Only One Well Coming Off Confidential List Today -- April 23, 2020

Jobless claims, link here:

• prior: 5.245 million
• revised: 5.237 million
• consensus: 4.250 millon
• actual: 4.427 million
• history:
• 22 million in four weeks
• then, another fivepointtwo million "prior week"
• now 4.4 million
• is that about 32 million in past six weeks?
• depression: defined as prolonged (undefined) economic downturn and 20 million unemployed

Gas Buddy: back to 79 cents/gallon in Wisconsin, but hit 75 cents last night.

Bankruptcy and bankers: link at Rigzone. 

Free oil won’t last. But it may linger long enough to persuade some creditors of bankrupt energy drillers to freeze their court fights awhile so they don’t wind up running a company with a product no one wants to buy.

At least seven North American oilpatch companies have gone bust so far this year, and that was before oil futures started trading at negative prices. This is dimming prospects for creditors who had counted on recovering most or all of their investments.

Losses in those cases give energy lenders an incentive to put court fights on hold, or to back delay of bankruptcy in hopes that prices will rebound, just as retailers and landlords declared a time-out when the Covid-19 pandemic closed stores around the world.

Shale bust, Bloomberg: link here. Interesting:

Even at $15, “everything back in the field, except the newest and most productive wells, is losing money on a cash-cost basis,” said Raoul LeBlanc, a Houston-based analyst at IHS Markit. “At this price you’ll start shutting in large amounts of production.”

US petroleum consumption: EIA link here --

Saudi: announces record debt plan; plans to borrow as much as $58 billion (220 billion riyals) this year. 

• already announced 120 billion riyals in new debt; looking at a possible additional 100 billion
• comes on top of cut in government spending
• to limit drawdown of reserves at 120 billion riyals
• bond sales in previous years (approximate)
• 2016: $20 billion
• 2017: $30 billion
• 2018: $22 billion
• 2019: $25 billion
• 2020: $58 billion 
• average yields have surged 110 basis points as Saudi investors fled to safer havens, such as US Treasuries; average yields now around 3.4%;
• IMF estimates Saudi budget based on $73-oil 

Mexico: blinks; will shut down new wells in a move that comes just over a week Maduro almost wrecked a global oil deal by refuisng ot make deep output cuts -- NY TImes; also here.

California masks: Governor Newsom contracts with China firm for masks; $1 billion contract; legislature is yet to see the contract/document. First $500 million has already been processed. The contract is with Chinese firm BYD (Build Your Dreams): known for batteries, EVs. Link here.

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Back to the Bakken

Active rigs:

$16.39	4/23/2020	04/23/2019	04/23/2018	04/23/2017	04/23/2016
Active Rigs	29	61	60	49	29

Only one well coming off confidential list today --
  
Thursday, April 23, 2020: 36 for the month; 36 for the quarter, 291 for the year:

• 37068, DRY, Wave Petroleum Operating, Hudson 1-32, Tyler, wildcat, see this note;

RBN Energy: how much can refineries slow their operations without going offline?

Sharply declining refinery demand for crude oil was a key driver in the historic collapse in near-term futures prices for WTI at Cushing earlier this week. With stay-at-home directives in place in most of the industrialized world, U.S. — and global — demand for motor gasoline and jet fuel has plummeted to levels not seen in decades. These changes in refined-products demand, which may continue for months, already are having significant impacts on U.S. refineries — not just in how much crude oil they need but in operators’ decisions on whether to adjust their crude slates and ramp down or alter their operations. Their urgent challenge is to revise their yields to something close to the appropriate volumes of gasoline, diesel and jet fuel. Today, we begin a blog series on the U.S. refining sector and what refiners can — and can’t — do to adapt to these extraordinary times.