Hey guys I thought I'd share a chat I had with my CEO ( as we went to pick up his patio set ). I mentioned this downgrade in recoverable reserves to him and he said that the formation was probably too tight to drill - so in terms of being recoverable if oil goes higher in price that remains to be seen. You may need new technology to come in and I'll add color to it.
Locally we are in a field called the cardiem which the horizontal drilling technology from the bakken was quickly transplanted in. Just recently 3 wells were drilled by 3 different companies and I assume much like the aforementioned monterey they found the formation unusually tight and the horizontal legs drilled were shorter than planned because they were just burning up bits. Also, all the wells were planned to have multi stage fracs and not all of them were successful. Again, too tight. All the wells are producing but the point is, is that they weren't as successful as planned and this directly leads to the notion that the tight oil boom although remarkable is nowhere near the known quantity we think it is because I got firsthand feedback that we're starting to run into brick walls here as evidenced by the 3 wells I just mentioned and no oil price will change that.
FYI - the wells here at least I'm told don't bleed off near as quick as I am told and all the gas is gathered. Oil companies get a flare permit for a few weeks after which the gas has to be gathered. This is how Saskatchewan is apparently going to go and to add credence to that I see a huge project bid for a gas plant sitting on a desk here.
[quote=canadian_dirtlump]Locally we are in a field called the cardiem which the horizontal drilling technology from the bakken was quickly transplanted in. Just recently 3 wells were drilled by 3 different companies and I assume much like the aforementioned monterey they found the formation unusually tight and the horizontal legs drilled were shorter than planned because they were just burning up bits. Also, all the wells were planned to have multi stage fracs and not all of them were successful. Again, too tight.
I figured I'd share an on the ground story.
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Thanks for sharing!
I love getting news from the ground.
The results you describe are far from unique…the Utica in Ohio and the Mississippian in Kansas also 'under-flowed' badly and were largely abandoned by all but the scrappiest and hungriest of players.
While (much) higher oil prices could change companies' appetite for these plays, it goes without saying that the returns to society will be lower than prior plays.
The basic message is that shale plays are still subject to geology and that until we drill we usually don't know. We don't know if the play will flow at all and, if it does, we don't know where the sweet spots are going to be.
So too tight, poor flows, unknown faults and fractures bleeding away the frac pressure, and other such realities are practically never talked about in the general media…
"The Wall Street Journal’s Russell Goldexplains that while there is still an enormous oil deposit below California, the crude can’t be tapped with existing technology and at existing prices.
At existing prices, you say? Light, sweet crude for delivery in July closed Wednesday at $104.07 a barrel on the New York Mercantile Exchange and many Americans are already miffed that the country’s astonishing glut of oil hasn’t made motoring any cheaper. The EIA expects a gallon of regular unleaded gasoline to sell at an average $3.48 in 2014 and $3.39 in 2015, so how much higher, they may ask, do prices have to go?
That depends where you are. The break-even price at the Bakken, Eagle Ford and other shale formations is way below crude’s current selling levels, Rigzone explains. Oil consultancy Wood Mackenzie says at least 70% of shale production would still be economically viable at $75 a barrel, and new drilling practices may push Bakken breakeven to as low as $58 a barrel."
Chris,
there's an issue much closer to your home to which I'd like to see your 3E's applied: the Kinder Morgan/Tennessee Gas Pipeline Northeast Expansion. Briefly, they are proposing a 36 inch pipeline to start at Wright,NY and extend 250 miles east to Dracut,MA. This will enter MA in Richmond and the move north to the small towns along the MA northern border. Plans have th pipeline crossing major rivers (Connecticut, Deerfield, Millers, Nashua and Merrimack, to name the most prominent ), as well as private lands, forests, farms, conservation lands, town owned land, state lands and state parks.
It seems that the high price of fracking is, perhaps driving this push to find a market. Massachusetts and New England don't need this gas; there are other, less costly ways of managing our high energy peak demands. But, the companies performing he fracking need to sell the gas. Interestingly, there is also significant dispute about how much gas there is in the Marcellus shale.
Care to share your thoughts on an issue so close to home? For more info, check out www.NoFrackedGasInMass.org.
[…] back on his website from 2014 one finds an article by Chris Martenson entitled “The US Shale Oil Miracle Disappears” and immediately preceding that one is an article by Gail Tverberg “The Shale Oil Boom is More […]