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Strategies & Market Trends : The Aristocrats (tm)

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From: sense	1/30/2024 3:27:39 PM
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US Oil, Gas Drillers Add 1 More Rig As Production Plummets I've been poking at the issue of "oil production soaring" in spite of a massive reduction in the number of active rigs... The explanation, according to the government... is that frackers have become better at optimizing spacing with longer laterals that better address the oil in the ground... But, beyond some efficiencies in drilling longer laterals once set to drill... there are also increasing risks and completion difficulties the longer the laterals become... so the "time savings" seems illusory, to me... even with "fewer wells" but longer laterals... there's still X amount of drilling to be done... and, time is time... A more rational explanation has appeared, recently... which has little to do with Federal policy enabling "more" as a function of technological innovation... as opposed to (state) government imposing lags in the timing of completions being brought on line... generating a back log in wells already drilled but only now being added to the cadre of producers. That's because North Dakota has (finally... should have been done years ago) imposed new rules on flaring gas... which now is no longer allowed... That requires connecting wells to gas collection equipment... and installing the collection gear... whether pipelines or other compression with storage... or using it as the source of power to operate the fields... before wells are allowed to begin production. Recent progress in linking existing wells to the gas collection infrastructure... has enabled bringing a number of already completed but non-producing wells online... and THAT's why production is rising now... inspite of rig counts falling... And, that suggests... the next step lower... might be a big one... I've not done the work to figure out "how it's going" in terms of "what's done" and "what's left to be done" in converting non-producing wells and fields into producing wells and fields... But, the math on the rig count is unavoidable... and the timelines as new wells come online isn't a mystery... So, better predictions require only correlating the numbers in the "done" and "still to be done" issue with the declining pace of new wells being drilled... And, otherwise... that's why Biden is ignoring Maduro going stupid... in order to sustain a "buffer" in allowing some flow of oil from Venezuela...

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