Friday, August 18, 2017

The Market And Energy Page, Part 3, T+210 -- August 18, 2017

DAPL upends region's dependence on oil: from The Financial Post --  As Dakota Access comes online, America's most pipeline-constrained shale play sees new life. The completion of the Dakota Access pipeline in June has upended the region’s dependence on rail — good news for Calgary's Enerplus.
Ian Dundas expects to see far fewer oil trains rumbling across the sprawling farmlands of North Dakota in coming years.
Dundas is the chief executive of Calgary-based Enerplus Corp., one of the first companies to enter the Bakken, an oilfield spanning southern Saskatchewan, North Dakota and Montana. In the absence of available pipeline capacity, companies operating in the region had for years moved oil on an existing rail network in Canada and the United States. As production boomed, producers began investing more in oil-by-rail terminals, paying a premium to get their product to market.
But the completion of the highly contentious Dakota Access pipeline in June, a major oil conduit carrying some 570,000 barrels per day of crude from North Dakota to Illinois, has upended the region’s dependence on rail.
The pipeline has dramatically reduced shipping costs for Bakken companies, bringing overall costs in line with other U.S. shale producers, like those in the highly prolific Permian Basin in Texas and New Mexico.  
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STACK. From an analyst's press release:
Despite the fact that the Oklahoma STACK oil and gas play is still evolving and its total potential is undetermined, evidence thus far indicates the play is delivering impressive results, leading operators to commit significant 2017 CAPEX to its development, according to new analysis from IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

“The Oklahoma STACK (Sooner Trend Anadarko Basin Canadian and Kingfisher County) play is early in its development but wells have shown great productivity,” said Imre Kugler, associate director, energy research at IHS Markit and author of the IHS Markit Plays and Basins: Oklahoma STACK analysis. “Questions still remain regarding potential across various horizons; however, for operators with acreage and capital to test the play, economic upside exists so the biggest six operators in the play are on track to invest more than $2.5 billion during 2017.”

Whether the play will be a major contributor to domestic supply is still undetermined, Kugler said. “To date, fewer than 1,000 wells have been brought online in the liquids-rich STACK play, but estimated break-evens for first quintile wells in the play are quite low and competitive with top Permian plays. First quintile wells in the STACK for both short- and long-laterals are estimated to break even under $30 per barrel.”

The early stage of the STACK play equates to some variance in well performance as operators seek to optimize development. The spread between first and second quintile wells is wider when compared with the relatively more well-known Permian plays, with second quintile STACK wells estimated to break even near $41 per barrel for longer laterals, and $55 per barrel for shorter laterals, IHS Markit said.

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