And we've come full circle. Back to the future. The Red Queen.
Link here. At link, click on the graphics for enlargement.
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North Dakota Oil Well Productivity
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Back to Body Counts
Back to Body Counts
We don't need 800. That's more than we had during and after the massive growth of 2018-2019. We haven't had that amount of rigs since 2015.
ReplyDeleteIn addition, the recent drop in production actually makes the Red Queen easier to deal with. What makes the Red Queen tougher is how much of the production is from recent wells (thus higher decline). This is why when you're in growth mode, it gets harder and harder. But also after a setback, it is easier. (Same thing occurred after the 2015-2016 decline.)
Shale Profile estimates about 400 oil rigs needed. There are a few rigs they don't track (AK, CA) but still something less than 450 oil rigs is plenty. We're actually not that far from it, now. And rigs are adding steadily.
Frac crews are actually very close to the level needed for flat production. Came back earlier--working on DUCs. But the rigs are coming back now also.
That fellow is a poor analyst...seen him make failed peak oiler forecasts previously, often.
Thank you; appreciate that. I agree with you.
DeleteI am not familiar with Alexander Stahel; not sure how I stumbled on his post. The good news: I'm posting another link to a Forbes article in a few minutes that should be interesting.
For a different view, see this post:
Deletehttp://themilliondollarway.blogspot.com/2021/02/bullish-on-frackers-countintuitive-view.html.
i was going to ask you what that meant, but i just replied to the tweet instead...
ReplyDeletewtf does "800 rigs (ex DUCs)" mean?
DUCs are at ~7000, completions at ~500 a month; the purpose of rigs is to add to the DUC inventory. to stem decline, completions must rise...
Yes, I did not understand that either; mixing apples with oranges: rigs vs DUCs.
DeleteI think what he means is that is the rig count needed, given constant DUC levels. Equilibrium rig count. I.e. absent a temporary depletion of an oversized DUC inventory. He's still wrong--it's 400 rigs, not 800. But I get what he's trying to say.
DeleteIf that's what he meant, he would be wrong there also.
Deletemy point was that the connection between rigs and production is tenuous at best; you can run rigs til the cows come home, but unless you're completing those wells, production doesn't change...
DeleteWow, wow, wow! Agree, 1000%. That's what I've been saying for years. It's the frack spreads, the number of wells that are being completed, not the number of wells that are drilled but then not completed.
DeleteThank you for your note: agree completely.