Sunday, July 26, 2020

More Observations On The EIA July, 2020, Dashboards -- July 26, 2020

Further observations on the EIA dashboards, July, 2020:

The first Saudi surge, 2014 - 2016:
  • number of active rigs in the Bakken plummeted from "200" to "50"
  • the number of active rigs in the Bakken never recovered; in fact after plummeting to "50" rigs, the number of active rigs fell another 50% to 25 active rigs, before "recovering" back to "50"
  • production during this period? actually increased slightly initially, and then surged when price recovered;
  • time period: about two years;
The second Saudi surge, late 2019 - early 2020:
  • number of active rigs in the Bakken plummeted to record lows, hitting an all-time low of ten active rigs in North Dakota;
  • the first phase, the Saudi surge, has pretty much played itself out (July, 2020);
    • lasted less than six months;
  • the second phase, demand-destruction brought on by Dr Faustus and Wuhan flu, is yet to play out
  • production per well surged during the second Saudi surge; see this post for more;
Possible long-term consequences vis-a-vis the Bakken:
  • first Saudi surge
    • the number of active rigs in the Bakken becomes even less significant in the overall picture of the Bakken
  • second Saudi surge
    • it's possible the price of oil will "never" recover; Bakken operators will thrive on $60-oil; Saudi will either learn to live on $60-oil or will implode;
    • global economy will thrive on $60-oil
    • US shale operators will become even more efficient
    • North Dakota will "learn to live" on 850,000 bopd production, and like it; 
      • $10 million / month into the Legacy Fund is just fine
      • it's time for ND legislators to get serious about "growing" the Legacy Fund (of course that won't happen -- just saying it's time for them to get serious about it)
Disclaimer: I am inappropriately exuberant about the Bakken. The metonymical Bakken.

Disclaimer: the opinions expressed in this post do not necessarily reflect the opinions of the hosting browser or blog owner.

Mississippi, Pussycat

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