So Many Stories On So Many Levels -- A Reply -- July 31, 2019

First things first: I got a long and detailed reply to a recent post. See this post.

The reply is too good to be lost in a comment (which are not "searchable").

Here's the comment, in full, unedited (except for some italics added).

I put a lot of "faith" in Rigzone so this was quite an eye-opener for me. As I've said any number of times, I know less than 1% of what's going on in the shale revolution, and I know even less of that in the Permian.

The Rigzone article is not incredible. It has been written about a gazillion times, including places that you read all the time, like RBN Daily or really like a gazillion other stories on the Permian in Rigzone, Bloomberg, etc. etc.

The white paper (I clicked through to it) is VERY SLICK in page production (double columns, quotes on side, glossy photos) which is very strange for an academic white paper. But it has shoddy analysis (not new, not solid). You can see traces of uncited Wikipedia use ("Marfa" subbasin). Almost all the graphics are cut and pasted from EIA, Rystad or DI [Drilling Info], versus them doing their own Excel with the source data. (The last two graphics sources may even be copyright violations, not "used with permission".) Many graphics are dated (showing a time series ending in 2016 for a Permian article published in 2019 AND whose topic is what to do with all the crude is insane.) They also don't adequately refer to tables or graphics, using them more as photographic illustration versus an academic discussion.

They have two (apparently self done) tables, figs 20 and 21, but they differ completely in appearance. And the second one has a missing field, lacks headers for columns, and misspells Newfield. New Field, haha. Dangers of spellcheck and autocorrect! Plus the first table is 2016 top operators data so useless and the second one (recent Permian acquisitions) has a deal, that is not Permian (New Field...haha). Plus they never refer to the tables, but just use them as illos...grrr.

On the content itself, they don't even KNOW the concept of how light/heavy mixing allows some continued increase in use of light (obvious concept to an analyst AND well covered in RBN Daily blogs).

Some dumb comments about shipping channel draft. Corpus being dredged deeper but then HSC can't be used for VLCCs because too shallow Huh? So dredge it...or show me how the work involved in dredging one is less than the other. With numbers and analysis...not fluffy cut and pasting.

Also they make a dumb comment about the length of the voyage to Asia making lightering (ship transfers from smaller ships to VLCCS) cost more. No, lightering is a single step cost. The issue with going to Asia is it is more likely that you lighter since the longer voyage makes you want to be in a VLCC. But the cost of lightering is identical for a short or long voyage. Then they show no dollar numbers for the steps. And these are business professors!

Comments on the majors "increasing domination of the Permian". No. Catching up is more like it.

Stray snippet about crude variability issues with some Korean cargoes. But no quantification of extent or comparison to other suppliers. No analysis of impact on price. And obviously it hasn't stopped export volume!

There is a discussion of fracking that is very cursory (lacks numbers, analysis) and is tacked on at the end in a strange way (not made into a section.)

There discussion of API gravity types, WTL and WTI, lacks numbers. At least they could have cut and pasted the Argus analysis.