Update On Texas Natural Gas Pipelines -- RBN Energy; Should The Samsung Galaxy Be Renamed The Samsung Supernova? -- October 10, 2016

Brent crude oil hits one-year high. WTI up 83 cents to $51.27. 

Presidential poll, USC-LA Times: I doubt this poll reflects most recent debate (but I could be wrong) but it does come late enough to "capture" the Trump comments in a 2005 (eleven years ago) video that has caused a bit of consternation among those interested:

********************************

Back to the Bakken

Friday's NDIC daily activity report posted. Link here.

Three new permits:

• Operator: EOG
• Field: Parshall (Mountrail)
• Comments: three Wayzetta permits, sese 12-153-90 (one) and sese 6-153-90 (2)

Two permits renewed:

• HRC: a Fort Berthold permit in Dunn County
• Oasis: a Lydell permit in Burke County (years ago, at the height of the boom, the "consensus" was that not many wells would be drilled in Burke County; the county was not particularly noteworthy

Three producing wells completed:

• 29145, 350, Triangle, J Garvin Jacobson 150-101-8-5-8H, Pronghorn, t10/16; cum --
• 31031, 1,038, EOG, Shell 6-1930H, 2 sections, Parshall, t9/16; cum --
• 31032, 910, EOG, Shell 5-1930H, API 33-061-03666; 2 sections, Parshall, t9/16; cum --

For #31032

• 6.925 million gallons of water, 8% by weight sand, per FracFocus:
• 79.97% of what =  57,791,895 pounds of water = 72,266,968 pounds proppant (water: 1 gallon = 8.3454 lbs)
• 19.95% sand by weight = 14.4 million lbs of sand
• Later, from the NDIC: pending

********************************

Active rigs:

	10/10/2016	10/10/2015	10/10/2014	10/10/2013	10/10/2012
Active Rigs	33	68	190	185	187

RBN Energy: update on Texas natural gas pipelines.

Over the next three years, 16 pipeline projects are in the works to add more than 14 Bcf/d of new take-away capacity to move Marcellus/Utica natural gas to the south and west, relieving takeaway capacity constraints that have plagued the Northeast since 2012-13. Much of this gas will be moved to the Gulf Coast, primarily via reversals of pipes that traditionally transported gas north and east, and will target rapidly growing LNG and Mexico export markets. But few of these pipeline projects get the gas all the way to those export outlets. The new supplies must traverse “Miles and Miles of Texas” (and Louisiana) to reach the export gateways and along the way deal with shifting production trends within the state, pipeline systems that are "telescoped the wrong way" constraining capacity of the Texas pipeline grid, and unique regulatory considerations associated with Texas intrastate pipelines.

Most of the pipeline projects that will provide desperately needed takeaway capacity out of the Marcellus/Utica region will either bring gas to states on the U.S. Gulf Coast or move gas into markets that have been traditionally served by Gulf Coast supplies, displacing those volumes back into the Gulf region.

Either way, significant volumes of gas are being pushed into two states that have historically been the most prolific U.S. sources of natural gas supply: Louisiana and Texas.  

Isn’t this a bit like bringing coal to Newcastle?  What are Louisiana and Texas going to do with all that incremental gas supply?  Some will be used to generate electricity, not only in Louisiana and Texas, but in a few states where gas will be dropped off along the way to the Gulf Coast. 

But most of the gas is targeted for exports into Mexico, where it will be used to generate power in that country, or is intended for LNG exports to meet demand in Latin America, Europe and Asia.

A few new natural gas export facilities have already come online over the past two years, including the first liquefaction trains at Cheniere Energy’s Sabine Pass LNG terminal in Louisiana and NET Midstream’s pipeline to Mexico, which together have ramped U.S. gas exports almost 2.0 Bcf/d over the past two years.

Many more export facilities are being developed, including liquefaction/LNG export capacity at Sabine Pass, LA; Freeport, TX; Hackberry, LA; and, Corpus Christi, TX, plus another half dozen new pipeline projects being built into Mexico connecting through Texas natural gas supply corridors. 

It is amazing isn't it, that 16 pipeline projects are in the works to move Marcellus/Utica natural gas since 2012-13, and the Obama administration is concerned about the DAPL? Wow. Time for someone to go. 102 days. Feels like an eternity.

I can't remember if I posted this one. Permian gas output remains high; processing capacity is being added. From RBN Energy while I was traveling.

Natural gas production volumes in the Permian Basin are very near the all-time record of 6.9 Bcf/d set last September, and crude oil and gas producers alike see nothing but blue skies for the highly prolific West Texas/Southeast New Mexico play.

The Permian already has a lot of gas processing capacity, but a good bit of it is older, and parts of the region—especially the super-hot Delaware Basin—need more of the big, efficient cryogenic plants that can process 100 to 200 MMcf/d. Today, we continue our review of gas production and processing in the biggest U.S. gas-producing region that is not named Marcellus.

The past two years have been a challenging time for crude oil and natural gas producers in most of the U.S., but much less so for exploration and production companies in the 75,000-square-mile Permian Basin. In rock ‘n’ roll terms, the Permian is a lot like Bruce Springsteen––it’s been a consistent producer (of both gas and oil) for decades, and it has more respect today than ever. (You might even call the Permian “The Boss” of hydrocarbon output.) Thanks to favorable production economics and multiple pay zones, output levels in the Permian dipped only slightly as oil and gas prices tumbled, and have since rebounded. As we said in Part 1 of our series, crude oil has always been the big draw for Permian producers, but most of the wells there also produce large volumes of liquids-rich or “wet” natural gas that needs to be processed to extract natural gas liquids (NGLs). In its latest Drilling Productivity Report, the Energy Information Administration (EIA) projected that the Permian would produce an average of nearly 6.9 Bcf/d in October (2016), only 30 MMcf/d less than it did at its peak a year ago. Gas production in the Eagle Ford in South Texas, meanwhile, is projected to fall below 5.6 Bcf/d in October—a 25% drop from its all-time  high in February 2015. (Of course, Appalachia, with the prolific Marcellus and Utica plays, still reigns supreme as far as gas is concerned, with almost 25 Bcf/d now being produced in the region based on RBN production numbers).

************************************

Humor

From Reuters:

Saudi Arabia's Energy Minister Khalid al-Falih said on Monday that OPEC should not crimp oil supply too tightly and said he was optimistic a global production deal to limit supplies could be reached by November.

I doubt the last thing Khalid needs to worry about is OPEC "crimping"oil supply too tightly. LOL.

***************************

The Market

Late-day trading: Dow 30 appears to hold; up 100 point; WTI still near $52

Mid-day trading: after going as high as 125 or thereabouts, the Dow 30 is up about 100 points:

The Opening: Dow 30 up 144 points. NYSE:

• new highs:  140-- Deere, Encana, Halcon WT, Halliburton, SM Energy, 
• new lows: 19

********************

The Apple Page

It looks like Samsung will halt further production of its "safe" Galaxy Note 7 until they get it figured out. I wonder if the Samsung Galaxy Note should be renamed the Galaxy Supernova.

From the AP today: new incidents defy Samsung's efforts to end smartphone woes. Also, it was reported that the US Supreme Court will take the case involving Apple vs Samsung. If I read it correctly, it was to determine the amount of money Samsung owed Apple for "copying" Apple's smartphone design.

It seems somewhat of a precedent for the US Supreme Court to take a case like this. I don't know; just a random thought. So, let's look it up -- here it is, over at CNET: "This is the first time a design patent case has been examined by the Supreme Court since 1800s." And yes, "What's at question is how much money one company has to pay for copying the designs of another. Samsung says an Apple victory would stifle innovation."

*********************************