Sky Falls For Permian Gas Prices -- RBN Energy -- November 27, 2018

Race to export US shale oil getting fierce. From Bloomberg.  Some data points:

• Enbridge was an edge in Freeport, TX, about 175 miles northwest of Corpus Christi
• but Trafigura is already crying foul; at the link, see why
• five other proposals:

Trafigura’s proposal is one of five for the Corpus Christi area that would rely on the three new pipelines coming online in 2019. They comprise the Plains All-American Pipeline LP’s Cactus II conduit, with a capacity of 585,000 barrels a day; Epic Midstream LLC’s EPIC line, with 600,000 barrels a day; and the Grey Oak line, owned jointly by Enbridge, Andeavor and Phillips 66, with about 900,000 barrels.

MAGA: with a dog in the pipeline fight (as an investor), I should be "concerned" about the ultimate winner. I'm not. I couldn't care less. Bottom line for me: America will be the bigger winner, regardless of how this turns out.

By the way, look at this graph, previously posted, and oh, by the way, it's very possible that Saudi Arabia could be a net oil importer within my lifetime.

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Back to the Bakken

State lease auction, November 6, 2018: posted here. Quick note from Oil Patch Hotline --

Missouri River minerals draw High ND bidding .Missouri River acreage in Dunn County pulled high bidding totaling $1.9 million with the highest bid of $6,000 posted for 15 acres at the Nov. 6 North Dakota oil and gas lease state sale...

Wells coming off the confidential list today --Tuesday, November 27, 2018:

• 34802, 869, Newfield, Yellowfin 150-98-6-7-9HLW, Siverston, 62 stages; 7.2 million lbs, t8/18; cum 32K 9/18;
• 34589, 2,620, WPX, Grizzly 25-36HW, Spotted Horn, Three Forks, 40 stages 7.9 million lbs, t9/18; cum 31K after 16 days extrapolates to 57,242 bbls/30 days; 
• 33699, SI/NC, Oasis, Lite 5393 31-11 6T, Sanish, t--; cum 93K in less than four months;
• 33698, SI/NC, Oasis, Lite 5393 31-11 6T, Sanish, t--; cum 85K in about four months;

Active rigs:

$51.49	11/27/2018	11/27/2017	11/27/2016	11/27/2015	11/27/2014
Active Rigs	62	54	37	64	183

RBN Energy:sky falls for Permian gas prices on cyber Monday.

Permian natural gas markets felt a cold shiver this week, but not a meteorologically induced one of the types running through other regional markets. Gas marketers braced as prices for Permian natural gas skidded toward a new threshold: zero! That’s not basis, but absolute price, a long-anticipated possibility that became reality on Monday. The cause is very likely driven, in our view, by continued associated gas production growth poured into a region that won’t see new greenfield pipeline capacity for at least 10 months. What happens next isn’t clear, but expect Permian gas market participants to be a little excitable or jittery over the next few months. Today, we review this latest complication for Permian natural gas markets.

Permian gas markets were sent for a spin on Monday, with prices at the key Waha benchmark averaging just $0.625/MMBtu.

This is the second lowest price we have in our dataset from our friends at Natural Gas Intelligence (NGI), which dates to 2007.

That’s not all though, as that average is based on trading throughout a period spanning roughly three hours between 7 and 10 a.m. Central Time. Prices near the end of this period traded one penny below zero at Waha.

Some trades at other points on pipelines in the Permian also traded in negative territory yesterday. That’s right, someone was paid to buy gas in the Permian on Monday.

While we’d like to tell you this was some sort of transient, one-off event that led to a day of dramatically low gas prices, that isn’t likely the truth of the matter. The Permian gas market is flooded with associated gas and won’t see significant new takeaway capacity until the start-up of Kinder Morgan’s Gulf Coast Express (GCX) pipeline in late 2019. The problem is here to stay, at least for a few months. Take a deep breath if you trade the Permian gas markets.