Oasis Reports Another Huge Bakken Well -- Thursday, September 13, 2018; President Trump Threatens Mother Nature -- She Responds -- Hurricane Florence Drops From Category 4 To Category 2 In Less Than 12 Hours, And Hasn't Reached Landfall Yet -- But It's Still A Dangerous Storm

NG fill rate, link rate: for newbies -- this is quite incredible, this is historic -- this is something none of us have seen in years, breaking below the 5-year low, and the gap is widening as we move into autumn and fall -- as I've said before, if this is a cold winter and it turns out there are no problems with adequate natural gas, it tells me that tracking this metric is fairly unimportant.

Update: Mother Nature blinked ... again. Last night, just before going to bed, I wrote:

" ... apparently the president called Mother Nature, threatened the old lady with sanctions if she didn't moderate the storm. Mother Nature blinked. The hurricane has been downgraded from Category 4 to Category 3 -- and hasn't even hit landfall yet. Can't make this stuff up."

This morning, it turns out, Hurricane Florence was downgraded once again -- now it's a Category 2, hasn't reached landfall, but to save face, the soundbite, "... but it's still a dangerous storm."

Meet the Shalennials: from Bloomberg -- CEOs under 40 years of age making millions in Texas shale. 

Weekly jobs report, pending:

• actual: 204K 
• consensus: 210K
• prior: 203K, so, if accurate, the consensus would mean an increase of 7,000 week-over-week
• Hurricane Florence will affect numbers for next month or so, but wont' affect today's numbers

Fake news? No, probably just late. The EIA says that the US likely became the world's biggest oil producer earlier this year. 

America likely overtook Russia and Saudi Arabia in terms of oil output to become the world’s biggest producer earlier this year, according to the Energy Information Administration.

U.S. crude output exceeded that of Saudi Arabia in February for the first time in more than two decades, based on preliminary estimates from the agency’s Short-Term Energy Outlook. In June and August, it overtook Russia for the first time since 1999.
The EIA expects U.S. oil output to continue to exceed Russian and Saudi production for the rest of 2018 and in 2019. Growth has shot up in recent years from areas such as the Permian basin in West Texas and New Mexico.

Pipelines. Re-posting. From Rigzone.

Oil producers in the Permian Basin appear to be worried that key pipeline projects to boost takeaway capacity from the region might not hit their 2019 targeted start-up dates.

Wood Mackenzie noted that Permian oil production is ramping up at “breakneck speed,” with growth estimated at more than 400,000 barrels per day year-over-year on average through 2022. The study’s authors contend the production surge is overwhelming takeaway capacity within the Permian, causing oil and gas to sell inside the basin at steep discounts to national indexes. To illustrate, they noted that significant pipeline capacity constraints as recently as 2015 caused the Mid-Cush WTI discount to widen to $20 per barrel. As a result, many Permian operators have turned to derivatives to hedge against the risk of price differentials growing wider, Wood Mackenzie stated.

AMLO: leading from behind, a recipe for disaster -- Mexico's president-elect says "people" -- not the government -- should decide on nation's new airport, throwing into doubt the country’s biggest public-works project and billions in investment and debt.

La Mer. Impossible for me to listen to this song without recalling Tinker, Tailor, Soldier, Spy, perhaps the most incredible love story ever. The producer apparently used an uncut version recorded live in 1976 at the Olympic Theater in Paris.

La Mer, Julio Iglesias

The bullet train update: computer modeling says California's bullet train can meet 2-hour, 40-minute timeline, LA to SF. That's computer modeling, and this is the GIGO:

Computer simulations conducted earlier this year by the authority show the bullet train is three minutes and 10 seconds inside the legal mandate.

Such a tight margin of error has some disputing whether the rail network will regularly hit that two-hour-40 minute time, in part because the assumptions that went into those simulations are highly optimistic and unproven. The premise hinges on trains operating at higher speeds than virtually all the systems in Asia and Europe; human train operators consistently performing with the precision of a computer model; favorable deals on the use of tracks that the state doesn’t even own; and amicable decisions by federal safety regulators.

To get within the "legal mandate," my hunch is the modelers re-ran the program tightening the parameters with each iteration until the goal was met. And it appears every data input had to be optimized to meet the "legal mandate."  

The bullet train update, part 2: California's bullet train is ... drum roll ... eleven (11) years behind schedule. It appears that southern California's are bearing the brunt of cost increases .... for improvements in north California. Let's see ... what do we call that? Oh, yes, that's right -- bait and switch. Pretty funny. But eleven years behind schedule. I think the rule of thumb for a project of this magnitude, each year of delay results in a price increase of $1 billion. So far, the $77 billion project has more than doubled in cost and is more than 11 years behind schedule. And yes, here it is, the new cost projections ... drum roll .... $100 billion --- that's $23 billion or $2 billion/ year increase in costs.

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Back to the Bakken

Wells coming off the confidential list today --
Thursday, September 13 2018

• 34356, SI/NC, XTO, Bobcat Federal 14X-35A, Bear Creek, no production data,
• 34247, 3,463, WPX, Otter Woman 34-27HEL, Mandaree, 51 stages; 8.6 million lbs, t7/18; cum 4K 7/18 (full month)
• 32964, 978, Oasis, Ceynar 5198 12-5 5T, Banks, a huge well, 50 stages; 4.1 million lbs; t3/18; cum 104K in less than four months; now off line;

Here we go again: another pipeline proposed to go under the Native American-controlled Missouri River where hunting and fishing is a way of life for millions of Lakota and Chippewa. The pipeline would be buried 140 feet below the riverbed, but probably needs to be 141 feet below the riverbed to satisfy Why-no-na. A $30 million Kinder Morgan project: either this or flare 130 million cf/day = 22,000 boepd.

Correction: a reader questioned the " ... millions of Lakota and Chippewa." The reader is correct. I forgot the fighting Schwa. Adding in the latter, the number of Native Americans who rely on fishing and hunting along North Dakota rivers and creeks is numbered in the "hundreds of millions." This does not include the Alaskan Inuit who kayak from Utqiaġvik to Garrison every summer for the salmon run. 

Active rigs:

$69.43→	9/13/2018	09/13/2017	09/13/2016	09/13/2015	09/13/2014
Active Rigs	65	55	35	69	199

RBN Energy: what happened to the northeast gas takeaway constraints, part 3.

For the first time in years, natural gas takeaway capacity constraints from the Marcellus/Utica producing region appear to be easing, even as production volumes from the area continue to record new highs. That’s allowed regional supply prices this year to strengthen dramatically relative to national benchmark Henry Hub. A closer look at pipeline flow data indicates these developments stem from shifting gas flows that coincide with the ramp-up of Energy Transfer Partners’ Rover Pipeline. In today’s blog, we continue our update of the Northeast gas market with the latest on Rover’s gas receipts, along with its effects on other regional takeaway capacity and price relationships.

This is Part 3 in our series looking at recent shifts in the U.S. Northeast’s natural gas market. First, we started with a macro look at the critical role the Northeast gas production continues to play in the overall U.S. supply-demand picture. Lower-48 gas production in 2018 to date has averaged ~8 Bcf/d higher year-on-year. Nearly 50% of that growth has come from the Northeast. Moreover, given that the Northeast produces much more gas than it needs, the bulk of that incremental supply has flowed out of the region to other markets, including the Midwest and Gulf Coast states. Marcellus/Utica volumes have more than doubled in the five years since 2013, climbing by 16 Bcf/d to an average of 28 Bcf/d in 2018 to date, up from about 12 Bcf/d in 2013.

Until now, production has continued to outpace takeaway capacity, with incremental production volumes quickly inundating any available space on the pipes and keeping supply-area prices at severe discounts compared to other markets .

However, that imbalance has seen a dramatic — albeit partial — correction this year. Even as Marcellus/Utica supply continues to set record highs this summer, prices at Dominion South (Dom S) — the representative pricing hub — have strengthened compared to prior years. After tanking to more than $1/MMBtu discounts versus Henry Hub each of the past four summers, Dom S cash prices this July and August averaged less than $0.40/MMBtu behind Henry.

This shift has coincided with the step-change in Northeast takeaway capacity brought on by the start-up of ETP’s Rover Pipeline, which has been phasing in westbound capacity from southeastern Ohio since last September (2017).

Rover Pipeline flows have climbed from less than 1 Bcf/d with the initial start-up to nearly 3 Bcf/d now, as additional supply laterals were completed. The most recent bump comes from the new Majorsville lateral from West Virginia to Ohio, which was approved for service on August 23 and, within days, ramped up to nearly 400 MMcf/d.

Another lateral — Burgettstown — was approved at the same time but receipts from there have been near zero so far. The Burgettstown lateral will be supplied by MarkWest’s 200-MMcf/d Harmon Creek gas processing plant, due in service in the fourth quarter of 2018, and ETP’s Revolution processing plant, which is reportedly completed and awaiting full approval of the remaining supply laterals — Sherwood and Columbia Gas Transmission (CGT). Rover filed for federal approval of these two laterals last Friday (August 31).