Only One Well Coming Off Confidential List -- September 15, 2020

Anticipation: Apple event at 12:00 noon CDT today.

Anticipation: Director's Cut scheduled to be released at 3:00 p.m. CDT today.

OXY: Ecopetrol, Colombia's state-held oil firm, with strategic alliance with OXY to develop acreage in the Permian, plans to have drilled as many as 100 wells in the Permian by the end of 2021. Link here. 

OPEC basket, link here: continues slide, trading at $38.96.

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Back to the Bakken

Active rigs:

$37.78	9/15/2020	09/15/2019	09/15/2018	09/15/2017	09/15/2016
Active Rigs	12	64	65	56	34

One wellscoming off confidential list -- Tuesday, September 15, 2020: 120 for the month; 191 for the quarter, 637 for the year

• 37350, drl/drl, WPX, Fast Dog 7-6HS, Eagle Nest,
  

RBN Energy: Permian oil and gas growth stalls as new pipes come online, altering market dynamics.

A combination of new-pipeline development, lower capex by producers, production shut-ins, and changing expectations for future production has significantly altered crude oil and natural gas market fundamentals in the all-important Permian Basin. Just over a year ago, Permian production was rising steadily and oil and gas pipelines out of West Texas were running at or near full capacity. Since then, nearly 2.2 MMb/d of incremental crude takeaway capacity has come online, and production dropped by about 700 Mb/d before rebounding somewhat in recent weeks. As for gas, some takeaway constraints remain, but they are limited to when pipelines are offline for maintenance, and will be alleviated when new pipelines start operating in 2021. Today, we discuss the recent downs and ups in Permian production, takeaway capacity additions, and the resulting impacts on markets and market participants.

As 2019 was drawing to a close nine months ago, Permian producers knew that big changes would be coming in 2020. But they had no idea what they were in for. They expected steady increases in crude oil and natural gas production, driven by what was then $62/bbl West Texas Intermediate (WTI) and by rising demand for gas from a slew of new liquefaction/LNG export facilities along the Gulf Coast. Producers also were confident that a trio of new crude pipelines from West Texas to the Corpus Christi area — Cactus II, EPIC Crude, and Gray Oak — would ease takeaway constraints out of the Permian, and that while it would take longer, gas-takeaway constraints would be alleviated too as new Permian-to-Gulf Coast pipelines started up in 2020 and 2021.