[ROCKMAN]

"Tell us how your company and owner wouldn't LOVE to have all that production Rockman". Actually we wouldn't...and haven't. The ROR isn't adequate for my owner which is why we've never played the shales. I've never cared about how much oil/NG I produced for my company...just the profitability. Not being a public company we couldn't make a profit by sucking in share holders and bailing on our stock options like Petrohawk did. With the $12 billion dump of their company I still consider them to be the most successful Eagle Ford player to date. Not that I don't know how to work that game...made lots on money in the past taking advantage of investors hyping themselves. I never misrepresented the situation. Just sat back and let Wall Street sell the sizzle. Last time I made such a bundle the company went bankrupt about 3 years after I bailed out. Had I had the capex behind me just before the shale boom started I would have bought every acre I could, drilled some seed wells, sold out and would be sitting on a nice warn island somewhere typing this message right now. LOL.

[John_A]

$this->bbcode_second_pass_quote('ROCKMAN', '&')quot;Tell us how your company and owner wouldn't LOVE to have all that production Rockman". Actually we wouldn't...and haven't. The ROR isn't adequate for my owner which is why we've never played the shales.

[vox_mundi]

Eagle Ford Shale Task Force Report

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Chapter 1: Workforce Development . . . . . . . . . . . . . . . . . . . . . . . 11
Chapter 2: Infrastructure - Roads, Pipelines, Housing . . . . . . . . . . . 21
Chapter 3: Water Quality and Quantity . . . . . . . . . . . . . . . . . . . . 35
Chapter 4: Railroad Commission Regulations . . . . . . . . . . . . . . . . . 53
Chapter 5: Economic Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Chapter 6: Flaring and Air Emissions . . . . . . . . . . . . . . . . . . . . . . 75
Chapter 7: Health Care, Education, and Social Services . . . . . . . . . . 87
Chapter 8: Landowner, Mineral Owner, and Royalty Owner Issues . . 99

[Subjectivist]

What do you conclude from this? I am not going to read 99 page reports without some motivation.

[ROCKMAN]

sub . Nor I. But here's a hint of the plain vanilla (IMHO) contents. I doubt there's anything misleading in the report...just rather dry facts:

Railroad Commissioner David Porter took office in 2011 believing that many of the divisive and challenging issues that arose during the development of the Barnett Shale could have been alleviated if the local communities and other involved parties had a forum for open and constructive dialogue. To ensure that development in the Eagle Ford Shale is not hindered by a lack of communication, Commissioner Porter formed the 24-member Task Force, assembling a group of stakeholders from various interests and areas of expertise. He has led the Task Force with a belief in the importance of protecting the health and safety of Texans and properly managing the state’s precious natural resources, while encouraging the oil and gas industry to efficiently and economically produce the energy needed to support the Texas and U.S. economies.

The Task Force is comprised of a diverse group of community leaders, local elected offi cials, water representatives, environmental groups oil and gas producers, pipeline companies, oil services companies (including a hydraulic fracturing company, a trucking company, and a water resources management company), landowners, mineral owners, and royalty owners.

[ROCKMAN]

Now that the production data is coming in and we've see the reality of the decline of drilling efforts in the EFS I figured it was time to update the subject matter. We're now well beyond some of the theories, speculations and silly predictions. And in another 6 months or so if oil prices stay at current levels we'll be able to kill the rest of the unrealistic optimism. I'm showing the stats for just one month...July 2014. But month to months variations are minor:

In July 2014: 125 Eagle Ford Shale wells began producing. I won’t use the July production because I can’t tell which wells produced for 31 days or 1 day: just the total monthly production. So I’ll use the August production for those wells and thus have a full 31 days.

First shocker for some folks: by May 2015 40 of those 125 wells were no longer producing. Those depleted wells averaged just 56,000 bo and 0.11 bcf. So much for the BS about increased efficiency and productivity from longer laterals, lots of frac stages and pad drilling. And the 89 wells still producing in July 2015: average recovery to date: 122,000 bo and 0.36 bcf. And how much were those wells producing during July 2015: 178 bo/day and 17,000 mcf/day. And the initial production rate of those 129 wells: 556 bo/day. And the average initial production rate of the 89 wells still producing in July 2015: 586 bo/day.

So to summarize: of the 129 EFS wells that began producing in July 2014: 40 wells (31%) suffered a 100% decline rate per year. Actually it's higher since not all produced for the entire 12 months but I’ll let that slide: there were 4 wells that stopped producing after a month or so and only recovered less than 6,000 bo each. And the 89 wells still producing in July 2015: they have suffered a decline rate of 73%.

The first take-away is that those 350,000+ bo URR’s numbers that were tossed around a few years ago were complete BS. Especially when you consider how some folks have been touting the great improvements in technology/efficiencies in the last year or two. But even more important: thanks to the lag time between drilling and first production we saw an increase in EFS production during 1Q 2015. So in addition to the lack of increase in EFS production in the near future from the lower rig count: those wells during 1Q 2015 that boosted production will see a significant decline by 1Q 2016. The only good news is that wells drilled before 2014 are in their lower decline rate phase. The bad news: that decline is from rates significantly lower than when they first started producing.

As I said back when oil prices started to collapse and the cornies couldn’t give up their arguments: just wait until next fall...the data will eventually show the difference between hopium and reality. And now we have the data: much of the debate is over. And by the end of 2Q 2016 the arguments over how quickly the EFS production will decline will also be over assuming we don’t see significant increase in oil prices.

As always: data trumps theory

[GHung]

But,, but,, there's still the Bakken, and Marcellus, right?... and they'll think of something when prices go back up. They always do.

Then there's Green River. Trillions of barrels there. Not much success, but if we send Nony, he'll figure it out.

Party on.

[ROCKMAN]

Ghung - trust me: if/when oil gets back up to $85-90 per bbl you'll see the EFS boom again. But by many new smucks since the original ones have headed off to the Happy Hunting Grounds. Heck, if I'm still kicking as that time approaches I would want to tie up a few hundred thousand EFS acres cheap and then flip to the next fool for $15 BILLION like Petrohawk did in the beginning. LOL. I never said I didn't like the EFS play...I just said I was too late to the game to make it work for my company.

[eugene]

Thanks, Rockman. Disappointing though. Here I thought we were the saviors of the universe riding forth, in shining armor, on our white horse all set for a glorious future of infinite wealth. But then I'm one of those whose horse is sway backed, armor rusted, my arms are too old to raise my dull sword and reality has tainted my fantasies. Just had to write some BS as I enjoy my coffee.

Seriously, your comment confirms my long ago research into the realities of fracking, production, etc.

[ROCKMAN]

Yep---All the heroes are crippled or dead. LOL. I've made the point before with folks who thought the oil patch was caught off guard. Maybe some of the newbies. But nearly all senior management in the oil patch is 50+ yo. This means most of them lived thru (survived) the slaughter of the mid 80's. None were surprised by the bust. The only question was when it would happen and not if. Which IMHO also explains why so many companies went so deep into debt so fast. Very simple: however long the boom lasted it wouldn't be that long. So the quicker and more capex spent the sooner the big and last (for the majority) cash out would come. It was just a question of guessing the timing right. When will there be a significant recovery in the oil patch? I don't know but I can promise most of senior management doesn't expect to be around when it happens. For a great many of us that was our last rodeo: the newbies can deal with the carnage we've left behind.

Nothing personal but it just ain't our problem anymore. LOL.

[Subjectivist]

$this->bbcode_second_pass_quote('ROCKMAN', 'S')o to summarize: of the 129 EFS wells that began producing in July 2014: 40 wells (31%) suffered a 100% decline rate per year. Actually it's higher since not all produced for the entire 12 months but I’ll let that slide: there were 4 wells that stopped producing after a month or so and only recovered less than 6,000 bo each. And the 89 wells still producing in July 2015: they have suffered a decline rate of 73%.

The first take-away is that those 350,000+ bo URR’s numbers that were tossed around a few years ago were complete BS. Especially when you consider how some folks have been touting the great improvements in technology/efficiencies in the last year or two. But even more important: thanks to the lag time between drilling and first production we saw an increase in EFS production during 1Q 2015. So in addition to the lack of increase in EFS production in the near future from the lower rig count: those wells during 1Q 2015 that boosted production will see a significant decline by 1Q 2016. The only good news is that wells drilled before 2014 are in their lower decline rate phase. The bad news: that decline is from rates significantly lower than when they first started producing.

As I said back when oil prices started to collapse and the cornies couldn’t give up their arguments: just wait until next fall...the data will eventually show the difference between hopium and reality. And now we have the data: much of the debate is over. And by the end of 2Q 2016 the arguments over how quickly the EFS production will decline will also be over assuming we don’t see significant increase in oil prices.

As always: data trumps theory

[ROCKMAN]

Sub – “…what percentage of the depleted wells became strippers with very low but steady production vs what percentage just get capped off or plugged?” Difficult to put hard numbers on it. First I suspect you mean low volume producers and not “depleted wells” because depleted wells don’t produce anything. And a lot of low volume EFS wells were P&A because they cost a lot to pump and more to dispose of produced salt water. I was told back when oil prices were high that EFS wells didn’t have much more than a 5 or 6 year commercial life. But I just pulled this up: in July 2015 there were 618 EFS wells producing less than 30 bopd each. Of that number 283 were doing 10 bopd or less. On the flip side 1,245 were doing 200 bopd or more. But most are fairly recent: 426 of those wells are 1 year old or younger and are still in the relatively high decline rate period.

And a reminder: those counts are actually leases and not wells since Texas oil production isn’t reported by the well. So on a well basis all those numbers are too low to some uncertain degree.

[StarvingLion]

Rockman is out of his mind. Reminds me of that idiot Ron "I killed the planet, I killed the planet" Patterson...lol.

Shale and tar sands are everywhere.

Synthetic fuels and chemicals from cheap electricity will soon be everywhere.

The world has a lack of space problem, a suicidal anti-industrialist attitude brought on by computers and the space problem, a corruption problem due to fake money, and hordes and hordes of stupid people.

Nobody with a brain believes batteries are the solution.

The climate change crooks are a bunch of deadbeat rentiers.

Peak Oil is a FRAUD.

[GHung]

Who said anything about batteries,, or the climate for that matter?
SL, I think you need to change the battery in your pacemaker. You seem a little off. Do you have anything to contribute regarding the numbers Rockman took the time to post? Or on the proceses you mentioned that will save civilization as soon as we get rid of all the hoards of stupid people?

[ennui2]

I'll paraphrase SL's point in fewer words:

"Soylent green! It's Peeeople!"

Once you ratchet the emotion up beyond a certain notch all you look like is a raving maniac who sounds like you'll spray a McDonalds with bullets. A little too much uncontrolled rage going on and not enough self-reflection.

[ROCKMAN]

ennui - True but the rage can be very entertaining. The angry kitty is one of my favorites and I always look forward to his next post.

[StarvingLion]

The oil idiots don't know what they are doing. They are totally reliant on that seismic software crap. There is tons of oil in the arctic and Shell is simply too stupid to find it.

This problem of stupidity is compounded with shale. They drill in the shales with no intelligence whatsoever. Costs are 10x what they need to be.

These oil idiots make me laugh with their "look at the price of oil" bullshit. It means absolutely nothing. The prices are completely fabricated on demand.

[StarvingLion]

There is lots of oil in Kalifornia. Those commie bums in the universities and their toys for adult children (ev's, solar cells, everything from Apple) are going to bulldozed into the ocean.

Its time for renewed industrialism, ...that means high temp nuclear reactors and synthetic fuels, chemicals.

Ron Patterson: "Oh we're killing the planet...oh the planet...oh my god!!!!!"