Monday, November 30, 2015

Active rigs:

	11/30/2015	11/30/2014	11/30/2013	11/30/2012	11/30/2011
Active Rigs	64	185	191	182	198

RBN Energy: Permian Delaware and Midland Crude Gathering Build Out Continues.

While crude oil takeaway capacity out of the Permian Basin from major hubs is probably overbuilt for the time being that is not the case for gathering systems bringing barrels from the wellhead to mainline terminals. Production in the Permian has slowed since the drop in oil prices reduced drilling activity but is still increasing from sweet spots in the Midland and Delaware basins in West Texas where pipeline gathering can save producers as much as $2/Bbl in trucking fees. Today we continue our review of gathering infrastructure build out to deliver more crude to takeaway hubs in the Permian.

In Episode 1 we summarized the changing balance over the past year between Permian crude production and pipeline takeaway capacity out of the region. Since the summer that balance has favored producers because major pipeline capacity opened up since the end of last year (2014) to East Houston (the 300 Mb/d Plains All American/Magellan Midstream Partners BridgeTex pipeline), to South Texas and Corpus Christi (the 250 Mb/d Plains Cactus pipeline) and to Nederland/ Port Arthur, TX (the 200 Mb/d Sunoco Logistics Permian Express II pipeline).

With the impending addition of the 540 Mb/d Enterprise Products Partners Midland to Sealy pipeline expected online in mid-2017 overall crude takeaway capacity out of the Permian is looking overbuilt given that production in the basin has slowed down (although still increasing) from the dramatic growth seen between 2012-2014. Yet Permian wells remain among the most productive in U.S. shale plays and drilling continues in the sweet spot areas of the play – the Midland and Delaware basins. As a result there is considerable pipeline infrastructure build out continuing to connect new production to the big takeaway pipeline hubs. We began an update on the Permian gathering projects first detailed last summer in our “Come Gather ‘Round Pipelines” series with additions by Occidental, Plains, Blueknight Energy Partners, Navigator Energy Services and Medallion Midstream. Today we conclude that roundup of projects currently under construction.

From In-Play:

Tallgrass Energy Partners increases its revolving credit facility from $850 million to $1.1 billion: The firm has increased its revolving credit facility from $850 million to $1.1 billion, and has an option to further increase the revolving credit facility by up to an additional $400 million of commitments to $1.5 billion. As of Sept. 30, 2015, TEP had $696 million drawn on its revolving credit facility. Tracked here.

OPEC ready to rumble over Saudi Arabia output. Story at WSJ. All talk. Saudi won't budge.

It looks like Libya will belong to ISIL. Story at WSJ. Pretty good for a JV team.

Even as foreign powers step up pressure against Islamic State in Syria and Iraq, the militant group has expanded in Libya and established a new base close to Europe where it can generate oil revenue and plot terror attacks.

Since announcing its presence in February in Sirte, the city on Libya’s Mediterranean coast has become the first that the militant group governs outside of Syria and Iraq. Its presence there has grown over the past year from 200 eager fighters to a roughly 5,000-strong contingent which includes administrators and financiers, according to estimates by Libyan intelligence officials, residents and activists in the area.

On even of Paris climate conference, the UK decides not to fund Shell carbon capture scheme. Too expensive, even if it means the earth is lost to global warming.

Meanwhile, in California, if you install solar roof panels, as far as the state is concerned, you don't count:

California's aggressive push to increase renewable energy production comes with a catch for people with solar panels on the roof: You don't count.

If a home or business has a rooftop solar system, most of the wattage isn't included in the ambitious requirement to generate half of the state's electricity from renewable sources such as solar and wind by 2030, part of legislation signed in October by Gov. Jerry Brown.

That means rooftop solar owners are missing out on a potentially lucrative subsidy that is paid to utilities and developers of big power projects.

It also means that utility ratepayers could end up overpaying for clean electricity to meet the state's benchmark because lawmakers, by excluding rooftop solar, left out the source of more than a third of the state's solar power.