- February 17, 2017: #17089 off-line; are they getting ready to frack neighboring well (#31847)?
#31847 is still showing up as SI/NC, but FracFocus shows that #31847 was fracked 4/2/17 - 4/24/17.
I track the CLR Bridger wells here.
Continental Resources Inc, one of the largest U.S. shale oil producers, will fund future wells from cash flow and not take on any new debt, Chief Executive Harold Hamm said on Wednesday.
The vow from one of the shale industry's leaders and strongest advocates comes as prices mostly below $50 a barrel this year pressure oil companies to live within their means after overspending for years.
Heavy debt loads nearly decimated U.S. shale producers when oil prices started to tumble in 2014. The number of bankruptcies in the U.S. shale patch from 2014 through 2016 eclipsed the depths of the telecom bust of 2002 and 2003, a previous high-water mark.
Continental, which operates in North Dakota and Oklahoma, famously stopped hedging in late 2014, expecting oil prices to rebound. They didn't, and the company's debt load has jumped 15 percent to $6.54 billion.
But that appears to be at an end.August 12, 2017: more from the conference call sent in by a reader -
One interesting discussion from the conference call was the discount that Bakken crude sells to WTI, and the discount WTI sells to Brent.August 11, 2017: a reader provided this from CLR's conference call, 2Q17 earnings:
First, WTI discount to Brent. Here’s the transcript of Hamm’s conference call:
"[T]he market is in the process of correcting as is the disparity between WTI and Brent. The new light oil refining capacity comes online and increased export shipment of light crude take place, this differential will be eradicated to return to dort norms of WTI dominance over Brent."
Here's how Reuters explained it:
"Hamm also said he sees the U.S. West Texas Intermediate (WTI) crude oil contract regaining price 'dominance' over Brent, the global benchmark. He cited rising U.S. crude exports and refiners’ increasing ability to process the type of crude produced from shale.
WTI has traded at a slight discount to Brent for years, but if that dynamic were to flip, it would be a boon for Continental and its peers."
Don't know if you listened to Continental's conference call Wednesday, but if one wants to look at proven demonstrated performance, as opposed to Berman's fact-free nonsense and goofball predictions, this is it:
"Consequently, we have elevated our 2017 production growth guidance raising the expected range for exit rate to 24% to 31% above fourth quarter 2016 production. And even more significant we expect to accomplish this within the same capital expenditure budget or less ....
Continental has reset it's priorities and recalibrated its growth strategy to pluck the new era of U.S. energy technology. Having ownership of Tier-1 quality rock assets and multi-decades of highest quality drilling inventory, we're now capable of growing production at the industry leading and much lower level of capital investment compared with any time in our 50-year history ....
In the face of low oil prices we have recently released three grown rigs and four completion crews. This is a 20% reduction in rigs and cruise while increasing our production outlook ....
The second key factors are optimized completions which are improving performance in all of our assets.
In the Bakken, our optimized completions are bringing on company record wells over a broad cross-section of a play. Rates of return for typical Bakken wells have been doubled to 82% generating over $2 million of added revenue during the first six months.
We also increased the EUR type curves for Bakken wells by 12% to 1.1 million boe for 9,800 foot lateral well....
It's a challenge to estimate what those EURs are going forward. But again, when we’re talking about an extra $2 million per well in revenue in the first six months, so that's big. You’re tackling, accomplishing, increasing the economics up front in these wells and so the economics will actually prove quicker than EUR in time....
And so, I mean we're talking about getting this outcome over a broad area and it's … and we're not done. I mean we're continuing to push the extent of where this is for replying optimized completions. So, there's a lot of questions about the inventory and how much of the 1.1 million boe will ride now. The footprint continues to grow and we couldn’t be more pleased with what we’re seeing here. I mean here we’ve been in this play really we started out in 2003 and I remember having some conference calls with you just to talk about the Bakken way back when we first got into it....
It's amazing and so this is where technology has taken us....
[A]nd as far as the infill wells again this this particular this type curve is based on all wells. HPP, wells as well as those wells that we develop out from grass roots and that's 90% of what we have left to develop. There are not very many units we have out there at this point that still need development with pure infill wells."
ConocoPhillips (COP +1.2%) is evaluating a proposal from Alaska's Department of Natural Resources that would allow it to expand an existing North Slope oil field into an area near big discoveries if it agrees to development steps that include drilling a well by next June and possibly paying the state ~$7M.Wow, business writers may need to offer their services to Hollywood studios for screenwriting. Earlier we saw the word "terrifying" in relation to natural gas production; and, now, "desperately" with regard to Alaska's budget.
The offer to COP to add acreage its to its Colville River unit follows months of discussions between the company and the state over drilling rights on the Tofkat area
The prospect might attract significant interest if Alaska offered it to bidding companies in a lease sale, but doing so also could restart the clock on development, leading to delays in a state that desperately wants more oil production to help close a $2.5B deficit.
Two other ways of comparing military expenditures. Canada and Germany are getting a benefit from the USA's largess..If really interested in this, see this link which will provide links to spreadsheets and PDFs. See poll at the sidebar in which we ask what percent of GDP the US spends on defense.
https://en.wikipedia.org/wiki/List_of_countries_by_military_expenditure_per_capita (Germany & Canada are approx. $400 per capita)
Recent round of conference calls from Appalachian Basin operators validate the ongoing advances in processes that indicate enormous continuing efficiencies.
Rice described how they drilled and completed 19 wells simultaneously on 4 adjacent pads with 4 rigs, just like Encana is doing in the Permian.
Rice said it was the future model for Marcellus production.
The average gas initial production or IP rate of wells is up 34% year-over-year compared to a 7% compound annual growth rate in the 2012-to-2015 period, noted Alliance Bernstein analyst Jean Ann Salisbury. Gas well efficiency improvements are "terrifying," she said, in a report published this morning. Expecting that rate to continue would be unrealistic. Salisbury is adjusting her estimates downward to account for high grading, declining IP rates, and lower improvement rates from the shift from oil to gas in the Utica.I don't think I've ever heard/seen the word "terrifying" used to describe what is currently going on in the oil and gas sector.
In our updated base case, we forecast rig counts in associated basins slightly below current levels over the next 3 years to remain roughly within cash flow.
We grow Marcellus/Utica rigs by ~25 rigs to fill the coming pipelines by 2020.
With overall improvements in the 5-10% range, this gives us more than enough gas to meet demand to 2020 (+17 bcfd from 2016).
Thus, we think something has to give between associated gas ramp, Marcellus/Utica spending to fill the pipes, and Haynesville rigs staying flat …. it's probably the Haynesville first, but will do a deeper exploration into this.
In general, this update is even more bearish for our view of gas price, mixed but mostly negative for gassy E&Ps (more production but worse price), and bullish for gassy and NGL-y midstream.Saudi Arabia and OPEC can probably relate.
Canada’s oil sands are dirty, costly and the opposite of fast-money shale drilling, but the companies that mine them generate gushers of cash and are some of the biggest bargains in the stock market right now.Sage grouse. Zinke Directs Agencies to Follow New Plan on Sage Grouse Protections. U.S. interior secretary’s order follows task force recommendations that potentially loosen conservation measures around mineral leasing areas. Link at The Wall Street Journal:
Canada’s Suncor Energy SU 0.06% is among the world’s higher-cost producers of oil. By all rights it should have scaled back its ambitions during the last few difficult years. Instead, it did the opposite, buying out partners on the cheap and plowing ahead with projects that could pay off for decades.
This came at a time when the shale producers, which sport flashy growth rates but devour cash, attracted plenty of investment. Now Suncor’s shares look undervalued at current oil price assumptions. If prices rise then Suncor is especially alluring.
Interior Secretary Ryan Zinke has ordered his agencies to begin implementing a revised management plan to protect the greater sage grouse, a move that could undo some protections created under the Obama administration.
Among other things, the recommendations compiled by an Interior task force at Mr. Zinke’s request call for potential loosening of sage grouse protections around mineral leasing areas, using states’ conservation plans that provided more flexibility to potential economic development and using potentially increased cattle grazing in some sage grouse areas as a tool to protect the birds’ habitat against wildfire and invasive grasses.Nuclear energy: South Carolina Seeks Ways to Salvage Nuclear Project. Governor looks to get at least one reactor completed after Scana Corp. abandoned the project. Link at The Wall Street Journal:
An energy company’s decision to abandon work on a nuclear project in South Carolina has left the state reeling and the governor seeking one of several solutions to save at least one of the two reactors.Banks: Banks Poised to Boost Buybacks and Dividends. Financial stocks have been strongly correlated to the yield on 10-year Treasurys. The link at The Wall Street Journal:
Last week, Scana Corp. said it would walk away from its project to build two nuclear reactors in tiny Jenkinsville—after nine years and $10.4 billion spent—stunning local leaders and the 600 nuclear employees and 5,000 construction workers at its V.C. Summer Nuclear Station. The move left Jenkinsville, population 71, with an unfinished worksite the size of 1,000 football fields, while electric customers continue to pay 18% of their bill for a nuclear-power plant that may never generate a single kilowatt.
“I just hope that people who bought new houses, new cars, didn’t create a situation where they lose everything they worked so hard to get,” said Jenkinsville Mayor Gregrey Ginyard.
Financial stocks this year are more closely tethered to government bond yields than ever."Global Warming" is dead. US Dept of Agriculture will no longer use "climate change" in its correspondence. New phrase: "weather extremes." Link at The Guardian.
The tight relationship is an indication that traders are playing big-picture macroeconomic trends over stock-specific fundamentals. That focus could provide an opportunity for investors willing to look past the expected trajectory of interest rates as banks increase the capital they return to shareholders.
Higher rates tend to boost lenders’ profitability, so financial stocks often beat the S&P 500 when government bond yields rise and lag when they fall. This year the degree to which that is happening is unprecedented. This is evident in the six-month correlation between the performance of financial stocks versus the S&P 500 and the yield on benchmark 10-year Treasury notes.
.... the MTA has cobbled together an $800 million plan to fix the subways — and wants half of that from Gothamites.
No matter that the MTA’s own budget has increased by $3.4 billion since the governor has been in a charge, from $12.3 billion to $15.7 billion.
No matter, either, that much of that increase is due to the governor’s union deals. Payroll at NYC Transit, which runs the subways, has grown from $3.5 billion annually to $4.4 billion — a 26 percent increase, although inflation is up only 11 percent.
January 4, 2017, T+55: Trump rally extends to auto sales. December auto sales much stronger than expected; could push annual sales to new record.So, I was curious. Did the US set a new record in 2016 for automobile sales. Yes. From The Los Angeles Times, the headline: 2016 U.S. auto sales set a new record high, led by SUVs --
US consumers bought a record number of new cars and trucks in 2016. A repeat performance in 2017 could be a tall order.
Low gas prices, rising employment and low interest rates kept buyers coming to car dealerships last year. There was also the allure of new technology — such as backup cameras, automatic emergency braking and Apple CarPlay — and new vehicles such as the Chrysler Pacifica minivan, the Honda Civic and the all-electric Chevrolet Bolt.
U.S. vehicle sales totaled 17.55 million, beating 2015's record of 17.47 million. It was the seventh consecutive year of year-over-year sales gains, an unprecedented string.
That string could be in jeopardy, however. The National Automobile Dealers Assn. expects U.S. sales to drop to 17.1 million vehicles in 2017 as interest rates and vehicle prices rise. Large numbers of cars coming off leases will hit the used-car market next year, putting pressure on new-car sales. And more buyers are opting for longer loans, so they won't be returning to dealerships anytime soon.