MSNBC "Morning Joe":
- Trump has definitely shifted the conversation
- Trump "never sleeps"
- Trump: "predictably unpredictable"
- the flurry of the activity in the past two days is not a "one-off" -- it's going to continue
- Trump is keeping everyone off-balance
- if Obama is watching, he is being schooled; biggest lesson -- put American first; less golfing; and, less political fund-raising in California
- one of the most liberal talking heads on "Morning Joe" actually gives credit to the US military men and women in Afghanistan; first time I've heard anyone on "Morning Joe" actually acknowledge the work these folks are doing
- by the way, did any news outlet ever report that Rep John Lewis attended the inauguration? Absolutely amazing how that story was apparently killed by producers of all network news shows.
Twitter. Speaking of which -- that "Trump never sleeps" -- let's see if he has tweeted this morning? Last one was nine hours ago: "Big day planned on national security tomorrow (Wednesday). We will build the wall!" Maybe he will remind folks that Congress authorized "the wall" (although it was called a "fence" at the time) over a decade ago.
The RBN Energy blog today is particularly noteworthy; on the Permian; highly recommend reading.
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Back To The Bakken
Active rigs:
| 1/25/2017 | 01/25/2016 | 01/25/2015 | 01/25/2014 | 01/25/2013 | |
|---|---|---|---|---|---|
| Active Rigs | 38 | 48 | 157 | 187 | 190 |
RBN Energy: an analysis of Plains All American's Alpha Crude Connector deal.
Plains All American Pipeline announced on Tuesday that it has agreed to acquire Alpha Crude Connector (ACC), an extensive, FERC-regulated crude oil gathering system in the Permian’s super-hot Delaware Basin, for $1.215 billion.
At first glance that might seem to be a lofty price, but the development of the ACC system appears to be a classic case of right-place/right-time because it addresses a fast-growing need for pipeline capacity across an under-served area. And, with its multiple connections, ACC is an attractive source of crude to fill currently underutilized downstream pipelines headed to Midland, the Gulf Coast to Cushing. Today we review Plains’ newly announced agreement to acquire the ACC pipeline system in southeastern New Mexico and West Texas.
Let’s begin our look at Plains’ new ACC deal with a review of Permian Basin production trends. The Permian has proven to be a hydrocarbon superstar. Falling crude oil prices may have hurt most crude-focused plays in the U.S., but Permian production has continued rising; output there now averages ~2.1 million barrels per day (MMb/d), according to our friends at PointLogic, up from ~1.6 MMb/d in mid-2014, when crude prices started their long decline.
These production gains came as exploration and production companies (E&Ps) focused on their most prolific “sweet spots” and worked to further reduce their drilling and completion costs.
The Permian’s 10,000-square-mile Delaware Basin sub-region, and particularly the northern Delaware, offers many of what seem to be the sweetest of the sweet spots. E&P companies have been perfecting their drilling and completion technologies and wringing remarkable volumes of crude from the area’s Bone Springs, Avalon, Leonard, and Wolfcamp formations.
As a result, break-even costs in the area have dropped from $60/bbl in 2013 to as low as $30/bbl, ranking the area among the best return on investment anywhere in the U.S.
These outstanding returns will drive continued increases in Delaware Basin production. That assumes, of course, that there are cost-effective means to transport those incremental crude volumes to market. Historically, a significant portion of the oil produced in this area has been transported by truck to takeaway pipelines that began near the edges of the northern Delaware—a costly and cumbersome way to do business.
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