Thursday, March 26, 2020

The Wrong Question Is Being Asked -- March 26, 2020

Link here.


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Trapped By A Thing Called Love

TCM movies the past 24 hours have not interested me. I had to go to my "top shelf" DVDs.


An iconic scene.

Ora Denise Allen (July 16, 1939 – January 8, 2018), known by the stage name Denise LaSalle, was an American blues, R&B and soul singer, songwriter, and record producer who, since the death of Koko Taylor, had been recognized as the "Queen of the Blues". Her best known songs were "Trapped by a Thing Called Love" and "Down Home Blues".

Supposedly recorded in Memphis, TN. I would have guessed Muscle Shoals, AL. Muscle Shoals is very, very close to Memphis. One wonders.

Geography: The Tennessee River starts in eastern Tennessee before entering Alabama. After entering Alabama it goes north and for a few miles, forms the boundary between Alabama and Mississippi. Then it flows through Tennessee and Kentucky, where it joins with the Ohio River at the city of Paducah, the latter being a very, very important city during the Civil War.

The Tennessee River does not flow into the Mississippi; it discharges into the Ohio River, barely "missing" the Mississippi.

Muscle Shoals sits on the Tennessee River; Memphis, of course, on the Mississippi.

Here We Go -- North Dakota Rigs Drop To 46; Daily Activity Report With An Error; Will Likely Be Corrected Tomorrow -- March 26, 2020

Error: the name of the well for one of the three new Petro-Hunt permits is wrong. I assume it will be corrected in tomorrow's daily activity report. 

Active rigs:

$23.233/26/202003/26/201903/26/201803/26/201703/26/2016
Active Rigs4668594932

Three new permits, #37474 - #37476, inclusive --
  • Operator: Petro-Hunt
  • Field: Stoneview (Divide)
  • Comments:
    • Petro-Hunt has permits for a 3-well Watterud pad in NWNW section 14-160-95, Stoneview oil field
Four Enerplus "wildflower" wells have been approved for confidential status:
  • Moss, Wisteria, Fireweed, and Elderberry in Dunn County
Four producing wells (DUCs) reported as completed:
  • 35914, SI/A, CLR, Wahpeton 16-16H1, Banks, t--; cum --; fracked 12/6/19 - 12/17/19; 7.1 million lbs; 88.42% water by mass; friction reduction, 0.06511;
  • 31520, SI/A, CLR, Steele Federal 5-24H1, Banks, t--; cum 18K over 15 days; fracked 12/14/19 - 12/23/19;8.2 million lbs; 87.8% water by mass; friction reduction, 0.06636;
  • 31523, SI/A, CLR, Steele Federal 9-24H, Banks, t--; cum 15K over 14 days; fracked 12/2/19 - 12/13/19; 10.6 million gallons of water; 86.88% water by mass; friction reduction, 0.06511;
  • 31522, SI/A, CLR, Steele Federal 8-24H1, Banks, t--; cum 17K over 13 days; fracked 12/1/19 - 12/13/19; 9 million gallons of water; 88.2% water by mass; friction reduction, 0.06982;
The CLR Steele Federal wells are tracked here

Neighboring wells of the above DUCs showed evidence of the halo effect. 

The April, 2020, NDIC Hearing Dockets

The NDIC hearing dockets are tracked here.

Link here.

The usual disclaimer applies. As usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source.

Highlights in bold.

Wednesday, April 22, 2020
Only five pages.

These are cases, not permits:
  • 28430, White Rock Oil & Gas, MonDak-Stonewall; redefine field limits, McKenzie County;
  • 28431, Murex, West Tioga and/or Tioga-Bakken, i) extend Tioga Field to include W/2 SE/4 of section 10-157-95 (80 acres); ii) establish an overlapping 1600-acre unit, S/2 of section 34-158-95 and all of sections 3/10-157-95; iii) eight wells on that drilling unit; Williams County
  • 28432, BR, exception to rule, #37076, Cleofill 1D; McKenzie County;
  • 28433, MRO, Reunion Bay-Bakken; exception to rule, #37395, Wallentinson USA; Mountrail, McKenzie;
  • 28434, Bruin, Dublin-Bakken; establish an overlapping 2560-acre unit, one well, Williams;
  • 28435, MRO, Bailey-Bakken, 12 wells on a 2560-acre unit,section 6/7/18/19-146-94; Dunn County;
  • 28436, MRO, commingling;
  • 28437, MRO, commingling;
  • 28438, MRO, commingling;
  • 28439, MRO, flaring;
  • 28440, MRO, flaring;
  • 28441, MRO, flaring,
  • 28442, Petro Harvester, SWD

Thursday, April 23, 2020
Only eight pages.

These are permits, not cases:
  • 28443, WPX, Mandaree-Bakken; i) create an overlapping 640-acre unit, E/2 7- and W/2 8-149-93; ii) create an overlapping 640-acre unit, section 8-149-93, one wells; Dunn County;
  • 28444, EOG, Elm Tree-Bakken, i) fourteen wells in an existing 1280-acre unit, sections 2/11-153-94;; ii) fourteen wells in an existing 120-acre unit, sections 3/10-153-94; McKenzie, Mountrail;
  • 28445, EOG, Squaw Creek-Bakken, create an overlapping 2560-acre unit, sections 3/4/9/10-149-94; one well, McKenzie
  • 28446, EOG, rework/use the Burke 18-27H well, #17486, section 27-155-90, as a combined production/injection well for an operation in the Parshall-Bakken to the test the feasibility of EOR in the reservoir; Mountrail
  • 28447, EOG, rework/use the Burke 7-30H well, #17490, section 3-155-90, as a combined production/injection well for an operation in the Parshall-Bakken to the test the feasibility of EOR in the reservoir; Mountrail
  • 28448, EOG, rework/use the Burke 16-22H well, #174867, section 22-155-90, as a combined production/injection well for an operation in the Parshall-Bakken to the test the feasibility of EOR in the reservoir; , rework/use the Burke 17-23H well, #17949, section 23-155-90, as a combined production/injection well for an operation in the Parshall-Bakken to the test the feasibility of EOR in the reservoir; and, , rework/use the Burke 9-10H well, #17996, section 10-155-90, as a combined production/injection well for an operation in the Parshall-Bakken to the test the feasibility of EOR in the reservoir; Mountrail
  • 28449, Freedom Energy Resources LLC, exception; Lodgepole well, Stark County, section 17/20-139-96;
  • 28450, Freedom Energy Operating LLC, establish an approx 960-acre unit, S/2-12 and N/2, N/2-13-129-104 and W/2-18-129-103, Red River formation, Bowman County;
  • 28451, Crusoe Energy Systems,
  • 28452, WPX, pooling,
  • 28453, WPX, pooling,
  • 28454, WPX, Big Bend-Bakken, seven wells on an existing 640-acre units, section 15-152-92; Mountrail;
  • 28455, WPX, Heart Butte-Bakken, i) seven wells on an existing overlapping 640-acre unit, section 9-149-92; ii) seven wells on an existing 640-acre unit, section 9-149-91; Dunn County
  • 28456, WPX, Mandaree-Bakken, three wells on an existing 320-acre unit, W/2 section8-149-93; Dunn County
  • 28457, XTO, pooling,
  • 28458, XTO, pooling,
  • 28459, XTO, commingling, vapors,
  • 28460, Zavanna, commingling, vapors,
  • 28461, Zavanna, commingling, vapors,
  • 28462, EOG, Painted Woods-Bakken, four wells on an existing 1280-acre unit, sections 4/9-154-103; Williams County
  • 28463, EOG, Stanley field, authorizing the conversion of the Burke 16-22H well, #17487, section 22-155-90, allowing the injection of natural gas and other fluids into the Bakken formation; Mountrail County
  • 28464, EOG, Stanley field, authorizing the conversion of the Burke 9-10H well, #17996, section 10-155-90, allowing the injection of natural gas and other fluids into the Bakken formation; Mountrail County
  • 28465, EOG, Stanley field, authorizing the conversion of the Burke 13-15H well, #17862, section 15-155-90, allowing the injection of natural gas and other fluids into the Bakken formation; Mountrail County
  • 28466, EOG, Stanley field, authorizing the conversion of the Burke 17-23H well, #17949, section 23-155-90, allowing the injection of natural gas and other fluids into the Bakken formation; Mountrail County
  • 28467, EOG, Ross field, authorizing the conversion of the Burke 7-03H well, #17490, lot 4 section 3-155-90, allowing the injection of natural gas and other fluids into the Bakken formation; Mountrail County
  • 28468, EOG, Parshall field, authorizing the conversion of the Burke 18-27H well, #17486, section 27-155-90, allowing the injection of natural gas and other fluids into the Bakken formation; Mountrail County
  • 28469, Ballard Petroleum Holdings LLC, Chatfield-Madison Unit,, authorizing the conversion of the Fines 23-19 well, #31118, section 19-159-81, for the injection of fluids into the unitized formation, Bottineau County
  • 28470, Ballard Petroleum Holdings LLC, Chatfield-Madison Unit, authorizing the conversion of the Barton Trust 31-30 well, #31307, section 30-159-81, for the injection of fluids into the unitized formation, Bottineau County

Mid-Day Grocery Store Check -- March 26, 2020

Think about this: by government order, all retail stores have been ordered closed except grocery stores, pharmacies, gas stations, and parks. There's usual a qualifier: "...and anything considered essential." But malls are closed and most non-grocery store retail are closed. Didn't that work out well that the following have huge non-grocery retail "connected to their grocery business:
  • Costco
  • Sam's 
  • Walmart
  • Target
If Sophia needs a new bicycle, I won't be able to go to our local "mom-and-pop" bike dealer. I will have to buy that bike from Walmart. Very, very interesting. I should be able to telephone my local "mom-and-pop" bike dealer and set up an appointment, just the two of us, which is allowed under state mandates (no gatherings greater than ten people).  

Grocery store check: Our neighborhood grocery store is the smallest and most "low end" in the immediate area. There are two grocery stores (including this one) in biking distance -- less than three minutes; another two high-end stores about five minutes away by car; and then several very high-end stores all within 20 minutes driving time.

Our neighborhood grocery store has restricted its hours to opening at 7:00 a.m. and closing at 10:00 p.m. I've been going once or twice daily just to check things out, even if I don't specifically need anything. Today the weather was so nice, I biked over for a mid-day check which I generally never do.

Wow, wow, wow. The store looked incredibly well-stocked. Yes, they were still out of cleaning supplies but everywhere else one could tell they had a shipment come in last night. Surprise, surprise. The last item -- actually the last two items -- I had not been able to find were in very limited stock: rice, both medium grain and long grain; and, Bush's beans, Sophia's favorite. The rice was still limited to one package only, but no restriction on the beans.

If this is their only shipment this week, it's bad, bad news, but it sure looks like things are turning around. There are a number of reasons for this which should be obvious so I will move on.

Getting back to normal: A reader sent me a link to an article reporting that Ford will re-open its plant in Louisville, KY.

I replied:
My hunch is that regardless of what Trump/CDC say at the national level, state governors will sort it out at the state level after early-, mid-April, and they might even break it down by community.

I do think there are ways to gradually get back to normal. For example, retail. All the malls are closed. That's where they sell diamond rings, jewelry, etc. If I want a diamond ring, I should be able to call for an appointment: then the proprietor and I are only two individuals.

If my car needs servicing, I call the Firestone dealer and arrange a time. There are a lot of ways to transition back to normalcy.
Faster testing and targeted quarantines should give governors and mayors more leeway.

Free delivery: Amazon changed the way American business "did" online by offering free delivery. Initially, free delivery required a minimum amount (generally $25, and 48-hour delivery).
With Prime, no minimum and next-day delivery. Now, with businesses shut down, we are seeing other changes. Most noticeable, Denny's is now waiving delivery fees. When things are back to normal, perhaps they will institute delivery fees, but once something is free, it's hard to start charging for it. Might they simply raise prices slightly and continue "free" delivery with minimum purchase? 

Bakken Light Sweet Oil Down To $12/Bbl -- $8 Differential -- March 26, 2020

I don't know if this is the result of federal judge's ruling on the DAPL but if not, certainly coincidental.


Gas Buddy, Oklahoma City: $0.99/gallon.

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Frack Crews


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Saudi Arabia: In An Existential Fight For Its Life
Saudi Can't Give Their Oil Away Right Now



Bloomberg link here. $300 billion. The question is where the wealth funds stand now. Let's check.
Middle East wealth funds built up assets in excess of $2 trillion during the past few decades, building a cushion for when oil runs out or revenues drop. They have stakes in Uber Technologies Inc., Barclays Plc, and swathes of European and U.S. property.
Saudi Arabia’s Public Investment Fund has also committed giant sums to a Blackstone Group Inc.’s U.S. infrastructure fund and Softbank Group Corp.’s $100 billion Vision Fund. Other funds in the region also have significant placements with Carlyle Group Inc., BlackRock Inc. and KKR & Co. Inc.
Exactly how much the funds have placed and with whom remain undisclosed. Most don’t even report the value of assets they manage. Abu Dhabi Investment Authority is one of the few that publishes an annual report, and that only includes broad guidance on strategy and performance. ADIA’s 20-year annualized returns were 5.4% in 2018, the lowest since it began reporting in 2008. Developed market equities, which have crashed as a result of measures to contain the coronavirus, constitute up to 42% of its portfolio.
Much more at the link. As usual, a lot of hyperbole to begin the article and then common sense settles in.

Current [January, 2020] Saudi Arabian foreign reserve assets: $500 billion.

Be careful: that last link is simply Saudi Arabian foreign reserve assets. The Bloomberg is "all" wealth funds in "all" Mideast countries. But it helps me put the $300 billion in the Bloomberg headline in perspective. 

March 26, 2020 ... I Can Relax ....


... now that I can grow my own toilet paper.


Completion Strategies, Bakken 4.0 -- Fracking Question Now That We're In Bakken 4.0 -- March 26, 2020

Background: we entered "Bakken 4.0" in March, 2020. My hunch is that fracking / completion strategies will change -- some operators will change immediately; others will take a little longer.

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Something New?
large frack; large percentage water

Oasis:
******************************
First Group
small - medium fracks

BR:

Hess:

Whiting:
WPX:

 

******************************
Second Group
medium - large fracks

EOG:
Nine Point Energy:
Original Post
Just throwing this out for discussion (it's rhetorical); we'll see over the next twelve months.
I was unimpressed with the initial production for the Whiting well that came off the confidential list today, especially for Big Bend oil field, but then I saw the number of stages -- only 35 stages and a moderate frack, 7.4 million lbs. 
The question becomes:
  • when oil is trending toward $0/bbl (no typo), is it more economical to max out the frack to get highest IP possible and then choke back for a year; or is it more economical to minimize initial production using a smaller frack and then coming back (years later?) when prices are better? 
  • Other questions:
  • does choking back cause more problems for the "durability" of a well?
  • what affect on the well is caused by choking back for a year or longer? 
  • fracking is now said to account for upwards of 2/3rds of total cost of a new well; if much of that is due to cost of sand (transportation, etc), does it make sense to use smaller frack, better technology?
Completion strategies beginning in 2018 are tracked here
The well:
  • 36323, 563, Whiting, Oppeboen 14-5HU, Big Bend, t10/19; cum 62K 1/20; 1K month; 35 stages; 7.4 million lbs; fracked 8/1/19 - 8/7/19; 6.5 million gallons; 87.7% water by mass (on the low side, by percentage); 
  •  
From the file report:
  • wow, look how fast they drilled this well 
    • spud: June 3, 2019
    • cease drilling: June 11, 2019
  • logging services began at 1930 hours, June 5, 2019
  • the curve was landed at 0850, June 8, 2019
  • lateral began at 0550, June 9, 2019
  • drill rates averaged 400 ft/hour

This Tells Me All One Needs To Know About Analysts' Understanding Of Human Behavior -- March 26, 2020

Breaking news: my daughter in on the freeway on way to work -- she texts me -- most seen trucks: Tom Thumb (major grocer in Texas), Kroger (grocer), and Amazon Prime (everyone knows).

We are going to see a retail push/surge like we've never seen before.
  • folks are hoarding everything they can; instead of two-day supply of everything, Americans working towards three-week supply of non-perishables; maybe more; every home/apartment unit becomes a mini-storage site; 
  • "social distancing" -- we all know; next: "Mormon pantries"
  • I think I read somewhere upwards of 60% of American meals are consumed outside the home (probably on a dollar basis) -- now, instead of trucks delivering to restaurants, delivering to grocery stores
  • two weeks from now, we should start seeing grocery stores very, very well-stocked
  • if so: this would not have happened under a socialist, centrally-run, government-run economy; capitalism -- this is a once-in-a lifetime opportunity for some grocery story managers; suppliers;
US weekly jobs report (first time unemployment claims), link here:
  • prior: 281K (huge jump; far exceeded consensus)
  • consensus: one million; 
  • actual: 3.283 million

This number is staggering. I'm not watching the television at all (except TCM) so I have no idea how talking heads are taking this. I would think the market would plummet on this news.


So, what does this mean? Some ideas to throw out, explore, story lines::
  • expectations/forecast/consensus:the analysts were completely wrong on this one? how could they be so far off; do they not have "good" data bases for numbers employed by airline industry? In-restaurant dining? Travel (hotels)? Malls.
    • hey, Wall Street: everything except grocery, pharmacy, gasoline service stations, and parks are shut down; did someone miss that? Didn't GM shut down? Or at least stop major assembly lines;
  • this is truly a pandemic panic
  • this number is huge; going back before 1970 to compare is meaningless; since 1970, we've never seen anything like this
  • next year federal tax receipts: drop off a cliff
  • $2 trillion stimulus/bailout/New Green Deal won't do much (maybe $500 billion is actually stimulus); rest is bailout (attempt to keep heads above water); New Green Deal (huge, huge waste);
  • Medicare funding will take a huge, huge hit;
  • IRA funding will take a huge, huge hit; 
  • the number is staggering: 750,000 historically is a staggering number; a million would have been staggering; few saw two million coming; and, the number did not stop at three million;
  • we'll see one, maybe two, more weeks of numbers like this; then the number will drop precipitously -- these are "first time" claims -- "front-loaded" -- but overall unemployment will remain high for quite some time;
  • suicides, depression, child abuse, drug use, alcohol, jobs lost forever
  • tectonic change in the way Americans work, shop, school; prepare
    • on-line books; publishing industry;
      • Apple has released new iPad Pro; Tim Cook needs to do some live marketing ... and quick; 
    • on-line shopping; 
    • Mormon pantries for everyone;
    • gasoline demand
  • tethered vehicles
    • is Tesla dead? Or how fast can it recover
    • how long will gasoline prices remain this low?
  • China's future?
  • Saudi Arabia's future? they no longer control pricing; it's no longer a supply problem; it's a demand problem (of course that's a problem for all oil producers, but Saudi's entire economy is petroleum-based); 
    • Canada, not far behind? Mexico?
On-line economy: this is really, really not well understood. No one was prepared for this. Example: my daughter in health profession; psychiatric nurse practitioner; directed to do "tele-health" whenever possible -- turns out the "company" did not have video capability; audio capability (speakers); up-to-date computers; overnight they got some of this stuff but not well planned out. There will be a second wave of buying "tele-work equipment" across the country as more and more go to on-line retail.

Tethered vehicles: will Americans be in the mood to buy tethered vehicles in 2020? Automobile manufacturers put a lot of CAPEX into EVs this year. In hindsight, will be seen as huge, huge mistake. Some of it was not predictable (coronavirus) but anyone following oil production knew that there was a good chance that oil prices would be "depressed" for a long time.


Post-script:
My hunch: we're going to be in this lockdown a lot longer than folks realize now that the CDC is control, along with the media, and the public health tail is wagging the economy dog.

But other than the investor class, and 75% of Americans barely making ends meet month-to-month who's really hurting? I bet a lot of seniors are doing just fine. Their lifestyle probably hasn't changed a whole lot.

I'm hoping once we get the testing and quarantining down to a routine, states like North Dakota, South Dakota, Montana, and Wyoming can go back to normal, to the extent that local citizens want to go back to normal. There will always be risk involved.

Public health departments should be ramping up staff to do testing, monitoring targeting quarantining.

Five-Fold Jump To One Million First-Time Unemployment Claims -- March 26, 2020

Morning grocery store report: last night I saw the truck arrive to re-stock our neighborhood store. Arrived just after store closed at 10:00 p.m.
I was there this morning at 0700 hrs when the store opened -- as were a dozen other seniors and a few middle-aged folks. Busiest it's ever been for this early in the morning. Very, very successful scavenger hunt: got everything I needed (and didn't need but will give to daughter) except for one item.
  • available for first time in days: Clorox cleanser (birthday gift for our older daughter -- her birthday was yesterday; she's been eager to get cleaning supplies); eggs; Sophia's particular brand of milk (but milk has always been in good supply, just not her brand); Bush's beans (Sophia's favorite brand); Dawn dish washing soap;
  • not available: fresh bread except in the bakery section (which is more than enough)
  • forgot to check: rice, but I doubt they had any
  • overall: a great trip -- just the Clorox, eggs, Dawn made my day
Earned income or taxable income? As a general rule, seniors have little earned income; hefty pensions, unearned income.
The package’s central cash-injecting giveaway would cut checks of up to $1,200 to each taxpayer, with phased out for people who earned between $75,000 and $99,000 in 2018. For each child, there would be a $500 tax rebate.
What were they thinking? Russia will now suspend all international flights.
Sure took them a long time. The bigger question: why are domestic flights in/out of NYC-area still allowed? We're in lockdown in many parts of the country and yet folks are flying in/out of NYC. Any restrictions? Any testing? The good news: there's a reason "they" call it "fly-over" country.
NYC subways: ridership drops 87%; service cut by a quarter.  MTA was looking for a $4-billion bailout from the $2-trillion bailout/stimulus/New Green deal bill -- received $3.8 billion.

US GDP, 4Q19, second estimate, link here:
  • US GDP, 4Q19
    • prior: 2.1%
    • consensus: 2.1%
    • actual: pending (7:30 a.m. CT)
  • consumer spending
    • prior: 1.7%
    • consensus, best: 1.7%
    • actual: 1.8%

US weekly jobs report (first time unemployment claims), link here:
  • prior: 281K (huge jump; far exceeded consensus)
  • consensus: one million; 
  • actual: 3.283 million

Jobless claims: this will be unprecedented in modern times (1970 - 2020 graphic here);
  • will far exceed worst hits in recessions of 1982 and 2009
  • has not surpassed 700,000 claims in one week since 1970
  • will unemployment rate for April top out at 15% or will it be worse?
US dollar / Canadian dollar: link here. Be sure to click through each of the time frames (12 hours, one day, one week, one month, one year. And then read the RBN Energy blog today, linked below.

US dollar / Mexican peso: link here. Most dramatic is the one-year and two-year graph -- from 18 pesos to 24 pesos in one / two years. This particular chart only goes back years:
  • 2010: 12 pesos / US dollar
  • 2014 - 2017: inflection point; jumped to 20 pesos / US dollar; this was during the Saudi surge; oil prices collapsed
  • 2020: unprecedented jump; literally overnight 25 pesos / US dollar
*****************************************
Back to the Bakken

Active rigs:

$23.723/26/202003/26/201903/26/201803/26/201703/26/2016
Active Rigs5068594932

Wells coming off the confidential list today -- Thursday, March 26, 2020: 65 for the month; 236 for the quarter, 236 for the year:
  • 36323, 563, Whiting, Oppeboen 14-5HU, Big Bend, t10/19; cum 62K 1/20; 1K month; 35 stages; 7.4 million lbs;
  • 34599, drl, MRO, McRoberts USA 14-21TFH, Reunion Bay,
RBN Energy: price crash could upend western Canada's propane export outlook.
The collapse in crude oil prices has sent shock waves throughout the global energy industry and Canada has been no exception. Sorting through all the impacts will take time, but what’s clear is that any earlier optimism surrounding supply growth in Canada has evaporated, including for propane supply to feed the new propane export terminals on British Columbia’s coastline. Edmonton propane prices fell 58% since the start of March to as low as 10.25 cents per gallon in U.S. dollars on March 23 — the lowest level since April 2016 — and settled yesterday at 13.13 cents per gallon, according to data from our friends at OPIS. A dampened supply outlook means future export expansion plans also are being reconsidered. Today, we explore what the sharp decline in propane prices could mean for the region’s supplies and future propane exports, including from Pembina Pipeline’s nearly completed export terminal in Prince Rupert, BC.
The past few weeks have seen many an energy outlook completely overturned. The effects of the huge downturn in crude oil prices have rapidly forced a large majority of producers in the U.S. and Canada to drastically reduce their spending plans for at least the first half of this year, and likely for all of 2020. Our examination of Canadian producers, both large and small, reveals more than C$6 billion ($4.1 billion) of capital spending reductions announced in just the past three weeks, with some producers still to release information on their capex plans. These spending reductions equate to a more than 30% cut versus previously announced capex plans for this year before prices came crashing down. The impacts may soon be seen in the number of drilled and completed crude oil and liquids-rich gas wells across Western Canada, although it may take some time for the supply impacts to be more fully realized.