No Wells Coming Off The Confidential List Today -- Director's Cut Due Out Later Today -- June 12, 2020

Italian lives matter: Governor Andrew Cuomo, NY, does not favor removing a statue of Christopher Columbus. Over at twitter. Maybe they could replace it with a statue of Eric the Red.

Yesterday's sell-off due to:

• spike in corona viruses; Houston, TX, looking to re-instate "stay-at-home" orders;
• gasoline demand;
• the "Fed" 

Saudi surge:

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Back to the Bakken

Wow, who wudda guessed: a Marcellus LNG firm sees opportunities in the Bakken and the Permian. Link here. That was the headline but the "Bakken/Permian" angle is buried in the story and seems to be a small component of the overall story. They story concerns Edge LNG which uses "Cryobox" liquefaction units mounted on trucks to transport natural gas produced from "stranded wells." Little story, big headline:

Active rigs:

$36.42	6/12/2020	06/12/2019	06/12/2018	06/12/2017	06/12/2016
Active Rigs	13	61	62	53	28

No wells coming off the confidential list today.

RBN Energy: northeast gas production cutbacks tighten regional balance, for now, part 2.

U.S. Northeast natural gas production has tumbled nearly 900 MMcf/d in the past month alone since EQT Corp., Cabot Oil & Gas, and others began curtailments in response to low gas prices, and is averaging nearly 2 Bcf/d below last November’s peak of 32.9 Bcf/d. But regional gas demand has lagged this year, storage inventories have surpassed five-year highs and outbound flows to the Gulf Coast are being challenged by reduced takeaway capacity and drastically lower demand from LNG export facilities.  Today, we examine the net impact of these competing fundamental factors on the region’s supply-demand balance and the resulting implications for Appalachian supply prices.

The potential for an extended period of lower crude oil prices has opened a window of opportunity for the gas-focused Marcellus/Utica production region — lower oil prices and a prolonged pullback in oil-directed drilling, the thinking goes, would curb associated gas production from those wells, possibly tightening the gas supply-demand balance and boosting gas prices enough to spur more gas-directed drilling.

But, as we said in part 1 of this series, in the near term, Northeast gas producers, who only in the past year or so emerged from a years-long battle with pipeline constraints, are facing new challenges to regional supply growth. Appalachian producers began laying down rigs and slashing capital spending last year, well before either the oil market mayhem or COVID pandemic hit, in response to sub-$2.00/MMBtu natural gas prices in the region and overall weakness in Henry Hub benchmark futures prices. That price pressure has not let up since, as the regional and national storage inventories continue carrying hefty surpluses versus prior years. Additionally, LNG exports — a key driver of gas demand for U.S. production, including a large chunk of Marcellus/Utica outflows — have slowed dramatically, as the economics behind sending U.S. gas overseas have collapsed and LNG cargoes are being cancelled in droves.

We should note too that the reduced demand for feedgas demand at liquefaction and LNG export facilities has coincided with restricted southbound capacity to the Gulf Coast from the Northeast, following an explosion in early May 2020 on the Texas Eastern Transmission pipeline, or TETCO. Much of the production that was previously flowing south on TETCO was rerouted to other takeaway pipes, so this hasn’t necessarily affected overall supply volumes, though it may have shifted the direction of some of the flows.