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936horn

By 936horn
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Pescado_Rojo
Pescado_Rojo

I bet you could score a Lafayette 10 for a mani/pedi gift card and a pound of boudin right now.  I was sitting in a Starbucks by the med center in Laffy once, and a brand new white Escalade, lift

Rimbo
Rimbo

If you're Trump right now, you're watching Fox News, eating a cheeseburger, and getting mad about the lyin' media and preparing your next tweet about how some lupus treatment should be given to your s

fattyflattie
fattyflattie

My time finally came last Friday AM. I have survived around a dozen, give or take 1-2, since ‘08.  I was consulting for a project set to go in ‘22, but with all the uncertainty, it sounds like they’ve

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Moby Ric

Moby Ric 2058

Posted
Posted (edited)
On 5/11/2022 at 10:19 AM, oSuJeff97 said:

The stuff I'm looking at are subscription-based that we use at my company... Wood Mackenzie, IHS, S&P Global, etc., so I can't really link them here unless you have a subscription.  

In their latest long-term forecasts, Wood Mackenzie has nat gas power demand falling from 28.7 Bcf/d in 2026 to 28.4 in 2031; S&P Global has it falling from 29.7 in 2026 to 23.1 in 2031.  IHS has it peaking a few years later (2029) but falling after that. Of note, IHS's long-term forecast is the most stale (from February) and the other two both revised down 2026-35 power demand in the most recent updates so it will be interesting to see if IHS follows suit in their next update.

And to be clear, I'm talking about L48 demand, not world demand.

After working with this data for internal forecasts for the past few years, I just feel like there is a LOT of recency bias when prices make dramatic moves. Like in the summer of 2020 I remember getting into arguments about whether or not gas would ever get above $4 again because it was below $2 and there was nothing above $2.40 or so on the forward curve, even though forecasters kept talking about production was going to fall and prices would rise.  Now I'm having the opposite argument where nobody can imagine it going below $5, lol. 

It will eventually go back below $4.  10 -12 years ago natgas  was $8 and then it came down hard.  We had a long run of it being cheap.  But by 2024 we should see cheaper prices.  And that is just a guess on my part, it is a very real possibility that I am way off.  Speculation is evil, and rarely correct.

Other note, it looks like some are reporting that there is a diesel shortage about to hit the mid atlantic area coming in a few weeks.

Link:

https://www.zerohedge.com/commodities/major-trucking-firms-prepare-imminent-diesel-shortage-eastern-half-us-freightwaves-says

Edited by Moby Ric
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On 5/12/2022 at 11:05 AM, Moby Ric said:

It will eventually go back below $4.  10 -12 years ago natgas  was $8 and then it came down hard.  We had a long run of it being cheap.  But by 2024 we should see cheaper prices.  And that is just a guess on my part, it is a very real possibility that I am way off.  Speculation is evil, and rarely correct.

Other note, it looks like some are reporting that there is a diesel shortage about to hit the mid atlantic area coming in a few weeks.

Link:

https://www.zerohedge.com/commodities/major-trucking-firms-prepare-imminent-diesel-shortage-eastern-half-us-freightwaves-says

Speculation is “evil”?  Lol. 

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44 minutes ago, CHIEF said:

A buddy sent me this from Metcalf, southwest of Odessa, this morning. Nine thousand foot vertical with a three mile horizontal. He's running a 150 stage frac over those three miles:

Permianwell.png

CHIEF

Sounds cheap. 

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Excerpts from Dan Pickering's commentary I just read:

History shows that it takes more than an economic slowdown to generate negative oil demand. Looking at International Energy Agency data, oil demand has contracted in 11 of the past 50 years, in four separate instances.  1974 (Arab Oil embargo, skyrocketing prices), 1980-1983 + 1985 (high prices), 2008-2009 (Global Financial Crisis) and 2020 (Covid pandemic)(2).  Current negative conditions could escalate into something more dramatic, but for now we see the aggregate economic variables resulting in demand growth, not demand contraction.  

This leaves high prices (and resulting demand destruction) as the primary risk to the current energy cycle.  Russian production has continued near pre-conflict levels, but countries around the world are preparing to reduce/eliminate their Russian imports as 2022 continues.  This means increased competition for non-Russian supplies.  So far, this has generated WTI oil in the low-$100/bbl range and global natural gas at $20+/mmbtu.  Punishing, but not cycle-ending.  

Some pundits inflation-adjust 2008’s triple digit oil prices (the time frame when US gasoline last experienced a price-driven contraction) to arrive at the conclusion that oil could rise to the $150/bbl range before demand destruction would occur.  We disagree.  Even with higher wages, the double whammy of rising food and energy prices is already hurting global consumers, as is the strong US dollar.  We expect pent-up demand for travel will result in a summertime spend-whatever-it-costs dynamic (and price-insensitive gasoline consumption), but we should carefully watch demand patterns later in 2022.  

Also, keep in mind that governments around the globe are working feverishly to support the demand side of the equation, as witnessed by releases from Strategic Petroleum Reserves and continuation of retail-level price subsidies. Perhaps this will allow a softer landing for global consumers….or perhaps it simply delays the process of ripping off the cheap energy BandAid. 

On the supply side, Q1 earnings results and 2022 guidance showed continued capital spending and production restraint from US-listed energy companies.  In the midst of triple digit oil prices and a threefold increase in natural gas prices, compared to prior expectations, the 28 companies on PEP Insights upstream coverage list boosted 2022 capital spending by an aggregate of +3% (from $84.7B to $87.0B), while 2022 oil production growth expectations actually decreased -22 kbbls/day on lower 1Q22 volumes and 2Q22 downtime (y/y growth is now at +4.6% vs. +4.9% previously)(3).  Producers are holding the line on growth, even though cost inflation is demanding incremental capex.  Meanwhile, OPEC continues a measured production ramp.  Supply is simply not going to spoil the energy party for the next few years.

Turning to energy investing, April was choppy, but the sector’s recovery is finally capturing mainstream attention.  Bank of America research noted Q1 was the worst performance of mutual funds relative to their benchmarks since 2002, with lack of energy exposure contributing fully one third of the lag.  Now at 4% of the S&P500 (versus less than 2% at the trough), energy is back on generalist money manager radar screens.  This trend is exemplified by Warren Buffett’s purchase of $40B of Occidental and Chevron stock during Q1.  The Great One himself is on board the energy train.  As is activist investor Elliott Management, pushing for change at Canadian heavy oil producer Suncor.  In addition to the strong underlying fundamentals, sector rotation has also begun to favor the energy sector. Some of the capital flowing out of technology stocks (which had generally poor results during Q1) is finding its way into energy names.  Money flow is a force to be respected and it’s nice to see it flowing toward our sector.

 

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Tex48

Tex48 840

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Might not be the place to ask but anyone know any E&Ps looking to hire engineers?

I graduated from UT last May in Chemical Engineering honors and have been working as an analyst in commodity trading for an E&P. I interned as a field completions engineer and received a return offer in reservoir engineering for EOR. My second internship was cancelled because of covid. My current company won't let me move roles because they have a policy where you must stay in your role for 2 years before transferring internally. The biggest issue I am running into externally is that most E&Ps are looking for engineers with a few years of experience, and I have none bar my internship experience. Even though I studied Chemical engineering, I still took production facilities management, reservoir engineering, and drilling and completions. I miss engineering for upstream oil and gas and would like to get back into it. 

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Fudge Nuggets

Fudge Nuggets 19220

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11 hours ago, Tex48 said:

Might not be the place to ask but anyone know any E&Ps looking to hire engineers?

I graduated from UT last May in Chemical Engineering honors and have been working as an analyst in commodity trading for an E&P. I interned as a field completions engineer and received a return offer in reservoir engineering for EOR. My second internship was cancelled because of covid. My current company won't let me move roles because they have a policy where you must stay in your role for 2 years before transferring internally. The biggest issue I am running into externally is that most E&Ps are looking for engineers with a few years of experience, and I have none bar my internship experience. Even though I studied Chemical engineering, I still took production facilities management, reservoir engineering, and drilling and completions. I miss engineering for upstream oil and gas and would like to get back into it. 

In the past one of the best paths was to start out with a service company to get your initial experience then jump to an E&P.

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MoJames

MoJames 8253

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12 hours ago, Tex48 said:

Might not be the place to ask but anyone know any E&Ps looking to hire engineers?

I graduated from UT last May in Chemical Engineering honors and have been working as an analyst in commodity trading for an E&P. I interned as a field completions engineer and received a return offer in reservoir engineering for EOR. My second internship was cancelled because of covid. My current company won't let me move roles because they have a policy where you must stay in your role for 2 years before transferring internally. The biggest issue I am running into externally is that most E&Ps are looking for engineers with a few years of experience, and I have none bar my internship experience. Even though I studied Chemical engineering, I still took production facilities management, reservoir engineering, and drilling and completions. I miss engineering for upstream oil and gas and would like to get back into it. 

Just have your dad hire you.

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8 minutes ago, The Royal We said:

No joke, that was my first thought as well - what was the afe on that bad boy?  And I wonder what Control of Well insurance limit they had on it - if it was a smaller company I bet it wasn't enough.

More or less than $20 million?

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The Royal We

The Royal We 3072

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My first thought on the AFE was ~$20mm+, but I'm pulling that out of my ass.  That's a metric fuck ton of frac stages.

If it was my client I'd make them confirm in writing if they elected anything less than $50mm COW limit.  That's a lot of opportunities for shit to go pear-shaped.

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CHIEF

CHIEF 5095

Posted
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16 hours ago, Tex48 said:

Might not be the place to ask but anyone know any E&Ps looking to hire engineers?

I graduated from UT last May in Chemical Engineering honors and have been working as an analyst in commodity trading for an E&P. I interned as a field completions engineer and received a return offer in reservoir engineering for EOR. My second internship was cancelled because of covid. My current company won't let me move roles because they have a policy where you must stay in your role for 2 years before transferring internally. The biggest issue I am running into externally is that most E&Ps are looking for engineers with a few years of experience, and I have none bar my internship experience. Even though I studied Chemical engineering, I still took production facilities management, reservoir engineering, and drilling and completions. I miss engineering for upstream oil and gas and would like to get back into it. 

I'll put out a feeler to my buddy at Pioneer.

CHIEF

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jeevsie

jeevsie 3739

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2 hours ago, The Royal We said:

No joke, that was my first thought as well - what was the afe on that bad boy?  And I wonder what Control of Well insurance limit they had on it - if it was a smaller company I bet it wasn't enough.

Sounds like a pretty standard completion these days.

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21 minutes ago, Archer said:

I wouldn’t be surprised if it’s under $10 mil. 2 miles are costing around $6 mil. 

I’d be shocked if it was under $15. And 2-mile laterals aren’t $6 to drill and complete. 

20 minutes ago, Archer said:

Pretty similar in Delaware 10,000’ TVD and 10,000’ laterals drilling Wolfcamps. 

This is what I thought was the norm in terms of lat length. 

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Archer

Archer 474

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52 minutes ago, Porterhouse said:

I’d be shocked if it was under $15. And 2-mile laterals aren’t $6 to drill and complete. 

This is what I thought was the norm in terms of lat length. 

I don’t pay much attention to D&C cost in my new role so I found a couple AFEs on my phone for what appeared to be 2 mile wells and they were $6, there is a chance they were 1.5 mile instead of 2 I didn’t check the entire approval package.  I’ll look better tomorrow on my computer. 
 

I’d say 2 mile is the standard now, 1 mile is the exception and 3 miles the new experiment. I wouldn’t be surprised if in a couple years 3 miles is the standard, I know we are putting a few in the ground. 

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Storm the Field

Storm the Field 5301

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Posted

Rig activity picking up steam the past few weeks. Rig count stalled out right below 700 for about 4 straight weeks in April, but has increased by 30 over the past 3 weeks. Currently sitting at 728 active rigs.

Leaderboard:

Permian: 343

Haynesville: 70

Eagle Ford: 65 

Bakken: 38 

DJ/Niobrara: 15

728 just so happens to mark the exact same number on the last Friday of March 2020, when the COVID crash was kicking into high gear (dropped 50+ rigs that week from the week before). A lot more fun to see on the way up than the way down.

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Storm the Field

Storm the Field 5301

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Posted (edited)
6 hours ago, CycleTex87 said:

Is the Barnett totally off the table for new drilling?  Asking for my family with some minerals in Parker & Palo Pinto counties. 

In regards to those two counties, not a lot of good news for you. There have been a whopping 3 drilling permits filed in Parker and Palo Pinto thus far in 2022, all recompletions. 

There are more or less 3 companies currently active in the Barnett doing new drills, as best I can tell from permitting records. TEP Barnett (Total) is drilling some wells in Arlington, Sage Natural Resources has a few new wells near Alvarado, and GHA Barnett has some new wells in Grand Prairie. 

You're a little too far west of where the action currently is. Who knows though? Nat gas stays up above $8 for a while and companies might start looking out that way again.

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CHIEF

CHIEF 5095

Posted
Posted (edited)
12 hours ago, Storm the Field said:

In regards to those two counties, not a lot of good news for you. There have been a whopping 3 drilling permits filed in Parker and Palo Pinto thus far in 2022, all recompletions. 

There are more or less 3 companies currently active in the Barnett doing new drills, as best I can tell from permitting records. TEP Barnett (Total) is drilling some wells in Arlington, Sage Natural Resources has a few new wells near Alvarado, and GHA Barnett has some new wells in Grand Prairie. 

You're a little too far west of where the action currently is. Who knows though? Nat gas stays up above $8 for a while and companies might start looking out that way again.

Parker and Palo Pinto were not even desirable during the heydays of the Barnett. It is way up dip. Those wells are marginal at $10/mcf. Permian wells flare off per day as much as a Barnett well can produce in a week. 
CHIEF

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tx 3 putt

tx 3 putt 77395

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On 5/18/2022 at 9:23 PM, Tex48 said:

Might not be the place to ask but anyone know any E&Ps looking to hire engineers?

I graduated from UT last May in Chemical Engineering honors and have been working as an analyst in commodity trading for an E&P. I interned as a field completions engineer and received a return offer in reservoir engineering for EOR. My second internship was cancelled because of covid. My current company won't let me move roles because they have a policy where you must stay in your role for 2 years before transferring internally. The biggest issue I am running into externally is that most E&Ps are looking for engineers with a few years of experience, and I have none bar my internship experience. Even though I studied Chemical engineering, I still took production facilities management, reservoir engineering, and drilling and completions. I miss engineering for upstream oil and gas and would like to get back into it. 

 

stay in trading and bank 

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Archer

Archer 474

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1 hour ago, ATexanAbroad said:

is it time to start selling the oil stocks? I mean I am double on XLE and 50%+ on others. Is it possible that XOM breaks $100? Are we pretty close to the ceiling? Thanks in advance?

I sold my RSUs a couple months ago and missed another 25% run up on one and almost 60% on another. Cost me six figures selling too early; from the risk prospective I know it was the right move but man I’m kicking myself watching the stock just keep going up. I’m still holding all of my other oil companies but they were small positions compared to my RSUs. 

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ATexanAbroad

ATexanAbroad 627

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3 minutes ago, Archer said:

I sold my RSUs a couple months ago and missed another 25% run up on one and almost 60% on another. Cost me six figures selling too early; from the risk prospective I know it was the right move but man I’m kicking myself watching the stock just keep going up. I’m still holding all of my other oil companies but they were small positions compared to my RSUs. 

I have held, but I am thinking of dumping the profits into all the blue chip tech stops and then riding those up over the next couple weeks before the bottom falls out again. But if we have a recession then wont oils be a good place to keep the money. So I dont know what to do.

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Eastwood

Eastwood 4394

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Posted
Usually recession means demand destruction and energy stocks get hammered. But who knows this time around?

Yeah, recession becomes a huge buying opportunity on the front end. Demand destruction and tanked commodity prices and then demand severely outpaces supply because we can’t just turn on the tap and fire back up. That’s what is playing out right now, with your typical dash of international instability.

Such is the cycle until we finally hit peak demand.
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