Monday, March 6, 2017

The Market And Energy Page, T+45; The Permian Still Trading For $35,000/Acre -- March 6, 2017

Williston prepares for Bakken 2.0: from The Billings Gazette.

Resolute Energy inks $160 million deal to expand in Delaware Basin. From Zacks:
  • 4,600 net acres of undeveloped and producing property; Reeves County, TX
  • half of this acreage is adjacent to the company's operating area in Reeves; produces 800 net boepd 
  • increases the company's holding in Reeves by almost 30% to 21,000 net acres
  • $160 million / 4,600 net acres = $35,000 / acre
Saudi Aramco IPO: yet another story on the IPO. From Reuters. I did not read it.  But I think Saudi is in deep doo-doo. There are two stories out there today about the growing realization that oil may not move much higher than the current $53 - $56 (WT - Brent). Saudi needs $100 oil; really, really needs $80-oil; says it would like to see $60 oil this year; and, now, well into the 1Q17, stuck at $55 (at best).
The Market really wants to go up. I am quite surprised. The market surges to 21,000 the past few weeks and despite the following, the market opens about 60 points down, and gradually coming back up:
  • North Korea fires four more missiles into "the" ocean over the weeeken
  • the Drudge headline: "Dems smell blood in the water"
  • Trump goes on a tweet ramp
  • oil and reality (see above)
  • Janet Yellen suggests she may move Fed rates a lot higher a lot faster
And yet the market hangs in there. Color me surprised.

Marathon's $2.2 Billion CAPEX For 2017

Link over at Emergent Group.Data is broken out for MRO's involvement in three plays: SCOOP/STAC; Eagle Ford; and, the Bakken. For the Bakken:
In the Bakken, Marathon’s Maggie pad in Mountrail County, brought online in Q3, continues to lead the basin in 90-day production rates. Since December the company has mobilized four rigs to Mountrail and McKenzie Counties to support its development program.
Marathon is expanding on its 2016 Mountrail wells with enhanced completion designs that utilize 6–15 MMLBS of proppant with 45–50 stages. In Dunn County, the company is using slickwater with plug and perf technology and reports a >100% increase in proppant use as well as a >60% increase in stage count.
A graph at the link suggests that MRO's production in the Bakken remained fairly flat from 4Q15 to 4Q16 but the number of new wells (gross wells/net working interest wells) dropped throughout the year, down to zero by 4Q16).

Of its $2.2 billion CAPEX, one-third will be spent in each of three plays mentioned above, or about $660 million in the Bakken.
In the Bakken, Marathon plans to focus on its highest-return areas, Mountrail and McKenzie Counties, where it completed several wells in 2016. The company will continue to focus on optimizing base production while bringing 70–75 gross company-operated wells to sales. Marathon expects to average approximately six drilling rigs in the Bakken in 2017.
Unless I missed it, this particular article did not mention Marathon's re-frack program which has been mentioned elsewhere. 

For articles on MRO and re-fracking:
Another article on MRO with much background, but nothing about re-fracking, conference, 2014;

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