Monday, August 13, 2018

Active Rigs Drop To 60 In North Dakota -- August 13, 2018 -- Breakeven In The Bakken -- $35 -- Rystad Energy -- WSJ

Breaking news: Friday's NDIC daily activity report was posted early this morning. At this link

Frackers burn cash to sustain US oil boom: from The WSJ Sub-heading -- many U.S. drillers have increased spending, but not production forecasts, pointing to possible slowdown. I
Two-thirds of U.S. oil producers failed to live within their means in the second quarter, even as oil rose above $70 a barrel. Collectively, 50 major U.S. oil companies reported in their second-quarter results that they have spent $2 billion more than they took in.
Pioneer Natural Resources Co. , one of the biggest operators in the Permian Basin of West Texas and New Mexico, told investors a year ago it expected to largely make up for rising operating costs with “efficiency gains” such as producing more from each well. Last week , Pioneer reversed course and raised its annual spending forecast to $3.3 to $3.4 billion, from $2.9 billion, to produce roughly the same amount of oil.
“We’ve had a more significant increase in cost issue than we would have assumed,” Pioneer Chief Executive Tim Dove told investors. Some of the new spending will push up output next year.
Comment: it would be interesting to see a comparison of companies in the Bakken vs companies in the Permian.
[Where the rigs are going: see below.]
In his comments, Stuart Baxter pretty much summarizes my sentiment regarding the article:
What a stupid article.  I expect to lose a bunch tomorrow because of these witless journalists who thinks they have a clue.  What are they trying to accomplish with this trash?
But, look at this: forget about the verbiage in the article -- look at the graph that was embedded in that article linked above -- look at that incredible fall from $70 - $100 all the way down to $35 in the Bakken -- what did the writer expect? That the break-even price would drop to zero dollars? Wow, another doofus. This graphic is incredible:

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.

New rigs: where are they going? -- from Energent -- for all that ink -- no real change, +/- a rig everywhere.
  • Permian Basin +1.0% to 485 rigs compared to last week's 480 rigs -- added 5 rigs
  • Eagle Ford -1.3% to 79 rigs compared to last week's 80 rigs -- dropped one rig -- big deal. LOL.
  • Williston stayed flat at 56 rigs 
  • DJ-Niobrara stayed flat at 25 rigs 
  • Cana Woodford stayed flat at 68 rigs
  • Marcellus -1.9% to 52 rigs compared to last week's 53 rigs 
  • Haynesville +2.1% to 49 rigs compared to last week's 48 rigs -- added one rig -- big deal. LOL.
  • Utica +4.3 to 24 rigs compared to last week's 23 rigs 
  • Granite Wash +6.3% to 17 rigs compared to last week’s 16 rigs
WTI? Tea leaves of no help --
  • analysts' expectations: we should see supply constraints sooner than later
  • WTI: continues to fall; strong dollar as world markets plunge on fears of "Turkish contagion"
  • John Kemp today: frothy oil market turns increasingly flat
  • Baker Hughes: US rig count rose +13 last week to 1,057; oil rigs +10 to 869, the highest since March 2015, and largest one-week rise for 11 weeks (need ot find out where the increase -- certainly not the Bakken; see below)
  • inflation: ticked up to +2.9% in July, up form +2.8% in June, and the fastest increase since February 2012 (almost 5 and a half years) -- inflation generally drives WTI a bit, all things being equal
  • US refineries: running near-record highs -- EIA

Turkey: imploding ... from Argus -- A total of six Turkish gas-fired power plants with a combined capacity of 5.3GW have stopped generation, as a result of the domestic currency's record-low against the US dollar.

Trucking: wow, how many times have we talked about this in the blog in the past year? Trucking's tight capacity squeezes US businesses. From The WSJ
Empty trucks are so hard to come by right now that Dean Foods Co., one of North America’s largest milk suppliers, cut its full-year earnings outlook in part because it simply can’t move its goods for anything close to what it expected to pay this year.
“Industry capacity for truck drivers remains extremely tight. This is driving third-party hauling rates to record levels, up 26% versus prior year,” Chief Executive Ralph Scozzafava said in a Tuesday call with investors.
The warning from the Dallas-based dairy processor puts Dean in a growing line of U.S. businesses struggling with the tightest freight market in recent memory. Distribution channels that carry goods to retailers, factories and consumers are struggling to keep up with the fast-growing U.S. economy as more companies caution that the strains in the transport sector are holding back their ability to grow.
Back to the Bakken 

Director's Cut is scheduled to be released Wednesday, August 15, 2018.

Wells coming off the confidential list today. this past weekend:
Monday, August 13, 2018
  • None.
Sunday, August 12, 2018
  • 33977, SI/NC, BR, Kermit 5-8-32 UTFH, Pershing, no production data,
  • 30527, 1,457, CLR, Burr Federal 19-26H, Sanish, 64 stages; 15 million lbs, huge well; 41K in second full month, t4/18; cum 109K 6/18;
Saturday, August 11, 2018
  • 33978, SI/NC, BR, Rink 5-1-5 UTFH, Pershing, no production data,
  • 32947, 408, Oasis, Ceynar 5198 11-5 3TX, Banks, Three Forks 1st, 50 stages; 4 million lbs, very nice well; t2/18; cum 82K 6/18;
  • 32946, 678, Oasis, Ceynar 5198 11-5 2BX, Banks, middle Bakken, 50 stages, 10 million lbs, very nice well; 27K if second full month; t2/18; cum 115K 6/18;
Active rigs:

Active Rigs60573372193

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