The Trump Rally May Not Be Over -- November 29, 2017

Plans to spend more time with his family. Matt Lauer.

Mr Wobegone? Also, gone.

GDP, 3Q17: revised upward -- second estimate at 3.3% for 3Q17. This is a 3-year high.

Weekly petroleum report: pending; released 10:30 a.m. Eastern Time.

Market: the Trump rally may continue today based on futures.

ESPN: lays off 150 people today.

Oil majors just got the memo: "It's all about shale." -- Reuters --- pressured for profit, oil majors bet big on shale technology (spoiler alert: article is light on examples that get me excited).

Now, oil majors that were slow to seize on shale are seeking further efficiencies by adapting technologies for highly automated offshore operations to shale and pursuing advances in digitalization that have reshaped industries from auto manufacturing to retail.

If they are successful, the U.S. oil industry's ability to bring more wells to production at lower cost could amp up future output and company profits. The firms could also frustrate the ongoing effort by the Organization of the Petroleum Exporting Countries (OPEC) to drain a global oil glut.

Hebron, just in time for Christmas. Exxon Mobil's Hebron oil project off the coast of eastern Canada has produced its first oil -- Reuters via Rigzone.

At its peak Hebron will produce up to 150,000 barrels per day (bpd), Exxon said. It will help Atlantic Canada offshore production climb 44 percent to 307,000 bpd by 2024, according to estimates from the Canadian Association of Petroleum Producers.

Cars. I've never been particularly interested in cars but with all the Tesla excitement, I've enjoyed watching the new muscle cars rolling out. Two links covering the Los Angeles car show: Automotive News; and, Motor Trend.

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

Back to the Bakken

Active rigs:

$57.85→	11/29/2017	11/29/2016	11/29/2015	11/29/2014	11/29/2013
Active Rigs	55	39	64	185	191

RBN Energy: the rejuvenation of natural gas processing plants, part 2.

NGL prices have been rising fast since the middle of this year, but the same cannot be said for the price of natural gas. So how does this market scenario play out for gas processors who make their money extracting NGLs from gas? It plays out pretty darn good. In Part 1 of this series, we looked at how the relationship between the price of NGLs versus natural gas can be assessed by the Frac Spread, and concluded that things are definitely looking up for gas processing economics.

But we also concluded that the Frac Spread misses the impact of a few key factors, including the BTU value and composition of the inlet gas stream. So today we’ll see what it takes to incorporate those factors into our assessment and, in the process, do a deep dive into the math of gas processing to examine the relationship between volumetric capacity, gallons of NGLs per 1,000 cubic feet of natural gas (GPMs) and moles.

Today, we continue our latest expedition into the wilds of gas processing. In Part 1, we reviewed the calculation methodology, the history and the pros and cons of the Frac Spread — the difference between the price of natural gas and the weighted average price of NGLs on a BTU basis. We noted that while the Frac Spread is a good indicator of the relative health of natural gas processing over time, it is not representative of the specific processing margin for a particular stream of input gas. That is because the Frac Spread does not take into account the quality of the gas being processed either in terms of the liquids content or the BTU content, nor does it factor in things like the operating efficiency of the plant or help determine if ethane rejection makes sense. (We’ll get to these issues in later episodes of this blog series.) These factors and others ultimately determine the quantity of NGLs that a given inlet gas stream can produce from a given gas processing plant.

To incorporate these factors into gas processing margin calculations, we first have to understand how liquids content and BTU content are measured and then how to convert between gas volumes and liquid volumes, since we transform the input gas stream into both liquid and gas outputs in our processing plant.