Article with a summary of technology advances -
Intrepid and NGL water deal in Loving Co.
Third train at enterprise plant in Orla opens.
Article about spread of automated valves-
Analyst says 1000 more disposal wells needed in Permian by 2030.
New Mexico State Land office revenue tops $1 billion from energy
Antelope building water facility in Lea and Eddy Cos.
OneOk expanding its West Texas LPG pipeline
More good news on pipeline capacity. Epic has started shipping crude on its new pipeline, causing oil prices in that area to bounce above the futures prices for a change. We have seen oil sell for discounts of over $15/barrel at times.
Hi Wade- thank you for this note. Assuming a lease does not allow deductions and an Operator is charging negative amounts for gas, what is the best way to address and correct?
Thanks so much,
Challenge the deductions. Look carefully at your lease language, but most leases royalties are to be “paid” not deducted.
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Great News- Gas prices finally starting to return closer to market price as new pipeline capacity about to open.
Haven’t mentioned here, but Sinton is getting a huge, over $1 billion plant investment. If you have ever driven through Sinton on the way to Rockport or Fulton, you can imagine how big this news is. The plant is also spurring pipeline deals like the one below.
NuStar receives Permian crude to export from Corpus, Qatar investing $550 million on Oryx Midstream.
PDC acquiring SRC in $1.7 billion merger.
Bloomberg article about choices facing N.M.
Article about Concho’s “Dominator” project where they drilled 23 wells in 640 acre with 230’ between well bores in Lea Co. Results were not good, about 45% below average wells in the area, which triggered a big sell off in Concho’s stock, and has raised questions about the rosy “wine rack” drilling pictures which a lot of producers have put out to support projections about how many locations they have in inventory to develop.
Take Away - While still extremely local and area specific, the limit of how closely wells can be put together is being reached with current technology. Expect producers to push for more generous retained acreage per well in leases, and fewer infill wells to be drilled, until operators know what is the optimal spacing for their area. The big caveat, as always, is “with current technology”.
Several infrastructure articles in PB Oil and Gas Magazine- 1) Construction has started on the Permian Highway gas pipeline from Waha to the Gulf Coast; 2) H2O Midstream acquired produced water infrastructure from Sabalo in Howard Co.; 3) Freeport LNG Train 1 has started up.
Epic has begun filling its 590,000 BPD oil pipeline. Prices jumped 50 cents on the news.
XRI has opened its water infrastructure in Eddy and Lea Cos.