Thursday, April 23, 2020

Saudi Arabia Is In Deep Doo-Doo -- April 23, 2020


April 24, 2020: I am so fascinated about Saudi Arabie, I forget to mention Iran. That country is in real, real trouble. For the first time in years it is asking for a $5 billion loan from the IMF.

Original Post
OPEC Basket, link here:

Oilprice confirms:

It's a long, long story, and a long history, and we've discussed it on the blog before, so I'm not going to go through it again, but historically, WTI has traded at a higher price than Saudi oil. Just saying.

Operators in the Bakken can survive on $15-oil with new wells only, and only for the first six months or so. Saudi Arabia needs $73-oil to balance their budget. They might squeeze it to $60, and they might even say they can squeeze it to $50 but the 15,000 princes won't be happy with $12-oil, especially when this was all started by MbS. At least that's the meme. The truth is probably somewhat different.

ND Rig Count Holds Steady At 29; WTI Fairly Stable -- April 23, 2020

Gasoline demand, link here, truly incredible -- if atmospheric CO2 doesn't show a decrease in April, 2020, it will speak volumes about the human contribution to same.

US oil supply, in days, link here:

See previous week data here. At that time I suggested the US will max out at 39.7 days supply of crude oil.

Back to the Bakken

Active rigs:

Active Rigs2961604929

Two new permits, #37533 - #37534, inclusive --
  • Operator: MRO
  • Field: Jim Creek (Dunn County), Murphy Creek (Dunn County)
  • Comments:
    • MRO has permits for two wells; both sited in SESW section 33-145-96, but one in Murphy Creek; the in Jim Creek
Five permits renewed:
  • NP Resources (4): four Elkhorn Ranch Federal permits, all in Billings County;
  • Equinor: a Marcia permit in Williams County
Dry hole:
34107, dry, Oasis, Wren Federal 5300 11-35 8B,

Two producing wells (DUCs) reported as completed:
  • 36496, SI/NC, MRO, Royal USA 41-3TF, Reunion Bay, t--; cum 122K 2/20; a 61K month;
  • 36493, drl, Hess, TI-Stenbak-158-95-2526H-7,  Tioga, t--; cum 8K over 17 dasy;

Too Nice Of A Day To Be Blogging -- April 23, 2020

Because NoDaks "Get 'Er Done"



Last evening, about 8:30 p.m. I saw a driver in a brand-new Budget minivan dropping off Amazon packages.

About an hour later, coincidentally, I saw the article at this line:

T-Mobile: 5G Gets Boost As Sprint Merger Takes Off

With the addition, T-Mobile users in New York will be the first to be able to access low-band, mid-band, and mmWave 5G. Later this month, current Sprint customers who have a Samsung Galaxy S20 5G smartphone will be able to tap into T-Mobile's 5G network in 5,000 cities and towns across the United States.
This marks the first giant step toward supercharging the Un-carrier's nationwide 5G network by beginning to combine the assets of T-Mobile and Sprint, just weeks after completing their merger. The company's unique combination of low, mid and high-band mmWave spectrum makes T-Mobile the only company with the resources to create a transformative network capable of driving innovation across the country and providing people in cities and rural areas with a 5G network the other guys can't match.
As of now, Sprint customers can roam on the T-Mobile network, providing access to more than double the number of LTE sites than on Sprint's network alone, expanding cellular availability to everywhere T-Mobile's network covers.
Too Nice To Be Blogging

I may take the day off, come back to the blog later this afternoon / evening.

It is incredibly beautiful. Sophia and I biked for about two hours in the park, discovering new trails that we had not seen before.

Some photos:

Is this not a great photo?

On the way home, we stopped for donuts. The Texas governor has declared donuts "essential."

And now, outside enjoying breakfast.


Parr Park, Grapevine, TX

 Crawdad Season 

At the grocery store this morning, we picked up a free loaf of French bread -- a promotional item -- which we will "save" for tonight when we have crawdads again.

The seafood restaurant where we get the crawdads, gets a fresh delivery every Tuesday, Thursday, and Saturday, and they always sell out by the following day, which means, Monday is the only day they do not have crawdads. We order early enough to make sure they still have some.

Because there is no traffic, a round trip that would normally take forty minutes + with a challenge to find parking is now a twenty-minute trip and we always find parking right in front of the restaurant. It's really quite incredible. 

Wave Petroleum's Wildcat Tyler Well -- Hudson 1-32 -- Southwest Of Dickinson -- Dry -- But Possibly A Re-Entry Candidate Later -- April 23, 2020


April 23, 2020:

The Wave Hudson 1-32 spud on October 23rd, 2019 by Key 885 to drill the surface and vertical hole. The well reached total depth in 10 total drilling days on November 2nd, 2019. After not observing the channel sand interval suggested by seismic data, Wave decided to plug the well with the possibility of reentry under better economic conditions to exploit the porous interval noted in E-Logs.
Original Post
This is pretty cool: Wave Operating. Coming off confidential list this next week:
  • Thursday, April 23, 2020: 36 for the month; 36 for the quarter, 291 for the year:
    • 37068, DRY, Wave Petroleum Operating, Hudson 1-32, Tyler, wildcat
      • this well is almost exactly 25 miles directly southwest of Dickinson

Only One Well Coming Off Confidential List Today -- April 23, 2020

Jobless claims, link here:
  • prior: 5.245 million
  • revised: 5.237 million
  • consensus: 4.250 millon
  • actual: 4.427 million
  • history:
    • 22 million in four weeks
    • then, another fivepointtwo million "prior week"
    • now 4.4 million
    • is that about 32 million in past six weeks?
    • depression: defined as prolonged (undefined) economic downturn and 20 million unemployed
Gas Buddy: back to 79 cents/gallon in Wisconsin, but hit 75 cents last night.

Bankruptcy and bankers: link at Rigzone
Free oil won’t last. But it may linger long enough to persuade some creditors of bankrupt energy drillers to freeze their court fights awhile so they don’t wind up running a company with a product no one wants to buy.
At least seven North American oilpatch companies have gone bust so far this year, and that was before oil futures started trading at negative prices. This is dimming prospects for creditors who had counted on recovering most or all of their investments.
Losses in those cases give energy lenders an incentive to put court fights on hold, or to back delay of bankruptcy in hopes that prices will rebound, just as retailers and landlords declared a time-out when the Covid-19 pandemic closed stores around the world.
Shale bust, Bloomberg: link here. Interesting:
Even at $15, “everything back in the field, except the newest and most productive wells, is losing money on a cash-cost basis,” said Raoul LeBlanc, a Houston-based analyst at IHS Markit. “At this price you’ll start shutting in large amounts of production.”
US petroleum consumption: EIA link here --

Saudi: announces record debt plan; plans to borrow as much as $58 billion (220 billion riyals) this year. 
  • already announced 120 billion riyals in new debt; looking at a possible additional 100 billion
  • comes on top of cut in government spending
  • to limit drawdown of reserves at 120 billion riyals
  • bond sales in previous years (approximate)
    • 2016: $20 billion
    • 2017: $30 billion
    • 2018: $22 billion
    • 2019: $25 billion
    • 2020: $58 billion 
  • average yields have surged 110 basis points as Saudi investors fled to safer havens, such as US Treasuries; average yields now around 3.4%;
  • IMF estimates Saudi budget based on $73-oil 
Mexico: blinks; will shut down new wells in a move that comes just over a week Maduro almost wrecked a global oil deal by refuisng ot make deep output cuts -- NY TImes; also here.

California masks: Governor Newsom contracts with China firm for masks; $1 billion contract; legislature is yet to see the contract/document. First $500 million has already been processed. The contract is with Chinese firm BYD (Build Your Dreams): known for batteries, EVs. Link here.

Back to the Bakken

Active rigs:

Active Rigs2961604929

Only one well coming off confidential list today --
Thursday, April 23, 2020: 36 for the month; 36 for the quarter, 291 for the year:
  • 37068, DRY, Wave Petroleum Operating, Hudson 1-32, Tyler, wildcat, see this note;
RBN Energy: how much can refineries slow their operations without going offline?
Sharply declining refinery demand for crude oil was a key driver in the historic collapse in near-term futures prices for WTI at Cushing earlier this week. With stay-at-home directives in place in most of the industrialized world, U.S. — and global — demand for motor gasoline and jet fuel has plummeted to levels not seen in decades. These changes in refined-products demand, which may continue for months, already are having significant impacts on U.S. refineries — not just in how much crude oil they need but in operators’ decisions on whether to adjust their crude slates and ramp down or alter their operations. Their urgent challenge is to revise their yields to something close to the appropriate volumes of gasoline, diesel and jet fuel. Today, we begin a blog series on the U.S. refining sector and what refiners can — and can’t — do to adapt to these extraordinary times.