Peak Cheap Oil Update - Part I: The glass is half empty

[GRG55]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

I have read that the bakken oil formation in Canada & the US is a huge resource (between 400-500 Billion barrels) of light crude. I have attached some links:
http://www.canada.com/saskatoonstarp...5-17fb0c61cd61
http://www.cbc.ca/money/story/2008/0...on-bakken.html

Did any party at the conference touch on this play?

The Bakken's a decent shale oil play that looks like it's in danger of being overcapitalized.

Recoverable reserves are currently estimated at between 1% and 2% of the oil in place - which is still a hell of a lot of oil*. And no doubt technology will increase that recovery rate over time. The main issue is the same as the shale gas plays. The wells deplete rapidly, so maintaining production becomes like running on a treadmill...the more wells you have, the more new wells you have to drill to keep the production and cashflow from falling. Hence my comment about overcapitalization.

Having said that, the best of the wells in the Bakken, although expensive to drill and complete, pay out in under one year, so for the moment the economics are pretty attractive.

[* The midpoint of that estimate would be about 6 Billion barrels of recoverable oil. By way of comparison, the prolific West Texas Permian Basin, first drilled in 1921, has produced about 11 Billion barrels cumulative to date]

[mooncliff]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

I would modify the title slightly to

Part I: The glass is half empty (and what is left is the dregs)

[maTTz]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

The Bakken's a decent shale oil play that looks like it's in danger of being overcapitalized.

Recoverable reserves are currently estimated at between 1% and 2% of the oil in place - which is still a hell of a lot of oil*. And no doubt technology will increase that recovery rate over time. The main issue is the same as the shale gas plays. The wells deplete rapidly, so maintaining production becomes like running on a treadmill...the more wells you have, the more new wells you have to drill to keep the production and cashflow from falling. Hence my comment about overcapitalization.

Having said that, the best of the wells in the Bakken, although expensive to drill and complete, pay out in under one year, so for the moment the economics are pretty attractive.

[* The midpoint of that estimate would be about 6 Billion barrels of recoverable oil. By way of comparison, the prolific West Texas Permian Basin, first drilled in 1921, has produced about 11 Billion barrels cumulative to date]

So if we're consuming 85 million barrels of oil per day, and a 10 billion barrel find only gives us another 1 million barrels per day, then does that mean the best we can hope for is a bit over 1% of our oil consumption from this Bakken field? not quite the 10 Saudi Arabia's is it...