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Saturday, September 29, 2018

New England Natural Gas Could Very Well Be The Story Of The Year -- Week 39: September 23, 2018 -- September 29, 2018

Vern Whitten quarterly package of photos; northwestern North Dakota here.

If you have time for only one post/story this weekend, read the September, 2018, Rystad Energy production newsletter at this link.

Peak oil? What peak oil? US hitting crude oil production records. So much for Hubbert.

US gasoline demand dropped precipitously.

Some of this has been previously posted.

US natural gas:
Natural gas: this might be the story of the year -- lots of buzz, lots of talk -- from SeekingAlpha yesterday --
  • a severe cold spell could raise Henry Hub natural gas prices to a range of $12-$16/MMBtu, “similar to where marginal generation costs of fuel oil and diesel would be,” says Citi’s Anthony Yuen
  • and if bitter cold weather hits both the U.S. and “either Europe or Asia at the same time... spot LNG [liquefied natural gas] prices could surge to $20/MMBtu at the extreme," Yuen writes; Nymex U.S. natural gas currently trades at ~$3.00/MMBtu
  • Yuen thinks a spike in gas prices this winter could lift shares of gas-oriented companies such as Range Resources, Southwestern Energy, and Cabot Oil & Gas
  • shares of many gas companies, while up from winter lows, are still lower YTD, reflecting concerns that there is too much new gas supply to sustain a rally in the gas market
WTI: closes solidly above $73. Data points:
  • "relentlessly climbs"
  • Iranian sanctions: would remove 1.5 million bopd from global market
  • Saudi Arabia will boost production by 0.5 million bopd in 4Q18
Saudi boost: Saudi Aramco to boost oil capacity by over one-half million bopd in 4Q18 -- link at Reuters

Iran: reported earlier that by November or so, South Korea would no longer be importing Iranian oil. Now it is being reported that China's top refiner will halve Iranian oil imports.

US crude oil production: staggering -- Rystad Energy. Link here.

US crude oil production, July, 2018: just short of 11 million bopd

Chevron: growing volume will support a growing dividend. -- SeekingAlpha.

US natural gas:
  • fill rate well below 5-year average and the gap is not closing
  • New England could face natural gas shortage over next month or so
  • natural gas being diverted from New England to Florida
  • Florida: #1 electricity producer in US; #2, Texas
  • Florida: converting from coal to natural gas

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Back to the Bakken
Week 39

From Geoff's top North Dakota energy stories:


Back of the envelope:
  • some folks suggest North Dakota production will level off at 1.5 million bbls / day
  • unfettered, the Bakken should be able to produce 2.2 million bopd (early, early estimate)
  • 2.2 million x 365 = 800 million bbls/year
  • 40 billion bbls / 800 million bbls = 50 years of production
  • 500-billion-bbl reservoir x 12% primary recovery = 60 billion bbls
  • unfortunately many of us won't be around fifty years from now
Land grab:
NDIC accepts "ordinary high water mark study" results: the state owns 9,500 more acres than originally shown by the US Army Corps of Engineers; mineral owners along the river between New and Williston may find they don't have as many acres as they once thought they did

Records
SHD's Golden well pegs the company's natural gas pressure gauge
Bruin: almost 100,000 bbls of crude oil from one well in one month

Bakken 2.5
Slawson' sweet spot north of the river
XTO wants to unitize a large area of the Bakken -- good luck with that
MRO wells in Bailey oil field hitting 300,000+ bbls crude oil in one year
XTO's huge Sand Creek well;
CLR's Antelope wells -- Christmas in  July
Hess EN-Jeffrey wells; CLR Florida / Alpha wells
CLR's Kennedy-Miles wells
BR's Jerome wells
BR's CCU Corral Creek well
BR's Dodge well 
CLR's Hendrickson wells
Bruin E&P on a roll
Newfield Wisness well
QEP Tipi with 110,000 bbls in two months
Equinor picking up the pace: here; and, here; and, here; and, here;
PetroShale anticipates eleven (11) more wells on an existing 640-acre drilling unit
 
Fracking
Completion strategy for MRO wells in Reunion Bay

Refinery
East Coast refinery back in the news; taking advantage of the WTI - Brent spread 

Natural gas
ONEOK to build yet another natural gas processing plant, Demicks Lake II
ONEOK to increase natural gas processing in the Williston Basin

Bakken economy
Williston, Dickinson lead increase in August enplanements (boarding at airports) 

Miscellaneous
Awaiting results of the "ordinary high water mark" study
Legacy Fund deposits hit recent record

Other formations
Southwestern to target the Tyler

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