December 23, 2019 -- Pretty Much Down To The Last 36 Hours Of Shopping -- Nine Wells Coming Off The Confidential List -- RIg Count Back Up To 55

Peak demand? What peak demand? In 2018, the US consumed more energy than ever before.

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Back to the Bakken

Active rigs:

$60.42	12/23/2019	12/23/2018	12/23/2017	12/23/2016	12/23/2015
Active Rigs	55	69	53	41	65

Wells coming off the confidential list today --

Monday, December 23, 2019: 70 for the month; 275 for the quarter:
36524, conf, Slawson, Challenger Federal 9-29-32H, 
36173, conf, XTO, Lavern 42X-14H,
35902, conf, Slawson, Tempest Federal 1 SLH, 

Sunday, December 22, 2019: 67 for the month; 272 for the quarter:
36172, conf, XTO, Lavern 42X-14CXD, 
34838, conf, Enerplus, Hera 149-93-33D-28H,
30178, conf, Slawson, Diamondback 1 SLH, 

Saturday, December 21, 2019: 64 for the month; 269 for the quarter:
36171, conf, XTO, Lavern 42X-14BXC, 
35901, conf, Slawson, Slasher Federal 722-27 MLH, 
34746, conf, Oasis, Nordeng 5298 13-25 8B,

RBN Energy: crude oil pipeline rate compression from the Permian and Cushing to the coast, part 2.

The battle for pipeline supremacy in the Permian is really heating up. From Cactus II, to EPIC, to Gray Oak, to a bevy of upcoming expansions and a couple of longer-term behemoth greenfield projects, there are multiple new takeaway options for Permian producers. But could it all be coming online at the wrong time? If there’s one thing we’ve learned from third-quarter earnings calls and recent conversations with producers, it’s that balance-sheet management and fiscal conservativism are top of mind right now. As a result, drilling plans and production growth expectations have been tamped down considerably for 2020 and beyond. Midstreamers and pipeline companies in the Permian are responding quickly. Tariffs are being slashed, margins are getting cut, and competition for West Texas barrels is fierce. Today, we look at recent developments and what they’ll mean for revenues and market differentials heading into the New Year.

Several Permian-focused exploration and production (E&P) companies' stocks took a hit after third-quarter investor calls revealed their previous production targets had been missed, or that upcoming goals would be lowered. While Permian wells are still highly productive, producers there are being pressured by Wall Street to focus less on absolute productivity, and more on profitability and financial sustainability. As a result, in their earnings calls, many producers announced lower capital budgets for 2020 and scaled-back drilling plans. Further, productivity improvements are having less of an impact than they did a couple of years ago when the basin was ramping up, meaning that lower producer activity will not be offset as much by increasing well results. The cumulative effect of initial decline rates on all of the recently drilled wells in the Permian is huge, so you need to keep completing more and more wells to keep production numbers increasing. The production treadmill that E&Ps are on is getting faster as the proportion of new wells (experiencing typically much higher decline rates) to legacy wells (whose decline rates have leveled off) has increased, and producers are having a harder time staying on it while keeping their investors happy.