US L48 Oil & Gas Activity Update???: As of July 5, 2024
Justin Gauthier, MSc
US Business Strategist at AES Drilling Fluids | Energy Industry Specialist and Podcast Host
What’s up energy fam! Hope everyone had a fun and safe 4th of July! Mine started off by doing the “Hardest Mile.” For all my fellow fitness enthusiasts, it consists of:
400 m of burpee broad jumps
400 m of walking lunges
400 m of bear crawl
400 m sprint
It took me just under an hour. If anyone cares to try it, I’d love to hear your times!
The rest of the day consisted of celebrating the 4th with BBQ, swimming, wobbly pops, fireworks, and good ol’ fashion fun with family and friends!!!
In other exciting news, I spent last week in Midland, which is always a fantastic experience. It was a great opportunity to hear the latest industry developments firsthand. In my world on the drilling side, there continues to be interest in the Permian in using less oil-based drilling fluids and more water-based drilling fluids.
A number of different operators are seeing great results from a drilling perspective, including increased penetration rates, increased HSE benefits, and, of course, better economics. Much of the challenge remains in selecting the right WBM package to handle the extended laterals now pushing up to 3-4 miles. Drilling laterals with that degree of length creates serious mechanical challenges regarding torque and drag, further emphasizing the need for highly lubricious drilling fluids.
Oil Prices: Hurricanes, Stockpiles, and Summer Surge!
Oil is on a roll, with a fourth consecutive weekly gain thanks to dropping U.S. stockpiles and Hurricane Beryl fueling the early-summer rally.
WTI settled near $83 a barrel on Friday, marking a solid 2% weekly boost and its longest winning streak since August 2023. Beryl, expected to hit northern Mexico or southern Texas by Monday, might disrupt oil production and signals a potentially wild hurricane season.
A mid-week report revealed the largest drop in U.S. crude inventories in nearly a year, hinting at tighter supplies. Gasoline consumption saw a year-over-year uptick, according to the U.S. Energy Information Administration .
Seems like inventory data is worth looking at a little closer, "Investors should monitor inventory data," said Fawad Razaqzada from City Index and Forex.com. "More drawdowns could further boost oil prices."
Crude has surged nearly 14% since early June, driven by a bright demand outlook for summer. Hedge funds are also bullish, holding the largest net long positions on Brent crude in seven weeks.
While positive market sentiment and expectations of interest rate cuts are boosting oil, concerns remain about an economic slowdown impacting U.S. consumer demand. Softer demand in Asia led Saudi Aramco to cut crude prices to the region, and Saudi oil flows dipped in June. Lastly, geopolitical tensions are easing with Israel in peace talks with Hamas.
Rig Count:
After six consecutive weeks without a gain in rig count, this week's pivot was refreshing, adding four to the board. Interestingly, all coming from the gas side of the equation while oil focused rigs remained flat. As conversations with numerous operators continues, the plan for 2H2024 remains flat with a couple onesie toosies here and there. I expect rig count count to remain below 600 for the remainder of the year.
Rig Count Numbers:
Total US rig count increased by four, reaching 585
YoY change of -95
US L48 rig count
Oil rig count: 479 (N/C)
Gas rig count: 101 (+4)
Misc rig count: 5 (N/C)
Basin Rig Count
Permian: 305 (N/C)
Eagle Ford: 49 (+2)
Haynesville: 36 (N/C)
Williston: 35 (N/C)
Marcellus: 25 (N/C)
Cana Woodford: 17 (N/C)
DJ-Niobrara: 10 (N/C)
Utica: 10 (N/C)
Others: 98 (+2)
Frac Spread Count:
Double win this week with rig count and frac spread count seeing gains. This week, the frac spread count increased by 5, reaching 242. However, we're still 18 less than this time last year. It appears that even considering the weaker frac spread counts, oil and gas production remains strong and DUC count is hanging in there. Which leads me to my next section, DUC count! Finally, I was able to find the data…
领英推荐
DUC Count as of 6/11/2024 – Finally!!:
Finally heard back from the EIA and will now be back on track reporting monthly DUC count. Last week, Saba Sadiq guessed June’s count would be less than 5,000. At a quick glance, you’ll notice that your number was quite off as June’s numbers came in at 5,495 for a drop of nine. That’s because they’re now reporting “Rest of the L48”, which adds a significant amount of DUCs. The previous version only counted the major basins and now they’re reporting everything across the L48.
From a basin perspective, it’s no surprise that the oil-focused plays drew down a couple while the Haynesville added a handful to the board. It's nothing significant, but worth noting nonetheless.
Basin DUC Count and MoM Change:
Appalachia: 807 (-1)
Bakken: 325 (N/C)
Eagle Ford: 341 (-1)
Haynesville: 792 (+5)
Permian: 881 (-1)
Rest of L48: 2,349 (-11)
Total: 2,495 (-9)
Regional Production for June, 2024 – Published Monthly
Release Date: Jun. 11, 2024 | Next Release Date: Jul. 9, 2024
US crude oil production saw minor changes from April to May. Eagle Ford's production increased slightly from 1.02 to 1.03 mmbd, and the Permian Basin rose from 6.30 to 6.32 mmbd. Bakken's output decreased marginally from 1.32 to 1.31 mmbd. Appalachia and Haynesville remained steady at 0.15 and 0.03 mmbd, respectively.
U.S. Production numbers aren’t updating until this week so this week’s numbers are unchanged from last week’s newsletter. But in case you missed it…!
Weekly Crude Oil Production:
L48 crude oil production remains STILL unchanged at 12.8mmbpd.
Alaska crude oil production dropped from 410 to 383mbpd
Total U.S. crude oil production unchanged at 13.2 mmbpd.
U.S. inventories dropped by a total of 11.8 million bbls (SPR increased by 0.4M)
Natural Gas Production:
Month over Month:
U.S. natural gas production showed slight changes: Eagle Ford rose from 6.70 to 6.73 bcf/day, Bakken increased from 3.11 to 3.14 bcf/day, while Permian, Appalachia, and Haynesville saw slight decreases to 23.20, 34.84, and 13.75 bcf/day, respectively. Other regions' production remained stable at around 25.45 bcf/day.
Weekly Supply Update:
The natural gas scene saw a little shake-up this week. The average total supply of natural gas took a tiny 0.1% dip (0.1 Bcf/d) compared to last week. But don't worry, dry natural gas production stepped up its game, growing by 0.3% (0.3 Bcf/d) to hit an average of 100.7 Bcf/d. Meanwhile, our northern neighbors in Canada sent us 4.9% less gas (down by 0.3 Bcf/d) than they did the week before.
Weekly Demand Highlights:
This week, U.S. natural gas consumption surged by 5.7% (4.1 Bcf/d), according to S&P Global Commodity Insights. The electric power sector led the charge, with a 10.7% (4.4 Bcf/d) increase, thanks to scorching heat across the eastern U.S. Meanwhile, the industrial sector took a tiny step back, with a 0.6% (0.1 Bcf/d) drop, and the residential and commercial sectors saw a 1.8% (0.2 Bcf/d) decrease. On the flip side, our natural gas exports to Mexico slipped by 3.5% (0.2 Bcf/d).
LNG Exports(same as last week):
The EIA will be updating last week's numbers early this week... seems like the 4th really through a wrench into their reporting...
Delivery Snapshot:
Average natural gas deliveries to U.S. LNG export terminals took another weekly step back, decreasing by 0.4 Bcf/d to 12.2 Bcf/d, according to S&P Global Commodity Insights.
Sailing Away:
From June 20 to June 26, a fleet of twenty-nine LNG vessels set sail from U.S. ports. These included nine from Sabine Pass, five from Freeport, four each from Cameron and Corpus Christi, three each from Calcasieu Pass and Cove Point, and one from Elba Island. Altogether, these vessels carried a hefty 105 Bcf of LNG, based on shipping data from Bloomberg Finance, L.P.
This Week’s Wicked Energy Podcast Episode:
In this episode of Wicked Energy with JG, host Justin Gauthier welcomes Stuart Kinnear , CEO and co-founder of Interface Fluidics , to delve into the cutting-edge world of fluid analysis and its transformative impact on the oil and gas industry. Stuart shares insights on the critical role of PVT data phase behavior in understanding reservoir fluid properties, and the challenges of obtaining high-quality samples in remote and challenging locations.
All data is public and published by
Rig Count:?Baker Hughes
WTI/DUC/Production:?U.S. Energy Information Administration
Frac Spread Count:?Primary Vision Network - Frac Spread Count
Petroleum Engineering Consultant
8 个月Another great post, Justin (as usual)! I'm glad to see that Hurricane Beryl didn't stop the Wicked Energy Newsletter (unfortunately, I was in its path of destruction and lost power). Appreciate the shout-out, even though I was WAYYY off?? I suppose I mistook the previously reported DUC well count as a national total, INSTEAD of a count ONLY from the major basins (that it was). LESSON LEARNED, I've definitely got to do a better job at rationalizing numbers and data-points to ensure I correctly understand what they are representing. I often read your newsletters from the perspective of a student of the industry and appreciate insightful learning moments like these. Thanks for all that you do - keep killing it!