When we talk to folk in the industry, about our plans to steam the Pilot, Elke & Narwhal fields in the middle of the Central North Sea, sometimes we get a pretty sceptical reaction, sometimes we don’t.
Or should I say, might eat their company. To say that the company has been eaten would involve making a prediction about the future and I steadfastly refuse to make predictions about what another company might do and what might happen to their share price. So this is all just analysis of what has already happened and what has already happened is that the debt monster has nearly eaten Xcite, or more precisely, Xcite's shareholders.
As I have said before the US Energy Information Agency (the EIA) has a thankless task, compiling data from thousands of oilfields and operators to come up with an estimate of how much oil the USA actually produces. Some data is timely and accurate, Alaska is a case in point, some, not so much.
So how much oil will be produced going forward? After following the weekly production statistics avidly for some months and initially being smugly pleased by the data saying exactly what I wanted to hear, I then became completely befuddled by the data saying the opposite. I had almost reached the conclusion that the weekly production data wasn't worth paying attention to.
We are in the midst of a rout and the oil market has literally lost its mind. There is no logic or sense in the market whatsoever.
When we are presenting our plans to fellow professionals, we often get asked, "Surely steam flooding is an EOR technique, why steam from the start?" It is a good question, as generating steam is not cheap, of course we have a good answer to the question and the more we think about it the better the answer gets (For the time-challenged: the answer's at the end in bold).
Just before Christmas I thought Santa Claus had arrived early. There was a bulletin published by HMRC with updates on the rules that determine how the investment allowances on supplementary corporation tax would be calculated.
Friends, Oilmen, Economists, I come not to bury Sieminski but to praise him. In case you don't know (I confess I didn't) Adam Sieminski is the Administrator of the US Energy Information Administration, or the EIA. He, or more likely someone in his organisation, publishes a monthly forecast of oil production for the USA. It is called the Short Term Energy Outlook and in this post I am going to take a look at some of those forecasts over the past few years to see how Adam and his team have done.
The EIA has just published its latest update to the Drilling Productivity Report (DPR), and soon we will get their update to the Short Term Energy Outlook. These are the two documents in which the EIA take a stab at estimating where US production is going, as opposed to where it has been.
I read lots of commentary claiming that only now (when Brent is less than $35/bbl) are we getting back to the long run average oil price, which of course is where some economists think it should be.
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