Facts & Rumors # 554
June 1, 2024
NatGas Storage “Below Average.” The price of natural gas is, in one sense, complex, with lots of variables depending on where the gas is bought and sold. On the other hand, it can be boiled down to a simple-to-understand formula: Supply and demand. Of course, it is the factors that go into supply and demand that make it so tricky to nail down and predict! Weather and LNG exports are big factors on the demand side. Production and storage are big factors on the supply side. A number of Marcellus/Utica drillers have scaled back on production. In the month of May, according to analysts with S&P, storage levels are “below average” due to more gas being used to keep houses air-conditioned (NatGas is used to generate power, leaving less to be stored for next winter).
Record NatGas Generation Projected This Summer. Summer natural gas generation projected to match 2023’s record high. Power Engineering. The U.S. Energy Information Administration (EIA) forecasts that natural gas consumed for electricity this summer will match or come close to matching the record set last year. In its May 2024 Short-Term Energy Outlook (STEO), EIA forecast natural gas consumed to generate electricity will average 44.7 billion cubic feet per day (Bcf/d) in the United States during the peak summer months of June through August, matching the record high set in the summer of 2023.
Hess Shareholders Back Chevron Deal. Chevron’s $53 billion oil deal is backed by Hess shareholders. New York Times. A large oil industry deal advanced on Tuesday after shareholders of Hess approved a proposed sale of the company to Chevron for $53 billion. Control over one of the most prized oil assets, off the shores of Guyana, is at stake in the deal, which still faces significant hurdles. Hess is a junior partner in a lucrative Exxon Mobil-led drilling project in the South American country.
PA Frack Water Great Source of Lithium. Pa.’s fracking wastewater could be a reliable source of lithium, study says. Tribune Live. Newly published research by a University of Pittsburgh doctorate student estimates that up to 40% of the lithium needed in the U.S. could be extracted from wastewater created by unconventional drilling operations in Pennsylvania. Most batteries used in technology — like smartwatches and electric cars — are made with lithium, which travels across the world before getting to manufacturers. Much of today’s lithium is extracted from brine ponds in Chile, before being shipped to China for processing.
ConocoPhillips – Marathon Deal. ConocoPhillips agrees to buy Marathon Oil in $22.5bn deal. Financial Times. ConocoPhillips has agreed to buy US rival Marathon Oil in an all-stock deal that values the Houston-based company at $22.5bn, including debt. Under the agreement, Marathon shareholders will receive 0.255 shares of Conoco for each Marathon share they own, representing a 14.7 per cent premium to the target’s closing share price on May 28. That gives Marathon an enterprise value of $22.5bn, including $5.4bn of net debt, the companies announced on Wednesday. The talks between the companies were first reported by the Financial Times. Note: Wall Street Journal, New York Times, Bloomberg, and Reuters also report.
Expanding Gas Processing Capacity May Increase Permian Crude. Hart Energy. Crude production is about to pick up in the Permian Basin, analysts say. Permian players are expanding gas processing and takeaway capacity in the basin—an indication of plans to ramp up crude production over the next two years, according to analysts tracking the region. Permian crude production has flattened since February, staying within striking distance of 6 MMbbl/d since last fall, according to a study by analytical firm RBN.
Rigs Down for Fourth Time in Five Weeks. US drillers cut oil and gas rigs for fourth time in five weeks – Baker Hughes. Reuters. U.S. energy firms this week cut the number of oil and natural gas rigs operating for the fourth time in five weeks, energy services firm Baker Hughes said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, fell by four to 600 in the week to May 24, the lowest since January 2022. Baker Hughes said that puts the total rig count down 111, or 16%, below this time last year.
Energy Transfer to Expand Network. Texas pipeline giant Energy Transfer to expand network with $3.25 billion acquisition. Dallas Morning News. Dallas-based energy giant Energy Transfer plans to expand its massive natural gas network with a purchase valued at $3.25 billion. The company has agreed to acquire WTG Midstream, a privately held Midland-based organization that specializes in gas processing and gathering. The deal will add upward of 6,000 miles of gas-gathering pipelines to Energy Transfer’s more than 125,000 miles of energy infrastructure, and expand the company’s natural gas pipeline and processing network in the Permian Basin.
Fossil Fuels Keep Expanding Globally. Thanks, MDN. The left constantly spins false media narratives as a form of psychological operation (psyops) to discourage those of us who support the fossil fuel industry. Our good friend Tom Shepstone, who writes the Energy Security and Freedom blog site, recently took time out to step back and survey the landscape to remind those of us who do support fossil energy that we are winning! Let’s not lose sight of that fact!! For example: “Consumption of every fossil fuel has steadily increased for almost six decades, with only minor interruptions for special events. Natural gas use is 6.25 times what it was in 1965.” This is great news and is completely contrary to the media narrative that fossil energy is in a death spiral.
Southeast Needs More NatGas. U.S. Southeast manufacturing, industrial growth driving billions in new natural gas infrastructure. NGI. While data centers and artificial intelligence (AI) may dominate the news, investments by large load industrial and manufacturing sectors, particularly in the U.S. Southeast, are driving a significant portion of an expected rise in natural gas consumption. Southeast utility Santee Cooper is looking to add more than 1,000 MW of natural gas-fired electric generation to help meet expected industrial growth and continued economic development across the state.
LNG Shipments Drop to 23. U.S. LNG exports drop to 23 shipments. LNG Prime. US liquefied natural gas (LNG) exports dropped in the week ending May 22 compared to the week before, according to the Energy Information Administration. The agency said in its weekly report that 23 LNG carriers departed the US plants between May 16 and May 22, five shipments less compared to the week before.
Saudi’s Consider LNG Investments in U.S. Saudi Aramco considers U.S. LNG deals with Rio Grande, Port Arthur export projects: sources. S&P Global. Saudi Aramco is considering major investments in two US LNG projects as part of a broader push by the state-owned oil giant to build a global LNG business, according to sources familiar with the matter. US LNG developers’ talks with Aramco are centered on Sempra’s Port Arthur LNG terminal and NextDecade’s Rio Grande LNG terminal, both in Texas, the sources said.
PA NatGas Delivered $500 Billion. PA’s switch from coal to NatGas netted at least $500b in benefits. Marcellus Drilling News. The switch from coal to natural gas in power generation has led to historic emissions and air pollutant reductions equaling $450 billion to $1.04 trillion in public health benefits for Pennsylvanians, according to a Marcellus Shale Coalition (MSC) analysis. The analysis leverages emissions data from the Pennsylvania Dept. of Environmental Protection (DEP) and applies U.S. Environmental Protection Agency (EPA) methodologies to assign a dollar value to each ton of NOx and SOx reduced.
April DUC Report. Exploration and production companies operating in four of America’s most productive shale plays in April put a serious dent in the drilled, but uncompleted well inventory, Energy Information Administration data shows.
EIA’s monthly Drilling Productivity Report reported Monday 2,390 DUCs were in place last month in Appalachia (the Marcellus and Utica Shale plays), the Bakken, Eagle Ford and Permian plays. The latest total is down 287 wells, or nearly 11%, from April 2023’s 2,677-well total. April’s DUC total is up 11 wells from March 2024’s 2,379, EIA reported.
The biggest year-over-year drop in DUCs was in the Bakken, to just 328 wells from 565, a 237-well, 41.9%, decrease. The latest Bakken total was up six wells from March’s total.
In the Eagle Ford play, the number of DUCs year-over-year fell by 149, or 30.2%, to 345 from 494 drilled but uncompleted wells. The April number was two wells higher than March’s 347 total.
There was a slight 22-well, 2.4% drop in the Permian year-over-year, to 893 DUCs last month from 915 one year ago. In March of this year the total number of DUCs was 891.
Appalachia went against the grain last month in terms of a year-over-year DUC comparison. The combined Marcellus and Utica Shale plays recorded a 121-well, 17.2%, increase in DUCs, to 824 from 703 one year ago. Last month’s total was up five wells from the previous month, EIA reported.
PA Permits May 17, to May 30, 2024
County Township E&P Companies
1. Allegheny Farm Range
2. Allegheny West Deer Olympus
3. Sullivan Cherry Chesapeake
4. Sullivan Cherry Chesapeake
5. Sullivan Cherry Chesapeake
6. Sullivan Cherry Chesapeake
7. Sullivan Cherry Chesapeake
8. Washington Deemston EQT
9. Washington Deemston EQT
10. Washington Smith Range
OH Permits May 19, to May 25, 2024
County Township E&P Companies
1. Guernsey Center INR
2. Jefferson Cross Creek Ascent
3. Jefferson Cross Creek Ascent
4. Jefferson Cross Creek Ascent
5. Jefferson Cross Creek Ascent
WV Permits May 13, to May 24, 2024
1. Brooke SWN
2. Brooke SWN
3. Brooke SWN
4. Lewis HG Energy
5. Lewis HG Energy
6. Wetzel Antero
7. Wetzel Antero
8. Wetzel Antero
