Oil Prices Crash After Saudis Fail To Broker Global Production Cut
Shares in UK Oil and Gas Investments soared by as much as 77pc after the Aim-listed developer announced that oil from its well near Gatwick Airport in Surrey flowed at a faster rate than expected. UK Oil and Gas (Ukog) has claimed that oil from the so called “Gatwick gusher” at Horse Hill flowed from 900m below ground level to the surface without extra help from operators, and at a better rate than expected of 463 barrels a day. Ukog and its partners in Horse Hill have claimed that more than 9.2 billion barrels of oil lie under the 55 square kilometre licence area in the Weald Basin. –Jillian Ambrose, The Daily Telegraph, 16 February 2016
A spot in the south of England near Gatwick airport could hold a massive amount of oil even larger than that found at the North Sea oil fields. Investigations at the site in Horse Hill by UK Oil and Gas Investments (UKOG), have discovered the site could hold up to 100bn barrels of the black stuff – dwarfing the 45bn barrels produced by the North Sea in the last 40 years. –City A.M., 9 April 2015
The world’s two most powerful oil producers have reached a tentative agreement to freeze oil production at their current levels, dashing hopes of a supply cut for the world’s glutted market. Meeting in Doha, Russian, Venezuelan, Qatari and Saudi Arabian oil ministers reached a deal to not exceed production from their January levels, but only if it was followed suit by other producers such as Iran and Iraq. Forward prices for Bent crude plunged by as much as 3pc on the news to $33.68 a barrel, reversing days of gains. –Mehreen Khan, The Daily Telegraph, 16 February 2016
h/y to TheGWPF
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Crikey, there’s a helluva lot of conjecture in this blog based one drillhole … one cannot help but be humbled by such certitude.
I don’t understand the controversy about the possibility of abiotic oil. After all , the organic chemicals in outer space also of biotic origin, starting with alcohol and methane?
I don’t understand the controversy about the possibility of abiotic oil. Or are all the organic chemicals in outer space also of biotic origin, starting with alcohol and methane?
Biomarkers?
Ristvan did not say there was no abiotic hydrocarbons. Titan’s methane is insignificant. The methane detected on all the other moons/planets you refer to are also insignificant. They are trace molecules. Ignore the hydrocarbon oceans, and the methane-ethane clouds in the atmosphere. Ristvan will assure you they are actually insignificant.
You and I just find that hard to believe.
Biomarkers?
RO, a great question. But you overlook rocky planet v. Gas planet formation processes. And also the iron oxidation period of earth’s biosphere, long before multicellular organisms evolved (so far as we know). Just geology. Also all known petroleum geophysics. So, get a grip?
We should leave it there….for future use & use the cheap stuff that’s around now.
Here’s the official press release , for those interested:
http://www.ukogplc.com/ul/ukog.pdf
Another important detail – the referenced 9.2 Billion barrels is OOIP, not recoverable oil.
See link:
http://www.ukogplc.com/page.php?pID=104
Recovery factor likely to be in the 6-9% range, based on other unconventional plays. See
http://eaglefordshale.com/companies/eog-resources/
and
https://www.onepetro.org/conference-paper/SPE-133719-STU
which would put recoverable oil in the 550-830 MMBO range.
That’s a nice discovery, but hardly a world changer. Recoverable resources of this size are still commonly found around the world. And just to put it in perspective, we are burning ~34,000 MMBO per year world wide, so this about (700/34,000) = ~ 2% annual replacement. Great for this little company if it all works out, inconsequential to the world oil markets.
But this may be important to DOMESTIC energy supply. How different would the world be if we changed the geopolitics of energy through domestic self-sufficiency?
R2Dtoo
No “government-favored, government-flavored “renewable” scheme can create energy self-sufficiency. Other than locally produced fossil fuels and nuclear, combined with the hydro power already near-maximum. There are too many million acres too far north, too cloudy, too storm-swept for solar to provide much more than now generated – and those sources are very ineffective anyway, since the sun is capable of producing meaningful power only 6 hours per day. Wind? Fully half the country is blocked by the Bermuda high and local wind patterns. More than 5-8% cannot be produced. And that level will break (is already breaking!) conventional machines by forcing them through startup/shutdown cycles two and four times daily.
I suppose from an energy security standpoint in might be comforting but from an energy price standpoint, it is irrelevant as oil is an internationally traded commodity – push here, pull there, … the price all equals out according to worldwide supply & demand , other than minor government driven or supply chain dislocations. Disagree ? Check out world wide prices for benchmark crudes – not much difference is there ?
mmm Jeff, it is “conventional” not shale but they can and will still frack it
You should probably read a bit more before making statements like this.
See link from UKOG website :
http://www.ukogplc.com/ul/Nutech%20OIP%20Exec%20Summary%20Final%20201015.pdf
Quote from that :
“Nutech considers that the Kimmeridge limestones are analogous to the oil productive Austin Chalk and Eagle Ford formations of the US.”
and
“These US analogues have estimated recovery factors of between 3% and 8% and in a few cases up to 15% of contacted Oil in Place per well.. These recovery factors are achieved with the use of well stimulation techniques. ”
This is absolutely unconventional & the analogs I site above are also sited by the operator
I’ve drilled and fracced many shale oil reservoirs in Canada. None produced at that rate on test from a vertical well bore with minimal conventional completion (simple perfs and/or chemical wash). They didn’t describe what type of completion they used. If this well wasn’t fracced, at that depth vertical development would probably be by far the most econonomical. If it was fracced, that is a whole different kettle of fish. Either way it is a good sign to flow at that rate through a vertical well. By the way, recovery factors in the Williston basin in Saskatchewan Bakken are being assigned 15% recovery factors by the third party reserve evaluators for public and private companies and their lenders. Additionally, recovery factors in a pool or basin are also influenced by the well density of the development program.
All I know 900 meter is a shallow well, the Bakken oil runs from from 2500 meter to 4300 meters down with the Three Forks further down, with on more shale formation below that, in North Dakota you need to drill the first 461 meters with fresh water and then case that first drill before going deeper, only after you have that first drilling cased can you use conventional drilling fluids. Those rules are in place to protect the fresh water deposits that generally lays above 461 meters. To think that the oil they just found is so shallow and yet no one has tapped it, it simple amazing. Considering fracking is over one hundred and fitly years old and hydraulic fracking is over sixty years old it is a wonder that is was not “found” earlier.
Jeff what part of ” “Importantly, tests so far show oil has flowed to the surface under its own pressure and has not, so far, required artificial lift.
“The flow test, the first ever in the Lower Kimmeridge limestone within the Weald basin, provides proof that significant quantities of moveable oil exist within the Kimmeridge section of the well and can be brought to surface at excellent flow rates.” ” do you not understand?\
And thats not the point. its that technology will be used where it works and maximises output from any field under the prevailing economic condition. it does not follow “you cannot do that”
How is anything in your quote above in conflict with anything I stated above? Why do you think I don’t understand this quote? What point are you even trying to make? Just because it is unconventional doesn’t mean the flow rates can’t be great. And just because flow rates are great, means nothing about recoverable reserves. The operator has clearly stated this is an unconventional resource and there is nothing in the test results to suggest otherwise.
Seems that what Nutech considered was wrong.
By whom?
Why are you nit picking? How can you say they are the same, then admit they are different. whilst at the same time your contradictions have nothing to do with the point that I am making.
Bafflled, you bet
Now we wait for the protestors. Or perhaps they are already there.
When you consider the amount of costly hardware that’s gone into North Sea production when there was easily accessible oil under our feet all the time, you realise that science is a very fallible process that can make extremely costly mistakes. The lesson from this should perhaps not be lost on those who believe the climate alarmists without question.