Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Kemp: Shale Producers Postpone Oil Well Completions
Reuters via Rig Zone ^ | February 20, 2015 | John Kemp

Posted on 02/22/2015 5:10:17 PM PST by thackney

EOG Resources became the latest major shale producer to state that it would "delay a significant number of completions" when it announced fourth-quarter results.

The company plans to end 2015 with 285 wells awaiting completion services, up from 200 at the end of 2014, it told investors during an earnings call on Thursday.

Continental Resources has also announced plans to go slow on well completions in response to the slump in oil prices.

Apache and Anadarko Petroleum are among other shale producers to announce a deliberate strategy of delaying completions.

U.S. shale producers are postponing well completions to conserve cash and defer production until prices recover.

There are a large number of wells that have been drilled but are awaiting the arrival of pressure pumping crews to fracture them and service companies to link them up to gathering pipelines.

In North Dakota, there were an estimated 750 wells that had been drilled but not yet completed at the end of December, according to the state's Department of Mineral Resources.

Once these wells are completed, they will increase the number of producing wells in the state by more than 8 percent, from the current total of around 8,950.

At recent completion rates, it would take another 3-4 months to clear the backlog even if no new wells were drilled in the meantime.

Similar backlogs have emerged in the other shale plays. They have been a source of frustration for producers and mineral rights owners waiting for the oil to begin flowing and royalty payments to start arriving.

For the most part, delays in completing wells arose inadvertently as drilling outpaced completions during the frenzied drilling boom in the first eight months of 2014.

But now some exploration and production companies are deliberately postponing completions to improve their financial performance....

(Excerpt) Read more at rigzone.com ...


TOPICS: News/Current Events
KEYWORDS: energy; oil
Navigation: use the links below to view more comments.
first 1-2021-29 next last

1 posted on 02/22/2015 5:10:17 PM PST by thackney
[ Post Reply | Private Reply | View Replies]

To: thackney

The market is functioning as the market will. The less efficient producers will shut down. More efficient methods will be designed to make profit at from lower input. The new generation of wells can be reactivated when the price comes back down or when they are graced with improvements. Improvement is occurring at a faster than ever pace. Petroleum, including gas,is transitioning in the market from being a limited resource to being a near ubiquitous mineral.


2 posted on 02/22/2015 5:30:31 PM PST by arthurus (it's true!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: arthurus
Striking workers at refineries tend to reduce demand and supply as well as the Saudis did in the 70s, maybe they are at it again.
3 posted on 02/22/2015 5:34:00 PM PST by mountainlion (Live well for those that did not make it back.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: thackney
This is just what he Saudis want.They're afraid of our fracking and want to shut it down.
4 posted on 02/22/2015 5:46:03 PM PST by Gay State Conservative (Obama;A Low Grade Intellect With Lower Morals)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Gay State Conservative

In my view fracking can shut down due to low prices, and it can start right up again when prices go up.
It’s a technology that is well proven, and will be employed whenever the financials are adequate.

At some point the Saudis are going to be left selling to China, that friendly country with Mafia business practices and 1.5b expendable people to enforce them.
It won’t be fun to be a raghead over the next decade I believe.


5 posted on 02/22/2015 5:52:06 PM PST by nascarnation (Impeach, convict, deport)
[ Post Reply | Private Reply | To 4 | View Replies]

To: arthurus
The new generation of wells can be reactivated

Shutting down a new well can cause a lot of problems. This is rarely done unless intended not to return to production.

6 posted on 02/22/2015 5:53:17 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 2 | View Replies]

To: mountainlion
Striking workers at refineries tend to reduce demand and supply

Only one of the 15 refineries/chem plants on strike actually stopped production. That is the Tesoro’s Martinez refinery in California and it was half down for other work already.

7 posted on 02/22/2015 5:56:17 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Gay State Conservative

Saudi Arabia started using hydraulic fracturing themselves a few years ago.


8 posted on 02/22/2015 5:57:11 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 4 | View Replies]

To: mountainlion

I believe the strikes to be part of a belated reaction to the heavy inflation of the past decade. The.5% claimed by the government is bogus. The prices we pay have reflected much more inflation than that, probably closer to 7% or so, In an inflation the price of labor rises last and labor has not risen since 2008. We got out of the habit of large industrial strikes in the Reagan boom and they were slow to begin in the collapse, but they are happening now and will probably proliferate. Workers are feeling harassed as their incomes buy less and less. They finally strike. That is one benefit, perhaps the only one, of the existence of unions in the major industries. They are another canary in that coal mine. They strike when they feel the pinch no matter who is in the White house.


9 posted on 02/22/2015 5:58:42 PM PST by arthurus (it's true!)
[ Post Reply | Private Reply | To 3 | View Replies]

To: thackney

That is less true now than 20 years ago and will be lss and less true as time goes on, barring the government shutting down the oil industry altogether, which might well occur in the next 18 months.


10 posted on 02/22/2015 6:00:19 PM PST by arthurus (it's true!)
[ Post Reply | Private Reply | To 6 | View Replies]

To: arthurus
I believe the strikes to be part of a belated reaction to the heavy inflation of the past decade.

Nah - they're striking because they can:

BP spokesman Scott Dean told the Chicago Post-Tribune that USW employees are among the highest paid hourly workers in the midwest. “The average BP USW employee earns more than $82,000 a year in base salary. This does not include overtime, bonuses, company retirement contributions or other benefits, which on average adds well in excess of $20,000 to the total annual compensation package for the average BP USW employee.”

11 posted on 02/22/2015 6:19:24 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Zhang Fei

How highly paid they are is irrelevant. What their income is worth at the store or the car lot is what counts. When wages do not keep up with inflation you eventually get the major strikes, with the very highly paid as well as with the less well paid.


12 posted on 02/22/2015 6:23:30 PM PST by arthurus (it's true!)
[ Post Reply | Private Reply | To 11 | View Replies]

To: arthurus

I think entering into higher pressure formations makes it more true today, than lighter pressure formations of past days.

Good info here:

http://www.freerepublic.com/focus/chat/3236160/posts?page=82#82

http://www.freerepublic.com/focus/chat/3233396/posts?page=102#102


13 posted on 02/22/2015 6:28:55 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 10 | View Replies]

To: arthurus
I believe the strikes to be part of a belated reaction to the heavy inflation of the past decade.

If that were a true reason for striking, we would be seeing more strikes across more industries year after year. I don't track that, but it does not appear to be true.

14 posted on 02/22/2015 6:30:24 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 9 | View Replies]

To: thackney

Watch. It is just getting started. And the Unions don’t have such a heavy presence as they once had. Do you remember the seventies?


15 posted on 02/22/2015 6:31:54 PM PST by arthurus (it's true!)
[ Post Reply | Private Reply | To 14 | View Replies]

To: arthurus
When wages do not keep up with inflation you eventually get the major strikes, with the very highly paid as well as with the less well paid.

What wages do in relation to inflation is irrelevant. Wages move alongside per capita output. If per capita output stagnates, income stagnates. I understand they want a bigger piece of the pie. But that piece of the pie is extracted out of the incomes of people who buy gasoline and other refined products. If everyone struck, we'd be right back at our starting point, except with higher unemployment, lower relative wages and a less prosperous economy. Nations known for strikes don't generally grow their economies until they crush the unions responsible. Thatcher's demolition of British unions was a crucial step towards the rejuvenation of the British economy.

16 posted on 02/22/2015 6:44:51 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: arthurus
Watch. It is just getting started.

Inflation has been going down. If that was the real issue, we would have seen more strikes before this point.

17 posted on 02/22/2015 6:54:50 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 15 | View Replies]

To: thackney

Back in the early 1980’s I roughnecked for a couple of summers. The first summer all of the holes were “dry”. The geologist said that we had stopped just before hitting the production zone. So I guess the thinking was to drill most of it, and then finish the last of it when the oil prices were higher. (Labor higher as well). And take the tax write-off on a dry hole.

But I’m guessing that once you start producting, esp. with fracking, you want to keep the product flowing.


18 posted on 02/22/2015 7:01:59 PM PST by 21twelve (http://www.freerepublic.com/focus/f-news/2185147/posts It is happening again.)
[ Post Reply | Private Reply | To 6 | View Replies]

To: 21twelve

Pretty expensive to spend the cost of a drilling rig and crew and not get any return, without proving the well location to count on it for later.


19 posted on 02/22/2015 7:06:26 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 18 | View Replies]

To: thackney

They are drilling to hold leases.


20 posted on 02/22/2015 7:30:48 PM PST by FlyingEagle
[ Post Reply | Private Reply | To 19 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-29 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson