The current production level in the Permian Basin, as of September 2017, is 2.6 mmb/d. That is enough to make the Permian, which straddles Texas and New Mexico, the single largest production area in the US, having exceeded offshore output from the Gulf of Mexico since early 2016.
Projections indicate that production from the Permian could exceed 5 mmb/d by 2025. That vast increase in output will come not only from the small, nimble players that have characterised the shale play since 2010, but also the supermajors - Chevron has upped its Permian spending budget to US$4 billion for 2018 alone, while ExxonMobil has just bought an oil terminal in the Delaware Basin from Genesis Energy, connecting Gulf Coast infrastructure to its planned push into the Permian. These rosy projections sound familiar, having been applied to other major American basins in the past. But the Marcellus hit midstream bottlenecks, Bakken and Haynesville are dealing with massive production swings and Eagle Ford sweet spots ended up being far smaller than originally anticipated. Given that the active rig count in the Permian has plateaued in recent weeks, could the Permian peak sooner than anyone anticipates?
The Permian has always been important. This is, after all, where the Santa Rita No.1 oil well was drilled in 1923, kicking off a production dynasty that has lasted almost a century. In its heyday between the 1940s and 70s, the Permian represented half of total American production, a percentage that declined only when offshore Gulf production kicked in. It is estimated that some 30 billion barrels of oil have been extracted from within the Permian borders. That sounds like a lot, but estimates also suggest that there are some 60-70 billion recoverable barrels left in the ground – a reserve that rivals Saudi Arabia’s great Ghawar field. After three decades of decline, activity in the Permian mounted a huge comeback in 2010, coinciding with the shale revolution.
The number of active drilling rigs in the Permian has plateaued in recent months. According to Baker Hughes data, there were 370 active rigs (all oil) operating in the Permian at end-July 2017. As of mid-October, that number is 378. It’s easy to look at this and tie it in with price signals. WTI crude oil prices have been stuck in a stubborn US$48-52/b range since July; stagnant prices like that don’t inspire much new drilling. Extend the rig data back further, and we find that it has increased from 267 in January 2017 and a paltry 199 sites exactly a year ago. Against a backdrop of OPEC (twice) enforcing a supply freeze, crude prices rose and Permian activity with it.
Consultant Wood Mackenzie recently released a report questioning the sustainability of Permian growth, highlighting potential geological and technological hurdles. It is concerned that tighter well space and well-on-well interference, stemming from an unparalleled increase in drilling activity, could interfere with growth. The sheer amount of activity means that Permian output would see a steep jump in the immediate years, but Wood Mackenzie points out that unprecedented close-proximity drilling and fracking could reduce future estimated ultimate recovery (EUR) by 30% or 1.5 mmb/d of future production in the long-run. If that happens, then peak production will be brought forward to 2021 from 2025.
A few ultra-efficient shale drillers have breakeven prices well below the current market price but on average; the shale sector requires a more sustainable $50 - $55 per barrel to be profitable. In such circumstances, most players have not been hitting their profit targets to meet their debt obligations from investors.
Previous generous financing and cheap capital from Wall Street, are running dry now. Confidence that the oil market will rally up to $70 or more seems to be getting weaker, and this is making investors lose their patience, and ultimately their interest to re-invest into shale for now.
Doug Suttles, CEO of Encana Corp in a presentation at the New Your Stock Exchange puts across a new reality for North American oil and gas producers. “The industry had gone from “resource capture” to “value maximization”. And as reported by Ed Crooks of the Financial Times, “This is a profound change. Since the shale oil revolution began, management teams have mostly focused on growth at any cost and investors have mostly been prepared to back them. In 2017, however, investor sentiment has shifted. Shareholders are less dazzled by the excitement of the shale boom and more interested in orthodox measures of success including returns on capital and cash generation.”
Technically speaking, there is still room to grow in the Permian. The lowest number of active rigs in the Permian was 132 sites in May 2015, but the highest was 562 sites in October 2014. Of course, WTI crude prices in October 2014 were at some US$85/b. There’s a strong correlation here – a 40% difference in WTI prices between October 2014 and October 2017 has led to a 35% difference in active rigs in the same period. Should WTI be able to make a rally towards US$60/b, could more rigs could be added? Ultimately if the shale drillers cannot demonstrate a sustainable profitable business (either from a cost or oil price perspective), the prospect of investment returning back to support drilling activity may eventually disappear.
Something interesting to share?
Join NrgEdge and create your own NrgBuzz today
Nitrogen in liquid form is a colorless, odorless, nonflammable, inert cryogenic liquid. It has a boiling point of less than -130 °F (-196 °C). Although this product is freezing, Nitrogen is widely used in chemical analysis during sample preparation. It is employed in the concentration and condensing of liquid sample volumes. It is used in the production of explosives, nylon, nitric acid, fertilizers, and color-safe operation precautions must be taken when handling or using it in Dubai.
Buy Liquid Nitrogen Cylinder in the UAE from GasNtools and improve the display of your frozen items!Ways To Deliver Nitrogen
You must be wondering where to buy nitrogen gas. GasNtools is one of the best liquid nitrogen suppliers that can meet your needs for nitrogen gas no matter what they are. They provide nitrogen to:
Compressed nitrogen is offered in a variety of cylinder sizes:
40-liter nitrogen cylinder with a 6 m3 capacity at 140 bar and a 10 m3 capacity at 200 bar.
Different-sized pour spouts of liquid nitrogen are available.
Massive service: For high-volume applications, liquid nitrogen is transported in cryogenic tankers to on-site storage. It is kept as a cryogenic liquid in a vacuum-insulated vessel that can hold enough over many days and is available as either a liquid or a gas on demand.
It has spread throughout the industry and is now widely used in restaurants to quickly freeze liquids to ice creams and desserts for live food displays. Because liquid nitrogen has a temperature of -196 °C, the liquid ice cream mixture can be quickly cooled and frozen. Any remaining nitrogen escapes as a gas. Another advantage of freezing is that it reduces dehydration losses, which can reach crucial economic tiers with these items under ambient air. The cost of liquid nitrogen in Dubai is completely inexpensive. As a result, many customers approach GasNtools to obtain this nitrogen gas quickly and affordably.
Although liquid nitrogen is safe in food and beverages, it should not be consumed immediately. Before providing it to the customer, it must have vanished entirely from the food or drink. Because it can be highly hazardous or devastating if not handled properly, this product is only maintained by trained chefs.
When managing liquid Nitrogen, wear dielectrics gloves and carefully made PPEs (Personal Protective Equipment).
GasNtools is Dubai's most dependable nitrogen gas supplier. They always transport nitrogen gas in a trustable container. You must use a service elevator to transport this gas.
A portable oxygen cylinder is capable of holding oxygen gas. Compressed gas systems are what these are. The oxygen supply can last longer by utilizing the smaller tanks in conjunction with oxygen-conserving apparatus. Instead of being given constantly, oxygen is given in pulses.
While a smaller portable oxygen cylinder can be used when leaving the house, a bigger stationary concentrator is used inside the home.
If you don't obtain enough oxygen, you'll exhibit several symptoms, such as:
If you suffer any of these indications, you should seek emergency medical assistance and obtain an oxygen cylinder at your doctor's suggestion.What Rules Apply When Using Oxygen Cylinder?
You will receive a prescription from your doctor to start using an oxygen cylinder. You'll also receive instructions on how and when to use it. The flow rate, or how much oxygen you'll require per minute, will be included. You must strictly abide by the directives given to you by your doctor. Before making any modifications, consult them if you believe the oxygen therapy is not helping you.
Some people only use oxygen tanks when they are asleep or exercising. Others have a constant desire for oxygen. The majority of oxygen therapy kinds have transportable oxygen tanks so that you can take them outside the house if necessary.What Safety Factors Apply To An Oxygen Tank?
Oxygen is required for combustion, but it is not flammable. Fire is prone to burn faster in environments with too much oxygen. When using oxygen tanks near heaters and open flames, exercise caution. Also, keep oxygen tanks securely.Safety Advice
An oxygen tank can be very helpful for people who frequently have low oxygen levels. By reducing shortness of breath when necessary, frequent oxygen therapy can enable people to be more active and mobile. Additionally, it can considerably raise the quality of life and, frequently, lengthen lifespan.
Moreover, an oxygen tank might lessen symptoms like:
Children with chronic lung diseases who receive oxygen cylinders can benefit from faster growth and development. Additionally, it can alleviate behavioral issues or symptoms such as headaches brought on by low oxygen levels.
We realize that the business of gas regulators can be pretty complex. Depending on the application, each type has a different function. Understanding what a gas regulator valve is and how it functions is essential mainly when you depend on professionals to assist you.
What Exactly Is A Gas Regulator Valve?
The regulator was created in 1835, and its impact has lasted for a very long time. Regulators come in a variety of shapes and sizes, but they all serve the same purpose: controlling the flow of other gases or the pressure of natural gas or propane via a valve system.
Gas regulator valves are frequently used in appliances including gas stoves, propane barbecues, and welding oxy-fuel bottles. A set spring is connected to a rod that descends from a set screw, passes through a diaphragm, and enters the valve in each type of regulator.
How Does A Gas Regulator Valve Work?
A Gas Regulator Valve is used to regulate pressure across the entire gas distribution system, from the well to the stove burner, to assure safety. Natural gas first exits the well and then travels through gate stations, transmission systems, and gathering stations before entering distribution lines.
Regulators regulate the flow of gas from higher pressure to lower pressure while it is in the distribution system. When a line's pressure falls below a predetermined set point, regulators detect and open it, allowing more gas floConverselyide, the regulator will shut down to change the downstream pressure if demand increases above a predetermined level.
When natural gas exits the main, it passes through a "service line" to get to residences or establishments. This service line is probably made of polyethylene, has a diameter of maybe an inch or less, and has pressures ranging from roughly 60 PSI to 14 PSI. The pressure of the gas is decreased to under 14 PSI and monitored in a water column after it passes through another residential or light commercial regulator and reaches the home or workplace meter.
The pressure inside the valve is regulated by three main functioning elements that operate together. The delivery pressure is determined by the loading mechanism. It is typically a spring. The diaphragm, or sensing component, detects the force acting on the spring. The control element successfully reduces the inlet pressure to the outlet pressure.
There are many different types of regulators, including relief valves, appliances, line, and service, pilot driven, direct acting, high pressure, and propane regulators. Even specialized products like high-purity regulators are available for those particular jobs.