From Seeking Alpha:
Rigzone is reporting:
- A new EIA report underscores the remarkable comeback of the Permian Basin, which boomed in an earlier era, faded and now leads the U.S. in oil production. [My hunch is the "Peak Oil" crowd used the Permian as their poster child some years ago.]
- Daily crude oil production in the Permian, which lies under much of west Texas and part of eastern New Mexico, has increased from a low of 850K barrels in 2007 to 1.35M barrels last year.
- The increased production is concentrated in six low-permeability formations: the Spraberry, Wolfcamp, Bone Spring, Glorieta, Yeso, and Delaware.
Rigzone is reporting:
Six formations within the Permian Basin region in Texas and New Mexico have provided the bulk of the basin’s 60 percent increase in oil output since 2007, positioning the Permian as the largest crude oil producing region in the United States, the U.S. Energy Information Administration (EIA) reported Wednesday (July 9, 2014).
Permian Basin oil production has grown from a low point of 850,000 barrels per day (bpd) in 2007 to 1,350,000 bpd last year, EIA reported. The growth has largely resulted in oil production in Permian Basin counties exceeding production from the federal offshore Gulf of Mexico since March 2013.
Last year, the Permian Basin accounted for 18 percent of total U.S. crude production. The recent growth in Permian crude production has come primarily from six low-permeability formations, including the Spraberry, Wolfcamp, Bone Spring, Glorieta, Yeso, and Delaware formations.
The Spraberry, Wolfcamp and Bone Spring formations have played a significant role in boosting Permian production, comprising almost three-quarters of the increase in Permian crude production.
Production from these formations have driven the increase in horizontal oil drilling in the Permian in recent months, EIA reported earlier this year. Collective production from these formations has grown from approximately 140,000 bpd in 2007 to an estimated 600,000 bpd in 2013; as a result, their share of total Permian production has grown from 16 percent to 44 percent.
According to the EIA, initial well production rates from Spraberry, Wolfcamp and Bone Spring wells are comparable to those in the Eagle Ford and Bakken shale formations.
This is really quite a story on so many levels. I remember someone telling me some time ago that the Permian was a dying oil "field." Most remarkable is how fast the industry took lessons learned from the Bakken and the Eagle Ford and used them in the Permian.
But this is the story line that jumped out at me: oil production in Permian Basin
counties exceeding production from the federal offshore Gulf of Mexico
since March 2013. Earlier this week, President Obama noted that federal lands really were contributing less to the US energy security than non-federal land. Here again, President Obama has noted it. The EIA is his agency. Quick: name the US Secretary of Energy.
RBN Energy looks at utilities buying up natural gas acreage.
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Utilities Buying Up Natural Gas Acreage
RBN Energy looks at utilities buying up natural gas acreage.
If a company expects to consume large volumes of natural gas for decades to come, why not remove at least some price risk by acquiring a working interest in gas production assets? Florida Power & Light (FPL), which burns more gas than any other US electric utility, recently asked regulators to permit the company to co-develop up to 38 gas production wells in the Woodford Shale with PetroQuest Energy, and to establish rules to let it make other, similar investments in the future.
FPL is not first in its plan to acquire gas interests as a physical hedge; leading fertilizer and steel companies already have taken that plunge, with positive results. Today we examine what could become a trend: Major gas consumers buying a piece of the gas production action.
US shale gas production is at record levels and rising and the forward gas curve (for Henry Hub futures contracts on the CME NYMEX) suggests gas prices will remain moderate and stable for the foreseeable future. Still, there is always a risk of gas-price volatility in the short term (this past winter’s polar vortex-related price spikes being a recent example), and over the long term increasing demand for gas (new petrochemical capacity, more LNG exports etc.) may well put upward pressure on gas prices.
An understandable desire to mitigate such gas price volatility risk has led FPL—one of the nation’s largest electric utilities and gas consumers—to pursue a plan to invest in natural gas production assets to supply a portion of its expected gas needs. This plan is a physical hedge where the utility (FPL) takes ownership in producing assets to provide a source of physical supply in order to protect itself from increases in the market price for gas relative to the cost of production. FPL is paying a portion of the the cost of its gas “up front,” effectively fixing the price of gas for the duration of production from those producing assets.
Under the plan, which must be approved by the Florida Public Service Commission (FPSC), FPL would pay a share of development and operating costs for PetroQuest Energy gas production wells in a dry gas portion of the Woodford Shale play in Pittsburg County in southeastern Oklahoma, and receive in return a portion of PetroQuest’s interest production from those wells for shipment east.
Global Warming
On July 6, 2014, it was noted that the Great Lakes (US) were rising and scientists were unable to explain why.
We may have an answer: icebergs.
As water freezes, it expands. All things being equal, icebergs in Lake Superior would cause the lake to rise.
Over on Twitter, a photograph of an "iceberg" on Lake Superior. Memo to self: this photo was taken in July, 2014.
I didn't read the story, but I think Algore just made another speech on the crisis facing us which he calls "Global Warming -- An Inconvenient Truth" and for which he won a Nobel Peace Prize. More correctly, he shared in winning the prize with a panel. It is my understanding (and that of wiki's) that a prize may not be shared among more than three people. This is more than idle chatter because the "rule" that the prize may not be shared among more than three people resulted in at least three women being snubbed (their word, not mine) by not being award a Nobel Prize.
Quick: name the members on the panel that shared the prize with Algore. LOL.
[Note: of course the "stuff" about "icebergs" raising the water level in Lake Superior was "tongue-in-cheek," humor, and not to be taken seriously. However, I feel I need to point that out because at least one reader apparently did take that seriously, telling me that most of the iceberg is "above the water line" and thus would not contribute to the water level rising. I can't make this stuff up. (Memo to self: include a YouTube clip from the movie, The Titanic.) The "stuff" about women being snubbed by the Nobel Committee was noted by The Scientific American, so that must be true.]
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A Note to the Granddaughters
An important concept to consider: cognitive dissonance.
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