Tuesday, April 28, 2020

BR With Permits For A Faye/Don Juan Pad -- April 28, 2020

Work On Long X Bridge Continues

Back to the Bakken

API: a build of 10 million bbls, in line with forecast. EIA data will be released tomorrow. 

OPEC basket: $13.30

Active rigs:

Active Rigs3064624929

Three new permits, #37539 - #37541, inclusive --
  • Operator: BR
  • Fields: Elidah (McKenzie), Dimmick Lake (McKenzie)
  • Comments: 
    • BR has permits for two Faye wells in NENE 14-151-97, Elidah oil field; both 290 FNL, about 650 FEL
    • BR also has a permit for a Don Juan well in NENE 14-151-97, Dimmick Lake; 290 FNL 581 FEL;
Four permits renewed (a lot of typographical errors on the daily activity report):
  • SHD (3): a Charging Wildcat; a Luke Neset, and a War Eagle permit, all in McLean County;
  • Rimrock: A Two Shields Butte permit in Heart Butte; misidentified in the daily activity report
Two producing wells (DUCs) reported as completed:
  • 24089,  TA/A, Equinor, Sax 25-36 7H, Banks, t--; cum 74K 2/20; a nice well, TA'd soon after being completed;
  • 36498,  SI/NC, MRO, Peterson USA 41-3TFH, Reunion Bay, t--; cum 75K in three months;

One Last Hurrah -- OPEC Oil Supply Surges In April -- Ahead Of New Cuts -- Reuters -- April 28, 2020

Link here.

Independent analyst: Geneva-based Petro-Logistics --
  • OPEC "supply" surged by more than 2 million bopd in April
  • highest since December, 2018
  • increase driven by record supply from Saudi Arabia and the UAE
  • multi-year high from Kuwait
  • the new quotas take effect May 1, 2020

That's a 60-million-bbl surge for the month. Meanwhile, the US SPR received one million bbls of crude oil in the month of April -- reported by Bloomberg.

As I've said many times on the blog, there never was an "OPEC." It was all Saudi Arabia and now it's come down to this: Saudi Arabia vs Russia vs the US. 

To paraphrase Roy Scheider in Jaws: "we're gonna need a bigger hole."

Déjà Vu All Over Again

I remember all the discussion on the blog some years ago regarding shale vs offshore. Some memes from that era:
  • offshore produces oil more cheaply than shale;
  • global supply will fail to meet demand because oil companies investing so little in offshore drilling;
April 27, 2020: Diamond Offshore files for bankruptcy Year-end 2019 data:
  • $5.8 billion in assets
  • $2.6 billion in debt
  • $434.9 million in cash on hand
Diamond owns rigs that can drill in water more than two miles deep. But offshore oil is among the most expensive to produce, putting the company at a disadvantage when prices plunged to less than $30 a barrel.
While newer deepwater projects are less expensive, they still take longer to develop than shale wells and they still can’t compete on costs. What’s more, a global glut of offshore vessels has squeezed profit margins.

Saudi imports: there are reports that US will import 600,000 bopd from Saudi Arabia in April. This is 50% higher than the current 400,000-bopd-average over past few months but is in line with Saudi imports one year ago

BP earnings plummet by two-thirds -- reported by Financial Times. Maintains dividend.

Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

Venezuela: importing gasoline.

US exported record amount of naphtha; the drop in US gasoline demand due to COVID-19 lockdown measures has reduced requirements for naphtha for domestic gasoline blending, prompting US producers to export excess cargoes not only from the US Gulf Coast but also the US West Coast. Link here to S&P Global Platts.

Texas governor will let "stay-at-home" orders to expire on May 1, 2020. First place I'm gonna visit: local Lego min-bricks and figures outlet.

Ferrule: word of the day. From I. Pencil

WTI Falls A Whopping 16%; Six Wells Coming Off Confidential List Today -- April 28, 2020

OPEC basket: $14.31 -- a drop of over 6%; WTI fell a whopping 16%. OPEC basket link here. OPEC had it as low as $13.30 yesterday.

Headlines over at oilprice.com -- it's all about storage:
  • oil prices crash 24% as storage fears mount -- yesterday
  • South Korea has run out of storage -- yesterday
  • Russia steals Chinese oil market share from Saudi Arabia -- yesterday
Back to the Bakken

Active rigs:

Active Rigs3064624929

Six wells coming off the confidential list -- six months ago, it was October, 2019  --

Tuesday, April 28, 2020: 46 for the month; 46 for the quarter, 290 for the year:
  • 35706, 2,382, Hess, SC-Hoving-154-95-1003H-7, Truax, t10/19; cum 88K 2/20; a 37K month;
  • 35705, 2,716, Hess, SC-Hoving-154-98-1003H-8, Truax, t11/19; cum 102K 2/20; a 34K month;
  • 35534, A, Oasis, Merritt 5693 13-24 6B, Alger, t--; cum 62K in less than three months;
  • 35532, 738, Oasis, Merrit 5693 13-24 8B, Alger, t11/19; cum 76K 2/20; two 23K months;
  • 34164, drl, Crescent Point Energy, CPEUSC Lloyd 5-27-34-157N-100W TFH, Marmon, t--; cum --;
  • 33811, drl, BR, CCU Gopher 8-2-15MBH, Corral Creek, t--; cum --;
SC-Hoving wells: are tracked here, but need to be updated. 

RBN Energy: Permian natural gas forwards curve signals better days ahead. Archived.
The market’s spotlight in recent days has been on negative prices for both Permian crude oil and natural gas, but in the shadows a powerful rally has taken place in the forward market for Permian gas at the Waha hub.  Much of this month’s price weakness for gas in West Texas has been driven by pipeline maintenance.
But the Waha forward curve indicates market expectations for higher prices in May, and the possibility of a summer in which Permian gas prices could be some of the strongest on a consistent basis since negative pricing first appeared in the basin back in 2018.
Today, we dive into the drivers behind the rise in forward Permian gas prices.