Shale Oil Observations
• Shale oil obeys the laws of physics:
Considerable areas of commercial success in Eagle Ford & Bakken plays,
Commercial oil is found in fields,
Plays are not fields,
Overall play results are marginally commercial to non-commercial,
Largest fields usually found early in the exploration cycle,
Later discoveries generally smaller and less profitable,
Plays will contract to fields that will represent a smaller portion of the play area along with corresponding reserves,
• Fields will reach peak production in 3-5 years and then decline.
• The oil plays require very high oil prices to be commercial.
• The total contribution of shale oil to U.S. supply is presently 1.2 mmbo/d and will probably not increase to more than 2 mmbopd (14% of consumption) by 2020 because of high decline rates.
• Oil prices must remain high to sustain drilling required to replace annual base and add production.
• The shale oil plays we analyzed are commercially attractive.
• Their contribution to U.S. supply is notable.
• It is unlikely that oil from shale plays will result in energy independence.
Oil-Prone Shale Plays: The Illusion of Energy Independence
Arthur E. Berman
Labyrinth Consulting Services, Inc.
Houston SIPES Continuing Education Seminar
Halliburton Conference Theater
October 19, 2012