The Market, Energy, And Political Page, T+23 -- November 29, 2018 -- Mexico To Drill 40 Onshore Conventional Wells For $1.47 Billion

From Ice Age: "mini-ice-age" in a matter of months?  Probably not. I guess it depends on how "matter of months" is defined. For the archives.

From twitter this morning:

***************************************
New England Natural Gas Hookups Update

I had forgotten all about this but the moratorium on new natural gas hookups in Boston and the eastern half of Massachusetts continues. Most of the stories are behind a paywall but if interested google boston moratorium on natural gas hookups update. The ban is effectively "destroying" development in eastern Massachusetts, some say. The moratorium is the result of devastating natural gas explosions earlier this year. MarcellusDrilling calls this a "police state" run amok and I thought my blog was a bit bombastic at times.

*********************************

Canadian Update

Canadian crude oil output continues to grow despite all its problems -- Bloomberg. Data points:

• daily average output "will" average about 4.59 million bopd
• 22,000 bopd more than forecast
• this despite two big producers curtailing production by about 160,000 bopd

Okay, folks this is the lede for that story:

Canada’s lingering crude glut isn’t hindering the country’s growing oil output, according to the National Energy Board’s most recent forecast.

Now this line in the second paragraph:

The raised production outlook comes even as pipeline bottlenecks have driven Canadian crude prices to record lows and prompted some producers, including Canadian Natural Resources Ltd. and Athabasca Oil Corp., to reduce output by about 160,000 barrels a day, according to estimates by TD Securities Inc.

It's hard for me to accept the writers' premise when they say "Canada's lingering crude glut isn't hindering the country's growing oil output."

It certainly appears that by their own reporting the glut is "hindering" at least 160,000 bopd from reaching the market.

Whatever.

**********************************

Mexico

Yesterday from the blog:

From Platts:

• Pemex (Mexico) doubles Ixachi oil and gas reserves to 750 million boe
• production to peak at 80,000 beopd
• development cast estimated at $1.5 billion

When I first saw the headline that Pemex "doubles" its reserves at Ixachi, I was excited. Then I saw the numbers: max production at 80,000 boepd and, reserves increased to 750 million boe. Not exciting.

The Bakken currently produces about 80,000 boe in 90 minutes. Bakken reserves: for those with exuberant "feelings" about the Bakken, as much as 50 billion boe, maybe more.

750 million / 50 billion = 1.5%. And that's just the Bakken.

I wonder if we should start measuring pools of oil in "Permians." For example, the Bakken would be estimated to be 0.25 Permians. The Ixahi reserves would be 0.00375 Permians. At 268 billion bbls (wiki), Saudi Arabia's reserves would be 1.34 Permians. I would like to use the Bakken as the "unit of measure" for any number of reasons, but I would be voted off the island -- "everyone" would vote for the "Permian."

And then the day we have a massive carbon tax and no one can afford oil at all -- sort of like the yellow vests in France -- we can take oil off the "Permian standard."

So, yesterday, Platts says Pemex "doubled its estimate for the Ixachi oil field, putting oil and gas reserves at 750 million boe.

Today, this story from Bloomberg: Pemex has more than tripled its estimated reserves in its Ixachi field. Data points:

• the onshore field in Veracruz is now estimated to contain 1.3 billion boe in proven, probably and possible ("3P") reserves
• the story sticks with max production at 80,000 bopd (see Platts above, and my comments
• the field is currently producing about 2,000 bpd of condensate; hopes to get to 5,000 bpd of condensate by end of 2019
• development costs for Ixachi: $1.47 billion for 40 wells = I've done the math three times -- see if you get a different number -- $1.47 billion for 40 wells = $36,750,000 / well 
• this is Mexico's most important onshore field in 25 years, Pemex says -- if so, Mexico is in a heap of trouble .. 2,000 bbls of condensate a day and that gets them excited
• Mexico currently produces about 1.8 million bopd, down from a recent target of 1.95 million bopd

Screenshot from the article: