Notes From All Over -- Part 3 -- The Natural Gas Edition -- September 19, 2021

Updates

September 19, 2021:

From a reader who follows the Appalachia, Marcellus, Utica, very, very closely --  

    The well: the Deremer 2HC, 3,617,694 boe  / 22 months on line -- the "Mighty Marcellus' best! 

        Succinctly, I present you with data, with some context - current to July, 2021 - of the very best                Marcellus well.

 

        This in an effort to show the scale of what has been unfolding in the Appalachian Basin ...

       
        Numbers:

• 220,982,624,000 (just shy of 21 billion) cubic feet production (3,627,694 boe using 5.8 conversion factor)
• 658 days online (~22 months)
• July output 18,291 million cubic feet per day, oil energy equivalent of 3,153 barrels per day 
• currently ranked #7 all time producer, on track to be #1 in a few months

Context:

     This one well can provide the annual residential gas needs for the cities of Cincinnati, Pittsburgh, and Buffalo COMBINED. (75,000 cubic feet per  household/year ... 3 persons/household)

The 5 wells on this Deremer pad all came online 22 months ago and have cumulatively produced 70 billion cubic feet ... enough to supply the annual residential gas needs of Philadelphia, Boston and Atlanta COMBINED

At a cost to drill and complete of approximately $50 million, this pad shows the incredible potential to any and all who continue to disparage embracing the  hydrocarbon bounty that lies beneath our feet.

Population / costs:

• the cities:
• Boston: 700,000
• Philadelphia: 1.6 million
• Atlanta: 500,000
• population total: 2.8 million
• one year to drill / complete the wells: $50 million
• $50 million / 2.8 million = $18 / resident / year -- assuming these wells produce for only one year, which, of course, is not the case. 

By the way, this is why the EU has worked so hard to convince Americans of global warming. The gap between the energy available in the US and the EU is absolutely incredible. The EU desperately needs to keep the US from gapping ahead of the EU. The EU will do anything to make US energy costs equal to that of the EU. 

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Original Post 

Link here.

UK/ Europe: US manufacturer CF Industries and Norwegian chemical producer Yara International ASA announced closure of their facilities due to extraordinarily high European natural gas prices.

UK Steel: will close some steel plants across the UK due to high energy prices.

Freeport LNG, Texas: remained without power Friday; unclear when the plant might return to service.

Cheniere Energy, Inc: asked for FERC approval for a sixth train at Sabine Pass LNG in Louisiana. Approval was requested by Tuesday, September 21, 2021 (good luck with a Dem-dominated FERC). Train 6 is expected to be complete in 1Q22. 

• US LNG export terminals are tracked here. I still get a kick out of the reader who pushed-back on the plans for all these terminals back in 2016. 

Predictions: I don't know if folks recall but only a few years ago, "everyone" was predicting a natural gas shortage in the US and these export terminals were being proposed as import terminals. Then... the Bakken revolution. From twitter:

O&G on Twitter: "In the early 2000s the O&G industry warned everyone that the US would run out of natural gas in 10-15yrs. Those forecasts were spectacularly wrong. Green energy forecasts will also be spectacularly wrong Nobody has a monopoly on being wrong on long-term forecasts." / Twitter

By the way, that was about the time, the experts saw the need for the Keystone XL: ultimately killed by .. Resident Biden. Will we see $150-WTI due to this bone-headed decision?

Bloomberg: winter is coming and Europe is running scarily low on natural gas. Bloomberg used the word "scarily." I used the word "unnerving" earlier this week. I like "unnerving" better.  

NY Times: shutdown of fertilizer plants puts British meat supply at risk. Link here. I can't imagine this happening overnight but it may surprise me. This is the problem:

... carbon dioxide is used to stun animals like pigs and chickens before they are slaughtered, under regulations intended to protect animal welfare. The gas is also injected into meat packaging to extnd the shelf life in supermarkets.

Once current stocks of carbon dioxide run out -- less than fourteen days are left -- some companies would need to "stop taking animals and close production lines."

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How Bad Has It Been In The Bakken

From NaturalGasIntel:

The “number of well completions has been low and volatile since April 2020,” Helms said. The number of active completion crews declined “from 25 to one, then increased to six in July and to 12” as of Friday. 

With all due respect to Art Berman, the long pole in the tent in the Bakken is not the number of active rigs, but the number of frack spreads. One can drill wells -- at the rate of one well every six days for each rig -- until the cows come home, as they say, but without fracking them, they are simply DUCs. And, oh, by the way, all things being equal, fracking generally slows down in the cruel months of January and February in North Dakota.

The big question, unanswered, is whether operators are able / not able to get the frack spreads they want.