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Everything in the oil market is operating on the belief that when oil gets to X price, shale will flood the market again.
@Go_Rozen explains what the market is missing.
@Go_Rozen explains what the market is missing.
Because the decline rates in shale are so severe, the productivity per well, particularly in the first 12-18 months of production, and the drilling rate determine the industry's ability to actually grow production as a whole.
The part that people haven't noticed yet is that if productivity declines, or even stalls out, it almost doesn't matter what the drilling rate is. Even at ~ 15,000 completions per year, it's hard to grow production without growing productivity.
This is why Rob West claims that if shale productivity doesn't keep growing at 5% per year we are headed for an energy crisis. (Rob's a huge shale enthusiast fwiw)
Everything, literally, is riding on shale productivity. Do you feel lucky?
Everything, literally, is riding on shale productivity. Do you feel lucky?
