British Oil Production Falls 11% in April, gas down 16% year on year...

This from an article in today's Scotsman (hat tip:
BRITISH oil production fell 11 per cent in April, continuing the past year's trend of declining production, according to the latest Royal Bank of Scotland Oil and Gas index.

The June survey says that gas production was also down by 16 per cent on the year. Combined oil and gas production was down 13 per cent on the year.
RBS said, however: "Continued high oil prices and the success of the most recent offshore licensing round continue to point towards a positive outlook for the North Sea."

Tony Wood, senior economist with Royal Bank of Scotland, said: "The ongoing rate of decline of UK oil and gas production continues to be of concern.

"However, high oil prices combined with the success of the recent Seaward Licensing Round point to a much more positive operating environment in the UK for at least the next two years."

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In regard to the debate over conventional oil production versus price, Texas is an interesting case history.

In regard to Texas, the data on the number of producing wells are completely counterintuitive. The number of producing wells fell from 1962 to 1972, even as production went up from 2.5 MMBOPD to 3.5 MMBOPD. And the number of producing wells increased from 1972 to 1982 (by 14%) even as oil production fell from 3.5 MMBOPD to 2.5 MMBOPD. Consider what happened from 1972 to 1980. Oil prices went up by 1,000%, and the rig count exploded.

When large oil fields like the East Texas Field started declining in 1973, no amount of drilling or technology could reverse the decline. If Texas were the sole source of crude oil for the world, for every four gallons of gasoline that we bought in 1972, we would be bidding for one gallon today.