http://www.fool.com/investing/2016/08/24/this-oil-play-is-scorching-hot-right-now.aspx?ref=yfp

Link no workie?

Seems to be up now.

Link worked for me.

You must have caused so many people to hit the site that thier server went down.

But yes, over to block 31 and Coyonosa, it has been hot. Glad I'm not there right now.

I've got some co-workers out in Midland right now and it's a very busy field!!

I still say we don't need ANY foreign oil, we have more then enough here to last MANY years!

Seems like the Permian just keeps on keeping' on!

That field has produced a lot oil.

Oilfield vehicle traffic on highways between San Angelo and Pecos has jumped up significantly in the past month.

http://www.bizjournals.com/houston/...sin-sees-double-digit-growth-in-rig.html

The Permian produces 2M bbls/day. Only 10 entire countries produce more oil daily. My buddy who runs Schlumberger's pumping service division here in Midland says there are nearly 400 DUC's here........Drilled and UnCompleted well bores.

There were an estimated 2,000 DUC wells in the US the last time I heard. What people don't realize is that this down turn has made oil companies (and service companies )even better at what they do. Wells that were drilled in 30 days 2 years ago are now down to 14. Couple that with a huge cost reduction on goods and services, and they can make it. Now, all of the associated costs will increase as the market recovers, but the efficiency gained in the last 2 years won't be lost. That could mean it will only take 2/3 of the rig count to drill the same number of wells.

But what the hell do I know....

You obviously know quite a lot.

Oklahomahunter
I am with you on this. Where there "is a will there is a way". I just think the Saudies may have shot their own foot with the play they started two years ago. I do have a feel for what is going on ,lost my father , he was a derrick man, step father was an oilman and other family members
were also into the oil patch. Cheers NC

seeing a little uptick in demand here for various parts, hope it continues

Yes, there's been a slight upturn over the last 45-60 days. It hasn't taken long to exhaust supply of certain services (which are probably the hardest hit) so they will be the first to have the ability to push price up. Then, as long as oil price creeps, the cycle begins again.

Oilfield work there is tough, hot summer and cold winter.

Do you have an idea what the average terms are on these leases? Are they getting full 7/8 leases, for instance?

Marathon paid in excess of $40k per acre for some of their Eagle Ford lease. Most was $25 or $30k per acre, but in order to secure certain drilling units, they stepped up.

Gene, the contracts of leases vary widely. They may be for several years, but many are including a clause that stipulates that the operator must drill and complete "X" number of wells in order to hold the lease. Otherwise, the lease option becomes avl. to be leased again.

That accounts for the rig count in some areas.

While it may not be profitable for companies to drill now, they have to do so to hold on to their lease holdings, or risk losing them.

Must be the reason gas went up 20+ cents here last couple weeks Gouging robbing bastads !!!!!! S O B's one and all

Maybe if you'd find an outlet to buy only Saudi gasoline you'd find that happiness that seems to elude you.

You bitch when the price is up. You bitch when the price is down. You relish Americans being out of work in the oil industry.

Why don't you make a sincere statement about all this and sell your cars and get you and your wife and kids a bike?

Or is all you can do is bitch?

Wrong arse hole never bitch when it is down !!! I would just like to see some real reason it is going up??? Sure is good to see people not spending their life savings just to drive to work everyday and farmers not spending a whole crop on fuel

Since it is late August, I'm pretty sure it is because the refineries are switching to winter blend gasoline, so stocks of summer blend are dwindling. It's called supply and demand, with goverment mandated regulations on when you have to sell what.

Don't try to be logical with the people like mohick who know nothing about the oil business but still have all of the answers. It ruins all of their conspiracy theories and makes them pout.

It's just hard to believe there's that much oil under the earth's surface. powdr

Yes, can you just imagine the amount of global warming it took to put all yhat oil and coal in the ground for us?

The project I worked in the Caspian Sea, Kashagan, holds 13 billion barrels of recoverable oil. Once fully developed production will be almost 400k bbl/day. This from just one field.

Those off shore plays better be prolific, considering what it costs to get that crude to the market, huh Ed?

That's what makes the Permian so cost effective compared to most inland plays.

Alberta's oilsands plays produce just under 3MM/bbl/day at current production volumes. The rest of Canada adds about 1MM/bbl/day. (Source from CAPP website found here: http://www.capp.ca/publications-and-statistics/publications/282894)

The prevalence of shale oil production in the US means that while gasoline prices are likely going to fall or remain stable, diesel prices in the US will likely go up. You are able to get far more diesel per barrel of heavy oil than you can from light shale oil. It all has to do with the number of long chain hydrocarbons available in the product. Diesel is longer chain than gasoline. Shale oil has much more short chain hydrocarbons than heavy crude.

I applaud the US for striving to be energy independent. If I was in their shoes I would try to do the same. That said, it really has put a hurt on the Canadian oil and gas business as we ship nearly all our production stateside. Our current federal and provincial governments haven't helped things either by not getting pipelines built that can supply other markets. Refineries on the east coast import oil from the middle east instead of using Canadian oil because Quebec doesn't want a pipeline through their province and they hold the political clout to hurt any party that lets it happen.

SS

I leased a few spots and drilled them back in the 70's and early 80's so I'm familiar with the variation in lease terms. My question should have been phrased more specifically.

The best deal possible in Texas is an 87.5% percent lease since , by law, 1/8 of the production must be awarded to a named royalty owner. But royalty owners can demand more and then middlemen can hold an overiding royalty interest, so some leases I've known were only 75% to the working interest. I never drilled less than an 80% lease myself.

Considering the huge prices being paid, I just wondered if most of it had production already but had open acreage, or if it was land that had never been leased and what sort of working interest they might be getting.

I am concerned that after drilling all this oil America might actually. ..tip....over.....

LOL


You would make a dang fine Senator with a D by your name!!!!

While I won't get into the details about how the Italians (AGIP who I was seconded to) don't know their azzez from 9th Street on project management when I started there the project cost was forecast at $30B. When I left 2 1/2 years later it was $52B and an easy 5 years behind schedule. Upon startup, the pipelines to shore leaked so all was shut down for replacement that still is not complete some 2 years later. The expats named it CashAgain...

Sam,

I was the engineering manager on the Shell Upgrader Expansion project in Fort Saskatchewan 2004 - 2009. Given the "cost of business" there during that boom and the province re-looking at their royalties it was clear that the project was a bad investment. I would be surprised if we are breaking even up there.

[quote=EdM]Sam,

I was the engineering manager on the Shell Upgrader Expansion project in Fort Saskatchewan 2004 - 2009. Given the "cost of business" there during that boom and the province re-looking at their royalties it was clear that the project was a bad investment. I would be surprised if we are breaking even up there. [/quote

EdM
Small world isn't it, I lived in FT. Sask after my Dad was killed in 48 while working as derrick man and my step father was western regional mgr. for Shell for a long time prior to that.
Cheers NC

I will never forget one Italian machine tool that a previous employer bought, dedicated to making one specific family of high volume parts. It bent the steel rod with a series of servo motors. The motors were sized barely big enough to do the job, no reserve capacity. If the wire was slightly harder than spec, it would just stop in the middle of the cycle, with no error message. I inherited the project from a plant that had closed, and it about drove me nuts trying to figure out what was going on with it. It was incredible to me that you build a large expensive machine, with zero safety factor or reserve capacity, but apparently that was an Italian thing.

The question is did the manufacturer of the equipment undersize the motors, or did the purchaser of the equipment choose a machine barely suitable for the job to save money?

Sooner or later there will be at least one and maybe 2 new pipelines coming down from Canada. I see this as only adding to the excess surplus. I suppose it can be called "reserve" and only a minimum amount processed.

This is good because it will be predominantly Canadian oil and not ours or Saudi's but I only see this as putting Canadian oil workers out of a job an not Americans but the issues will be the same for Canada as it is here.

Unless we can bring back some factories from China. I'm sure that will give them a case of the @ss.

kwg

Precisely why I always thought the Keystone Pipeline Project made little sense for us, contrary to most here... I was always looking for independence, no?

I could care less about the Saudi's but I would like to keep the Canadians on friendly terms. I guess as long as there is a Canadian reserve of oil, the politicians can no longer hold us hostage about no north American oil and we have to buy from people who don't like us like they have done to us since the 1970's. Gawd I hate liberals and tree huggers.

kwg