Boom! Staggering! -- Keeping Texas Great -- Making America Great Again -- June 18, 2018

This is simply staggering. Consider all the investments already made along the coast.

Now this.

From Reuters via Rigzone: Texas oil port will raise $300 million for work to handle US shale export boom --

Port officials are expected to consider $300 million in financing that would prepare the country's largest oil-export port - Corpus Christi, Texas - to handle a surge in U.S. shale production over the next five years.

International buyers would like more U.S. crude but are unable to get it because of infrastructure constraints along the U.S. Gulf Coast. 

Terminals originally designed for imports only recently have revamped operations to handle exports including accepting larger tankers preferred by China and other oil buyers.

The port is prepared to levy new user fees for the debt costs if the U.S. government does not reimburse it for spending the money to deepen and widen port facilities to accept larger ships.

The United States is now exporting more than 2 million barrels of oil a day, but the largest tankers currently only move in and out of a Louisiana offshore port because others are not deep enough. [And it's still headline news when one of those VLCC tankers moves in.]

Corpus Christi exports 800,000 barrels per day (bpd) of crude.

Corpus Christi sits on the U.S. Gulf Coast near two of the nation's largest oilfields, the Permian Basin and Eagle Ford shale, which together produce about 4.7 million bpd, nearly half of the total U.S. production.

The channel's existing 47-foot-depth restricts it from fully loading crude tankers that carry up to 1 million barrels. Smaller vessels must finish loading the tankers offshore.

The project will deepen the channel to 54 feet for larger tankers.

Oil export capacity from the Corpus Christi area is expected to rise to 3.3 million bpd by 2021 from 1.3 million bpd this year, keeping its rank as the top oil export port.

Much more at the link.

So, in round numbers, today: 1 million bopd exported from Corpus Christi; in three years, 4 million bopd (yes, I know 3.3 doesn't round to 4.0 but as I've said often about the shale revolution: I'm inappropriately exuberant).

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That Was Crude Oil ... Now, LNG

Did North Dakota Just Set An All-Time BOEPD Production Record? -- April, 2018 Data

I'll let folks fact check me on this.

Disclaimer: I'm inappropriately exuberant about the Bakken. Take everything I say in this post with a grain of salt.

First, go back to the director's cut with the most recent data, April, 2018, data.

April, 2018, data suggests "we" came very, very close to setting a new all time crude oil production record in April, missing the record by 2,500 bopd or about 0.21%. That was missing the record by 2,500 bbls on total production of over 1.224 million bbls of crude oil. Per day.

However, if one adds in the natural gas production it is very, very clear North Dakota set a new all-time BOE production record of 1,598,948 boepd. Staggering.

Someone can fact check me on that, but for now, I will use that as the BOE all-time production record for North Dakota, going forward.

Some other observations:

• 374,000 boepd natural gas production / 1,598,948 boe total production = 23%
• 374,000 boepd natural gas production / 1,224,948 bopd production = 31%
• new Bakken wells, first six months of production: about a 94% / 6% crude oil / natural gas split
• as wells mature, crude oil declines but natural gas production may increase

Other observations:

• reminder, for newbies: the greatest production from Bakken wells occurs in the first six months of production
• in April, there were over 900 DUCs (wells drilled to depth but not completed/fracked)
• had three more DUCs been brought on line in April: 90,000 bbls of oil over 30 days =  3,000 bopd would have been added to total production, setting an all-time record (preliminary data)
• in addition, in April, there were over 1,500 wells on inactive status (many Bakken wells -- and some very good Bakken wells -- are taken off line when neighboring wells are being fracked; they can be off line anywhere from a few days to a few months)
• back in 2014, there were in excess of 175 active rigs drilling in the Bakken; in April, 2018, less than 60 active rigs drilling in the Bakken -- wow, staggering

Bottom line: the April, 2018, data was much more surprising than a lot of folks realize.

Update On Pure Permian Play -- Energen -- Mike Filloon -- June 18, 2018

From SeekingAlpha:

Energen has been in the news lately with Icahn and Corvex mulling a bid to buy the company. The question seems to be why EGN? There are a number of reasons why the company is attractive. The shares seem undervalued at current valuations.

This seems linked to EGN's recent production improvements per location. EGN is a Permian pure play, and has continued to improve production results. The Permian has the most valued acreage, but widening differentials are providing value in some names. EGN's well design changes have amped up production per foot.

Its Gen 3 Delaware frac' design uses 1,800 to 2,400 lbs./ft. of proppant. It has also decreased frac' cluster spacing. These changes have provided a significant improvement, and could continue to do so. Delaware well results continue to improve, and we think it should still be the focus going forward. EGN production improvements have been significant, and we believe this will continue in 2018. We pulled production results from 2016 and 2017. Improvements as a whole have been much better than the average Permian operator. It's Delaware acreage is improving faster than Midland. Locations already produce approximately 40% more oil per foot. EGN also has 85% of its production on pipe. It has hedged for differential protection. Approximately 72% of production is hedged this year.

Compare Energen's frack design in the Permian with that of the Bakken: 1,800 to 2,400 lbs/foot of proppant:

• 9,000-foot laterals
• 10 million lbs
• 50 stages
• 10 million lbs / 9,000 feet = 1,100 lbs/foot (as much as less than half what they're using in the Permian)
• 10 million lbs / 50 stages = 200,000 lbs of sand / stage in the Bakken

Also, look at this (previously posted), link here; EIA's monthly drilling productivity report --

So, the Permian producers are using much more proppant / foot to get much less crude oil / well.

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

Put Another Nail In The Coffin Of The Peak Oil Theory -- Bakken Setting New Reocrds -- June 16, 2018 -- Baseball Attendance Drops Due To Global Warming

Reposting:

From The Bismarck Tribune:

North Dakota oil production jumped 5.4 percent in April to more than 1.2 million barrels per day, coming in just shy of the state’s record.

Director of Mineral Resources Lynn Helms called it a big surprise to see production levels within 2,500 barrels of the all-time high of nearly 1.23 million barrels per day.

“We were not expecting that kind of a surge until late May, early June,” Helms said Friday while discussing the preliminary figures.

Natural gas production increased 7.4 percent in April, setting another record at more than 2.24 billion cubic feet per day.

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Global Warming

The US Open on Long Island: miserable cold, rainy weather, June, 2018. No sign of global warming in NYC.

Also this: major league baseball is reporting a sharp drop in in attendance -- The WSJ. League-wide attendance of 27,328 per game is down almost 7% from this time a year ago.

With the regular season approaching the halfway point, it seems safe to say that this is baseball in 2018: lots of home runs, even more strikeouts—and, relatively speaking, not a lot of people in the stands to see them.

League-wide attendance entering Friday of 27,328 per game is down 6.6% from this date last year and 8.6% overall, according to Stats LLC. The sport hasn’t seen an attendance drop of more than 6.7% in a single season since 1995, when the average crowd fell nearly 20% following the player strike that canceled the 1994 World Series. MLB attendance has remained consistent throughout this decade, never changing more than 1.9% in either direction.

While unwelcome to MLB commissioner Rob Manfred, small decreases in attendance aren’t unusual or cause for alarm. Crowds sank 0.7% last year and 0.8% the year before that. But this season has been more than a minor dip, raising legitimate questions about what is happening.

And to what are they attributing the decline in attendance?  It's been too cold this year.

I can't make this stuff up.

The simplest answer, and the one Manfred would prefer, is the weather.

And undoubtedly, it has been a factor.

Rain and unseasonably cold temperatures plagued an unusual number of markets throughout April and May, causing 36 postponements already in 2018. There were 25 weather postponements total in 2016. Attendance always climbs in the summer, when schools are closed and the thermometer is friendlier, and Manfred said he thinks “weather’s a big part” of the drop so far.

NDIC Site Back Up -- June 18, 2018 -- WTI Recovers

Active rigs (link here):

$65.25	6/18/2018	06/18/2017	06/18/2016	06/18/2015	06/18/2014
Active Rigs	62	57	28	78	189

RBN Energy: Pioneer rides crest of the wave on Permian growth, ample transport to Gulf Coast. Archived.

Permian producers led the U.S. exploration and production (E&P) sector’s remarkable recovery from the financial crisis that was spurred by the oil price crash in late 2014.

Dramatically lower costs and higher well productivity led to strong margins even at $50/bbl oil and promised bountiful returns should oil prices move higher. It’s no surprise that investors flocked to the stocks of Permian-focused producers, driving equity valuations, as measured by enterprise value per barrel of oil equivalent (boe) of proved reserves, to multiples three or four times the industry average.

Recently, however, there have been growing investor concerns that logistical constraints on shipping crude oil and gas out of the region could restrict cash flows, investment budgets and output growth, and on Friday, Baker Hughes reported that the Permian’s rig count was down (albeit by only four, to 476). Since May 15, stock prices of smaller pure-play Permian producers Concho Resources, Diamondback Energy, Parsley Energy, RSP Permian, and Laredo Petroleum have fallen 10-15%.

One of the larger Permian producers has bucked the trend, though: Pioneer Natural Resources. Today, we explore the drivers of Pioneer’s current valuation and analyze the factors that could propel future growth.