Quote:
Originally Posted by Izzle
Oil hovering at $40. It briefly dipped below $40 this morning. News suggest oil oversupply and rigs coming back online are not helping. Looks like single meat for days.
|
US shale drillers have apparently improved more than expected:
http://www.telegraph.co.uk/business/...-a-standstill/
Quote:
|
North America's hydraulic frackers are cutting costs so fast that most can now produce at prices far below levels needed to fund the Saudi welfare state and its military machine, or to cover Opec budget deficits.
|
Quote:
The 'decline rate' of production over the first four months of each well was 90pc a decade ago for US frackers. This dropped to 31pc in 2012. It is now 18pc. Drillers have learned how to extract more.
Mr Sheffield said the Permian is as bountiful as the giant Ghawar field in Saudi Arabia and can expand from 2m to 5m barrels a day even if the price of oil never rises above $55.
His company has cut production costs by 26pc over the last year alone. Pioneer is now so efficient that it is already adding five new rigs despite today's depressed prices in the low $40s. It is not alone.
The Baker Hughes count of North America oil rigs has risen for seven out of the last eight weeks to 374, and this understates the effect. Multi-pad drilling means that three wells are now routinely drilled from the same rig, and sometimes six or more. Average well productivity has risen fivefold in the Permian since early 2012.
|
Bad news for Alberta, unfortunately:
Quote:
|
The losers are high-cost projects elsewhere: off the coast of Nigeria and Angola, in the Arctic, or the oil sands of Canada and Venezuela's Orinoco basin. Roughly 4m to 5m barrels a day of future supply has been shelved around the world.
|