Permian Gas Flaring Hits Another High -- 752 Million Cubic Feet Per Day -- November 7, 2019

Updates

November 9, 2019: see first comment.

Unless I have my math wrong, I figure New Mexico's natural gas consumption to be 743 mcf / day, so the Permian is burning off enough natural gas to power the whole state..
https://www.eia.gov/dnav/ng/ng_cons_sum_dcu_SNM_a.htm

Original Post

I don't care much way or the other regarding flaring, but flaring provides a great proxy for "activity" in the shale plays. The Oil & Gas Journal link is here.

752 million cubic feet rounds to one billion cubic feet per day. The Bakken is producing ... drum roll ... about three billion cubic feet of natural per day. The Permian is flaring about one-third that amount. That sort of puts things into perspective. By the way, I'm missing a Thursday night NFL game streaming on Amazon Prime. Good luck to all.

From Rystad/twitter today:

A Closer Look At Five Incredible MRO DUCs Reported Today -- November 7, 2019

This page won't be updated.

Record IPs are tracked at this post.

These MRO DUCs were reported today:

• 36108, 5,396, MRO, Sarah 24-12TFH, Chimney Butte, t8/19; cum 91K in 54 days!
• 36120, 3,196, MRO, Tufte 24-23TFH, Chimney Butte, t8/19; cum 64K in 47 days!
• 36118, 4,348, MRO, Brewster 24-23TFH, Chimney Butte, t8/19; cum 74K in 56 days;
• 36119, 5,068, MRO, Bugbee 24-23H, Chimney Butte, t8/19; cum 68K in 52 days!
• 36352, 3,445, MRO, Delmont 34-23H, Chimney Butte, t8/19; cum 70K in 58 days!

The graphics:

Other wells in the graphic:

• 16908, off line since 5/19; 248, MRO, Marlin 14-12H, Chimney Butte, t3/08; cum 154K 5/19;
• 16180, off line since 5/19; 128, MRO, Marlin 24-12H, Chimney Butte, t8/06; cum 354K 5/19;
• 20233, 947, MRO, Marlin 44-12H, Chimney Butte, t6/11; cum 252K 9/19;

Notes From All Over, Part 7 -- November 7, 2019

I follow the news fairly closely, I think. But on the way to looking for something else, I came across a story I had not seen. I fact-checked with another google search and this is what popped up. Completely off my radar scope.

Five New Permits -- November 7, 2019

The price is right! Oilprice has it exactly right. The one metric that "matters" for electric cars -- $/KWh. That metric affects a) whether consumers buy EVS; and, b) whether manufacturers can make a reasonable profit. The metric that comes in second: range. I'm not sure we needed an article on the obvious.

*************************************

Back to the Bakken

Active rigs:

$56.92	11/7/2019	11/07/2018	11/07/2017	11/07/2016	11/07/2015
Active Rigs	54	67	54	38	64

Five new permits, #37163 - #37167, inclusive:

• Operators: Newfield (3); Whiting (2)
• Fields: Sand Creek (McKenzie); Glass Bluff (McKenzie)
• Comments:
• Newfield has permits for a 3-well PIttsburgh pad in section 3-153-96, Sand Creek oil field
• Whiting has permits for a 2-well Gullikson pad in section 31-152-103, Glass Bluff oil field

Thirteen permits renewed:

• CLR (9): two Sacramento permits, Williams County; seven Durham permits, McKenzie Coiunty
• EOG (4): four Mont permits in Williams County

Nine producing wells (DUCs) reported as completed:

• 36108, 5,396, MRO, Sarah 24-12TFH, Chimney Butte, t8/19; cum 91K in 54 days! (see this page for graphics)
  
• 36120, 3,196, MRO, Tufte 24-23TFH, Chimney Butte, t8/19; cum 64K in 47 days!
• 36118, 4,348, MRO, Brewster 24-23TFH, Chimney Butte, t8/19; cum 74K in 56 days;
• 36119, 5,068, MRO, Bugbee 24-23H, Chimney Butte, t8/19; cum 68K in 52 days!
• 36352, 3,445, MRO, Delmont 34-23H, Chimney Butte, t8/19; cum 70K in 58 days!
• 36374, 1,454, Kraken, Wallace 6-7 2H, Oliver, t10/19; cum --;
• 36632, 1,321, Kraken, Stevenson-Garner LE 31-30 1H, Oliver, t10/19; cum --; 
• 36375, 1,323, Kraken, Stevenson 31-30 5H, Oliver, t10/19; cum --;
• 35430, 570, Kraken, Knox-Ruby 16-21 LW 1H, Winner, t10/19; cum --;

Notes From All Over, Part 6 -- November 7, 2019

Another great example of writing the headline / lede before the information is released. These screenshots were caught on an iPad Pro at 2:12 p.m. CT today:

And I was so excited ... until I clicked on "Story continues" and saw the rest of the story.

The story has been updated.

Oilprice.com is probably one of the worse offender of writing headlines before the data is released; thisis the first time I've caught Investor's Business Daily at it.

Random Look At Wells That Came Off Confidential List In 4Q15 -- November 7, 2019

This page will not be updated. 

Continuing the review of wells that came off the confidential list 4Q15. 

Note #24096: in excess of 626,000 bbls since June, 2015 (a little over four years old) and a very, very short lateral, only 15,000 feet and spacing at only 320 acres.

From 4Q15:

• 26988, 2,842, Enerplus, Bull 152-94-18B-19H-TF, Antelope, 41 stages, 10 million lbs, t6/15; cum 542K 9/19;
• 26989, 2,357, Enerplus, Rattle 152-94-18B-19H, Antelope, 40 stages, 10 million lbs, t6/15; cum 411K 9/19;
• 31062, 170, Denbury Onshore, Cedar Hills, a Red River B well, t7/15; cum 370K 9/19;
• 29849, 1,464, Oasis, Fort Berthold 147-94-3A-10-12H, McGregory, t6/15; cum 403K 9/19;
• 30514, 3,020, MRO, Rufus USA 21-4H, Reunion Bay, t9/16; cum 438K 9/19;
• 30414, 1,622, Slawson, Lightning Federal 7-24-13TFH, Big Bend, t4/16; cum 445K 9/19;
• 30412, 2,684, Slawson, Lightning Federal 6-24-13TFH, Big Bend, t4/16; cum 449K 9/19;
• 24096, 3,148, Equinor/Statoil, Jay 24-13F 1H-R, Banks, t10/15; cum 506K 7/19; off line 7/19; remains off line 9/19;30286, 1,974, EOG, Riverview 102-32H, 23 stages; 12.8 million lbs; Antelope; spacing: 320 acres, t6/15; cum 626K 9/19;
• 29445, 2,441, WPX, Emma Owner 34-14HB, Spotted Horn, t3/16; cum 527K 9/19;

Notes From All Over -- Part 5-- November 7, 2019

EOG -- 3Q19 -- Earnings -- Presentation

Link here.

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 think you may have read here.

Note: some would argue that EOG Resources is the premier shale oil company in America right now. Some would argue that CLR might want to claim that title. And then, there are still others. Good luck to all.

Now, back to the featured presentation.

Note: in a long note like this there will be factual and typographical errors. If this is important to you, go to the source.

What I will be looking for in the presentation:

• half-cycle costs
• notes on the Bakken
• examples of single well production

So, here goes.

• costs and returns:
• minimum 30% return on $40 oil / $2.50 natural gas (premium drilling)
• ensures strong returns through cycles
• maintained direct finding cost to less than $10/boe through cycles
• premium wells:
• finding and development cost, 2018: $8.86/boe
• depreciation, depletion, amortization: from $18.43 in 2014 to $12.65 in 2019E; down 31%
• 2018 ROCE (return on capital employed) highest since shift to oil
• guidance: full year growth target of 15% with no change in CAPEX or activity
• do rig counts matter?
• financials:
• at mid-point: $1.5 billion CAPEX; below $1.6 billion target
• debt: 15% net debt to total capitalization lowest since 2008
• $337 million free cash flow
• Permian (as noted in the press release):
• added two new premium plays in the Delaware Basin
• Wolfcamp M
• Third Bone Spring
• 24 years of inventory at current drilling pace
• 6,500 total net premium drilling locations in the Delaware Basin
• Wolfcamp M
• 193,000 net acres
• 855 net undrilled premium locations: EUR -- 1.175 million boe
• total estimated net resource potential: 1.0 billion boe
• well cost target: $7.7 million
• Third Bone Spring
• 200,000 net acres
• 615 net undrilled premium locations: EUR -- 950,000 boe 
• total estimated net resource potential: 615 million boe
• well cost target: $7.6 million
• Bakken: mentioned in passing -- considered to be in its mature phase
• developing its Antelope Extension in 2019
• Clarks Creek 18 IP30 of 3,800 bopd, 4,800 boepd
• 15-well average IP30 of 2,150 bopd, 300 bpd NGLs, 2 million cfpd gas
• net completions across all plays in 2019 
• Eagle Ford: 300
• Permian/Delaware Basin: 270 
• Powder River Basin: 40  
• Wyoming DJ Basin: 35 
• Woodford (OK, TX panhandle): 30
• Bakken: 20

Inventory:

Notes From All Over -- Part 4-- November 7, 2019

US natural gas: 



 

*******************************************

Permian Pipeline

Link here. 

• Agua Blanca natural gas pipeline
• expansion to double capacity approved
• Delaware Basin expansion 
• currently: a 36-inch diameter, 1.4 billion cubic fpd; 90 miles
• expansion: a 42-inch; capacity to more than 3 billion cfpd
• WhiteWater Midstream, LLC
• JV partner: MPLX LP 
• in addition, WhiteWater and MPLX okay'ed the 458-mile Whistler Pipeline that will link to Agua Blanca
• natural gas to the Texas Gulf Coast

******************************************  
Pakistan Coal

Coal is dead, long live coal. I don't think this is an outlier:

Notes From All Over -- Part 3-- November 7, 2019

Wells on confidential list due to be reported yesterday not yet reported. 

Wind tower decommissioning in Minnesota, link here, from a reader:

In Minnesota, Xcel Energy estimates conservatively that it will cost $532,000 (in 2019 dollars) to decommission each of its wind turbines—a total cost of $71 million to decommission the 134 turbines in operation at its Noble facility.

Decommissioning the Palmer’s Creek Wind facility in Chippewa County, Minnesota, is estimated to cost $7,385,822 for decommissioning the 18 wind turbines operating at that site, for a cost of $410,000 per turbine.

Restoration activities include the removal of all physical material and equipment related to the project to a depth of 48 inches. Most of the concrete foundations used to anchor the wind turbines, however, are as deep as 15 feet.

The concrete bases are hard to fully remove, and the rotor blades contain glass and carbon fibers that give off dust and toxic gases. 

More wind here, Falmouth, MA: link here.

Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

Jobless claims, link here:

• prior: 218,000
• prior revised: 219,000
• forecast: 215,000
• actual: 211,000

Market: I may have to break my MSNBC-CNBC embargo and watch the market today. Completely unexpected.

• China, China, China
• Dow: up 212 points
• NASDAQ: up 50 points
• WTI: up 1.1%
• S&P 500: up 16 points
• AAPL: hit a new all-time intra-day high; now up almost $2.00; trading at $258.43; remember this was a "bad year" for Apple, Inc, and the third quarter was particularly bad according to pundits going into earnings season;
• Warren Buffett: riding the AAPL wave; actually cut his Apple holdings in 3Q19;
• IMUX: up slightly
• SRE: continue to slip
• oil companies should do well today
• XLNX: up almost 3%; up $2.79; trading at $96.56; pays 1.63%, but well off it's 52-week highs

***********************************   Pulled Over For Driving Without A License

Sophia's Corky pulled over for driving without a license:

Notes From All Over, Part 2 -- November 7, 2019

Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

Market:

• pre-market trading, futures holding; all major indices solidly in the green
• most major indices could open at all-time highs
• buzz: China, China, China
• QCOM: up 6.17%
• CAH (Cardinal Health): up 3.5%
• AAPL: up $1.29 -- completely unexpected -- shouldn't we see a bit of profit-taking?
• BRK-B: riding the coattails of AAPL; up $1.50
• T: even T is getting into the holiday spirit, up 6 cents -- trending toward $40
• D: down a bit
• XLNX: not often seen trading in pre-market, but today, up over 1%
• did we say, China, China, China?
• TSLA: up $9 yesterday; up another $3.41 in pre-market trading
• XOM: down so low, it can only go up; up 60 cents in pre-market today but was down $1.60 yesterday
• DIS: up $1.04
• OXY: wow, fell below $40 yesterday; I think Warren has 8% bonds, but not he stock;

LA Times: the Mormom family killed by the drug cartel had it coming.

Houston ISD, not independent any more: to be taken over by the state. Link here. 

No link; if interested, google it.

Investors with 20-year horizon: this is a most incredible time for investing -- see disclaimer above --

• if long term, 20-year horizon, you think oil will be "dead," now is the time to start re-balancing your portfolio 
• if long term, 20-year horizon, you think oil will still be in demand, now is the time to accumulate shares in solid oil companies, many of which are paying great dividends
• it's hard to believe but XOM is paying over 5%, as just one example
  

Off  the net for awhile -- Gr-Uber duties begin.

Just How Serious Are Things In Saudi Arabia? -- November 7, 2019

November 9, 2019: Breaking news: the "2% IPO" will be lucky to get to 0.5%.

• Link here. Archived.

Remember? Playing with fire -- November 30, 2014, The [London] Telegraph.

Reminder: Saudi will take all steps necessary to save their country -- August 7, 2019.

Proof? In latest Saudi shakedown, Aramco "taps" Prince Al-Waleed for IPO money -- zerohedge. November 7, 2019. 

Back in November 2017, a number of prominent Saudi Arabian princes, government ministers, and business people were arrested in Saudi Arabia a few weeks after the creation of an anti-corruption committee led by Crown Prince Mohammad bin Salman. Among them was one of Saudi Arabia's wealthiest men, billionaire Prince Al-Waleed bin Talal, who along with the other arrested individuals was confined in the Riyadh Ritz-Carlton and was only released months later after he pledged an unknown amount of money to the Saudi treasury.

While the Crown Prince dubbed the arrests an anti-corruption exercise, it was plain that Saudi Arabia, then facing a gaping budget deficit had engaged in nothing short of a massive extortive shakedown. 

Two years later Saudi Arabia is engaging in a similar shakedown, only this time instead of very broad "uses of funds", it hopes to narrow down the extorted money solely for one purpose - to get more "willing" Aramco anchor investors.

And just like in 2017, Prince Al-Waleed - one of the largest investors in Twitter - is once again in the crosshairs.

As Bloomberg reports, one day after China tentatively agreed to invest $5 to $10 billion in the Aramco mega IPO which has so far found precisely zero anchor investors, Saudi Arabia was "negotiating commitments" from its wealthiest citizens to buy stock in the Aramco initial public offering. Translation: MbS gave his oligarchs a choice - invest in Aramco, or spend some more time in the Riyadh Ritz Carlton. Among those Riyadh has reportedly approached include the Olayan family and Prince Alwaleed Bin Talal to low-profile tycoons in the oil producer’s backyard.

Following polite but stern and "convincing" discussions with MbS and his goon squad, the billionaire Olayans, who own a major stake in Credit Suisse, are said to be considering buying several hundred million U.S. dollars worth of Aramco shares.

Prince Alwaleed - who knows too well what happens if he disagrees with the Crown Prince - has also "held talks" to commit a significant amount to the IPO.

Re-posting. I think this is a huge story:

Wow, wow, wow -- Saudi Aramco delays payment on the Sabic deal by four years ....  huge story ... buried, but a huge story ... Bloomberg --- November 4, 2019 ... 

Saudi Aramco will delay fully paying for the acquisition of a 70 percent stake in petrochemicals company Sabic by four years until September 2025 under terms of a new deal agreed on last month.

Aramco will also only pay the kingdom’s sovereign wealth fund about a third of the $69.1 billion price tag in cash, down from half previously, the oil firm said in its intention-to-float announcement.

Re-posting from the other day:

Meanwhile, Saudi Arabia foreign exchange reserves, most recent data, just released, September, 2019, link here. Corroborates IMF data suggesting that $61-oil is inadequate for Saudi Arabia.

Ten-year history:

Re-posting:

Break-even costs in the Bakken.

Saudi Arabia? $85, per IMF, via twitter:

Notes From All Over, Part 1 -- November 7, 2019

Wow, wow, wow -- Saudi Aramco delays payment on Sabic deal by four years ....  huge story ... buried, but a huge story ... Bloomberg --- November 4, 2019 ... 

Saudi Aramco will delay fully paying for the acquisition of a 70 percent stake in petrochemicals company Sabic by four years until September 2025 under terms of a new deal agreed on last month.

Aramco will also only pay the kingdom’s sovereign wealth fund about a third of the $69.1 billion price tag in cash, down from half previously, the oil firm said in its intention-to-float announcement

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, travel, career, or relationship decisions based on what you read here or think you may have read here.

From twitter:

• high-sulphur marine fuel prices are falling in Rotterdam, IMO 2020
• Russia to "hold out" on IMO 2020 on its "inland waterways"
• Brazil and Chinese state-owned firms only ones bidding on Brazil's off-shore oil in latest round
• Iran nuclear crisis escalating; Americans seem unmoved; same old, same old
• China said to be studying lifting the curb on US poultry imports
• one hour ago: China says US agrees to phased tariff rollback if deal reached
• US-led naval forces formally begin operations to protect Mideast sea lanes

Futures:

• all major indices up significantly; all -- maybe not the NASDAQ -- would open at new highs (?)
• Dow: up about 135 points 
• NASDAQ: up about 40 points
• S&P 500: up about 10 points

Startling:

• Bill Gates says if it comes down to Trump vs Pocahontas, he will vote pragmatically

Pocahontas:
may have had her "Beto O"Rourke" moment when she said, "Hell, yes, we'll take your private health insurance."

Cleaning out the in-box:

• shale wells are on the edge of profitability at current prices, November 10, 2019, WorldOil
• new term for me: half-cycle drilling costs; we'll come back to this later
• the historical floor price for U.S. oil of $45, which in the past has been based on so-called half-cycle drilling costs, is likely to rise to $50 as investors use different metrics
• US productivity plunges for the first time since 2015 as labor costs surge -- zerohedge -- November 6, 2019 -- consider the source when reading the headline and then check out the graphic at the link
• global warming: several blasts of Arctic air will bring early winter to northeast -- zerohedge-- November 6, 2019 -- remember, the 2019 - 2020 Farmers' Almanac said it would be a milder winter -- at least the one I read, but I think you can find anything you want when it comes to weather predictions in the Almanac
• global warming: cold October (and now November) in perspective -- The Next Grand Minimum -- November 3, 2019
• global warming -- Bjorn Lomborg -- Paris climate promises will reduce temperatures by just 0.05°C in 2100 -- November, 2015, peer-reviewd paper
• US holiday to soar -- UPS -- forecasts "peak day" to be 26% higher than 2018 -- recession? what recession? -- Benzinga via Yahoo!Finance -- November 5, 2019
• Texas scores again: national clothing retailer Ross Dress for Less will build massive distribution facility outside of Houston, TX; bizjournals -- November 6, 2019; the Ross facility will be nearly twice the size of the Amazon Fulfillment Center that opened in 2018 in the same area as the new proposed Ross facility

Holidays: I don't know if others have noticed, but here in the southwest, folks are switching out Halloween decorations for Christmas. Thanksgiving will be a speed bump on the way to holiday spending.

• next big thing: year 'round holiday lights; computer-LED color changes based on the season
• we have a huge McMansion in our area that has bright blue-yellow lights on almost year 'round
• from my perspective three variations in holiday lights
• green and red (and or multi-colored across the entire spectrum)
• green and white
• blue and yellow

All That Talk About Fewer Rigs -- Coming True -- North Dakota Down To 53 -- November 7, 2019

Active rigs:

$57.11	11/7/2019	11/07/2018	11/07/2017	11/07/2016	11/07/2015
Active Rigs	53	67	54	38	64

Seven wells coming off the confidential list yesterday, today -- Thursday, November 7, 2019: 26 for the month; 121 for the quarter:

• 36353, conf, Abraxas, Jore Yellowstone 2H,
• 35441, conf, Hess, GO-Elvin Garfield 156-97-1918H-9,
• 35294, conf, BR, Prairie Rose 1A MBH-ULW,

Wednesday, November 6, 2019: 23 for the month; 118 for the quarter, NDIC shows these wells should have been reported yesterday but are still confidential:

• 35437, conf, Hess, GO-Elvin Garfield 156-97-1918H-1,
• 35283, conf, Enerplus, Mulberry 149-93-21B-22H-TF, 
• 34947, conf, Whiting, Moline 41-15-1H,
• 34926, conf, CLR, Collison 9-23H1, 

Yesterday, daily activity report, only three wells released from the confidential list -- EOG Parshall permits  -- PNC

• 32227, PNC, EOG, Van Hook 51-2523H, Parshall,
• 32228, PNC, EOG, Van Hook 53-2523H, Parshall,
• 32229, PNC, EOG, Van Hook 56-2523H, Parshall,

Wells scheduled to come off confidential list yesterday have not yet been reported, for example:

RBN Energy: crude oil pipeline rate compression from Permian and Cushing to the Gulf Coast

Like the proverbial dog who finally catches the truck he’s been chasing, only to wonder what to do next, midstreamers at long last have brought on enough crude oil pipeline capacity to move Permian barrels to the Gulf Coast. In fact, right now there appears to be more than enough pipeline space, with several pipes flowing less than their capacity. What midstream companies now face is a race to the bottom as their pipelines compete with each other to attract barrels by offering service to Gulf Coast markets at the lowest price — resulting in transportation rate compression. Today, we begin a blog series on the tug-of-war for barrels and its effect on prices.

Crude oil production growth in the Permian Basin has been meteoric. The region’s output has more than doubled since the beginning of 2017, from about 2.1 MMb/d then, to more than 4.6 MMb/d today. As production ramped up, midstream companies scrambled to develop and build outbound pipelines to move those barrels to market, primarily to points along the Gulf Coast for refinery use or exports.