Saturday, June 13, 2020

An Oasis Rolfson Well To Hit 500K Crude Oil Cumulative This Summer -- June 13, 2020

The well:
  • 31486, 1,752, Oasis, Rolfson N 5198 14-17 11BX, Siverston, 50 stages, 4 million lbs, t9/16; cum 496K 4/20;
Recent production, typical Bakken profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-202030257925853425219872122899
BAKKEN3-2020312548256136892388322483718
BAKKEN2-20202924292432285220796189301228
BAKKEN1-20203130433039352426546240151849
BAKKEN12-20193135543560362427514247682064
BAKKEN11-2019303352331535022779626587549
BAKKEN10-20193137353789389926546233182546

2 comments:

  1. No surprise with the decline in production of oil in USA.
    -Shale wells decline rate of 6-8% per month.
    -Rig count down for horizontal rig count down by 70+ percent
    -Horizontal wells deplete ~70% on first year on average.
    -Some wells shut in due to low spot price. Generally transport costs are fixed by pipeline increasing breakeven price to oil producer.
    -Bankers will not be willing to loan $$$ to oil production companies unless you see solid $50+ oil prices.
    -Shale oil production is more than 50% of oil production in USA.
    -Large and small oil are cutting spending for shale, but keeping the long term projects going. One can drill and complete a shale well in months, not years.

    Oil in storage is no surprise.
    -Looking at EIA data, most of oil in storage increase is on Gulf Coast PADD 3. Other areas are even to down. https://www.eia.gov/petroleum/weekly/crude.php#menu
    -IMHO the contango purchased oil is being delivered to California and Gulf coast.
    -Tanker rates have decreased for both spot and long term charters indicating that the contango oil is being delivered.

    IMHO price of crude should be in the $50s in a few months due to contango deliveries and continued reduction of oil production due to drilling downturn. Before shale oil a legacy oil will drilled vertically would typically decline 10-15% per year, unlike 70% for a shale well.

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    Replies
    1. Looks about right.

      I remember a long time ago, on the blog, I opined that $50/bbl seems to be the sweet spot -- good enough for shale operators; okay for consumers (price of gasoline); and not particularly helpful to the Saudis.

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