Thursday, April 18, 2019

Now There Is Worry That There Will Be A Permian "Overbuild" -- LOL -- April 18, 2019

Jobless claims: link here --  
  • forecast: 206,000
  • prior: 196,000, revised to 197,000
  • actual: 192,000
Wells coming off confidential list today -- Thursday, April 18, 2019: 62 wells for the month; 62 wells for the quarter
  • 34930, 870, Liberty Resources, Double-R N 158-94-34-33-1MBH, White Earth, t10/18; cum 76K 2/19;
  • 32927, drl, Sinclair, Sinclair State 5-36H, Robinson Lake, no production data; spud, November 10, 2018; cease drilling, November 28, 2018; TVD: 10,684.66 feet; TD, 20,480';
  • 16648, 508, CLR, Carus 13-28H, Cedar Coulee, SESW 28-147-96; Bakken pool, t8/07; cum 302K 2/19; see this post where this well will be followed; the file report is still confidential (9:00 a.m. CT, April 18, 2019)
Active rigs:

Active Rigs6459512993

RBN Energy: can a Permian crude takeaway overbuild be averted? LOL. An overbuild? Part 1.
Only a few months after major crude oil takeaway constraints out of the Permian Basin caused price spreads to widen, the pipeline network serving the U.S.’s most prolific shale play may be on the brink of becoming overbuilt. We’ve already seen a number of new expansions and pipeline conversions completed in the past six months, and construction is underway on another 2 MMb/d of new pipeline capacity scheduled to come online between now and the first quarter of 2020. Beyond that, a few remaining projects have been proposed but have not yet reached final investment decisions. No midstream group wants to build a pipeline that will be half full, and no producer wants to make a 10-year commitment to a pipeline if there are going to be plenty of other options available. So who blinks first? In today’s blog, we review the Permian pipeline projects that are still on the fence and examine what factors will determine whether they end up being a “go” or a “no.”
In part 1 we looked at the recent pipeline expansions that have contributed to a sizeable bump-up in Permian takeaway capacity and a tightening in price spreads in the basin. All in, the Permian was able to swiftly increase pipeline capacity by 635 Mb/d in just under six months. The build-out started with Plains All American’s Sunrise Expansion (350 Mb/d) in November 2018, followed by a 40-Mb/d increase in BridgeTex’s capacity at the end of last year, a 45-Mb/d expansion of Enterprise Products Partners’ Midland-to-Echo pipeline in March 2019, and finally, Enterprise’s most recent conversion of an existing NGL pipeline to crude oil service, which added 200 Mb/d of capacity. Also in Part 1, we discussed the pipeline projects that are currently under construction. Between Plains’ Cactus II, EPIC’s EPIC Crude, and Phillips 66/Enbridge’s Gray Oak pipelines (white rectangles in Figure 1 below), there is upwards of 2 MMb/d of new pipeline capacity that should be completed and in-service by this time next year, with at least 1 MMb/d of that likely to come online by the third or fourth quarter of 2019.

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