Shale matters

[dspp]

US shale prioritises profitability over production, radical notion,

https://www.reuters.com/article/us-usa- ... SKBN1Z108U

Yet the [shale] revolution did not translate to higher stock prices. The S&P 500 Energy sector only gained 6% for the decade, far less than the 180% return for the broader stock market.

The decade-long oil expansion failed to boost profits, which has discouraged investors. The shale industry was squeezed by an OPEC price war that began in 2014, sending U.S. crude prices below $30 per barrel at one point.

Production temporarily slowed, but accelerated into the end of the decade as companies cut costs and grew more efficient. Now, with investor returns flagging, the industry no longer believes in drilling its way to success even at higher prices.

....The shale producer’s spending next year will drop about 15% and will not rise even if oil prices do, instead using higher returns to pay down debt, he said.

“We had to be a competitive and profitable business, not just recover resource at all cost,” said Gallagher of the industry’s shift in thinking. ........

Yet even if oil prices were to remain above $60 a barrel next year, analysts say it will not spur another production spurt because of the pressure for returns.

- dspp

[dspp]

Equinor, Shell, Total reaffirm commitment to Vaca Muerta
Equinor (NYSE:EQNR), Royal Dutch Shell (RDS.A, RDS.B) and Total (NYSE:TOT) say they will press on with projects in Argentina's Vaca Muerta shale play, even as policy uncertainty and price controls make it harder to make plans there.
etc

https://seekingalpha.com/news/3534957-e ... email_link

The commitments are very small beer .........

dspp

[dspp]

courtesy John Kemp Reuters, signposting a good piece of the Vaca Muerta

https://business.financialpost.com/pmn/ ... aca-muerta

Basically, say one thing to get elected, then try to do the other thing once elected. With the clock ticking on the end of shale at the same time.

regards, dspp

[spasmodicus]

this caught my eye a couple of weeks ago, when Bernie's chances seemed better than perhaps they do today

https://www.woodmac.com/news/opinion/what-might-bernie-sanders-plan-to-ban-hydraulic-fracturing-mean-for-the-lower-48/

I wonder what Joe Biden's boy Hunter thinks of this, given his connections to the Ukrainian oil industry.

S

[Proselenes]

Bye bye US Shale oil................LOL..............Breakeven prices below.

[dspp]

I don't quite think the subeditor gets the subtlety of Spanish double entendres, but nonetheless a good Vaca Muerta update

https://www.theguardian.com/environment ... oronavirus

- dspp

[dspp]

Argentina tries for a local $45 oil price to rescue Vaca Muerta
https://uk.reuters.com/article/us-oil-g ... SKBN22V2SG

!!!
- dspp

[dspp]

https://www.reuters.com/article/us-glob ... SKBN2392UG

US shale tries again ? Or is it a dead cat ?

- dspp

[dspp]

thanks to JohnKempReuters

U.S. shale producers are expected to restore roughly half a million barrels per day (bpd) of crude output by the end of June, according to crude buyers and analysts, amounting to a quarter of what they shut since the coronavirus pandemic cut fuel demand and hammered oil prices.

https://uk.reuters.com/article/us-globa ... KKBN23O2OQ

- dspp

[dspp]

Art Berman latest,

"U.S.’ energy dominance agenda is dead as the country’s shale industry is looking at a steep production decline.
The U.S. tight oil or shale rig count has fallen 69% this year from 539 in mid-March to 165 last week.
U.S. oil import dependence is set to grow in the next couple of years.

U.S. energy dominance is over. Output is probably going to drop by 50% over the next year and nothing can be done about it."

https://oilprice.com/Energy/Crude-Oil/U ... n-End.html

- dspp

[PeterGray]

thanks to JohnKempReuters

U.S. shale producers are expected to restore roughly half a million barrels per day (bpd) of crude output by the end of June, according to crude buyers and analysts, amounting to a quarter of what they shut since the coronavirus pandemic cut fuel demand and hammered oil prices.

https://uk.reuters.com/article/us-globa ... KKBN23O2OQ

- dspp

No surprise really, I suppose. They were effectively storing the oil underground waiting for a better PoO. It doesn't really bear on the issue of the long term, or even medium term, for shale - no wells have been drilled or fracced to restore the shut in.

[xxnjr]

Can't really say I've followed ArtB's scribbling's over the years. Have his projections been consistently correct? I get the impression he's been saying the same thing for years, basically that "Shale oil is doomed". If that indeed HAS been his central message - then doesn't it follow that AB has been consistently wrong?

[dspp]

Can't really say I've followed ArtB's scribbling's over the years. Have his projections been consistently correct? I get the impression he's been saying the same thing for years, basically that "Shale oil is doomed". If that indeed HAS been his central message - then doesn't it follow that AB has been consistently wrong?

One main message has indeed been that shale is doomed. The other main message has been that to the extent that it has been successful it has been due to incredibly low interest rates and a massive Ponzi scheme. I would tend to agree as the EROI number for shale is barely above unity even when highgrading, and Art is well aware of that.

https://en.wikipedia.org/wiki/Energy_re ... investment

In the end some of the shale CEOs also faced the conclusion that it couldn't go on.
https://en.wikipedia.org/wiki/Aubrey_McClendon

What Art is very reluctant to acknowledge is the role that renewables are playing.

regards, dspp

[dspp]

In the end some of the shale CEOs also faced the conclusion that it couldn't go on.
https://en.wikipedia.org/wiki/Aubrey_McClendon

and on cue

Chesapeake Energy Corp (CHK.N) filed for Chapter 11 on Sunday, becoming the largest U.S. oil and gas producer to seek bankruptcy protection in recent years as it bowed to heavy debts

https://uk.reuters.com/article/us-chesa ... KKBN23Z0SS

- dspp

[dspp]

Second U.S. shale boom's legacy: Overpriced deals, unwanted assets
Now, many of the 2016 to 2019 shale deals are financially unworkable due to low oil prices,
etc
https://www.reuters.com/article/us-glob ... SKBN25R1GG
- dspp

[dspp]

"Argentina's : Output from the Vaca Muerta region in Patagonia, which holds the fourth-largest shale oil reserves in the world, stalled during the coronavirus pandemic but hit a record high in December as producers revved up wells with an eye on rebounding prices and a new export market.

The revival of the formation that has been compared with the U.S. Permian Basin signals how it is growing more competitive globally, helped by government policies protecting oil producers, an export tax holiday and reviving global prices........

That saw oil production in Vaca Muerta hit a record 124,000 barrels per day (bpd) in December, according to data from consultancy Rystad Energy.

Vaca Muerta, given its unusual name literally meaning the “dead cow” by a U.S. geologist in 1931, has taken nearly a century since then to really get going, with its first export cargoes of liquefied natural gas (LNG in 2019) and oil just last year.

Previous, and ambitious, government plans here have though targeted over 1 million barrels of unconventional oil per day from the Neuquen region by 2030."

https://www.reuters.com/article/energy- ... NL1N2KG1HY

etc, dspp

[dspp]

US rig count trending up
https://fingfx.thomsonreuters.com/gfx/c ... (Q1%202021).pdf

"By John Kemp
LONDON, Feb 12 (Reuters) - Oil prices have reached a critical threshold where OPEC+ must decide whether to increase production, or risk losing market share again to U.S. shale producers.
"

- dspp

[dspp]

"OPEC this month cut its 2021 forecast for U.S. tight crude, another term for shale, and expects production to decline by 140,000 barrels per day to 7.16 million bpd. The U.S. government expects shale output in March to fall about 78,000 bpd to 7.5 million bpd."

https://www.reuters.com/article/shale-o ... SL8N2KO6IN

- dspp