Energy Prospectus

Arthur suggests the best days of the Bakken are over...

http://oilprice.com/Energy/Crude-Oil/Wh ... akken.html

Bakken Production is still falling. See: https://www.eia.gov/petroleum/drilling/#tabs-summary-2

When I worked at Hess (1983 to 2001), North Dakota was one of our three onshore core areas. It still is for Hess. In most areas, horizontal well in the Bakken and Three Forks are probably sub-economic at oil under $50/bbls. Net back prices are lower up there because of the transportation costs.

I do think Art is a bit to pessimistic, but we will see.

Yeah Dan. I know Arthur is a sharp guy.

But what bothers me about the analysis - even though well counts have grown, continuing to date, I would guess that the average age/well is significantly higher than it was in 2014.

Due to the significant reduction in drilling of new wells over the last 2-2.5 years.

i.e. there is a much higher concentration of older wells, later in their EURs, and producing more water and gas as they age.

It seems a little deceiving to site the higher well count when clearly the second derivative of well count should be significantly negative for the last 2 years.

But I could easily be wrong - I haven't done the analysis.

IMHO the worry of U.S. production growth is overblown. I doubt that U.S. production gets back to the peak this year.

If Saudi Arabia wants oil over $60/Bbl then that is where it will go. In addition to their own production, Saudi Arabia has a lot of control over the other OPEC members. Russia also must have higher oil prices to survive.