• 8 minutes U.S. Shale Oil Debt: Deep the Denial
  • 13 minutes WTI @ $75.75, headed for $64 - 67
  • 16 minutes Trump vs. MbS
  • 42 mins Despite pressure about Khashoggi's Murder: Saudi Arabia Reassures On Oil Supply, Says Will Meet Demand
  • 18 hours Nuclear Pact/Cold War: Moscow Wants U.S. To Explain Planned Exit From Arms Treaty
  • 10 hours Knoema: Crude Oil Price Forecast: 2018, 2019 and Long Term to 2030
  • 5 hours Merkel Aims To Ward Off Diesel Car Ban In Germany
  • 1 hour Why I Think Natural Gas is the Logical Future of Energy
  • 17 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 14 hours Iraq war and Possible Lies
  • 9 mins Satellite Moons to Replace Streetlamps?!
  • 10 hours Get on Those Bicycles to Save the World
  • 1 day Can the World Survive without Saudi Oil?
  • 1 day Long-Awaited Slowdown in China Exports Still Isn’t Happening
  • 17 mins Aramco to Become Major Player in LNG?
  • 11 hours EU to Splash Billions on Battery Factories
Alt Text

Oil Experts Divided As Iran Sanctions Loom

The world’s top oil trading…

Alt Text

Can We Expect A Rebound Rally Next Week?

Despite recovering somewhat on Friday,…

Alt Text

Oil Prices Subdued, But For How Long?

Oil prices may have closed…

Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

More Info

Trending Discussions

Investors Should Beware The Fracklog

"Fracklog” is the latest term running around the oil world, a new game that oil producers are playing to try and outlast temporarily depressed oil prices. The Catch-22 is that the more doggedly shale players hold on to production, the longer prices stay depressed and the more difficult it will be to carry on.

Recently, one of the techniques that US oil producers have been using to keep production in reserve without relinquishing acreage is to delay well completions. The economics of shale drilling can be difficult for the oil producer; most leases require oil companies to develop at least some of the acreage in order to maintain control of the mineral rights, and several standard clauses allow landowners to renegotiate leases should production fall under a certain level. So, many smaller oil companies choose to partially develop lease acreage but stop short of 'completion' – the point in drilling when oil finally comes out of the ground. The completion stage is by far the most expensive.

It's a trick of necessity, allowing tremendous Capex reductions while still controlling the prime acreage at the same lease rates that were initially negotiated. But it has created what is being called a 'fracklog' – a backlog of ready production that companies plan to turn on as soon as market conditions allow. In other words, there's a lot of oil out there waiting for oil prices to rally.

And there's the problem – oil waiting for a rally puts continuing…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions





Oilprice - The No. 1 Source for Oil & Energy News