It is indeed interesting timing... I think with American oil firms likely doing 50/50 with Venezuela oil firms when ever Maduro is ousted, will keep the price of oil artificially low mainly for political reasons, interesting articles about US Shale well ponzi
https://www.resilience.org/stories/2019-01-27/has-u-s-shale-oil-entered-a-death-spiral/
Tens of thousands of shale oil wells drilled prior to 2014 now make less than 30 BOPD of rod lift and the number of all wells (2009-2018) that produce less than 50 BOPD on rod lift is alarming (shaleprofile.com, IHS). "Terminal" decline rates range from 10% annually to even 15% or higher in the Permian (EIA). There are excellent comments of shaleprofile.com, Bakken, that suggest increased productivity is not resulting in higher EUR's or greater recovery factors of OOIP. The Eagle Ford is over the hump and on the down hill slide.
The EIA and others suggest that annualized decline in American shale oil basins is 3MM BOPD and it is currently taking 75% of wells drilled in the US (10,000 +/-) to simply offset this decline each year. To do this the shale oil industry has, and will continue to have to outspend revenue by relying heavily on credit/debt.
Productivity is not the same as profitability and shale oil extraction is a business. For the business to succeed and be sustainable, it must be profitable. The shale oil industry has NEVER been profitable. It must pay down its massive long term debt. The weighted price of WTI (Cushing) for 2018 was $69 and change; if you can't grow production, deleverage debt, show profit and pay dividends to shareholders at those kind of prices, you don't belong in the oil business. SEC K's will be out soon; we'll see.
The scam was to dump the fracking companies on unsuspecting pension funds, and run off with the profits before the big collapse but the information is already leaking out. Those shale fields are big but unfortunately they are just chock a block full of shale and the oil exists in the gaps between the rubble and there is not much oil there. Add in something like 6 to ten times the drilling for each well, the horizontal drilling radiating out from the centre and they are real expensive, huge debts, hidden behind new production as existing production fails, the race to drill wells faster than existing ones fail
https://www.resilience.org/stories/2019-01-27/has-u-s-shale-oil-entered-a-death-spiral/
Tens of thousands of shale oil wells drilled prior to 2014 now make less than 30 BOPD of rod lift and the number of all wells (2009-2018) that produce less than 50 BOPD on rod lift is alarming (shaleprofile.com, IHS). "Terminal" decline rates range from 10% annually to even 15% or higher in the Permian (EIA). There are excellent comments of shaleprofile.com, Bakken, that suggest increased productivity is not resulting in higher EUR's or greater recovery factors of OOIP. The Eagle Ford is over the hump and on the down hill slide.
The EIA and others suggest that annualized decline in American shale oil basins is 3MM BOPD and it is currently taking 75% of wells drilled in the US (10,000 +/-) to simply offset this decline each year. To do this the shale oil industry has, and will continue to have to outspend revenue by relying heavily on credit/debt.
Productivity is not the same as profitability and shale oil extraction is a business. For the business to succeed and be sustainable, it must be profitable. The shale oil industry has NEVER been profitable. It must pay down its massive long term debt. The weighted price of WTI (Cushing) for 2018 was $69 and change; if you can't grow production, deleverage debt, show profit and pay dividends to shareholders at those kind of prices, you don't belong in the oil business. SEC K's will be out soon; we'll see.
The scam was to dump the fracking companies on unsuspecting pension funds, and run off with the profits before the big collapse but the information is already leaking out. Those shale fields are big but unfortunately they are just chock a block full of shale and the oil exists in the gaps between the rubble and there is not much oil there. Add in something like 6 to ten times the drilling for each well, the horizontal drilling radiating out from the centre and they are real expensive, huge debts, hidden behind new production as existing production fails, the race to drill wells faster than existing ones fail
