Saturday, April 15, 2017

A Recovery Rate Of 25%? -- Oilprice.com -- 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 oilprice.com 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 oilprice.com 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. 

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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

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Putting Things Into Perspective
Champions

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.

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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.


8 comments:

  1. ZONE XX (60/2560H)
    TOWNSHIP 150 NORTH, RANGE 94 WEST, 5TH PM ALL OF SECTIONS 8, 17, 19 AND 20.

    EOG has drilled 8 to date in this L shaped 2560 in Spotted Horn field. No new permitted wells as of yet.

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    1. Thank you, much appreciated. To me it is simply amazing how many wells are being drilled in any given drilling unit. When the Bakken boom began a lot of folks thought there would be only one well in each spacing unit, but it appears that if one has a well in one drilling unit, they will have many more wells than that down the road.

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  2. Note above is probably the only thing the Spurs and Trailblazers (my team) have in common in the playoffs. Have grudgingly admired the "Spurs way" for years. While my PDX Blazers have floundered, frequently, in the land of "One-round-and-done."

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    1. At least one other things the Trailblazers and the Spurs have is incredibly great fan loyalty. Partly helped by only professional sports team in each of those cities (that's true in San Antonio; I think that's true in Portland).

      Other teams have incredibly good fan base, also, but not all.

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  3. Portland does have the Timbers, (MLS), but soccer fans and hoop fans are like oil and water.
    Portland fans, in general, are extremely loyal.

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    1. That's what I thought about Portland fans; my sister lives there and says the same thing.

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  4. Maybe too optimistic??? How much of OOIP in Bakken is spread out over hundreds of square miles in fringe areas. My guess is at least 25 percent will never get drilled. But as MO in fringe area I hope I'm wrong!

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    1. You are absolutely correct about me being a bit "too optimistic." That's why I included "inappropriate exuberance."

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