Top story over at oilprice: Saudis "admit" they will do anything "for" $70-oil. Today --
- WTI, took a nice jump overnight: $59.72, up 1.53%; up 90 cents/bbl
- Brent, a bit of a lift, to $67.41
- OPEC basket: down $1.11, trading at $66.67 -- and you know what? Saudi has the wrong kind of oil, as does Mexico
- 34929, 396, WPX, Plenty Sweet Grass 18-19HZ, Squaw Creek, t2/19; cum --;
- 34795, 1,139, Kraken Operating, The Kraken 24-13 8H, Epping, t10/18; cum 122K 1/19;
- 34522, 535, EOG, Austin 424-1721H, Parshall, t9/18; cum 76K 1/19;
- 30363, 2,446, CLR, State Weydahl 6-36H, Corral Creek, t1/19; cum 19K over 14 days;
RBN Energy: crude shippers struggle with locking in down-the-Rockies pipeline space.
Crude production is at all-time highs in the Bakken and the Niobrara, and the latest pipeline-capacity expansions out of both regions have been filling up fast.
At the same time, producers in Western Canada are dealing with major takeaway constraints and are on the hunt for still more pipeline space. Midstream companies are trying to oblige, proposing solutions like a major Pony Express expansion or a new Bakken-to-Rockies-to-Gulf Coast fix — the Liberty and Red Oak pipelines — that could help address all of the above.
The catch is that, with multiple producing areas funneling crude along the same general eastern-Rockies corridor and the outlook for continued production growth uncertain, how’s a shipper to know whether to sign a long-term deal for some of the incremental pipe capacity now being offered? Today, we consider the need for new takeaway capacity, the potential for an overbuild scenario, and what it all means for producers and shippers.
It’s tough enough to determine how best to increase pipeline capacity between one production area and one destination market — the Permian and Corpus Christi, for example, or the Permian and Houston.
As we’ve seen recently, multiple pipeline projects in these distinct corridors were initially proposed, then a winnowing process of sorts has been occurring, with some projects advancing and others falling to the wayside. Things become even more complicated, though, when you’re dealing with a situation in which multiple producing areas are served by — and vying for space on — the same pipeline systems. Crude flows from one production area through (or nearby) another — and then another — on its way to a number of possible destinations.
That’s the case along the eastern Rockies, where crude works its way down from Western Canada, the Bakken, and the Niobrara’s Powder River Basin (PRB) and Denver-Julesburg (D-J) Basin on its way to either the Midwest, the Midcontinent or the Gulf Coast. Put another way, Niobrara shippers are affected by production trends, pipeline capacity and pipeline utilization upstream and downstream of them — if pipes come down to Wyoming and Colorado filled to the brim, the opportunities to add PRB and D-J barrels to the systems diminish.Flashback: from The Center of the American Experiment, September 25, 2018 --
The world already knew North Dakota has enough oil left in the ground to traumatize climate activists for decades. But come on.
The latest estimate of oil reserves under our westerly neighbor truly defies the imagination. Not to mention the U.S. government’s official calculations. The fracking company that’s led the way in developing the state’s reserves even rocked attendees with the news at an industry meeting covered by the Fargo Forum.
Continental Resources estimates that the Bakken Formation has reserves of 30 billion to 40 billion barrels of recoverable oil, or roughly four to five times more than the government’s latest estimate.
“It’s a big number but I think it’s a technically sound and a technically well-founded number,” [CLR/CEO] said. “There’s a lot of future left in the Bakken.”
Official government estimates put North Dakota’s oil reserves at just under 8 billion barrels. But the frackers on and under the ground say the state has the potential to rival some other nations.
North Dakota recently surpassed Venezuela in oil production, and the United States recently became the world’s largest oil producer, outranking Saudi Arabia and Russia.
North Dakota has 15,000 oil wells, and state officials estimate it has the potential for another 50,000 wells in the decades ahead.