Tag: Light Tight Oil

Texas Oil Production Still on a Plateau

Ron Patterson 411 Comments

The Texas RRC Oil and Gas Production Data is out. There appeared to be no decline in December production and may have even been a slight increase. 

The Texas RRC data is incomplete and only gives an indication as to whether Texas production increased or decreased. The data appears to droop because each month the the Texas Railroad Commission receives a little more data and the totals increase, little by little, month by month, until after many months the data is complete.

In my charts I post the past six months of data in order to give some indication as to whether production is increasing or decreasing. The final data is through December and the EIA data is through November.

Texas C+C

Texas crude plus condensate declined a little in November but seemed to make up that decline in December. Total Texas C+C seems to be on a flat plateau, declining in Eagle Ford but making up that decline in the Permian and the rest of Texas.

The EIA estimates the final Texas data through November. They have Texas peaking in March and down about a quarter of a million barrels per day since that point.

Read More

BAKKEN – Single Well Economics

Ron Patterson 493 Comments

This is a guest post by Ciaran Nolan

Disclaimer

The opinions and views expressed in this presentation are solely those of the author and not necessarily those of any organisation.

Introduction

This presentation builds upon earlier work carried out by the author in May 2015 on the North Dakota (ND) Bakken / Three Forks Light Tight Oil (LTO) Play – ‘Bakken – the bubble has burst’*. 

North Dakota Industrial Commission (NDIC) production data (up to November 2015) kindly supplied by Enno Peters. Data analysed in Excel and IHS Kingdom.

Production decline curves generated for P10 – P90 type wells, based on8843 wells with 1 year full production (January 2007 – October 2014).

Discounted cash flow (DCF) models were generated by the author for single wells in the ND Bakken / Three Forks Play.

Break even oil prices for Net Present Values with a 10% discount rate (NPV10) determined for P10 – P90 type wells. NPV10 break even oil price map generated. Historical NPV10 generated for average wells for 2008 – 2015. NPV10 breakeven oil price determined for top ten Bakken Producers in 2014, for 2014 wells.

Ciaran 1

Read More

Doubting The Peak in 2015

Ron Patterson 525 Comments

Dennis Coyne, an editor and frequent contributor to this blog, has suggested that we are not at peak oil. He argues that there is likely to be a dip in production starting next year but higher prices will cause things to turn around and we will surpass the 2015 peak by 2019. He commented a few days ago:

If we take some of the larger producers that have been increasing output and compare with the rest of the world(ROW) using EIA data from Jan 2004 to June 2015 (using the trailing 12 month average to focus on the trend) we see ROW decline has been relatively modest (1.4% based on the trailing 12 month output in June 2015). The eight increasing producing countries I have chosen are Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and US and ROW=World minus the 8 countries just listed.

One possible scenario is that output is flat for the Big 8 in 2016 so that World C+C output falls by 485 kb/d in 2016 (average output for the year compared to the 2015 average). Over the 2009 to Jun 2015 period the Big 8 increased output at about 1300 kb/d per year, if we assume this rate slows to half the previous rate to a 650 kb/d per year increase (1.4%/year), then the peak is surpassed in 4 years in 2019. On a per country basis this would be a little more than a 80 kb/d increase in average annual output for each of these countries, though I doubt it would be divided equally.

So I have taken close look Dennis’s “Big 8” countries as well as “The Rest of the World”, and  looked at their JODI data charts. The last data point is October 2015.

First, the rest of the world.

Dennis's Rest of the World

This is the world less Brazil, Canada, China, Iraq, Iran, Russia, Saudi Arabia and the USA. As a group they peaked in October 2004 and have been in decline ever since. They have declined in times of low oil prices and high oil prices. And barring a miracle they will continue to decline.

Read More