CITI's Energy 2020: Too Optimistic -- Re-Posted

I am again posting this link to Oilprice.com: The No 1 Source for Oil & Energy News.

[For some reason, the link frequently breaks. If it's broken again, cut and paste this URL: http://oilprice.com/Energy/Energy-General/Citigroups-Overly-Optimistic-Energy-Projection-for-2020.html]

I was impressed with the amount of information about the Bakken in this article, comparing it to other fields/other basins around the world.

And then this: of the 150 companies drilling in the Bakken, and some of the biggest being Continental Resources, Whiting, Statoil (BEXP), EOG, and Hess, who does the author single out to demonstrate a point? Fidelity.

Wow, who wudda thought.

The author mentions that Fidelity is operating five rigs. Who am I to argue? Up until several days ago I thought Fidelity had two rigs, and then we thought Fidelity hit a milestone late last week/early this week reporting four active rigs. Whatever, four or five.

It is instructive to this argument to note that Fidelity E&P has just celebrated reaching a production record of 3,500 bd in the Bakken which it derives from 58 wells. As they continue to run 5 rigs, and have been able to drill a long lateral horizontal well in 28 days they should be able to increase production this year, but they are fighting the rapid decline in existing wells, which requires that more wells be drilled every year, and that (as the better spots become drained) so the drilling activity must accelerate to sustain existing production.

It's an interesting article with several graphics for those so inclined.