Revisions to oil reserves
There have been accusations of a number of OPEC countries 'misreporting' oil reserves for a while and jacking up the number. I can't remember the source, (I think it might be the book 'Oil's Endless Bid) but the reason or motivation to misreport is that sometime in the mid 1980s or 1990s, OPEC changed the formula for production quotas. One of the big factors was total reserves, so if a country reported a larger reserve, it got a higher portion of the quota.
Saudi Arabia is rumored to have increased its reserves by 100% after the change in the formula, and there are rumors that at a number of fields the percentage of water is 50% to 55% (the amount of water coming out of the well with the oil; the water is partly already there and additional water is forced down into the well to get more oil out.)
I think a big thing to watch into the summer are the storage reports for Cushing, OK; to see if storage fills up or not. Right now they are still on track for storage being operationally full on June 16, 2016. (80% of capacity, while not 100%, the 20% is needed so you can move different blends around in the systems).
as long as Cushing does not fill up, then CHK might have a chance, but if Cushing fills up, then CHK is dead. At that point oil and has prices would have to crash since they would need to get rid of the stuff at any price to free up room for current production.
Louis J. Desy Jr.
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