Link here.
Natural gas drilling has been the dominant energy story in the U.S. for the past few years, but oil is back with a vengeance.
For the first time in 18 years, the number of oil rigs working in the U.S. has exceeded the number of natural gas rigs, according to July rig data compiled by IHS-CERA, covering both land and offshore rigs.
By 2020 this surge in oil drilling could increase U.S. oil production by as much as 3 million barrels per day, Peter Stark, head of IHS-CERA's industry relations said Wednesday during a session launching the start of Summer NAPE, the semi-annual oil and gas prospects expo being held in Houston.
But:
The surge could slow if natural gas prices continue to rise and make gas projects more attractive -- which many analysts expect in the next year.
And this is why I commented on another post why it concerns me that a well in the Bakken can now cost $9 million:
In some cases drilling for oil can cost less than for gas. Tom Ward, CEO of SandRidge Energy, said his company is spending as little as $760,000 per well in the Central Basin field in the Permian, compared to several million per well in most shale gas fields.
John Christmann, head of Apache Corp.'s Permian Basin operations, said his company has acquired acreage in the Empire ABO field in the Permian, a field where no new wells have been drilled since 1984.
"In some cases you have million-barrel wells that have never had an offset drilled near them," Christmann said, seeing strong potential for large quantities of oil.
Bruce, a ton of natural gas is shut in by current prices. These are economic choices by companies with control over to open the valve, these wellls are paid for, we would have seen Supply at well above current record of storage had decisions to shut wells in had not been made. Drilling for OIL in shale will be more economic for some time.....if gas prices do rise, believe it when i tell you supply will be easily gotten from work done several years ago.
ReplyDeleteThat's interesting. Even in the oil patch, it seems individual wells can be turned on and off at will.
ReplyDeleteYes, "tons" of natural gas just sitting there, waiting for valves to be opened. One wonders if natural gas companies are just waiting for coal-fired utility plants to convert to natural gas.
Partially, but NG producers need transport application that is the big kahoona of applications, progress is coming on that front, and why not....Japans move is very significant in the long run, as NG from PNG will now find a ready buyer.....Team USA export will become the goal, we'll accomplish that with Lower Prices higher volumes. World needs much lower prices and most efficient producers will displace least efficient producers, hence NOPEC is a certainty.
ReplyDeleteHM4E heterogeneous matrix for energy is the prevailing bet for the next 50 years. HM4E is full of wild cards, some known some unknown, which are all about shifting applications between alternatives to bring efficiency to world energy requirements..