Monday, March 25, 2019

Frack Sand Revolution, Part 2 -- RBN Energy; Exxon/Chevron Battle It Out In The Permian; ND Rigs Back To 69; Seasonal Driving Restrictions Begin In The Bakken -- March 25, 2019

Housing starts:
  • January, 2019: jumped 18.6%, month-over-month
  • February, 2019: up 12% -- I thought I heard that on talk radio; not confirmed; said housing sales (?) were up 12% month-over-month despite the cold weather [I definitely heard that, but must have been dreaming; Econoday calendar says this data will not be released until tomorrow, Tuesday, March 26, 2019;
The market:
  • futures overnight went to a Dow down 150 points
  • now, about an hour before the market opens, down about 50 points
Apple: presentation today, 12:00 noon Central Time.

Gravy train will not end: the Mueller team, $40 million to date, will now transition to the US House.

The big question: when did Mueller know that he would report "no collusion"? When did he know and what was the "tipping point"?

Later, a reader writes: the bigger question is how things would look this morning if Mueller said that Trump colluded with Russia to swing the election, and he clearly obstructed justice. Instead, we get a definite, no wishy-washy, "there was no collusion."

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

Battle royale: Exxon, Chevron battle it out in the Permian. Featured story over at Rigzone Archived.

Quick notes:
  • WTI misses milestone: comes close but did not settle above $60.
  • Murphy oil to focus on western hemisphere. Will sell two primary Malaysian subsidiaries, $2.127 billion deal.
    • Malaysian subsidiaries pump 16% of Murphy's annual output
    • all cash to be repatriated to the US
    • $500 million: share repurchases
    • $750 million: debt reduction, before dividend payments from 2019 - 2023
    • based on a flat $55-per-barrel WTI price
    • assumption: will be able to generate an 8% compound annual growth rate "during the same period" (2019 - 2023) from its three core-producing assets in onshore US; onshore Canada; and, offshore North America
    • quote: 
    • “We will continue with our plans of investing in our high margin, oil-weighted Western Hemisphere opportunities, especially the Eagle Ford Shale and the Gulf of Mexico while maintaining our focused low-cost exploration program.”
Back to the Bakken

Wells coming off the confidential list today/weekend -- Monday, March 25, 2019: 105 wells for the month; 325 wells for the quarter
  • 34794, 550, Kraken Operating, The Kraken 24-13 7TFH, Epping, t10/18; cum 80K 1/19;
  • 34793, 616, Kraken Operating, The Kraken 24-13 6H, Epping, t10/18; cum 97K 1/19;
  • 34524, 1,076, EOG, Austin 426-1721H, Parshall, t9/18; cum 75K 1/19;
  • 34523, 1,108, EOG, Austin 425-1721H, Parshall, t9/18; cum 75K 1/19;
  • 33897, 955, Oasis, Berry 5493 44-7 14BX, Robinson Lake, t10/18; cum 111K 1/19;
  • 28009, 1,591, NP Resources, Roosevelt 23-29-1PH, Roosevelt, t11/18; cum 56K 1/19;
Sunday, March 24, 2019: 99 wells for the month; 319 wells for the quarter
  • 31800, 1,814, CLR, Mittlestadt 7-17H, Chimney Butte, t1/19; cum 31K 1/19;
  • 30364, 2,988, CLR, State Weydahl 7-36H2, Corral Creek, t1/19; cum 39K 1/19;
Saturday, March 23, 2019: 97 wells for the month; 317 wells for the quarter
  • 34644, 2,236, CLR, Anderson 11X-4HSL, Crazy Man Creek, t10/18; cum 143K 1/19;
  • 24978, A, CLR, Syverson 3-12H1, East Fork, t--; cum --;
Active rigs:

Active Rigs6960493298

RBN Energy: part 2, the frack sand revolution. Archived.
Over the past three years, the U.S. frac sand market has been transformed. Demand for the sand used in hydraulic fracturing is more than twice what it was in early 2016. Dozens of new “local” sand mines have come online, slashing the need for railed-in Northern White Sand in the Permian and a number of other fast-growing plays. Frac sand prices have fallen sharply from their 2017 highs. And exploration and production companies, which traditionally outsourced sand procurement and “last-mile” sand logistics to pressure pumpers and other specialists, are taking a more hands-on approach. It’s a whole new world. Today, we continue our series on the major upheavals rocking the frac sand world in 2019 with a look at the development of local sand sources in the Eagle Ford, SCOOP/STACK and the Haynesville.
What we’ve been witnessing in shale plays in Texas, Oklahoma, Louisiana and other energy-producing states in recent years is the industrialization — or, better yet, the assembly-lining — of crude oil and natural gas production. Like Henry Ford and his Model T more than a century ago, Shale Era pioneers started out small and in experimental mode, first with single wells, then with small groups of wells as they learned more about what worked (and what didn’t). By the latter half of the 2010s, exploration and production companies (E&Ps) had learned a lot: where the best “rock” is, for one thing, but also how they can improve their economics by (for example) drilling much longer laterals from multi-well pads, using more frac sand per linear foot of lateral, and developing pipelines to transport large volumes of produced water from the lease to disposal wells. They, like Ford, learned that nothing beats a robust, repeatable system. As a result, oil-field productivity in most plays is way up, and the break-even price for crude and gas production is way down.

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