May 7, 2013
- EOG: huge earnings report for 1Q13; stock surges; 160-acre downspacing;
- Stable price for oil, though surplus seems to be developing (WTI: $95, trending down)
- Mideast: Egypt imploding; SyrIran threatens Israel; Israel strikes inside Syria
- Increasing number of stories pro/con on the Keystone XL, suggesting decision is close
- Brent/WTI narrows; putting pressure on Bakken crude-by-rail, especially to East Coast
- International: North Korea removes missiles from launch pad; less hysteria about euro imploding (yet to come); coal surging; no real follow-on to Kyoto Protocol, suggesting global warming movement dead for all practical purposes though ideologues (including the US president will continue to pursue)
1. Surging stock market; rising price of oil (WTI: $98)January 18, 2013
2. Mideast: Egypt imploding; SyrIran threatens Israel; Israel strikes inside Syria
3. State Dept states no decision on Keystone XL before end of June, 2013
4. Brent/WTI spread widens; Seaway expansion on hold; wont' be "fixed" until 4Q13
5. Otherwise, similar to January 18, 2013
1. Debt ceiling: careening from crisis to crisis. No, not Greece; the USDecember 10, 2012
2. Pipelines will be the energy story of 2013
3. Multi-well pad starting to take off
4. 160-acre well density in the Bakken (incredible)
5. No movement on the Keystone XL; Hillary announces resignation; Kerry yet to be approved; sworn in; Heidi visits a HeadStart program; nothing on the Keystone XL [update: Nebraska governor approves new routing plan o/a January 22, 2013]
6. Natural gas in the Bakken becoming an ever bigger story
7. WTI/Brent spread narrowing for many reasons
8. Number of rigs in the Bakken trending higher; price of oil trending higher
9. US can't rule out chemical warfare in Syria
10. $625 million needed for Williston infrastructure over next six years due to surging population
1. ObamaCliff -- time is running out; status quo will be extended six monthsOctober 22, 2012
2. Chinese accelerating purchase of American energy assets (Canada, US, particularly)
3. Bakken potential significantly greater than once thought (CLR's TF3; 1.5-million-bbl EURs; 1-trillion-bbl reservoir)
4. Price of oil trending lower: foreshadowing the Great Recession of 2013
5. Oil from the Bakken moving east-west-east; not north-south; Enbridge UP; ONEOKs BCOE pipeline nixed for lack of subscriber support
6. Mideast stalemate; use of chemical warfare discussed
7. Rail over pipeline (for now)
8. Political movement on Keystone XL eerily quiet despite election being over
1. Earnings seasonSeptember 12, 2012:
2. Slawson targeting the Upper Bakken Shale -- Huge! Shale vs tight.
3. Mideast risk: Russia/Syria vs US/Turkey
3. The four benches in the Three Forks: altering the definition of the stratigraphic limits
5. Bakken oil selling at a premium to WTI due to rail
6. The boom continues: North Dakota sales tax collections increase 40% year-over-year 7. Greece crisis coming to a head -- and then the can kicked down the road (again)
8. Pace of permitting in the Bakken quickening
9. ONEOK's Bakken Crude Oil Express Pipeline (1,300 miles from the Bakken to Cushing); nail in coffin for Keystone XL [update: ONEOKs Bakken Crude Oil Express Pipeline DOA]
1. Mideast heating up: Obama won't meet with Israeli PM; US ambassador to Libya killed; Egyptians storm evacuated US embassy;August 18, 2012:
2. Flexibility of rail cars now provides opportunity to bring diluent back to northern tier; remember, they are putting in a pipeline from Tioga area to take NGLs up to Canada
3. Minot, North Dakota: airport facility plans suggest more is going on in Minot than meets the eye
4. EOG -- only two relevant fields -- the Bakken and the Eagle Ford
6. Work over rigs
7. Specialty rigs
8. Euro gets kicked down the road; QE3 anticipated
9. CVX hit's all-time high; XOM hits 52-week high
10. Economic boom in western North Dakota continues
1. Bakken continues to set new production records
2. Operators decreasing rigs in the Bakken; to contain costs
3. Work over rigs
4. Energy focus moving to North America: Eagle Ford, Bakken, Permian
5. Natural gas prices may have bottomed
6. Crude-by-rail out of the Bakken
7. Boom flattening out (I don't agree)
8. Euro gets kicked down the road
9. War drums in the Mideast; Muslim Brotherhood consolidates control over Egypt
10. Price of oil creeping back to $100; White House talks about releasing SPR after September
June 25, 2012:
1. Energy focus moving to North AmericaJanuary 18, 2012:
2. Dropping natural gas prices, global recession doom wind, solar
3. Natural gas liquids (NGLs), ethane story coming out of the Bakken
4. Mining the Bakken: 8+ wells/spacing unit in the better Bakken
6. Formations other than the Bakken getting increased attention
7. Dickinson's attitude becoming more pro-growth
8. Keystone XL: does it even matter any more?
9. Serious, serious slowdown; Euro will not survive as it exists today
10. War drums in Mideast, but amazing how this can is kicked down the road
1. US becomes energy leader, again: natural gas glut; net oil exporter. Energy focus moving to western hemisphereDecember 28, 2011: Notice #9 in the list below -- I failed to mention the Madison formation. Other than that, I'm not sure I would change the list except for one thing. Maybe omit EOR, and add this one if I have to keep the list to ten:
2. Fracking: sand, EPA, mismatch in drilling/fracking
3. Arab Spring: to upset balance of power in the Mideast
5. New formations in the Williston Basin getting attention, esp. the Madison.
6. The Bakken: manufacturing phase
7. The Bakken: activity in 2012 moves to northeastern McKenzie County
8. Operators establishing in-house oil service support (such as fracking)
9. Saudi sets $100 as new floor -- January 17, 2012
10. Boom continues in Williston; four new motels in play; luxury apartments downtown
1. The drilling / fracking mismatch continues. Recent data suggests they will drill about 2,000 wells this year in North Dakota, and be able to frack only 700 wells. Nothing yet suggests this will be a huge difference next year. Something tells me the operators are not concerned about this mismatch. This may be working to their advantage. It's counterintuitive, but ...
This list will change periodically, and it may not have "10" items, but I will do the best I can.
Maybe it's just my imagination but for the past six months I have seen an upsurge in stories about enhanced oil recovery (EOR). A year ago I did not even know what EOR was despite a friend sending me story after story about EOR and Denbury. Now, either it's my imagination or there really are a lot more stories on EOR.
So, that's the reason for this list. Try to get folks to thinking about trends in the oil patch..
Another trend is for more powerful, specialty rigs for unconventional shale plays, and the leader in this area seems to be H&P, so this will go on the top 10 trend list.
Readers can help me with the list. I'm not even sure it will amount to anything, but we'll see.
(A huge trend in 2010 was merger and acquisition in the Bakken --> XOM/XTO; Hess/AEZ/TRZ; OXY USA/Anschutz; DNR/Encore; etc; but that activity has slowed for the moment and I expect to see more of it in 2012 but not seeing a new trend yet. [In 2011, KOG buys BTA, and North Plains, all of the latter.]
A trend we will likely see in late 2012, or early 2013, will be stories on proppants, additives in hydraulic fracking, new ideas in these additives, as the Texas law takes effect for companies to release the content of their fracking cocktails.
So with that for introduction, the start of a new top ten list:
1. Enhanced oil recovery, EOR/CO2.
2. Specialty rigs, H&P. I mentioned it within the past year, and in the last six months it has gone from $50 to $73. 2Q11 announced contracts for 42 more rigs.
3. Fracking sand and proppants. EOG fracking sand plant in Wisconsin as example.
4. Crude-by-rail. Rail will have 400,000 bopd capacity in North Dakota by end of 2011 -- that exceeds current daily production; adds flexibility.
5. Energy focus moving to Western Hemisphere, away from OPEC. (Alaska, Canadian oil sands, Bakken, Niobrara, Eagle Ford, Utica, Venezuela (reserves > Saudi's), Brazil. France bans fracking; Libya in disarray.
6. Operators setting up in-house oil service support. Chesapeake already doing this; now Oasis says they are doing same thing.
7. The Bakken: the nation's largest industrial park. Paradigm shift: no longer drilling, but rather manufacturing. The industry will look to manufacturers to learn how to make unconventional operations more efficient.
8. Integrated companies splitting upstream/downstream: MRO, COP have announced; BP could be next.
9. More formations in play in North Dakota (Bakken, TF, Spearfish, Scallion, Lodgepole, Tyler, Red River).
10. Fracking cocktails. Texas law takes effect in 2012 that requires companies to release contents of their fracking cocktails.