Re-Posting: Pending DAPL Decision -- Wednesday, April 14, 2021

Re-posting:

Link here.

If DAPL shutdown were to occur:

• CLR says it would not be affected; doesn't ship on the DAPL;
• CLR says it would affect Bakken light sweet by $1 - $2 / bbl:
• operators shipping on the DAPL have contingency plans ready to go, posted yesterday; some operators are already booking CBT (crude by truck) -- a third-world option.
  
• CBR: wow -- again -- CLR says a DAPL shutdown would impact Bakken oil by $1 - $2 / bbl

For me, shutting down the DAPL will be a "psychological / emotional" phenomenon more than anything else.

Most interesting to me:

• DAPL is getting more press than the situation regarding Brent. 
• Brent: trending toward production less than amount of oil that would be carried by DAPL + DAPL expansion.

CBR: look at that capacity. Blows me away.

• look at all the jobs a DAPL shutdown would provide
• reminder: BNSF generates 25% of all Warren Buffett's Berkshire Hathaway's revenue
• I assume there are CBR options for Enbridge pipelines at risk running between Canada and the US;

Where we stand today:

Friday, April 9, 2021, day 0:

• US Army Corps of Engineers won't shut it down; will let judge decide
• Judge: thumbs down; kill it;

Saturday, April 10, 2021, day 1:

• Judge: thumbs up; let it flow;

Sunday, April 11, 2021, day 2:

• Judge: thumbs down; kill it;

Monday, April 12, 2021, day 3:

• Judge: thumbs up; let it flow;

Tuesday, April 13, 2021, day 4:

• Judge: thumbs down; kill it;

Wednesday, April 14, 2021, day 5:

• Judge: thumbs up; let it flow;

Thursday, April 15, 2021, day 6:

• Judge: thumbs down; kill it;

Friday, April 16, 2021, day 7:

• Judge: thumbs up; let it flow;

Saturday, April 17, 2021, day 8:

Additional Details On The Enerplus - Hess Deal Announced Recently -- April 14, 2021

There's a handful of "things" I like about the blog. One of the "things" I like is the sidebar at the right with all the links. Among that long, long list, are the deals for each calendar year. That section comes in quite useful.

I follow the recent Enerplus - Hess deal, 2021, here. 

At the time I missed the press release from Hess which was much more informative than the news reports. This is additional information not previously noted on the blog:

Hess Corporation announced today that it has entered into an agreement to sell its Little Knife and Murphy Creek acreage interests in the Bakken in North Dakota to Enerplus Corporation for a total consideration of $312 million, effective March 1, 2021.

The sale consists of approximately 78,700 net acres, which are located in the southernmost portion of Hess’ Bakken position and not connected to Hess Midstream infrastructure. Net production from this acreage averaged 4,500 barrels of oil equivalent per day net to Hess in the first quarter of 2021.

"The Bakken is a core asset in our company’s portfolio," CEO John Hess said. "Sale of the Little Knife and Murphy Creek acreage – the majority of which we were not planning to drill before 2026 – brings material value forward and further strengthens our cash and liquidity position."

The sale is expected to close in May 2021, subject to customary closing conditions.

See first comment. A reader provided this link regarding Hess and Guyana.  

From Offshore, December 10, 2018 -- wow, that was a long time ago -- tying up loose ends. Headline: Hess to focus on deepwater Guyana projects. Hess Corp has reported an E&P capital and exploratory budget of almost $3 billion for 2019.

Of this, about 75% will be allocated to high return growth assets in the Bakken and Guyana. 

The $2.9 billion capital and exploratory budget is allocated as follows: $1,890 million (65%) for production, $570 million (20%) for offshore developments and $440 million (15%) for exploration and appraisal activities.

The operator forecasts net production to average between 270,000 and 280,000 boe/d in 2019, excluding Libya, compared to approximately 245,000 boe/d in 2018 proforma for the sale of the company’s joint venture interests in the Utica shale play.

For production, the company has allocated $1.425 billion to fund an increase to six rigs, from an average of 4.8 rigs in 2018, and the shift to higher intensity plug and perf wells in the Bakken. The company expects to drill approximately 170 new wells and to bring online approximately 160 new wells in 2019. Funds are also included for investment in non-operated wells.

Weekly EIA Petroleum Report -- April 14, 2021

Link here. 

Weekly EIA petroleum report:

• US crude oil in storage: 492.4 million bbls; only one percent above the five-year average for this time of year;
• US crude oil in storage decreased by a non-trivial 5.9 million bbls from the previous week;
• US distillate fuel supplies decreased by 2.1 million bbls last week, but still 4% above the five-year average;
• US refiners operating at 85% their operable capacity;
• imports, FWIW, averaged almost 6 million bpd; down by about a half-million bpd;
• over the past four weeks, crude oil imports averaged 6 million bpd; 0.7% more than same four-week period last week;

So, think about that: possibly driving into the most uncharted territory ever -- coming out of a pandemic where people do not want to use mass transportation, and US driving season about to begin --

• US crude oil in storage only one percent above the five-year average for this time of the year;
• what about gasoline: production is increasing but inventories decreased last week;
• gasoline imports are running about a million bpd day (rounded up from 839,000 bpd)

WTI after the report! Whoo-hoo! I had not looked at this until now, but I thought the EIA report above was very bullish ....

• WTI: up over 4%; up $2.50 / bbl; and now trading at $62.68;
• a nice day for an E&P company to be "naked" (unhedged)
• explains why EOG popped today

Re-posting:

Total cost structure; E&Ps; from RBN Energy, back in early April, 2020, almost exactly one year ago.

From RBN Energy the other day:

Annotated:

Notes And Comment -- Early Morning Edition -- April 14, 2021

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. 

US markets:

• Dow and S&P 500: new all-time record?

US markets:

• futures were relatively flat last evening;
• at 4:00 a.m. EDT this morning, futures began to move up; subtle but very noticeable;
• open: bank earnings "eye-popping"; across the board, well above analysts' expectations; as much as 80% above forecasts; most at 40 - 60% above forecasts
• at open, Dow surges, up 170 points;
• S&P 500: open up 7 points;
• NASDAQ: up 30 points
• WTI: over $61
• pipelines (reminder: Texas pipelines will struggle this summer -- source):
• OKE: up 1.4%; up 70 cents; trading at $51.78;
• ENB: up 0.5%; trading just under $37;
• EPD: up 0.65%; trading just over $23;
• ET, most exposure to bad news: trading just over $8;
• AAPL: surprisingly, after being up slightly before market open, drops back 0.6%; profit-taking;
• UNP: up 0.4%; trading just under $223;
• SRE: up a bit; trading at $135.45; several weeks ago, I considered this a $124-stock;
• MNRL: whoo-hoo! Up almost 4% today; up 61 cents; trading at $16.31;
• EOG: whoo-hoo! up over 5%; up $3.55; trading at $74
  

Total cost structure; E&Ps; from RBN Energy, back in early April, 2020, almost exactly one year ago.

From RBN Energy the other day:

Annotated:

WTI Above $61; Active Rig Count At 17; One Well Coming Off Confidential List, No Data -- April 14, 2021

Good riddance:Bernie Madoff.

Banks: "eye-popping" numbers; earnings exceeding analysts by as much as 80%; most at 40 - 60% over expectations.

Saudi-India rift: link here. Stand-alone post, later, perhaps.

China oil imports: surge ahead of refinery maintenance season. Link here. Stand-alone post, later, perhaps.

SRE: SeekingAlpha, April 14, 2021.

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. 

WTI: up over 2%; up over $1.21; trading at $61.39. Whoo-hoo!

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

Active rigs:

$61.39	4/14/2021	04/14/2020	04/14/2019	04/14/2018	04/14/2017
Active Rigs	17	34	63	61	51

One well coming off confidential list -- Wednesday, April 14, 2021: 8 for the month, 8 for the quarter, 89 for the year:

• 37232, drl/NC, WPX, Patricia Kelly 2-1HA, Spotted Horn, no production data,

RBN Energy: less gas available for Canadian gas storage injection this summer.  

Every gas storage injection season gives us a chance to size up how supply and demand components might influence how much gas can be stuffed away in underground reservoirs prior to the next heating season. For the Canadian storage injection season that is just getting underway, a number of factors have shifted that balance, resulting in a slowing rate of gas storage builds this year. A slower build, and subsequently lower storage levels by the end of the injection season than last year, seems likely to provide solid support for Canadian gas prices. Today, we review the latest developments and outlook for gas fundamentals in Canada.

The arrival of spring in North America brings with it more temperate weather, prompting people to get outside, do some spring cleaning, and shake off the winter cobwebs. This year, even more than most, we’re looking forward to coming out of our winter burrows (or pandemic bunkers), the beginning of baseball season, and, of course, the gas storage injection season. This period, traditionally running from April 1 to October 31, takes advantage of the lower space heating demand of the spring, summer, and early fall to replenish underground storage reservoirs across North America. It is also a time when market pundits develop forecasts of how much gas will be injected, and to what level storage reservoirs will fill, by the end of October and before the kick-off of the next heating season and another round of storage withdrawals.