WTI Drops Below $63 -- May 2, 2019

Higher oil prices here to stay -- economists, oilprice -- no link; I didn't bother to look at the story;

• WTI tumbled below $63
• fundamentals hardly support $55
• $60-oil is hardly expensive -- no matter how you want to spin it
• (maybe I should look at the article to see their definition of "expensive" oil -- nahh!)

Wells coming off the confidential list today -- Thursday, May 2, 2019: 7 wells for the month; 102 wells for the quarter

• 35009, SI/NC, Hess, CA-Ferguson Smith-155-95-3031H-8 
• 29136, 1,389, Bruin, Fort Berthold 147-94-1B-12-7H, McGregory Buttes, t11/18; cum 80K 2/19;

Active rigs:

$62.87	5/2/2019	05/02/2018	05/02/2017	05/02/2016	05/02/2015
Active Rigs	65	60	49	29	86

RBN Energy: Enterprise's Lumberjack pipeline to expand Haynesville gas takeaway.

The Texas natural gas market is rapidly evolving, in large part due to burgeoning Permian production but also due to gas production gains in East Texas driven by strong returns on new wells in the Haynesville and Cotton Valley plays. Most of this supply growth is looking to make its way to the Gulf Coast, where close to 5 Bcf/d of LNG export capacity is operational and plenty more is under construction. The combination of fast-rising supply and demand is straining the existing gas pipeline infrastructure across Texas, creating the need for more capacity. The Permian has been grabbing the headlines for its extreme takeaway constraints and depressed, even negative supply-area prices, and all eyes are trained on the announced pipeline projects that will eventually provide relief to the region. But pipeline constraints also are developing between the Haynesville and the Texas coast. Today, we discuss the latest solution for the intensifying Haynesville-area supply congestion.

As proposed, Lumberjack — named for the mascot of Stephen F. Austin University in nearby Nacogdoches, TX — would be a 36-inch-diameter pipeline extending from the Carthage Hub (left red circle) in Panola County, TX, to a termination point near Beaumont in Jefferson County, TX. Enterprise has suggested a capacity of 1.3 Bcf/d for the pipe but has said that should customer interest exceed the currently proposed capacity the pipeline could be upsized to 42 inches. Based on the route and an estimated length — right around 185 miles — we figure the transportation rate on the pipe would be somewhere in the ballpark of 25 cents/MMBtu.