One Well Coming Off Confidential List -- Oil Flirting WIth $40 (Yawn) -- October 23, 2020

Permian: another Permian operator may be forced to consolidate or die.  Link to David Messler.

One by one they are starting to fall. The long predicted consolidation wave in U.S. shale players, particularly those with assets in the Permian stacked play, is in high gear. Just in the last month or so, Chevron has taken out Noble Energy; Devon swallowed WPX Energy; ConocoPhillips snapped up Concho Resources; and, just last night, Pioneer Exploration, announced it would merge with Parsley Energy. 

Earlier this year in an OilPrice article, I wrote a detailed thesis for the future of shale that forecast the current wave of consolidation taking place. 

One key tenet that I postulated would come into play was “economy of scale,” meaning that larger, well-established companies would snap up smaller ones with assets that would easily “bolt-on” to their acreage inventory. 

That seems to be the dynamic currently in play. 

Which brings us to the question as to…who is next? 

We think the management at Diamondback Energy might be feeling the heat, right about now. As a combination of debt, liquidity, and assets someone could have them in their sights now.

OPEC basket, link here: $40.88.

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Back to the Bakken

Active rigs:

$40.58	10/23/2020	10/23/2019	10/23/2018	10/23/2017	10/23/2016
Active Rigs	14	56	70	54	34

One well coming off the confidential list today -- Friday, October 23, 2020: 19 for the month; 19 for the quarter, 684 for the year

• 37427, loc/NC, Slawson, Orca Federal 4-23-26TFH, Big Bend, no production data;

RBN Energy: floating LNG prospects fizzle as operational issues emerge. Archived.

Over the past decade, floating LNG — for liquefying and shipping offshore natural gas supply — emerged as a promising technology that would enable development of smaller, more remote offshore gas fields around the world. But with a handful of projects now completed and in commercial operation, the challenges of financing, developing, and operating this relatively new technology are overshadowing its prospects. Of the more than 20 FLNG projects that have been proposed since 2007, only five have crossed the finish line and only two others have reached a favorable final investment decision (FID). Moreover, Shell’s Prelude FLNG offshore Northwest Australia — the largest of the existing FLNG facilities — has been dogged by issues since its commissioning in mid-2019, and the operator last week said the unit will not produce any more LNG cargoes this year, after being shut down since February for electrical problems. Today, we examine the headwinds facing FLNG projects.