Blog : 3 Alarming Facts About American Shale Oil Production
by Peter Leeds on November 17th, 2014
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Don't believe the shale oil hype. Here are the facts:
- Production from each well drops off incredibly rapidly
- Fracking for shale oil is NOT economically realistic (not now, not long term)
- Thousands of new wells are needed each year, just to maintain production levels
The Bureau of Economic Geology will be releasing a report soon on shale oil production in Texas' Eagle Ford territory. This will clearly explain what we are already telling you - most shale oil wells are financially unrealistic.
The wells cost millions of dollars just to get established, and even once they are in full operation, many require inputs of more money than they generate. This is true before oil prices dropped 25% over the last couple months, and it is certainly more true now.
Most new shale oil wells produce over half of their reserve within the first year, like pricking a pin into a balloon filled with water. Afterwards, they linger for many years, trickling out much less each year.
Even with all the finds pumping full pace, the shale oil is expected to last us for about 15 to 17 years.
Just to maintain current production levels, thousands of new wells must be found, established, and brought into operation each and every year. Given the economic realities of shale oil, compounded by the current crash in oil prices, many fracking projects will be shut down, or abandoned before they go live.
While the current mania for shale oil is running wild, consider avoiding many of the underlying stocks. Just like the California gold rush generated a great deal of interest, the majority of prospectors and their investors went broke. The shale oil boom will be no different for related penny stocks.
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As of January 2017 we no longer publish the blog and it has been removed from the webiste menu.
You are reading this old blog entry because we still like to reference it. :-)
You are reading this old blog entry because we still like to reference it. :-)
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