Monday, June 1, 2020

Six Wells Coming Off The Confidential List Today -- June 1, 2020

This statistic blows me away. A huge "thank you" to the reader who caught this and sent it my way. Corona virus testing in North Dakota, link here:
  • as of yesterday, the state reports that there have been 72,040 tests for active disease;
  • it is being reported that, as of yesterday, there have been 2,577 cases of Wuhan flu in North Dakota
  • 2,577 / 72,040 = 3.6%
  • a positive test is not required to make a diagnosis of Wuhan flu, according to the CDC; a physician can make the diagnosis based on clinical symptoms and history; Medicare reimburses $13,000 automatically if a hospital admission carries a diagnosis of COVID-19;
  • obviously, everyone who tested positive for corona virus was diagnosed as an active case
  • many folks with symptoms consistent with Wuhan flu would have been tested more than once
  • North Dakota recently reported a problem with their testing
  • see related post here;
  • hard-hit states are showing a 20% rate on the tests performed for active disease;
  • less hard-hit states are showing a 10% rate 
  • but 3% -- that's fairly low -- like pretty close to 0%;
The magnificent seven, link here, or google: US pension plans warned they will run out of money by 2028 --
  • the following seven, less than three years at current burn rate --
    • Chicago Municipal: by 2025, maybe enough cash to cover three months of  the fund's retirement payments
    • New Jersey Teachers: by 2025, maybe 19 months of reserve;
    • Kentucky
    • Providence
    • Dallas Police and Fire
    • Charleston Fire
    • Chicago Police
  • This one might cover a little more than three years of benefit payments
    • Chicago Teachers 
  • the good news:
    • no pension fund is likely to run out of money in the next five years
OXY: it keeps getting worse. After slashing their dividend to one cent, now comes news that OXY faces investor lawsuit over Anadarko acquisition. Warren Buffett should be watching this closely. Link here.

CAPEX: IEA expects biggest ever drop in energy investment. Link here. Related article and comments here. But you know, when you actually look at the numbers, one could argue that for publicly traded companies, the CAPEX is not falling fast enough. CAPEX is dropping 20% compared to last year but ... somehow I just can't get excited from this headline, except in terms of jobs lost. From the linked article on IEA projections:
Global energy investment is now anticipated to fall by 20 percent, or almost $400 billion, compared to last year, the IEA highlighted. At the start of 2020, investment was on track for growth of around two percent, according to the IEA, which noted that this would have been the largest annual rise in spending in six years.
At least he's getting out of the basement:

OPEC basket, link here: $28.45, down from $29.02. The OPEC basket has not been above $30 since March 17, 2020.
  • Saudi needs $110-oil to balance its 2020 budget.
  • Saudi has enough money to cover its imports for less than four years
  • cash burn: $25 billion / month (March - April, 2020) from its "cash account"
  • a cash burn of $25 billion / month:
  • $500 billion in its cash account
  • $25 billion / month
  • 20 months of cash on hand (foreign exchange reserves)
  • cross-check: 2020 budget (forecast end of 2019): $272 billion
  • $272 billion / 12 months = $23 billion
Disclaimer: like Brian Williams, I often make simple arithmetic errors. If this is important to you, go to the source.
Back to the Bakken

Active rigs:

Active Rigs1164604827

Six wells coming off the confidential list over the weekend, today --

Monday, June 1, 2020: 4 for the month; 149 for the quarter, 376 for the year:
  • 37047, drl/drl, CLR, Simmental Federal 10-16H, Elm Tree, no production data,
  • 36157, 895, Nine Point Energy, S Missouri 152-103-9-11-12H, Eightmile, t12/19; cum 105K 3/20; these wells are tracked here; and they are huge wells;
  • 35192, drl/drl, XTO, Zane Federal 21X-6B, Siverston, no production data,  
  • 33838, drl/drl, conf, Crescent Point Energy, CPEUSC Tami 9-8-5-157N-99W, Lone Tree Lake, no production data,
Sunday, May 31, 2020: 95 for the month; 145 for the quarter, 372 for the year:
  • None. There was no November 31.
Saturday, May 30, 2020: 95 for the month; 145 for the quarter, 372 for the year:
  • 36471, drl/NC, Slawson, Periscope Federal 2-10-11-12H, Big Bend, no production data,
  • 33839, drl/drl, Crescent Point Energy, CPEUSC Tami 4-8-5-157N-99W TFH, Lone Tree Lake, no production data,
RBN Energy: northeast gas production cutbacks take effect. Article archived here.
U.S. Northeast natural gas producers may be on the other side of a years-long battle with perpetual pipeline constraints and oversupply conditions. But they’re now facing new challenges to supply growth, at least in the near-term, from low crude oil and gas prices and the decline of a major downstream consumer of Appalachian gas supplies: LNG exports along the Gulf Coast. Most of the U.S. well shut-ins since the recent oil price collapse are concentrated in oil-focused shale plays, and gas volumes associated with those wells will be the hardest hit. However, a number of gas-focused Marcellus/Utica producers also have announced or escalated supply curtailments in recent weeks, as they wait for associated gas declines to buoy prices enough to support drilling. The pullback has had immediate effects on the region’s production volumes and supply-demand balance. Today, we provide an update on the latest Appalachia gas supply trends using daily gas pipeline flow data.
In recent years, U.S. production regions that focus on natural gas have taken a backseat as capital spending shifted toward crude oil-focused resource plays like the Permian, Bakken, Eagle Ford and others. Associated gas production from these oil-rich basins drove the bulk of the total gas supply growth in recent years, outpacing U.S. natural gas demand, eroding Henry Hub prompt gas futures prices, and taking even more of the air out of gas-focused drilling.
In the COVID era and with oil prices in the $30s/bbl, prospects for gas-weighted basins have turned somewhat more positive, at least for the longer term. Massive cutbacks in oil producers’ capital spending is translating to lower crude production and, with it, lower associated gas output. If production losses mount and tighten the supply-demand balance, gas prices would rise enough to incentivize producers to bring on rigs in gas-centric basins.
This has shifted sentiment in favor of gas-weighted exploration and production companies (E&Ps), particularly in Appalachia, boosting their share prices in the past couple of months as oil production cuts materialized.

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