[ROCKMAN]

"...what does "swab in" mean?". If you pull the drill pipe up too fast you can reduce the EFFECTIVE weight of the mud column and thus lower the pressure below that of the reservoir. That allows the well to flow the NG up the bore hole. Which is exactly what BP did at Macondo when the replaced a portion of the heavier mud column with the lighter sea water. With the cement in the annulus not sealing the NG pressure in the reservoir flowed up the well bore to the drill floor where it ignited. Which is how the water well drillers do it: keep the effective pressure of the mud column lighter than the reservoir pressure.

Sorry...GEOTHERMAL...not ground sourced for me. I am a GEO-logist who studies GEO-logic formations. Who eats GEO-burgers and puts on GEO-underwear. It's all GEO! GEO! GEO! LOL

[Synapsid]

RCKMN,

OK, I'm confused. Do you mean water-well drillers keep the effective weight of the mud column higher than reservoir pressure?

GEO-confused

[ROCKMAN]

Syn - "Do you mean water-well drillers keep the effective weight of the mud column higher than reservoir pressure?" Exactly. But that’s easier for water well drillers to do then when I drill for oil/NG. Too much detail to get into but one metric is "hydrostatic pressure". Essentially the pressure produced at the base of a column of water. Think of diving in the ocean: at a depth of just 100' there’s a good bit of water (hydrostatic) pressure on your body. Think what that pressure would be at a depth of 1,000'. Now think about that pressure under a 12,000' column of water.

Most fresh water aquifers are at a normal hydrostatic pressure (artesian wells are above hydrostatic pressure which is why they’ll flow to the surface without pumping). So a water well driller needs to use just a little heavier drilling mud. But when I encounter a deep oil/NG reservoir it can be at pressure well above normal hydrostatic pressure. Again too complex to explain why. So I have to use heavier drill mud. For instance plain water will weight around 7 lbs/gallon (ppg) but I’ll use a mud weighing anywhere from 12 ppg to 17 ppg.

So the answer is simple: Always use a very heavy mud, right? Wrong: if the mud weight is too much higher than the reservoir pressure the mud will flow into the reservoir. We call that “lost circulation”. A very bad and potentially dangerous situation: damages the reservoir, potential to stick the drill pipe and possibly lead to a blowout. Thus we always shoot for that “Goldilocks mud weight.”

The trick is to figure out what that mud weight should be especially when you’re drilling in an area where there hasn’t been much drilling. The mud weight requirement can change drastically over very short distances. Prior to my current gig that was my job: I was a “pore pressure analyst” consulting on Deep Water GOM wells for a company. I would monitor a variety of drilling parameters at the well site and use my software to estimate reservoir pressure as we drilled.

And yes: I’ve had “debates” with engineers on the rig as to whether we had sufficient mud weight to prevent a blowout. Just as there was a debate on the Macondo well. And yes: I’ve used the phrase “I guess that’s why we have blow out preventers” more than once when I’ve lost the debate. And once got run off a job because saying it pissed the head engineer off so bad. But my responsibility was the safety of the rig, the crew and the environment so my natural response to him was “F*ck you!” LOL. Getting put off a rig that’s not drilling safely isn’t the worst thing to happen.

[llamaths]

Currently the prices seems to remain flat as OPEC has continued with he oil production which has lead for supply demand disconnect.

[Pops]

Baker Hughes says that oil rigs actually increased last week by 12, one or 2 here or there, still down 1012 from last year.

640 oil rigs was last seen around August 2010, but there were almost 1,000 going for gas then. Out of the total that august there were over a third still drilling a vertical hole, now of a total of 800 rigs only 100 are vertical wells and 657 are horizontal, the rest "directional" which I assume is just something other than just plumb or level.

You can get spreadsheets and PDFs to poke around in,
http://phx.corporate-ir.net/phoenix.zht ... portsother

[ROCKMAN]

"...the rest "directional" which I assume is just something other than just plumb or level." Probably a fair number are hz or near hz. An 85 degree hole might be classified as vert compared to a 90 degree hole. In reality most "hz holes" will be between 80 and 95 degrees.

But the important fact you highlight is how many of those rigs were drilling for NG way back when. With NG prices staying low we won't see that category gain much anytime soon. As far as oil drilling we'll have to wait another 6 months to know if we have really bottomed out or not. Between revenue generating hedges ending and bank debt repayments worse times may be ahead.

[StarvingLion]

The Saudis ended the fracing "revolution" barely working up a sweat
The russian/chinese missiles can sink the entire US Navy in a month.

Conclusion: Its over. The deposits that matter are in Eurasia.

Show me a profitable US oil and gas industry. It does not exist.

[Tanada]

Oil rig counts remain in the same range as they were in 2010. If these drilling levels support around June 2011 production rates from LTO that means we will be falling back to around 6 MMbbl/d until such a time as the price goes back up and fracking rates also go back up.

http://static2.businessinsider.com/imag ... -18-15.png


$this->bbcode_second_pass_quote('', 'T')he oil rig count fell again this week, according to driller Baker Hughes.

Producers idled 8 rigs, bringing the tally to 644. It's the slowest pace in what's now a three-week streak.

The count fell by 10 last week, and that decline followed another in the prior week that wiped away all the additions made in August.

The combined count of oil and gas rigs fell by 6 to 842.

[ROCKMAN]

T - "If these drilling levels support around June 2011 production rates from LTO". Not disagreeing with you generally speaking. But there's two weaknesses. First shale wells are being drilled differently these days: longer laterals and mucho frac stages. Thus not as many rigs needed. Second, we drill the better prospects/sweet spots first: future locations wouldn't have the same potential as ones drilled 5 years ago. And ultimately there will be very few prospects left to drill even at lower oil prices. In fact a big reason for longer laterals/more frac stages is to offset the loss of the sweet spots. OTOH such recent wells are much more expensive so even if their productivity is similar the economics suffer. OTOOH costs have come down due to lack of competition due to the drop in activity. OTOOOH if activity increases significantly costs will increases. Perhaps very quickly given how many of those service companies are no longer in business.

Obviously lots of moving parts making projections a tad difficult.

[Tanada]

Nifty chart in link shows we are back down to mid 2010 drilling rigs being active.

$this->bbcode_second_pass_quote('', 'T')he US Oil rig count is now down over 63% from its highs in October 2014. Last week's 10 rig decline is the 7th straight weekly drop, pushing the count below 600 for the first time since July 2010. Crude prices are modestly higher on the news...

*U.S. TOTAL RIG COUNT FALLS 8 TO 787 , BAKER HUGHES SAYS
*U.S. OIL RIG COUNT FALLS 10 TO 595, BAKER HUGHES SAYS

Now down over 63% from highs... New Mexico, Oklahoma, and Texas saw the big declines this week.

[GoghGoner]

Oil rig count dropped by 16 this week, down to 578. Three vertical rigs were added, now, that is different. Oklahoma lost 6 rigs and Texas lost 7 rigs. NG rigs went up by 4, probably Rockman gearing up those old vertical rigs.

[ROCKMAN]

Cog - You might be aware but for others: there are not vertical, horizontal, gas, etc "drilling rigs". There are "drilling permits" that are classified as vertical, etc, etc. The same rig can drill any one of those permits. A little picky but to the Rockman it's a bit like finger nails on a blackboard. LOL

[GoghGoner]

Thanks for the distinction, rock. One thing I have learned is that the vertical rigs (permits) don't boost production near as much as the fracking permits.

[ROCKMAN]

Goner - Good point. It emphasizes how little new conventional production can be developed today. Such wells are almost all drilled vertically.

[llamaths]

http://www.oilandgas360.com/u-s-rig-count-falls-to-700/

[onlooker]

http://www.zerohedge.com/news/2016-03-0 ... -time-2009
US Oil Rig Count Drops Below 400 For The First Time Since 2009
Turnabout is fair play.

[Subjectivist]

$this->bbcode_second_pass_quote('onlooker', 'h')ttp://www.zerohedge.com/news/2016-03-04/us-oil-rig-count-drops-below-400-first-time-2009
US Oil Rig Count Drops Below 400 For The First Time Since 2009
Turnabout is fair play.

[onlooker]

I agree that zerohedge tends to exaggerate the doom and gloom but I would think a fairly straightforward fact like the one I linked is not open to hyperbole. As for the comparison to 2009, is still think this year is an apt year as it shows that for some 7 years or so things were going fairly well in the oil patch but now things are worsening and 2009 being a particularly bad year only highlights this fact. Notice though I did not make a doomerish interpretation. I will leave that connection to someone with expertise like Rockman.

[ROCKMAN]

I'm not sure I get either point. Yes 2009 was an unusual spike down. But at 400 the count is now the lowest its been since before 1973 according to Baker Hughes. The lowest count in that entire time span was 500 in 1999 due to the inflation adjust price of $17/bbl.

I'm not sure how having fewer rigs drilling now then in 1999 when the current oil price is almost double what is was back then can be taken as anything but a very bad omen.

[tita]

I think there is some confusion here between oil rig count and total rig count (oil and gas).

The total rig count is almost at the lowest level of 1999, which was a decades-low. At this time, the gas rig count was around 400 and the oil rig count was around 100.

The present situation is inverted, with gas at 100 and oil at 400. (lazy to find real numbers). And it doesn't look like there is much enthusiasm to add new rigs.

In 1999, total rig count increased because of nat gas. You had to wait for 2005 (and 50$) to see the increase in oil rigs.