Seven Wells Come Off Confidential List; Nothing Exciting Except For One Nice Oasis Well -- February 11, 2019

Wells coming off confidential list today --
Monday, February 11, 2019: 43 wells for the month; 146 wells for the quarter
34672, drl, Hess, GO-Bergstrom 156-98-2833H-2, Wheelock, no production data,
32070, drl, XTO, Maddy Federal 24X-34D, North Fork, no production data,

Sunday, February 10, 2019: 41 wells for the month; 144 wells for the quarter
33293, 683, Liberty Resources, Waldon W 157-97-24-25-3MBH, Ray, t8/18; cum 60K 12/18;
32071, drl, XTO, Maddy Federal 24X-34AXD, North Fork, no production data,
29404, A, Oasis, Seattle Federal 5200 42-35 8B, Camp, t1/19; cum --;

Saturday, February 9, 2019: 39 wells for the month; 141 wells for the quarter
33984, 1,195, Oasis, Dawson 5494 43-12 10B, Alkali Creek, t9/18; cum 106K 12/18;
29402, drl, Oasis, Seattle Federal 5200 42-35 6B, Camp, t1/19; cum --;

WTI: killing Saudi Arabia and OPEC. 

Active rigs:

$51.63	2/11/2019	02/11/2018	02/11/2017	02/11/2016	02/11/2015
Active Rigs	63	58	36	41	137

RBN Energy: a new tolling framework for Enbridge's mainline crude system?

The recently mandated reduction in Alberta crude oil production has helped to ease takeaway constraints out of Western Canada, but only temporarily. Worse yet, it’s unclear how long it will take to add new takeaway capacity from challenged projects like the Trans Mountain Expansion Project or Keystone XL. In the midst of all this trouble and uncertainty, Enbridge is pursuing a potentially controversial plan to revamp how it allocates space — and charges for service — on its 2.8-MMb/d Mainline system, the primary conduit for heavy and light crudes from Western Canada to U.S. crude hubs and refineries.

Today, we begin a series on the company’s push to shift to a system that would allocate most of the space on its multi-pipe Mainline system to shippers that sign long-term contracts.

The Enbridge Mainline isn’t just the biggest crude pipeline system out of Western Canada, it’s also the only major line whose service is 100% “uncommitted” — that is, the Mainline has no capacity under long-term contracts with shippers. Instead, every month, each shipper submits nominations stating the volumes of crude it would like to transport the following month on various elements of the Mainline system — say, 100 Mb/d from Edmonton to Superior. After verifying that shippers actually have upstream volume and tankage as well as downstream refining, pipelines and tankage to support their nominations, Enbridge then divvies up the available capacity based upon the nominations.

If the system were running only half full, every shipper would get the volume it nominated.

But if, as has been happening regularly in recent years, considerably more pipeline capacity is nominated than is available, Enbridge would give each of the shippers a percentage of their nominated volume — for instance, if a total of 500 Mb/d were nominated on a 400-Mb/d section of the system, each shipper would face a 20% apportionment — in other words, each would be told it only could ship 80% of what it had asked for. 

As for what shippers pay for using elements of the Mainline system, that’s based on the Competitive Toll Settlement (CTS) that Enbridge negotiated with the Canadian Association of Petroleum Producers (CAPP) and shippers between the fall of 2008 and the spring of 2011. The 10-year CTS, which became effective on July 1, 2011, and remains in force through June 30, 2021, established tolls for various elements of the Mainline, as well as a mechanism for adjusting these rates to reflect general inflation and other factors.