How "real" is the WMB - ETP story? Not very. Enbridge is flat on a day the market surges 135 points in early trading. KMI not much higher; OKE up 3% but it had fallen so far to begin with.
Key dates:
- October 1, 2014: Saudi slide starts
- June 20, 2015: new Bakken production shuts down
From the first quarter of 2014 to the first quarter of 2015, medium-grade crude oil imports to Gulf Coast refineries decreased 45%, from 1.5 million barrels per day (b/d) to 0.8 million b/d. On the other hand, over that same period there was a 0.4 million b/d (22%) increase in imports to Gulf Coast refineries of heavy crude oil. Improved refining margins from processing additional volumes of heavy crude have resulted in a 3% increase in gross atmospheric distillation unit (ADU) throughput in the Gulf Coast region over this period, from 8.0 million b/d to 8.2 million b/d. -- EIA
| 6/22/2015 | 06/22/2014 | 06/22/2013 | 06/22/2012 | 06/22/2011 | |
|---|---|---|---|---|---|
| Active Rigs | 77 | 189 | 189 | 211 | 173 |
RBN Energy: this is frustrating. Just as I'm getting the "natural gas fill rate" figured out, the EIA is going to move the goalposts. Actually, the EIA is going to re-do the entire field. (Archived.)
The biggest fundamental price indicator in the natural gas market -- Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report – is about to get a major makeover. The EIA is planning to split the US gas inventory data into five regions, from three macro regions currently. The idea has been floating out there for a while, but now it looks imminent, with a good chance it is rolled out before the gas winter season comes around in November. When it does happen, the increased granularity will vastly improve the transparency of natural gas storage inventory data on a weekly basis. But there’s another reason it will be a big deal when it happens: It will break everybody’s storage scrapes and models. Storage modelers and forecasters will have their work cut out for them. In today’s blog, we break down the upcoming changes.
EIA’s weekly gas storage report, which quantifies changes in natural gas storage inventory from the previous week, is easily the most closely watched piece of fundamental data in the US gas market. The weekly inventory number, which is reported on a national and regional level, reflects the tension (or lack thereof) between supply and demand, and has a big impact on price sentiment.
The market tunes in each Thursday morning at 10:30 AM EST for the release of the storage inventory data to determine if the supply demand balance is loosening or tightening, relative to history and also relative to expectations, and a flurry of trading activity usually surrounds its release. As such, an entire cottage industry of forecasters at banks, trading shops and analytics companies exists around predicting what the EIA numbers will be each week. Their models are built to predict what the EIA will report and, after the fact, the data is treated as the benchmark by which to recalibrate supply demand models. These models typically are built to emulate the EIA storage regions and then aggregate up to the total US. Thus, changes to the EIA report will change not only the mechanics of how the models ingests and aggregate the data but also the assumptions and calculations behind them.
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QEP Resources Not Feeling The Love
Baxalta to replace QEP Resources Inc. in S&P 500 index. Link here.
Baxalta Inc. will replace QEP Resources Inc. in the benchmark S&P 500 index.
Baxalta, a biopharmaceutical company based in Deerfield, Illinois, will join the index after the close of trading June 30. QEP, an oil and gas company, is being replaced because it's near the bottom of the index.
Priceline Group Inc. will replace Baxter International Inc. in the S&P 100. Baxter, which is spinning off Baxalta later this month, will remain in the S&P 500.
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This is not an investment site.
WPX Energy purchases 14,300 acres in the San Juan Basin's Gallup oil window, for ~$26 mln : The acreage purchase represents an estimated 100 gross drilling locations, boosting WPX's tally in the San Juan Gallup to approximately 500. WPX now owns or controls approximately 100,000 acres in the core of the Gallup oil window where it has spud more than 100 wells following a successful discovery in early 2013.
Magellan Petroleum provides updates on several of its projects:
- Poplar: Magellan has completed a detailed reservoir engineering study using data from the CO2-enhanced oil recovery pilot, and with the results of that study has estimated that approximately 80 to 100 MMboe may be recoverable from the B-1 and B-2 zones of the Charles formation at Poplar using the CO2-EOR technique over approximately 40 years. This estimate, which does not constitute reserves as defined by the SEC, is approximately double the amount of previous estimates.
Goodrich Petroleum says that it has commenced completion operations on two of its six drilled but uncompleted wells in the Tuscaloosa Marine Shale; Reaffirms Q2 CapEx : The B-Nez 43H-1 (70%WI) and B-Nez 43H-2 (74% WI) wells in Tangipahoa Parish are near completion of fracture stimulation, with flow back and initial production expected within 1 - 2 weeks. The Company currently anticipates completing the remaining four drilled but uncompleted TMS wells from mid-July through early September. All six wells, which are located within the Company's core acreage position of 150,000 net acres, will be completed prior to the fall borrowing base redetermination scheduled for October 2015.
- The Company's full year capital expenditure budget of $90-110 million was front-end loaded, with approximately 46% of the budget at the mid-point of guidance spent in the first quarter, as the Company entered the year with three rigs under contract. The Company currently has zero rigs running with plans to bring a rig back to the TMS in October, with no change to previously issued guidance. The Company re-affirms second quarter capital expenditure guidance of $10 -- 15 million and exited the first quarter with in excess of $100 million of liquidity. The Company maintains the ability to enhance liquidity by pursuing a potential joint venture or sale of its Eagle Ford Shale asset.
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More Idle Chatter On That WMB - ETP Story
Let’s first look at Williams Companies Inc in which Lone Pine Capital held a total of 12.02 million shares with a market value of $607.85 million at the end of the first quarter of 2015.
The investment represents 2.3% of the fund’s total holdings, and being a new purchase, it’s a significant investment, even for a company with billions in equity exposure. Let’s try to understand why an experienced investor like Mandel would want to own a stake in the Tulsa, Oklahoma-based energy company.
First, Williams Companies Inc is in a sector that’s expected to post better performance in general going forward.
Moreover, this is one of the companies that embraced what has been widely referred to as the “Internet of Things”, having installed sensors in its pipelines for decades. While this might have appeared unimportant at the initiation stage, a new app has made it an important aspect of the company’s operations, helping in monitor and resolve detected slowdowns in the flow of natural gas. The app, called Pi, has made it possible for the company to boost its revenue by between $1-2 million. Over the past three months, the company has registered 3.11% growth. In Williams Companies Inc’s most recent results, it posted $0.16 in earnings per share, beating Thomson Reuters’ consensus estimate of $0.15. Williams Companies Inc’s earnings per share for the same quarter last year was $0.28.There was a "first" in that story, but no "second."
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