Seven Generations Energy Ltd. class A common shares T.VII

Permian Decline Rates Increasing Faster than Expected

[Specul8r]

https://www.worldoil.com/news/2018/10/9/decline-rates-from-maturing-oil-wells-in-the-permian-are-on-the-rise "Growth in the Permian has, in fact, been shrinking, down almost every month this year, while declines in older wells are trending higher, according to the U.S. Energy Information Administration. In October, the organizations data shows declines offsetting output by about 18%, compared with 4% at the start of the year." Does this mean 2019 production forecasts might be high? Rig count went down by 10 last week. Oil is anything but boring.

[retiredengexec]

Higher declines does mean slower production growth. I have felt for some time that the IEA routinely overstates production. They have forecast growth from 10.9 to 12.1 million bpd in 2019, or another 1.2 million bpd. I think they are at least 400,000 bpd too high. Permian legacy production declines have been increasing each month in 2018. In the last drilling productivity report, the Permain only

[retiredengexec]

The real issue is when does US shale oil growth slow? The market has baked in 1.2 Million bpd forever.  Is it this year, next year? Imagine if the rate of growth slows to 800,000 bpd this year and continues to slow year after year. The market is bearish simply becuase it thinks that US shale oil can fill demand growth on its own. IMHO, the rate aof growth slows by June this year.