Notes From All Over -- Part 1 -- July 1, 2019

From Energent this morning: are there really 4,000 DUCs in the Permian? Link here.

To many analysts and investors who monitor energy sector, drilled-but-uncompleted well (DUC’s) counts are an important metric along with CAPEX plans, acreage grades, and regional risk factors that might affect the production level in the near-term. [One might note that "rig count" was not in that short list. LOL.]

As E&P’s increasingly focus on optimizing field development through multi-well pad drilling in a factory style, it is important to understand how this phenomenon could impact the DUC’s going forward. Energent’s undertaking begins with a well-by-well assessment of DUC counts in the major unconventional basins.

Energent data suggests that post-downturn (Q4 2017 – now) accumulation of Permian DUC’s were not only entirely generated by multi-well pads which consist of between 2 and 4 wells but there was also a sharp drawdown of DUC’s from single-well pads totaling nearly 200. This could suggest tightening capital market for smaller E&P’s that mostly drill vertical and deviated wells.

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Bruin Fort Berthold Wells -- 152-93-9

Lot 8 / section 8-152-93,
new wells: avg 1725 FSL; 850 FEL
36653, drl, Bruin, Fort Berthold 152-93-9C-10-14H, Four Bears,
36654, drl, Bruin, Fort Berthold 152-93-9C-10-13H, Four Bears,
36655, drl, Bruin, Fort Berthold 152-93-9C-10-12H, Four Bears,
36656, drl, Bruin, Fort Berthold 152-93-9C-10-11H, Four Bears,
36657, drl, Bruin, Fort Berthold 152-93-9C-10-10H, Four Bears,
36658, drl, Bruin, Fort Berthold 152-93-9C-10-9H, Four Bears,

section 9-152-93,
exiting wells: avg 1280 FSL, 348 FWL
21800, 1,584, Bruin, Fort Berthold 152-93-9C-10-1H, Four Bears, t11/12; cum 311K 8/19;
21801, 1,206, Bruin, Fort Berthold 152-93-9C-10-2H, Four Bears, t11/12; cum 318K 8/19;
21802, 741, Bruin, Fort Berthold 152-93-9C-10-3H, Four Bears, t11/12; cum 264K 8/19;
21807, 1,349, Bruin, Fort Berthold 152-93-9C-10-6H, Four Bears, t5/14; cum 225K 8/19;
21805, 1,362, Bruin, Fort Berthold 152-93-9C-10-5H, Four Bears, t5/14; cum 289K 8/19;
21803, 1,467, Bruin, Fort Berthold 152-93-9C-10-1H, Four Bears, t5/14; cum 393K 8/19;

The graphic:

Well, That Didn't Last Long -- WTI Ended The Day Below $60; Fifteen Permits Renewed; Five DUCs Reported As Completed -- July 1, 2019

Active rigs:

$59.18	7/1/2019	07/01/2018	07/01/2017	07/01/2016	07/01/2015
Active Rigs	61	67	58	30	76

Three new permits: 

• Operator: Petroshale
• Field: Bear Den (McKenzie)
• Comments: Petroshale has permits for a 3-well Jorgenson Federal pad in section 19-149-95, Bear Den oil field

Fifteen permits renewed:

• SHD Oil & Gas (7): seven permits -- an Epsilon permit, a Delta permit, a Demeter permit, a Cheetah, a Narcissus permit, a Poseidon permit, and a Zeta permit, all in McLean County
• Oasis (5): five Slagle permits in McKenzie County 
• BR (2): two Patton permits in Dunn County
• Whiting: one Stenehjem Federal permit in McKenzie County

One permit canceled:

• CLR: one Burr Federal permint in Mountrail County

Five producing wells (DUCs) reported as completed:

• 28953, 2,464, Hess, EN-Jeffrey-154-94-2215H-6, Alkali Creek, t5/19; cum 7K over six days;
• 28952, 2,999, Hess, EN-Jeffrey-154-94-2215H-5, Alkali Creek, t5/19; cum 4K over three days;
• 28951, 2,362, Hess, EN-Jeffrey-154-94-2215H-4, Alkali Creek, t6/19; no production data,
• 35095, 3,807, Hess, AN-Bohmbach-153-94-2734H-6, Antelope-Sanish, t4/19; cum 52K over 43 days;
• 33739, 2,444, Hess, BB-Federal B-151-95-2122H-6, t5/19; cum 22K over fourteen days; neighboring well, #18250, off-line; back on line for two days 5/19;

Hey, We Did It -- Broke Through $60 -- July 1, 2019

Wells coming off the confidential list today --
Monday, July 1, 2019: 1 for the month; 1 for the quarter;

• None: six months ago this day, it was January 1, 2019.

Sunday, June 30, 2019: 82 for the month; 271 for the quarter;

• 34401, SI/NC, WPX, Lion 18-19HC,  Mandaree, no production data, 
• 32895, 1,311, CLR, Colter 12-14H, Bear Creek, t3/19; cum 85K 5/19;

Saturday, June 29, 2019: 80 for the month; 269 for the quarter;

• 35840, SI/NC, XTO, Halverson 13X-33EXH, Alkali Creek, no production data,

Active rigs:

$60.08	7/1/2019	07/01/2018	07/01/2017	07/01/2016	07/01/2015
Active Rigs	61	67	58	30	76

RBN Energy: another one bites the dust -- market impacts of Philadelphia Energy Solutions' Refinery shutdown.

Philadelphia Energy Solutions (PES) announced last week (on June 26) that it was shutting down its 335-Mb/d refinery in Philadelphia, PA. This announcement came just five days after a major fire destroyed a portion of the refinery, which turned out to be the last straw for the facility that has been struggling financially for many years. Today, we consider the various market impacts that will likely follow the closure of the PES refinery, including its effect on fuel supply, where the closure leaves refinery production capacity in the region and how the refined product supply will need to adjust in response.

The PES refinery, which has a long history in the Philadelphia region, is currently made up of two adjacent facilities located at Point Breeze and Girard Point (shown in the map to the left in Figure 1). The initial refining facility at Point Breeze was constructed in 1870 by Atlantic Refining Company, while the Girard Point facility was constructed in the 1920s by Gulf Oil. Over the years, the facilities have been modernized and expanded, and ownership has changed hands several times, as shown in the timeline to the right in Figure 1, with the two facilities integrating in 1995 under the Sunoco banner. Sunoco, now a subsidiary of Energy Transfer, reportedly contemplated closure of the refinery in 2012 but subsequently formed a joint venture (JV) with The Carlyle Group called Philadelphia Energy Solutions, or PES. After a bankruptcy restructuring in 2018, Credit Suisse Asset Management and Bardin Hill became majority shareholders in the partnership, leaving The Carlyle Group/Energy Transfer JV with a minority stake.