Utica's production decline rate

Has anyone heard anything about the rate of production declining abnormally fast?  It was brought to my attention that there is some concern that production might fall off in Utica wells faster than in other shales.  Does anyone know if this is the case?

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Permalink Reply by Jim Litwinowicz on October 23, 2012 at 9:00am

It would be my guess is that reporting became mandatory after the companies were proven time and again to be not paying the full royalties to royalty owners.The only way to limit the shenanigans would be for all production to be made public. Just my guess.

Government usually steps in after a problem has been shown to need government intervention. The problem with government is that it always oversteps its boundaries and grabs too much power. Just like ObamaCare. There are issues with the healthcare system that need to be addressed. But the government used the issues for a power grab.

Permalink Reply by william on October 23, 2012 at 9:26am

I read the article in Reuters. I did notice the financial research group Argus at the end of the article. Argus has been very bearish with Chesapeake and now with the Utica shale formation.

I am not a scientist or geologist. I have no engineering background. However I do know that billionaires who have earned their money have earned it by smart investments. Billions have been invested to develop the Utica shale. Billions! Players like Shell, BP, Exxon, Carl Icahn etc., have flocked to the opportunity and have bought in for a reason...profit,big profit.

Fluctuations with market price on commodities are inevitable. We as landowners possess these natural resources. Infrastructure is still developing as well. Don't believe companies like Argus who make their living selling research information. They're pissed because they are not privy to information they can use to rate these companies.

As a wiseman once said "follow the money".

Permalink Reply by Dan on October 23, 2012 at 9:05am

Joseph, 

"But then again - so much for the 'free market' principal - as we once again watch that idea go down the drain - HA !"

"But, all of that said, I have to add (in my opinion) that unless there is created a market to domestically use domestic production and infrastructure provided to facilitate it's use; development can't happen.  That's where the government really needs to step in and help." 

You leave me confused once again.  You want it both ways, a socialist system to protect us by direction and a free-market.  Not trusting the Goverment for wanting to do "bean counting" and messing with the free market but wanting them to start and run another subsidy program.  Maybe instead of paying landowners that never grew crops to not grow them, they can pay us every month to not lease our O%G under our land. 

THE MARKET IS THERE.  We allready consume massive amounts of energy everyday.

Yes we need to know how much oil and energy in general there is for many reasons.  Number one reason is ability to fight a war and know we have enough present and future supply.  Granted having domestic energy supplies to support 100% of our needs should diminish our millitary engagements, that is not a reason for the Goverment to pick the energy winners and losers by subsidy.         

Permalink Reply by Joseph-Ohio on October 23, 2012 at 9:14am

Middle of the road is my perspective.

The government seems to have developed into what it is.

There are Social Programs that exist today and which are in my opinion very necessary.

Reverting to American Revolutionary principals and laws is not the answer to modern issues / problems.

My point is to direct government attention and subsidy to attention and expense worthy projects as opposed to stupid projects the likes of which are discussed above for a few instances.

It may be confusing - heck I think it is confusing too - but that's the way it is.

Permalink Reply by Dan on October 23, 2012 at 9:47am

Joseph,

Since you mention roads,

Goverment attension should be towards our roads and bridges.  I don't know what it costs to fix a pothole, but the true cost of that pothole is extremly high after X number of tires and rims are ruined and X number of mufflers and cad convertors are trashed and bearings and ball-joints fail prematurly etc .  There is a lot of oil in a tire and rare elements in a cad convertor, granted we won't need a cad for NG engines.  Lets keep the goverment maintaining infrastucture so when we do buy a new Chineese Chevy CNG 1/2 ton truck, it doesn't fall apart because of poor roads.

Permalink Reply by Joseph-Ohio on October 23, 2012 at 10:00am

Dan,

Roads are good things.

We need good roads.

Let's keep them in good shape.

Let's fix them and fix them to last.

You know, my place sits on a county road and it's construction is macadam.

It's a darn good road.

It gets quite a bit of traffic but of course no where near the amount of traffice an Interstate gets.

I think they have the material and technology to fix the Interstates to much higher standards of wear.

I don't know why they don't do a better job.

Man, there's always work and orange barrels on I-90 for instance.

Every year - you can count on it.

What do you think ?

As far as Chinese Cars are concerned I don't think I could talk myself into buying one.

Hoping we here in the U.S.A. develop our own reliable CNG vehicles to drive around with.

 

Permalink Reply by Dan on October 23, 2012 at 10:53am

Joseph,

I am being sarcastic about the Chinese cars.

Some countries don't take the lowest bid for road work, they take the bid that will warrant and bond the road to last 50 years. 

I will wait for a mid-engine CNG that powers four electric wheel motors, no spining drive-train or the weight of it.  This will be AWD, the wheel motors double as the brakes eliminating them completly.  Linear motor steering to reduce more weight, active suspension that sends extra preasure on bumpy roads to power generation.   The car manufactures have told us for years that goverment cafe rules and emmissions standards have been the reason for prices to soar.  NG all but eliminates emmissions and NG will put them in target with the upcoming cafe rules.

If I was to direct goverment money, I would fund R&D to develope lighter more supple higher preasure tires and lighter wheels to reduce rolling resistance.  The rim could be the outer ring of the wheel motors.  Anything rotating requires more energy to move down the road than the static parts .  The popular larger diameter tires and wheels are killing the MPG, the larger the diameter and weight the more energy needed to make it spin. 

Anything that spins in a car that is not needed wastes energy.  Subsidizing to convert outdated technology to CNG is wasted money.  It is time to rethink transportation.  Allthough I beleive the auto bail out was needed to prevent economic collapse, I beleive it stiffled ingenuity in the industry once again.

Permalink Reply by Joseph-Ohio on October 23, 2012 at 11:12am

Dan,

Lofty ideas that make alot of sense - just don't know how many steps can be taken all at once ?

How long would it take to just get the ball rolling ?

I'm thinking a long time.  

I don't think it makes much sense to let Rome burn in the mean time (not being connected to the gears that will get it all done and just voicing my opinion).

Permalink Reply by Rick on October 23, 2012 at 12:12pm

Dan, is that comment about paying farmers to not grow stuff actually true? or is that just an urban legend? I dont know anyone that gets paid not to plow and plant.

Permalink Reply by Kathleen on October 23, 2012 at 12:33pm
One thing I read recently concerning the drought was the government allowed farmers to take hay off resting fields this year to get hay. To me that sounds like something similar to paying not to plant.
Permalink Reply by Meg R on October 23, 2012 at 12:52pm

I've seen a conservation easement that prohibited plowing and he had been paid upwards of $800,000 to establish the easement.

Permalink Reply by Joseph-Ohio on October 23, 2012 at 1:03pm

Utica Shale,

Sounds like a duck, looks like a duck, walks like a duck, must have been a subsidy paid in the name of the best national interest.

I'm thinking the same would hold true for a CNG Conversion subsidy - paid in the name of the best national interest as a matter of national  security. 

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