Idle Chatter -- April 17, 2015

Don sent me the link yesterday. My unedited, immediate reply:

From the article:

"OPEC is now collectively producing nearly 31.5 million barrels per day, well above the cartel’s stated quota of just 30 million barrels per day. The enormous increase in production...."

1.5 / 30 = 5% -- that's hardly an "enormous increase."

And then this: ".... shale operations ramp up and down much quicker than conventional drilling. But they don’t turn on and off that quickly."

Actually, I think the shale oil can be ramped up pretty quickly, considering there are 900 wells in the Bakken and 1400 wells in the Eagle Ford waiting to be fracked. The first three to six months is huge production of a shale well....and if there's a risk of $150 oil, NDIC will waive flaring rules and conditioning rules (the latter have almost no impact regardless).

For newbies: I bet they can frack 200 wells a month in the Bakken, maybe more, if given the green light. 200 new wells x 10,000 bopd for the first two months = 4 million bbls cumulative in new crude oil a the end of those first two months, or 150,000 bopd. Additional. 10,000 bopd for the first two months is on the very low side for the best of the best wells now being drilled in the sweet spots of the Bakken.

At 300 wells, 20,000 bopd for the first two months, 200,000 bopd in new oil. 

This gives me an opportunity to comment on an earlier article. On April 16, 2015, I posted:
Bloomberg is reporting:

Saudi Arabia boosted crude production to the highest in three decades in March, with a surge equal to half the daily output of the Bakken formation in North Dakota.

Perhaps I'm a bit sensitive, but to me that has the sound-bite of an east coast writer who sort of misses the point of the Bakken. All that extra production in Saudi Arabia will generate additional revenue for a handful of princes in the kingdom. Meanwhile, the Bakken is creating more and more millionaires among every-day people day in / day out.