Three Stories To Start Your Day -- March 14, 2021

Day rates: Helmerich & Payne to change way it determines lease rates.

• Bakken revolution: from 60 days to 6 days to drill a horizontal well; a data point few talk about;
• cost to drill and complete a well:
• at one time, drilling / completing: about 50/50
• now, some suggest drilling, one-third of total cost; completion, two-thirds of total cost;
• what is not said, the total cost to drill / complete a well may be around 60% of what it was during the boom

Shell's shale sale: say that quickly fifty times; it seems I've posted this before; can't remember; link here;

• buyer: Calgary-based Crescent Point, a common name in the Bakken;
• $707 million deal
• for sale: Shell's Kaybob Duvernay assets for $550 million in cash and 50 million Crescent Point common shares
• assets: about 35,000 boepd by 2Q21
• latest in a string of western Canadian deals:
• Seven Generations Energy Ltd and ARC Resources Ltd agreed to merge;
• Tourmaline Oil Corp purchased rivals Jupiter Resources Ltd and Modern Resources Inc, last fall
• earlier, the much larger deal in which oil sands producer Cenovus Energy Inc took over Husky Energy
• Crescent Point: free cash flow in 2021 -- between $300 and $475 (US)
• Shell, which sold most of its oil sands operations in 2017, said this sale allows it to focus on its "core" upstream positions such as the Permian
  

Oxymoron: OXY's Permian output slump drives millions in midstream losses. Link here. 

The decline in Occidental Petroleum Corp.’s oil production in the Permian Basin has left the company with so much unused capacity on pipelines to the Gulf Coast that the problem will drive a midstream loss of as much as $750 million this year.

Occidental said Tuesday that total Permian production is expected to be about 485,000 barrels of oil equivalent a day this year, well short of the 800,000 barrels of pipeline space it’s committed to. That means the company needs to buy the balance elsewhere, adding to costs.

Occidental has long held more pipe space than it needs from the Permian, in the hope that its shale business would eventually grow big enough to make use of it. But last year’s oil-price crash, and, more recently, the winter freeze in Texas, caused the company to cut investment and production in an effort to prioritize near-term cash flow for debt reduction. That has left its pipeline position exposed.

Reminder:

• Biden XL doesn't matter; western Canada oil supplies to reach record highs;