No Wells Coming Off Confidential List; Schlumberger In The News Today -- September 1, 2020

Schlumberger

Merger: often seen when one or both companies are in distress. In this case, it is likely that both companies are in distress. Schlumberger / Liberty Oilfield Services Inc, join forces. In pre-market trading, LBRT is up almost 9%, up 55 cents, trading at $7.00. Meanwhile, SLB is flat at $19.

New geothermal company: Schlumberger New Energy, a new Schlumberger business, and Thermal Energy Partners have agreed to create STEP Energy, a geothermal project development company. Link here.

First project: the 10 MW Nevis Geothermal Power Project on the Caribbean island of Nevis.

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They must be reading the blog: I talked about this from the very beginning and then mentioned it again, just last week. Now, over at Reuters, moving into the Permian was a fool's errand -- overpriced deals and unwanted assets. This will drive a stand-alone post:

Overall, Permian basin purchases accounted for nearly a third of the 2016-2019 deals, Ernst and Young said. In the Permian, over 80 deals were done in which exploration and production companies (E&Ps) paid over $10,000 an acre, according to industry information provider Enverus.

“The current price environment is in no way sufficient for a large number of E&Ps in the medium-term,” said Artem Abramov, Rystad Energy’s head of shale research.

Different formulas can be used to evaluate deals, but analysts said Concho Resources Inc’s March 2018 purchase of RSP Permian was one of the costliest. The $9.5 billion deal implied a $75,504 purchase price per acre.

Diamondback Energy Inc’s 2018 purchase of Energen came out to a $54,977 per-acre price, but from a price-per-barrel metric, it was the most expensive Permian deal, according to Wood MacKenzie, at an average Brent price of more than $77 a barrel.

Drones: Equinor makes drone news in the North Sea. Link here.

Equinor has completed the world’s first logistics operation with a drone to an offshore installation, the company announced late last week.

Under the operation, a drone flew a 3D printed part for the lifeboat system from the Mongstad base to the Troll A platform in the North Sea.

The flight spanned around 50 miles to the Troll field and took about one hour. An altitude of around 5,000 feet was reached by the drone, which is more than 13 feet long and weighs in excess of 220 lbs.

OPEC basket, link here: $46.27. This certainly appears to be the beginning of a breakout. See the graph at the link.

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. 

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Back to the Bakken

Active rigs:

$43.09	9/1/2020	09/01/2019	09/01/2018	09/01/2017	09/01/2015
Active Rigs	10	64	63	56	76

No wells coming off confidential list today.

RBN Energy: is propane production increasing or decreasing? Great article. I think the answer will surprise you. Archived.

Understanding whether propane production is up or down over the past few months is a bit more difficult than you might think, depending on which set of EIA numbers you choose to look at. 

The U.S. Energy Information Administration provides monthly numbers on the last day of the month lagged by about two months, and weekly numbers on Wednesdays, lagged by only five days. Both time series are closely watched by the propane market to assess the availability of supply for retail customers, petrochemical feedstock demand, and exports. 

Usually, these two sets of numbers move in tandem. But not always. The monthly numbers show production down by about 70 Mb/d from April to June, which is what you would expect given what was happening with crude and gas production at that point in time. Yet EIA weekly production numbers showed production increasing by about 90 Mb/d for the same period. So which way is propane production really trending? If you want to understand what’s going on, and you don’t mind delving into some deeply wonky NGL analytics, hang on for today’s blog.