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“I think what you need is for the public to be reassured that the analysis coming from the IEA and the EIA is fact-based and not being driven by a policy agenda.” J. Barrosso
*
Last week, President Donald Trump quietly nominated Tristan Abbey, a senior fellow at the center, to serve as director of DOE’s Energy Information Administration. Abbey served on Trump’s National Security Council in his first term as the director for energy and environment and is a former
Senate Energy and Natural Resources Committee staffer. Abbey wrote frequently for Real Clear Energy; you decide how reliable the information you now receive from the EIA will be and remember, the U.S. is on a mission to drill baby, drill...the last of our affordable hydrocarbon resoures
used for exports and as a foreign policy tool.
$60 NYMEX WTI
-$4.00 transportation & marketing
-$12.60 royalty burdens
-$3.23 prod. taxes & ad valorem taxes
-$2.50 general overhead costs
-$2.35 interest expense on long term debt
-$1.00 dividend costs
-$5.00 produced water costs
-$7.00 lease operating costs including DH maint.
= $22.32 per incremental BO net back
$8MM Well Costs/ $22.32 = 358,422 BO to P/O
/ $25.00 = 320,000 BO to P/O
/ $28.00 = 285,714 BO to P/O
This chart and corresponding narrative was a poor description of well economics in U.S shale oil basins, particularly the Permian Basin where 250,000 barrels of oil produced in two years does NOT pay $8MM wells back. At $60 WTI, after all costs are deducted from the barrel of oil produced, including G&A and debt service, the net back, or profit is pretty close to $25 per BO. To make predictions about America's oil and gas future based
on poor well economics, or misuse of terms, or changing of definitions, or non-GAPP crap people have never heard of before,
is deceptive and does not serve the country well.
The insert, from LinkedIn, the source of perpetural U.S tight oil and gas growth, where no barrel or no MCF will ever be so scarce, or unaffordable to export, is even worse. A large American based data-sell company makes an important statement about ROR's on $8MM shale wells and when asked to see the actual data to back it up, you get dismissed with a haha.
If you wish to know about the energy future of your country you just have to believe what you are told and otherwise shut up.
Don't do that! Use common sense and think for yourself.
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The materials provided on this site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. I may make data related mistakes occasionally; if you use my opinions about oil reserves or shale well economics for financial purposes, to buy or sell stocks, your nuts. Don't do that. If I have used a photograph incorrectly it was for educational purposes and I have done my best of to give credit where credit is due. My stories are all true, slightly embellished, perhaps, but true; I don't change names to protect the guilty. I am as accurate as possible about history and historical facts; I work very hard at that.All rights are reserved, whatever that means. Don't blame me, I didn't do it.