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re: $19 Crude. Wow.
Posted on 3/30/20 at 9:38 am to GREENHEAD22
Posted on 3/30/20 at 9:38 am to GREENHEAD22
It will be interesting to see natural gas price response this summer upon onset of hot weather. With cushing filling shutting in a ton of permian production alongside oklahoma and North Dakota a ton of associated nat gas is coming off the market. First time in ten years we may have more normal natural gas storage/supply versus constant oversupply. We'd be in even better shape on that side if it weren't for the lack of winter weather this year.
1
Posted on 3/30/20 at 9:42 am to GREENHEAD22
quote:
but wasn't their cash reserves almost double that last time they tried this?
I seem to remember that being close to correct. KSA said very similar things between 2014 - 2016 - "this is fine, we're comfortable with low prices, even lower for even longer is good for us" but they pissed through a ton of money to fund their expensive social programs (you know, police officers driving Ferraris) and cried Uncle after a couple of years.
If reports from the ME are to be believed (massive massive grain of salt), it was KSA that wanted to extend production cuts this time and Russia wouldn't play ball. I think the Saudis were trying to avoid another (worse) 2014 meltdown scenario when they elected not to cut at their November meeting that year, which kicked this whole bullshite off.
Posted on 3/30/20 at 9:43 am to cwill
Trump will be speaking with Putin later today regarding oil prices & trade.
Hopefully we get something positive out of this
Hopefully we get something positive out of this
Posted on 3/30/20 at 9:44 am to TigerDog83
quote:Wasn't in the industry then, so I can't really speak to how much they had stashed at that time.
Also, correct me if I am wrong, but wasn't their cash reserves almost double that last time they tried this? Grated their fiscal breakeven cost was higher then as well.
quote:Should be well situated given the storage situation & production we'll have through winter 2020-21 given hedged gas and oil volumes. Summer 2021 is when the market should tighten up if given normal weather.
It will be interesting to see natural gas price response this summer upon onset of hot weather. With cushing filling shutting in a ton of permian production alongside oklahoma and North Dakota a ton of associated nat gas is coming off the market. First time in ten years we may have more normal natural gas storage/supply versus constant oversupply. We'd be in even better shape on that side if it weren't for the lack of winter weather this year.
Posted on 3/30/20 at 9:48 am to Boring
SA wanted a 1.5MM b/d cut, and from many accounts, Russia believed there needed to be a 3.5-5MM b/d cut to come even remotely close to balancing given the coronavirus outbreak. To that end, Russia wasn't willing to provide their % cut needed to make that bigger figure a reality, so they told SA to pound sand. The March 14 Columbia Energy Exchange podcast is centered around this topic, and it's well worth a listen.
Posted on 3/30/20 at 1:11 pm to Louie T
Saudis have already bought shipping contracts on oil tankers at very high rates. They are willing to store the oil on tankers for awhile.
However, there are zero tankers left for this. Everyone is running out of storage.
Posted on 3/30/20 at 1:13 pm to GREENHEAD22
quote:
It is going to take years to push out all of the larger shale guys, SA cant keep their people contained that long. They will end strung like the Gaddafi.
Something like that. Many of the shale players hedged their price with future contracts, meaning they can still produce for three to nine months and make the numbers work.
Posted on 3/30/20 at 1:13 pm to Hammond Tiger Fan
quote:
Why in the hell is gas still sitting at $1.95 in Covington and Mandeville?
Hello taxman.
Posted on 3/30/20 at 1:30 pm to Louie T
quote:
Yup. Greenhead underestimates the $500B Saudi currency reserves. They can weather 18-24 months of this without question if needed, but the question is whether it will be needed and whether they can keep a united front long enough to weather it. Russia would have an even easier time dealing with it with well over $400B in reserves and easier budget balancing.
When oil reached $50 to 36 then to 50 from Oct 15 to May 16, SA was burning through $10 billion per month. Just an idea of that burn rate. Reserves fell from its high of $737B in Aug 14 to $529B at YE 2016.
Keep in mind SA was about to gain record high reserves due to oil prices of $80 to 120 to $80 from June 2009 to Nov 2014. Oil prices have not reached above $80 since Nov 2014, meaning no significant accumulation in currency reserves. SA has already cut is budget since then. Keep in mind, the populace is one well kept set of people. I think they hire people to wipe their arses.
Posted on 3/30/20 at 2:05 pm to Thecoz
quote:
shutting in wells is generally bad and can damage the down hole completion and if producing water allow it to work into places that hurt production ......this is not like turning your garden hose off and on
hopefully things change soon ....shale wells are expensive and decline curve steep....
I was always under the impression that unlike traditional Wells, fracking wells can be shut down with far less issues. The oil simply stays in the rocks until it is actually drawn out by the fracking process, so there is no worry of reservoirs collapsing when shut down.
Posted on 3/30/20 at 6:41 pm to Buck_Rogers
With all the downvotes and not one response to inform otherwise, I'll have to ask a few in the field why they say this. I noticed people on this board vote according to how they'd WISH things would go according to their investments.
Posted on 3/30/20 at 6:53 pm to Buck_Rogers
quote:
I was always under the impression that unlike traditional Wells, fracking wells can be shut down with far less issues. The oil simply stays in the rocks until it is actually drawn out by the fracking process, so there is no worry of reservoirs collapsing when shut down.
You still have to drill the well.
Basically, all "fracked wells" start with traditional horizontal wells.
Posted on 3/30/20 at 6:58 pm to JayDeerTay84
Yes, but the problems shutting them down doesn't effect the well so much as the reservoir. Start draining a conventional reservoir and you have to constantly consider what happens to the earth structure surrounding it when it doesn't have the oil to support it. Shale oil is in the earth structure itself, so the well can be drilled and capped then fracked as needed to extract oil.
This post was edited on 3/30/20 at 7:00 pm
Posted on 3/30/20 at 7:14 pm to Buck_Rogers
I dont think you find many conventional wells these days. like maybe around 20% or less of wells.
Posted on 3/30/20 at 7:23 pm to JayDeerTay84
You have to consider the point on the decline curve.
The reservoir pressure
If producing water and any head in the tubulars and skin damage to the completion
The time spent shut in and compaction to the propant
The impact of relative permeability and if the matrix is water wet or oil wet and impact of snap off in the pore system
Pretty sure old school Darcy’s law and production nodal analysis. Still applicable...
The reservoir pressure
If producing water and any head in the tubulars and skin damage to the completion
The time spent shut in and compaction to the propant
The impact of relative permeability and if the matrix is water wet or oil wet and impact of snap off in the pore system
Pretty sure old school Darcy’s law and production nodal analysis. Still applicable...
Posted on 3/30/20 at 7:42 pm to Thecoz
When I worked conventional wells I never worried about the earth structure...
Pore system ,fluids in them ,movable fines, clay, pressures,permeability...etc
They are grain to grain structures....
Unless abnormally pressured when the fluid picks up some of the lithostatic pressure or diagenesis creates fluid pressure during burial
Pore system ,fluids in them ,movable fines, clay, pressures,permeability...etc
They are grain to grain structures....
Unless abnormally pressured when the fluid picks up some of the lithostatic pressure or diagenesis creates fluid pressure during burial
Posted on 3/30/20 at 8:31 pm to GREENHEAD22
The shale plays can be shut-in for indefinite periods and resumed quickly. It’s not like a deep water play with millions or billions of sunk costs that almost forces continued operations. The Saudi’s can’t continue bleeding like they are much past YE2020. Going to be a wild year
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