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Orange Blooded [2711]
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There are 9,000 unused inshore drilling permits
Mar 9, 2022, 2:26 PM
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Half of which are held by two companies for wells in the Permian oil basin, so light sweet crude, aka WTI.
It doesn’t take a genius to figure out what’s going on here. Oil production takes several months to realize cash flow, and because there was a glut in the oil market for so long thanks to Saudi Aramco’s battle with Putin, a Pandemic economy which reduced consumption and demand, and capital flight to renewables, this all made domestic drilling financially unwise.
Now, the ###### has flipped. Oil companies need to #### or get off the pot.
https://twitter.com/acyn/status/1501631890968571904?s=21
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Orange Blooded [2711]
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All-TigerNet [13347]
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Re: There are 9,000 unused inshore drilling permits
Mar 9, 2022, 2:32 PM
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We cannot drill as cheap as we can in other countries. Every single phase of getting oil out of the ground takes an army of lawyers and months in court.
It always goes back to the strictest regulations and the highest costs on the planet. And we haven't even gotten to the promised Biden corporate tax rates. At least our sea levels will not rise near as much as the other country's.
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All-In [25028]
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That last sentence was classic...***
Mar 9, 2022, 2:35 PM
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Orange Blooded [2711]
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It costs $4.3 million on average
Mar 9, 2022, 2:48 PM
[ in reply to Re: There are 9,000 unused inshore drilling permits ] |
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To drill in the Permian and the costs are primarily from five things:
Rig related costs (rig rates and drilling fluids) –17% or $1.28 MM
Casing and cement – 13% or $0.98 MM
Hydraulic fracture pump units and equipment (horsepower) – 26% or $1.95 MM
Completion fluids and flow back disposal – 19% or $1.43 MM
Proppants – 17% or $1.28 MM
In New Mexico, there are also issues with water.
But if even with all that, if we did the math on current pricing and demand, they will make beaucoup dollars.
Time for them to quit bellyaching and drill the dang wells.
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All-In [25028]
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That's if they make a hit... Misses cost, too.***
Mar 10, 2022, 12:07 AM
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Rock Defender [54]
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Re: There are 9,000 unused inshore drilling permits
Mar 9, 2022, 2:42 PM
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Orange Blooded [2711]
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Who cares?
Mar 9, 2022, 2:52 PM
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If we have extended permits and leases to drill, why aren’t these companies drilling?
I’m so sick of these petty excuses and distractions.
Either use the permits and do your job and make tons of money, or get out of the way and let some less lazy company do it.
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Rock Defender [54]
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Re: Who cares?
Mar 9, 2022, 3:12 PM
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Orange Blooded [4030]
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Re: Who cares?
Mar 9, 2022, 3:42 PM
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What has Biden done that is restricting domestic production today? We're still waiting.
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Orange Blooded [2711]
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no ####
Mar 9, 2022, 4:39 PM
[ in reply to Re: Who cares? ] |
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of course there is more involved.
Energy security is really a two way street in my book.
In my opinion we should not extend the privilege to extract the nation's natural resources without requiring that they actually take responsibility to actually DO the job when it MOST needs to be done. If you aren't going to use the permit that we gave you, then we should give it someone who will use it when WE ACTUALLY NEED IT.
Oil industry wants to have it's cake and eat it too, which is doing a disservice to the nation in its greatest time of need.
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All-In [48046]
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Orange Blooded [2711]
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What a joke….
Mar 9, 2022, 3:05 PM
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The ###### has flipped.
The American oil and gas industry needs to do what’s best for the country, and themselves, and quit whining and drill these wells. If there is a Permian basin well, that’s like liquid friggin gold.
There is literally no excuse for them to be sitting on permits in that basin. They are holding out on us. And to claim that Biden administration is the problem is such a chicken #### excuse when 75% of the nation’s leases are being tapped and making giant profits.
They need to quit making lame excuses, pointing fingers at others and do their #### job.
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CU Guru [1515]
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Re: Do your homework.
Mar 9, 2022, 4:10 PM
[ in reply to Do your homework. ] |
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You do your homework. I read the article and it's obviously biased and highlights "federal lands" when federal lands make up about 8% of our total oil production. Anyway, "Daily Caller" as an actual truthful news source. Really???? ...
FAIL!
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110%er [9101]
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Re: There are 9,000 unused inshore drilling permits
Mar 9, 2022, 2:55 PM
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would you invest in a new well with these clowns in charge?
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Orange Blooded [2711]
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Re: There are 9,000 unused inshore drilling permits
Mar 9, 2022, 3:10 PM
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Yes, because I know how to do my job without pointing fingers or making excuses, lol.
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110%er [9101]
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Re: There are 9,000 unused inshore drilling permits
Mar 9, 2022, 3:29 PM
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its like trying to get sawmills to increase production to lower the price
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All-TigerNet [11044]
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BS narrative. Biden’s actions have limited US oil production.***
Mar 9, 2022, 3:46 PM
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Orange Blooded [2711]
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Hey Tom, what about the 9,000 permits?
Mar 9, 2022, 4:50 PM
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half of those permits are held by two companies, EOG and Devon, in the Permian basin. They are sitting on liquid gold. The average WTI well was worth 3.5 BILLION DOLLARS at the end of 2021.
Oil companies are literally printing money, but they are sitting on it because they have a balance sheet they don't want to overload in one year for tax reasons.
That's the real bs, print that....tweet that.
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Heisman Winner [112332]
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I'd be all for Nationalizing US Shell
Mar 9, 2022, 4:54 PM
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and Exxon Mobile, would not lose any sleep. I just worry that the Clintons will kill whoever tried to sign that legislation, 
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Lot o points [156401]
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You understand that the highest percent of permits
Mar 9, 2022, 4:54 PM
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In history are currently being used, right? It’s not a 1:1 ratio on permits to wells. Some make more sense than others and they’re fishing in a much smaller pond than they were before.
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Orange Blooded [2711]
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this is true.....but the math is totally lopsided
Mar 9, 2022, 5:03 PM
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If I owned, 4,500 permits in that basin, and knew that I would be able to produce 3.5 Billion dollars per well, what kind of risk should I be willing to take?
Production is capital intensive. It obviously requires lots of cash. The problem is that we are in a transition with our energy infrastructure. I also understand that some of the capital that was going to oil production and refinement started to be diverted to renewables.
But doesn't it seem weird that with the obvious supply-demand imbalance we are currently faced with, that this would still invite a much higher risk appetite than in previous years?
The market needs the juice, the oil companies have plainly run out of excuses and are just trying to deflect.
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Lot o points [156401]
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Your first sentence seems to logically make my argument.
Mar 9, 2022, 5:07 PM
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Why wouldn’t they do it if that were the case? They aren’t allergic to profits. If those permits are unused, they are probably likely duds in the company’s eyes.
It’s like a little league draft. You’re going to get some studs and some kids who couldn’t catch a cold. You don’t expend your coaching resources equally on those kids.
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Orange Blooded [2711]
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If two companies own half those permits
Mar 9, 2022, 5:32 PM
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then it should be easy to figure out whether they are even trying.
This article talks about all the leases they have and mentions the fact that they pay the $11,000 permit fee when they are confident in the geology of the site that they will be able to produce.
So it is unlikely a problem with them picking duds. They may be overextended financially and don't have the capital. Who knows?
These permits cost money — about $11,000 a pop — and companies aren’t collecting them by accident. Oil and gas companies still see the near future powered by oil and gas, despite the increasingly clear and urgent reality that greenhouse gas emissions need to be brought down to zero.
“The odds are this stuff’s going to get produced,” says Tom Singer, senior policy advisor at the Western Environmental Law Center.
When talking about companies like EOG and Devon, he says, “They’re not some prospector on the back of a mule with a pickaxe … They know where the good geology is. They’ve already bought it.”
And nearly all of the drilling permits are for the “good geology” they bought in the Permian Basin, where oil is trapped in layers of rock sitting one atop another in what’s called a “stack play.” That has helped turn the basin into the top oil-producing region in the country.
“It’s what makes it so juicy for these companies,” Singer says.”
https://capitalandmain.com/new-mexico-drilling-permits-skyrocketed-under-trump-states-climate-future-at-risk
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Freshman [6]
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Re: If two companies own half those permits
Apr 29, 2022, 4:33 AM
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Absolutely right . Moreover Carbon dioxide (CO2) makes up the vast majority of greenhouse gas emissions from the sector, but smaller amounts of methane (CH4) and nitrous oxide (N2O) are also emitted. These gases are released during the combustion of fossil fuels, such as coal, oil, and natural gas, to produce electricity.
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Lot o points [156401]
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Bruh....you're bumping a month and a half old thread.***
Apr 29, 2022, 8:31 AM
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Hall of Famer [24531]
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Can issue a permit for my backyard. Doesn't mean the driller
Mar 9, 2022, 10:05 PM
[ in reply to You understand that the highest percent of permits ] |
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wants it. I don't know the nature of the permits issued by this administration, but given the ideological profile of its appointments and actions so far, I'm not believing anything by them that is a one word answer to a question, in this case, "9000". There is way more to that story.
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All-In [31988]
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You clearly understand how federal oil leases work!***
Mar 10, 2022, 5:38 AM
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Hall of Famer [24531]
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I said I didnt. I said i know "9000" is not the answer to
Mar 10, 2022, 4:48 PM
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the question. You and profusely seem to want to conform that.
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Orange Blooded [2711]
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Re: Can issue a permit for my backyard. Doesn't mean the driller
Mar 10, 2022, 2:06 PM
[ in reply to Can issue a permit for my backyard. Doesn't mean the driller ] |
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Ask EOG Resources and Devon why they paid $11k per permit, x 10,000 permits in the Permian if they didn’t think it was a good bet. They wouldn’t have pursued permits if they didn’t expect them to produce. Especially in the most productive area in the country for oil. They obviously rushed in to get the permits before anyone else got them, similar to what homebuilders due to prevent competition from getting them.
This excerpt from the article above explains it very clearly:
EOG Resources of Houston — already New Mexico’s largest oil and gas producer — has nearly 2,700 of those 10,000 APDs either approved or pending approval. In fact, it has more permit applications either approved or pending than the next five companies combined. Devon Energy of Oklahoma City — the state’s second-largest oil and gas producer — is a distant second with a little more than 1,100 permits either approved or pending.
When asked about EOG’s plans in New Mexico, its expectations for development in the future and its thoughts on the IPCC report, Kimberly Ehmer, a company spokesperson, wrote in an email, “We have been building a backlog of permits in the Delaware Basin for a number of years primarily to provide flexibility for future development planning as our operations in the basin expand over time.”
Oil and gas companies still see the near future powered by oil and gas, despite the increasingly clear and urgent reality that greenhouse gas emissions need to be brought down to zero.
Cowan says that while some of the smaller producers on the list might be gambling on whether or not the market and their land will bring them money, EOG is not “willy-nilly in how they do things. They’re very purposeful.”
He says, “EOG over the years has been a leader as far as operating margins. And the only way you get to have good operating margins is by selecting good rocks to drill and doing it cheaper than your peers.”
Tom Zelenka, a petroleum engineer with the BLM state office in Santa Fe, says that companies plan well in advance to have drilling permits lined up when leases approach their expiration dates. “They’re aware of their time periods, they’re aware of the expiration of leases and of wells,” he says.
These permits cost money — about $11,000 a pop — and companies aren’t collecting them by accident. Oil and gas companies still see the near future powered by oil and gas, despite the increasingly clear and urgent reality that greenhouse gas emissions need to be brought down to zero.
“The odds are this stuff’s going to get produced,” says Tom Singer, senior policy advisor at the Western Environmental Law Center.
When talking about companies like EOG and Devon, he says, “They’re not some prospector on the back of a mule with a pickaxe … They know where the good geology is. They’ve already bought it.”
And nearly all of the drilling permits are for the “good geology” they bought in the Permian Basin, where oil is trapped in layers of rock sitting one atop another in what’s called a “stack play.” That has helped turn the basin into the top oil-producing region in the country.
“It’s what makes it so juicy for these companies,” Singer says.
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Lot o points [156401]
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Broseph.......do you know what a drop in the bucket $11k is
Mar 10, 2022, 4:55 PM
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for an oil company? It would be like if you or I lived in New York City and got offered to buy reserved parking spaces, sight unseen, for $1 each.
I'm probably going to pick up 1,000 spaces or more in that scenario. Some might be really useful, in front of major destinations, and some might be on the backside of a junkyard in the Bronx, but for $1000, why not?
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All-In [25028]
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Like Bear Bryant recruiting... "They're all mine, not yours"***
Mar 10, 2022, 5:19 PM
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110%er [9101]
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Re: There are 9,000 unused inshore drilling permits
Mar 9, 2022, 10:05 PM
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i say conservation
back to 55 mph!
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