The Million Dollar Way (The Bakken Oil Blog): Another Incredible CLR Mountain Gap Well To Be Reported Today -- September 11, 2018

Tuesday morning, September 11 .... cyclic, not linear ...

Time for another road trip?

On Route 66 to Oatman, going south from Kingman, Arizona
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Headline: stocks slump as China plans trade retaliation. Nice to be overweight in dividend-paying equities with automatic reinvestment. Just saying.

Really fast. And really furious:

API weekly crude oil inventories: pending later today.

So, we'll see how relevant Iran is. I doubt very relevant. The pundits suggest crude oil could surge in price due to Iranian sanctions. My hunch: a big nothing sandwich. But if there is a surge in prices, it has to do with heavy oil / light oil imbalance.

Fast and furious:

South Korea: grants US wish for zero oil imports from Iran; link here;
today's article in The WSJ on peak oil demand is amateurish and irrelevant; just saying; link here; any doubt? see LNG story below and the comments at the linked article
speaking of amateurish and irrelevant: Serena Williams, also at The WSJ; she's not even a millenial; a loser; Martina Navratilova got it right;

It's all about LNG

see RBN Energy below
PetroChina and Qatargas sing 22-year LNG supply deal; link here;

around 3.4 million tonnes of LNG annually
a million tonnes LNG = 48 billion cubic feet NG; 22 x 48 = 1,056 billion cubic feet, or 1 trillion cubic feet?
China requires LNG for its push to replace coal with cleaner burning natural gas, a way to reduce air pollution. After Beijing started the program last year, China has overtaken South Korea as the world’s second-biggest buyer of LNG.
China’s LNG imports may surge 70 percent to 65 million tonnes by 2020, according to consultancy SIA Energy. Last year, China imported a record 38.1 million tonnes, 46 percent more than the previous year.
Meanwhile Qatar, the world’s biggest LNG producer, is seeking buyers for a planned expansion of its output.

Exxon, BP reach deals with state of Alaska to provide 23 trillion cubic feet of natural gas, mostly from the North Slope, for the Alaska LNG Project; link here;

still in talks: COP: for 9 trillion tcf
Alaska LNG: a $43B-plus project; 800-mile gas pipeline from the North Slope to planned liquefaction plant in Nikiski ("Pat, I'd like to buy a vowel") on the Kenai Peninsula south of Anchorage
23 trillion cubic feet of natural gas = eleven (11) years of Bakken production (boe) with Bakken at 1 million bopd and conversion factor of 6001

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Back to the Bakken

Wells coming off the confidential list today --

34545, 3,425, MRO, Hartvig 14-8TFH, Killdeer, 45 stages; 6.4 million lbs, t8/18; cum --
34072, SI/NC, Petro-Hunt, JL Moberg 153-95-18C-20-1HS, Charlson, no production data,
34355, SI/NC, XTO, Bobcat Federal 14X-35E2, Bear Creek, no production data,
33847, 2,462, WPX, Otter Woman 34-27HP, Mandaree, Three Forks, 51 stages; 8.5 million lbs, t8/18; cum --
33123, 2,904, CLR, Mountain Gap 10-10H, Rattlesnake Point, 63 stages; 15 million lbs, a huge, huge well; Mountain Gap wells are tracked here: t6/18; cum 127K 7/18;

Date	Oil Runs	MCF Sold
7-2018	72304	73769
6-2018	52816	51466
5-2018	1232	832
3-2018	76	0

Malaguena Salerosa, Chingon
Active rigs

$67.75→	9/11/2018	09/11/2017	09/11/2016	09/11/2015	09/11/2014
Active Rigs	66	56	37	69	198

RBN Energy: Part 4, plentiful Permian gas drives NextDecade's Rio Grande LNG export project.

Each of the “second wave” liquefaction/LNG export projects along the U.S. Gulf Coast now closing in on a Final Investment Decision (FID) believes it has an edge — that special something that will enable it to cross the finish line ahead of its competitors.

Things like a prime location, access to an existing network of natural gas pipelines, lower capital costs, or going with smaller “midscale” liquefaction trains instead of traditional big ones. Some tout the experience and depth of their executive teams, while others claim that thinking outside the box is key. Time will soon tell which two or three (or four) projects advance to FID. Today, we continue our series on the next round of liquefaction/LNG export terminals “coming up” with a look at NextDecade’s plan for the Rio Grande LNG project in Brownsville, TX, which would export large volumes of Permian and Eagle Ford gas.

By this time next year, there’s a good chance that at least one new greenfield liquefaction/LNG export project will get the financial go-ahead and start construction. And, given the expectations that global LNG demand will keep growing and that U.S. shale plays like the Permian and the Marcellus/Utica will remain highly competitive sources of gas supply, it would be a fair bet that we’ll see several projects under way by the end of 2020.

This blog series is a primer on the projects that appear to be in the running. Earlier, we reviewed the dramatic shift in U.S. expectations regarding LNG a few years back. Through the 1990s and the first two-thirds of the 2000s, U.S. natural gas production was close to flat, so the general thinking was that U.S. gas output had peaked, and that over time, increasing amounts of LNG would need to be imported to keep pace with gas demand. It became clear by 2010-11, however, that the Shale Revolution — and the resulting boom in U.S. gas production — had eliminated the need for LNG imports. In a flash, many of the companies that had just finished building LNG import terminals started exploring the possibility of adding liquefaction plants at those sites to export LNG instead. Since then, six liquefaction/LNG export projects advanced to FID and construction — and five liquefaction trains (four at Cheniere Energy’s Sabine Pass in southwestern Louisiana and one at Dominion’s Cove Point in Maryland) with a combined capacity of more than 23 million tonnes per annum (MMtpa) are up and running.

Later, we began our second-wave project with a deep dive on Tellurian’s Driftwood LNG, a proposed 27.6-million metric tons per annum (MMtpa) liquefaction/LNG export terminal in Louisiana’s Calcasieu Parish, south of Lake Charles. In contrast to the large-scale liquefaction trains now operating at Sabine Pass and Cove Point and under construction along the Gulf Coast (generally with capacities of 4 MMtpa or more each), Driftwood LNG will consist of as many as 20 smaller, modular-based trains (1.38 MMtpa each). Also, Tellurian is acquiring natural gas reserves that will be tapped to produce gas for the LNG project, and it is developing two 2-Bcf/d long-haul pipelines — and a 96-mile, 4-Bcf/d connector pipe — to deliver most of the natural gas that the Driftwood trains will demand. To help finance its project, Tellurian is seeking a handful of customers/partners that would take a combined 60% to 75% equity interest in a holding company that will own all those assets, which will give the customers/partners equity LNG at the tailgate of the liquefaction trains at cost (an estimated $3.00/MMBtu).

Then we turned our attention to Venture Global’s plan for two large projects, also along the Louisiana coast: the 10-MMtpa Calcasieu Pass project in Cameron Parish (south of Lake Charles) and, after that, the 20-MMtpa Plaquemines project along the Mississippi River southeast of New Orleans. Venture Global is “going small” too, planning a total of nine liquefaction “blocks” at Calcasieu Pass, each with two 0.6-MMtpa liquefaction trains, for a total of about 11 MMtpa of capacity. The modular design of the trains is aimed at accelerating the pace of construction and minimizing project costs. (The Plaquemines project will have 18 liquefaction blocks, again each with two 0.6-MMtpa trains.) Unlike Tellurian, however, Venture Global is taking the same approach to project financing taken by the first round of U.S. liquefaction/LNG export projects, namely lining up a number of long-term, “take-or-pay” Sales and Purchase Agreements (SPAs) with international LNG traders, foreign utilities and other major LNG buyers. (Venture Global announced on September 7 that it has just lined up a new, 1-MMtpa SPA with Repsol.)