James Hamilton discusses US oil production trends and shows several long term production graphs from localized areas that don't look anything like Hubbert's Peak, although US production in aggregate does.
Here is a slideshare of a presentation I gave in Vancouver recently. You can fast forward the slides but the audio track won't be synchronized (also there is some "dead air" at the beginning but if you're patient you'll hear me eventually). I know we're not currently in an energy bull market, but the seeds of one are being sown as we speak. Companies are being acquired at nice premiums to current levels so people are starting to see value.
Land sale activity in Alberta is dwindling due to an uncertain royalty structure, low commodity prices and a dwindling credit market. Land acquisition shows commitment on the part of oil companies to drill new wells. If they don't drill within a fixed period of time, they lose their drilling rights and the lands revert back to the Crown. Diminished drilling budgets force companies to "high grade" their land packages. They'll do the minimum amount of drilling required to keep their core landholdings and let the rest expire.
Land sales are not the best barometer of future industry activity. Record Alberta land sales in in 2005 related to a boom in coalbed methane plays marked a peak in the fortunes of companies focused on unconventional gas. The 2008 land sale take was $938 million, in 2005 it was $1.8 billion. While 2009 is shaping up to be a very slow year, it is going to get easier for companies to make a profit exploring for oil as land and drilling costs plummet from peak levels.
What was the field name that kicked off commercial oil production in Mississippi in 1939? What is currently happening in that field?
The Tinsley Field in Yazoo County is recognized as the discovery field in Mississippi. Denbury Resources (NYSE:DNR) acquired the Tinsley Field in 2006 and has initiated CO2 tertiary operations. In their 3rd Qtr 2008 report of results, Denbury notes that tertiary production from Tinsley averaged 1,518 bopd during the quarter, up from 675 bopd during the 2nd quarter.
Denbury has done an amazing job of applying new technology to old oilfields and their shareholders were duly rewarded. The recent correction in oil prices didn't leave Denbury unscathed but they are worth keeping an eye on.
It was a busy media day as I had a quick interview with CBC News at the house about the layoffs at Teck before lunch ( Later in the day Schlumberger announced that they were laying off 5% of their worldwide staff). It looks like layoffs in the resource sector are going to be across the board.
In the afternoon I did an interview with Anne Evers of The Energy Report and then later in the day I did my interview with Louis Paquette.
We talked about Louis' outlook for gold, oil and the broad markets for 2009. He admitted to owning some gold bullion but was reluctant to tell me his home address. Use the player below to listen.
