something like 800,000 base decline rate vs 400,000 new production (current), or 12,000,000 barrels per month, or 96,000,000 barrels  last 8 months. Let's say you averaged 8,000,000 for first 4 months you'd have a total for the year of 128,000,000 barrels. Personally I don't think they'll do what they've been doing. I think by April new production will be 300,000 so nearly 152,000,000 million barrels total drained from inventory. And 2018 lost another 1,000,000 barrels a day at the end of 2018, that's not factored into this. They are down to 700,000 barrels a day.

Edited December 27, 2019 by James Gautreau

[Gerry Maddoux + 3,627]

Well, we may be "losing" oil quickly, but the overall production is still growing . . . from DUCs, doubtless. 

The "collapse" has occurred because, as we've discussed ad nauseum, a lot of infills were drilled with the promise of an EUR of 600,000 bo, only some of them will never crack 100,000. That's not quite break-even. So leases that were bought at a 12 well/1280 A spacing are now going to have to downsize to a 4-6 well/1280 A spacing. 

While it's almost never talked about, the parent-child interaction isn't much of an issue up in the Bakken. Density isn't either, up to 12 wells per 1280 A spacing. Nor is the gas:oil ration, one of the lowest in the world. Prices exploded up there, then came back to earth. You can still buy very good core properties for good value. The downside is that . . . the Bakken is almost never talked about; it's a lonely life. And in the winter the oil field hibernates like a bear--you can't frack a well when it's twenty below.

2020 is going to see an awful lot of production come off: SCOOP/STACK down by 75%, eastern Permian down maybe 25%, Bakken down maybe 10%. Like Old Ruffnek said, there are several countries chomping at the bit: Russia, Nigeria, Iraq, Iran, Brazil, even Saudi Arabia. It's a pretty sad well in the remaining shale basins that won't make money at $65-$70 oil and I think we're going beyond that price. I don't expect drastic deterioration in supply during 2020, due to those rising prices. In 2021, I actually think we'll see a supply growth . . . due to the Guyana blocks coming on line, an increase in shale drilling rigs, an improved recovery profile on the wells that are finished.

But here's the thing . . .

Innovation moves forward fairly steadily, but technology makes quantum leaps--these days it's machine learning. I'll bet you anything that Measurements While Drilling, utilizing the millions of data points stored in the cloud, cut a day off drilling time, a million dollars off drilling cost per well, another million off completion costs per well, and I strongly suspect that there won't be a set # of infill wells per tract, but the number will be determined by AI. In the Permian, during the last year, every fourth child well was a total dud, but it cost the same ($6-7M) as a very productive infill well. If it could be figured out how to drill according to "most favorable production," think how much money could be saved.

It's massive!

IOW, if you can save $14-$20M per 1280 A spacing (by eliminating drilling costs on duds and accentuating production from the others), all at once you've put yourself in a profitable spot. I  believe this is going to happen. Just as it's insane to make projections on hope, it's equally insane to believe that we are frozen in aspic, that no one can figure out how many infills to place or drill more profitably. 

[D Coyne + 305]

3 hours ago, wrs said:

Is that a uniform simple exponential decline model?  My middle well up there, the hurley 1h recently produced 13,000 barrels in August followed by 9kbbl in September and 7k in October which is a major outlier on your chart there because that would be at month 37-40 and it's peak month back in Sep 16 was only 18k. That was a result of having child well completions in this past July.   Even the Scott 1h produced 7kbbl in October after the completion of a child well near it the previous month.  That will show up as an outlier on my graph and so I didn't include that data point. I am interested to see how the new completions affect the future production of the Scott 1h and 2h wells.  It appears to have helped rather than hindered.

wrs,

No, it is based on data from 2019 for the first few months, then uses 2018 data for a few months.  After month 8, I use the following Arps hyperbolic:

q_0=36658

b=0.9615

D_0=0.3628

 

I do this by months with output per month t=0.5,1.5,...,6.5,7.5, ...

I assume terminal exponential decline after month 74 at a 15% per year rate of decrease.

Well profile after month 8 based on 2018 well (about 5200 wells completed in 2018).  The first 7 months is based on more limited data from 2019 wells, with gradually fewer wells each month.

Edited December 27, 2019 by D Coyne

[Rob Kramer + 696]

One input into convo. Canada.  If oil price goes up up up does a pipeline get built or does wexit (far but possible) join hands with the states and deliver years of reliable heavy to mix with light at sub wti prices. Our oil stocks on the tsx are at multi year lows . And most are profitable at 60$ wti or 42$ wcs. 

[Gerry Maddoux + 3,627]

I, for one, would really like to see the US use Canadian heavy on a preferential basis. 

Unfortunately, we have a president who seems enthralled with the murderous Saudi prince, for God knows what reason. 

The US desperately needs a contiguous, reliable source of heavy oil. Yours is just right. 

[wrs + 893]

Far as I know, we import 3400-3600 mbbl/day from Canada and in the Midwest it's the main input to a number of refineries.  I saw a good analysis of what sources the US refineries use on a per refinery breakout.  I am not sure I can find it again though.  It was posted on the OOTT twitter feed a few weeks ago.  

[Gerry Maddoux + 3,627]

49 minutes ago, wrs said:

Far as I know, we import 3400-3600 mbbl/day from Canada and in the Midwest it's the main input to a number of refineries.  I saw a good analysis of what sources the US refineries use on a per refinery breakout.  I am not sure I can find it again though.  It was posted on the OOTT twitter feed a few weeks ago.  

Sounds about right. Canada used to be the largest supplier to the US. I don't follow that sort of thing; probably should.

[Old-Ruffneck + 1,177]

6 hours ago, D Coyne said:

Let's also assume oil output never peaks because demand for oil remains strong.

Demand destruction in 25 years, pressures from Banks and Nations wanting to "Green" will tear this commodity apart and in that short of time. By 50 years oil will be just a product for plastics. USA is major consumer of Diesel, Gasoline, on a per daily basis. Imagine if you will in 25 years NG Semi Fleets and mostly electric cars (85%). Now show me on a graph the curve where Crude is still a major energy factor. Let's not assume as one Large bank of the 6 decided no more money for the oil industry. As for the total sum of oil I was referring to world-wide. There's a sh*t load more yet to be found. Exxon's Guyana find is quite large and in the end be pumping 4mbd alone. KSA may be cutting back more as more discoveries are found.  Now 50 years out...…… Do you really believe oil will have any say in worlds consumption? Probably not, by then the stuff will be a petro-chemical mainly, not used in transportation. I sincerely believe our thirst for oil will be less than half of todays rate, and then let's go another 25 years to the 75 year mark. Oil will be mostly a after thought, will have revolutionized away from the goo. Forward thinking today for travel had begun some years back. I am realistically going out 75 years and if YOU truly think oil will still be a major force globally, well then sir I hope your right. But I wouldn't stake my great-grandchildren's lives on it. 

2020 is going to be a swing year, pumping away and then technology will start to get more money thrown at it to get us away from oil. Slow at first but when Goldman cuts oil money, the other 5 are likely to follow suit. 

https://www.cnet.com/roadshow/news/rivian-rt1-rs1-tank-turn-electric-truck-worlds-coolest-donuts/   Think I will invest in this. 

[D Coyne + 305]

12 hours ago, Old-Ruffneck said:

Demand destruction in 25 years, pressures from Banks and Nations wanting to "Green" will tear this commodity apart and in that short of time. By 50 years oil will be just a product for plastics. USA is major consumer of Diesel, Gasoline, on a per daily basis. Imagine if you will in 25 years NG Semi Fleets and mostly electric cars (85%). Now show me on a graph the curve where Crude is still a major energy factor. Let's not assume as one Large bank of the 6 decided no more money for the oil industry. As for the total sum of oil I was referring to world-wide. There's a sh*t load more yet to be found. Exxon's Guyana find is quite large and in the end be pumping 4mbd alone. KSA may be cutting back more as more discoveries are found.  Now 50 years out...…… Do you really believe oil will have any say in worlds consumption? Probably not, by then the stuff will be a petro-chemical mainly, not used in transportation. I sincerely believe our thirst for oil will be less than half of todays rate, and then let's go another 25 years to the 75 year mark. Oil will be mostly a after thought, will have revolutionized away from the goo. Forward thinking today for travel had begun some years back. I am realistically going out 75 years and if YOU truly think oil will still be a major force globally, well then sir I hope your right. But I wouldn't stake my great-grandchildren's lives on it. 

2020 is going to be a swing year, pumping away and then technology will start to get more money thrown at it to get us away from oil. Slow at first but when Goldman cuts oil money, the other 5 are likely to follow suit. 

https://www.cnet.com/roadshow/news/rivian-rt1-rs1-tank-turn-electric-truck-worlds-coolest-donuts/   Think I will invest in this. 

Oldruffneck,

I misunderstood your previous comment, you are expecting that supply will fall due to lack of demand, I expect it will be a bit of both. That is supply will become expensive as the peak in output approaches in 2025,  the price will rise enough that production matches consumption, in the long run (this will always be true as stocks of produced oil are relatively limited, about 60 days forward consumption).  I expect by 2025 the Brent price may be $135/bo in 2018$ and quite a bit of demand gets destroyed at that price, it might require even $150/bo to match production and consumption, difficult to predict.  Gradually alternatives to oil will ramp up in response to high oil prices and EVs, natural gas, and biofuels will all compete with oil for land transport, which fuel wins will depend on relative prices and consumer preferences, my bet is electrified rail, light rail, and EVs, with perhaps a bit of NG for truck fleets for land transport and perhaps NG for water shipping and perhaps even air transport at some point.

In short I agree consumption of oil will go down.  Interesting you expect that in 50 years oil consumption will be less than half today's rate, let's call today's rate about 83 Mb/d for C+C only (2018 annual rate), my model has World output at about 40 Mb/d in 2068 (unlikely to be accurate of course) which jibes with your guess.  Model for World Oil Shock Model (first developed by Paul Pukite) using the high price tight oil scenario presented earlier in the thread (peak at about 12 Mb/d) with data from https://shaleprofile.com used to develop well profiles for tight oil model in chart below.  URR=3060 Gb peak C+C output at about 87 Mb/d from 2024 to 2027 (output between 86.5 and 87.0 Mb/d).

The high oil price tight oil scenario I presented earlier can be found on page 26 of this thread.

Edited December 28, 2019 by D Coyne

[Jan van Eck + 7,558]

14 hours ago, wrs said:

Far as I know, we import 3400-3600 mbbl/day from Canada and in the Midwest it's the main input to a number of refineries.  I saw a good analysis of what sources the US refineries use on a per refinery breakout.  I am not sure I can find it again though.  It was posted on the OOTT twitter feed a few weeks ago.  

See if you can find it, and post it!   Would make fascinating reading.  Have to wonder how much WCS is being processed in Sarnia. 

[D Coyne + 305]

On 12/26/2019 at 11:20 PM, Gerry Maddoux said:

Agree. The biggest problem we Americans have is that we do not own most of the conventional oil in the world. That would be Venezuela, which has the biggest reserves, and it's mostly owned by Putin and Xi via debt obligations. That a big enough thorn in the foot, but then there's KSA, Iran, Iraq, Brazil, Africa. This shale skirmish may seem big to us, because it's totally American, but in the composite of the world's oil reserves, it is but a pittance. 

Gerry,

Most of the Venezuelan "proved" reserves are Orinoco belt extra heavy oil.  Not really "conventional" oil any more than Canadian oil sands are "conventional".  You are correct that the 60 to 120 Gb of tight oil resource likely to be recovered in the US, is a pretty small piece of the overall picture, it is unclear how much of the extra heavy oil will be profitable to produce and how quickly it will be developed, my guess is that the amount ultimately recovered will be far less than proven reserves (roughly 400 Gb), probably 150 to 200 Gb, remaining conventional resources are probably around 1500 Gb, so possibly 1750 Gb total C+C resources remaining with about 14% of the resource unconventional (tight oil and extra heavy oil with API Gravity less than 10 degrees).

[Jan van Eck + 7,558]

7 minutes ago, D Coyne said:

Not really "conventional" oil any more than Canadian oil sands are "conventional"

I predict that 100% of the Canadian heavy oilsands oil will be recovered - eventually. 

Here's why:  Canada is a developed society with an educated workforce and lots of accumulated experience, and lots of smart people.  The missing ingredient is capital formation, held back by a stodgy and stuffy financial sector in Toronto.  It is also held back by the crazies that have pushed Ontario into its wind-power fiasco, the extent of that damage (financially and to the power grid) is now sinking in.   What will align the stars for oilsands recovery will be the development of solvent technology, which I predict is coming soon enough, and capital infusions spurred on by favourable tax breaks done by a Conservative national government. 

Yes, that requires the dumping of the Trudeau Liberals.  And that requires new and inspiring leadership in the Conservatives.  Will that new and charismatic leader come forth?  Matter of time. 

[wrs + 893]

21 minutes ago, Jan van Eck said:

See if you can find it, and post it!   Would make fascinating reading.  Have to wonder how much WCS is being processed in Sarnia. 

Browser history came to the rescue, I couldn't find it in the twitter feed but I found where I linked it in my browser history.

https://public.tableau.com/profile/jbarnett#!/vizhome/U_S_RefineryCrudeOilInputs/Story1

[AcK + 50]

On 12/12/2019 at 9:18 PM, 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" . 

 

 

Very interesting interview - very short so nothing discussed in detail.

Most discussion around what they have done in Eagle Ford - yet in the beginning of the interview itself the Bloomberg presenter notes EF is a late stage growth asset (few years left) - why, if your recovery rates have gone from sub-10% to 20%?

[Jan van Eck + 7,558]

8 minutes ago, wrs said:

Browser history came to the rescue, I couldn't find it in the twitter feed but I found where I linked it in my browser history.

https://public.tableau.com/profile/jbarnett#!/vizhome/U_S_RefineryCrudeOilInputs/Story1

Great stuff!  Fascinating, although graphs hard to interpret.  Will have to study more. 

[wrs + 893]

Just now, Jan van Eck said:

Great stuff!  Fascinating, although graphs hard to interpret.  Will have to study more. 

If you click on the box that says

where does each US refinery get it's oil and what kind is it?

Then you can select just one country, canada and see where the oil goes.  It all goes to refineries up in the midwest.

[James Gautreau + 86]

The heart of the discussion over the Permian peaking or not has to do with whether you think a field that has produced 20 billion barrels of conventional oil could possess 46 billion more. That's it in a nutshell. I for one do not believe it. But I am the doubting type. I don't believe nuclear weapons exist. I tell people is it reasonable to think that a basketball sized hunk of uranium or plutonium or whatever they say is capable of destroying an entire city. Does that seem reasonable? It's like a snowflake causing an avalanche. I don't believe we landed on the moon. I believe we sent a ship that passed over the moon, took some pictures, but people going there, landing, and returning. Sorry. They didn't do it then, they can't do it now, and won't be able to do it for another 100 years at least. See how much trouble Bezos, Musk, and Branson are having? See how silent they have been of late? Reusable rockets can't be done. Rockets only have about 1-2 % useful payload, and if you beef up the areas that you need to make the rocket reusable you have no payload- a huge bottle rocket, in other words. The only chance they have is to do like the airlines do and not let the rocket cool off. That's the only way, and that is impossible at this point because so many of the systems need refurbishment after every flight. The space shuttle engines had to be rebuilt every flight. Every flight! That is hardly reusable, but that is what many people believe. It's not true. Space is incredibly hard. There are many on this site that believe the Permian does indeed have 46 billion barrels. I don't.