Regular readers know my argument, "rigs don't matter (don't take that out of context)."
This is really quite fascinating.
Scrolling through social media tonight, it is obvious that the argument is not settled. I think this will be fascinating. It will be interesting to see what plays out over the next twelve months:
- global supply / demand;
- US supply / demand;
- North American supply by basin;
- Canadian supply;
- CBR vs pipeline
- whether oil companies focus on FCF or expansion;
- the price of oil one year from now;
- canary in the coal mine: whether President Biden grants a waiver for leasing on federal land in New Mexico;
- the DAPL;
- whether US shale can "turn on a dime" (I think it can)
- will rig counts increase appreciably?
- will pace of permitting increase in the Bakken in 2H21?
From social media tonight, not in any particular order:
1. 17 frac spread jump is huge.
ReplyDeletehttps://twitter.com/MOAR_Drilling/status/1370525944511926275
2. Still need more spreads though. We are up to 187 spreads. I estimate we need something like 200-225 spreads to hold steady at 11.X MM bopd. Mark at C6 says somewhere in the 200-230 is needed. But in any case, we are getting close to a stabilizing number of spreads.
3. Realize this is total frack spreads and does include a small amount in the gas basins. (But a small fraction of oil wells are not fracked, so it evens out.)
4. Right now, we are still drilling DUCs. But you can't burn the furniture forever. We need about 400-450 oil rigs, along with 100 gas rigs, to "hold serve". Right now, we are at 310 oil rigs and 90 gas rigs. Gas is pretty close to right number. Oil still needs to add rigs.
We need 400-450 oil rigs
Great note, thank you. I've brought this to the top of the blog so it's searchable (Google does not search comments?).
DeleteI think this is the most fascinating story for 2021: can US shale "turn on a dime?"
Again, thank you for a great note. We now have some benchmarks from which to follow.
Forgot to include the link:
Deletehttp://themilliondollarway.blogspot.com/2021/03/notes-from-all-over-early-saturday.html