Tuesday, October 10, 2017

Statoil: I wasn't impressed with the announcement by Statoil yesterday regarding its recent announcement. Today, from Reuters via Rigzone: Statoil's Arctic, UK drilling campaigns yield disappointing results.

Norway's Statoil reported disappointing outcomes from three oil and gas exploration wells on Monday, one in the Norwegian Arctic and two in the British North Sea, while a fourth well in British waters found only moderate quantities.

Statoil's failure to strike oil at Norway's Koigen Central capped a disappointing year for the firm in the Barents Sea, where four wells were dry or contained non-commercial volumes, and one found an oil discovery too small to develop on its own.

It was also a setback for the Norwegian government's ambitions to expand oil production in the Arctic as output from mature North Sea fields is set to decline from the mid-2020s.

In Britain, Statoil announced its Verbier well had proved 25-130 million barrels of oil (boe), its biggest find outside of Norway this year, while the Mariner Segment 9 found non-commercial volumes and a third well, Jock Scott, was dry.

Puerto Rico is taking its toll on Tesla: the company pushes back electric semi truck reveal -- again. TSLA shares dropped almost 4% yesterday; TSLA futures today -- up about 1%.  I think this was reported several days ago; same report, simply a new article --

We’ll now have to wait until November to see Tesla’s electric semi-trailer truck.
After first stating in June that the truck would be unveiled in September, CEO Elon Musk in September pushed back the reveal date to October.

Come October, and Musk has announced yet another delay, this time pushing the reveal date back to November 16.

In a Twitter post on Friday, Musk cited Model 3 production difficulties as well as relief efforts for energy supply to Puerto Rico and other storm-affected areas as the reasons for the latest delay.

Whining: from Bloomberg via Rigzone --

On the darkened bridge of the Chesapeake Trader, with radio chatter filling the air, three officers were easing the giant freighter into San Francisco Bay when an unexpected vessel suddenly appeared on the starboard side. They scrambled to avoid catastrophe.

The computerized simulation -- conducted in a landlocked office park outside Baltimore -- is part of a two-week course offered by the International Order of Masters, Mates & Pilots. The union facility was once packed with students working their way up the ranks, but attendance has plunged as the number of U.S.-flagged, oceangoing freighters has fallen from nearly 3,000 in 1960 to fewer than 170 today.

The decline has occurred despite the Jones Act, a law that requires goods moving between U.S. ports and territories to be carried on American-built vessels crewed by American officers and deckhands. That's energized opponents of the nearly 100-year-old law, who say the protectionist measure hasn't saved the fleet and should be curtailed or eliminated once and for all.

Saudi to continue export cuts: from MarketWatch --

Crude-oil prices traded higher on Tuesday and were on pace to notch a second straight gain as Saudi Arabia said it would reduce its monthly crude exports next month as OPEC’s swing producer attempts to tackle a global glut of oil.

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Back to the Bakken

Active rigs:

$50.17↑	10/10/2017	10/10/2016	10/10/2015	10/10/2014	10/10/2013
Active Rigs	57	32	68	190	185

RBN Energy: US energy markets facing dramatic basis volatility.

For the past three years, the price for U.S. WTI crude oil at Cushing has remained close to $50/bbl while natural gas at the Henry Hub has gravitated in a range around $3.00/MMbtu. It has been one of the most stable periods of energy prices in decades. But below the surface of stability at the major hubs, prices at the regional level have been wildly volatile, driving dramatic swings in geographic basis. 

Alternating cycles of basis blowouts followed by basis collapses have become standard fare for U.S. oil, gas and NGLs as producers ramp up production, local prices get hammered due to capacity constraints, midstream companies respond by (over) building infrastructure, and regional price differentials implode due to overcapacity.

With more production growth and infrastructure on the way, these basis cycles will keep on coming.  In today’s blog we’ll consider a few of the market sectors particularly susceptible to basis volatility, and provide a subliminal advertorial for our upcoming School of Energy, where we explore both the underlying causes and the outlook for future basis cycles.

Sempra buys interest in Mexican pipeline for $520 million. From Zacks:

• 270-mile pipeline; 42-inch diameter
• $231 million in cash; assumed $289 million in Pemex debt 
• from the article:

Mexico has been registering an increase in demand for natural gas, primarily due to its electricity and industrial sector. Per a report from FTI Consulting, Mexico’s natural gas demand will grow to 9.2 Bcf/d or 22% above 2015 levels by 2030 and imports will rise 53% to 5.4 Bcf/d.

In excess of 50% of the natural gas demand in Mexico will be met through imports and the natural gas producers of United States will play a key role. The natural gas pipelines will play a crucial role to transport this much needed volume of natural gas to Mexico from the United States.

STACK/SCOOP update: Mike Filloon over at SeekingAlpha -- summary -- 

• horizontal oil production data has improved significantly in recent years
• production data is more transparent as we are seeing some huge results linked to increased frac' sand and frac' fluid usage
• Devon has had the best recent results, although Marathon has the best current producer 
• from the article:

Although frac' sand and fluids usage has increased, the additional costs are offset by better production. This continues to effect balancing world inventories, but not to the extent initially thought. While the Bakken is more transparent, plays in Texas and Oklahoma do not provide the quality of data.  

The STACK/SCOOP in Oklahoma has emerged as one of the premier unconventional plays in the US. Newer well designs have improved economics significantly.

One example -- Olive June 1-27XH has outperformed in a significant manner. It was drilled and completed by Marathon (MRO) and produced more then 1.36 MMBOE in 10 months. Marathon used 19.6MM gallons of fluid and 29.2MM lbs of proppant.

The wells that interest me: