The number of Permian wells that were drilled but left unfinished surged to 3,203 last month, a 90 percent increase from a year earlier and the highest since the Energy Department began tracking them in 2013. Postponing fracking, the final stage of drilling, reduces the supply a company needs to ship to markets. The jump in unfinished wells is a harbinger of oil producers actually shutting down older wells.
Permian pipelines probably will be totally full in three or four months, Pioneer Natural Resources Co. Chairman Scott Sheffield said in an interview Wednesday. Those constraints will compel some drillers to shut off wells.
“Some companies will have to shut in production, some companies will move rigs away, and some companies will be able to continue growing because they have firm transportation,” Sheffield said, using the industry jargon for guaranteed pipeline contracts.More LNG: link here.
EOG Resources Inc., the world’s second-largest independent oil producer, also sounded the alarm, warning that smaller operators that haven’t already locked in pipeline space will soon feel the brunt.
Guyana: ExxonMobil announces eighth discovery offshore Guyana, a press release. Data points:
- eighth discovery offshore Guyana at the Longtail-1 well; EUR: 500 million BOE
- drilled to 18,000 feet in 6,365 feet of water
- Liza Phase 1 will consist of 17 wells; will produce up to 120,000 bopd
- first oil is expected in early 2020
- Phase 2 similar to Phase 1; 220,000 bopd
- a third development, Payara, is planned to follow Liza Phase 2
Back to the Bakken
RBN Energy: widely varied interests coalesce against coal and nuclear bailouts.