Member Info for epiphany121

Cheers, H. Was that a headline statement from them or did they say if the expected 2 mmbbls/day was predicated on the TRRC agreeing to 20% proration next week. I can only see a reduction of that scale in May, if the TRRC votes yes on Tuesday next week. Donnie has probably given his blessings/strong-armed them in the past few days and it's a go!!

The proration would be temporary till such time that global demand is 85 mmbbls/day - god knows hpw they'd really measure that though.

Hello R - The key point that you and I agree on is that we can survive low oil prices longer than the indebted shalers can't (in 'normal' circumstances), and as you pointed out Oasis has nearly $3 billion debt and so do players like Callon (CPE). What's really needed is a level-playing field - Trump blathering on about saving the shalers and UK producers not having access to the loose purse strings from the Fed that shalers do, is seriously market distorting. That's my concern.

The fact that this is an election year and he doesn't want the topics of huge layoffs in the shale patch is playing into the mix here, to my chagrin. It's for the long term health of the oil market that weak shalers like OAS/CPE do go bankrupt.

Cheers, Mod. For now, all of these actions are doing only one thing - push up share prices of highly indebted shalers massively off the lows from last month. Both large and small (imperilled) shalers are up 300% to 500% from the lows in March, and so far none of the actual drillers have gone bankrupt. They (and the market) feel that Donnie will support them with loans to avoid layoffs and shutdowns.

I'm surprised by what's transpired with their share prices recently and this sort of action will only embolden them to continue on their merry path of over-production just as soon as WTI gets into the 40s. Bast**ds..

Spot on with that assessment, Hitman. If the study's results do come out positive, and it's been noted that the efficacy is a lot better if the treatment is started early. It just means that our NHS guidance of waiting at home till it gets worse 'may' not make too much difference even if treated with Remdesivir. The fact that it's an intravenous drug only will mean that an assumed infected person in the high-risky category will need to come in ASAP an get tested and put on Remdesivir, if positive.

Not quite the panacea, but certainly a positive.

Chilting - Apparently, Remdesivir's shown positive results ina NIH instituted placebo controlled study. News came out a few minutes ago and the markets are jumping as a consequence. Baby steps...

Good afternoon P - or should I say 'god eftermiddag' :-)

I hope all's well in Sweden and that social distancing is working well in Malmo. We should also be emerging soon enough from our lockdown - I think parts of the UK economy will start to open up soon. Oil demand will slowly pick up in Q3, along with these massive supply cuts coming from the US and elsewhere, oil will be in 40s in Q3, and hopefully 50s in Q4.

make that down 60, not 62, in line with the oil rigs fall today...

Frac spread count came out a few minutes ago and they printed at 87 - down 62 in the past week. That's indeed a reflection of the reality on the ground that it just doesn't make any sense to frac wells at these prices. Circa 100 was expected at the end of next week, but they got there and then some, a week sooner. If the rigs+ Frac spread levels stay at these levels for a couple of more months, US production will easily fall closer to 9 mmbbls/day by the end of the year (with shut-ins resulting in supply cut spikes for the duration of shut-in). The excess inventories will take months to work their way through though..

No problem at all, P. Do you have an email address I can ping you at?

Hi L7 - yes, that's a good take indeed and you may be right. AB says on the call that all of Q2 production, with the exception of the Kraken production has been 'hedged' and so that's what I was going by. Either way, we'll need higher prices after Q2 given the poor hedging in place for the rest of 2020 and this is a headwind for Enquest at this time, vis-a-vis the better hedged ones.

Oil rigs off 60 and Gas rigs off 4. Permian's off 37, whilst Williston (Bakken) and Eagle Ford were off 7 each. Frac spread count shuold come out around 10 PM UK time and we should see that trend down from 147 last week to get to close to 100 by next week.

Hi P - So, June futures expires on 30/04, May would've expired 31/03. My take is that they'd have sold in the futures market sometime late March/Early April and we'd have received high 20s, I'd suggest for the second quarter.

P and L7 - I don't think so. The 2.9 mmbbls was for Q1 and that's now settled. The 1.1 mmbbls sculptor hedge was through the end of 2020 and so, some of these would be included in the 4 mmbbls as of April 8th. THis is referring to the 'hedge' that Enquest put in place for Q2 with the price just below futures price for the quarter. Here's the question/s from the earnings call a few weeks ago.

Unidentified Analyst, [2]

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I'm aware of the increasing differences between that would describe as paper power and physical, so between perhaps what we see on our screen as being $30 plus a barrel and maybe what you receive. So I wonder whether you could give us a sense of the sort of prices you're getting for the North Sea production at the moment, of course, excluding the usual differential we see on Kraken for its quality.

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Amjad Bseisu, EnQuest PLC - CEO & Executive Director [3]

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Thank you, Stefan. A very good question. We have put in place, Stefan, a hedging program for our dated front line exposure or the difference between what you see on the screen and what you get as physical barrels. So our production for the second quarter has in place 100% hedge for the dated frontline exposure, excluding Kraken barrels, which are sold on a low sulfur fuel oil equivalent. So I think we are well positioned to be covered in this environment of the large delta. And the -- obviously, the hedges are at very favorable prices compared to the physical versus paper differentials, which we're seeing, which are near $10 a barrel. Our hedge is in the low single-digit numbers for the 3 months.

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Unidentified Analyst, [4]

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So the reference price, I would say, because of what you've put in place, assuming that we are still at this paper barrel price of $33 or whatever, that's really an indication of what you get.

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Amjad Bseisu, EnQuest PLC - CEO & Executive Director [5]

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Yes, that's right. I mean the differential we have is negative, but it's in the -- on the average of 3 months, it's in the low single digits.

Hello Mod - I know ESTE quite well. I had some shares in the past, not anymore. They have low debt and their SP hasn't fallen much since Jan. Contrast with CDEV - both were at $5 in Jan - ESTE is now1.80 and CDEV is 0.55. Debt is the difference.

In Enq's case here versus PMO/TLW - one reason they've jumped much more than us recently is their level of hedging, IMO. THey're both more than 50% hedged for 2020, and I know TLW is 40% hedged for 2021 in the low 50s too. This is my (and P's) favourite gripe with the Enquest 'hedging lead'. Since H2 2018, they've never really got it right, except for Q1 2020 of course.

Very good news indeed, Mod. Bakken price realisations are a lot less vis-a-vis the Permian/WTI and this is why it just isn't economical to produce in the Bakken unless the shalers have hedged. Even if the shalers did hedge, they could just stop production right now and just take the money from their hedges - after all, their oil production costs are a lot higher than what they could sell it for in the spot market. Once they shut-in, it's likely that the flow rates in the future when they start up won't be good. All good, IMO.

This is why for the life of me I can't understand why a bankrupt Bakken shaler, WLL, has gone up from 34 cents on Tuesday to $2.39 at the highs yesterday - in 2 days. They're F**ked as a company, but no one cares.

CDEV has moved up 28 cents on Tuesday and they're quoted at 75 cents in the pre-market. Relatively speaking, I think they'll survive as they have no debt for redemption till 2025 and like Enq, will cut to the bone and sit tight. OAS/QEP/CPE - these as are chapter 11 candidates. We haven't as yet seen a violent shakeout in shale land, but it's coming.

P - not sure if Harold Hamm bought more shares recently in his CLR; He already owns 80% of the company.

Continental is the largest Bakken producer producing 150 kbopd (over 10% of the entire Bakken production) and they've now fully shut down Bakken production as it's no longer economical to produce, and they're one of the few shalers that don't hedge production.

https://www.reuters.com/article/us-continental-resources-shale-north-dak-idUSKCN2260PX

I'm very positive about 2021. A few more dead-weight shalers going bankrupt will only help.

Or you could've tried a disinfectant injection, instead of taking the sun bed too seriously. I understand that's far more effective for Covid.

https://www.politico.com/news/2020/04/23/trump-coronavirus-sunlight-205969

Although, the light therapy should've been just as good...

Back to rig tracking. Enervus rig count, ahead of Baker Hughes' count tomorrow, (think of these as API vs EIA weekly inventory count comparisons) is counting a 73 oil rig count drop and 3 gas rig count drop. OIl rigs are at 371 by their count and BHI should confirm a similar count reduction tomorrow. And late in our evening, we'll get the frac spreads count from pimary vision. They've come down rapidly from over 300 a few weeks ago to 147 last week, and should head to near 100 by the end of April. Sets us up well for next year, IMO. The future looks bleak at this time no doubt, but I'm optimistically looking to the other side of Covid and Trump getting kicked out in November. Oil will rally in 2021, if not sooner.

https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/042320-us-oil-gas-rig-count-falls-76-on-week-to-491-enverus-said-after-record-low-crude-price

Thanks for clarifying, L7. That makes sense. We know that shale wells lose anywhere in the 40 - 50% production rate range annually, and hence new wells have to be drilled to sustain production. Given that shale contributed circa 9 mmbbls/day last year, with no drilling at all from herein on this year, we can see a circa 3 mmbbls/day drop, Y-O-Y (Calendar 2020 ending versus beginning - that's closer to 9.5 mmbbls/day at the end of 2020. But, There's some drilling going on, and with some non-shale also shut-in, I won't be suprised to see an year-end figure closer to 9.5 mmbbls/day figure, with an average of around the same number, as some non-shale wells get shut-in for a short period of time, THat's no small drop, mind you.

I'm still optimistic for 2021 - just need 2020 to go away ASAP.

I wanted to say 'have rocketed in the past 3 days' - For most of them it just doesn't make any sense, as they're well on their way to bankruptcy and WLL has already filed Chapter 11 bankruptcy. The bears will be back soon though as they need to be culled soon.