North American Oil Boom Spectacular — Best is Yet to Come

The North American oil & gas boom has taken the world by surprise. As US oil production pushes ever upward toward the magic number of 10 million barrels per day (US peak production in November 1970), peak oil prognosticators and oil tyrants have been caught flat-footed. And it looks like this boom is only just getting started.

Oil field production numbers continue to rise, pushing oil imports downward.

The EIA estimates that the U.S. has 223 billion barrels of technically recoverable shale oil. Pioneer Natural Resources estimates that 75 billion barrels are located in the Permian Basin alone, in the Spraberry/Wolfcamp shale formations. That estimate is up 50% in the last year.

estimates of technically recoverable oil are likely to increase dramatically in the years to come. For example, in the EIA’s 2011 world shale and tight oil report, the organization estimated that the world had 32 billion barrels of technically recoverable shale/tight oil reserves. By 2013, those estimates had increased nearly 11-fold to 345 billion barrels. Given the fact that the EIA estimates 3.357 trillion barrels of shale oil resources exist in the world, even today’s lofty estimates are likely only scratching the surface of what future technology can accomplish.


The technology of oil discovery and oil production is moving forward at remarkable rates, bringing more and more oil formations into reach.

At the same time, the cost of discovery and production are being brought down by new approaches, and depletion rates are being brought under better control.

The drilling techniques were developed by companies that began drilling multiple wells offshore from one location. The technique is called horizontal drilling, where companies could drill thousands of feet vertically and then drill hundreds of feet horizontally from the same well bore. Multiple wells could be drilled from the same platform, which saved time and money.

Horizontal drilling moved onshore and became a key component in the production of natural gas, and later crude oil, from shale formations originally in the Barnett Shale of North Texas…

… Companies have been fracturing wells since 1947 in an effort to force open intervals in the rock.

Shale, however, created additional problems because of the tightness of the formation. A technique called slick water injections using hydraulic fracturing was developed and the success started a flurry of activity.

Today, companies are experimenting with new technologies that are even more successful. One such company is BHP Billiton, an Australian based company that plans to spend $4 billion drilling 400 wells in Texas’s Permian Basin and Eagle Ford Shale this year…

… poorly propped fracs were the primary cause of rapid decline in production, which caused BHP to turn from the slick water techniques to the BroadBand Sequence technique developed by Schlumberger that creates chemical diversions to improve stimulated rock volume and create a more uniform distribution across clusters.

Skaufels said BHP, which holds about 300,000 net acres in the Eagle Ford play, is the second largest producer in the Eagle Ford, but it has its sights on becoming the largest and most cost efficient producer.

Our costs have come way down over the last year, and it’s because now we’ve got time to actually be able to look at what we’re doing, analyze our data, and improve,” he said.

“We have seen a 25 percent improvement in both time and cost,” Skaufels said … __Alex Mills

As long as oil prices remain above $60 a barrel, most North American shale producers will continue to operate profitably. When we look at Canadian oil sands producers, the breakeven prices range between $25 a barrel and $65 a barrel, depending upon the fields and methods of production. The important thing to remember is that production costs are coming down for both shale oil and oil sands, as experience and technology improve.

If one were diligent enough to search the archives of Al Fin and Al Fin Energy, he would find articles where Al Fin facetiously encouraged Russia and Saudi Arabia to produce as much oil as they could, to drive oil prices down. Had they done so at that time, North American oil development would have been retarded, and N.A. production would be much less than it has become. Russia and Saudi Arabia would now be in a more powerful position to influence global oil prices.

But since neither tyrannical oil state paid attention to Al Fin energy analysts, a new oil & gas power — North America — has entered the global scene, in just a few short years. And unless governments spoil the boom through unwise regulations, this boom has just begun.


N.A. Shale Plays Are Big (and getting bigger)

Oil & gas well rejuvenation via refracking

Mexico trying to join the N.A. oil boom

US shale boom bails out an ungrateful Obama Just as Obama had done everything he could to destroy the US economy and US energy production, the shale boom came along and revived it.

Update Oct 2014: US oil & gas production continues to amp upward toward the end of the decade

This entry was posted in Energy, Shale Oil & Gas Revolution and tagged , , . Bookmark the permalink.