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Guest Post: The Top 5 Oil & Gas Plays For 2012

Tyler Durden's picture




 

Submitted by Jen Alic of OilPrice.com,

2012 has been a stellar year for oil and gas. From East Africa to North America, new technology, major new discoveries, an unparalleled appetite for exploration and a metamorphosing perception of risk have changed the playing field.

We’re looking at potential rather than existing production, and here are our Top 5 picks for this year:

Turkana County, Kenya

We have to start with Kenya, the biggest success story of the year.

In March, the UK’s Tullow Oil and Canada’s Africa Oil Corp. discovered 100 meters of oil in the Ngamia-1 well. The euphoria was in part because this discovery was made on the very first try in the very first well. Stocks shot up to record highs as a result.

The euphoria has not abated. In late November, the same duo made another find of 30 meters of oil in the nearby Twiga-1 well.

September also saw Kenya strike 53 meters of natural gas in its first-ever offshore find in the Mbawa-1 well, off the coast of Malindi. US-based Apache Corp. owns 50% the well in a consortium with a handful of other companies. They’re still digging, hoping that going deeper will reveal the oil.

The bigger picture, however, is that only the surface has been scratched in terms of exploration. The East Africa Rift is believed to hold over 70 billion barrels of untapped crude oil, while offshore Kenya, Tanzania and Mozambique have a joint estimated 250 trillion cubic feet of natural gas. There may be offshore oil, too. The oil discoveries in Kenya so far have been confined to one massive basin, and there are six more.

In addition to the size of the prize here, Kenya is favorable for other reasons as well: It offers relative political stability in the midst of a rather restless Africa; it offers attractive fiscal terms; it offers easy access to export markets; and it has an appetite for infrastructure that is hard to beat.

While 2013 may see some changes in the regulatory environment that could be less favorable, as for 2012, Kenya remains THE number one East African play in terms of potential. Next year will give us a better idea of commercial viability. 

 

Bakken, North Dakota

The Bakken shale play has placed North Dakota ahead of Alaska, making it the number two oil producer in the US for 2012, after Texas. Because of Bakken, the US has increased oil production this year to a level it hasn’t seen in almost a decade and a half. In one month alone this year, North Dakota issued 370 drilling permits.

Stretching from Eastern Montana to Western North Dakota and across parts of Saskatchewa and Manitoba in the Williston Basin, the Bakken Shale Play could yield some 4.3 billion barrels of oil, according to the US Geological Survey. That’s the modest estimate. Continental Resources—one of the major Bakken players—estimates as much as 40 billion barrels.

The clincher is that much of the vast Bakken Petroleum System has not even been tapped. So far, drilling has primarily targeted the Middle Bakken and the upper Three Forks Zones.  The Three Forks Zones have not been fully tapped, and the Upper Bakken Shale hasn’t really been tapped at all.

Eagle Ford, South Texas

Eagle Ford is potentially the next Bakken. It’s one of the most ACTIVE plays in the US right now. And what the majors and juniors are playing with is 7,500 in total acreage, five producing wells, two more wells being drilled, and the potential for 100 wells. This year, oil production has increased to some 300,000 bpd (as of August).

Natural gas is also a major Eagle Ford offering. Last year, it produced 914 million cubic feet of natural gas, though that has dropped slightly for this year.

So far, drilling seems to have had even better results than in Bakken. And there is a great deal of confidence and optimism. Enough so that Marathon Oil is planning to shift its primary focus from Bakken to Eagle Ford and spend one-third of its operating budget there. Right now Marathon is producing around 40,000 net barrels of oil equivalent (boe) per day and plans to more than double this next year. It’s already doubled production this year (and, incidentally, seen its profits jump 11% in the first quarter).

The biggest producer is EOG Resources (NYSE:EOG), putting out about 110,000 boe/day and holding reserves of around 1.6 billion boe.

Analysts think Eagle Ford could end up out-producing the Permian Basin in west Texas—and soon.

 

Mediterranean Plays

The Levant Basin in the Mediterranean has an estimated 122 trillion cubic feet of recoverable natural gas, and around 1.7 billion barrels of recoverable oil. And the area has seen a flurry of activity recently.

Between 25 and 33 billion cubic feet of this gas is in Israeli waters. The rest is carved up between Greek-held Northern Cyprus (which is a bit problematic), Syria and Lebanon.

Of course, along with this potential comes some uncomfortable geopolitics; on one hand among Israel, Lebanon and Syria; on the other hand between Israel, Turkey and the Greek Cypriots.

The first new natural gas field in the region is expected to begin full-scale production this year, with two additional fields coming on-line over the next six years. 

Specifically, we’re talking about:

•    The discovery to two offshore natural gas fields in northern Israel (Leviathan and Tamar) with an estimated 25 trillion cubic feet (about 100 years year of gas for Israeli domestic use)
•    Estimates that Israel has a potential 1.9 billion barrels of untapped oil
•    About 5-6 tcf of natural gas in the Aphrodite field claimed by Greek-held Northern Cyprus (just west of Israel’s Leviathan field)

Exploitation will be a bit expensive, though. Israel’s offshore fields are located 100 kilometers from the coast and in 6,000 feet of water. The natural gas is some 5,000 feet under the sea bed.

Offshore Tanzania & Mozambique

Tanzania has become a gas sensation in a very short time, with recent offshore discoveries of some 33 trillion cubic feet.

Sweetening the deal, we have political stability and low security risk, relatively speaking, as well as an existing 70-million-cubic-feet/day capacity for natural gas processing. More gas infrastructure is in the works.

Next door, Mozambique’s 130 trillion cubic feet of gas in its offshore Rovuma Basin is eye candy for foreign investors, and officials believe there is double this amount still waiting to be discovered. It’s not as attractive as Tanzania for one reason: There is no infrastructure.

 

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Thu, 12/13/2012 - 15:24 | 3060411 Flakmeister
Flakmeister's picture

Levant: 1.7 billion barrels of oil...

If this is a good play we are even more fucked that I ever could have imagined...

Thu, 12/13/2012 - 15:41 | 3060496 MillionDollarBonus_
MillionDollarBonus_'s picture

Oil and gas is a dead industry. The green revolution is going to completely obliterate the dreams of peak oilers. Those who are counting on oil futures and oil stocks to carry them into the higher echelons of society are in for a rude awakening. Green energies already starting to replace oil and gas. Wind farms are starting to appear everywhere.  I’ve seen pictures of wind farms appearing in waiting rooms, shop windows and in street posters on every block. The revolution is coming. Those who prepare for it by putting together a green portfolio will ride this wave to great fortunes. Those who remain fixated on the ways of the past will suffer severe financial losses.  

Thu, 12/13/2012 - 15:44 | 3060511 mayhem_korner
mayhem_korner's picture

 

 

Did you cut and paste that from some 1974 issue of Time?

Thu, 12/13/2012 - 15:49 | 3060522 sdmjake
sdmjake's picture

Well played, Mayhem. LOL

Thu, 12/13/2012 - 16:16 | 3060631 trav777
trav777's picture

Another RETARDED article!

It DOES NOT MATTER, for the eleventy TRILLIONTH time, how much there are in RESERVES of ANYTHING.

The ONLY THING that matters for something you intend to consume at a desired RATE, is the freaking RATE at which it can be produced!

The author states NOWHERE the expected rate of PRODUCTION from any of these reserves.  I'll help you out here:  the "new Saudi Arabia," aka Canadian oil sands, have nearly the same RESERVES as the Saudis did.  However, their reasonable maximum PRODUCTION RATE is less than HALF of what the Saudis achieve NOW.  And even hitting that requires insane amounts of freshwater and some supplemental energy source (right now NG) to mobilize the bitumen.  Nevermind the FLEET of mining vehicles (the largest dumptrucks on earth, etc.) driving through bazillions of gallons of diesel just to carry this crap up out of the MINE.  And that's what oilsands are, MINES.

This should illustrate to tards just how production peaks and resource quality works, the principle of "low-hanging fruit" and effectively how evolution works.  The reserves left after the low fruit is picked are of NECESSARILY lower quality, meaning the same amount of "stuff" YIELDS at a lower rate!

ALL the YIELDS across the planet are declining...this is precisely WHY interest rates are at such insane lows despite de facto bankruptcy, but you still cannot get a loan.  It's all about yield.  Unfortunately people don't work well in their pathetic average brains with concepts like rates. 

Thu, 12/13/2012 - 16:21 | 3060647 HeatMiser
HeatMiser's picture

Yeah Trav777 is back.

Thu, 12/13/2012 - 16:28 | 3060678 akak
akak's picture

And wow, six whole paragraphs and he managed to avoid badmouthing niggers in any of them --- a new record!

Thu, 12/13/2012 - 16:34 | 3060708 trav777
trav777's picture

are you gonna wake up someday or remain terminally clueless?  I just don't get people like you who are afraid to admit the obvious.  I can't fathom someone stupid enough not to GET the obvious.

Hispaniola is a nice case study.

Thu, 12/13/2012 - 16:46 | 3060754 akak
akak's picture

The point is, you complete jackass, that even IF one were to concede the validity of your bigotry, and that some races are "inferior" to others in some measures, then just what practical, or possible, consequences and policies would flow from that acknowledge?  NeoApartheid?  Death camps for niggers?  Come on, tell us Trav, you vile piece of shit, what exactly do we do with all those inferior darkies?  Let's ignore that ALL human attributes exist on a continuum, and that what YOU focus on is merely a group racial mean.  You are asdisgustingly collectivistic in your thinking as any Nazi, or as AnAnonymous for that matter.

Thu, 12/13/2012 - 16:48 | 3060769 fuu
fuu's picture

Excuse me you are actually thread jacking at this point.

Sat, 12/15/2012 - 01:16 | 3065740 MeelionDollerBogus
MeelionDollerBogus's picture

It's all the damned hispanic Joos supporting the black pope in Vatican Jesuitland!

They're in league with the LIBERTARIANS

Now that's a proper thread-jacking.

Thu, 12/13/2012 - 17:03 | 3060835 tickhound
tickhound's picture

Damn, did it go that deep?

All I took from it was the reminder that the French hate trees.

Thu, 12/13/2012 - 17:06 | 3060844 akak
akak's picture

*Crickets*

As expected.

Thu, 12/13/2012 - 19:19 | 3061132 trav777
trav777's picture

Do you ACTUALLY fuckin think I WAIT AROUND for posts of yours to reply to, you fucking babbling moron?

I'll get to you when I feel like it, bitch.

Thu, 12/13/2012 - 22:25 | 3061652 Western
Western's picture

Shit son, you're so cool on the internet.

Thu, 12/13/2012 - 19:04 | 3061097 hangemhigh
hangemhigh's picture

@ akak 3060754

trav is an r. crumb clone…………………………………….

"Well, he is a sexist, racist, antisemitic misogynist," Aline says.

 He talks about a cartoon he did, advertising a fantasy product called [Canned] Nigger Hearts. "This cute kid says, 'Hey, mom let's have nigger hearts for lunch!' with this kinda jigaboo image on it. And it's like canned nigger hearts. It looks like a straight newspaper advertisement. It's actually about all the sordid murky stuff going on in the real world, but some people thought it was a racist image. Those things are complex, y'know. They were as much about what was going on inside white people as their attitude to black people. I liked the idea when I was doing that stuff of making things that looked as if they were one thing but were actually something else."

 Actually, Aline says, he is a true egalitarian. "Yep, everybody's fair game. Y'know, he spares no one.”

http://www.freerepublic.com/focus/f-news/1357587/posts   

Thu, 12/13/2012 - 19:23 | 3061141 trav777
trav777's picture

Ok, fuck you then.

If you're NOT willing to have a real conversation, then fuck off.

STAY CLUELESS...I really DON'T give a fuck!

But don't EXPECT to be taken fucking seriously if you CANNOT acknowledge what is PATENTLY OBVIOUS.  You will continue to IGNORE why Detroit is detroit, why Rhodesia became Zimbabwe the Clusterfuck and what the hell is happening to a formerly 1st world country in South Africa.

And, Hispaniola, why DR is TYPICAL of a central american country and Haiti, on the SAME FUCKING ISLAND, is typical of a subsaharan african country.  Maybe the miasma that you idiots think causes such disparities only floats over one half.  Go figure.

Oh, in case I forgot to tell you this, go fuck yourself.  Belly crawling, sniveling bitch ass whites are the LOWEST form of life.  The absence of a practical SOLUTION does not negate the existence of a PROBLEM, you stupid, bumbling fuck for brains.

Thu, 12/13/2012 - 19:32 | 3061178 akak
akak's picture

LOL

I can just picture you, 60-something with high blood pressure and bad cholesterol, red in the face, spittle spraying over the keyboard, cruising for a stroke while belting out your racist bilge.

OK, the world has just made Trav dictactor for life.  You have unlimited power.  Now, what do YOU do about the "inferior races"?  Tell us.

Thu, 12/13/2012 - 16:42 | 3060737 Doña K
Doña K's picture

It's either Greek held South Cyprus or Turkish held North Cyprus. Clarify please

Thu, 12/13/2012 - 16:39 | 3060724 otto skorzeny
otto skorzeny's picture

Trav is still on double-secret probation until he has been fully vetted after such a long absence

Sat, 12/15/2012 - 01:09 | 3065731 MeelionDollerBogus
MeelionDollerBogus's picture

ya, there's trav777 and trav7777 - the arche-type is easy enough to mimick so who knows if it's the same.

Thu, 12/13/2012 - 16:42 | 3060732 otto skorzeny
otto skorzeny's picture

leave it to the canucks to fuck up in the foulest way some of the most pristine land on earth for a short-term gain with these stupid tar sand plays. at the end of the day all you have got is clean water,soil and air. another way the bernank and his "push everybody into commodities" is distorting things.

Thu, 12/13/2012 - 18:52 | 3061074 CPL
CPL's picture

BP, Esso, Exxon...all those huge mutli-national Canadian oil giants.

 

Oh wait...

Thu, 12/13/2012 - 21:39 | 3061518 Go Tribe
Go Tribe's picture

A college textbook, I believe.

Thu, 12/13/2012 - 15:46 | 3060514 bullet
bullet's picture

mdb... what time does your shift start at McDonalds...

Thu, 12/13/2012 - 15:55 | 3060552 trollin4sukrz
trollin4sukrz's picture

@ 93 million barrels used per day world wide.. I dont think a windmill is going to be able to put 7 gallons of oil in a car tire? Peak oil is here and all one needs to use as a gage is food prices. Humans are truely fucked and there is and will be a massive die off in the future. OIL feeds the world    .

Thu, 12/13/2012 - 16:45 | 3060745 Matt
Matt's picture

Depends on allocation. If less oil goes to airplanes, cruise ships, and commuting 2 hours to work every day with one person in each car, and more goes to food, then the oil shortage won't be such a big deal.

Changes in fresh water supply, weather and climate may be bigger issues.

Thu, 12/13/2012 - 16:47 | 3060759 trav777
trav777's picture

meh.  There needn't be.

But with THIS stock of humans, probably.

Not to feed the technocornucopians, but everything seems to hang on production of electricity and the viability of transport without hydrocarbons.

We can explore options to achieve that.  First we need a base power source.  Nuclear fission is funtionally inexhaustible, but only with breeder reactors.  The technology exists to fiss actinides and other nuclear waste down to half-lives of a few hundred years, but this requires Gen IV reactor technology that really isn't seeing much investment.  Compared to military expense, it's not even a blip.

On that notion of investment, where IS the money going?  Stealth drones?  Killing robots?  War stuff.  Spy stuff.  DARPA has the robot cheetah and robot mule.  The RFP on the robot cheetah clearly specifies what they want it for...to hunt down and kill people, avoiding defensive fire while it does so.  'course they state it in terms of "subdue noncompliant subject" but is this thing expected to handcuff you?  GTFO here.  It's an HK, just like the robot mule with the rotary engine that can carry 300lbs 15 miles.   It will go from a pack animal to hey let's mount a cannon on this thing.  It can sit silent in the camouflage, wake up and just absolutely ROCK out with a minigun or whatever and mass kill people.  It doesn't need food or drink or anything.  A good muffler makes it really quiet.  They have robot sharks and robot water snakes, even robot tree climbers.  Our public loves war so long as no real people on OUR side die.  We send robots to do it.

My kids ask, how is this robot sea snake gonna kill people?  Or the robot tree climber?  This just shows how kids are naive...ok, the robot sea snake is just going to wrap itself around you.  The robot tree climber is going to get near you then explode.  Gotta think laterally.

Anyway, on energy...assuming functionally inexhaustible fuel in fission reactors, we have to have a storage means.  We are already at the theoretical limits of chemical batteries.  We can't do cars with them, not like with liquid fuels.  Just like we can't do Mars with a chemical rocket....just doesn't have the physics.

The only storage alternatives I can think of are superconducting coils to persist far more current than a battery or something exotic like a nuclear isomer.  Dunno how you recharge the latter of these.

YBCO is a miracle material, people won the Nobel for HTS; but it took 20 years of time for it to start to be used in nearly any commercial applications.  The R&D time cycles weren't there as far as ROI for private actors and the gov only cares about stuff that can kill.  Only since maybe 2006 have YBCO tapes shown up and they have already dropped MRI prices by an order of magnitude and will permit applications that were impossible prior.  CERN is using superconducting tapes, BSSCO ones, in its collider and the difference is profound.  But to push technology, you have to focus on it.  Our best minds are coming up with stealth drones to spy and kill, robots to spy and kill, planes to spy and kill, computer centers to spy and help kill, new aircraft carriers to spy and kill...everything revolves for us around spying and killing.

So, yeah pretty clearly what's possible ain't what's likely.

Thu, 12/13/2012 - 16:54 | 3060799 centerline
centerline's picture

Seen the latest DARPA robot (V-bat)?  Stuff looks more and more like something out of the terminator movies every day it seems.

Thu, 12/13/2012 - 17:29 | 3060905 mtomato2
mtomato2's picture

Cheetah = Fahrenheit 451.

 

Brrrr.

 

 

Thank God for iPads.  And TV.

Thu, 12/13/2012 - 22:29 | 3061671 Western
Western's picture

The only thing that gives you up as either a A) numbskull, or B) gov't shill, is this;

"Our public loves war so long as no real people on OUR side die.  We send robots to do it."

Those things will be deployed in America long, long before there's some bogus international war hunting boogeymen across the sea.

Thu, 12/13/2012 - 16:18 | 3060642 trav777
trav777's picture

FYI, I LOL at your posts as well as at the cretins who can't get your schtick.

Pictures of wind farms...hahahahahahahaha...you forgot "complimentary airline flight magazines in the seatback in front of me"

Thu, 12/13/2012 - 19:15 | 3061112 hangemhigh
hangemhigh's picture

mdb is solar leo in wind farm drag................

Thu, 12/13/2012 - 18:35 | 3061020 DoChenRollingBearing
DoChenRollingBearing's picture

dupe post

Thu, 12/13/2012 - 18:22 | 3061021 DoChenRollingBearing
DoChenRollingBearing's picture

Wrong MBD.

Natural gas is a BIG THING.  It gets bad press here in the USA.

I am just back from Peru, where I finally did some digging into their large scale work powering their car fleets on naturral gas and its derivative LPG.  These guys put up the money and have an impressive infrastructure!  About 20% of Lima's car fleet runs on CNG or LPG (difference explained below at the link).  One of Ameru's own vehicles runs on LPG!  It costs about $1000 to make the vehicle conversion, but you save 50% on fuels costs, a GREAT rate of return.  The Peruvian NatGas business community is worried that our HUGE reserves will prevent them from building petrochemical and plastics plants there, they are right to be concerned...

http://tinyurl.com/9w9texx

 

Thu, 12/13/2012 - 21:56 | 3061110 AssFire
AssFire's picture

You are spot on! I have always agreed with T Boone Pickens about CNG for the heavy trucks- it will be the standard in 10 years for the trucking industry.

Energy is a great thing once you start to think about it the right way: Think of oil and gas as toxins affecting our dear mother earth- we are doing God's work to remove it and at the same time we are saving the planet from the ice age when we burn these hazardous toxins. God willing, Yellowstone and other pristine areas will be lined with drilling rigs removing these evil fuels soon.

I don't even like to mention how well things are going here in Texas- this site is supposed to be nothing but gloom. The natural gas is a big game changer as the new techniques breaths fresh life into the older fields. In Midland the per capita income is 60K (2nd highest in the nation). No housing bubble here, wouldn't even know there is a recession going on if it weren't for the federal government beggars mugging us for their Socialist agenda.

One thing is certain: energy costs would plummet if the gobermint would open up more federal land. When NASA did their tether ball experiment we were able to see 60 miles deep into the earth's surface- oil is everywhere. It is just part of the game- acting like it is scarce.

Thu, 12/13/2012 - 18:27 | 3061037 Vashta Nerada
Vashta Nerada's picture

Oil and gas will provide for us for the next 500 years at least.  Federally subsidized wind farms will only last until the subsidies run out.

Thu, 12/13/2012 - 18:45 | 3061061 Dixie Rect
Dixie Rect's picture

Okie dokie, Major Douche Bag! Were those pictures or actual windmills in waiting rooms? Next thing you're going to tell us is that they will insert methane recovery tubes in obese women's arses to recover green fuel while they walk through Walmart and beat their kids.

Thu, 12/13/2012 - 18:01 | 3060978 Bicycle Repairman
Bicycle Repairman's picture

What about "122 trillion cubic feet of recoverable natural gas"?

That's slightly more than a popcorn fart.

Thu, 12/13/2012 - 15:24 | 3060412 q99x2
q99x2's picture

Hey what about the Bernanke Call?

Thu, 12/13/2012 - 15:26 | 3060415 otto skorzeny
otto skorzeny's picture

check the charts for NatGas-it's on a slide back down. another mild winter(it is 50 degrees in Chicago today-with basically the same call through X-Mas) does not bode well for the "widow maker trade". also-that big Israeli field is BS-they still rely on Egpyt for alot of their NG.

Thu, 12/13/2012 - 15:24 | 3060417 Flakmeister
Flakmeister's picture

Anytime you hear someone making a pitch talking about boe's, just run away, fast...

Thu, 12/13/2012 - 15:35 | 3060459 falak pema
falak pema's picture

So Flak, 

sorry for insisting, but do you believe in the 10 MMBPD meme of Us liquid oil production in 2020, which includes NGL/Condensate/Heavy Bakken/Bio corn oil...its the "new US energy horizon" along with frack gas, which  is now of interest in Eurozone; as the UK makes that plunge.

Thu, 12/13/2012 - 15:58 | 3060558 Spastica Rex
Spastica Rex's picture

Either the petroleum hole is filled with the liquid of your choice,  or exponential growth is over - I believe that.

P.S. Sorry for butting in.

edit: flammable liquid. Beer won't work.

Thu, 12/13/2012 - 16:00 | 3060570 falak pema
falak pema's picture

you are more than welcome and beer has many good qualities according to a recent study; like wine has, always in moderato canto.

Thu, 12/13/2012 - 17:03 | 3060831 centerline
centerline's picture

It is all about EROEI.  We don't have to run out as in the last drop of oil.  The remaining oil, no matter how much there is, just has to be economically unviable to obtain, transport, process, etc.

The US military did not conduct studies regarding Peak Oil decades ago for nothing.  The energy issue is right up there at the top of the ponzi pyramid game... right there with food and water.

Thu, 12/13/2012 - 17:13 | 3060867 Spastica Rex
Spastica Rex's picture

Right, and when I said "hole" I meant hole in growth.

Thu, 12/13/2012 - 19:20 | 3061136 centerline
centerline's picture

Got it.  Was just adding to you point!

Thu, 12/13/2012 - 16:00 | 3060567 CrashisOptimistic
CrashisOptimistic's picture

The Bakken cannot grow without frantic avalanches of oil wells.  The day a well is completed and starts to flow is the highest flow rate that well will ever see.  Every day less of a flow rate flows.  It becomes subtractive.  New wells have to overwhelm that.

The article mentions Marathon diverting drilling to Texas.  That is very bad for Bakken output growth.

Remember, probably more than anything else about oil remember this:

Oil is not measured in barrels.  It is measured in barrels/day.  When the barrels/day flow stops growing, so does optimism.

Thu, 12/13/2012 - 16:05 | 3060580 falak pema
falak pema's picture

MMBPD...my question is that the projections of recent studies define that as horizon for 2020...and that is a challenge which has to be substantiated.

Thu, 12/13/2012 - 16:08 | 3060595 Spastica Rex
Spastica Rex's picture

Are these linear projections? Based on what prior time period? I haven't seen these. Link?

Thu, 12/13/2012 - 16:25 | 3060667 Spastica Rex
Spastica Rex's picture

TFTLs

In fact, I've heard the claims but haven't seen the basis.

I'm suspicious that claims on future production are overly optimistic for a variety of reasosn, not least of which being the tendency to hurry initial production at new sites.

Some stuff on TOD today:

http://www.theoildrum.com/node/9702#comments_top

 

Thu, 12/13/2012 - 16:59 | 3060823 Matt
Matt's picture

Even if they are accurate, America producing 10 Million Barrels Per Day Equivelent means 50% of todays consumption.

North America may be able to produce enough to meet todays consumption, for a little while at least.

Thu, 12/13/2012 - 17:49 | 3060953 falak pema
falak pema's picture

good catch REX, 

Trav has no faith in IEA but these Oil Drum figures are not far away fron those projections. 

correction : these look of similar origin.

Thu, 12/13/2012 - 16:27 | 3060676 trav777
trav777's picture

IEA has been lying for over a decade.

These are all magical projections.

Thu, 12/13/2012 - 16:44 | 3060738 otto skorzeny
otto skorzeny's picture

you're using BI as a source?

Thu, 12/13/2012 - 17:23 | 3060890 falak pema
falak pema's picture

not BI, sources printed by BI. Hey don't get hoity toity...media is just an intermediate. You appraise the content of what's transmitted. 

Thu, 12/13/2012 - 16:08 | 3060601 CrashisOptimistic
CrashisOptimistic's picture

The farther into the future you look, the more presently producing wells there will be with reduced production.  Those reductions become additive.  If you don't drill more and more frantically, you can't overcome them.

The ugly part of the Bakken is not . . . "there will be 1 million bpd of production".  That's not the problem.  The problem is they may hit that number, but only hold it for 6 hours.  The decline rates for present wells are steep and drilling rig count is falling.

Thu, 12/13/2012 - 16:12 | 3060622 falak pema
falak pema's picture

why concentrate just on Bakken, I hear ya, but that report has a cumulative view for US liquid energy balance. From all sources. To contradict that we need somebody who has an angle on each segment. It sounds far fetched but the euro press is going bonkers about US oil production surge in coming years.

Thu, 12/13/2012 - 16:31 | 3060684 CrashisOptimistic
CrashisOptimistic's picture

Shale gas plays are not gas plays.  They produce NGLs, seemingly as a byproduct, but they fund the entire effort.  NGLs are priced higher than gas, so they are actually the primary product of a nat gas well.

A barrel of NGL does not  have the energy content of a barrel of crude oil.  It's about 60%.  Adding up total liquids is an invalid calculation.  You can't stack a barrel of NGL onto a barrel of crude on a graph and declare a total that is meaningful.  NGL barrels are usually used as industrial feedstock; not as input to a refinery to make gasoline.

Total liquid numbers grow because of shale gas wells.  Not shale oil wells.  They don't equate to continued ability to fuel a truck that brings food to your grocery store shelf.

Thu, 12/13/2012 - 17:20 | 3060885 falak pema
falak pema's picture

NGL is light, and has same BTU/kg as oil but less per cu M, so you r right on volume basis. But NGL is precious as its transportable cheaper than gas via pipeline. NGL/condensates (C5 cut) are the most valuable portions of NG production. And we will be finding more gas than oil in the future. 

So don't discount NGL. 

Thu, 12/13/2012 - 16:42 | 3060731 Darth Sidious
Darth Sidious's picture

There is almost limitless oil and gas in source shale.  The issue is the cost of getting it out.  More than likely the best and cheapest shale is being exploited now .... and those shales are still pretty expensive all in.  Most currently drilled Bakken wells require $60-70 wti all in to make a decent return.  5 years down the road you'll need $130 oil.  Just look at production profile of the first shale, the Barnett and you know what is coming. 

Shale story is another bit of wall street hype . . . meant more to exploit investors than natural resources

Thu, 12/13/2012 - 16:30 | 3060685 trav777
trav777's picture

IEA doesnt want to talk about that though, because it would upset people.

What's worse is that they make no attempt to talk about NET boe...it's always some BS fudged "liquids" total that they can make look however they want nevermind that the barrels don't have the same energy content.

Or that tarsands requires massive negative balance on NG and diesel to mine that crap and wash it off.

Thu, 12/13/2012 - 16:27 | 3060668 trav777
trav777's picture

10mbpd?? BWHAHAHAHAHAHAHAHAHA.

You might want to peek into how the IEA was forced under political pressure to effectively LIE on everything they've produced for over a decade now.

This 10 mbpd can be filed with their 130mbpd of world production in 2020 or whatever it was.

The people they fired after that WEO...the last time they released an alarmist outlook.  Then they went and scrubbed it...when was that, like late 90s or something?  Calling for peak in the next decade and the US came down on them like a shelf of the BOE's tungsten bars.

then there is the USGS which is so laughable I cannot understand how someone could even mention it with a straight face.

Every single projection fills in the gap between what they REALLY project and what we NEED by "undiscovered countries."  Or whatever...fantasy BS.  Read any of the late 2000s vintage WEOs and you will see it.  There have been whistleblowers crawling out from under the floorplanks there exposing how IEA has ignored and softsold Peak while pretending that all the oil we could ever wish for will just be "found."

Then you have these idiots tacking on all these imaginary "reserves" without reference at ALL to the EROI or even base liquid production rate of the resource. 

Thu, 12/13/2012 - 15:36 | 3060472 tooriskytoinvest
tooriskytoinvest's picture

Largest Capital In The World Now Entering Gold & Silver Space: The Treasury Is Now Issuing Debt For FREE! If One Has Wealth To Preserve, The Time For Action Is Now!

http://investmentwatchblog.com/largest-capital-in-the-world-now-entering-gold-silver-space-the-treasury-is-now-issuing-debt-for-free-if-one-has-wealth-to-preserve-the-time-for-action-is-now/

Thu, 12/13/2012 - 15:36 | 3060473 yabyum
yabyum's picture

The niobrara play is picking up steam in easter Colorado and Wyoming.

Thu, 12/13/2012 - 15:40 | 3060487 AnAnonymous
AnAnonymous's picture

Too bad the article only scales Israel consumption to their alleged reserves.

Would have been funny to read about Kenya, Tanzania consumption vs their reserves.

Somehow, in this 'american' world, some are entitled to consumption, others are not.

Indians are the scarce products of these days.

Thu, 12/13/2012 - 16:26 | 3060594 akak
akak's picture

Too bad China's rampant and exponentially growing resource consumption is far greater than their alleged reserves of anything, including honesty.

Would have been funny to read about America's, Europe's, South America's, Africa's consumption vs China's ballooning resource consumption.

Somehow, in this Chinese shitizenism world, some are entitled to objectivity, others are not.

Ability to societally self-indict is the scarce product of these AnAnnoyingUs posts.

Thu, 12/13/2012 - 15:42 | 3060498 Scalaris
Scalaris's picture

Namibia, Morocco, Poland.

Thu, 12/13/2012 - 15:43 | 3060500 1835jackson
1835jackson's picture

It's the hard knock life for us....

http://www.youtube.com/watch?v=s4sQI8Evfhc

Thu, 12/13/2012 - 15:51 | 3060525 Mad Mohel
Mad Mohel's picture

Beware the shale bullshit they've been pumping lately. Trying to go for an energy bubble based on bullhit. The ROI makes it a waste of time, but the very bubblish 370 drilling permits is a good indication of what they are trying to do.

And the estimates are even more reason to be cautious. Seriously, between 4.5 - 40 billion barrels. Thats quite a wide margin there. Pump, pump, pump the bubble.

Thu, 12/13/2012 - 17:08 | 3060853 Matt
Matt's picture

Even if it is not BS and their most optimistic projections are true, 4 Billion barrels / 80 million per day consumption = 50 day supply. You need to discover a new one of those every two months.

Thu, 12/13/2012 - 15:50 | 3060527 Caviar Emptor
Caviar Emptor's picture

New Joisey, exit 12-13 dirt play: the ground is saturated with oil from 90 years of seepage! Git it while the gittin is good

Fri, 12/14/2012 - 00:30 | 3061913 willwork4food
willwork4food's picture

But, will i get mugged?

Thu, 12/13/2012 - 15:51 | 3060535 buzzsaw99
buzzsaw99's picture

Under 6k feet of water and another 5k feet of sea bed. That sounds like where a joo would hide his valuables. lulz

they don't need oil or gas while they have their hands in uncle sam's pockets anyway.

Thu, 12/13/2012 - 16:05 | 3060582 1100-TACTICAL-12
1100-TACTICAL-12's picture

What do you have against the chosen people ?

Thu, 12/13/2012 - 16:48 | 3060765 otto skorzeny
otto skorzeny's picture

who the fuck "chose" them? if we are all worship the same God-that of Abraham-then Jews,Catholics, and Muslims are all "chosen". also-Israel is a nation of welfare queens sucking on uncle sam's dry and cracked teats.

Thu, 12/13/2012 - 17:47 | 3060940 stiler
stiler's picture

you're right about that; the jews are no more "chosen" than any other people. Everyone must come to God by "calling on the name of the Lord" (notice no mention of repentance, but the calling on implies need). Anyone can be spiritually made one with God. Catholics must come in the same way as must a Jew. But as far as physical blessings are concerned, the Jews are more blessed than other people and God has used them to be a blessing; just look at the ratio of jews to gentiles in every field, and they are great in those fields. God told Abraham, a gentile moon-god worshipper to follow Him, saying, "and in thee shall all the families of the earth be blessed." They would be blessed to have the opportunity of taking the same faith in God through the One that would come through his loins-- Christ.

Thu, 12/13/2012 - 18:08 | 3060980 stiler
stiler's picture

by ratio of jews to gentiles I mean there are more jews in more fields of knowledge than would naturally occur. When a Jew is saved he becomes a member of Christ's body-- the church. At Armageddon the Jews will be saved nationally by repentance after 1/3 of them are killed by Antichrist--or is it 2/3? I don't know It's just pretty sad in view of their promises and in view of their sorry history, that that's what it takes for them to be saved as Israel.

Thu, 12/13/2012 - 16:05 | 3060583 CrashisOptimistic
CrashisOptimistic's picture

No, that truly is a big deal.  Israel is 100% dependent on Egyptian nat gas.  That would cease to be so when this gas from the find starts to flow.

Additionally, a great deal changes when they start to export that gas to local countries.  Jordan and Syria may change their attitudes about Israel if they depend on Israel for nat gas.  

Thu, 12/13/2012 - 16:02 | 3060577 toomanyfakecons...
toomanyfakeconservatives's picture

The petro dollar is all done... don't kid yourself otherwise.

 

http://www.youtube.com/watch?feature=player_detailpage&v=4Z9WVZddH9w#t=8...

 

 

Thu, 12/13/2012 - 16:11 | 3060598 jubber
jubber's picture

No mention of Kurdistan? biggest onshore Oil discovery in three decades  GKP. Exxon, Total Statoil Gazprom Chevron, hess, Marathon etc, all moved in this year.

Thu, 12/13/2012 - 16:33 | 3060698 Scalaris
Scalaris's picture

Indeed, Kurdistan is rarely mentioned despite its massive reserves. As for GKP, it has been a non-stop drama with speculation regarding its takeover by Exxon at some point, which would have been of little surprise, considering the around 13.5 billion barrels of gross mean oil-in-place, found in its Shaikan block.

At some point I thought that Rothschild would sweeten a deal for Todd Kozel, so that he would be able to cash out, and allow for a Vallares/Genel - GKP mergence of sorts, which would eventually be sold partial or as a whole to Exxon, when its reserves would be priced at multiples. 

Thu, 12/13/2012 - 16:09 | 3060606 haskelslocal
haskelslocal's picture

Curious. How are these "plays" when the forward potential has been extrapolated out by first commers?

Are they "plays" to find prop investors to backfill profit take downs?

Thu, 12/13/2012 - 16:18 | 3060638 Taint Boil
Taint Boil's picture

 

 

I would believe / listen to The Oil Drum before I would OilPrice.com

Thu, 12/13/2012 - 16:31 | 3060689 trav777
trav777's picture

bingo

Thu, 12/13/2012 - 16:33 | 3060701 gmak
gmak's picture

Big deal.If the title had 2013 instead - you might have something here.

Thu, 12/13/2012 - 16:34 | 3060702 therearetoomany...
therearetoomanyidiots's picture

"Stretching from Eastern Montana to Western North Dakota and across parts of Saskatchewa and Manitoba in the Williston Basin, the Bakken Shale Play could yield some 4.3 billion barrels of oil, according to the US Geological Survey'

 

Too bad, as with the keystone pipeline, all that oil would not stay in the US for the US.   It will go to the highest bidder overseas and with the piss poor value of the USD and it's ever deflating value, our energy costs will 'necessarily skyrocket'.

 

 

Thu, 12/13/2012 - 17:17 | 3060877 Matt
Matt's picture

Why too bad? Don't you think America might benefit from higher energy costs? Less urban sprawl, less long distance commuting. Maybe people will walk more and eat less.

Fri, 12/14/2012 - 09:47 | 3062315 therearetoomany...
therearetoomanyidiots's picture

Yeah, real aswesome.   Just fuck those that have set up lives outside the big city.   I know, really, it'll be awesome when people have to spend, what, 500-1000 percent more on food, clothing, just about anything that isn't made or grown in the area?    Super, then the government canwork harder to take more money from idiots like you while creating more and more people who will need their help.  Yeah, super suggestion.  Then only elites can drive around, have things, enjoy life, everyone else can just shit.  that'll be super.    Beautiful vision of the future numb nuts. 

Why do you hate America and why do you continue to live here if you hate it so much.  

Thu, 12/13/2012 - 16:44 | 3060744 Super Broccoli
Super Broccoli's picture

there will be oil FOREVER ! Petrocorp are just not looking for it. If you were told petrol was pretty much as common water is you'll never be willing to pay $100 a barril !

Remember, 40 years ago we were being told the petrol ressources were about to end within 30 years ...

Thu, 12/13/2012 - 16:45 | 3060746 earleflorida
earleflorida's picture

the war has been fought and won... it's over-- blue-gold, now controls the blue skies?

and who is it that has won the battle-- why, the chinese of course.

think about it? amerika has been playing world cop for thirty years while the hen-house has been raided-- right, under our noses!!!

why???

jmo 

Thu, 12/13/2012 - 17:19 | 3060882 Matt
Matt's picture

Because America was playing Checkers while the Chinese were playing Go?

Thu, 12/13/2012 - 16:45 | 3060749 Super Broccoli
Super Broccoli's picture

there will be oil FOREVER ! Petrocorp are just not looking for it. If you were told petrol was pretty much as common water is you'll never be willing to pay $100 a barril !

Remember, 40 years ago we were being told the petrol ressources were about to end within 30 years ...

Thu, 12/13/2012 - 22:58 | 3061739 earleflorida
earleflorida's picture

"The most Important Video You'll Ever See" __ by Dr. Albert A. Bartlett *1995   [8 part series ~ 9min. each __ total ~1:14 min.] http://www.youtube.com/watch?v=umFnrvcS6AQ

ref: 32 min -35 min / 40 min - 50 min. marks best overview 

Note: it's well worth your time

Ps. when the U.S. was told we have plenty of oil... no one mentioned China, India, Russia, Brazil... all soveirgns of Latin America, S.Africa, N. Africa, EU, and the ME,...et.el.

Ps2.  The world population at the end of 2011 was ~7.0 billion people [  http://www.worldometers.info/world-population/  ]  In 1975 it was ~ 3.7 billion, so it will mostly have doubled by the end of 2013. Do the arithmetic, or [  http://www.prb.org/Educators/TeachersGuides/HumanPopulation/PopulationGr...   ] whatever?

Ps3.  Thorium Nuclear Module Reactors, can't melt down, or up... and light-water is no mystery today. Only drawback is where will the mega, mega wmd's controlled by the MIC get their plutonium, and who will have any use for uranium anymore!!!  

Thu, 12/13/2012 - 17:07 | 3060849 jmcadg
jmcadg's picture

Trav has been on the Red Bull :) Good work buddy.

Thu, 12/13/2012 - 17:09 | 3060854 Jack Sheet
Jack Sheet's picture

"2012 has been a stellar year for oil and gas"
What fucking rubbish, Where have the energy stocks gone? No fucking where.

Thu, 12/13/2012 - 19:32 | 3061171 PGR88
PGR88's picture

for those of us small-fry unwilling or unable to go to Kenya or Mozambique, what do you suggest for oil and gas investments?

Thu, 12/13/2012 - 23:36 | 3061833 matsoR
matsoR's picture

A world without oil, now that would be something!

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