Retired User

Retired User
Contributor since: 2008
Company: Crone Software R&D
Hi Craig. Looks like you're going to win our bet about North Dakota topping 1MMb/d before 2015. Unfortunately, Blanco's closed last month and House of Pies burned down, so we'll have to pick another joint to settle the $100 bet. Sam's Boat on Richmond?
http://1.usa.gov/1eJMgPL
Liquid fuel is more powerful, economical transport. Think aircraft. Then do the math on converting 300,000 big rigs, a million farm implements and bulldozers.
'North American energy independent' means what? - more exports to Mexico? growing mountains of toxic asphalt coke from upgrading and refining Canadian dilbit? an environmental wasteland in Fort Mac?
Your 10 year plan smacks of Stalinist thinking. What happened in Soviet Union when they confiscated private industry? - and that's exactly what you'd have to do, one way or the other, to force oil companies to cut off sales you didn't like and/or make products they didn't want to produce. Solyndra-ize Exxon? Hah.
Permian and South Cana could go the way of Mississippi Lime. I wouldn't count those barrels as a done deal. EOG's larger shorter laterals are as far as "new technology" will take us, if adopted by other drillers. I'm particularly worried about deepwater GOM. There have been too many projects scratched, and performance at Thunder Horse showed that digital reservoir modelling is in trouble. Finding oil with the drill bit (subsurface exploration) still matters, and the cost of drilling the Lower Tertiary in ultradeep water is a 'bet the company' proposition for all but the biggest IOCs. Okay for reserves windowdressing, but not necessarily development. Lastly, I'll mention delivered price and cost of rail transport. $70 kills North Dakota. Another train wreck might kill it. Price and availability of HY debt matters. Maybe you have better data than I do.
Lower 48 could grow another notch, but not enough to fix anything financially. Banking on Ohio to pay for itself is an Aubrey fairy tale. EIA is using rose-colored glasses.
"The US government allowed the financial crisis to happen... then fine the hell out of the big banks and take the cash... Over and over this pillaging happens."
Good thing you're not worried about your credibility.
Agreed, your thesis is 'in tact' and you're not the smartest tool. The giant institutions are buying PBR debt, hedging currency risk. Unless you look under the hood at the Chinese priority claim on pre-salt and the goofy sand castle of directional drilling and gas reinjection, PBR chart technicals are meaningless. Petrobras is dead money, dude.
My suggestion is to look at Marcellus producers and midstream blue chips on the chance we'll see secular gains that lifts all boats. Me? No position long or short in energy.
Gumby has a good point, more natgas power gen http://1.usa.gov/1ddW1c2
Stocks were 562 Bcf less than last year as of Friday, December 27, 2013 and
289 Bcf below the 5-year average of 3,263 Bcf. http://1.usa.gov/ofCrGW
Next EIA data release is Jan. 9 and subsequent reports will tell the tale in working storage and drawdowns as winter grinds on. Solar Cycle 24 may be a 'Dalton minimum.' http://bit.ly/1drNEnL
Arctic sea ice and Eurasian snow pack larger this year http://bit.ly/1drNEnN
UNG has option decay that makes it a false indicator of supply and demand.
Natural gas for Tuesday delivery rose as high as $90 a million British thermal units at a pipeline delivery point in New Jersey where New York City gas prices are set, according to IntercontinentalExchange Group Inc. On Friday, gas there traded at an average of $13.6102/mmBtu. Two other trading hubs, where natural gas is bought for states from South Carolina to New Jersey, each saw prices reach a record of $95/mmBtu. [WSJ]
Last week's natural gas storage report revealed that stocks fell by 97 billion cubic feet during the week ending Dec. 27, according to data from the Energy Information Administration released Friday morning... Heavier drawdowns are predicted for the two weeks ending on Jan. 10, Richard Hastings, a strategist at Global Hunter Securities, said in a report on Monday. Hastings put the drawdown at up to 430 bcf over the 14-day period. [Reuters]
In oil [and gas] fields from Texas to North Dakota and Canada, the severe cold threatened to disrupt traffic, strand wells and interrupt drilling and fracking operations... In Cleveland, Ohio, the temperature was minus 3 degrees F and was forecast to drop to minus 6 degrees F overnight...The National Weather Service issued warnings for life-threatening wind chills in western and central North Dakota, with temperatures as low as -60 F. The U.S. cold snap mirrored or outdid freezing weather in parts of the world as Almaty, Kazakhstan where it was -8 degrees F, in Mongolia where temperatures reached -10 degrees F, and Irkutsk, Siberia, where it was -27 degrees F. [TD Waterhouse]
Global warming? - pffft.
12 Nov 13: IOC jumps to $80 on heavy volume, tops at $90 three days later.
I commented: "Nice exit price. Don't forget to sell on the news, kids."
http://bit.ly/1eZrgsM
Widely reported Total will carry the cost of drilling for appraisal well program.
An estimate of contingent resource is at issue. No matter whose estimate is ultimately accepted, the Final Investment Decision will be based on projected cost of development drilling, completion, well control, gathering, dewatering, disposal, injectors, cryogenic separation, compression, pipeline construction over rugged terrain, electric power generation, communication, accommodation, security, indigenous training and supervision, landing docks, and 150km road construction -- just to get gas from Antelope to shore. Forget the LNG project. How big a financial gamble is it to produce the contingent resource?
"Of all gas fields discovered prior to 1982, 228 (5.6 percent) accounted for 75 percent of gross gas reserve growth... Rather than a common characteristic, effective reserve growth in terms of substantial volumetric change is actually the minority effect of a few fields... Statistical aggregation methods should be used with great care and a high level of understanding of the follow-on effects when dealing with the highly skewed distribution of volumetric reserve growth in fields." [Cook, T.A., 2013, USGS]
A bid by SandRidge Energy Inc. to dismiss an investor lawsuit that claims the Oklahoma City operator provided misleading information regarding natural gas drilling programs has been rejected by a federal district judge... The Pinon Field, which in 2007-2008 comprised more than 60% of SandRidge's proved oil and gas reserves, is but a small part of the company's overall portfolio today. Production in the field has declined rapidly, from 153 MMcfe/d in 2008 to just 47 MMcfe/d in December 2012... SandRidge's lawyers argued that the "factual allegations in the complaint constitute nothing more than a claim that SandRidge was wrong in its predictions of future profits and outputs, which does not suffice to create a strong inference of fraudulent intent," said Thompson in his ruling. "The plaintiffs contend that they have alleged facts constituting strong circumstantial evidence that the defendants were, at the very least, reckless in making false and misleading statements. The court agrees with the plaintiffs." [NGI Daily, July 8, 2013]
Tullow Oil failed to meet production targets at the Jubilee oilfield at the end of 2012, causing problems for the firm and the Ghanaian government. The declining productivity led to declining revenues for the government who had budgeted for oil revenue of more than $650 million. The corresponding shortfall was more than $410 million. [Wikipedia]
Reserves growth? --- pfft.
"the tendency is for reserve engineers to err on the side of conservatism"
Rubbish.
80% recoverable is amusing.
Always appreciate your thoughtful, data-rich articles.
"The US, thanks to shale oil and shale gas revolution, can become a creditor nation in less than ten years!"
Not one shale operator has positive cash flow past or present.
They sell software. Enter well data and seismic lines, push a button and get reserves. How else do you suppose IOC got such nice 3D cartoons?
http://bit.ly/19uMElp
I think kencooksan is right. Won't be worth a dime after that.
"focus is clearly on locating huge gas and oil reserves"
Oil?
"2D seismic data is displayed in the time domain"
I'll add that 2D is notorious for pull-up errors at both ends of the line. There are very few seismic interpreters who know how to "tie around" legacy 2D lines and well tops to arrive at a geologically possible and plausible structural map.
Estimated Ultimate Recovery is not what you think it is. Certainly not a magic wand to wave away field development and completion, pressure management, gathering, separation, compression, pipeline construction through rugged terrain, workforce support and payola to tribal chieftains. Ultimate Recovery is probablistic estimates derived from IOC mapping on skimpy 2D seismic. It'll take a couple years to decide what, if anything, to do with the play.
Gaffney Cline wasn't in Phil's hip pocket for fees like GLJ was. The two firms are totally different in methodology, size, client list, and credibility.
Still laughing about "a bit of a beauty contest" that dragged on for 5 years!
The issue isn't "no gas" but rather how much is economically recoverable.
I'm sure everything will turn out just fine when Total takes over and commissions two new independent reserves assessments. What could possibly go wrong?
:)
Nice exit price. Don't forget to sell on the news, kids.
World's largest uninsured floating bomb.
Phooey. My money was on Roger Ferguson.
Short version: Russia produces more than twice as much oil as U.S., and they export half of their production. The half Russia exports is *still* more than the aggregate of all "liquids" produced in U.S.