Two Articles On The Permian After A Very, Very Busy Day-- June 12, 2018 -- Reading Between The Lines, The Permian Could Be A Disaster For Some Operators In The Short Term (One To Two Years) Including Apache

The Permian is turning out to be a bigger challenge than operators acknowledged two years ago. All good news for the Bakken.

The first article is a "keeper." It has been archived. Lots of incredible data. 

From Michael Fitzsimmons over at SeekingAlpha: an update on Apache's Alpine oil field.

• the Alpine discovery, announced two years ago, is a world-class field
• but it is predominately a wet-gas field which will require substantial midstream infrastructure to gather, transport, and process
• meantime, the pricing outlook for dry-gas and NGLs is anything but certain
• investors looking for a large independent oil and gas E&P firm might consider the largest of them all instead: ConocoPhillips
• it appears as though the Alpine High field is primarily a wet-gas play, and overwhelmingly so
• specifically, note the very low oil split of 15% (or less...) of a typical well's production. And while NGLs contribute ~50% of the production, that still leaves 35% (or more) of the split to dry gas. That's one thing we don't need a whole lot more of - especially in the Permian Basin where dry gas prices already are below NYMEX
• Mike cites an RBN Energy blog today: What about all those NGLs? A blog on RBN Energy today (see Magical Mystery Tour - Soaring NGL Supplies May Soon Overwhelm Mont Belvieu Fractionation Capacity) points out that NGLs "don't do anyone much good until they are fractionated into "purity products" like ethane, propane, normal butane..." and that the existing fractionation plants in Mont Belvieu are running flat-out to keep up with already burgeoning production
• In the case of Phillips 66, it is probably getting much of its feedstock from its mother company ConocoPhillips, which is pumping the heck out of the Eagle Ford shale these days
  

From SeekingAlpha news editor:

• a worsening pipeline bottleneck in the Permian Basin is seeing investors favor more diversified independents with a smaller footprint in the area
• EOG Resources CEO Billy Thomas says Permian constraints likely will weigh on U.S. production growth next year so much that it will be "much slower next year than it is this year," with inadequate infrastructure in place to take away gas and oil until late 2019 or 2020
• "Allocating away from the basin or into a Permian name protected by either firm transport agreements or meaningful basis swaps is likely a necessary move," Seaport Global says, listing APC, DVN, PXD, PE, AREX and WPX as among the least exposed to the Permian's "differential blowout" while APA, FANG, CDEV, XEC and AXAS are the most exposed
• Argus says money managers are targeting firms that have minimum exposure to the widening differentials, both with Permian crude and Brent, but also are low-cost operators with presence across a range of basins, such as COP, MRO and APC

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