Tag: Light Tight Oil

US Oil Output Continues its Steady Decline

Ovi 147 Comments

A post by Ovi at peakoilbarrel

All of the oil (C + C) production data for the US states comes from the EIAʼs Petroleum Supply Monthly (PSM). At the end, an analysis of three different EIA monthly reports is provided. The charts below are updated to March 2020 for the 10 largest US oil producing states, (Production > or close to 100 kb/d).

Today’s June 1 update shows the continuous slow decline in oil output from US oil fields from November 2019 to March 2020. March output was 12,716 kb/d, down by 28 kb/d from February’s 12,744 kb/d. Also it should be noted that February’s output estimate from the EIA’s earlier May report, 12,833 kb/d, has been revised to 12,744 kb/d, a downward revision of 89 kb/d. The Red dot is the projected April output from the May Monthly Energy Review.

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Permian Basin, Bakken/Three Forks and Eagle Ford Net Volume

D C 115 Comments

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.)

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US Tight Oil Scenario based on BNP Paribas Study

D C 327 Comments

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.

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US Tight Oil Estimate and Projection to Dec 2019

D C 305 Comments

New tight oil estimates were recently released by the EIA. The chart below compares estimates from Dec 2018 to May 2019, where the Dec 2018 estimate is that estimate with the most recent month estimated being Dec 2018 and likewise the May 2019 estimate has May 2019 as the most recent month estimated. The May 2019 estimate is fairly close to the April 2019 estimate with a slight downward revision of the April 2019 estimate from 7399 kb/d to 7368 kb/d, March 2019 was also revised lower by 10 kb/d from 7292 kb/d to 7282 kb/d. For May 2019 the most recent estimate is 7462 kb/d and if past history repeats this estimate may be revised lower next month.

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Oil Shock Model Scenarios

D C 391 Comments

Many different oil shock model scenarios have been presented over time at Peak Oil Barrel. Information on the Oil Shock Model, originally developed by Paul Pukite can be found in Mathematical Geoenergy. The future is unknown, so future extraction rates from conventional (excludes tight oil and extra heavy oil) oil producing reserves are unknown. Also not known are future oil prices which will affect the amount of tight oil and extra heavy oil that is ultimately produced.

For tight oil I have created three scenarios corresponding to a low, medium and high oil price scenario. Likewise I have created three scenarios for extra heavy oil which correspond to the same low to high price scenarios used for the tight oil scenarios.

The mean estimates by the United States Geological Survey (USGS) for technically recoverable resources in tight oil plays combined with reasonable economic assumptions and data gathered from www.shaleprofile.com are used to model tight oil output. The EIA’s AEO 2018 reference oil price scenario is used for the high oil price case and the low scenario uses the AEO reference price case up to the date when it reaches $70/b in 2017$ and assumes oil prices remain at $70/b for all future dates. The medium oil price scenario is the average of the low and high price cases.
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