[sameu]

yep and that's what all the optimists are forgettin

[AirlinePilot]

This is what i have been learning also. i have a "relative" in the field and they tell me it will take 18-24 months and possibly a good bit longer to ramp things back up once demand signals increase. I somehow even doubt that possibility as the turn in price which is needed for new production once it is shutdown is what causes any recovery to stall.

At some point the decline catches up with us no matter what we do.

[shortonoil]

Shannymara said:

$this->bbcode_second_pass_quote('', 'M')y industry friend (I can't say who or give any other details, sorry) told me the other day how so many of their projects are not profitable at current prices that a steep production decline is inevitable, and that even if we get a huge price spike there will be 1-2 year lag time to ramp it back up again.

[Schmuto]

Weird. I was just thinking about that this morning.

There used to be rigs running all over our area trying to suck out some NG and oil here and there.

And I kept thinking, "would that be profitable at 1/2 the price?"

Now I hear stories of some neighbors with gas/oil wells not getting paid by the energy companies. Perhaps overextended.

Oil is staying rock steady at 50.

The second most interesting stat for the oil industry that we will never know is - "how much per barrel does each well cost to operate, including all required inputs?"

Of course, the most interesting stat, which we also will never know, is, "what is the maximum rate of output of each well over the next 36 months."

Oil rock solid at 50.

It's going to be a very interesting year.

[copious.abundance]

The last time we had a significant decline in world oil consumption in the early 80's, it took at least 5 years for consumption to get back to its pre-decline levels. If it takes 1-2 years for companies to ramp up their operations again, so what? We might not need the extra oil for another 5 years.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'T')he last time we had a significant decline in world oil consumption in the early 80's, it took at least 5 years for consumption to get back to its pre-decline levels. If it takes 1-2 years for companies to ramp up their operations again, so what? We might not need the extra oil for another 5 years.

[Ludi]

$this->bbcode_second_pass_quote('Shannymara', ' ')They are scrapping projects, shutting down wells (gas and oil), and selling things off.

[AAA]

$this->bbcode_second_pass_quote('Shannymara', ' ')shutting down wells (gas and oil),

$this->bbcode_second_pass_quote('rockdoc123', '')$this->bbcode_second_pass_quote('', 'T')he last time we had a significant decline in world oil consumption in the early 80's, it took at least 5 years for consumption to get back to its pre-decline levels. If it takes 1-2 years for companies to ramp up their operations again, so what? We might not need the extra oil for another 5 years.

[shortonoil]

Shannymara said:

$this->bbcode_second_pass_quote('', 'T')his aspect of the situations reminds me a lot of some things MonteQuest used to talk about, too, as far as peak oil being primarily an economic problem (I might be misquoting him but I'm sure y'all can look it up if you are curious). So far it seems to me he was correct. The interplay between economics and geology, as well as geopolitics, is certainly interesting and complex.

[AirlinePilot]

$this->bbcode_second_pass_quote('AAA', '')$this->bbcode_second_pass_quote('Shannymara', ' ')shutting down wells (gas and oil),

[copious.abundance]

Some people here seem to be forgetting that as recently as the first half of last year and the last half of 2007 the world's oil producers "cranked it right back up when we needed it again" to the tune of 2+ million bpd in just about a year's time.

[AAA]

$this->bbcode_second_pass_quote('AirlinePilot', '')$this->bbcode_second_pass_quote('AAA', '')$this->bbcode_second_pass_quote('Shannymara', ' ')shutting down wells (gas and oil),

[AirlinePilot]

OF,

It's tiring pointing out the "obvious" to you time and time again.

Yes your chart shows production growth, but lets take a peek at what is happening NOW. In light of the largest credit/banking/lending crisis in modern times.
That is what is going to cause the delays my friend. You also had rapidly increasing oil prices prior to 2008 which bouyed the production end of things significantly. You have exactly the opposite going on right now with prices plunging farther than they ever did in the history of the industry!

Your obfuscation of data to fit your premise is blatant, it's childish, and it lacks credibility.

[AAA]

$this->bbcode_second_pass_quote('AirlinePilot', 'O')F,

It's tiring pointing out the "obvious" to you time and time again.

Yes your chart shows production growth, but lets take a peek at what is happening NOW. In light of the largest credit/banking/lending crisis in modern times.
That is what is going to cause the delays my friend. You also had rapidly increasing oil prices prior to 2008 which bouyed the production end of things significantly. You have exactly the opposite going on right now with prices plunging farther than they ever did in the history of the industry!

Your obfuscation of data to fit your premise is blatant, it's childish, and it lacks credibility.

[AirlinePilot]

$this->bbcode_second_pass_quote('AAA', '
')Do you work in the oil industry or are you reading this stuff online and consider yourself knowledgeable?

I do work in the oil industry. My family has been in the oil industry for over 50 years. I don't know everything but I personally know of many companies shutting-in production both oil and natural gas. My family owns WI and ORRI in wells and many are being voluntarily shut-in.

You cannot shut-in wells in every field because in some places shutting-in a well will actually damage formations, water-cut, etc... but many places you can shut-in wells if prices don't favor the operators and then when prices do favor the operator they can start producing the wells.

[copious.abundance]

AP, the only childish things here are your accusations.

1. Right now, OECD stocks are through the roof. It is going to take a while to work these down, during which time "low" prices (which, at $50 aren't even that low) are no big deal.



2. If and when those stocks get drawn down and demand goes up again, the price will go up again. Once the price goes up again, output can go up again, just as it has in the very recent past. Notice on this chart we have not just one but *two* periods when output increased by 2+ million bpd in a year or less.

[AAA]

$this->bbcode_second_pass_quote('AirlinePilot', 'A')fter 6 years of intensive study, I consider myself an expert on oil production and the markets involved in its delivery as a product.

[AirlinePilot]

$this->bbcode_second_pass_quote('AAA', 'D')o you realize that most major projects that were brainstorm ideas in early 2005 won't see any production for another 1-5 years?

Most major projects take 5-7 years to produce 1 barrel of oil and many take 10+ years. You can't build something like Thunderhorse in a couple of weeks.

[AirlinePilot]

I consider myself an expert compared to majority of the population. I've probably read enough books to fill several college level course with material on those subjects you so acrimonioulsy list! Reading leases, understanding mud samples, figuring out which type of pipe to order, or attending conferences doesn't give you any lock on the ability to think. Give me a break.

OF,

We are not talking about Stocks, we are talking about what is happening right now with production and how that changes moving forward in light of present and likely future economic and financial markets.