Two Wells Coming Off Confidential List -- June 11, 2019

Note: I have a few spelling errors in the long note posted yesterday. After I finish this post, I will go back and correct those typos.

Huge story: Comstock to acquire Covey Park in $2.2 billion deal. Rigzone. Data points:

• buyer: Comstock Resources, Inc: based in Frisco, TX (just a few miles up the road from where we live)
• seller: Covey Park Energy, LLC
• sale:
• Covey Park operates in the Haynesville Basin of North Louisiana and East Texas
• will increase Comstock's production to 1.1 billion cubic feet (194,397 boepd)
• will make the company a basin leader in the Haynesville
• after the deal, Comstock will have
• 293,000 net acres
• 2,000 net drilling locations
• 500 miles of gas gathering infrastructure
• Dallas Cowboys owner Jerry Jones will invest almost $500 million into Comstock
• total investment by Jerry Jones will jump to $1.1 billioin
• he will be the company's largest shareholder with 75% ownership interest
• As Don noted the other day when he alerted me to this deal: "Fads like solar and wind energy will come and go but coal and natural gas are going to be here for a long, long time."

European refiner margins "flop": Bloomberg, data points:

• northwestern Europe; oil refining margins are collapsing
• three out of seven refining "configurations" are losing money while the remaining processes are the least profitable in years
• apparently North Sea oil is costing the European refiners more
• the Asians have been huge buyers of North Sea oil
• and, if I understand free market capitalism correctly, a supplier will sell to the highest bidder and it appears that Asia has more money to spend on energy than Europe
• meanwhile, these data points are worth reflecting upon:
• a resumption of South Korean buying of Forties oil, a benchmark grade in Europe, has added to the difficulties Europe’s refineries are facing. Having barely bought the crude this year, at least 4 million barrels will be sent to the Asian country this month.
• South Korea agreed a new free-trade agreement with the U.K. that should eliminate some of the uncertainty surrounding Britain’s exit from the European Union.
• the timing of that extra buying has been tough for European refineries that had already been scrambling for crude after the halt of a pipeline from Russia due to a contamination crisis, according to Jan-Jacob Verschoor, a director at Oil Analytics, which tracks hundreds of refinery margins around the world.
• all the while, weakness in oil products markets, in particular naphtha, is hurting refineries. The product can be used to make gasoline or -- ultimately -- plastics.

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Back to the Bakken

Two wells coming off the confidential list today -- Tuesday, June 11, 2019: 32 for the month; 221 for the quarter;

• 34692, 1,553,  CLR, Springfield 4-8H, Brooklyn, t3/19; cum 46K 4/19;
• 34089, 532, Oasis, Aagvik 5298 13-26 11B, Banks, t1/19; cum 123K 4/19;

Active rigs:

$53.72	6/11/2019	06/11/2018	06/11/2017	06/11/2016	06/11/2015
Active Rigs	64	63	52	28	77

RBN Energy: part 8 -- 3 Bear Energy's crude gathering system in the Northern Delaware.

For evidence of America’s unwavering entrepreneurial spirit, look no further than smaller midstream companies that develop crude oil gathering systems in the Permian. These midstreamers — many of them backed by private equity — scramble to identify production areas on the cusp of needing gathering lines, propose systems to serve them, convince producers to dedicate acreage, then lay pipe, install tankage and get things up and running. All of this occurs in an atmosphere of intense competition.

A number of new and growing crude gathering systems are under development today in southeastern New Mexico, an area that has experienced more than its share of production growth in the past couple of years. Today, we continue our series with a look at 3 Bear Energy’s Hat Mesa Oil Gathering System in the northern Delaware Basin, which was developed from scratch in Lea County and now serves 10 producers there.
It should come as no surprise that a blog series on Permian crude gathering systems would be an extensive one — there are so many to cover.

• the Beta Crude Connector, a 100-mile-plus, 150-Mb/d gathering system that a joint venture of Concho Resources and Frontier Energy Services is developing in the Midland Basin to serve Concho and other producers
• considered another Midland-area system: Reliance Gathering’s 185-Mb/d pipeline network, which was originally developed to serve the affiliated producer Reliance Energy, but which has since undergone a number of expansions to serve other producers too
• San Mateo Midstream’s crude gathering systems in the Delaware Basin — one in Eddy County, NM, and the other in Loving County, TX — and its plans for two new systems on the New Mexico side of the state line
• Medallion Midstream’s fast-growing, 1,000-mile crude oil gathering/header system in the Midland (which provides access to firm shippers serving 20 producers) and its 116-mile Delaware Express gathering/shuttle system in the southern Delaware
• the 200-mile gathering system that refiner Delek US has been developing — also in the Midland — to deliver locally produced crude to Delek’s Big Spring, TX, refinery and others
• the crude gathering system that a joint venture of WPX Energy and Howard Energy Partners (HEP) has been developing in the Delaware Basin’s Stateline area; that system currently includes more than 50 miles of pipe, with another 20-plus miles under construction
• the 860-mile Oryx Trans-Permian gathering and regional transport system, which Oryx Midstream Services has taken from initial concept to 23 producers and nearly 1 million dedicated acres in only five years’ time.