Statistics: interesting, interesting story from PennState on more cost-effective method for finding shale gas. I am 1000% confident that Harold Hamm has been using this method for years. Corroborates a blog reader who says "statistical analysis" is the answer.
Big oil circles Permian riches: from Bloomberg, link here. Data points:
Independent producers in the Permian Basin of Texas and New Mexico are trading much lower than when Chevron Corp. bid for Anadarko Petroleum Corp. in April. Royal Dutch Shell Plc and ConocoPhillips have expressed interest in bulking up in shale at the right price. Exxon Mobil Corp.’s chief said Wednesday his company is keeping a “watchful eye” on the Permian for potential deals.
Oil’s drop to near $55 a barrel, from $75 in October, is putting pressure on shale producers at a time when investors are losing faith in an industry that has burned about $200 billion of cash in a decade. Despite record U.S. output, the S&P index of independent exploration and production companies is trading near its troughs of 2008 and 2015, when crude prices sank south of $35 a barrel. The producers are now worth just 4.5 times their earnings before certain items, compared with 9 times about a year ago.
“It’s clear there are many E&Ps trading well below the Chevron valuation watermark from April,” said Michael Roomberg, who helps manage $4.4 billion at Miller/Howard Investments Inc. He expects “several additional deals over the next several quarters, and wouldn’t be surprised if the majors are involved.”
Pioneer Natural Resources Co. or Concho Resources Inc., which have both struggled this year, would be a good fit for Exxon, while Shell may look at smaller players like WPX Energy Inc. and Cimarex Energy Co., according to Tudor, Pickering, Holt & Co.
Comment: I posted my story on the Oasis Permian acquisition before I saw this article. Something to think about.XOM: getting ready to pounce. Exxon will reap $4 billion with sale of 20 oil and gas assets in Norway. Just announced. Link at Reuters. In 2017, Exxon's net production from these assets was around 170,000 boepd. At $50/boe, that works out to $3 billion/year.
Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or what you think you may have read here.
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Back to the Bakken
Wells coming off confidential list today -- Friday, September 6, 2019: 19 for the month; 151 for the quarter:
35811, conf, WPX, Ruby 31-30HG, Antelope, the Ruby wells are tracked here:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 7-2019 | 42565 | 48139 |
35751, SI/NC, XTO, Tom State 34X01HXE, Alkali Creek, no production data;
35090, 1,094, Liberty Resources, AZ 158-93-13-24-4MBH, Enget Lake, t3/19; cum 96K 7/19;
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 7-2019 | 14548 | 17068 |
| 6-2019 | 17010 | 17148 |
| 5-2019 | 20504 | 19105 |
| 4-2019 | 21549 | 22837 |
| 3-2019 | 22396 | 16776 |
34306, SI/NC, XTO, Rough Federal 44X-23B, North Fork,
Active rigs:
| $55.42 | 9/6/2019 | 09/06/2018 | 09/06/2017 | 09/06/2016 | 09/06/2015 |
|---|---|---|---|---|---|
| Active Rigs | 62 | 65 | 56 | 33 | 75 |
RBN Energy: establishing the value of crude oil storage in the shale era. Archived.
Here at RBN, we frequently receive questions about our thoughts on the value of storage. Whether it be crude, natural gas, or NGLs, we answer like any good consultant, “It depends.” What operational need does this storage serve? Where is it located? Does it have optionality for receipts and deliveries? These factors and many more can affect both the strategic and tactical value of a storage asset. Those assets that are integrated into midstream systems and facilitate movements from the upstream to the downstream are generally better poised for success. Those attempting to carve out a niche in isolation or relying on uplift purely from commodity price fluctuations … well, good luck to them. Today, we begin a series examining the value of — and changing markets for — crude oil storage.
Crude oil storage is an integral part of the midstream sector, which (as its name suggests) occupies the market midway between the upstream production of crude and other hydrocarbons at the wellhead and the downstream refining or exporting of oil. As such, the role of crude storage is to facilitate the transfer of oil as it works its way down the line from the lease to the refinery or export dock. That includes moving the various grades of oil across distances, from Point A to B, over a period of time — days or a month or more — as price differentials and economics dictate. This is an important distinction because it means that midstreamers must employ different strategies to capture value in dynamic markets than buyers and sellers in the upstream and downstream sectors. Over time, upstream and downstream folks have had to adapt to manage the commodity price risk that they face. They’ve accomplished this through a variety of financial instruments and physical trades, including a combination of term contracts, spot transactions, physical forwards, futures, options and other derivatives.
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