tag:blogger.com,1999:blog-5235419263414453422.post8369835487996660351..comments2024-02-23T01:30:06.101-08:00Comments on Early Warning: US Rig Count TrendsStuart Stanifordhttp://www.blogger.com/profile/07182839827506265860noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5235419263414453422.post-7978373015495420202012-03-28T22:04:58.051-07:002012-03-28T22:04:58.051-07:00Stuart
Image 4, of your series has been the cause...Stuart<br /><br />Image 4, of your series has been the cause of much exultation, see the NYT, but it's sobering as hell if you think about. <br /><br />Let's see, we added 1000 oil rigs, and perhaps 10,000 new oil wells in the space of 18 months of so, and production only rose 600,000 b/d. <br /><br />So we drove more wells in one year than the Saudis have done in their history, gaining 60 b/d per new well on average. <br /><br />Not much return for the effort. <br /><br />And you now need to offset depletion in the 10,000 new wells. It will be interesting to see how this looks once the Bakken plateaus. <br /><br />Will the Eagle Ford, Niobrara and others be able to boost the goose?Jameshttps://www.blogger.com/profile/18257268717607114462noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-25538216840441932132012-03-28T20:32:53.210-07:002012-03-28T20:32:53.210-07:00Another factor: many gas wells were drilled in 08,...Another factor: many gas wells were drilled in 08, before the Panic, and not completed until later. Drilling rebounded quite rapidly, because many companies had long-term hedges in position, and many had to drill to hold newly leased acreage, and, I suspect because the industry didn't suspect that the Haynesville would, in just 4 years, exceed the Barnett in daily volumes. <br /><br />The Haynesville really queered the deal on prices, however, so lots of rigs are being laid down.<br /><br />We amateurs tend to think of "oil wells" and "gas wells," but we all need to learn more about GOR or gas-oil ratios. <br /><br />This is how the industry thinks of wells, not so much as either gas or oilJameshttps://www.blogger.com/profile/18257268717607114462noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-13480378108384001352012-03-28T15:52:18.267-07:002012-03-28T15:52:18.267-07:00One big factor is "associated gas" - the...One big factor is "associated gas" - there are a lot of oil wells that produce a fair amount of gas, and the gas can be sold at very low prices and overall the well will be very profitable.<br /><br />In fact, there are many wells that mostly produce gas, but the oil and NGLs still carry the whole operation.Nick Ghttps://www.blogger.com/profile/12721405349726668110noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-38182080228862229122012-03-28T09:02:11.697-07:002012-03-28T09:02:11.697-07:00Hi Stuart,
I've also been keeping an eye on t...Hi Stuart,<br /><br />I've also been keeping an eye on the gas rig count in the US and it is clearly falling off a cliff. It is well known (TOD posts, etc.) that frack'ed wells deplete extraordinarilly fast during the first 12-24 months on stream so one would expect US gas production to follow the rig count down with 6-18 months delay. Of course conventional wells still produce the bulk of US nat gas, but nevertheless I would expect a pretty clear response in gas produciton soon.<br /><br />This begs the question:<br />Why did the steep drop in 2008/09 in nat gas rigs not result in a production drop in 2010/11? In fact the production increased substantially during that time. Why do you think this is?<br /><br />RegardsPeter Vesborghttps://www.blogger.com/profile/09685023609986331179noreply@blogger.com