"Asset Retirement Obligations" (ARO) is the formal accounting term for finally having to clean up a site. I got involved in this when I was working with refineries. It's amazing how small that number can be when you push the shutdown date out by 50 years. And if that doesn't work, turn it into a product terminal. I don't know of many refinery sites that have actually been removed and remediated but there are a few. For gas plants, don't actually know of any other than the ones that are on skids. For wells, check out Diversified's financials. They're the scavenger company that's picking up thousands of old wells. Supposedly some of theirs will have a 70 year life - from the time they bought them! So again, the ARO can be cut down very low. Of course, those are the numbers that are shown to investors on the balance sheet. Sometimes companies can get lucky and get money from the governments they purport to hate for P&A costs, last the last couple years.

I agree that these liabilities are highly likely to be underestimated, if/when the issue is forced. Hard to put in a massive acid gas injection operation if you have a bunch of old wells blowing stuff to the surface around it. Maybe some will be forced to do good by needing to close the book on the old wells to get carbon credits for the new ones?

Amazing catch! I'll definitely use that information in my macro discussions! Re "New Resources & projects needed" those would be fields not currently under production and additional EOR projects to extract more from existing fields.

Thanks, Mike. Still find it ironic that even Oklahoma finally got fed up with earthquakes when the Capitol building started rattling but Texas is still trying to figure out some way around this.

At this point I'm just scared that the quest to try and inject and contain high pressure CO2 underground will kick off a round of geysers, this time a true witches' brew of H2S, CO2, and saltwater that eats every piece of metal it touches + being deadly dangerous to people and livestock. Maybe Season 2 of Landman will show this as yet another way to kill field hands and keep the drama going? Gotta sell those ads.

@Anne Keller

Of personal interest to you and Christine, a covey of earthquakes yesterday in an old spot on the Loving, Lea County line, one was a 3.9. This area was under SRA scrunity before by the TRRC, which means nothing, but you should be keen on the proximity of these SWD facilities in relation to the New Mexico line...they get a ton of produced water from New Mexico here. Always willing to sacrifice Texas for the sake of oil exports to Rotterdam, "if you build it, they will come."

This problem is never going to go away, it just lies dormant for awhile and one day they'll be a plus 5.5 again in guts of the shale play and...nothing will be done about it. This is one of the ways Trump can facilitate drill baby, drill...tell the three Stooges in Austin to not get all uptight about earthquakes. Henceforth they shall be called necessary nuisances and shall not in any way slow down the mission to drain America dry, ASAP.

Another observation...looky at all them EOG wells in Lea County (that still go further west past the map's cutoff line). Zowee. They are packed in there like pixie sticks. And in the BS, communicate with each other, big time.

A comment by Mr George Kaplan on another blog . We know him so no need to check veracity .

'' I have been looking at the Baker Hughes active drilling rig numbers and they show quite a marked (and accelerating) drop in international (i.e. non USA or Canada) oil rigs since April last year. All continents are affected but the Middle East might show slightly the largest proportional fall. This would support an expected rising drop in global production from the second half of 2025 onwards.

Active oil rigs peaked at 1080 in mid 2014 when prices were high and the industry went a bit bonkers, they dropped to the 830s just before the Covid crash then hit a low of 490 at the end of 2020 before recovering to 742 last April, but have now fallen to 671 (dropping about 10 rigs a month but steepening). The numbers don’t include Iran or former USSR states but I would expect these to be at least as bad, if not worse, as Azerbaijan and Kazakhstan have few oil development opportunities left and sanctions are hitting Russia and Iran. The numbers don’t differentiate between development and exploration wells but exploration has been slowly fading for over a decade and would not explain this fall. Oil price may play a part – the way contracts work the price at least six months to a year before would be the most influential and prices were falling from over 90 dollars in September 2023, but usually large oil companies, which would be responsible for most of these rigs, take a longer view. With discovered fields getting smaller wells are gradually getting less productive, although moving to deeper water complicates things, so to some extent more rigs would be needed to maintain production but it’s difficult to see the effect clearly because of the long time lags during development projects.

Active international gas rigs have been constant over 2024 at around 190.

In the context of the whole of Texas:

EV Driver, thanks for this comment and post. If you live in an urban area I would keep driving an EV if I were you.

This is a good chart. For IOC's around the world the question of "investment" is entirely different than the same question for private enterprise in the U.S, that must make enough of a profit from production revenue to stand on its own financial feet and invest more. The days of OPM are gone in the oil industry in America.

U.S. shale oil has been the only source of worldwide oil growth for the past eight years. In my opinion, facing the liabilities it has regarding debt and retirement costs, U.S. shale oil is STILL not profitable and STILL has not made money.

Now as the resource begins to deplete here in the U.S., shale oil will become more costly to produce and will produce less from flank, non core areas, requiring more wells and more investment. None of this bodes well for a very illiterate public that believes the U.S. will always have affordable (?) sources of oil and (associated) gas, and for a world who believes the same thing, and that America owes them cheap energy. Trump is really stupid about all this.

So I'd stay plugged in, for sure. And thanks very much for trusting me with this important post. The U.S. can never dominate the rest of the world with its energy, it does NOT have more black gold than the KSA and we are draining ourselves dry in the U.S at an alarming rate.

David

I've taken a crack at projecting Howard Gas and it looks like it is on a plateau but may have peaked in July 2024. The projection tries to estimate how gas production provided by the Tx RRC in about 6 months from now will look.

Also I am wondering why the gas output for October on your chart is different then mine. I have this from the RRC for October gas 26,356,173 mcf. 26,356,173/31/1000 gives me 850 Mcf/d. Your chart is showing 710 Mcf/d.

Ovi

Further to Ovi's GOR chart for Howard County, this is oil and gas production for Howard County. Current gas production is about one third of oil production in energy content terms but sells for not much. The question is what month will gas production start falling too?

Mike

Attached are two charts for Howard. The first one tries to project where production from Howard will look like in about 6 months. Unfortunately the Texas RRC made significant revisions to production from May and onward so I don't think the flat part for August to October is correct. The big revision can be seen in the gap between the green and orange graphs. Normally after about 3 months the gap between the graphs is less than 5 kb/d. Hopefully a truer picture will show up next month.

The second chart shows the GOR. As you noted it continues to get bigger and I think it is telling us that production is falling.

Ovi

Looks like 2025 will be pretty lively year!

Its difficult to know for sure whats happening in Howard County, or anywhere else, isn't it? The only sources of information now available to the public about any shale oil basin in the U.S. are from the EIA and/or the tight oil sector itself, neither very reliable for unbiased data, IMO.

This was WOR in that country three years ago...its only gotten way worse. There are at least two SRA's in nearby Martin County, near the county line. I know of that are shut down because of BIG earthquakes. I know for a fact that in the north part of the country they have to put wells on ESP, or gas lift, immediately after frac'ing; inducing artifical energy with a frac cannot even help lift all the produced water.

Mostly I would guess it is GOR related. Two years ago it was going up, I'll bet its thru the roof now. Very nice, clean graphics on the charts, by the way!

Hi Mike,

Since 2009(?), I have been following the ExxonMobil Outlook Reports that continue to be published yearly. This year there has been a big change. In previous years, they would publish a graph of "Global liquids supply by type". In that graph, there were categories (bottom to top) for Conventional Crude and condensate, Deepwater,Oil sands, Tight oil, Natural gas liquids, Other liquids, and Biofuels. Placing a ruler just over Tight oil, I've seen the inflection point move from around 2050 to around 2030 for the peak in oil used for making transportation fuels. There is some growth in Biofuels and the graph is fairly flat so any changes in production can shift the inflection year. Here is the link to last year's graph:

https://corporate.exxonmobil.com/-/media/global/images/eo22/108-liquidssupplyhighlightsneedinvestment3.png?usecustomfunctions=1&centercrop=1

This year, that graph was not published. Instead and featured prominently is a graph with a top line labeled Global Outlook from 2010 to 2050. Under that line are three areas: Supply with no investment, Investment in existing fields, and New resources and projects needed in order to sustain that Global Outlook curve. The last area mentioned indicates that there is a need for approximately 70 million barrels of oil equivalent will be world short fall if those new resources and projects are NOT found. Here is the link:

corporate.exxonmobil.com

Explore the global demand for oil and natural gas, the need for sustained investment, and the growing role of LNG by 2050.

Here is the graph:

I'm assuming that New resources would be new fields(?) And projects would be ways of creating energy but I'm not sure. I'd like to hear your comments on this and my thoughts.