Miscellaneous Notes, Part 3 -- November 15, 2017

US shale plays: where we stand --

• for all intents and purposes, there are only three (four if you count STACK/SCOOP) viable onshhore shale plays in the US -- the Bakken, the Permian, and the Eagle Ford
• the Eagle Ford is huge for some players, but in the big scheme of things, taking a back seat to the Permian and the Bakken, and possibly, even a back seat to STACK/SCOOP
• the Permian is turning out to be incredibly expensive for operators
• with DAPL flowing, Bakken light sweet oil is almost on par with Brent (according to some sources; I'm not totally convinced)
• from Bloomberg via Rigzone: operators drilling the Permian are finding out that it's a lot cheaper to drill in New Mexico.

Oil producers discouraged by the rising cost of accessing the vast deposits of the Permian Basin in Texas are sneaking into a geological back door, through neighboring New Mexico.

The state, which covers a smaller part of the oil-soaked shale formation, is the fourth-largest U.S. producer and luring industry giants including Exxon Mobil Corp., Chevron Corp., EOG Resources Inc. and Occidental Petroleum Corp. Their investments -- while small compared with Texas -- are increasing as activity in the rest of the Permian starts to slow down.

In just the past five months, drilling on the New Mexico side of the Permian expanded 25 percent to 75 rigs, while Texas contracted by 2 percent to 490, according to data compiled by Drilling Info Inc., an Austin-Texas based industry consultant. At the same time, the pipeline network is being expanded, which could mean more sustained growth in development and production.

New Mexico “may well be the next wave,” said Haag Sherman, chief executive officer at Tectonic Holdings LLC, a Houston-based investment firm overseeing $3.2 billion for clients. “If Exxon’s looking at it, that’s probably a good sign.”

Earlier this year, Irving, Texas-based Exxon, the world’s largest energy company by market value, jumped into New Mexico with a $5.6 billion acquisition of assets from the Bass family. Exxon said the quarter-million acres it bought will provide 20 years of drilling prospects.

• this is huge for New Mexico, an impoverished state by many standards
• much more at the link

US energy: from Rigzone -- I'm getting tired of these headlines, these stories -- the headline -- "IEA: it's too early to write obituary of oil." Well, duh.

Data points based on IEA's World Energy Outlook 2017 report (note what they don't mention in this article):

• global oil demand will continue to grow through 2040, but at a steadily decreasing pace
• until the mid-2020's, demand growth remains robust
• after mid-2020's, growth slows due to greater efficiency (that I can accept) and fuel switching (that I cannot accept)
• but look at this: demand trajectory to 105 million bbls / day through 2040
• I have trouble imagining how the oil companies can supply 105 million bopd -- currently it's about 100 million -- the big three -- the US, Saudi Arabia, and Russia each supply 10 million bopd; most agree that by 2040, Saudi Arabia will be a net importer of oil (possibly due to need to supply new refinery buildout)
• the US is set to become the undisputed global oil and gas leader, accounting for 80% of the increase in global oil supply to 2025 (so, if we are at 100 million bopd, and global production increases to 105 million bopd, the delta is 5 million bopd and 80% of that is 4 million bopd -- easily accomplished: the Permian can add another 1 to 2 million bopd; and the Bakken can add another 1 million bopd)
• natural gas will grow to account for a quarter of global energy demand by 2040, becoming the second-largest fuel in the global mix after oil (coal dropping to 3rd place, I assume; nuclear is dead)
• and then this:

"One of the most interesting themes is the expected rise of the US as a global leader in oil and gas production, largely due to its success in the unconventionals sphere – something that was unforeseen a decade ago,” Burns said in a statement sent to Rigzone.

2017. A decade ago, 2007. The Bakken boom began in 2007. Wow, I love following this story. There's only one thing I enjoy more than blogging about the Bakken is traveling cross-country and if I didn't have Sophia to care for, that's all I would be doing. Just saying.

US -- hyperrole in energy -- we didn't stumble in -- lots of technology, entrepreneurial culture, and lots of politics to hold back the likes of Andrew Cuomo, Hillary Clinton, Tom Steyer ..

Stumblin' In, Chris Norman and Suzi Quatro