??? US L48 Oil & Gas Activity Update???: As of June 14, 2024

What’s up energy fam! A big Happy Father’s Day to all the fellas out there. I also want to acknowledge those Father’s who are out on a drilling rig or in the field right now. Your sacrifice and dedication to our great industry is truly inspiring. Your hard work and commitment ensure that our operations run smoothly, and your efforts do not go unnoticed.

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I hope you and your loved ones are able to celebrate you and the incredible role you play both at work and at home. Thank you for your resilience and for being the backbone of our energy family. Happy Father's Day!

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In the news!

A big win for the Mountain Valley Pipeline (MVP)!

On June 11, the Federal Energy Regulatory Commission (FERC) gave the green light for the Mountain Valley Pipeline (MVP) to start operations! This 303-mile powerhouse can transport up to 2.0 billion cubic feet of natural gas per day from Wetzel County, WV, to Transcontinental Gas Pipeline’s (Transco) station in Pittsylvania County, VA. With Transco's extensive 10,000-mile interstate system stretching from South Texas to New York, we're talking major energy movement here!

So why is this a big deal? For starters, MVP has secured long-term agreements with multiple shippers for its full capacity for at least 20 years. This ensures a steady flow of natural gas to the Northeast, mid-Atlantic, and Southeast markets, enhancing our energy security and boosting reliability across regions.

And there's more! In March 2024, EQT Corporation announced its acquisition of Equitrans Midstream Corporation, the operator of MVP. This move will create a vertically integrated natural gas giant in the Appalachian Basin, combining natural gas production and transportation. The deal is set to close by the end of 2024, setting the stage for increased efficiency and growth in the sector.

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So…. Why should you care? This development is bullish for rig counts as it signals growing demand for natural gas infrastructure and exploration. More rigs mean more jobs, more energy security, and a stronger economy. Let's get fired up about the future of natural gas!

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O&G Prices:

Oil had a field day on Monday as savvy traders jumped on the "buy the dip" train after last week’s selloff. The dip came courtesy of OPEC+'s chat about maybe restoring supply later this year, which sent prices tumbling to four-month lows. But don't worry, OPEC+ assured us they're ready to hit pause or even reverse those production changes if necessary. Talk about keeping us on our toes!

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WTI ended the week around $78.49 for a ±4% gain for the week. Lots of discussion and debate around the future outlook for oil demand, which will significantly impact oil prices. On the one hand, you have the IEA curbing forecasts for demand growth and are sounding the alarms for a major surplus over the long term, while OPEC sees demand continuing to grow for years to come.

?Rig Count:

Rig count took another stumble, dropping to 590 rigs in the L48, roughly 97 rigs less than this time last year. When looking at Spears’s most recent drilling data, the US is expected to drill 238.5 million feet of reservoir, compared to 270.7 million feet in 2023 and roughly 2,500 less wells. Further, the numbers of wells isn’t as relevant as reservoir footage drilled… remember, longer laterals and unique profiles such as the U-Turn wells, are requiring less wells drilled to meet production goals. In talking to OCTG folks, this doesn’t bode well for the business… talk about an ever evolving landscape in an already tight margin environment.

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The Numbers:

Total US rig count dropped to 590

YoY change of -97

US L48 rig count Oil rig count: 488 (-4)

Gas rig count: 98 (N/C)

Misc rig count: 4 (N/C)

Basin Rig Count

Permian: 309 (-1)

Eagle Ford: 51 (N/C)

Haynesville: 36 (N/C)

Williston: 34 (N/C)

Marcellus: 25 (N/C)

Cana Woodford: 16 (-1)

DJ-Niobrara: 10 (N/C)

Utica: 10 (N/C)

Others: 90 (N/C)

Frac Spread Count:

The L48 frac spread count took a nice little pivot last week, adding three to reach 250. This is still well below last year’s count of 270 but I expect we are slowly climbing out of the trough. I just can’t see the US maintaining or even growing production when frac spreads are well below where they need to be. However, I’m confident that any big movement in spread count will be to the upside, especially with production forecasts and demand.

DUC Count as of 5/13/2024 – Next release 6/11/2024 (I thought):

Well... since the EIA changed things up again, I have no idea where they’re reporting DUC count. I’ve emailed them to ask so stay tuned. It used to be on the same page with regional production, but now that’s moved to their Short Term Energy Outlook (which doesn’t include DUC count)… So stay tuned!!!

Basin DUC Count and MoM Change (last month):

Anadarko: 701 (+4)

Appalachia: 824 (+5)

Bakken: 328 (+6)

Eagle Ford: 345 (-2)

Haynesville: 791 (+7)

Niobrara: 628 (-16)

Permian: 893 (+2)

Regional Production for June, 2024 – Published Monthly

The EIA has now included regional production numbers in their Short Term Energy Outlook, which reported in a different format.

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The short version is that 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.

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US 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.

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Weekly Crude Oil Production:

L48 crude oil production actually increased this week, reaching 12.8mmbpd from last week’s 12.7. This could be a rounding error and certainly not an indication that we’re starting to grow production.

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Alaska crude oil production basically unchanged at 425mbpd

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Total US crude oil production increased from 13.1 to 13.2 mmbpd.

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Natural Gas Production:

Dry natural gas production decreased by 0.3% (0.3 Bcf/d) to average 99.3 Bcf/d, and average net imports from Canada increased by 6.8% (0.4 Bcf/d) from last week.

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LNG Exports:

Average natural gas deliveries to U.S. LNG export terminals decreased 0.3 Bcf/d from last week to 12.9 Bcf/d, according to data from S&P Global Commodity Insights.

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Vessels departing U.S. ports: Twenty-five LNG vessels (seven from Sabine Pass, five from Corpus Christi, four each from Cameron and Freeport, three from Calcasieu Pass, and one each from Cove Point and Elba Island) with a combined LNG-carrying capacity of 94 Bcf departed the United States between June 6 and June 12, according to shipping data provided by Bloomberg Finance, L.P.

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This Week’s Wicked Energy Podcast Episode:

In this episode week’s of "Wicked Energy with JG," we announced Ben as co-host for the Wicked Energy podcast, with the goal of Ben starting his very own show! Be sure to check out Ben’s story and mission behind joining Wicked Energy!

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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