Saturday, April 15, 2017

A Recovery Rate Of 25%? -- -- April 15, 2017

This is a pretty good update (consider the source). The most interesting data point in the linked article has to do with the recovery rate from unconventional plays. I have two tags that haven't been used in years: recovery rate and recoverable.

When I first started blogging about the Bakken, I believe it was said that 1 - 3% of original oil in place was recoverable (with primary production). I believe it was Whiting who first suggested that operators were recovering significantly more than 3% of OOIP in the Bakken, and that was years ago. Now in the linked article:
But now the recovery rate, from 5 percent to 12 percent, may reach 25 percent in coming years.
It is not a matter of if but when this technological revolution extends across all oil-producing regions outside the Middle East. There is strong evidence of the aforesaid rising oil production as well, with the EIA forecasting a U.S. daily crude output of 9.2 million barrels this year. It is expected to reach 9.7mpd in 2018 (sic).
The rise in oil prices and U.S. production are directly proportional. This is one of the reasons that, as prices have recovered over past few months, we have witnessed a historic build in inventories.
In fact, the EIA is now forecasting that the US will produce 9.9 million bopd sometime in 2018. 

But back to the recovery rate. For newbies, look at this, posted almost two years ago:
Also note that is also calling this "fracking 2.0". We started calling it Bakken 2.0 quite some time ago.

Back of the envelope:
  • Bakken: 500 billion-bbl OOIP
  • 25% recovery = 125 billion bbls
  • Bakken/Three Forks: 400 million bbls produced / year (2015
  • 125 billion / 400 million = 312 years of production
  • 125 billion / 800 million = 156 years of production
  • we're into year ten in the North Dakota Bakken
If that sounds outrageous, a couple of reminders:
And these are just a few of many, many examples.

And conservatively, it was suggested some years ago, the Bakken would be producing oil until 2100.

Disclaimer: I am inappropriately exuberant about the Bakken. 

Putting Things Into Perspective
High Tech vs Low Tech

America drops the MOAB the other day. First reports: 16 members of ISIS killed. That has been updated to suggest that 94 members of ISIS were killed; no non-combatants killed.

Meanwhile, today it is being reported that a car bomb in Syria has killed 100 non-combatants

Putting Things Into Perspective

The Spurs have been in the NBA for 40 years. They have been in the play-offs 37 of those years. The next closes: Los Angeles Lakers, 35 years; and, then the Portland Trailblazers, 32 years. 

And the best part: their home court is the ATT Center. What an incredible investment made by ATT some years ago when the corporation was headquartered in San Antonio.

Putting Things Into Perspective
These 138JC Penney Stores Needed To Be Closed

The store closures will represent 13% to 14% of J.C. Penney's current store base and less than 5% of annual sales.

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