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Old 07-26-2013, 09:49 AM   #1
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Default West TX Oil Field Holds 50 Billion Barrels

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Pioneer Natural Resources, the Irving-based company that ranks as one of the country’s largest independent oil and gas firms, is estimating the recoverable oil in a single field in West Texas’ Permian Basin at 50 billion barrels of oil and gas.
http://www.dallasnews.com/business/e...ow-massive.ece
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Old 07-26-2013, 11:41 AM   #2
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Guess we don't need the Keystone after all. Time to build another refinery in TX.
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Old 07-26-2013, 12:13 PM   #3
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Interesting... most of the gains are from drilling horizontal drilling and fracking. That's gonna prove interesting, to say the least... it pays to not listen to the hype too much, as this might be another tight oil play ala Bakken, but it's still very welcome news.

50 Billion?!?!!? If it really pans out that well, that's almost another Ghawar!!! Though sadly, it's not even a full year's consumption for the US...

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Old 07-26-2013, 01:02 PM   #4
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Though sadly, it's not even a full year's consumption for the US...
I believe we consume something like 25 million bpd. So, it is actually 6 years' worth by my calculation. It would fuel worldwide consumption nearly 2 years.
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Old 07-26-2013, 01:27 PM   #5
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If it really pans out that well, that's almost another Ghawar!!!
Ghawar is an oil field--meaning it contained lots of liquid oil. The area in Texas is not. It is a shale deposit. Shale deposits are expensive, difficult, and highly speculative.
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Old 07-26-2013, 03:11 PM   #6
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Depending on how you count, 22 million barrels/day when the economy is humming, which it isn't—and a fair amount of that gets exported as finished product. 18 is probably a good number at the moment.

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Originally Posted by Dietrich
Shale deposits are expensive, difficult, and highly speculative.
Expensive and difficult, yes, just as oil production has been since Edwin Drake. Speculative, no; once you've established the parameters of an individual field, you can be assured that you will get oil, though not how much. This is in sharp contrast to conventional vertical wells. It is a sufficiently sure thing that shale producers now refer to their production model as "manufacturing"; output is guaranteed.
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Old 07-26-2013, 08:23 PM   #7
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Shale deposits are expensive, difficult, and highly speculative.
What? Holy cow. Next time I am out in West Texas, I will let them know. They must be fooled by the large amount of money they are making. Even worse, they think difficult and speculative work is a good thing. Maybe we could arrange for some economists from Detroit to come down and teach them how to do it.
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Old 07-26-2013, 09:23 PM   #8
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They must be fooled by the large amount of money they are making.
Oil companies make much, much less from shale deposits than from conventional oil. In some areas it costs upwards of $80/barrel to produce oil from shale. Conventional oil can cost as little as $10/barrel to produce.

Apples and oranges.
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Old 07-26-2013, 10:09 PM   #9
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Originally Posted by Dietrich View Post
Oil companies make much, much less from shale deposits than from conventional oil. In some areas it costs upwards of $80/barrel to produce oil from shale. Conventional oil can cost as little as $10/barrel to produce.

Apples and oranges.
... are both good fruit and somebody somewhere is paying a lot of money for them and the oil. It is all good as long you as get in the money stream somewhere . . . while it is in the bust to boom phase.

I don't know the price of production but I do know that it is not a fixed amount. Innovation is rampant right now in the oil fields as they are filled with ambitious speculating competitors. The details don't matter to many as long there is a big boom of money and they get a share. And they all know the bust is coming, but don't really care.
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Old 07-26-2013, 10:36 PM   #10
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at some price They're going to come and rip out my neighbors driveway just to get the oil spot om his drive way eh!

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Old 07-27-2013, 12:51 AM   #11
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Is it my imagination or are we seeing a sudden flood
of good news stories about oil and gas ? On the one hand I
hope it is true but at the same time worry there is an
element of manipulating expectations involved .

What fundamentals really changed so much over
the last 3 months ?

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Old 07-27-2013, 10:20 AM   #12
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Quote:
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Ghawar is an oil field--meaning it contained lots of liquid oil. The area in Texas is not. It is a shale deposit. Shale deposits are expensive, difficult, and highly speculative.
I meant in terms of size of output, I'm not implying that the Permian is anything like Ghawar in terms of liquid vs. shale or tight oil...

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Old 07-27-2013, 10:24 AM   #13
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Quote:
Originally Posted by Ross View Post
What fundamentals really changed so much over
the last 3 months ?
.
The price signal, given by all international benchmarks whether Brent crude or Dubai crude, suggests that supply has TIGHTENED over the last 3 months. Oil costs about 5% more than it did 3 months ago.

The stories about "huge finds" in Australia or Texas are not real--for one thing they are announcements written by companies trying to raise money, not independent geologists, and so they try to confuse he public into thinking that they are finding oil fields. They are not. Try are finding shale formations, which require a manufacturing process called fracking.

For another thing, the really important producers are Russia and Saudi Arabia, who together produce a quarter of the world's supply. And unfortunately both of those countries' stats cannot be trusted, and both of those countries at probably at or near peak production. Saudi is not producing any more than it did 5 years ago.
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Old 07-27-2013, 03:02 PM   #14
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The stories about "huge finds" in Australia or Texas are not real--for one thing they are announcements written by companies trying to raise money, not independent geologists, and so they try to confuse he public into thinking that they are finding oil fields. They are not. Try are finding shale formations, which require a manufacturing process called fracking.
You are right. One does not find an oilfield. You make one. An oilfield is the place where there are oil wells but it does matter what kind of geological formation is below the surface to be called an oilfield.

It is true that getting oil out of the shale is more expensive. I don't think that many are being fooled by the terminology.

Yes, the new oilfields are not anywhere near the biggest but they are being found all over the world. My neighbor works in the industry and his boss, a wildcat driller, has 1200 successful wells in the Eagle Ford field and is currently spending a lot of time in Columbia and Mexico.

I know this: A lot of people, including "independent" geologists, are getting very rich at the local level working in the new oilfields. BTW, the independent geologists, that I know, don't make public announcements about their work. They keep their advice private.

My neighbor's boss . . . net worth 3 billion in about 10 years and rising fast.
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Old 07-27-2013, 04:30 PM   #15
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Quote:
Originally Posted by dyrt View Post
An oilfield is the place where there are oil wells but it does matter what kind of geological formation is below the surface to be called an oilfield.
Incorrect.
http://onswipe.investopedia.com/inve...27f5d9d0bfbafe
http://www.thefreedictionary.com/oilfield

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I don't think that many are being fooled by the terminology.
Obviously they are. After all, you don't even know what the word oilfield means.
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Old 07-27-2013, 05:02 PM   #16
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Incorrect.
http://onswipe.investopedia.com/inve...27f5d9d0bfbafe
http://www.thefreedictionary.com/oilfield


Obviously they are. After all, you don't even know what the word oilfield means.
I guess that depends on who you ask. Wikipedia simple says: "The term "oil field" or "oilfield" refers to a region with an abundance of oil wells extracting petroleum (crude oil) from below ground."

It don't matter and I will stick to the common use of the term but the definition, "an area containing reserves of petroleum, esp one that is already being exploited" does not explain why a layer a shale under the ground disqualifies the area from being called an oilfield. (I could only get 1 of your links to work.)

You said,
Quote:
...confuse he public into thinking that they are finding oil fields. They are not. Try are finding shale formations, which require a manufacturing process called fracking.
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Old 07-27-2013, 05:19 PM   #17
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"an area containing reserves of petroleum, esp one that is already being exploited" does not explain why a layer a shale under the ground disqualifies the area from being called an oilfield.
The term "petroleum" or "crude" or "crude oil" refers to a liquid that can be extracted and placed into barrels. It is extremely cheap (at least on shore) and easy to convert into things like diesel or gasoline. Indeed, light sweet crude is so close to a ready-to-use fuel that it is generally flammable.

Shale refers to a solid that contains hydrocarbons on it. No petroleum, no crude. Not flammable. Not liquid. You can take a hose and blast the shale with fluid, blast those hydrocarbons off and convert them into a liquid and then convert that liquid into a fuel.

Big difference economically. There's a reason shale costs $80/barrel and conventional crude costs $10.
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Old 07-27-2013, 11:36 PM   #18
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Again, it depends on who you ask and I add where you are:

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Oil shales differ from oil-bearing shales, shale deposits which contain petroleum (tight oil) that is sometimes produced from drilled wells. Examples of oil-bearing shales are the Bakken Formation, Pierre Shale, Niobrara Formation, and Eagle Ford Formation.
It is all the same stuff when it comes out and the Eagle Ford costs about $55. They are also getting better prices at the refinery because they are so close.

I suppose the price of oil could plummet but not likely considering the Middle East is coming apart at the seams. The Sauds at some point might consider taking a lot less profit to kill off the new oilfields but they are in a war and I suspect the fear of the end of the monarchy is bigger than the fear of 55$ competition.

Oil and natural gas have always been a risky business, shale or no shale. Some wells make a profit and others don't. I understand that some people have lost a lot on shale investments. Others can't spend their profits fast enough. Not all the fields are the same. Expensive or not, call the area what you want, a lot of very big players are rushing to spend an incredible amount of money on those oilfield and 'not-an-oil-field' wells. It is a very good thing no matter how big and long the play.
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Old 07-28-2013, 09:05 PM   #19
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I believe we consume something like 25 million bpd. So, it is actually 6 years' worth by my calculation. It would fuel worldwide consumption nearly 2 years.
You're correct, Sysiphus, I forgot a zero...

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Old 07-28-2013, 11:13 PM   #20
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I think it's remarkable that Pioneer Natural Resources [see post #1] bought old oil fields in the Permian basin that the Oil Majors had sold off for cheap because they thought they had sucked all the oil out of them, and when oil was $20/bl. they probably had,
But with use of enhanced oil recovery technology of fracking and CO2 flooding and $100/bl oil, their stock price has increased 10X in 5 years. That For me is the lesson to be learned.

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Kinder Morgan is a big player in west Texas CO2.
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Old 07-29-2013, 06:14 PM   #21
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The term "petroleum" or "crude" or "crude oil" refers to a liquid that can be extracted and placed into barrels. It is extremely cheap (at least on shore) and easy to convert into things like diesel or gasoline. Indeed, light sweet crude is so close to a ready-to-use fuel that it is generally flammable.

Shale refers to a solid that contains hydrocarbons on it. No petroleum, no crude. Not flammable. Not liquid. You can take a hose and blast the shale with fluid, blast those hydrocarbons off and convert them into a liquid and then convert that liquid into a fuel.

Big difference economically. There's a reason shale costs $80/barrel and conventional crude costs $10.
Geez, where to start? Perhaps with your contention that crude is "generally flammable"?

Yeah, it's generally flammable, alright. I think anyone who remembers the towers of fire that Saddam turned Kuwait's wells into can probably agree.

Petroleum accessibility is a continuum, or perhaps a series of them. Sixty years ago, one could drill a shallow well in Saudi Arabia and produce 35,000 barrels/day; the record, I think, was actually set in Texas back in the 20s or 30s, at around 200,000.

It's a little tougher to produce a shale well; oil is tightly bound into the source rock (you might want to look into the concepts of "permeability" and "porosity"), and something called "fracking" is required. This is not a new process, or one confined to shale wells; about a million fracs have been performed in Texas and Oklahoma alone in the last fifty years.

However, I can assure you, what comes out of the pipe is petroleum. You may be confused by the fact that certain kinds of shale contain kerogen, a geologic precursor to petroleum, but this is not what we mean when we discuss "oil shale" in areas like the Bakken.

Wells in Texas, back in the day, produced oil that sold for a dollar a barrel at times, and, even then, a dollar was pretty cheap. It's been steadily costing more ever since, and there are good reasons for that. Shale oil is not a sudden step change, there's still money being made, and civilization is still functioning nicely, give or take some idiot politicians.
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Old 07-30-2013, 09:35 AM   #22
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It's a little tougher to produce a shale well; oil is tightly bound into the source rock (you might want to look into the concepts of "permeability" and "porosity"), and something called "fracking" is required. This is not a new process, or one confined to shale wells
A little tougher? Yes. It's "a little tougher" to blast rocks with fracking fluid, than it is to stick a metal tube in the ground.

And, you're right it is not a new process. What's new is that fracking is necesssary. This is not good news. It's necessary because we are running out of easy oil.

Remind me--how much does a barrel of oil cost right now?
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Old 07-30-2013, 11:42 AM   #23
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Originally Posted by Dietrich
What's new is that fracking is necessary.
I'd like to have seen you try to convince the rig supervisor on the first frac job I witnessed back in '83 that what he was doing was not "necessary".

Well stimulation—including not only fracking but acidizing, solvent/surfactant/detergent injection, use of gas or water lift, etc.—has been done since drillers first dropped sticks of dynamite downhole in the early 1900s. It's always been "necessary, to turn marginal wells into producers, to make producers more prolific, to obtain maximum production from old wells.

It is the nature of the business that whatever the state of the art is—multistage fracking, sophisticated seismic, steerable bits, horizontal wells, single pad staged drilling—is what's "necessary".

Quote:
Originally Posted by Dietrich
It's necessary because we are running out of easy oil.
I'd also like to see you convince the oil guys I hung out with back when that what they did was "easy". It's never been easy. It's always been a hard, dangerous, dirty, expensive process. They'd look at the companies drilling shale wells and marvel at the lack of dry holes and the computer imaging and the production monitoring, and be amazed. They might be tempted to call it "easy", but they'd be too smart and too experienced for that.
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Old 07-30-2013, 01:06 PM   #24
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I don't know if yall noticed but George Mitchell, a early pioneer of the fracking business, died last week.

http://en.wikipedia.org/wiki/George_P._Mitchell
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Old 07-30-2013, 01:47 PM   #25
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American hero.
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