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Thursday, January 25, 2018

WTI Holds Solidly Above $66 --- January 25, 2018

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship-related decisions based on what you read here or what you think you read here or what your neighbor told you that she read here.

Shell: Royal Dutch Shell is set to surpass US rival Exxon for the first time this century. What changed? The CEO saw an opportunity, took a huge risk:
It’s the $53 billion BG deal that’s really made a difference. When oil’s crash started in the middle of 2014, just months into Van Beurden’s tenure as Shell’s boss, he saw an opportunity. BG’s oil projects in Brazil and gas in Australia were just starting up, easing uncertainty on future growth. Rumored for years to be a suitor, van Beurden finally made the move for the British company.
The deal immediately put Shell in an exclusive club with Exxon, placing it on a plane above its European rivals Total SA and BP Plc. Some use the phrase ultra-major to differentiate the industry’s big two from the pack – at least until Saudi Aramco’s giant IPO, slated for the end of this year.
Mark Papa: a reader sent me this link earlier today, it's from November, 2017. I know I talked about Mark Papa's remarks at the time but failed to link that presentation at the sidebar at the right. It will be interesting to see how Papa's prognostications turn out five years from now. After re-reading the Papa's remarks, I replied to the reader who sent me the link (the link will most likely show up as a pdf on desktop), but not ready for prime time:
It will be interesting to look back on this presentation in five years. I think if price is right, the Bakken will surprise, and the Permian will really surprise. I agree that GoM will "come back."

Eagle Ford will do well but not as great as originally hoped/hyped.

SCOOP/STACK great for a few operators but agree that it is a rounding error.

What is not mentioned are all the other shale plays that could yet see life.

I need to link this at the sidebar at the blog so we can look at it again in five years. It will be interesting to see what percent of US crude oil is provided by shale in five years. I don't think Mark Papa suggested a percent where he thought shale would be five years from now. 
For the record, the EIA says US shale oil accounted for 48% of total US crude oil production in 2016. My feelings: if US shale oil continues to account for more than 40% of total US crude oil production five years from now, Mark Papa was off a bit in his remarks; if US shale oil trends higher than 48% over the next five years, Mark Papa was way off on his comments. Below 40% and Mark Papa was right on target.
Jobs: the jobs data last week was incredible. record plunge in first time claims. Claims drop 4x greater than forecast. That was last week. Today, the expected "rebound" but still less than forecast.
  • forecast: 240,000
  • actual: 233,000
Cold: Tokyo.
  • the coldest in 48 years
  • weather agency has issued a low temperature warning for Tokyo for the first time in 33 years
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Back to the Bakken

Active rigs:

$66.281/25/201801/25/201701/25/201601/25/201501/25/2014
Active Rigs563848157187

RBN Energy: when will the Permian need new gas takeaway capacity?

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