Sunday, December 15, 2019

Idle Rambling On A Sunday Morning -- Thoughts On The Bakken -- December 15, 2019

First, this article from The WSJ: shale slowdown takes economic toll. I have not read the article yet. I will read it in a few minutes. These will be the story lines I will be looking for:
  • is the article "shale-in-general" or is it focused on the Permian
  • was all shale created equal, or is the Bakken different than the Permian and are the Permian/Bakken different from the other US shale plays
  • will the writer corroborate my thesis that the only US shale plays that matter right now are the Bakken, the Permian, and the Eagle Ford, and the latter is slip-slip-slipping away
  • does the writer understand the inherent nature of boom-and-bust in the oil patch
  • several years ago, it was said that the Bakken would be entering the "manufacturing stage" -- probably about 2016 or thereabouts
  • So, let's take a look at the article:
  • the byline: Midland, TX
  • the lede begins with mentioning the Permian by name
  • operators now focusing on profits over expansion
  • "the boom time is done at this point, unless oil prices go up significantly" -- senior economist at Federal Reserve Bank of Dallas
  • the graphic, revenue change year-over-year, is hard to read
  • shows very well the effect the Saudi surge had on US shale from 2014 - 2017
  • shows very well the boom-bust cycle in the oil patch
  • CAPEX forecast to fall 6% in 2019
  • CAPEX forecast to fall another 14% in 2020, adjusted for inflation
  • jobs are being trimmed; leading to a 5% decline in seasonally adjusted oil-field service employment in the 12 months ended in October, 2019
  • Texas: energy-related employment dropped 2.1%, annualized, through September
  • North Dakota: energy-related employment dropped9 %, annualized, through October, 2019
  • Texas/New Mexico: regional unemployment at 2.4% in October, up from 1.9% in April, 2019
  • Permian workers:
  • hours cut
  • hotel occupancy in Midland has fallen 14% the past ten months compared to the year earlier
  • average cost of a room in Midland was about 55% higher last year (2018) than in 2017
  • silver lining: less employee turnover
  • companies have time to check references, etc
And then this near the end:
The slowdown is unusual because it hasn’t been driven by a sharp decline in crude prices, which have hovered around $57 a barrel this year. Rather, U.S. oil producers are paring growth and spending largely because many have struggled mightily to generate returns for shareholders and are facing tightening access to capital. Including reinvested dividends, a broad index of U.S. oil-and-gas companies’ share prices has fallen about 47% in the past three years as the S&P 500 index soared roughly 49%, according to FactSet.
“Investors are playing a large role here, and that’s the biggest driver of this cycle,” said Chris Wright, chief executive of Denver-based Liberty Oilfield Services Inc., which specializes in hydraulic fracturing. Companies such as Liberty that provide services or parts to shale producers have been among the hardest-hit by the pullback.
Takeaway / comments:
  • simply a snapshot in time
  • almost all of this pertains to the Permian; the Bakken went through the same (boom to manufacturing stage);  
  • looks more like moving into the "manufacturing stage" than bust following a boom;
  • 2020 will be a make or break year for many producers
  • 2021 and farther out: will depend more on the new administration in Washington, DC,  than almost anything else
  • the wild card is what Prince Salman does to prop up his hobby horse
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The Enerplus Chili Pepper Pad In McGregory Buttes

Locator: 10001ERFPEPPER

The initial ten-well pad:

  • 34773, 573, Hidalgo 148-94-11C-2H-TF, McGregory Buttes, t6/19; cum 192K 8/20; cum 332K 3/23;
  • 34774, 1,738, Ancho 148-94-11C-2H, McGregory Buttes, t6/19; cum 305K 8/20; cum 429K 3/23;
  • 34775, 560, Santaka 148-94-11C-2H-TF, McGregory Buttes, t6/19; cum 134K 8/20; cum 249K 3/23;
  • 34776, 357, Thai 148-94-11C-2H-TF, McGregory Buttes, t6/19; cum 115K 8/20; cum 206K 3/23;
  • 34777, 789, Tabiche 148-94-11C-2H, McGregory Buttes, t6/19; cum 214K 8/20; cum 335K 3/23;
  • 34778, 674, Serrano 148-94-11D-2H, McGregory Buttes, t6/19; cum 271K 9/20; cum 382K 3/23;
  • 34779, PNC, Hatch .... 2H,
  • 34780, PNC, Paprika .... TF,
  • 34781, PNC, Chimayo .... 2H,
  • 34782, PNC, Diablo .............TF,
Initial production.

#34778:
DateOil RunsMCF Sold
10-20192378820466
9-20192252520910
8-20193386230170
7-2019414011944
6-2019176430


#34777:
DateOil RunsMCF Sold
10-20192205418974
9-20192557823744
8-20191927017169
7-2019214311006
6-201997900


#34776:
DateOil RunsMCF Sold
10-201950924381
9-2019995924
8-201951124555
7-201916321766
6-2019980


#34775:
DateOil RunsMCF Sold
10-20192065517771
9-20192012018677
8-20191303211611
7-2019244261147
6-2019105230


#34774:
DateOil RunsMCF Sold
10-20192022817403
9-20193280630453
8-20193598332059
7-2019430832023
6-201960200


#34773:
DateOil RunsMCF Sold
10-201987977568
9-20191795116664
8-20191757115655
7-201917130804
6-201915590
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Production Data For Wells Coming Off The Confidential List This Next Week -- Decebmer 15, 2019

Comments:
  • Enerplus Greek God wells are starting to come off the confidential list. These wells are tracker here.
**********************************
The Wells
 
36524, conf, Slawson, Challenger Federal 9-29-32H, Big Bend, no production data,

36173, conf, XTO, Lavern 42X-14H, Capa, no production data,

35902, conf, Slawson, Tempest Federal 1 SLH, Big Bend, no production data, 

36172, conf, XTO, Lavern 42X-14CXD,  Capa, no production data,

34838, conf, Enerplus, Hera 149-93-33D-28H, Mandaree,

DateOil RunsMCF Sold
10-20193089225390
9-20193996835889
8-20192177014056
7-2019326741116
6-201990790

30178, conf, Slawson, Diamondback 1 SLH, Big Bend, no production data,

36171, conf, XTO, Lavern 42X-14BXC, Capa, no production data,

35901, conf, Slawson, Slasher Federal 722-27 MLH, Big Bend, no production data,

34746, conf, Oasis, Nordeng 5298 13-25 8B,  Banks,

DateOil RunsMCF Sold
10-20193246879993
9-20192974858529
8-20193147678706
7-20192919867120
6-201935652051

36170, conf, XTO, Lavern 42X-14AXB, Capa, no production data,

34839, conf, Enerplus, Apollo 149-93-33D-28H-TF, Mandaree,

DateOil RunsMCF Sold
10-201936673014
9-201973506600
8-201946733017
7-201916745572
6-201993370

33886, conf, Petro-Hunt, USA 153-95-8A-31-3H, Charlson, no production data,

34745, conf, Oasis, Nordeng 5298 13-25 7T, Banks,

DateOil RunsMCF Sold
10-20192564665219
9-20191859450696
8-20192693667983
7-20192915863299
6-201953464013

30177, conf, Slawson, Muskrat Federal 5 SLTFH, Big Bend, no production data,

36169, conf, XTO, Lavern 42X-EXF,  Capa, no production data,

35900, conf, Slawson, Slasher Federal 2-222-27H, Big Bend, no production data,

36168, conf, XTO, Lavern 42X-14AXD, Capa, no production data,

35742, conf, Whiting, Ogden 41-9HU, Sanish,

DateOil RunsMCF Sold
10-20193364433307
9-20192618817759
8-2019221660
7-2019396960
6-201942860

35899, conf, Slawson, Typhoon 149-93-07D-12H-TF,  Big Bend, no production data,

35337, conf, Hess, EN-Dobrovolny A-LE-155-94-1319H-1, Alger, no production data,

34778, conf, Enerplus, Serrano 148-94-11D-2H-TF, McGregory Buttes,

DateOil RunsMCF Sold
10-20192378820466
9-20192252520910
8-20193386230170
7-2019414011944
6-2019176430

34777, conf, Enerplus, Tabiche 148-94-11C-2H, McGregory Buttes,

DateOil RunsMCF Sold
10-20192205418974
9-20192557823744
8-20191927017169
7-2019214311006
6-201997900

34775, conf, Enerplus, Santaka 148-94-11C-2H, McGregory Buttes,

DateOil RunsMCF Sold
10-20192065517771
9-20192012018677
8-20191303211611
7-2019244261147
6-2019105230

34098, conf, Resource Energy Can-Am, Trooper 0409-1TFH, Blooming Prairie,

DateOil RunsMCF Sold
10-20199534455
9-20191130374

35336, conf, Hess, EN-Ruland A-LE-155-94-1201H-1, Alger, no production data,

35335, conf, Hess, EN-Ruland A-155-94-1201H-4, Manitou, no production data,

34096, conf,Resource Energy Can-Am, Trooper 0409-3TFH, Blooming Prairie,

DateOil RunsMCF Sold
10-201911048382
9-20192265640

35334, conf, Hess, EN-Ruland A-155-94-1201H-5, Manitou, no production data,

35118, conf, Oasis, Kellogg Federal 5297 11-30 2BX, Banks,

DateOil RunsMCF Sold
10-20193042374638
9-201940929882
8-2019899619786
7-20191626936835

34843, conf, Enerplus, Boreas 149-93-33C-28H, Mandaree,

DateOil RunsMCF Sold
10-20192378019545
9-201977977001
8-20192112213637
7-201922595771
6-201991040

34842, conf, Enerplus, Metis 149-93-33C-28H-TF, Mandaree,

DateOil RunsMCF Sold
10-20191877715433
9-20191861216713
8-201993336026
7-201914034479
6-2019105860

34841, conf, Enerplus, Athena 149-93-33C-28H-TF, Mandaree,

DateOil RunsMCF Sold
10-20191541312668
9-201943713925
8-201968144399
7-201917149585
6-2019133440

34840, conf, Enerplus, Zeus 149-93-33D-28H, Mandaree,

DateOil RunsMCF Sold
10-20192005216481
9-20192225419983
8-20192410415563
7-2019402501374
6-2019200260
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Wells Coming Of The Confidential List This Next Week -- December 15, 2019

Monday, December 23, 2019: 70 for the month; 275 for the quarter:
36524, conf, Slawson, Challenger Federal 9-29-32H, 
36173, conf, XTO, Lavern 42X-14H,
35902, conf, Slawson, Tempest Federal 1 SLH, 

Sunday, December 22, 2019: 67 for the month; 272 for the quarter:
36172, conf, XTO, Lavern 42X-14CXD, 
34838, conf, Enerplus, Hera 149-93-33D-28H,
30178, conf, Slawson, Diamondback 1 SLH, 

Saturday, December 21, 2019: 64 for the month; 269 for the quarter:
36171, conf, XTO, Lavern 42X-14BXC, 
35901, conf, Slawson, Slasher Federal 722-27 MLH, 
34746, conf, Oasis, Nordeng 5298 13-25 8B, 

Friday, December 20, 2019: 61 for the month; 266 for the quarter:
36170, conf, XTO, Lavern 42X-14AXB, 
34839, conf, Enerplus, Apollo 149-93-33D-28H-TF,
33886, conf, Petro-Hunt, USA 153-95-8A-31-3H,
34745, conf, Oasis, Nordeng 5298 13-25 7T, 
30177, conf, Slawson, Muskrat Federal 5 SLTFH, 

Thursday, December 19, 2019: 56 for the month; 261 for the quarter:
36169, conf, XTO, Lavern 42X-EXF, 
35900, conf, Slawson, Slasher Federal 2-222-27H, 

Wednesday, December 18, 2019: 54 for the month; 259 for the quarter:
36168, conf, XTO, Lavern 42X-14AXD, 
35742, conf, Whiting, Ogden 41-9HU, 

Tuesday, December 17, 2019: 52 for the month; 257 for the quarter:
35899, conf, Slawson, Typhoon 149-93-07D-12H-TF, 
35337, conf, Hess, EN-Dobrovolny A-LE-155-94-1319H-1, 
34778, conf, Enerplus, Serrano 148-94-11D-2H-TF, 
34777, conf, Enerplus, Tabiche 148-94-11C-2H, 
34775, conf, Enerplus, Santaka 148-94-11C-2H, 
34098, conf, Resource Energy Can-Am, Trooper 0409-1TFH,

Monday, December 16, 2019: 46 for the month; 251 for the quarter:
35336, conf, Hess, EN-Ruland A-LE-155-94-1201H-1, 


Sunday, December 15, 2019: 45 for the month; 250 for the quarter:
35335, conf, Hess, EN-Ruland A-155-94-1201H-4, 
34096, conf,Resource Energy Can-Am, Trooper 0409-3TFH, 

Saturday, December 14, 2019: 43 for the month; 248 for the quarter:
35334, conf, Hess, EN-Ruland A-155-94-1201H-5, 
35118, conf, Oasis, Kellogg Federal 5297 11-30 2BX, 
34843, conf, Enerplus, Boreas 149-93-33C-28H,
34842, conf, Enerplus, Metis 149-93-33C-28H-TF, 
34841, conf, Enerplus, Athena 149-93-33C-28H-TF, 
34840, conf, Enerplus, Zeus 149-93-33D-28H,
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Color Me Embarrassed -- Two "Big" Stories I Missed This Past Week -- December 15, 2019

First things first: the Weber Vortex.

First story I somehow missed this past week: Harold Hamm steps down as CLR CEO; Washington Post. I somehow missed it. Geoff Simon probably mentioned it but I had not read his note for the week.
Harold Hamm is stepping down as chief executive of Continental Resources Inc. to serve as executive chairman, company officials said.
Beginning Jan. 1, Continental board member William Berry will take over as CEO for the Oklahoma City-headquartered company. Jack Stark, Continental Resources’ president, will also serve as its chief operating officer.
Hamm, the highest-paid CEO in Oklahoma in 2018, will remain active as chairman, founder and majority shareholder with about 77% of the company’s stock.
“I’m not going anywhere,” said Hamm, who pioneered the use of fracking that was used to tap a massive domestic oil play in the Bakken formation in North Dakota. “I’m an oil finder and geologist at heart.
Berry has more than four decades of oil and gas experience. As an executive at ConocoPhillips, Berry oversaw its global operations, managing more than 10,000 employees and more than $12 billion in capital outlays.
Second story that I don't recall posting. Maybe I did but don't recall. Company statement:
Enbridge has paid dividends for over 64 years to its shareholders. In December 2018, we announced a 10% increase to our dividend per share, increasing the quarterly dividend to $0.738. This translates into $2.952 dividend per share on an annualized basis for 2019. Payable on March 1, 2019, to shareholders of record on February 14, 2020.
New story: popularity of bourbon booming -- WSJ. I'll come back to this later, perhaps.

New story: how Enbridge plans to grow in era of pipeline opposition -- Financial Times. Three low-risk projects:
  • joint venture with EPD to build a deep-water port near Houston; the Sea Port Oil Terminal (SPOT)
  • joint venture with EPD to expand the Seaway Pipeline by 200,000 bbls per day
  • will build a new 15-million-bbls crude oil storage terminal near SPOT
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