Comments from Seasoned Oilmen

[cottonpicken]

What i'm worried about is the decline rates in shale.

After 3 years them wells are nothing what they where so them companies have had to drill drill drill to maintain,which you can do for a while if you have revenue,and we are not many years in to shale so.....if a company drops its drilling capex,for any length of time,how does its share price on a p/e ratio perform?

[grassfarmer]

Cotton, I think I replied once before on your observation not sure if you saw it.
We are in the centre of a fracking for shale gas area at the moment - still very busy. Fracking is a hugely expensive process and it doesn't make sense to use a lot of diesel (directly down hole as well as in engines) given the relative price of diesel and natural gas. What they are really after are the fluids extracted along with the gas, primarily "condensate" which is shipped to Ft Mac to thin the bitumen enough to get it shipped down the pipelines to Texas. I've heard it is so valuable it is separated out in Texas and shipped back here to help move more bitumen south.
These fluids are "milked" out in the first few years of production leaving only some gas. I think the decision
on whether to keep pumping that will depend on gas price but the fluids are the real pay dirt they are after.
Not sure if the Americans are in the same position with their shale gas but I believe this explains what is happening around us in AB.

[cottonpicken]

Seem to remeber it pretty interesting. Dont know much about gas. Supposedly lots of it. LNG projects will probably be put on hold.

[tstep]

Butane is the product now used to mix with bitumen. Butane is taking the place of condensate.

[bucket]

Cotton

Is Boone Pickens still pushing natural gas for semis?

Seems he was pushing the benefits of natgas when oil was high. Still must make sense today. Infrastructure costs were the stumbling block?

[WiltonRanch]

Reason why they would use butane over condi is simple fact that condensate has a very low flashpoint. Very very dangerous shit!! There's condensate pipelines across our land. They use lots of it to push that heavy crude into the upgrader. There was this guy who tried welding a tanker that had hauled condi. Trailer wasn't cleaned properly. Well it wasn't good blew the trailer shop and man up.

[Horse]

SK3 Glad to hear you are cutting imputs I have been preaching that for yrs. Not that I am anywhere in your league but I could never see the sence in producing all you can for as little as they want to pay, but then I guess I am just lazy and after 50 crops I mabey take a different look at things. Have a good holiday in wherever you are and I will go ice fishing and drink a little Rum with the neibors as they get ready for calving.

[sumdumguy]

Hope there was no calving yesterday. That storm would have covered up the calves.

[ajl]

Now we are going to have exports of US oil into Canada with the new upland pipeline proposal out of North Dakota. Now I have seen everything.

[wilagro]

ajl: Must be better quality oil than the crud coming from the tarsands. I think the bitumen in the tarsands should be left there until we really, really need it. There would be none of that crap on the market if it wasn't for dirt cheap NG to make their steam with and the favourable tax laws put in place by the Feds and Alberta. A subsidy is a subsidy no-matter how it is implemented or named.

If we got the proper royalties from the NG used they wouldn't be producing any bitumen at all...that and the free water wasted on its production.