The Bakken Is Back -- Breakevens In Some Areas: $29 -- September 28, 2021

WTI: continues to melt up. CNBC says rise is due to hurricane "that swept the gulf disrupted energy supplies across the US." Say what? Nothing said about what was going on in Europe / UK.

The numbers:

• WTI: $76+
• TYT: 1.5%

The Fed:

• wow, look at this -- the two Fed heads leaving are among the most hawkish
• heard on the street: more dovish heads will be appointed
• Steve Liesman appears to blow off the "more dovish" signal but it's pretty obvious
• as long as we brought up the Fed, Jay Powell now says inflation will (likely?) last longer than expected

Automakers: automakers temporarily shut down more facilities. Link here.

• Stellantis: four of its plants will close the week of September 27, 2021 (that would be this week);
• Detroit; Illinois; Brampton, Ontario; and, Saltillo, Mexico
• Ford: will cut production at its SUV plant in Oakville, Ontario this week (week of September 27, 2021)

Ford: that deal looks pretty good. Link here. Will add an electric F-150 plant; add three battery factories.

Tea leaves: Administration increasingly nervous that the courts have not yet struck down his executive order mandating the vaccine. 

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Back to the Bakken

The Bakken is back: this should be nothing new to those who have been following the Bakken --

• "leap" in EURs show Bakken's core is growing; link to The Williston Herald;

The Bakken has its own mineral tracker, Joel Brown, who was among the first graduates of North Dakota’s Petroleum Engineering program in 2013. Brown founded Mineral Tracker to help royalty owners, a service that has since been wrapped into First international Bank and Trust in Watford City.

Since creating Mineral Tracker, Brown often hears is that the Bakken is close to being drilled out. But that’s not at all what Brown is seeing in the data.

The real story is much more complex, but it’s by and large story about innovation, and it’s a story about how the Bakken’s producers are defying the odds against them, despite OPEC-induced downturns that might have crushed them.

The core of the Bakken is expanding, Brown said. He sees it most clearly in the estimated ultimate recovery figures for Bakken wells. From 2014 to 2018, estimated ultimate recoveries for Bakken wells have increased nearly 70 percent.

A well drilled in 2013 averaged an EUR of around 240,000 barrels of oil. That had been the average for the 10 years prior, too.

But in 2020, Brown has been seeing much higher EURs. The new average for the state is more like 580,000 barrels. That, in turn, has changed break-evens from what used to be a $70 average to more like $37 per barrel.

More here.

Grayson Mill:

• first rig scheduled for November, 2021; link here;
• a real company. LOL. Has 150 employees; Eighty-five work in the field

Active rigs, best guess*, NDIC no longer reports this information:

$76.17	9/28/2021	09/28/2020	09/28/2019	09/28/2018	09/28/2017
Active Rigs	26*	11	57	66	58

No wells coming off confidential list according to the NDIC which has quit updating scout tickets, production.

RBN Energy: rising LNG exports hitch US gas to soaring TTF, JKM prices, part 2. Archived.

The U.S. natural gas market’s exposure to global gas and LNG markets has come into sharp focus in recent days. A gas supply crunch in Europe and scant LNG cargoes have roiled the international markets and kicked competition into overdrive. European natural gas and Asian LNG prices are at record highs and locked in a race to the top. The U.S. gas market has been relatively buffered from the full extent of the panic-driven premiums enveloping European and Asian markets, constrained primarily by its limited ability to help meet international demand. In other words, the U.S.’s LNG export capacity ceiling is likely the only thing reining in Henry Hub prices from following European and Asian gas/LNG prices to the moon. As explosive as Henry Hub futures are these days, if not for the capacity constraint, they would be much higher. That ceiling is about to get a little higher, however, as two liquefaction projects — Cheniere Energy’s Sabine Pass Train 6 and Venture Global’s Calcasieu Pass — get ready to export LNG from U.S. shores this winter, amid what’s already the most bullish Lower 48 gas market in years. In today’s RBN blog, we detail the timing and demand implications of these two projects.