Natural Gas Up 7.4% Over The Weekend -- November 5, 2018

Natural gas:  up a whopping 7.4% over the weekend; up 24 cents; now trading at $3.527.

Boom: posted several times now, this is Bloomberg's story -- Exxon Mobil and Chevron reported strongest third-quarter results in four years. Data points:

• both companies -- double-digit production increases in the Permian Basin
• the Permian now makes up 11% of Chevron's overall output
• the Permian: Exxon's fastest-growing large project
• Exxon and Chevron changed strategy after oil prices plunged in 2014 and 2015
• Exxon's oil and natural gas output surpassed expectations for the first time in 10 quarters
• Exxon earnings climbed 57% yoy
• Chevron doubled its profits yoy
• much more at the article
• comment: many, many story lines in that article
• comment, Art Berman: "shale is not a revolution, it's a retirement party." 

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Back to the Bakken

Wells coming off the confidential list over the weekend, today --
Monday, November 5, 2018:
30222, conf, BR, Jerome 41-15MBH, North Fork, no production data,

Sunday, November 4, 2018:
34262, conf, MRO, Yellow Otter USA 14-7TFH, Reunion Bay, no production data,
30547, conf, BR, Merton 41-15TFH ULW, Croff, no production data,
30221, conf, BR, Merton 41-15MBH, North Fork, no production data,

Saturday, November 3, 2018:
34664, conf, EOG, Wayzetta 164-23M, Parshall, target = Souris River; no plans to produce; no production data,
34261, conf, MRO, Young Woman USA 44-12H, Reunion Bay, no production data,


Active rigs:

$63.12	11/5/2018	11/05/2017	11/05/2016	11/05/2015	11/05/2014
Active Rigs	66	55	37	67	190

RBN Energy: Permian natural gas: more production, infrastructure and demand.

Right now, pipeline capacity out of the Permian is constrained, and consequently some producers have cut back on well completions, more gas is getting flared, and ethane recovery is being driven more by bottlenecks than by gas plant economics.  But even with these issues, there are still 487 rigs drilling for oil in the basin (according to Baker Hughes), and all will come along with sizable quantities of natural gas.    Not only does this production need to be moved out of the Permian, the volumes need to find a home — either in the domestic market or overseas. These were all issues that were considered by our speakers, panelists and RBN analysts last month at PermiCon, our industry conference designed to bridge the gap between fundamentals analysis and boots-on-the-ground market intelligence.  In today’s blog, we continue our review of some of the key points discussed during the conference proceedings.

PermiCon was held on October 10 and about 750 industry leaders joined us for the conference. Our content combined six presentations by RBN alongside the views of 14 CEOs and senior executives with significant operations in the Permian. Earlier we discussed the driver of all action in the Permian — production growth, with crude oil growing from 900 Mb/d ten years ago, doubling by 2014, never dropping off after the crude price crash that year, and now up by double again, to 3.5 MMb/d . We covered the implications of this growth for current crude oil pipeline takeaway capacity (regularly maxed out), Permian crude price differentials (wide, though a little narrower in the near term due to the rush to bring on new capacity), new crude oil pipeline projects designed to relieve the bottlenecks, and the strategies that infrastructure companies are taking to position themselves to be able to ride out any possible overbuild cycle in the crude pipeline capacity market.

We also considered the implications for natural gas and NGLs, also up on the very same trajectory as crude oil, because these hydrocarbon streams come right along with crude oil from the wellhead. So Permian gas production is up to nearly 8.7 Bcf/d (middle graph, Figure 1) and NGL production is at about 1.3 MMb/d.