GoHaynesvilleShale.com2024-03-19T04:44:01ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirlhttps://storage.ning.com/topology/rest/1.0/file/get/2192520039?profile=RESIZE_48X48&width=48&height=48&crop=1%3A1https://gohaynesvilleshale.com/forum/topic/listForContributor?user=11c3rolk8lhfy&feed=yes&xn_auth=nodivision orders for alternate wellstag:gohaynesvilleshale.com,2024-03-19:2117179:Topic:40547012024-03-19T04:17:20.346ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p>When a well is drilled, mineral owners get division orders and are paid royalties. If an alternate well is then drilled for the same unit, are there new division orders issued?</p>
<p>When a well is drilled, mineral owners get division orders and are paid royalties. If an alternate well is then drilled for the same unit, are there new division orders issued?</p> It’s never been cheaper to buy an EV. Here’s why.tag:gohaynesvilleshale.com,2024-03-18:2117179:Topic:40545582024-03-18T17:16:50.240ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p><strong>I<span style="font-size: 12pt;">t’s never been cheaper to buy an EV. Here’s why.</span></strong></p>
<p><strong>New electric car prices dropped $2,000 in the U.S. last month, bringing EVs close to price parity with gas-powered cars.</strong></p>
<p>By <a href="https://www.washingtonpost.com/people/nicol%C3%A1s-rivero/?itid=ai_top_riveron">Nicolás Rivero</a> March 18, 2024 washingtonpost.com</p>
<p>The price of…</p>
<p><strong>I<span style="font-size: 12pt;">t’s never been cheaper to buy an EV. Here’s why.</span></strong></p>
<p><strong>New electric car prices dropped $2,000 in the U.S. last month, bringing EVs close to price parity with gas-powered cars.</strong></p>
<p>By <a href="https://www.washingtonpost.com/people/nicol%C3%A1s-rivero/?itid=ai_top_riveron">Nicolás Rivero</a> March 18, 2024 washingtonpost.com</p>
<p>The price of <a href="https://www.washingtonpost.com/business/interactive/2023/electric-vehicles-compare-models-shopping-guide/?itid=lk_inline_manual_2">electric cars</a> is plummeting so fast that they’re now almost as cheap as gas-powered cars.</p>
<p>Since EVs first hit the market, car buyers have had to pay a steep premium if they wanted a car that ran on batteries instead of a gas engine. Two years ago, they would have paid about $17,000 more on average for a new electric car than for a new gas-powered car. But that gap has been rapidly closing, shrinking to $5,000 last month, according to data from Cox Automotive.</p>
<p>That’s an 11 percent markup over the average new car price last month — roughly similar to the price difference between picking the base model of some cars vs. the performance model that comes with all the bells and whistles.</p>
<p>Tesla is setting electric vehicle prices so low, they’re almost even with gas-powered cars.</p>
<p>Of course, part of the reason EV prices are plunging is that <a href="https://www.washingtonpost.com/business/2023/12/26/ev-demand-slows/?itid=lk_inline_manual_9">consumers are not buying them</a> as fast as dealers and automakers expected. As the industry moves beyond enthusiastic early adopters, it now faces car buyers who are concerned about charging infrastructure and high upfront costs.</p>
<p>So car dealerships are discounting electric cars on their lots. Average EV prices dropped $2,000 last month. “We’re going to continue to see price cuts or discounts just because there’s inventory and [dealers are] really trying to get these sold,” said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive.</p>
<p>That’s good news for Americans in the market for a new car who might be considering going electric. “Price is always one of the top barriers for adoption, so I think getting down to price parity is key,” she said.</p>
<p><strong>Which EVs are getting cheaper?</strong></p>
<p>Tesla, which sells more electric cars in the U.S. than all other automakers combined, has been the driving force behind the EV price plunge. The automaker started slashing the price for its popular Model Y SUV and Model 3 sedan in January 2023, dragging down the average for all electric cars. For instance, the base Model 3 sedan, which <a href="https://www.teslarati.com/tesla-model-3-model-y-price-cut-united-states-update/">cost $47,000</a> at the beginning of 2023, <a href="https://electrek.co/2024/02/13/tesla-increases-model-3-price-now-cost-as-much-as-model-y/#:~:text=The%20Performance%20has%20been%20removed,the%20same%20price%20at%20%2438%2C990.">now sells</a> for $39,000. The premium Model Y dropped from $70,000 to $52,500 in that same period.</p>
<p>Tesla is probably cutting prices to maintain its market share as rival automakers start selling electric cars, Valdez Streaty said. There are now <a href="https://www.caranddriver.com/features/g32463239/new-ev-models-us/">57 EV models for sale</a> in the U.S., according to Car and Driver magazine. While Tesla once commanded roughly <a href="https://www.cnbc.com/2023/06/15/teslas-us-electric-vehicle-market-share-could-drop-to-18percent-by-2026.html#:~:text=Tingshu%20Wang%20%7C%20Reuters-,Tesla's%20share%20of%20the%20U.S.%20electric%20vehicles%20market%20will%20drop,78%25%20market%20share%20in%202018.">80 percent of the U.S. market</a>, it’s now clinging to a bare majority — and most of its top competitors are also cutting prices.</p>
<p>“Tesla still dominates, but … there’s so much more competition now,” Valdez Streaty said.</p>
<p><strong>EV prices are set to keep dropping</strong></p>
<p>Last month’s drop in EV prices is part of a long-term trend toward cheaper electric cars, mainly due to falling battery prices. Batteries are nearly <a href="https://www.energy.gov/eere/vehicles/articles/fotw-1272-january-9-2023-electric-vehicle-battery-pack-costs-2022-are-nearly">90 percent cheaper</a> today than they were in 2008, according to the U.S. Energy Department.</p>
<p>“Batteries can make up as much as 40 percent of the cost of the vehicle,” Valdez Streaty said. “We’re going to see battery prices continue to drop … so I think we’re going to start to see this closing near that price parity.”</p>
<p>The cost to make a new electric car could fall to the same level as gas-powered ones <a href="https://www.gartner.com/en/newsroom/press-releases/2024-03-07-gartner-outlines-a-new-phase-for-electric-vehicles">as soon as 2027</a> because of more efficient manufacturing, according to a March 7 report from the technology consulting firm Gartner.</p>
<p><a href="https://www.coxautoinc.com/news/new-cox-automotive-study-ev-consideration-at-record-high-but-dealers-feel-unprepared/">Cost is the main barrier</a> for U.S. car buyers thinking of making the switch, according to a 2022 Cox Automotive survey. If prices keep dropping as they did last month, more Americans may be willing to ditch their gas-guzzlers for electric cars.</p> Cost to market transport chargestag:gohaynesvilleshale.com,2024-03-14:2117179:Topic:40546852024-03-14T19:51:53.996ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
I received my 1099 form from an oil and gas company and I has a huge amount of cost to market transport deductions that was on there as an income and now I have to pay taxes for money that I didn't receive... can someone tell me if this is standard procedure?
I received my 1099 form from an oil and gas company and I has a huge amount of cost to market transport deductions that was on there as an income and now I have to pay taxes for money that I didn't receive... can someone tell me if this is standard procedure? Failed Oil Well Plugs Are Silent Polluters That No One Watchestag:gohaynesvilleshale.com,2024-03-13:2117179:Topic:40547592024-03-13T14:53:42.838ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p><span style="font-size: 12pt;"><strong>Failed Oil Well Plugs Are Silent Polluters That No One Watches</strong></span></p>
<p>By <a href="mailto:bmagill@bloombergindustry.com">Bobby Magill</a> and <a href="mailto:dhutchinson@bloombergindustry.com">Drew Hutchinson</a> March 13, 2024 bloomberglaw.com</p>
<p>Link to full article:…</p>
<p><span style="font-size: 12pt;"><strong>Failed Oil Well Plugs Are Silent Polluters That No One Watches</strong></span></p>
<p>By <a href="mailto:bmagill@bloombergindustry.com">Bobby Magill</a> and <a href="mailto:dhutchinson@bloombergindustry.com">Drew Hutchinson</a> March 13, 2024 bloomberglaw.com</p>
<p>Link to full article: <a href="https://news.bloomberglaw.com/privacy-and-data-security/failed-oil-well-plugs-are-silent-polluters-that-no-one-watches">https://news.bloomberglaw.com/privacy-and-data-security/failed-oil-well-plugs-are-silent-polluters-that-no-one-watches</a></p>
<p>Some states using federal infrastructure dollars to plug abandoned wells have increased the amount operators must pay upfront to cover future plugging costs—and others have instituted fees for the owners of idle wells that sit unplugged and untouched.</p>
<p>Colorado has some of the nation’s most stringent regulations around plugging orphaned wells, the result of <a href="https://ecmc.state.co.us/owe.html#/owe">2022 rulemaking</a> intended to raise about $10 million annually to clean up those sites. Those dollars fund initial plugging, but Colorado doesn’t have a framework for following up in the years ahead.</p>
<p>In the big picture, the 50,000 wells that have been plugged to date far outreach the “handful” of plugged wells that have failed, especially since the average plugged well emits little methane, said Julie Murphy, director of the Colorado Energy and Carbon Management Commission. Still, it’s an important issue, she said.</p>
<p>“We want to continue to be proactive on this, " she said.</p>
<p>New Mexico, the second-largest oil producer behind Texas, is attempting to update its regulations. It already requires well operators to document the quality of concrete they use in plugging. There’s also a post-plugging inspection, said Dylan Fuge, director of New Mexico’s Oil Conservation Division.</p>
<p>Inspectors haven’t seen issues with the more recently plugged wells, Fuge said. But New Mexico used state funds to look at older well plugs—and determined about 10% of them might need to be revisited, he said. A more robust review will be conducted as more funds become available, Fuge said.</p>
<p>The Permian Basin, which straddles the New Mexico-Texas line, is the source of nearly half of all the oil produced in the US and about 20% of all US natural gas. That’s in part thanks to a fracking boom that has transformed a vast swath of the desert there into an industrial zone.</p>
<p>Stephanie Garcia Richard, New Mexico’s Commissioner of Public Lands, said the region was “at the looming edge” of the boom, suggesting the state could see drilling activity decline.</p>
<p>At the same time, the groundwater pumping could jeopardize the integrity of existing plugged wells, she said. “This infrastructure is right where people live,” Garcia Richard said.</p>
<p>While the gap for holding oil and gas companies accountable narrows as the wider public embraces clean energy, concerns over failing plugs still aren’t on most officials’ radars, said Kyle Tisdel, senior attorney and Climate and Energy Program director at the Western Environmental Law Center.</p>
<p>Without a regulatory framework for monitoring plugged wells, the burden will fall to taxpayers, he said. “We are so far away from the state or federal government internalizing that reality,” Tisdel said.</p>
<p>States don’t always have the funding to inspect plugging operations, said Luke Plants, CEO of Pennsylvania-based well plugging company Plants and Goodwin, Inc. Before the 2021 infrastructure law, state inspectors failed to show up for about 25% of the well-plugging jobs his company completed in the Appalachian Mountains region, he said.</p>
<p>“Sometimes they never come out and you’re just signing an affidavit at the end of it saying you did things properly,” Plants said.</p>
<p>The infrastructure law changed that. About 10% of the funding states received can be used for administrative purposes, and now all federally funded plugging jobs are “very well-watched, inspected and regulated,” Plants said.</p>
<h2><strong>No Records Kept</strong></h2>
<p>The Texas Railroad Commission, the state’s oil and gas regulator, doesn’t keep records of leaking well plugs or even reports of them.</p>
<p>The commission recognizes the potential ground-shifting impact of fracking operations, and it asks landowners to notify staff if they see or smell leaks from old oil wells nearby, said Patty Ramon, another commission spokeswoman. If such a leak is reported, inspectors are dispatched to address the issue.</p>
<p>But Ramon said the commission’s seen “little evidence of a widespread occurrence of previously plugged wells leaking due to failing plug jobs.”</p>
<p>The Antina ranch manager and owner dispute that. Watt and Stogner sent multiple emails to the commission in 2022 and 2023 about the growing number of failed plugged wells on the 22,000-acre ranch.</p>
<p>“Given what has happened on the Antina Ranch and what’s currently happening with the blowout south of 329 please make sure the full regulatory process starts to IMMEDIATELY address the safety hazard these wellbores present,” Stogner wrote in one January 2022 note to the commission, referring to a well blowout near a Texas highway.</p>
<p>Watt said she and her team have reported “every single one of these problems” to the commission.</p>
<p>“They won’t make anyone clean anything up,” Watt said. “In their book, a plugged well cannot fail.”</p>
<p>R.J. DeSilva, another commission spokesman, said no wells on the Antina Ranch are known to violate state oil and gas regulations, except for one leaking oil tank.</p>
<p>Ramon said that Watt has been antagonistic toward the commission and noted she has been “in touch” with Chevron USA, whom Watt blames for the failure of many plugged wells on her property.</p>
<p>In Texas, as in many states, landowners hold the rights to the surface land, but the minerals underground are often owned by someone else. Chevron acquired the old oil field beneath Watt’s land when the company purchased Gulf Oil in 1984.</p>
<p>Watt sued Chevron in December 2022, seeking unspecified monetary damages and a court order for Chevron to plug or re-plug all its leaking wells on her property. A 2021 blowout of a previously plugged well took the company more than 12 weeks to control, according to the <a href="https://www.scribd.com/document/653341645/2022-12-09-Watt-Watt-s-Original-Petition-and-App-for-Declaratory-Relief-and-Mandatory-Injunction?doc_id=653341645&order=628777567">lawsuit</a>.</p>
<p>Chevron has denied Watt’s allegations or that many of the wells she found were theirs. The company accepted responsibility for three wells on her ranch but also accused her of excavating plugged wells on her own property without a permit and threatening Chevron employees on her land.</p>
<p>“We have continuously tried to address Ms. Watt’s concerns, but she and her team have made the process difficult,” Chevron spokeswoman Deena McMullen said, adding that the company has followed standard state and industry procedure in addressing plugged wells on the Antina Ranch.</p>
<p>A trial is scheduled for December.</p>
<h2><strong>‘Blowouts’ in Old Fields</strong></h2>
<p>More than 5 billion barrels of wastewater used in fracking were injected in the Permian Basin in 2022, up from 900 million in 2010, <a href="https://jpt.spe.org/the-growing-pressures-of-produced-water-disposal">according to</a> the Journal of Petroleum Technology.</p>
<p>Research, including a <a href="https://agu.confex.com/agu/fm23/meetingapp.cgi/Paper/1346790">study</a> by scientists at Southern Methodist University, suggests that wastewater injection is forcing brine and other fluids into derelict wells and contributing to wells blowing out—a practice that also causes <a href="https://sustainability.stanford.edu/news/earthquakes-oil-field-wastewater">earthquakes</a>.</p>
<p>“This wastewater is corrosive because of high salt concentrations,” Townsend-Small, the University of Cincinnati scientist, said.</p>
<p>In the Permian, there are “70-year-old casings, poor cement jobs, or no cement jobs at all—and then you add all this added pressure from the produced water injection around it, and they start popping like pimples,” said Hawk Dunlap, an oil field services specialist working with Stogner.</p>
<p>It’s also critical for plugging efforts to consider the wider implications in a region. Plugging just one or a few orphaned wells in an oil and gas field can increase gas leaks from unplugged wells nearby—including orphaned wells that haven’t been discovered yet—if pluggers don’t adequately assess the geology and state of all the wells in the field, said Arthur, the Tulsa consultant.</p>
<p>Purvis, the Forth Worth adviser, said the oil and gas industry needs to “come to grips with the fact that our dead wells become potential sources of pollution for the long term,” even if doing so isn’t profitable.</p>
<p>New technologies, such as methane-sensing satellites, will help states monitor leaks from plugged wells cheaply because they won’t have to send technicians to inspect the wells in person, said Daniel Raimi, a fellow at Resources for the Future and a lecturer at the Gerald R. Ford School of Public Policy at the University of Michigan.</p>
<p>If satellites prove too expensive, states will have to decide which plugged wells might pose the greatest risk, said Raimi, who, along with Kang and Arthur, serves on the American Association for the Advancement of Science’s <a href="https://www.aaas.org/programs/epi-center/aaas-epi-center-working-group-orphaned-wells">working group</a> on orphaned wells.</p>
<p>Kang’s push to monitor plugged wells also comes from all the unknowns around oil and gas wells after they stop producing. That means not only assessing how often plugs fail and what exactly happens to groundwater and other resources when they do, but also how much it benefits the earth to plug wells in the first place.</p>
<p>“We just can’t quantify the benefits,” Kang said. “Not that there aren’t benefits—we know there are benefits—we just don’t have the data.”</p>
<p>But on the Antina Ranch, evidence of what happens when oil and gas wells are left to rot—leaking oil, bubbling methane and other pollution from ignored orphaned wells and poorly plugged wells—is everywhere.</p>
<p>“What I’ve learned in this is wells are forever, and we can’t just drill them, plug them, and walk away,” Stogner said. “We need to be careful and conscientious of where we’re putting holes in the ground.”</p> Bossier 161030tag:gohaynesvilleshale.com,2024-03-07:2117179:Topic:40546272024-03-07T13:13:17.930ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p>Did anyone receive this letter yesterday?</p>
<p>Did anyone receive this letter yesterday?</p> Texas Standard article - Potential lithium boom simmers in East Texastag:gohaynesvilleshale.com,2024-03-06:2117179:Topic:40544482024-03-06T20:47:17.452ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p>I came across another article interviewing Sam Shaw of the Longview News-Journal I thought you all might be interested in reading.</p>
<p><a href="https://www.texasstandard.org/stories/potential-lithium-boom-simmers-in-east-texas/" rel="noopener" target="_blank">https://www.texasstandard.org/stories/potential-lithium-boom-simmers-in-east-texas/</a></p>
<p>The lithium-ion battery is<span> …</span></p>
<p>I came across another article interviewing Sam Shaw of the Longview News-Journal I thought you all might be interested in reading.</p>
<p><a href="https://www.texasstandard.org/stories/potential-lithium-boom-simmers-in-east-texas/" target="_blank" rel="noopener">https://www.texasstandard.org/stories/potential-lithium-boom-simmers-in-east-texas/</a></p>
<p>The lithium-ion battery is<span> </span><a href="https://www.texasstandard.org/stories/nobel-prize-winning-chemist-john-goodenough-enabled-widespread-use-of-the-lithium-ion-battery/">one of the inventions</a><span> </span>that makes the modern world possible. It’s in your cell phone, your laptop, maybe even your car. The device’s essential element – lithium – is therefore in<span> </span><a href="https://e360.yale.edu/features/arkansas-direct-lithium-extraction">very high demand</a>.</p>
<p>Right now most of the world’s lithium production occurs in Australia and Chile. But some lithium miners have tabbed East Texas as one of the element’s potential hot spots.</p>
<p>Samuel Shaw, reporter for the<span> </span><a href="https://www.news-journal.com/">Longview News-Journal</a>, spoke to Texas Standard about<span> </span><a href="https://www.news-journal.com/premium/spindletop-for-the-21st-century-has-the-east-texas-lithium-race-begun/article_b036a36c-c07b-11ee-aa4f-8f2a46e2e2a1.html">the region’s lithium rush</a>. Listen to the interview above or read the transcript below.</p>
<p><em>This transcript has been edited lightly for clarity:</em></p>
<p><b>Texas Standard:<span> </span></b><strong>You recently took a close look at the emerging lithium industry in East Texas. Let me first just ask “why?” Why is this part of the state getting attention as a place to potentially mine lithium?</strong></p>
<p><b>Samuel Shaw:<span> </span></b>It is getting attention because some of the highest grades of lithium, or I should say the highest grade of lithium sampled anywhere in North America was in deep East Texas, just by the Louisiana border. And then another sample was taken, which was even higher, just a bit west of that in Franklin County, in a formation called the Smackover.</p>
<p>The United States produces just 1% of global lithium. Most of that comes at the moment from Australia, the lithium triangle and, South America and China.</p>
<p><strong>Are we talking about a lot of companies flooding into the area? Is there really just one? What’s the market look like at the moment?</strong></p>
<p>At the moment, we know that there is Standard Lithium, which is a Canadian company. There’s East Texas Natural Resources.</p>
<p>Through contracts which were filed with the railroad commission, which is overseeing brine mining, we have seen some other companies jump in there, like Black Mountain Lithium. But right now this is all very fresh and novel and new and Standard Lithium was sort of the first entrant into the market here.</p>
<p><strong>Well, how long’s it been going on? How long has Standard Lithium been operating in the area?</strong></p>
<p>I think they began looking at geologic data and seismic information about five years ago. Obviously, East Texas is where the Texas oil boom began. So there’s a lot of information that’s available. The geology is well understood. And they knew that there was lithium here.</p>
<p>Then they began, around three years ago, very quietly locking down mineral leases. They became more and more confident that these deposits were not only here, but they were an extraordinary grade.</p>
<p>A executive at the company told me during an interview that they didn’t say much about what they were doing here because they knew what they had, and they didn’t want to face competition from a large company like Exxon, which has also started to move into renewable energy and increasingly into lithium in southwest Arkansas.</p>
<p><strong>So when we’re talking about mining lithium, what is the operation actually like? Is it like a pit? Is it more like fracking? What’s the operation look like?</strong></p>
<p>Well, it is like a pit and strip mine in a lot of parts of the world. That’s not what these companies are looking at. They’re looking at a technology called direct lithium extraction, which does resemble fracking in a lot of ways. In fact, the method is borrowed from a fracking technique.</p>
<p>And so what it looks like is a well being drilled, and then they run this salt water brine from about two miles underground into a processing station, and then from there, refine that brine into a battery grade product.</p>
<p>Normally it takes about a year and a half to two, conventionally, to get battery grade lithium. But they’re trying to cut out that conventional component entirely and basically do this as one kind of closed loop.</p>
<p><strong>Does that make for a potentially cleaner process? I’m sure there are people who are concerned about environmental issues.</strong></p>
<p>Yeah, I mean, even according to environmentalists, this is far and away the best way to get lithium if you have to get it, and it looks like we should.</p>
<p>But having said that, it does come with some consequences. Like the brine contains a lot of salt – packs more salt that seawater does. And salt is extremely damaging to ecosystems.</p>
<p>As far as the footprint goes for these drilling sites, they’re really small. They don’t look like a pit mine or anything like that. And I think that’s part of the reason why local policymakers, politicians, have sort of welcomed the industry in here.</p>
<p><strong>Well, it’s definitely new, this whole concept, to Texas at least. Do you get the sense – talking about some of those public officials, regulators or attorneys looking at contracts – do people know what’s going on out there? Do people have a sense of how this all works or are they flying blind?</strong></p>
<p>So I think that, at a county level, in places that first came into contact with these companies – like Cass County, Franklin County – folks who were making decisions have a decent idea of what’s going on.</p>
<p>But what really matters is that the folks on the ground, the landowners who are being approached by land men for contracts inquiring about their brine, they tend to not know as much. And that kind of gap in information is where there have been some difficulties.</p>
<p>There have been allegations of perhaps predatory business practices linked to one company. But a lot of this also has to do with the fact that the legal terrain itself is pretty nebulous at the moment. Unlike oil and gas, there isn’t a century worth of case law. And so a lot of this is in the process of being regulated, and policies are being designed at the moment.</p>
<p><strong>Can you describe the range of opinions you’ve heard from locals about how they feel about this potential development moving forward?</strong></p>
<p>Well, first, I mean, people are used to extractive industries out here. So, the idea of somebody offering you a deal to drill on on your property is not something new or necessarily unfamiliar.</p>
<p>What has concerned some locals is just that gap of information, which I alluded to before. Folks thinking that a strip mine might be going in their backyard or something like that. But the money talks and this is an area where oil and gas production has plummeted pretty much across the board.</p>
<p>And so folks are also interested in getting a little bit financial security, perhaps through these contracts. Though the money isn’t quite what it is with with oil and gas.</p> Natural Gas Prices and "Associated Gas" Productiontag:gohaynesvilleshale.com,2024-03-06:2117179:Topic:40546212024-03-06T14:35:42.509ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p><a href="https://r.smartbrief.com/resp/rKAODnoIuovCqUiMfEitfYfCMmbc?format=multipart"><span style="font-size: 12pt;">Drilling efficiencies drive record US oil output</span></a></p>
<p><strong><a href="https://www.eia.gov/todayinenergy/detail.php?id=61523">More productive wells spur U.S. crude oil production higher</a></strong></p>
<p>March 5, 2024</p>
<p> </p>
<p><strong>Data source:</strong> U.S. Energy Information Administration,…</p>
<p><a href="https://r.smartbrief.com/resp/rKAODnoIuovCqUiMfEitfYfCMmbc?format=multipart"><span style="font-size: 12pt;">Drilling efficiencies drive record US oil output</span></a></p>
<p><strong><a href="https://www.eia.gov/todayinenergy/detail.php?id=61523">More productive wells spur U.S. crude oil production higher</a></strong></p>
<p>March 5, 2024</p>
<p> </p>
<p><strong>Data source:</strong> U.S. Energy Information Administration, <a href="https://www.eia.gov/outlooks/steo/data/browser/#/?v=3&f=M&s=0&start=199710&end=202512&linechart=COPRPUS&ctype=linechart&maptype=0"><em>Short-Term Energy Outlook</em></a>, February 2024</p>
<p>U.S. crude oil production averaged 13.3 million barrels per day (b/d) in December 2023, following sustained productivity increases at new wells, according to our latest <a href="https://www.eia.gov/petroleum/supply/monthly/"><em>Petroleum Supply Monthly</em></a> (PSM). U.S. crude oil production has increased to record highs since 2010 and has risen even more quickly in recent months. These record highs have come despite declining U.S. drilling activity because the new wells are more efficient.</p>
<p>Since first surpassing the previous record in August 2023, U.S. crude oil production has increased another 2%, exceeding the pre-pandemic November 2019 peak by 0.3 million b/d.</p>
<p>The number of new wells brought on line by drilling activity has historically been the key determinant of whether crude oil production increases or decreases. However, advances in horizontal drilling and <a href="https://www.eia.gov/tools/glossary/index.php?id=H">hydraulic fracturing</a> technologies have increased well productivity, enabling U.S. producers to extract more crude oil from new wells drilled while maintaining production from legacy wells.</p>
<p>Our <a href="https://www.eia.gov/petroleum/drilling/"><em>Drilling Productivity Report</em></a> (DPR) shows more production from a combination of increasing new well production and higher sustained legacy well production. We define new well production as crude oil extracted during the first 12 months of production, while legacy production is crude oil extracted after the initial 12 months. The share of legacy production since 2021 has remained stable, and production from new wells has continued to increase.</p>
<p>The rig count is the number of active oil rigs in the United States as published by Baker Hughes. Traditionally, the number of active oil-directed rigs is a leading indicator of future crude oil production because more active rigs can drill more new wells. Recently, U.S. crude oil production has increased because of technological advancements and efficiency gains despite a 69% decrease in the number of active rigs since 2014.</p>
<p>The number of new wells added every year in the United States has fluctuated over the past decade. Although the number of new wells notably peaked at 13,745 in 2014, subsequent activity dipped before showing signs of returning in June 2016. The number of new wells fell by nearly 40% (4,829 wells) in 2020 to 7,147 because of the economic impact of the COVID-19 pandemic. Since then, the number of new crude oil wells has increased in every year at a slower pace compared with pre-pandemic rates. In 2022, the number of new crude oil wells was the same as in 2017. In the first half of 2023, drillers increased the number of new wells by 12% (624 wells) compared with the same period in 2022. This growth in the number of new wells indicates that growth in production is supported increasingly by increased productivity despite fewer operating drilling rigs compared with the past.</p>
<p>The United States became the global leader in crude oil production in 2018, surpassing Russia and Saudi Arabia, because of the substantial increase in crude oil output before 2016. By October 2023, after the economic disruptions resulting from the COVID-19 pandemic, the United States accounted for 16% of global crude oil production, the most recent month for which data are available in our <a href="https://www.eia.gov/international/data/world/petroleum-and-other-liquids/monthly-petroleum-and-other-liquids-production?pd=5&p=0000000000000000000000000000000000vg&u=0&f=M&v=mapbubble&a=-&i=none&vo=value&&t=C&g=00000000000000000000000000000000000000000000000001&l=249-ruvvvvvfvtvnvv1vrvvvvfvvvvvvfvvvou20evvvvvvvvvvnvvvs0008&s=94694400000&e=1696118400000">International Energy Statistics</a>.</p>
<p>In our February <a href="https://www.eia.gov/outlooks/steo/"><em>Short-Term Energy Outlook</em></a>, we forecast a dip in production in early 2024 because winter weather caused some operators to shut in production. We forecast production will continue to decline through the second and third quarters of 2024. We forecast crude oil production to climb again in 2025, and we expect it to exceed the November 2023 peak in February 2025.</p>
<p> </p> Chesapeake Moves to DUC Strategytag:gohaynesvilleshale.com,2024-03-05:2117179:Topic:40544382024-03-05T14:07:08.100ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p><strong>Just in Time - Chesapeake Counters Gas-Price Nadir With Output Slash, Innovative Inventory Build</strong></p>
<p><a href="https://dts.podtrac.com/redirect.mp3/rbn-polly.s3.amazonaws.com/a14eabec-c505-417d-8305-e7876a4d03b5_compiled.mp3">Link</a> to full article:…</p>
<p><strong>Just in Time - Chesapeake Counters Gas-Price Nadir With Output Slash, Innovative Inventory Build</strong></p>
<p><a href="https://dts.podtrac.com/redirect.mp3/rbn-polly.s3.amazonaws.com/a14eabec-c505-417d-8305-e7876a4d03b5_compiled.mp3">Link</a> to full article: <a href="https://rbnenergy.com/just-in-time-chesapeake-counters-gas-price-nadir-with-output-slash-innovative-inventory-build">https://rbnenergy.com/just-in-time-chesapeake-counters-gas-price-nadir-with-output-slash-innovative-inventory-build</a></p>
<p>Monday, 03/04/2024 Published by: <a href="https://rbnenergy.com/users/tom-biracree">Tom Biracree</a></p>
<p>Faced with sustained sub-$2/MMBtu natural gas prices and dim prospects for significant gas-demand growth until sometime next year, a number of major gas-focused E&Ps have been tapping the brakes on production and trimming their planned 2024 capex. But one company — Chesapeake Energy, slated to become the U.S.’s largest gas producer thanks to a recently announced acquisition — has taken a more dramatic step, implementing a novel strategy that will slash production by 25% but leave the E&P ready to quickly ramp up its output as soon as demand and prices warrant. In today’s RBN blog, we’ll review the 2024 guidance of the major U.S. gas producers and delve into the analysis of Chesapeake’s unusual approach. </p>
<p>Natural gas prices have declined severely over the past two or three weeks, and a few days ago (February 20) <u><a href="https://rbnenergy.com/fear-and-loathing-with-brutally-bearish-fundamentals-how-low-could-natural-gas-prices-go">the March contract settled at $1.576/MMBtu</a></u>. In nominal dollars, that was the lowest front-month price since the summer of 2020, but in real, inflation-adjusted terms it was the lowest price of the 21<sup>st</sup> century. The primary culprits are record-high production, which reached 106 Bcf/d in December 2023, combined with one of the mildest winters since the 1950s in many major U.S. heating markets. As a result, gas-storage levels are now more than 25% higher than the five-year average.</p>
<p>Lower natural gas prices are having a predictable impact on gas producer profits and cash flows. Although a couple of smaller producers have yet to report Q4 2023 results, the seven large gas-focused E&Ps that we monitor reported year-end pre-tax operating income and operating cash flows down 86% and 67%, respectively, from Q4 2022. Although their remarkable focus on investment discipline and operational efficiency have allowed producers to stay in the black, the continuing decline in natural gas prices in Q1 2024 threatens further erosion in profitability — and in the cash-flow generation that funds the modest shareholder returns some companies in the gas-focused peer group have managed to sustain. </p>
<p>With the gas market currently oversupplied, one potential solution available to some producers would be to rein in investment and production. However, there are a couple of complications to that strategy. For smaller producers who need to make payroll, scaling back operations may be impractical. For larger producers, strategic capital allocation decisions are complicated by the anticipated dramatic gas-demand growth in 2025-28, driven by an expected 12-Bcf/d increase in gas demand from LNG export projects under construction, growth in pipeline exports to Mexico, and increasing industrial and power-generation demand. Conference call comments over the past few weeks indicate that corporate managements have been weighing the short-term benefits of cutting investment to reduce output with the longer-term issues of retaining the ability to reverse course and boost output when gas demand, and then presumably prices, jumps in the future.</p>
<p>The results, as reflected in the 2024 guidance issued to date, generally reflect a cautious approach. As shown in Figure 1 below, eight gas-weighted producers are guiding, on average, to a 13% reduction in capital investment (from $9.6 billion in 2023 to $8.3 billion in 2024) and flat output at 1.4 trillion cubic feet of natural gas equivalent (Tcfe). Note that the chart excludes major producer Southwestern Energy, which has not released guidance because of <u><a href="https://rbnenergy.com/finally-after-a-long-courtship-gas-focused-chesapeake-and-southwestern-put-a-ring-on-it">its pending acquisition by Chesapeake Energy</a></u> (stock ticker CHK). </p>
<p>The importance of that $11.5 billion acquisition is magnified because Chesapeake’s 2024 guidance reflects what you might call the boldest, most coherent strategy to mitigate the impact of current low natural gas prices with the ability to quickly reverse course when gas demand increases. The company announced a 31% decrease in drilling & completion (D&C) capital spending, from $1.74 billion to $1.2 billion. It also said it will eliminate a rig in both the Marcellus (from four to three) and Haynesville (from five to four) and cut frac crews from two to one in both plays. The result will be about a 25% decrease in total 2024 production, from more than 3.6 billion cubic feet of natural gas equivalent per day (Bcfe/d) last year to less than 2.7 Bcfe/d this year.</p>
<p>Chesapeake’s capex reduction is less than the 37% cutback announced by Haynesville producer Comstock Resources (CRK) and roughly matches the 30% haircut revealed by Antero Resources (AR). However, both Comstock and Antero have guided to flat 2024 output. The reason for the dichotomy is an innovative Chesapeake strategy that is reminiscent of a widely employed manufacturing production strategy known as “Just in Time.” This approach, created in Japan in the early 1970s, closely coordinates the flow of raw materials and equipment with customer orders to cut costs by reducing the time between receiving inventory and meeting customer demand. But gas wells are not cars or consumer appliances. The obvious problem in translating this strategy to oil and gas production is the dramatic difference in time between receiving inventory and factory production, sometimes days or even hours, and the weeks to months-long process of planning, spudding, completing and turning a well in line — aka TIL, the industry term for initiating production.</p>
<p>The closest the E&P industry has come to inventory management is a reserve of drilled but uncompleted wells (DUCs — see <u><a href="https://rbnenergy.com/duc-duc-produce-the-new-eia-duc-estimates-and-us-oil-and-gas-production">DUC, DUC, Produce!</a></u> for a deeper dive on DUCs). While well completions can be delayed for a variety of reasons, such as bad weather, funding issues, temporary infrastructure constraints or difficulty in securing qualified completion crews, they can also result from affirmative decisions to defer the completion and TIL process because of low prices or poor market conditions. According to Energy Information Administration (EIA) data, the DUC inventory for major shale basins built to a high of about 8,900 wells in mid-2020 (shown in Figure 2 below), exacerbated by falling commodity prices in the second half of 2019. Early on in that phase, in the blog <u><a href="https://rbnenergy.com/got-that-swing-us-producers-new-critically-important-role-in-global-crude-oil-markets">Got That Swing</a></u>, we likened DUC inventory to storage that could be called upon based on price signals. But the number of DUCs since 2020 has subsequently been plunging, at first as a response to rebounding commodity prices and then, more recently as the industry turned to the alternative strategy of TIL-ing these wells, first to maintain production with lower capital investment, then to more quickly grow output as commodity prices soared. The DUC inventory reached a 10-year low of 4,386 in January 2024.</p>
<p> Rebuilding the DUC inventory is a logical approach after the bottoming of gas prices; however, Chesapeake’s recently announced strategy substantially shortens the time and slashes the expenditures needed to respond to a sudden demand increase. The company announced that its 2024 capital allocation plan involves building a substantial inventory of “deferred TILs” — namely, wells that have been drilled and completed up to the final step of turning them in line. [Turn-in-line is another way to say turn-to-sales, which differs from and happens after completing a well, which refers to the final steps of preparing the well for production, like fracking and installing the production valve.] As shown in Figure 2, Chesapeake expects an inventory of 80 deferred TILs by year-end 2024 (orange bar to far right) and has indicated that those wells can be activated to quickly add up to 1 Bcf/d of gas production at a cost of less than $50 million. It will also modestly boost its DUC inventory to 35 wells (blue bar to far right) that can be activated for approximately $175 million. This strategy should allow Chesapeake to quickly respond to price signals to better balance its supply with demand.</p>
<p>Chesapeake’s announcement of the substantial cut in output and its “Just in Time”-focused plan to rapidly ramp up production to meet demand changes certainly shocked U.S. gas and equity markets. U.S. natural gas futures soared to the best one-day gain in more than a year and a half on the day after the company’s announcement. Investor enthusiasm was reflected in an 8% gain in Chesapeake’s stock price, while other gas-focused equities — EQT, Comstock, Antero, Range Resources, Southwestern Energy, and Coterra Energy — surged by 6% to 10%.</p>
<p>Of course, one U.S. company can’t bring domestic gas markets back into balance. The impact on other gas equities was based on the analysis that Chesapeake’s bold move at least marks a bottom for gas prices and the expectation that the other producers with the wherewithal to temper production could follow suit. Chesapeake will almost certainly implement this strategy for the assets of Southwestern Energy after the expected midyear completion of its acquisition of the company, which reported 2023 production of 4.6 Bcfe/d, including 3.9 Bcf/d of natural gas. While Southwestern did not hold an analyst call or release 2024 guidance with its 2023 results because of the pending deal, its first-half capital allocation and drilling plans are likely to be influenced by the guidance of its acquirer. The combined company will take over from EQT as the largest U.S. gas producer, which will magnify the impact of its strategy on future gas markets.</p>
<p>EQT, the current top gas producer, is the rare company that has guided to approximately 11% increases in capex and production, which are both driven by the 2023 completion of <u><a href="https://rbnenergy.com/almost-heaven-eqt-acquisitions-boost-its-role-in-west-virginia-gas-ngl-markets">its $5.2 billion acquisition of Tug Hill</a></u>. EQT said in its conference call that its 2024 plan, which includes $200 million to $300 million of strategic growth capex above its maintenance capex, was made with “some flexibility to curtail volumes should natural gas prices remain weak.” In response to an analyst’s question, CEO Toby Rice said that EQT could decide to defer some planned TILs depending on the 2025 outlook.</p>
<p>Range Resources (RRC), which guided to relatively flat spending and production, outlined a plan that most directly reflected Chesapeake’s approach. The company said it was keeping the same level of drilling rigs and frac crews to “maintain operational efficiencies and provide flexibility for 2025 and beyond.” It also said its program increases its year-end inventory of “drilled and/or completed lateral footage” to provide flexibility to meet demand in future years.</p>
<p>Three other major producers released plans focused primarily on significant spending cuts. Coterra Energy (CTRA), which gained significant oil-weighted assets in the Permian and Anadarko basins with its acquisition of Cimarex Energy, announced a modest 4% reduction in total capex. However, that reflects a 55% reduction in investment in its core Marcellus Shale assets, which is offset by a boost in oil-weighted capex. The E&P’s resulting 6% decline in gas production will be more than offset by a gain in liquids output. Fellow Appalachian producer Antero Resources cut its 2024 investment by approximately 30%. Partially because of increased operational efficiencies, the company expects only a modest production decline as it awaits market developments in 2025.</p>
<p>Higher costs in the Haynesville resulted in negative Q4 2023 free cash flow for Comstock Resources. As a result, the company suspended its dividend and guided to a 37% capex reduction that included the release of two of its current seven rigs. The pain was also reflected in reports that large private Haynesville producer Aethon Energy suspended drilling in December 2023 on its drilling joint venture with mineral/royalties firm Black Stone Minerals.</p>
<p>In upcoming blogs, we will report in detail on the 2023 financial results and cash allocation for all the major U.S. E&Ps, including the gas-focused producers. We will also cover 2023 capital budgets and strategies across our universe, including any cascading impacts of Chesapeake’s announcement.</p>
<p><em>For those interested in how the U.S. natural gas market works, we’ll be diving into the nuances of pipeline analysis and modelling in our upcoming NATGAS Master Class on April 10th. This event provides a unique opportunity to gain a comprehensive understanding of these crucial topics and explore their practical applications through insightful presentations, interactive exercises, and discussion.</em> <strong><u><a href="https://rbnenergy.com/natgas-master-class/r1/register?utm_source=TextAd&utm_medium=Web&utm_campaign=Natgas-MasterClass-2024"><em>Click here for more information and to register.</em></a></u></strong></p>
<p> </p> Arkansas Smackover Lithium Playtag:gohaynesvilleshale.com,2024-02-27:2117179:Topic:40545952024-02-27T23:02:12.133ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p>As the Smackover (SMK) Lithium (Li) play picks up steam we need to acknowledge that from regulatory and legal standpoints, there will be significant differences between the play in South Arkansas and in East Texas. Very soon we expect to know more about royalty provisions and regulatory guidelines. From past experience with dissimilarities between Texas and Louisiana mineral laws and regulatory statutes governing the Haynesville Shale, we hope to limit confusion and make it easier to…</p>
<p>As the Smackover (SMK) Lithium (Li) play picks up steam we need to acknowledge that from regulatory and legal standpoints, there will be significant differences between the play in South Arkansas and in East Texas. Very soon we expect to know more about royalty provisions and regulatory guidelines. From past experience with dissimilarities between Texas and Louisiana mineral laws and regulatory statutes governing the Haynesville Shale, we hope to limit confusion and make it easier to access the information that will be pertinent to land and mineral owners.</p>
<p>In order to help members and quests to the website and to avoid confusion, we will start two new discussions, one for Texas and one for Arkansas. There is an abundance of information in the original SMK Lithium discussion threads and members may want to click on them and then save them to their computer bookmarks/favorites to be able to access them in the future as they will eventually rotate off the main page. After 24 hours, comments in those discussions will be closed but the replies will remain available in the website archive. Archived discussions are available by using the search box in the upper right corner of all website pages.</p>
<p>GoHaynesvilleShale.com was one of the first resources for mineral owners to learn basics, share information and generally provide a place where mineral owners could become more informed managers of their mineral assets in the age of the Internet. The website is pleased to continue to provide those services to those who will benefit from the SMK Lithium Play. Please keep in mind two things. You are a key part of the <em>on the ground intelligence network</em> by letting your friends and neighbors know about GoHaynesvilleShale.com and encouraging them to participate in site discussions. And since GoHaynesvilleShale.com is free for all to use, please consider a donation to help keep the website online.</p>
<p><a href="https://gohaynesvilleshale.com/donate">https://gohaynesvilleshale.com/donate</a></p> Texas Smackover Lithium Playtag:gohaynesvilleshale.com,2024-02-27:2117179:Topic:40545922024-02-27T23:01:14.786ZCarolyn Ezernackhttps://gohaynesvilleshale.com/profile/smalltowngirl
<p>As the Smackover (SMK) Lithium (Li) play picks up steam we need to acknowledge that from regulatory and legal standpoints, there will be significant differences between the play in South Arkansas and in East Texas. Very soon we expect to know more about royalty provisions and regulatory guidelines. From past experience with dissimilarities between Texas and Louisiana mineral laws and regulatory statutes governing the Haynesville Shale, we hope to limit confusion and make it easier to…</p>
<p>As the Smackover (SMK) Lithium (Li) play picks up steam we need to acknowledge that from regulatory and legal standpoints, there will be significant differences between the play in South Arkansas and in East Texas. Very soon we expect to know more about royalty provisions and regulatory guidelines. From past experience with dissimilarities between Texas and Louisiana mineral laws and regulatory statutes governing the Haynesville Shale, we hope to limit confusion and make it easier to access the information that will be pertinent to land and mineral owners.</p>
<p>In order to help members and quests to the website and to avoid confusion, we will start two new discussions, one for Texas and one for Arkansas. There is an abundance of information in the original SMK Lithium discussion threads and members may want to click on them and then save them to their computer bookmarks/favorites to be able to access them in the future as they will eventually rotate off the main page. After 24 hours, comments in those discussions will be closed but the replies will remain available in the website archive. Archived discussions are available by using the search box in the upper right corner of all website pages.</p>
<p>GoHaynesvilleShale.com was one of the first resources for mineral owners to learn basics, share information and generally provide a place where mineral owners could become more informed managers of their mineral assets in the age of the Internet. The website is pleased to continue to provide those services to those who will benefit from the SMK Lithium Play. Please keep in mind two things. You are a key part of the <em>on the ground intelligence network</em> by letting your friends and neighbors know about GoHaynesvilleShale.com and encouraging them to participate in site discussions. And since GoHaynesvilleShale.com is free for all to use, please consider a donation to help keep the website online.</p>
<p><a href="https://gohaynesvilleshale.com/donate">https://gohaynesvilleshale.com/donate</a></p>