Six Wells Coming Off Confidential List -- January 31, 2022

NOG: update. Announces closing of Permian Basin acquisition from Veritas Energy. 

• closing settlement: $419.4 million in cash + 1.94 million common stock warrants at $28.30 / share
• additional information here; previously posted
• this NOG-Permian acquisition is a different deal;
• back-of-envelope:
• 1.94 *28.30 = $55 million
• + $419.4 million = $474.3 million
• $474.3 million / 9,100 boepd = $52,000 / boepd
• at 10,500 boepd estimate in 2022 = $45,000 / boepd
• Delaware Basin, core, 6,000 net acres = $79,000 / acre

Shooting oil in a barrel: Doomberg.  

********************************
Back to the Bakken

Active rigs:

$87.07	1/31/2022	01/31/2021	01/31/2020	01/31/2019	01/31/2018
Active Rigs	31	13	54	65	59

Monday, January 31, 2022: 55 for the month, 55 for the quarter, 55 for the year

• 37983, conf-->loc/drl, CLR, Clear Creek Federal 9-26H, Westberg, no production data,
• 37909, conf-->loc/drl, CLR, Charolais South Federal 11-10H2, Elm Tree, no production data,

Sunday, January 30, 2022: 53 for the month, 53 for the quarter, 53 for the year

• 37986, conf-->loc/drl,CLR, Clear Creek Federal 8-26H1, Westberg, no production data,
• 37908, conf-->loc/drl, CLR, Charolais South Federal 10-10H, Elm Tree, no production data,

Saturday, January 29, 2022: 51 for the month, 51 for the quarter, 51 for the year

• 37984, conf-->loc/drl, CLR, Clear Creek Federal 7026H, Westberg, no production data,
• 37907, conf-->loc/drl, CLR, Charolais South Federal 9-10H1, Elm Tree, no production data,

RBN Energy: after MVP setback, is the Appalachia gas forward curve wrong?

There was no shortage of drama in the U.S. natural gas market last week. The February Henry Hub CME/NYMEX contract expired in a blaze of glory after frenzied short-covering led to the largest single-day percentage gain since Henry futures began trading in the 1990s. The Northeast was bracing for a weekend “bomb cyclone,” a particularly gnarly nor’easter that brought frigid temperatures and threatened to disrupt the market just as heating demand spiked. But there was another, more subtle but still seismic event that occurred, one that is likely to reverberate well beyond the near-term horizon. Namely, the Equitrans Midstream-led, 2-Bcf/d Mountain Valley Pipeline — the only major expansion project left for increasing egress out of the Appalachian gas supply basin — lost two key federal permits, all but ensuring that the long-delayed project will miss its latest target in-service date of this summer, and potentially be held back another year, or more. In our Top 10 Prognostications for 2022 blog, #7 predicted more severe capacity constraints and weaker basis differentials for Appalachian gas producers. This is the latest indication that things could get worse — and sooner — than previously expected. In today’s RBN blog, we focus on our latest outlook for Appalachia’s gas takeaway constraints and basis pricing.

For those holding onto a glimmer of hope that the long-delayed Mountain Valley Pipeline (MVP) — a big and important greenfield Appalachia natural gas takeaway project — would finally come to fruition this year, it’s safe to say those dreams were shattered last week. On January 25, the U.S. Court of Appeals for the Fourth Circuit vacated federal permits from the U.S. Forest Service and Bureau of Land Management that were needed to complete a 3.5-mile stretch of the mainline through the Jefferson National Forest along the West Virginia-Virginia border. The ruling said the permit approvals were premature — issued before the Federal Energy Regulatory Commission’s (FERC) environmental assessment — and failed to comply with the Forest Service’s 2012 Planning rule. The decision effectively sends the project back into the review process for the second time since construction began in 2018.