And there was much rejoicing in the land.... Gas Prices

[Sean88gt]

Oil hits $150/bbl, and they'll recover it

[KBScobravert]

Rumor is around the pumps that they ate frac'ing the shit out of about 2,000 wells in North Dakota or some other frozen hell in North west America. The wells are drilled and the state us threatening to give them back to the land owners. The state is going to label them abandoned if not completed in a set time.

Sent from my SAMSUNG-SM-G890A using Tapatalk

[GrayStangGT]

Monahans Sandhills: The pump jack in the photo was buried in sand and the oil company gave up on it because sometimes its completely buried as the dunes shift.

I haven't seen one that cool, but I have ridden the sandhills in kermit and there are spots where you actually ride under pipelines because the sand has been completely blown out.

[mstng86]

Just About Every Part of the Permian Basin is Unprofitable at $30 Per Barrel

Less than 2 percent of Permian basin tight oil wells are commercial at $30 per barrel oil prices.

Sorry about that. I know that many believe that U.S. shale and tight oil plays are commercial even at current low oil prices but data on the Permian basin and Bakken plays simply does not support that belief.

To make matters worse, Pioneer and EOG have made outrageous claims about Permian basin reserves in their 3rd quarter 2015 earnings reports that no sensible person should believe. Statements like these simply add to the mistaken idea that tight oil plays get a pass on the laws of physics and economics and that somehow the U.S. is going to beat Saudi Arabia as the low-cost “swing producer” of the world. I wish that were true but trust me–based on data, that’s not going to happen.

The Permian basin is one of the oldest producing areas in the United States. It has been thoroughly drilled and is in a hyper-mature phase of development. The Spraberry, Wolfcamp and Bone Springs plays that Pioneer and EOG are pursuing (Figure 1) are really secondary recovery projects in which horizontal drilling and hydraulic fracturing have replaced water and CO2 injection methods used in the past. Few new reserves should be expected. Most of the claims that these companies make are really about higher recovery efficiency of existing reserves.

Related: The Golden Age Of Coal In China Is Over

None of these plays are remotely commercial at present oil prices. In the most-likely per-well reserve case, these plays require break-even oil prices in the range of at least $50-$75 per barrel, and current wellhead prices in the basin are less than $30 per barrel.




..
View photo
.

Figure 1. Horizontal Wolfcamp-Spraberry & Leonard-Bone Spring play location map, Permian basin.
Source: Drilling Info & Labyrinth Consulting Services, Inc.

(Click image to enlarge)

Reality Check: The Claims vs. Proven Reserves for the Permian Basin

Related: Icahn Ousts Cheniere CEO For ‘Aggressive Expansion’ Plans

Pioneer claims more than 10 billion barrels for its Spraberry-Wolfcamp position, and EOG claims 2.35 billion barrels for its Bone Spring and Wolfcamp plays.

Let’s put that in context.

Total proven crude oil and condensate reserves for the United States as of the November 2015 EIA report are 39.9 billion barrels. So, these two companies claim that they have reserves or resources of more than one-quarter of all U.S. reserves in 3 plays in the Permian basin. According to the same EIA report, the Permian basin has less than three-quarters of a billion (722 million) barrels of proven tight oil reserves.

Right.

Pioneer’s claim is by far the more preposterous of the two but it wasn’t very long ago (May 2014) that EOG CEO Bill Thomas told investors that his company wasn’t really all that into the Permian basin.

Related: Breakthrough In Hydrogen Cracking Could Create Clean Fuel

Pioneer CEO Scott Sheffield has been making statements for a few years about the Spraberry that ought to give his company’s General Counsel heart seizures.

“The Spraberry Wolfcamp could possibly become the largest oil and gas discovery in the world.”

It is incredible that analysts have not challenged Sheffield’s claim over the last two years that the Spraberry is second only to the Ghawar Field (Saudi Arabia) as the world’s largest oil field.

What exactly do analysts analyze, anyway?

http://finance.yahoo.com/news/just-every-part-permian-basin-000000782.html

[Strychnine]

Can you go add some quote boxes in there so we know what are your thoughts and what is from an article

[Bputacoma]

Too good to be true? Should I buy my raptor before it's too late?

http://www.oiljobsnd.net/u-s-shale-o...-against-opec/

U.S. Shale Oil Industry Will Bankrupt Saudi Arabia And Claim Victory Against OPEC



It won’t be long now, until the U.S. Shale Oil Industry will bankrupt Saudi Arabia, and claim victory against OPEC. The war isn’t over yet, but America has already won, it’s just a waiting game now.


On Friday, December 18th 2015, President Barack Obama officially signed off on ending the 40 year ban on the export of crude oil. President Obama basically signed the death certificate of OPEC. By passing this new law, the US Shale Oil Industry will crush OPEC in the long-term.

For years now Saudi Arabia has been a major powerhouse in the oil and gas industry. When you think Saudi Arabia, you think of oil. Most people assume OPEC is the one calling the shots and setting the oil prices, it’s not, it’s Saudi Arabia and it’s been them this whole time. Why do you think the Bush Administration was in bed with them?

For the last few decades Saudi Arabia has printed money faster than they can pump oil, and they pump a tremendous amount of oil. When the markets swung up and down, it was due to the Saudi’s actions. Saudi Arabia has been the muscle in the oil industry for the longest time, until US operators cracked the shale oil code.

At the current time, oil accounts for 80% of the Saudi government’s budget revenues, 90% of its export earnings, and 45% of its overall GDP. So far, it’s estimated the oil crash has cost OPEC countries $500 billion a year. Saudi’s crude oil exports rose to 7.364 million barrels per day, from 7.111 million in September.



It won’t be long before Saudi Arabia shoots themselves in the foot and goes broke due to their refusal to decrease oil production. They may have started the oil war, but the US Shale Oil Industry is going to finish it. Saudi has gone from a budget surplus of 12% of GDP in 2012 to a projected deficit of 21.6% or roughly US$150 Billion in 2015. They can only keep their heads above water for so long at this pace. Saudi needs crude at US $106 a barrel to balance its budget, way higher than a once needed $69 a barrel back in 2010.

What the US operators need to do to bury OPEC 6 feet under the ground is ramp up production to further flood the market and drive the price of oil down. When you read the mainstream media, they talk about what number is needed for break-even numbers when drilling for oil. The main stream media has been wrong all along. The numbers they report are numbers that consist of unproven oil grounds. The thing is, in North Dakota and Texas, the operators have already pinpointed the sweet spots of the oil plays. They know where to drill to squeeze out the greatest amount of oil at the right price. The true break even numbers haven’t even been reported yet. Let’s just say the operators are still making money even with oil in the $30 range, and there’s still wiggle room.

Saudi Arabia and OPEC will eventually fall at the hand of their own weapon, oil. The US has more oil than it knows what to do with at this time. We will be the dominant force in the oil and gas industry, it’s only a matter of time. Our economy is much more diverse as opposed to Saudi Arabia. Their economy relies on oil. We do not. Who do you think will last longer? Sit tight, and watch the events unfold. America is the new powerhouse in the oil and gas industry, thanks to the shale oil revolution.

The sooner the price wars are over the better. When Saudi and OPEC wave their white flags, the markets will steady, and the prices will rise. We will go back to an all out wild west oil boom across America. It’s not a matter of if at this point, it’s a matter of when.

[Ruffdaddy]

Too good to be true? Should I buy my raptor before it's too late?

http://www.oiljobsnd.net/u-s-shale-o...-against-opec/

Yes...too good to be true. Its more complex than that bs makes it. If saudi cut production to ramp up prices the US wouldnt have lost nearly 2/3rds of the rigs drilling at the peak.

I doubt we see triple digit oil anytime soon. Shale has proven just how quickly production can happen. In saying that, the break even price varies so much from rig to rig, formation to formation and all other kinds of variables so we cant give one price.

If beating saudi means dropping the price per barrel enough to kill their balance sheet, then sure...we will have that battle won for awhile. But look around at the increasing number of shops shutting down here and canada. A lot of people here have lost more than saudi ever will.

People keep throwing out an unbalanced budget as if the US has had one in the past several decades.

Maybe i should ask you...what does winning mean to you?

[Strychnine]

This week's count is out early due to Christmas.

-9 total since Friday.

-3 oil
-6 gas



And the first bbl (600,000 actually) of US oil for export has been sold already. Will be loaded onto a ship the first week of Jan in Houston.

[SBFORDTECH]

This week's count is out early due to Christmas.

-9 total since Friday.

-3 oil
-6 gas



And the first bbl (600,000 actually) of US oil for export has been sold already. Will be loaded onto a ship the first week of Jan in Houston.

Only took 4 days for WTI to sell higher than Brent.

[Strychnine]

Only took 4 days for WTI to sell higher than Brent.

The gap is still closed.

WTI: $36.09
Brent: $36.53

Rig count was down last week -2.
-2 Oil
0 Gas


Texas Alliance of Energy Producers just posted this:

Industry Job Losses Worse Than Previously Thought

The Texas Petro Index was down again in September–with all indicators except crude oil and natural gas production volumes showing year-over-year declines–falling to 226.2, nearly 28 percent less than in October 2014 when the TPI hit a record 313.0.

But Karr Ingham, the economist who created the TPI and updates it monthly, cautions that actual job losses in the state’s upstream oil and gas industry could be as high as 56,000 far exceeding expectations.

“We use two data sets from the Texas Workforce Commission’s Current Employment Statistics (CES) series in calculating the TPI, because it is monthly and timely and reflects the industry standard for reporting monthly employment data,” Ingham said. “The CES, when a seasonal adjustment is applied, indicates the upstream oil and gas industry lost about 30,000 jobs through September since peaking in December 2014 at 305,000.

“That’s certainly significant enough, but it appears to be inaccurate when compared to the TWC’s Quarterly Census of Employment and Wages (QCEW), which measures jobs at the county level and sums up by industry.”

Evidence of steeper job cuts than indicated by the TPI can be found in the QCEW most recent estimate of upstream oil and gas employment, which totaled 258,200 as of the end of the second quarter 2015. That was about 47,800 fewer jobs than the 306,000 jobs indicated by the QCEW at the end of fourth quarter 2014, which was “amazingly close to the 305,000 jobs estimated by the TPI in December,” Ingham said.

“The loss of nearly 48,000 jobs in just six months is staggering, and again, that only represents industry employment loss through the second quarter of this year,” he said.

Although the TWC has not yet reported QCEW data through the third quarter, Ingham said, “It is certain that job losses have continued.” Extrapolating from the QCEW estimate at the end of second quarter, Ingham conservatively estimates upstream oil and gas job losses at 56,000.

“When the upstream oil and gas economy in Texas entered into the current contraction, we estimated jobs lost over the length of the downturn could total 40,000-50,000 jobs,” Ingham said. “We now appear to be well beyond that estimate, and the end is not is sight.”

Also, if anyone cares to read it, here's the American Petroleum Institute's 2016 "State of American Energy" report (16 pgs)

[Gasser64]

Hows butane doing? Specifically

[Strychnine]

The beatings will continue until morale improves.



WTI touched $32.10 Thursday morning

Saudi Arabia is thinking about doing an Aramco IPO.

Officials cited by The Economist say Saudi Aramco's value is “trillions of dollars." Launching an IPO of the company would be one possible step in King Salman's recently announced plans to work toward a balanced budget and allow greater access for global participants to the Kingdom's economy.

Saudi cut ties with Iran this week.

Black Swan Number One?

As we have written previously, the Saudi-Iran rivalry under girds much of the geopolitical volatility in MENA (see analysis below). Sunday evening's news underscores this volatility, and is an indication that Saudi King Salman is stepping up his efforts to reassert Saudi dominance in the region, counterpoised to Iran. This weekend's events could also portend one of the Black Swan theses recently written about: war in the Middle East as a potential cause for oil to rise in 2016.

The geographical implications of the Saudi-Iran conflict are also engendering nervousness in the global oil market. Bloomberg noted in a Monday report that the source of this tension is that both countries are located on either side of the Persian Gulf, the world's largest concentration of oil tankers.

Swift Energy became the 40th North American E&P to file bankruptcy in the past year.

Sixteen of the bankrupt companies were based in Texas. Most of them were small, and didn’t play a central role in the nation’s energy surge over the last few years. But together they had $13 billion in debt.

The top 59 E&Ps in North America have a combined debt of $200 billion now

reviewed the balance sheets of a group of 59 NAM-focused Independent E&P companies, adding up their debts. This exercise captures the majority of the US shale E&P business. US shale entered 2015 owing $200bn of total debt. Rewind to 2005, and the shale players only owed lenders $50bn.

Projected Regional Leverage Ratios

[Strychnine]

I'll just go ahead and stop until things turn around in a few years.

Rig count this week -34
-20 oil
-14 gas


Over and out.

[SBFORDTECH]

I'll just go ahead and stop until things turn around in a few years.

Rig count this week -34
-20 oil
-14 gas


Over and out.

Wow...

[jw33]