Chapter 1708 Other Oil Fields Are Miserable

"The land that Lao Tan and the others bought was an abandoned oil field. It originally belonged to Anadarko Petroleum Company. At the beginning, the other party only asked for 5 million U.S. dollars, but for some reason, it increased to 10 million a little bit. The drilling equipment was sold to Lao Tan at a low price, and the final transaction was 12 million.”

Yang Cheng nodded, "Well, let Uncle Tan get me a license first, and I'll send someone over to investigate the situation. Don't worry, I won't start large-scale exploration activities until the property rights are handed over."

How could Qiu Ying understand these things? As soon as she heard that there was hope, she wished to make a deal quickly, "Okay, I'll let Lao Tan prove it when I go back."

After breakfast, Yang Cheng returned to the company and contacted Abu and Conrad immediately, asking them to meet in New York as quickly as possible.

Conrad was in Australia recently, and he didn't know what he was busy with. After receiving Yang Cheng's call, he was still a little reluctant, "What can't I say on the phone?"

Yang Cheng snorted coldly, "If you don't come back, the tens of billions of business will have nothing to do with you~"

Still don't believe that this guy can't be cured, relying on his own seniority to pretend to be a wolf with a big tail all day long, he doesn't need to clean up.

Sure enough, upon hearing that it was a transaction worth tens of billions, he said without further ado, "I'll let the crew prepare~"

Compared with Conrad, Abramovich was much happier. He was on a business visit in Israel, and after receiving the call, he told Yang Cheng directly—he will arrive tomorrow!

After making a round of phone calls, Yang Cheng asked Susu to call Ruiz up.

"Tell me about the situation in the Permian Basin~"

Although Ruiz was not prepared, the trend of oil is an area that he must pay attention to every day. He knows a lot about the hot shale oil that has been hyped in recent years. He opened his mouth and said, "Shale oil will affect the price of crude oil in the next few years. The key factor in the trend, and the Permian Basin is the decisive factor affecting shale oil production.

Therefore, only by having an in-depth understanding of the Permian Basin can we have a clear judgment on the future trend of crude oil prices. Sitting in our office in New York, we can only understand very one-sidedly. "

Yang Cheng hummed, "It's okay, let's talk about it first~"

"From the perspective of cost, shale oil is very unique, because the dense oil-producing layers, as well as complete infrastructure, superior geographical location and developed oil and gas services have contributed to the Permian Basin becoming the core production area with the lowest cost of shale oil, The average break-even WTI oil price is below $45, and even below $40 in some areas.

From the perspective of development potential,

The Permian Basin is still in the early stages of development, and there are plenty of remaining economic wells at an oil price of $50.

Wall Street analysts in the energy field predict that by 2018, the average annual output of the Permian Basin is expected to reach 2.9 million barrels per day, accounting for 30% of US production, helping North American crude oil production hit a record high;

In the medium term, the Permian Basin will restrict the sharp rise in oil prices, and through flexible production increases, the sight of oil prices will be regulated. In the next 2 to 3 years, in the absence of special geopolitical events, the Permian Basin will control the main fluctuations in crude oil prices. The interval is suppressed between 45-65 dollars. "

This is similar to what Yang Cheng understands~

Ruiz added, "The three core shale oil production areas in North America are the Permian Basin, Eagle Ford and Bacon. In terms of output and rig count, only the Permian can maintain stability and continue to grow. Eagle Ford and Beiken Ken is on a downward curve."

Yang Cheng couldn't help frowning, "Isn't Bacon always hot?"

Ryze shook his head, "I can't tell you the specific situation, Eagle Ford, which belongs to Texas as the Permian, has a similar situation, only the Permian has bucked the trend, which is really incredible.

According to the data I have obtained, the Permian has been increasing production since 2007. Before the oil price crash in mid-2014, its production was 1.6 million barrels per day. In February this year, when the oil price was the lowest, its production was close to 2 million barrels per day, and it continued to increase production. middle;

The production of Eagle Ford was 1.4 million barrels per day in mid-2014, and reached a peak of more than 1.7 million barrels per day in March 2015. Since then, production has continued to decrease, and has now fallen to 1.1 million barrels per day;

Bacon is similar. In mid-2014, the output was 1.05 million barrels per day, and reached a peak of 1.25 million barrels per day in the middle of last year. After that, it continued to decrease and has now fallen below the million mark! "

Susu came in to deliver coffee, just as he was thirsty, Ruiz picked it up and took a sip, it was a little hot, and continued, "In addition, in terms of the number of drilling rigs, the peak value of the United States as a whole was close to 2,000 in 2014, and the valley value is this year. 400 units in May.

The peak value of the Permian was 560 units in 2014, the valley value was 130 units in 2015, and then slowly recovered to close to 200 units;

The Eagle Ford now has less than 70 units, and the Bacon is even worse, with less than 50 units. "

Yang Cheng was always puzzled, "It's understandable that the production of Bacon is relatively small, but Egle Ford is obviously in the remnants of Permian oil reservoirs. Why has the decline been so obvious?"

Eagle Ford is in southern Texas. Compared with the Permian in western Texas, the gap between the two large oil fields is not a little bit. Is Eagle Ford running out of oil?

This is obviously impossible. Since the day the Eagle Ford shale was discovered, it has been recognized as a world-class oil and gas region. The Eagle Ford shale has the potential to eventually become a single oil-rich and high-yield formation in the United States. How could it not It's oily.

After thinking for a few seconds, Ruiz said, "I think the most important and obvious reason for this different situation is economic issues.

The Permian Basin benefits from the existence of multiple sets of potential oil-bearing formations. For example, different horizontal formations underground have commercial oil and gas production capacity. For several oil and gas production layers, it is obvious that drilling one well can produce multiple sets of production layers, which greatly reduces the total unit production cost.

The Eagle Ford shale itself is a huge oil and gas-rich formation, but in this production area that has been in production for many years, only one layer of a well is currently producing.

Because of this difference, the average expected breakeven oil price in the Permian Basin is significantly lower than in the Eagle Ford region.

In many parts of the Permian Basin, the break-even point of oil and gas producers is US$30/barrel or even lower, while the break-even point commonly seen in the Eagle Ford area is about US$50/barrel. Judging from the current oil price, this price is obviously It is a loss.

Capital investment in the oil and gas industry always goes where the rate of return is highest, this is the law!

The Permian has always been producing oil and gas, that is, producing profits. Naturally, investors will not guard a high-cost oil field. "

Yang Cheng sighed, "You are right, so do you think it is still too late for us to invest in the Permian?"

Ryze didn't answer directly, but asked instead, "Boss, do you have a goal?"

Yang Cheng hesitated, and told about Lao Tan.

In this regard, Ruiz's reaction was straightforward, "It's worth the gamble. The abundant underground oil and gas reserves in the Permian Basin are worth the risk. If we take a step back, even if we lose money, we can afford it. But If the bet wins, the profit is comparable to selling arms!"

This idea coincides with Yang Cheng~

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