KramerKarma'd Profile picture
Oct 20, 2022 10 tweets 5 min read Read on X
🚨 USA Shale 🚨
My latest math & model
Like & share please #OOTT #COM #oilprice #GasPrice
This model is via EIA DPR.
It's based on averages and therefor is an estimate.
Let's dive in! The EIA has the Drilling Productivity Report at 9 million barrels oil per day ...continued 1/8 Image
Shale wells decline AVERAGE 60% per year with 40% of production remaining in the following year. I can get more precise but for simple example this is very close.
So 9M oil .6 declines so .4 remains.
9M ×.6 = 5.4M bbl/d needs replacement per year. (2/8) Image
On the 2022 dark blue line I have 160k bbl year 1 average across USA. ÷365= 438.3bbl/d per well.
5.4M decline ÷ 438.3= 12,320 wells to offset. More granular data lowers this to 5.0M + less decline is more conservative. Simply put wells older than 3yrs have lower decline (3/8) Image
So how many wells are we drilling?
11,516 × 438.3= 5,050,000bbl/d
So on the conservative side 5M lost bbl/d is met by 5.05M bbl/d supply.
Therefor shale is maxed out. (4/8) Image
Can they increase well productivity? Largely NO. Why? Because they are almost at full % weight to the Permian oil feild.
They are using the longest wells. The fastest drills, the heaviest frac + most injected material. So it's like trying to make a Formula 1 car faster (5/8) Image
What if they use more equipment? Say 1000/month if they can?
12k×438.3=5.260. +200k but 60% declines so without doing another 12k wells you'd loose 120k bbl/d if you did re drill 12k you'd have 80k additional decline . And a hypothetical what if all wells were Permian (6/8)
100% Permian hypothetical (aka if all oil wells got better)
So 175k bbl/yr1 = 480bbl/d
11,516×480= +5.5M so +500k
500k=316k needing replacement the following year. The treadmill effect. (7/8)
So summary.
9Mbbl/d =5M bbl/d decline
11,6k wells x438.3bbl/d =5.05M
USA outside of shale is declining.
At highest % to Permian
At full equipment capacity
At peak tech
Land getting chewed up.
Peak USA is here. (8/8) ImageImageImageImage
News article on the data above.
argusmedia.com/en/news/238346…
How could this have happened?!?!
Probably not going to add equipment and further depress their secondary resource price .

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More from @KramerKarma1

Mar 29
Revised down + storm ... still a large number vs peak.
GOM was down... interesting Image
Growth plays & total production.
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Read 8 tweets
Feb 23
Oil Rigs 💱 Fracs ~ Supply
Call me crazy but drills = frac lead = Supply. First seen as total liquids appearing in adjustment line. Image
If production stays flat ... we need to import 3.89M bbl/d ... almost 2022 levels so OPEC would control market via cuts.
Image
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USA could eat up a large portion of the 2.7M spare capacity.
Read 6 tweets
Nov 2, 2022
Data day!
EIA # rounded
SPR -1.9
Crude -3.1
Gasoline-1.26
Distillate +.43
NET draw 5.83
Read 11 tweets
Apr 21, 2022
$OBE is RED gotta make a post & vent lol.
The market is forward looking
...OK so look to the end of the year exit 22' 31,600boe and debt of 124M EV of 919M $/boe of $33k (equal to $90/boe or 3 years at q4 prices)... takes breath 😄 🤣 😂
(100wti 31k boe yr ave example) Image
Also that's about 300M FCF at 31,600 boe 157M capex in 2023. (But I'd bet on some growth or higher fcf if not growing and lower capex)
$GXE 407M EV/5900boe=69,000
$OBE 29,400boex69k= 2B-debt÷shares=$20.15
Take Jan-Dec debt $83wti (lowest capex) 2.3M÷(5,455boe×31days)= $13.6 fcf/boe.
OBE old guidance $70wti 149M FCF÷(29,600×365)= $13.79FCF ImageImage
Read 6 tweets
Apr 9, 2022
EV trucks. Long range is an issue. 334kwh = 112km 2.98KWh / km
VS BMW i4
84KWh = 484km 0.173KWH /km
Now you gotta charge them all at the same time every night to be ready for work the next day
200Amps 550-750 volts
That's 130,000 watts
1/82 of a windmill
1/4200 of a oil well ImageImageImage
Just incase any long haul truckers are worried you'd need to 10x the 334kwh battery to get 1000km. The current price of batteries is $100/KWh so a nice $334k for the battery of a long haul truck... with 220,000lbs of batteries to haul 30kg /kwh.
Now to be fair I quoted Permian oil wells (but excluded the energy in the natural gas) so USA drills 15k wells per year to replace these you'd need 51x more wind mills to oil wells but the wells decline by 50% so you need a 7500 well replacement. (This would be a new Permian)
Read 7 tweets

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