Monday, March 16, 2020

WTI Drops Below $30 -- Monday Morning Note: -- March 16, 2020

I just listened to the hour-long podcast linked a few days ago:  Columbia Energy Exchange -- why this oil crash is different. Too much in the presentation for a one-time "experience"; need to hear it again; it's probably the most important "thing" one can listen to right now.

Takeaways:
  • Saudi Arabia is getting prepared for much, much worse prices ($20-oil; $12-oil);
  • low prices will get lower; and will last a lot longer than folks can imagine;
  • Russia unwilling to give up 300,000 bopd if the US did not also cut
  • Russia / Saudi: unable to agree; Saudi wants Russia to realize how bad this can get without orderly management
  • Putin may have misjudged; Russia's position was being run by Rosneft (CEO considered second-most powerful man in Russia) and Putin did not provide Rosneft "guidance"; Rosneft has wanted to do this for quite some time: destroy the US shale sector
  • but did Putin make a huge, huge miscalculation
  • much,  much bigger than the oil sector; only a minute or two devoted to it but it was most concerning: banking system and bonds (this helps explains Fed's action over the weekend)
  • natural gas has fallen $0 in Texas; no one thought that could happen to oil; one analyst suggests that could actually happen to oil -- "two black swans" one might call it --
  • sanctions on Russia, Rosneft behind the scenes may be what this is all about -- the unintended consequences of sanctions 
  • is Russia looking for a major global financial crisis? Is Russia looking reaction from US or reaction from Saudi; it seems to be more the dialogue between Russian and the US, not Russia and Saudi Arabia
  • Analysis: Columbia Energy Exchange -- why this oil crash is different. Too much in the presentation for hearing it for just one time; need to hear it again; it's probably the most important "thing" one can listen to right now
*************************************  
Back to the Bakken

Active rigs:

$29.433/16/202003/16/201903/16/201803/16/201703/16/2016
Active Rigs5565584731

RBN Energy: looking at the developing bottlenecks in the Louisiana gas market
The natural gas market dynamics that were expected to turn gas flow patterns and price relationships in the Eastern U.S. on their heads and, in turn, transform supply-demand dynamics in Louisiana — including around the U.S. price benchmark Henry Hub — have come to fruition. LNG exports have surged as new liquefaction and export terminals have come online, injecting a new demand source along the Louisiana coastline.
Producers have lined up to serve that demand.
And midstreamers have worked to get the gas there, reversing and expanding existing northbound pipelines to move gas south into and through the Bayou State. Now, Louisiana’s gas market is nearing a critical juncture: the pipelines that connect the supply gateways in northern Louisiana to the demand centers along the Gulf Coast are nearing saturation. Today, we begin a series providing an update on Louisiana’s gas pipeline constraints and the projects lining up to alleviate them.

Gas production in the offshore Gulf of Mexico was steadily declining even as the need for gas supplies for LNG exports along the coast was ramping up. Historical flow patterns moving gas from offshore Louisiana north and east to Northeast and Midwest markets had flipped. A deluge of supply from the Marcellus/Utica was headed south on reversed and new pipelines, much of it bound for northern Louisiana, and production from northeastern Louisiana’s Haynesville Shale was in full growth mode after an extended plateau through the mid-2010s. With the supply influx and demand growth both bearing down on Louisiana and Henry Hub, the questions were, how would all that affect the Bayou State’s supply-demand dynamics, and could the pipeline infrastructure withstand it?
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Wells Coming Off The Confidential List

Wells coming off the confidential list over the weekend and Monday. NDIC appears to be reporting wells that come off the confidential list on the weekend on the Friday before.

Monday, March 16, 2020: 32 for the month; 203 for the quarter, 203 for the year:
  • 34854, SI/NC, CLR, Uhlman Federal 5-7H1, 33-053-08513; Banks, 40K in 30 days;
  • 34852, 865, CLR, Kuhn 8-12HSL1, Banks, t10/19; cum 81K 1/20; 40 stages; 7.4 million lbs;
  • 34849, SI/NC, CLR, Pittsburgh 6-18H,33-053-08508, Banks, 42K in 31 days:
  • 34377, drl, White Butte Oil Operations, Jore Federal 10-12TFH,
Sunday, March 15, 2020: 27 for the month; 198 for the quarter, 198 for the year:
  • 36943, drl, CLR, LCU Jessie 3-24H, Long Creek;
  • 36942, drl, CLR, LCU Jessie 2-24H1, Long Creek;
  • 35160, 1,050, CLR, Pittsburgh 11-18H1, Banks,
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-2020292334723830387653369232985654
BAKKEN12-2019312229322348376203187031285121
BAKKEN11-20193027296273534545838307376350
BAKKEN10-2019107024635612284102829348934
BAKKEN9-201940005840584
  • 35159, 1,050, CLR, Pittsburgh 10-18H, Banks,
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-2020181492315319131552056520134399
BAKKEN12-201931177671781628825249912453295
BAKKEN11-20193021973221583522529148286370
BAKKEN10-2019107116643912445104179471946
BAKKEN9-201940007150715
  • 35158, A, CLR, Pittsburgh 9-18H1, Banks,
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-2020312101220953432753276232075636
BAKKEN12-201912842778233683621
BAKKEN11-20190000000
BAKKEN10-20190000000
BAKKEN9-2019315315345485020502

Saturday, March 14, 2020: 25 for the month; 196 for the quarter, 196 for the year:
  • 34856, A, CLR, Uhlman Federal 7-7H1, Banks, t--; cum 46K 1/20;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20203143201431254561159358581141151
BAKKEN12-201922376231724943327326613
BAKKEN11-20190000000
BAKKEN10-20190000000
BAKKEN9-2019439939911558900890
  • 34855, A, CLR Uhlman Federal 6-7H, Banks, t--; cum 60K 1/20:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20203156395562905231078835771821529
BAKKEN12-201922883281127183822375214
BAKKEN11-20190000000
BAKKEN10-20190000000
BAKKEN9-2019343743719578110811

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