Chesapeake Energy -- Still On The Edge -- December 15, 2016

This was posted on the blog on October 21, 2016:

From Bloomberg/Rigzone: Chesapeake Energy declares "Propageddon" with record frack. Data points:

• first it was the single stage frack; then the multi-stage frack; then, the mega-frack; now it's the monster frack
• the era of the monster frack has arrived in North America -- Chesapeake singing its praises
• 25,000 tons of sand down one Louisiana natural gas well -- "propageddon"
• Black 2 & 11-15-11 1H: 50.185 million lbs of sand in the Haynesville shale region of Louisiana; the well's lateral length = 9,764 feet (typical for a Bakken well) 

More at the link.

In tomorrow's WSJ: Chesapeake Energy drills deeper for profit. Data points:

• Caddo Parish, LA
• Prop-a-geddon
• Haynesville Shale, near Shreveport, LA
• 2 miles deep, 2 miles horizontally (routine in the Bakken, not a big deal)
• 51 million pounds of sand -- Chesapeake thinks that's a world record

So, why in WSJ now?

• the article is about Chesapeake's viability -- recently sold 78,000 acres in the Haynesville to an unnamed private company fro $450 million (about $6,000 / acre)
• plans to sell an additional 50,000 acres in the same field in the coming months
• Chesapeake would retain roughly 250,000 acres

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Cushing Filling Up

Bloomberg update on Cushing. Data points:

• creeping near an all-time high
• currently at 66.5 million; within "a whisker" of  previous record, 68.3 million
• 1.22 million bbls added last week; 3.78 million bbls added the week before
• jump in inventories at end of year: oil companies looking to lower end of year taxes
• US refineries typically use less oil at beginning of year
• Saudi's cut will take time to be felt; Saudi won't start cuts until January, 2017; and, it takes 45 days for Saudi oil to reach the US