Austin Chalk, Louisiana -- May 3, 2018 -- Peak Oil? What Peak Oil?

Updates

November 19, 2019: COP to sell its Austin Chalk assets for about $4,000/acre. 

June 7, 2019: large seismic study scheduled.

March 12, 2019: must be a slow news day; Rigzone mentions that MRO is looking for the next big play; references the Louisiana Austin Chalk. 

June 18, 2018: "Analysts" are suggesting frackers will move to the Austin Chalk next.

Original Post

A reader alerted me to the Austin Chalk, Louisiana (different from the Austin Chalk, East Texas or Eagle Ford) today:

The Austin Chalk in Louisiana may be the next 'hot' play in the unconventional world, with EOG leading the way.

They have leased about 130,000 acres, along with Marathon and COP leasing about 200,000 acres each.

EOG has drilled a 16,700 foot deep well - Eagles Ranch 1 - that appears to be a success.
The Tuscaloosa Marine Shale us also in this area which could make for interesting times. 

From The Advocate, today:

Houston-based Marathon Oil has confirmed it has a position in Louisiana’s Austin Chalk play, making it one of several large industry players exploring the formation.

Marathon, in its first-quarter earnings report released Thursday (this link will probably break after ninety days), said it has accumulated 250,000 net acres in multiple new plays in the past year, including a “largely contiguous position in the emerging Austin Chalk play at a cost of less than $900 per acre.”

Recent leasing activity has raised the possibility of an onshore drilling resurgence in Louisiana.

ConocoPhillips also recently announced its position in Louisiana’s portion of the Austin Chalk formation, which stretches across Texas through the middle of Louisiana. The formation had little leasing activity here for two decades until the past year or so, when EOG Resources announced last fall it had leased 130,000 acres and drilled a test well.

Also, from the same Advocate link:

From The Hayride:

Just north of I-10 lies the Austin Chalk. The formation stretches from Texas to the Gulf of Mexico and cuts through much of central Louisiana. This play is no “new kid on the block” but more of a seasoned veteran who has to show the rest of the state it still has what it takes to make the band. In 1996, the Austin Chalk was considered “hot” and a source of much drilling and economic activity for Louisiana’s oil and gas industry. Over time it fell out of favor. The resources didn’t meet budgets, and companies moved on leaving billions of barrels in the ground.

The chatter about the Austin Chalk really started to resonate when EOG made headlines for its leasing of more than 130,000 acres in Avoyelles, St. Landry, and Pointe Coupee parishes in September of 2017, just months after Lafayette-based PetroQuest acquired 24,000 acres. The buzz continues to grow. Just this week, ConocoPhillips announced their plans to sell assets in the red-hot Permian Basin and have already purchased approximately 245,000 acres, most under lease happens to be in Louisiana’s Austin Chalk.

From The Hayride link:

NDIC Hearing Dockets -- Agenda For May, 2018, Has Been Posted

The NDIC hearing dockets for May, 2018, have been posted. Link here.

Dockets are posted at the NDIC site here.

Dockets are tracked here. 

The usual disclaimer applies. As usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source.

Highlights in bold.

Wednesday, May 30, 2018 -- Ten (10) Pages

26585, QEP, Spotted Horn-Bakken; appropriate spacing for wells in the s/u 2560-acre spacing unit, 24/25/36-150-95 and 1-149-95; McKenzie
26586, Whiting, Epping-Bakken; request for "wet shoe" design as an exception to rules; Williams
26587, Whiting, Stockyard Creek-Bakken; see #26586, Williams
26588, Whiting, Sanish-Bakken; see #26586, Mountrail
26589, Whiting, Robinson Lake-Bakken; establish an overlapping 2560-acre unit; 3 wells; Mountrail
26590, Kraken Operating, Squires and/or Painted Woods-Bakken; establish a 2560-acre unit; one well; Williams
26591, Oasis, Lucy-Bakken; proper spacing; Burke County
26592, Oasis, Bonetrail and/or Tyrone-Bakken; establish an overlapping 2560-acre one well; Williams
26593, Oasis, Bonetrail-Bakken; establish an overlapping 2560-acre unit; one well; Williams
26594, Oasis, Bonetrail and/or Bull Butte-Bakken; establish an overlapping 2560-acre unit; one well; Williams
26595, Oasis, Squires-Bakken; establish three overlapping 2560-acre units; one well on each unit; Williams
26596, Oasis, Camp and/or Willow Creek-Bakken; 1) establish two laydown 2080-acre units; 11 wells on one unit; and 7 wells on the other unit, or alternatively, 2) two 1760-acre units with 11 wells on one unit; 7 wells on the other units; and, one stand-up 640-acre unit with one well; and, 3) establish one 960-acre unit, 6 wells; McKenzie, Williams
26597, Hess, Capa-Bakken, establish an overlapping 2560-acre unit; one well; Williams
26598, Hess, Alkali Creek-Bakken; establish an overlapping 2560-acre unit; two wells; Mountrail
26599, Lime Rock Resources, Dimond-Bakken; establish two 2560-acre units; one well on each unit; Burke
26600, Bruin E&P; Antelope-Sanish, establish an overlapping 3840-acre unit; two wells; McKenzie
26601, Williston Exploration, Lourdes-Tyler, proper spacing Stark County
26602, Petro Harvester, Portal-Madison; pooling
26603, Petro Harvester, Portal-Madison; pooling
26604, PetroHarvester, Portal-Madison; pooling
26605, Petro Harvester, Portal-Madison; pooling
26606, Petro Harvester, Portal-Madison; pooling
26607, Petro Harvester, Portal-Madison; pooling
26608, Petro Harvester, Portal-Madison; pooling
26609, Petro Harvester; Portal-Madison; pooling
26610, Petro Harvester; Portal-Madison; pooling
26611, Petro Harvester; Portal-Madison; pooling
26612, Petro Harvester; Flaxton-Madison; pooling
26613, Petro Harvester; Flaxto-madison; pooling
26614, Lime Rock Resources; Dimond-Bakken; 6 wells on three 1280-acre units; 18 wells; Burke
26615, Kraken Operating, Blue Ridge-Bakken; pooling
26616, Kraken Operating, Blue Ridge-Bakken; pooling
26617, Kraken Operating, Burg-Bakken; pooling
26618, Kraken Operating; Burg-Bakken; pooling
26619; Kraken Operating; Epping-Bakken; pooling
26620, SWD
26621, Hess, Ross-Bakken; ten wells on two 1280-acre units; Mountrail
26622, Hess, Truax-Bakken; 2 wells on a 2560-acre unit; Williams County
26623, Hess, Capa-Bakken; pooling
26624, Hess, commingling;
26625, Hess, commingling;
26626, Hess, commingling;
26627, Hess, commingling;
26628, Whiting, Glass Bluff-Bakken; pooling
26629, Whiting, Glas Bluff-Bakken; pooling
26630, Whiting, Glass bluff-Bakken; pooling
26631, Whiting, Glass Bluff-Bakken; pooling
26632, Whiting, Glass Bluff-Bakken; pooling
26333, Whiting Glass Bluff-Bakken; pooling
26634, Whiting, Glass Bluff-Bakken; pooling
26635, Whiting, commingling
26636, MRO, Antelope-Sanish, pooling
26637, BTA, SWD
26638, BTA, SWD

Thursday, May 31, 2018 -- Eleven (11) Pages

26639, ERF, Bruin, Eagle Nest-Bakken; NDIC wants to review the status of the development of the s/u 320-acre unit, W/2 of 16-148-94; Dunn;
26640, Southwestern Production Company; Tracy-Mountain-Tyler; amend previous orders to creat a laydown 320-acre spacing unit, S/2 of 23-138-102; one well; Billings
26641, XTO, Heart Butte-Bakken; amend; establish an overlapping 2560-acre unit; two wells; Dunn
26642, Liberty Resources, Cottonwood-Bakken; establish an overlapping 1920-acre; and, another 1920-acre unit; 8 wells on each unit; Mountrail, Burke
26643, Liberty Resources, Cottonwood-Bakken; establish an overlapping 1920-acre units 8 wells; Burke, Mountrail
26644, CLR, Pleasant Valley-Bakken; establish an overlapping 2560-acre unit; one well; Williams
26645, CLR, Banks-Bakken; establish two overlapping 2560-acre units; two wells; Williams, McKenzie
26646, Newfield, North Fork-Bakken, establish an overlapping 2560-acre; one well; McKenzie
26647, EOG, Parshall field; exceptions to rule, Fertile #33021; Mountrail

26648, Slawson, Big Bend-Bakken, multiple large units; various number of wells on each; Mountrail
26649, Slawson, revoke a Lime Rock Resources permit; Dunn
26650, NDIC to review a permit for a treating plant
26651, NDIC to review a permit for a treating plant
26652, EOG, Parshall-Bakken; pooling; Mountrail
26653, XTO, Alkali Creek-Bakken; pooling; Williams
26654, XTO, Tobacco Garden-Bakken; pooling; McKenzie
26655, XTO, North Fork-Bakken; pooing,McKenzie
26656, XTO, North Fork-Bakken; pooling, McKenzie
26657, XTO, NOrth Fork-Bakken; pooling, McKenzie
26658, XTO, Haystack Butte-Bakken; pooling, McKenzie
26659, Hunt, Wolf Bah-Bakken, pooling, Dunn
26660, Enerplus, Antelope-Sanish, pooling, McKenzie
26661, Enerplus, Mandaree-Bakken, pooling, Dunn
26662, Enerplus, Mandaree-Bakken, pooling, Dunn
26663, Enerplus, McGregory Buttes-Bakken, pooling; Dunn
26664, Enerplus, McGregory Buttes-Bakken, pooling; Dunn
26665, Enerplus, Mcgregoy Buttes-Bakken; pooling; Dunn
26666, Enerplus, Moccasin Creek-Bakken; pooling; Dunn
26667, Enerplus, Moccasin Creek-Bakken, pooling; Dunn
26668, Enerplus, Moccasin Creek-Bakken, pooling; Dunn
26669, Enerplus, Moccasin Creek-Bakken, pooling; Dunn
26670, Slawson, Big Bend-Bakken, pooling, Mountrail
26671, Slawson, Big Bend-Bakken, pooling, Mountrail
26672, Slawson, Big Bend-Bakken, pooling, Mountrail
26673, CLR, Larson-Bakken, pooling, Burke
26674, CLR, Pleasant Valley-Bakken, pooling, Williams
26675, CLR, Banks0Bakken, pooling; Williams, McKenzie
26676, CLR, Banks-Bakken, pooling; Williams, McKenzie
26677, Liberty Resources, Cottonwood-Bakken, pooling, Burke, Mountrail
26678, Liberty Resources, Cottonwood-Bakken, pooling, Mountrail
26679, Liberty Resources, Kittleson Slough-Bakken, Mountrail
26680, Newfield, Pembroke, Sivertson, and/or North Fork-Bakken, pooling, McKenzie

26681, Abraxas, Pershing-Bakken; 16 wells on an existing 1280-acre unit; McKenzie; see this post;
26682, Zavanna, Avoca-Bakken, two section line wells on an overlapping 2560-acre unit; Williams
26683, WPX, commingling
26684, WPX, commingling
26685, WPX, commingling
26686, Hunt, commingling
26687, SWD
26688, SWD
26689, SWD 

Hess With Permits For A 5-Well Eide Pad In Blue Buttes -- May 3, 2018; MRO Continues To Report Huge Wells In The Antelope Sanish

Active rigs:

$68.50↑	5/3/2018	05/03/2017	05/03/2016	05/03/2015	05/03/2014
Active Rigs	62	50	27	86	185

Five new permits:

• Operator: Hess
• Field: Blue Buttes (Mountrail)
• Comments: Hess has permits for a 5-well Eide pad in Lot 4, section 4-150-95, up in the northwest quadrant of the section;

Five producing wells (DUCs) reported as completed:

• 32347, 57 (no typo), BR, CCU Mainstreeter 7-2-3- TFH, Corral Creek, t3/18; cum --
• 32348, SI/NC, CCU Mainstreeter 6-2-30 MBH, Corral Creek, --
• 33412, 6,509, MRO, WInona USA 21-2TFH, 2B, Antelope, Sanish pool, t4/18; cum --
• 33491, 4,125, MRO, Shoots USA 41-2H, Antelope, Sanish pool, t4/18; cum --
• 33493, 8,160,  MRO, Mark USA 11-1H, Antelope, Sanish pool, t4/18; cum -- ; 7,000 bbls in 6 days extrapolates out to 37K for 30 days; stimulated, 3/2/2018 - 3/21/2018; according to FracFocus: 9.5 million gallons of water (moderate amount); water 84%; sand, 16% (on the high side)
  

See also:

• April 18, 2018; 
• also, April 18, 2018; 
• March 27, 2018 -- a particularly important note;
• March 25, 2018;
• production by field, January, 2018, data;

EOG Releases 1Q18 Earnings; EPS Beat -- May 3, 2018

Updates

Later, 5:19 p.m. CDT: see first comment --

The Austin Chalk in Louisiana may be the next 'hot' play in the unconventional world, with EOG leading the way.

They have leased about 130,000 acres, along with Marathon and COP leasing about 200,000 acres each.

EOG has drilled a 16,700 foot deep well - Eagles Ranch 1 - that appears to be a success.
The Tuscaloosa Marine Shale us also in this area which could make for interesting times. 

I track the Austin Chalk in the Eagle Ford here, although it has not been updated in quite some time. I'm not sure if I know much about the Austin Chalk in Louisiana.

I now track the Louisiana Austin Chalk at this site.

Original Post

Link here.

• EPS: $1.10/share vs 5 cents/share one year earlier
• non-GAAP: $1.19/share vs 15 cents/share
• production increased by 15% compared to one year earlier
• maintains its forecast for 16 to 20% crude oil growth for full year 2018

"Bakken" not mentioned in this statement:

Strong production growth reflects the company's premium drilling strategy and technical advances across its diverse inventory of high-return plays.

EOG defines premium drilling as prospective well locations that will earn a minimum 30 percent direct after-tax rate of return at $40 crude oil and $2.50 natural gas prices.

EOG's prolific Delaware Basin, Eagle Ford and Powder River Basin assets all contributed to growth this quarter.

Explained later:

In the North Dakota Bakken, EOG drilled 4 wells in the first quarter and deferred completions until later in 2018.  

EOG shares trading flat after market close, at $116.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here. If this is important to you, go to the source.

Disclaimer: I make a lot of simple arithmetic errors. I often see things that do not exist; I read quickly and miss important points. Sometimes it takes me days (maybe even weeks) to see where I was wrong.

Zacks yesterday:

Investors are always looking for stocks that are poised to beat at earnings season and EOG Resources, Inc. EOG may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.

That is because EOG Resources is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for EOG in this report.

In fact, the Most Accurate Estimate for the current quarter is currently at $1.03 per share for EOG, compared to a broader Zacks Consensus Estimate of $1.00 per share. This suggests that analysts have very recently bumped up their estimates for EOG, giving the stock a Zacks Earnings ESP of +3.33% heading into earnings season.

US Natural Gas Fill Finally "Turned The Corner" -- May 3, 2018

From the EIA:

It will be interesting to see how steep the curve is over the next few weeks. My hunch: the curve will be quite steep.

How Mainstream Media Sees The US Economy -- May 3, 2018

Posted earlier:

Jobs: first time unemployment claims --

• prior: 209,000
• forecast: 224,000 --- which would be jump of almost 15,000 (seriously?)
• actual: 211,000 -- so, initial claims actually rose by 2,000
• comment: wow, that's a huge, huge discrepancy. It tells me the analysts did not "believe" the number last week when unemployment claims plunged by 24,000
• comment: making American great again

From the Drudge Report:

The mainstream media had two headlines to choose from:

• unemployment claims tick higher
• Americans receiving unemployment aid lowest since 1973

So, guess which headline CNBC / Reuters chose? Yup, from CNBC:

Oh, yes, did you hear the good news coming out of North Korea?

The Market, Energy, And Political Page, Part 3, T+64 -- May 3, 2018

Ahead of my headlights: a couple of readers will understand this -- sorry I can't say more -- for the Bakken:

• costs are coming down -- not a lot, but ...
• wells are getting significantly better -- seemingly overnight; certainly year-over-year
• Saudis want higher price for oil
• word on the street: Trump has already decided to tear up the Iran sanctions agreement 
• E&Ps with unhedged positions looking good: letting profits run
• but, as noted, I'm getting ahead of my headlights

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here. If this is important to you, go to the source.

Disclaimer: I make a lot of simple arithmetic errors. I often see things that do not exist; I read quickly and miss important points. Sometimes it takes me days (maybe even weeks) to see where I was wrong.

The Bakken: speaking of "wells getting significantly better" -- this looks like the year the Three Forks will start to reach its stride; "we" would have been there in 2015 except for the Saudi Surge which was announced in November, 2014, and the end was not announced until two years later, November, 2016. This was a Three Forks well.

Scouts: now that "the Boy Scouts" will "admit" girls/young women, will the "Girl Scouts" be seen as sexist if boys/young men cannot join "Girl Scouts"? I don't know. I don't care. Future Farmers of America was always ...

***************************************

North Korea

The deal: more evidence that the Korean deal is done. The first indication that the deal was done was Trump floating the idea that the "summit" be held in/near/along the DMZ. The most recent indication: North Korea, today, will release three Americans held in prison. Scott Adams. Timing? One would think that it would have taken about a month between "signing" of the deal and release of the Americans. If so, the deal was "signed" on/about April 2, 2018. From my daily note page:

April 20, 2018, T+51: North Korea announces that it will freeze all nuclear missile testing. 

That fits the timeline.

**************************************

Sophia's Spring Gardening Project

The Market, Energy, And Political Page, Part 2, T+64 -- May 3, 2018

Updates

Later, 3:06 p.m. CDT: Posted earlier:

Jobs: first time unemployment claims --

• prior: 209,000
• forecast: 224,000 --- which would be jump of almost 15,000 (seriously?)
• actual: 211,000 -- so, initial claims actually rose by 2,000
• comment: wow, that's a huge, huge discrepancy. It tells me the analysts did not "believe" the number last week when unemployment claims plunged by 24,000
• comment: making American great again

From the Drudge Report:

The mainstream media had two headlines to choose from:

• unemployment claims tick higher
• Americans receiving unemployment aid lowest since 1973

So, guess which headline CNBC / Reuters chose? Yup, from CNBC:

Oh, yes, did you hear the good news coming out of North Korea?

Original Post

 

Jobs: first time unemployment claims --

• prior: 209,000
• forecast: 224,000 --- which would be jump of almost 15,000 (seriously?)
• actual: 211,000 -- so, initial claims actually rose by 2,000
• comment: wow, that's a huge, huge discrepancy. It tells me the analysts did not "believe" the number last week when unemployment claims plunged by 24,000
• comment: making American great again
• this explains why the market, which was "positive" in early pre-market trading, all of a sudden plunged over a hundred points in pre-market trading -- this jobless claims number all but guarantees a Fed increase next month. Just saying. Dow futures have recovered a bit. 

TSLA; in free fall. Now down about 8%; down over $23. I feel sorry for "the kid" that has hit total net worth invested in TSLA -- all 54 shares ($15,000).

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here. If this is important to you, go to the source.

Disclaimer: I make a lot of simple arithmetic errors. I often see things that do not exist; I read quickly and miss important points. Sometimes it takes me days (maybe even weeks) to see where I was wrong.

TSLA, fast and furious. I was wondering who Adam Jonas was -- a frequent "feature" in the twitter world regarding Tesla, but here's the answer, from ZeroHedge:

Yes, Musk’s loans are now limited to 25% of the value of the pledged stock, a policy that seemingly did not exist when last year’s proxy was issued.

So how much money are we talking about here?

The most recent figure we have for the value of Musk’s margin loans comes from the registration statement for Tesla’s March 2017 stock sale, in which on p. S-9 it notes that he (at that time) owed a total of $624.3 million to various financial institutions, with the largest amount ($344.4 million) owed to Morgan Stanley whose Tesla analyst Adam Jonas has—coincidently or not—lately been desperately conceiving of increasingly fantastical reasons to maintain a TSLA price target of $376 despite steadily slashing his estimates as one “justification” after another for that target evaporates into the realities of Tesla’s massive cash burn and technological backsliding.

Comment: so Morgan Stanley is on the hook for almost $350 million?

Comment: talk about a conflict of interest. Wow.

Tesla's 2025 uncallable 5.3% bonds linked here. At time of conference call (yesterday), $89.29.

The Market, Energy, And Political Page, T+64 -- May 3, 2018

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here. If this is important to you, go to the source.

Disclaimer: I make a lot of simple arithmetic errors. I often see things that do not exist; I read quickly and miss important points. Sometimes it takes me days (maybe even weeks) to see where I was wrong.

TSLA: how low will it go? Down $19 (over 6%) in pre-market trading. The Dow that had been positive, is now down over a hundred points.

US exports: for newbies, this is an important distinction -- when "they" say the US will be "the world's top oil exporter," they mean "the US will be world's top exporter of oil AND refined products." Huge difference. Exported both is great. But exported refined products is a huge value-added advantage. US crude oil exports are actually quite small in the big scheme of things.

Meme: Libya is the "new" swing producer. LOL.

One conservative estimate of the effect of this chaos [in Libya] on oil production is for a 200,000-bpd decline. This is an amount substantial enough to push prices higher, especially now that global supply is tightening thanks to OPEC’s efforts, but mostly on the back of Venezuela’s strife.

Comment: seriously? This amount is substantial enough ... seriously? North Dakota alone could see a production increase of 200,000 bopd as early as this summer.

Real estate: this is a story in which I would have absolutely no interest except for the fact that while bicycling on the northeast side of Grapevine (TX) a few months ago, I cycled past a Berkshire-branded real estate office. Until then I had no idea that Warren was up to his gills in real estate.

The Omaha conglomerate was the nation’s second-largest residential real-estate brokerage last year, making Berkshire Hathaway a presence on neighborhood yard signs from Los Angeles to New York. It has franchised the Berkshire Hathaway HomeServices name to 1,330 offices and more than 45,000 agents.

Mr. Buffett, Berkshire’s chairman and chief executive, wants his franchise brokerage business, HomeServices of America, to get even bigger—and the sterling Berkshire Hathaway brand is an asset. But further expansion could also bring more visibility and risk for the Berkshire brand. Historically, its biggest consumer-facing companies—brands like Geico, Dairy Queen and Fruit of the Loom—haven’t used the parent company’s name.

Comment: yes, I was surprised that the subsidiary used the "Berkshire" brand.

Too greedy: something tells me Russia is about to say "enough, already." Link here.

OPEC and Russia seem determined to keep on cutting production even after their campaign to rebalance world oil markets achieved its main target. The primary justification for doing so looks shaky.

Sixteen months of output curbs have all but eliminated surplus oil inventories and prices are near a three-year high.

But Saudi Arabia says the “mission is not accomplished yet” and is urging fellow producers to keep output restrained to fulfill a new priority: encouraging companies around the world to invest more in future supply.

The Organization of Petroleum Exporting Countries isn’t the only voice warning about a lack of spending on new projects. Influential figures from the International Energy Agency to the boss of oil major Total SA have warned a supply shortage could emerge early next decade after a period of deep cuts in spending. Under-investment could push prices as high as $300 a barrel within a few years, prominent hedge-fund manager Pierre Andurand said this week.

Comment: shortly after that announcement (in a tweet), the tweet was deleted. "No one" seriously believes oil will go to $300. Maybe Pierre accientally typed an extra zero or misplaced the decimal. LOL. I find it unbecoming of Bloomberg to "re-tweet" this nonsense.

The Surge In US Crude Oil Inventories Largely Due To Build On West Coast --Thursday, May 3, 2018

OSP:

• Saudi Arabia needs more cash
• Saudi Arabia needs (at least) $88-oil
• "unexpectedly raises Arab light oil price to Asia" -- reported by oilprice.com in early April,
• now, this, Platts -- Saudi Aramco raises all June Asis-bound crude oil OSPs by about a buck

IPO: something "no one" has thought about -- but it's a fact, Jack -- the Saudi stock exchange cannot handle listing the Saudi Aramco IPO. No matter what they say. That doesn't mean "they" won't do it, but it will be disaster.

Re-balancing: for fifty (50) weeks I tracked "re-balancing." Then about three weeks ago, week 50, I stopped. Perhaps global supplies have re-balanced -- but certainly we're not seeing that in the US. From the EIA yesterday: US crude stockpiles surge to highest level this year. And the big surge in Permian production is yet to begin. But look at the gasoline numbers (and yet the price of gasoline continues to rise [can you spell "manipulation"?]) -

U.S. crude oil stocks rose sharply last week, bringing overall supply to its highest level since December, and gasoline inventories also rose, the Energy Information Administration said on Wednesday.

Crude inventories jumped by 6.2 million barrels to about 436 million barrels in the week to April 27, compared with expectations for an increase of 739,000 barrels. The build was largely concentrated on the West Coast, where inventories rose by nearly 5 million barrels. [And, of course, no analysis provided: why was the surge largely concentrated on the West Coast? Are California refineries cutting back operations?]

“Sometimes the West Coast numbers are erratic and usually when you get a big build in the West Coast, it’s followed with a big draw the next week," said Phil Flynn, analyst at Price Futures Group in Chicago.

Gasoline stocks rose 1.2 million barrels, compared with analysts' expectations in a Reuters poll for a 587,000-barrel drop.

****************************************

Back to the Bakken Where Fracking Is Always In Fashion

Active rigs:

$67.90→	5/3/2018	05/03/2017	05/03/2016	05/03/2015	05/03/2014
Active Rigs	60	50	27	86	185

RBN Energy: the US gas market braces for a storage surge.

The U.S. gas market in April — the first month of the official storage injection season — was anything but typical. Production was at record highs, nearly 8.0 Bcf/d higher than last year.

At the same time, weather in April was exceptionally cold, which meant storage activity remained in withdrawal mode on a net U.S. basis through the first three weeks of the month — a first for the April gas market going back at least eight years. That anomaly, in turn, led to an expanding deficit in storage compared to previous years, deferring the inevitable — shoulder season weather and supply surpluses — for another month.

But now, in May, with the cold-weather effects on gas demand fading and record production levels here to stay, the market is bracing for a storage tsunami. The question is, will it be enough to erase the massive inventory deficit compared to recent years? Today, we update our analysis of the gas market balance and implications for the 2018 injection season.