Monday, August 13, 2018

Ten Producing Wells (DUCs) Reported As Completed -- August 13, 2018

Active rigs:

Active Rigs60573372193

Six new permits:
  • Operator: MRO
  • Field: Reunion Bay (Mountrail)
  • Comments: MRO has permits for a five-well Gartland/Sears/Reyes/Flynn/Eunice pad in NESW 9-150-93; and one permit for a Driftwood well in SENW 8-150-93; I think those are two separate pads -- could be wrong
Eight permits renewed:
  • Crescent Point Energ (7): four CPEUSC David and three CPEUSC Bennie permits all in Williams County
  • Slawson: one Atlantis Federal permit in Mountrail County
Two permits canceled;
  • Cornerstone: a Melby permit in Burke County
  • Oasis: a Lydell permit in Burke County
Ten producing wells (DUCs) reported as completed:
  • 23026, 339, Hunt, Weflen 2-27H, Parshall, t3/18; cum --
  • 29287, 1,073, Hunt, Austin 154-90-27-22H-1, Parshall, t8/1; cum --
  • 33467, n/d, CLR, Ransom 3-30H1, Elidah, t--
  • 33468, n/d, CLR, Ransom 2-30H. Elidah, t--
  • 33646, n/d, CLR, Omlid 8-19H, Elidah, t--
  • 33746, 1,358, Whiting, Bartelson Federal 44-31-2TFH, Sanish, t7/18; cum --
  • 33748, 2,084, Whiting, Bartelson Federal 44-31-2H, Sanish, t7/18; cum --
  • 33914, n/d, CLR, Omlid 9-19HSL2, Elidah, t--
  • 33915, n/d,  CLR, Omlid 10-19HSL, Elidah, t--
  • 34622, 2,639, Whiting, Loken 41-17H, Pembroke, t7/18; cum --

US Crude Oil Production Drops Two Weeks In A Row After Hitting A Record High -- August 13 , 2018

Link here.

After hitting a record crude oil production of 11 million bbls/day a few weeks ago, I had not really paid much attention to recent data.

A reader noted that during the past two consecutive weeks, US crude oil production has dropped. It's a bit irritating that the EIA starting rounding this data a few months ago, but it is what it. After hitting 11 million bopd, US crude oil production dropped by 100,000 bopd the next week (to 10.9 million bbls) and then dropped another 100,000 bodp in the most recent reporting period to 10.8 million bbls.

See this graph.

My first thought: the drop in production, one could argue, mirrors or reflects gasoline demand in the US. Crude oil exports are still too small to greatly affect weekly changes. As noted last week, US gasoline demand has been trailing demand one year ago -- which certainly seems surprising considering the perceived strength of the US economy and the US GDP growth and unemployment rates. But US gasoline demand has been down compared to a year ago, and US production may reflect that.

US gasoline demand, posted last week:

One would like to suggest the fact that US production is down is proof that the loss of oil from Canada, Libya, and Venezuela does not matter. Perhaps in a convoluted way it does, but the "kinds" of oil are different (Canada, Venezuela, heavy; US, light) and the fact that US production is down is probably not related to world supply.

For the past several weeks, the #1 story coming out of the US oil patch is the Permian takeaway story: and that story is pretty "bad." I assume about a month ago, publicly traded companies starting putting together their quarterly reports together. A number of Permian operators are cutting back. Most notable, to me, was the announcement that COP was "existing" the Permian for the time being, and that during the earnings call seemed to have to explain why why still had rigs there (to keep their leases).

See this post on Noble and its challenges in the Permian; will shift well completions from the Permian Basin to their other oil assets , August 6, 2018.

Same link: same with EOG.

COP temporarily exits the Permian; will focus on the Eagle Ford/Bakken, Juy 5, 2018.

See Oasis here.

COP earnings transcript, July 27, 2018.

Bottom line: all that to say this -- the drop in US crude oil production probably reflects the reality of takeaway capacity in the Permian, and how operators there are responding. I assume after August 15, 2018, when the NDIC reports monthly production, we may see some stories on production coming out of the various shale pales in the US.

Try As They Might, Movers And Shakers Can't Move Oil -- August 13, 2018

It seems the preponderance of energy headlines for the past two weeks has been that the oil situation will get tighter, and by implication, the price of oil will rise.

Saudi Arabia will implode without higher prices.

But here we are, after another week and another weekend in which movers and shakers tried to talk up the price of oil, WTI has fallen 2.4%, has dropped $1.62 since this morning, and is now trading at barely above $66.

Both Goldman Sachs and the IEA have talked of oil prices going higher by the end of the year.

Right now, 12:00 noon, straight up, the price of WTI is $66.01.

Saudi Arabia

What do you do when you:
  • control trillions of dollars;
  • think of yourself as the big man on campus;
  • are unable to close the deal (the Saudi Aramco IPO); and,
  • you need to do something to save face.
You do something that tells the world that you:
  • still control trillions of dollars
  • still think of yourself as the big man on campus; and,
  • still want to close a big deal?
You buy Tesla. Not just 5% of the company but the entire company. 

Turkey's Trials and Tribulations
No End In Sight

Taking a page from Erdogan's page book.

The lira started tumbling long before Trump's tariffs.

This article was posted July 24, 2018

And Erdogan knows Russia doesn't have the rubles to bail him out.

Active Rigs Drop To 60 In North Dakota -- August 13, 2018 -- Breakeven In The Bakken -- $35 -- Rystad Energy -- WSJ

Breaking news: Friday's NDIC daily activity report was posted early this morning. At this link

Frackers burn cash to sustain US oil boom: from The WSJ Sub-heading -- many U.S. drillers have increased spending, but not production forecasts, pointing to possible slowdown. I
Two-thirds of U.S. oil producers failed to live within their means in the second quarter, even as oil rose above $70 a barrel. Collectively, 50 major U.S. oil companies reported in their second-quarter results that they have spent $2 billion more than they took in.
Pioneer Natural Resources Co. , one of the biggest operators in the Permian Basin of West Texas and New Mexico, told investors a year ago it expected to largely make up for rising operating costs with “efficiency gains” such as producing more from each well. Last week , Pioneer reversed course and raised its annual spending forecast to $3.3 to $3.4 billion, from $2.9 billion, to produce roughly the same amount of oil.
“We’ve had a more significant increase in cost issue than we would have assumed,” Pioneer Chief Executive Tim Dove told investors. Some of the new spending will push up output next year.
Comment: it would be interesting to see a comparison of companies in the Bakken vs companies in the Permian.
[Where the rigs are going: see below.]
In his comments, Stuart Baxter pretty much summarizes my sentiment regarding the article:
What a stupid article.  I expect to lose a bunch tomorrow because of these witless journalists who thinks they have a clue.  What are they trying to accomplish with this trash?
But, look at this: forget about the verbiage in the article -- look at the graph that was embedded in that article linked above -- look at that incredible fall from $70 - $100 all the way down to $35 in the Bakken -- what did the writer expect? That the break-even price would drop to zero dollars? Wow, another doofus. This graphic is incredible:

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 think you may have read here.

New rigs: where are they going? -- from Energent -- for all that ink -- no real change, +/- a rig everywhere.
  • Permian Basin +1.0% to 485 rigs compared to last week's 480 rigs -- added 5 rigs
  • Eagle Ford -1.3% to 79 rigs compared to last week's 80 rigs -- dropped one rig -- big deal. LOL.
  • Williston stayed flat at 56 rigs 
  • DJ-Niobrara stayed flat at 25 rigs 
  • Cana Woodford stayed flat at 68 rigs
  • Marcellus -1.9% to 52 rigs compared to last week's 53 rigs 
  • Haynesville +2.1% to 49 rigs compared to last week's 48 rigs -- added one rig -- big deal. LOL.
  • Utica +4.3 to 24 rigs compared to last week's 23 rigs 
  • Granite Wash +6.3% to 17 rigs compared to last week’s 16 rigs
WTI? Tea leaves of no help --
  • analysts' expectations: we should see supply constraints sooner than later
  • WTI: continues to fall; strong dollar as world markets plunge on fears of "Turkish contagion"
  • John Kemp today: frothy oil market turns increasingly flat
  • Baker Hughes: US rig count rose +13 last week to 1,057; oil rigs +10 to 869, the highest since March 2015, and largest one-week rise for 11 weeks (need ot find out where the increase -- certainly not the Bakken; see below)
  • inflation: ticked up to +2.9% in July, up form +2.8% in June, and the fastest increase since February 2012 (almost 5 and a half years) -- inflation generally drives WTI a bit, all things being equal
  • US refineries: running near-record highs -- EIA

Turkey: imploding ... from Argus -- A total of six Turkish gas-fired power plants with a combined capacity of 5.3GW have stopped generation, as a result of the domestic currency's record-low against the US dollar.

Trucking: wow, how many times have we talked about this in the blog in the past year? Trucking's tight capacity squeezes US businesses. From The WSJ
Empty trucks are so hard to come by right now that Dean Foods Co., one of North America’s largest milk suppliers, cut its full-year earnings outlook in part because it simply can’t move its goods for anything close to what it expected to pay this year.
“Industry capacity for truck drivers remains extremely tight. This is driving third-party hauling rates to record levels, up 26% versus prior year,” Chief Executive Ralph Scozzafava said in a Tuesday call with investors.
The warning from the Dallas-based dairy processor puts Dean in a growing line of U.S. businesses struggling with the tightest freight market in recent memory. Distribution channels that carry goods to retailers, factories and consumers are struggling to keep up with the fast-growing U.S. economy as more companies caution that the strains in the transport sector are holding back their ability to grow.
Back to the Bakken 

Director's Cut is scheduled to be released Wednesday, August 15, 2018.

Wells coming off the confidential list today. this past weekend:
Monday, August 13, 2018
  • None.
Sunday, August 12, 2018
  • 33977, SI/NC, BR, Kermit 5-8-32 UTFH, Pershing, no production data,
  • 30527, 1,457, CLR, Burr Federal 19-26H, Sanish, 64 stages; 15 million lbs, huge well; 41K in second full month, t4/18; cum 109K 6/18;
Saturday, August 11, 2018
  • 33978, SI/NC, BR, Rink 5-1-5 UTFH, Pershing, no production data,
  • 32947, 408, Oasis, Ceynar 5198 11-5 3TX, Banks, Three Forks 1st, 50 stages; 4 million lbs, very nice well; t2/18; cum 82K 6/18;
  • 32946, 678, Oasis, Ceynar 5198 11-5 2BX, Banks, middle Bakken, 50 stages, 10 million lbs, very nice well; 27K if second full month; t2/18; cum 115K 6/18;
Active rigs:

Active Rigs60573372193

RBN Energy: CITCO's future in the wake of a key US court ruling.

Just Checking In To See What Condition My Condition Is In

The Art Page