In the discussion here I use the term net volume to refer to the volume of prospective rock that might be developed to produce tight oil. For each bench of a prospective tight oil play (Wolfcamp A would be one example of a bench) there is an area estimate (5733 thousand acres for Wolfcamp A of Delaware) and a success ratio (%) = 94.7, in the case of Wolfcamp A. Net acres are the total acres times the success ratio, for Wolfcamp A, 5429 thousand net acres. On average the Wolfcamp A of the Delaware basin is about 400 feet thick, so the net volume would be net acres times thickness or 2172 million acre-feet. An acre-foot is a volume that is one acre (44,000 square feet) by one foot thick or 44,000 cubic feet (or a box that is 1000 ft long by 44 feet wide by 1 foot high.)
Read MoreTag: Eagle Ford
US Tight Oil Scenario based on BNP Paribas Study
An interesting analysis was recently published by BNP Paribas (one of the top 10 banks in the World by assets) entitled Wells, Wires, and Wheels… . In that analysis they argue that long term oil prices will fall to $20/b or less in order for oil used for personal land transport to compete with EVs powered by wind and solar at current cost levels.
I reworked my oil price assumptions, first with a simple scenario that follows the EIA’s AEO 2018 reference oil price scenario up to $70/b in 2017$ and then remains at that level long term. Second I noticed that a scenario with such an oil price assumption sees tight oil output fall in 2022 so the scenario was revised with oil prices rising from 70 to 80 per barrel from 2022 to 2024 and then remaining at that level until 2028. The BNP Paribus analysis suggests that EVs will have cut significantly into oil demand by 2022 to 2025 so I assume oil prices fall to $20/b over the next 10 years.
Scenarios below.
OPEC June Crude Oil Production
The following June OPEC data is based on the latest July OPEM Monthly Oil Market Report and is in thousand barrels per day.
OPEC 14 crude only production was down 68,000 barrels per day in June.
US Light Tight Oil (LTO) Update
by Dennis Coyne
I have updated my scenarios for US LTO output, based on both EIA tight oil output data and average well profile data from Enno Peters’ shaleprofile.com. I have also created a scenario for the Niobrara shale oil play and for “other US LTO” which excludes the Permian Basin LTO, Eagle Ford, North Dakota Bakken/Three Forks, and the Niobrara.
Open Thread Petroleum, March 28, 2018
This is NOT a non-petroleum open thread, see post below for those comments.
Comments on oil and natural gas output should be in this thread, thank you.