Beware the BOPDE numbers. The only part that makes any money is the “O” part.
Horizontal gets fracked also
And this article is misleading. These horizontal wells are fraced as well. Or they wouldn’t make anything.
Correct me if I’m wrong, but I think that what distinguishes the Permian Basin, I think, from the Eagle Ford and the Bakken
is that Eagle Ford and Bakken have mostly been derisked. That is, for the Bakken and Eagle ford the drillers know where all the most profitable oil is and understand the best economics for oil extraction at these locations—including spacing drill depth etc. As a result both the Bakken and Eagle Ford are in production phase.
This is not so for the Permian.
Even though much of the new horizontal drilling in the USA is being done in the Permian Basin—drillers do not have the permian derisked.
As a result, no safe estimates can be made for the amount of oil that can be extracted at what speed and at what price from the Permian. The Permian has not been derisked.
But you can see from the article the areas of concentration in the Permian.
If there is going to be any serious growth in US oil production after the end of 2015—it will have to come from the Permian Basin.
Will that happen?
Beats me but the Permian is where the big story is for the rest of this year and next—because we’ll learn just how much & how fast the oil can be extracted in the next 12 months or so.
( As a side note, EOG Resources is doing an immense amount of drilling in their derisked parcels in the Eagle Ford this year)
Rapid growth in production; imperceptible decline in price at the pump.
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For those who want to see a video showing how horizontal drilling and fracking is done, Northern Gas and Oil has a great one. It’s 6 minutes.
It includes a visual piece on how fresh water aquifers are protected from contamination.
http://www.northernoil.com/drilling-video
The key phrase her is "may be as much as". Last time I invested in a Texas oil company they used the stock book as a check book to pay their living expenses.
The largest step-rate technological advances That have given us access to huge added amounts of economically-extract able oil I have witnessed in the oil industry in past 4 decades(not in any order):
1.3 dimensional seismic( we can image what we used to have to drill to see)
2. Deep water drilling and production(be cause most of the world is underwater and oil exists there too)
3. Horizontal drilling (now we can explore and develop other than vertically)
4. Stage fraccing(cause the rocks are now so low quality we must create our own permeability)
I dream of what might transpire during the next 40 years
Fracking is a production enhancement technique which fractures the rock surrounding a hole which has already been drilled.
When the title of am article begins by displaying a fundamental lack of knowledge of the subject, I have a hard time convincing myself to read the rest.
It has been a drilling technique for over 30-40 years .