Breakevens — Re-Posting — April 6, 2024

Locator: 46930WTI.

WTI breakevens: The other day, a talking head on CNBC made a comment in passing about the breakeven for US WTI: it's $35 for existing wells in the Permian. Here's one source for that comment.

Monday, Monday -- March 4, 2024

Locator: 46670B.

Crawfish App: up and running; free. Crawfish now available in our area, running $9 to $12 / pound. 

Apple iPhone: simply amazing; every day it seems I find another incredible feature that makes my life so much easier.

Apple M3: announcements this morning. 

Somewhat of a surprise how early in March announcements made.M3 MacBook Air available for pre-order. A bit confusing but prices possibly slightly lower than previous models. With improvements (not best word) definitely much cheaper. Will fly off the shelves; will be #1 computer for college students this fall.

Breakeven: Saudi, Qatar:

Sports:

• basketball
• that Iowa - Ohio game was huge, yesterday; I'm hoping I can find it again, re-airing;
• average ticket price for yesterday's game: $546
  
• watching highlights now 
• Caitlin looking to sign with Indiana Fever; their season tickets already rising
  
• women's March Madness begins March 20, 2024
• Vanderbilt, SEC, on the bubble, as they say
  
• men's: begins March 19, 2024
  

• rain-delayed PGA tournament concluded this morning
• leader started on 8th hole
• incredible: aired on Golf Channel to which I don’t subscribe and aired on Hulu (via Amazon Fire Stick on Philips big screen bought years ago at Walmart). 
• Austin Eckroat, champion, by three strokes, first time winner at PGA tournament; automatic invite to Master’s later this year. Set all kind of records despite bogey on 14th; 50th start. Hadn’t won an event since 2019.
• elsewhere: $250,000 penalty for playing too slowly; article also explains why we didn’t see some big name players at this weekend’s PGA tournament.

Movies:

• lots of thoughts on Dune: Part 2; saw it last night; can't decide what to say about it
• Washington Post; over at RogerEbert.com; 
• quick notes:   
• huge for Dune fans; not my kind of movie
  
• while watching, flashed across my mind: Star Wars, Apocalypse Now -- both so much better than Dune. 
• while watching, flashed across my mind: Bloom's The Western Canon, the Bible, Shakespeare plays;
• first Star War movies much better; 
• minimal character development in Dune; can't warm-up / connect with Dune characters
• story line: dorky; not original at all
• too many scenes too dark (as in lighting, not story line)
• dialogue: not developed
• Christopher Walken: big disappointment; doesn't seem to fit; review here;
  
• $11.37 with tax; about the price of monthly subscription to Amazon Prime
  

Literature:

• Stuff Jeff Reads; looks like his last post was in 2022; Tristram Shandy; The Western Canon;
• Harold Bloom obit -- October 13, 2019; updated November 1, 2019; NYT; 

Personal investing: lots of dividend cash this month, but for now, holding; honestly can't decide

• after two years of re-balancing the portfolio, not sure what to do next
• will wait to see what Jim Cramer says this a.m.; panelists at "Half-Time Report" 

Dow 30 components, today, pre-market: link here.

Two tickers, I guess we'll start with the "A"s today: 

Ford monthly sales: F up 4% today.

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Back to the Bakken

WTI: it's Monday, WTI is down; trading at $79.43.

Tuesday, March 5, 2024: 91 for the month; 150 for the quarter, 150 for the year
None.

Monday, March 4, 2024: 91 for the month; 150 for the quarter, 150 for the year
36282, conf, Enerplus, Warthog 149-93-31D-30H-TF,

Sunday, March 3, 2024: 90 for the month; 149 for the quarter, 149 for the year
40006, conf, Slawson, Thor 2-31-30H,
36280, conf, Enerplus, Meerkat 149-93-31D-30H,

Saturday, March 2, 2024: 88 for the month; 147 for the quarter, 147 for the year
None.

RBN Energy: with brutally. bearish fundamentals, how low could natural gas prices go?

It’s been a devastating few weeks for the natural gas market. Sure, Shale Era abundance was supposed to keep gas prices from skyrocketing — and it generally has. But seriously? Henry Hub gas sinking below $2/MMBtu — and staying there, in the depths of the winter heating season? Prices have stabilized a little in recent days as a few E&Ps announced cutbacks in capex and gas-focused drilling, but gas-storage levels are abnormally high, coal-plant retirements have trimmed opportunities for coal-to-gas switching, and any significant gains in LNG exports aren’t going to happen until this time next year. With all that, you’ve gotta ask — as we do in today’s RBN blog — how low could natural gas prices go?

Eleven New Permits -- June 6, 2023

Locator: 44855B. 

From social media: link here.  Note CHRD below (Oasis + Whiting).

From social media: link here.

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Back to the Bakken

Active rigs: 36.

WTI: $71.54.

Natural gas: $2.265.

Eleven new permits, #39946 - #39956, inclusive:

• Operators: Hess (6); Oasis (4); Resonance Exploration.
• Fields: Big Butte (Mountrail); Alger (Mountrail); Bull Butte (Williams); Bonetrail (Williams); and, Sergis (Bottineau)
• Comments:
  
• Hess has permits for three EN-Wefald wells and three EN-Heinle wells, NENE 25-156-94;
• to be sited 824 FNL and between 1118 FEL and 1283 FEL; Big Butte oil field, Mountrail County;
  
• Oasis has permits for four Archerfield wells in SWSE 16-156-102; three are in Bull Butte oil field and one is in Bonetrail oil  field; 
• to be sited between 383 FSL and 482 FSL and 2352 FEL;
  
• Resonance Exploration has a permit for EOR, Resonance Lodoen 12-36H injection, NWSW 36-163-80; 
• to be sited 1838 FSL and 554 FWL.
  

One permit canceled:

• 37533, MRO, Rutledge 14-33H, Dunn County;

Two producing wells (DUCs) reported as completed:

• two CLR Kelling wells
• 39043, 1,051, CLR, Kelling 3-4H, Jim Creek,
• 39044, 1,035, CLR, Kelling 4-4H, Jim Creek, 
• the parent well is #18836; drilled in 2010; 225K 10/22; offline
  
• these wells are just east of the Micahlucas wells that are on DRL status
  

Best Thread Ever; Five DUCs Reported As Completed; No New Permits -- February 17, 2022

Best thread ever. Wow, it took them a long time to come around to what we've been saying for quite some time. Like the past ten years.

And from that thread, from Bloomberg, rigs don't matter (don't take that out of context):

And, more:

We've also said this for years, link here:

And that $72 for Saudi Arabia is low-balling it. Some years ago, it was $100. 

Link here.

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Back to the Bakken

Active rigs:

$91.76	2/17/2022	02/17/2021	02/17/2020	02/17/2019	02/17/2018
Active Rigs	33	15	56	64	56

No new permits.

Five producing wells (DUCs) reported as completed:

• 37242, 3,567, MRO, Denny 11-3TFH,
• 37156, 4,122, MRO, Lowry 44-9TFH,
• 38189, 1,102, CLR, Tallahassee FIU 8-21HSL,
• 38396, 1,330, CLR, Dvirnak 10-7HSL1,
• 38320, 995, CLR, Dvirnak 11-7H,

WTI Surges -- Well, Sort Of -- April 12, 2021

Wow, what a great way to start a week: the market is down (another buying opportunity) and WTI is up for some unknown reason (CBS 60 Minutes, inflation), up over 2%; up over $1.20/bbl; and trading over $60. 

Favorite graph: this graphic has appeared numerous times over the past couple of years. Some accept it, some don't. Whatever. I think it's pretty close to "accurate."

The difference between previous administration and this administration:

• previously: tweet, get 'er done;
• now: announce a new committee; a new White House summit;

MLB: move $100 million  --

• from "black" majority city,
• to "white" majority city,
• and, call it racial justice. 
• others call it karma.
  

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Back to the Bakken

Active rigs:

$60.57	4/12/2021	04/12/2020	04/12/2019	04/12/2018	04/12/2017
Active Rigs	15	36	63	59	51

Wells coming off the confidential list this week  --

• Monday, April 12, 2021: 6 for the month, 6 for the quarter, 87 for the year:
  None.
  
• Sunday, April 11, 2021: 6 for the month, 6 for the quarter, 87 for the year: 
• 37833, conf, Midwest AgEnergy Group, LLC, MAG 1, wildcat, lot 1 section 18-145-82; target: Precambrian; see this note;
  
• Saturday, April 10, 2021: 5 for the month, 5 for the quarter, 86 for the year:
  None.

RBN Energy: Patoka crude oil terminals and outbound pipelines, part 3.

It is impossible to overstate the significance of the crude oil hub in Patoka, IL, to refineries in the Midwest. The seven-terminal hub, whose 80-plus above-ground tanks can hold more than 17 million barrels of crude oil, serves as the primary storage, blending, and staging site for a dozen refineries in five states with a combined capacity of more than 2.6 MMb/d. In other words, if the folks that keep Patoka running decide to take a couple of days off, Midwest refining would pretty much grind to a halt. And that’s not all: the southern Illinois hub also plays a critical role in sending crude oil south to the Gulf Coast. Today, we conclude our series on the Patoka hub with a look at the infrastructure within the facility’s boundaries and the pipes that transport oil out of it.

This is the third and final episode in our review of the second-largest crude oil hub in PADD 2, the largest being Cushing in Oklahoma. As we said in Part 1, the Patoka hub has undergone a number of changes since the late 1930s and early ’40s, when it first emerged as a regional storage and pipeline center to support the area’s then-thriving crude oil production. As Illinois production declined, these midstream assets made Patoka a natural hub for receiving piped-in crude from more distant sources and distributing it further to refineries being developed across the Midwest. First it was crude from Texas and Wyoming, then from the offshore Gulf of Mexico and overseas producers delivered via the Capline pipeline from St. James, LA, to Patoka. In the early and mid-2010s, rising Western Canadian production spurred the development of Keystone and other new pipelines to move that crude — and diluted bitumen, or “dilbit” — to U.S. markets. Then, in 2017, came the start-up of the Dakota Access Pipeline (DAPL), which runs from the Bakken production area in western North Dakota to Patoka, followed by expansions of the Ozark and Wood River-to-Patoka (Woodpat) pipelines that help bring in WTI and other light, sweet domestic crude from a long list of basins, including Powder River, Denver-Julesburg (DJ), SCOOP/STACK, and Permian.n Part 2, we discussed the five pipelines that flow directly into the Patoka hub as well as the many upstream systems that feed into these lines. As a group, Patoka’s five inbound pipelines have a combined capacity of just over 2 MMb/d: 454 Mb/d from Woodpat, 590 Mb/d from Keystone, 570 Mb/d from DAPL, 300 Mb/d from Southern Access Extension, and 100 Mb/d from Mustang. And, with plans already in place to expand three of these pipelines (Keystone by 50 Mb/d, DAPL by 180 Mb/d, and Southern Access Extension by 100 Mb/d), that 2 MMb/d inbound capacity will soon increase to more than 2.3 MMb/d.

Today, we turn our attention first to the hub itself, which includes a mix of large, medium, and small terminals, and to its main operational function — namely, as a well-connected grouping of tankage that enables refiners and others to store, blend, and stage crude oil with the aim of maintaining desired flows of specific types of crude oil to an array of refineries in Illinois, Indiana, Ohio, Michigan, and Kentucky. Patoka’s tanks and intra-hub pipelines provide another operational function too: helping to manage southbound flows on the Bakken Pipeline System via the DAPL conduit to Patoka and the Energy Transfer Crude Oil Pipeline (ETCOP) from the Illinois hub to the Gulf Coast. Like Cushing (though to a much lesser degree), Patoka is often used as a place to sock away crude oil for commercial purposes — that is, to take advantage of contango markets, when the price of oil a few weeks or months from now is higher than the price today.

Shale Looking Good At $52-WTI -- February 5, 2021

Full story here. 

The Permian Delaware, Midland, Bakken, Denver-Julesburg, Eagle Ford, SCOOP/STACK and Powder River all shifted above the 10% cost of capital mark, suggesting new wells coming online should be able to realize cash flow neutrality at a minimum, according to S&P Global Platts Analytics.

The graphic:

 

For The Archives -- US Oil Sector Going Forward -- January 30, 2021

This was posted a few days ago; I'm finally posting it for the archives. It will help explain to Californians why gasoline prices will start trending higher this next year. 

Inflation-adjusted gasoline prices can be tracked here.

Friday, June 19, 2020

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

AAPL: pre-market trading, AAPL just hit its all-time intra-day record high of $355.40 before falling back to $355.30. Gonna be an interesting day. This is Friday, isn't it, going into a weekend?

Saudi breakeven: from "lower for longer," oilprice:

Normally, a forced production cut in U.S. shale would have been enough for a price rebound to levels that would allow the Gulf economies’ budgets to break even.

It is this breakeven that is important to them, not production costs that are notoriously the lowest in Saudi Arabia.

For all these low production costs, Riyadh needs $78.30 a barrel of Brent to clear its budget, and $58.10 a barrel of Brent to clear its current account. And things are not much different for its Gulf neighbors.

Russia: happy with $50-oil. 

OPEC basket, today, link here: flat at $37.70.

*******************************

Buffett Spreadsheet

	Airline	Shr Price: 3/31/2020	Dollars: 3/31/2020	Shares	Shr Price: June 19, 2020	Total: June 19, 2020
	DAL	28.53	675,000,000	23,659,306	31.58	747,160,883
	UAL	31.55	675,000,000	21,394,612	40.44	865,198,098
	AAL	12.19	675,000,000	55,373,257	16.92	936,915,505
	SWA (LUV)	35.61	675,000,000	18,955,350	36.46	691,112,047
			2,700,000,000			3,240,386,533
	AAPL	254.29	2,700,000,000	10,617,799	355.42	3,773,777,970
						533,391,437
						3,240,386,533
						16.46%
March 24, 2020		224		10,617,799		2,378,386,881
6/19/2020		355		10,617,799		3,769,318,495
						1,390,931,614

Saudi Aramco Breakevens -- Re-Visited -- May 13, 2020

This takes me back to all those discussions about the breakeven costs for Saudi Aramco and how inexpensive it is to produce oil in Saudi Arabia. Breakevens are very, very similar to those in tier 1 plays in the US.

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Highway 61 Re-Visited

Highway 61 Revisited, Karen O and The Million Dollar Bashers   ********************************** Steak Update  

Omaha Steaks: still a lot of selections "temporarily unavailable."

 

 

Another option from a reader: crowdcow.com.   

Cuts -- April 9, 2020

Updates

Later, 5:32 p.m. CT: OPEC+ confirms cut of 10 million bopd in May, June, 2020. Will US see another one or two million of decreased production?

Original Post

OPEC+ rumors.  Link here.

• Cuts could be as large as 20M bbl/day, Reuters reports, citing an unidentified Russian source and an OPEC source. 

Natural gas fill rate, link here.

From RBN Energy the other day:

In line with my thoughts about Oasis.

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The Literature Page

Middle Earth.

Tolkien first used the term "Middle-earth" in the early 1930's in place of the earlier terms "Great Lands", "Outer Lands", and "Hither Lands" to describe the same region in his stories.

"Middle-earth" is specifically intended to describe the lands east of the Great Sea (Belegaer), thus excluding Aman, but including Harad and other mortal lands not visited in Tolkien's stories.

Many people apply the name to the entirety of Tolkien's world or exclusively to the lands described in The Hobbit, The Lord of the Rings, and The Silmarillion.

In ancient Germanic and mythology, the universe was believed to consist of multiple interconnected physical worlds (in Nordic mythology, in West Germanic and English mythology).

The world of Men, the Middle-earth, lay in the centre of this universe.

The lands of Elves, gods, and Giants lay across an encircling sea.

The land of the Dead lay beneath the Middle-earth. A rainbow bridge, Bifrost Bridge, extended from Middle-earth to Asgard across the sea. An outer sea encircled the seven other worlds (Vanaheim, Asgard, Alfheim, Svartalfheim, Muspellheim, Niflheim, and Jotunheim).

In this conception, a "world" was more equivalent to a racial homeland than a physically separate world.

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Bird Watching

Notes From All Over, Part 1 -- February 17, 2020

Word for the day: velleities. Link here. Fourth word in very first sentence/first line.

Short shelf life: I may be wrong, buy my hunch is that a lot of "political stories" are going to have much shorter half-lives after the Mueller investigation (two years) and the impeachment (six months). Prior to these two events, the Roger Stone story might have had legs, lasting months. But my hunch is that the Roger Stone story is already over, except at anti-Trump cable network news shows. Do a word search for "Stone" over at The Drudge Report and the only hit is for The Rolling Stone Magazine.

Bloomberg: the videos suggest Bloomberg is much more vulgar and much more inappropriate than folks thought. Remember, he's a New Yorker, and spoke his mind. Tweets are one thing, but the videos that are being aired, are quite remarkable, to say the least. 

Black bears: thriving in New Jersey despite global warming. 700-pound black bear taken with bow-and-arrow sets new world record.

Something worse than Trump? No, this is not from the Babylon Bee: link here. This is a US senator. Posted as a PSA -- summer is just around the corner, as they say.

Bakken: old story; re-posting. Breakeven prices in the Bakken.

Cheap oil: China is renting huge storage facilities in South Korea for all the oil they are buying -- never let a crisis go to waste. WTI at $52.10 today. In the sweet  sport for the US consumer.
 

Managing Their Assets -- December, 2019, Data -- Director's Cut

The December, 2019, North Dakota oil and natural gas production data has been posted.

Comments and commentary here.

Actually, there are two takeaway stories from the December, 2019, data. Hopefully I don't forget what they are when I post my comments later. LOL.

Later, from Platts:

North Dakota oil production fell to 1.475 million b/d in December, down nearly 43,400 b/d, or about 3%, from what is now a record November, the North Dakota Pipeline Authority said Friday, February 14, 2002.

The state has revised upwards its production estimate for November to 1.519 million b/d, up more than 3,600 b/d from its initial estimate last month, making it the state's latest oil output record, breaking the record set in October.

North Dakota natural gas production averaged nearly 3.06 Bcf/d in December, down about 0.08 Bcf/d from November, the pipeline authority said. The authority estimates about 16% of the state's natural gas was flared in December, including 12% flared due to challenges or constraints on existing gathering systems and 4% flared from wells with zero sales.

There were 111 wells completed in December, down three from November, while the number of producing wells fell from an all-time high of 16,110 in November to 15,979 in December, according to the state department.

The number of wells waiting on completion climbed from 919 to 958, while the number of inactive wells climbed from 1,726 in November to 1,920 in December.

Lynn Helms, the department's director, told reporters Friday he expects the number of inactive wells to climb due to declining oil prices and the demand impacts of the coronavirus outbreak.

"My expectation is that at these oil prices, the cashflow for returning inactive wells to production is turned off," Helms said.

Helms said he expects the inactive well count to climb through the middle of this year, adding marginal, low-producing wells will be most vulnerable to low prices. The state allows operators to keep wells in inactive status for one year.

Statewide breakeven prices in the fourth quarter of 2019 averaged $10/b WTI, according to the state agency's latest data. North Dakota's McKenzie County, which accounts for half of the state's rig count, had a breakeven of $8/b, in Q4, according to the state data.

Saudi Aramco IPO -- The Economist's Perspective -- December 4, 2019

The Economist. Hard copy. (I assume the internet edition is behind a paywall.)

November 2nd - 8th, 2019.

Front cover, "To The Last Drop: Saudi Arabia's Strategy to Survive The End Of Oil."

Op-ed on page 11.

Three-page essay, starting on page 61.

First from the op-ed, page 11, near the end of the op-ed, verbatim:

America, meanwhile, remainswedded to oil, which meets 40% of its energy needs. Its thirst has been satisfied by the fracking boom, especially in he Permian basin in Texas. Yet fracking is dirty and new projects need an oil price of $40 - $50 a barrel to break-even, at twice the level Aramco requires. For the sake of the climate and efficiency, the fracking industry should eventually shrink. That, though, would make America more reliant on foreigners, just as its politics have turned inward.

Now, from the essay, page 63:

Aramco's breakeven costs for new projects, even after tax, are $31, according to Rystad Energy's data, slightly higher than Iran, Iraq or Kuwait but less than half the level of Russiant and wo-thirds the level in America.

From the NDIC, breakevens in the Bakken, released August 15, 2019:

 

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One comment: The Economist again disingenuously omits the fact that Saudi Arabia's budget is based on its only export product: oil. Several years ago Saudi said it needed $100/bbl to balance its budget. When the price of oil plummeted, Saudi Arabia initially said they only needed $80/bbl and then said they could meet their budget even at $60/bbl (Brent). Production costs are important, even for Saudi Arabia, but failing to state the budgetary requirements for Saudi Arabia completely misses the bigger picture. 

Breakeven Points -- Definition -- November 8, 2019

Link here.

Article can saved as a PDF.

Tag: break-evens; breakeven; breakevens, breakeven points.

Breakeven Points In The Bakken -- A Closer Look At MRO Wells -- November 8, 2019

Updates

Later, 9:46 p.m., see first comment.

Filloon on MRO in the Bakken: back in August, 2018, Mike Filloon, over at SeekingAlpha, had a great update regarding MRO in the Bakken. It is still accessible, though you may have to register at the site.  Archived, in case the SeekingAlpha site "disappears."

At that SeekingAlpha article, Filloon posted this graphic, one of many:

Original Post 

See this post.

Average wells are now costing MRO less than $5 million/well. See 3Q19 MRO earnings conference call presentation.

$5 million / $50-oil = 100,000 bbls of oil (does not include associated NG and NGLs)

$5 million/ $40-oil = 125,000 bbls of oil (does not include associated NG and NGLs)

$5 million / $30-oil = 167,000 bbls of oil (does not include associated NG and NGLs)