Shale Survives Oil Slump:Two Years Into Oil Slump, U.S. Shale Firms Are Ready to Pump More

[IsailedawayfromFR]

Shale industry has proved resilient despite low prices thanks to cost cuts, efficiency improvements
When oil prices began to plunge two years ago due to a global glut of crude, experts predicted U.S. shale producers would be the losers of the resulting shakeout.

But the American companies that revolutionized the oil and gas business with hydraulic fracturing and horizontal drilling are surviving the carnage largely unbowed.

Though the collapse in prices caused a wave of bankruptcies, total U.S. oil production has only fallen by about 535,000 barrels a day so far this year compared with 2015, when it averaged 9.4 million barrels, according to the latest federal data.
As the oil markets ponder where production will resume when prices pick back up, one clear answer has emerged: America. Goldman Sachs forecasts the U.S. will be pumping an additional 600,000 to 700,000 barrels of oil a day by the end of next year—making up for every drop lost in the bust.

Few predicted that in the fall of 2014, when Saudi Arabia signaled that it wouldn’t curb its output to put a floor under crude prices. Oil pundits concluded that a brutal culling would force higher-cost players known as marginal producers—a group that includes shale drillers—out of the market.

But the greatest consequence of the Saudi decision and subsequent price drop is that it has delayed costly oil megaprojects, from deep-water platforms off Angola to oil-sands mines in Canada.

Even if members of the Organization of the Petroleum Exporting Countries, which are meeting this week in Algiers, manage to strike a deal to cut oil production later this year, U.S. producers will step into that void.
http://www.wsj.com/articles/two-years-into-oil-slump-u-s-shale-firms-are-ready-to-pump-more-1474968601

What is staggering is that the 535,000 bopd lost decline of the past two years will be more than made up by next year.

Anyone suggesting shale is not the answer due to its high production decline have not been paying attention.

Or are like this fool forecasting
Obama in 2012: "We can't just drill our way to lower gas prices"

https://www.youtube.com/watch?v=Z96ZiaQbwqw

He thinks checking your tire pressure is a better way to lower gas prices.

[thackney]

What is staggering is that the 535,000 bopd lost decline of the past two years will be more than made up by next year.

535,000 is a questionable number.

The average of 2015 production is 9,415,000 bpd.

http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_a.htm

The peak monthly production in 2015 was 9,627,000 bpd in April.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

The latest oil production numbers are 8,512,000 bpd.

http://www.eia.gov/dnav/pet/pet_sum_sndw_a_epc0_fpf_mbblpd_w.htm

So our production numbers have dropped by 1.1 million bpd.  That has been the trend.

As for Shale field specifically, it is not looking to be our savior in the near future.

In the Bakken, the drop in production per month has averaged:
2.5% drop in the last 9 months
2.6% drop in the last 6 months
3.3% drop in the last 3 months.

In the Eagle Ford, the drop in production per month has averaged:
4.3% drop in the last 9 months
5.1% drop in the last 6 months
5.2% drop in the last 3 months.

In the Permian Basin, they have held their own, actually a slight gain averaging 0.1% to 0.5% gains over the same time period.

In the Niobrara, the drop in production per month has averaged:
2.8% drop in the last 9 months
3.2% drop in the last 6 months
2.9% drop in the last 3 months.

http://www.eia.gov/petroleum/drilling/xls/dpr-data.xlsx

I don't look at these trends and see any way that our domestic shale field oil production is going to be more than made up next year.

[IsailedawayfromFR]

I don't look at these trends and see any way that our domestic shale field oil production is going to be more than made up next year.

I think you meant "I  look at these trends and don't see".

So I wonder how Goldman Sachs conjured up the "the U.S. will be pumping an additional 600,000 to 700,000 barrels of oil a day by the end of next year"?

Think they have some vested interest in propping up some financial sector that profits them?

Truthfully, I have repeatedly believed that oil or liquids from shale(or what people call 'unconventional') is a relatively short-term phenomenon as there are just not that many places to exploit that meet all the criteria to produce liquids like that.  Tite rocks are just too poor a conduit for liquids to flow save in very specific cases like the Bakken, Eagleford and the like. 

Over the longer-term, geologists will run out of these spots, and what is left will be subcommercial to exploit, virtually regardless of price, due to the physics.

The really big promise is natural gas, which has many times the resource extent than liquids from such tite rock, and which flow much, much more easily in situ.

[uglybiker]

But the greatest consequence of the Saudi decision and subsequent price drop is that it has delayed costly oil megaprojects, from deep-water platforms off Angola to oil-sands mines in Canada.

Makes me wonder where the Russians are in all of this. 

[thackney]

I think you meant "I  look at these trends and don't see".

Yep.  Thanks for the correction.

So I wonder how Goldman Sachs conjured up the "the U.S. will be pumping an additional 600,000 to 700,000 barrels of oil a day by the end of next year"?

Goldman Sachs' big bold oil flop: Cramer
http://www.cnbc.com/2014/10/27/goldman-sachs-big-bold-oil-flop-cramer.html
 27 Oct 2014

...The first Goldman report that Cramer examined said that brent crude is headed as low as $80 a barrel by summer of 2015. This is a radical change from Goldman's previous projections of $100.

Cramer also looked at a January note from the exact same analyst, which said oil could hit $150 a barrel by 2015....

Think they have some vested interest in propping up some financial sector that profits them?

Remember that mostly they need movement.  They don't need prices high or low to make money, they just need it to keep moving around.

Truthfully, I have repeatedly believed that oil or liquids from shale(or what people call 'unconventional') is a relatively short-term phenomenon as there are just not that many places to exploit that meet all the criteria to produce liquids like that.  Tite rocks are just too poor a conduit for liquids to flow save in very specific cases like the Bakken, Eagleford and the like. 

Over the longer-term, geologists will run out of these spots, and what is left will be subcommercial to exploit, virtually regardless of price, due to the physics.

The really big promise is natural gas, which has many times the resource extent than liquids from such tite rock, and which flow much, much more easily in situ.

The amount of reserves available for either, are going to be greatly dependent on price.

[IsailedawayfromFR]

The amount of reserves available for either, are going to be greatly dependent on price.

Well, in a world of market forces, you are correct.

The world we live in does not exist that simply. It is a world where profitable energy like coal can be eliminated by government edict, and unprofitable energy like solar/wind can flourish due to government handouts.