Friday, June 21, 2019

Four New Permits -- June 21, 2019

Active rigs:

$57.436/21/201906/21/201806/21/201706/21/201606/21/2015
Active Rigs6464592777

Four new permits:
  • Operators: Nine Point Energy (3): XTO
  • Fields: Squires (Williams); Beaver Lodge (Williams)
  • Comments;
    • Nine Point Energy has permits for a 3-well Shaffer pad in section 27-155-102, Squires oil field
    • XTO has a permit for a single Haustveit well in section 10-155-95, Beaver Lodge, oil field
Three permits renewed:
  • BR (2): a Cleoff permit and a Veederstad permit, both in McKenzie County
  • Whiting: a Jackman permit in Wiliams County

Breaking News! US Oil And Gas Rig Count Fell By 3 -- WTI Holds Steady! -- Oilprice -- June 21, 2019

Updates

Later, 3:38 p.m. CT: hallelujah! I asked for a bit more granularity on "that one rig," and Rigzone via Twitter provided the information. The nation's oil rig count increased by one last week -- it was in Texas. The nation's number of natural gas rigs declined. By four. Texas has dropped several rigs in a row. One will have to visit the article which I am not linking to see if these are natural gas rigs, oil rigs, or both.


Original Post 

Link here.


In fact, oil prices surged today, WTI up 32 cents at time story was initially posted, now up 59 cents/bbl. The increase was despite the fact that the number of active oil rigs actually increased. The decline was in natural gas rigs. This begs the question, of course: in the Permian, Eagle Ford, and Bakken, is every well drilled with two rigs: one for oil and one for natural gas?

The number of active oil rigs in the US increased by one, week-over-week.

Generally, an increase in the number of oil rigs is seen as a driver for lowering oil prices, but apparently not today, as the number of oil rigs increased by one, and the price of oil actually surged by 32 cents (WTI), at the time the story was first posted. Since then, the surge has continued, up 59 cents/bbl as this is being typed. That one oil rig will result in increased oil production and that should drive the price of oil down despite the tensions in the Mideast as adversaries prepare for all-out war. At least three of the adversaries have nuclear weapons and a fourth is well on its way to having nuclear weapons.

Year-to-date, the oil rig count has fallen from 877 active rigs since the beginning of the year to 789.

Despite the rig decline year-on-year, US production is still almost 2 million barrels per day higher year-on-year. And, you know, that drop is the number of active rigs is not trivial. From 877 to 789 that represents a decrease of more than 10% -- and that's just from the beginning of this year. And yet, US production has increased almost two million bopd year-over-year.

So, the overall rig count (oil and gas) reached its lowest point since February, 2018, and US production is higher by almost two million bopd year-over-year.

Who wudda thought?

I wonder if we could get a little more granularity on that one oil rig -- was it in the Bakken, in the Permian, or elsewhere?

Disclaimer: I often misread articles. There may be typographical and/or factual errors in this post. If this is important to you, go to the source.

This post has been tagged with "humor." Mostly because I don't yet have a tag for "sarcasm."

By the way, that jump in "OPEC basket" is a function of reporting. The "OPEC basket" is a 3-day delay according to the source. The jump in the OPEC basket occurred shortly after the US drone was downed by the Iranians but was not recorded until now due to that "3-day delay."

Notes From All Over -- Part 3 -- June 21, 2019

What? Me, worry?


I'm still not following the  market much any more, not during this volatility (China-US tariffs). Checking in on a few independent oil companies, but that's about it.

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.

Natural Gas -- A Reader Comments -- June 21, 2019

I'll never be able to find it, but two or three years ago I mentioned in passing that my focus on oil had caused me to miss a much bigger story: natural gas. At the time, I said in passing that it was my hunch that this would be the decade (starting in the mid-20-teens) of natural gas.

Earlier today I made another passing reference to that thought about natural gas being the "big" energy story this next decade.

Today, a reader who writes me often about natural gas sent me this note:
Quick background ... 4 years or so ago, I started focusing on the Appalachian Basin region as the production numbers being thrown about seemed outlandishly high.

This interest segued into an exploration first of the gas world in toto and then, more specifically, into the rapidly evolving realm of LNG.

The hardware such as Floating Storage and Regassification Units (FSRUs), small and mid scale LNG plants, containers to both transport and store LNG via truck, rail, barge and ship are ALL prompting the swift transition to natgas as a fuel/energy source.
(Today's HH price of $2.16/mmbtu means the heat energy in natgas is about ONE FIFTH the equivalent energy in oil form).
Data points ...

Pakistan is installing its 3rd FSRU terminal shortly after bringing its first 2 online.

Bangladesh is quickly setting up its 2nd FSRU.

Brazil is soon to bring online the huge (1,500 Mw) Sergipe power plant - biggest gas plant in South America - using fuel from its just- installed FSRU. Two more FSRUs are planned for Belem and Santa Catarina.
Poland setting up an FSRU as is China.

India is planning on possibly an FSRU in all of its ports.

Even Kaliningrad - Kaliningrad!!! - is setting up an FSRU!

Port Kembla, Australia, building $170 million LNG terminal ... expected to take 16 months ... deploying an FSRU ... and - get this - very possible that the LNG could come from USA. Truly a coals to Newcastle situation.

Abundant, economical supply ensures an ongoing transition to natgas for decades to come.
By the way, my hunch is that the reader would suggest that BP's 2019 statistical estimate of US natural gas reserves is again way too low.

By the way -- did you note that comment about transporting LNG by truck. We talked about that earlier this week -- that it might even happen in the Bakken. 

Legacy Fund: June, 2019, Deposit Exceeds Annual Average For Every Year But Two -- June 21, 2019

Legacy fund is tracked here.


Notes From All Over -- Part 2 -- June 21, 2019

For background, see this post -- natural gas production, global.

From a story linked earlier today:
The latest Wood Mackenzie "Global Gas Markets long-term Outlook 2018: LNG Supply" authored by Giles Farrer, expects that capital spending on LNG plants and upstream infrastructure will total more than $200 billion from 2019 to 2025, to be shared by Canada, Mozambique, Qatar and the U.S., which is scheduled to see a flood of shale gas development. Industry experts maintain that rising world demand for LNG will require the sanctioning of around 60 million tonnes of new gasification facilities by 2020 and a further 100-plus million tonnes between 2020 and 2025 to ensure that markets in such countries as China, India and Pakistan are adequately supplied. Wood Mackenzie global LNG supply research director Giles Farrer said, “The LNG boom is back”.
What's that about Mozambique, of which I always forget:
In Southern Africa, Exxon is involved with Eni to develop an $11.2-billion LNG export facility to capitalize on Mozambique’s Rovuma basin which is estimated to contain a massive 85 trillion cubic feet of gas.
From the 2019 BP statistical review:
  • 2018 was a bonanza year for natural gas, with both global consumption and production increasing by over 5%, one of the strongest growth rates in either gas demand or output for over 30 years
  • Natural gas consumption rose by 195 billion cubic metres (bcm), or 5.3%, one of the fastest rates of growth since 1984.
  • Growth in gas consumption was driven mainly by the US (78 bcm), supported by China (43 bcm), Russia (23 bcm) and Iran (16 Bcm).
  • Global natural gas production increased by 190 bcm, or 5.2%. Almost half of this came from the US (86 bcm), which (as with oil production) recorded the largest annual growth seen by any country in history. Russia (34 bcm), Iran (19 bcm) and Australia (17 bcm) were the next largest contributions to growth.
  • Growth in inter-regional natural gas trade was 39 bcm or 4.3%, more than double the 10-year average, driven largely by continuing rapid expansion in liquefied natural gas (LNG).
  • LNG supply growth came mainly from Australia (15 bcm), the US (11 bcm) and Russia (9 bcm). China accounted for around half of the increase in imports (21 bcm).
From the same link (the 2019 BP statistical review:


Mozambique, with 85 trillion cubic feet, is not even listed by BP. Say what?


By the way, a great op-ed from Bloomberg regarding BP's 2019 statistical review

Notes From All Over -- Part 1 -- June 21, 2019

What, me worry? The Dow set a record earlier this week. Since then, the Fed does not cut rates; the Iranians shoot down a $130 million US drone over international waters; Trump says "yes," then "no" to a retaliatory strike; and there's a massive refinery explosion in Philadelphia, and the Dow today .... drum roll ... up 110 points.

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.

Natural gas fill rate, link here:


Be happy, don't worry, or as we say down here the national anthem for the Dominican Republic:

Be Happy, Don't Worry

Global warming. Say what?  Link here:


Oh, by the way, in case you missed it, Greenland's largest glacier is getting bigger and the four biggest glaciers in Iceland are also growing. Previously posted. 

DAPL Capacity To Nearly Double -- Bismarck Tribune -- June 21, 2019

"Nearly double." Say what? From "more than 500,000 bopd to as much as 1.1 million bopd." 

A huge thanks to the reader for catching this, sending it my way.

This is quite incredible. This one pipeline -- the "black snake" -- could pretty much transport all current oil produced by North Dakota. 

From The Bismarck Tribune:
The operator of the Dakota Access Pipeline is planning to nearly double its capacity, to a point where it could transport nearly all of the daily oil production of the nation’s No. 2 producer. The plans include new pumping stations in three states.
Energy Transfer Partners informed North Dakota regulators that it plans to expand the pipeline capacity from more than 500,000 barrels per day to as much as 1.1 million barrels.
The "black snake" becomes the "black anaconda."

McKenzie County -- Again #1 Among All Counties In The US For Crude Oil Production -- June 21, 2019

From The Williston Herald:
North Dakota’s oil production has been setting new records as a state, even while remaining the No. 2 producer in the nation. However, sometime — perhaps last year or even the year before — one of its counties set a national record. It was a record that no one really even noticed, until a newspaper in New Mexico happened to write about it.

McKenzie County has surpassed all other oil-producing counties in the nation to take the #1 spot with 17.89 million bbls of oil produced in January, 2019. 
Memo to self: note to Art Berman.

Memo to self: note to Jane E. Nielson.

The Oasis Nelson Wells In Banks Oil Field

The Aagvik wells are tracked here.

The wells:
  • 34237, 576, Oasis, Aagvik 5298 42-23 7B, Banks, t12/18; cum 136K 4/19;
  • 34238, 640, Oasis, Aagvik 5298 42-23 8T, Banks, t12/18; cum 92K 4/19;
  • 34239, 605, Oasis, Aagvik 5298 42-23 9B, Banks, t12/18; cum 142K 4/19;
  • 34240, 504, Oasis, Nelson 5298 422-23 5T, Banks, t1/19; cum 82K 4/19;
  • 34241, 1,138, Oasis, Nelson 5298 42-23 6B, Banks, t12/18; cum 139K 4/19;
  • 34242, 969, Oasis, Nelson 5298 42-23 7T, Banks, t1/19; cum 86K 4/19;

  • 34088, 645, Oasis, Aagvik 5298 13-26 10T, Banks, t1/19; cum 106K 4/19;
  • 34089, 532, Oasis, Aagvik 5298 13-26 11B, Banks, t1/19; cum 123K 4/19;
  • 34090, producing, Oasis, Aagvik 5298 13-26 12T, huge well,
  • 34091, 924, Oasis, Nelson 5298 13-26 8B, Banks, t1/19; cum 110K 4/19;
  • 34092, producing, Oasis, Nelson 5298 13-26 9T, huge well,
  • 34093, 379, Oasis, Nelson 5298 13-26 10B, 50 stages, 6.1 million lbs, Banks, t1/19; cum 105K 4/19;

  • 34153, producing, Oasis, Nelson 5298 14-26 11TX, huge well,
  • 34154, producing, Oasis, Nelson 5298 14-26 12BX, huge well,
  • 34155, producing, Oasis, Aagvik 5298 14-26 13BX, huge well,
  • 34156, producing, Oasis, Aagvik 5298 14-26 14TX, huge well,

  • 18249, IA/702, Oasis, Lundeen 4-26H, Banks, t6/10; cum 216K 7/18; off line since 7/18 for the most part;
  • 34039, 733, Oasis, Aagvik 5298 41-35 5B, Banks, t11/18; cum 143K 4/19;
  • 34040, 613, Oasis, Aagvik 5298 41-36 6T, Banks, t11/18; cum 115K 4/19;

  • 34088, 645, Oasis, Aagvik 5298 13-26 10T, Banks, t1/19; cum 106K 4/19;
  • 34811, 685, Oasis, Aagvik 5298 41-35 15T, Banks, t11/18; cum 113K 4/19;

  • 34037, 1,787, Oasis, Aagvik 5298 41-35 3BX, Banks, t11/18; cum 243K 4/19;
  • 34036, 543, Oasis, Aagvik 5298 41-35 2TX, Banks, t11/18; cum 108K 4/19;

Production;
  • 34037:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-20193023003229972260486149838751962
BAKKEN3-20193131769322602737886655839272728
BAKKEN2-2019284380643880269851406911379602440
BAKKEN1-20193153601537823361615805014382313905
BAKKEN12-20183159173590194172914768310086046501
BAKKEN11-2018233102530408326071051082813076739
  • 34093:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-20193031966320202067482114795112393
BAKKEN3-2019313275432998236371039931008483145
BAKKEN2-2019282254122346315926866967982491
BAKKEN1-201931161421609145980546224274211663
BAKKEN12-201815189517701050913960013960


The graphics:




It Gets Tedious -- 24 Hours Later -- Oil Up ... Drum Roll ... 27 Cents -- June 21, 2019

Mideast today? Same ol'; same ol'.

Twitter: Trump being skewered by his opposition because he changed his mind. As noted in an earlier post. His decision-decision: brilliant.

Oilprice: oil surges on Mideast tension. Twenty-four hours later:
  • WTI: up 27 cents
  • OPEC basket: actually decreases a big


Massive Explosion At Philadelphia Refinery -- June 21, 2019

Massive explosion at Philadelphia refinery.

There used to a internet site called "Breaking News" or something to that effect. It died. The reason it died: too much trivia was posted as "Breaking News."

Best internet site for "breaking news"? Twitter. 

One Word: Brilliant -- June 21, 2019


Rig Count At 64 -- Same As One Year Ago -- June 21, 2019

Updates

June 21, 2019: after posting the note below, I received a note from a reader regarding LNG --
Today, a reader who writes me often about natural gas sent me this note:
Quick background ... 4 years or so ago, I started focusing on the Appalachian Basin region as the production numbers being thrown about seemed outlandishly high.

This interest segued into an exploration first of the gas world in toto and then, more specifically, into the rapidly evolving realm of LNG.

The hardware such as Floating Storage and Regassification Units (FSRUs), small and mid scale LNG plants, containers to both transport and store LNG via truck, rail, barge and ship are ALL prompting the swift transition to natgas as a fuel/energy source.
(Today's HH price of $2.16/mmbtu means the heat energy in natgas is about ONE FIFTH the equivalent energy in oil form).
Data points ...

Pakistan is installing its 3rd FSRU terminal shortly after bringing its first 2 online.

Bangladesh is quickly setting up its 2nd FSRU.

Brazil is soon to bring online the huge (1,500 Mw) Sergipe power plant - biggest gas plant in South America - using fuel from its just- installed FSRU. Two more FSRUs are planned for Belem and Santa Catarina.
Poland setting up an FSRU as is China.

India is planning on possibly an FSRU in all of its ports.

Even Kaliningrad - Kaliningrad!!! - is setting up an FSRU!

Port Kembla, Australia, building $170 million LNG terminal ... expected to take 16 months ... deploying an FSRU ... and - get this - very possible that the LNG could come from USA. Truly a coals to Newcastle situation.

Abundant, economical supply ensures an ongoing transition to natgas for decades to come.
By the way, my hunch is that the reader would suggest that BP's 2019 statistical estimate of US natural gas reserves is again way too low.

By the way -- did you note that comment about transporting LNG by truck. We talked about that earlier this week -- that it might even happen in the Bakken. 

Original Post 

LNG: the boom is back. From Rigzone. The article below piques my interest -- back to Chevron, OXY, and Anadarko. There's a data point in the linked article that I have completely missed -- and it's because I don't understand natural gas, and have not followed it closely. Elsewhere the "$200 billion to be spent on LNG plants and upstream infrastructure between now and 2025" was the headline story elsewhere. The LNG story is absolutely incredible .... huge story. 
Liquefied natural gas (LNG) met almost 11 percent of global energy demand last year and trade in LNG reached a record 316.5 million tonnes, helped by increased supply from Australia, the U.S. and Russia, and growing demand from 37 countries. This picture of buoyant demand and supply is set to continue and even accelerate in coming years.
The latest Wood Mackenzie "Global Gas Markets long-term Outlook 2018: LNG Supply" authored by Giles Farrer, expects that capital spending on LNG plants and upstream infrastructure will total more than $200 billion from 2019 to 2025, to be shared by Canada, Mozambique, Qatar and the U.S., which is scheduled to see a flood of shale gas development. Industry experts maintain that rising world demand for LNG will require the sanctioning of around 60 million tonnes of new gasification facilities by 2020 and a further 100-plus million tonnes between 2020 and 2025 to ensure that markets in such countries as China, India and Pakistan are adequately supplied. Wood Mackenzie global LNG supply research director Giles Farrer said, “The LNG boom is back”.
Plastics: Chevron Phillips Chemical to acquire Canadian Plastics maker; $15 billion deal.

******************************************
Back to the Bakken

Wells coming off confidential list today -- Friday, June 21, 2019: 70 for the month; 259 for the quarter;
  • 34396, SI/NC, WPX, Lion 18-19HW, Mandaree, no production data,
  • 34091, 924, Oasis, Nelson 5298 13-26 8B, Banks, t1/19; cum 110K 4/19;
Active rigs:

$57.306/21/201906/21/201806/21/201706/21/201606/21/2015
Active Rigs6464592777

RBN Energy: Permian gas takeaway project Whistler Pipeline moves forward, part 2.
Permian gas marketers were likely breathing a sigh of relief earlier this month when news came that the developers behind the Whistler Pipeline had made a final investment decision (FID) to proceed with the new 2.0-Bcf/d link between the Permian and South Texas. The project provides a crucial link in the gas takeaway picture for the Permian and makes it less likely that gas pipeline capacity constraints in the future will result in the negative prices that are plaguing the present-day gas markets in West Texas. Combined with the two other Permian greenfield gas pipelines that have taken FID — Kinder Morgan’s Gulf Coast Express (GCX) and Permian Highway Pipeline (PHP) — there is now ~6 Bcf/d of incremental Permian supply pointed at the Texas Gulf Coast over the next two years. That’s great news for Permian producers, as well as demand centers along the coast, where tremendous growth in LNG exports is under way. Today, we detail the third natural gas pipeline being built from the Permian to the Texas Gulf Coast.

Lawsuit Dismissed: Judge Rejects Suit To Reinstate UND Women's Hockey -- June 21, 2019

Link here.