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there's some life in the oil industry after-allHondo Lane | October 05, 2020

Petrolytics - Despite a tepid week in the oil and gas markets, there does appear to be some life in industry with regard to energy policy. More specifically, the Trump administration has extended the offshore energy moratorium. NPR reports: "This week, President Trump expanded a ban on exploratory…

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highlights of offshore US oil and gas developmentHondo Lane | September 14, 2020

Petrolytics - The American Petroleum Institute (API), in conjunction with OnLocation, Inc, published a report documenting the consequences of a leasing and development ban on US federal lands and waters. The stated goal of the analysis "is to project the impact that stopping leasing and development…

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california blacks out but natural gas is a hangover cureHondo Lane | August 17, 2020

(Petrolytics) - Summer months tend to be a stress test for state utilities. More specifically, as a prolonged heat wave batters the west coast, California issues their first rolling blackout since 2001. The** California Independent System Operator (California ISO)**, which oversees the electric…

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solar soars in 2018 new plant constructionHondo Lane | August 14, 2020

(Petrolytics) - The EIA released earlier this week data concerning US electricity generator construction in 2018. And while 2020 has certainly shaken things up, assessing generator construction (even as a lagging indicator) is informative. This is especially true given the long-lead time in…

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recovering from colossal impairmentsHondo Lane | August 13, 2020

(Petrolytics) - $90 billion dollars. Thirteen of the top oil and gas operators have written-down $90 billion dollars in value so far in 2020. One might discard this as a one-off event related to the COVID pandemic. We don't buy it. Sure, COVID has had some impact, but we think this impact is in the…

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the staggering losses and the relative resilienceHondo Lane | August 11, 2020

Highlights (Petrolytic) - Last week ended the bulk of Q2 2020 earnings for the energy sector (although Oxy reports today). Renewable firms demonstrated relative resilience, while oil and gas operators suffered staggering losses. And although the** Big Oil financials** were abysmal, unlike oilfield…

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big oil earningsHondo Lane | August 04, 2020

Highlights (Petrolytics) - Big Oil earnings dominated the headlines last week, as a number of large firms reported Q2 results. Shell, Total, ExxonMobil, and Chevron were among the filers, and, as expected, the results were underwhelming (albeit with a few surprises). The oilfield services earnings…

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all quiet in the energy spaceHondo Lane | July 27, 2020

Highlights (Petrolytics) - All is eerily quiet in the energy space. And while natural gas prices recovered from an early week decline, both gas and crude closed within a pretty tight range. In any case, the key highlights to begin this week: Oil & Gas Weekly Stats WTI open: $41.26/bbl Brent open…

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long, hot summerHondo Lane | July 24, 2020

(Petrolytics) - It's been a long, hot summer. And things are just warming up. Q2 energy-sector earnings have been tepid, to say the least, however we have on our radar a handful of critical players. Among those to watch out for: July Earnings Schlumberger - This morning (July 24) before market open…

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halliburton and baker hughesHondo Lane | July 23, 2020

(Petrolytic) - Earnings season is upon us. And this isn't any ol' normal earnings season. This is COVID earnings season; where the models (seriously) don't work and no one has a clue what's coming next. We think it's prudent to take a step back and assess the context clues put forth in the…

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chevron acquisition a sign of the timesHondo Lane | July 22, 2020

(Petrolytics) - While Chevron's acquisition of Noble Energy certainly feels like a bargain, and it undoubtedly appears that way, the deal could be indicative of a start to larger wave of consolidation. The oil and gas industry a year or two from now will most certainly look different than today. The…

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chevron acquires noble energyHondo Lane | July 21, 2020

(Petrolytics) - Big news yesterday as Chevron announced the acquisition of Noble Energy for $5 billion in an all-stock deal ($10.38 per share). The total enterprise value is expected to be $13 billion, including debt. This marks the first major M&A deal of the COVID-era, and we would expect is the…

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economically shut-in oil productionHondo Lane | July 20, 2020

(Petrolytics) -Despite a tepid week of oil prices, US rig count appears to be slowing it's decline (and in Canada, a few rigs have been added). Additionally, frac spreads have continued to increase off of their May low of ~45 to roughly ~75 today. We've discussed in a previous post the importance of…

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preparing for energy earnings seasonHondo Lane | July 17, 2020

(Petrolytics) -As we drift into another season of oil and gas sector earnings, we'd like to take time over the next few posts to survey the lay of the land. That is, we'd like to review a few simple, but key elements of the larger players. Taking routine inventory of changes in production volumes…

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the state of oil, gas, and renewablesHondo Lane | July 16, 2020

Oil & gas markets (Petrolytics) - Despite tightening global oil inventories and increasing economic activity, OPEC+ will begin easing production cuts. The group expects the August and September 2020 cuts to be approximately 8.1-8.3 mmbopd; higher than the 7.7 mmbopd consensus (due to compensatory…

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oil and gas drilling set to hit record lowHondo Lane | July 15, 2020

(Petrolytics) - While all eyes are on the anticipated OPEC+ meeting, a number of lower-profile headlines have skirted across the tape. Namely: Oil and gas drilling set to hit a record low Big decline in US oil and gas production in April Viper and Diamondback release updated guidance - typically a…

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2020 opec annual statistics bulletinHondo Lane | July 14, 2020

(Petrolytics) -In addition to the OPEC+ meeting this week to discuss the easing of production cuts, the group has released their 2020 Annual Statistics Bulletin. The report highlights a few key figures for calendar year 2019, namely: Total world crude oil production declined 0.56 mmbopd (0.…

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opec meeting expectationsHondo Lane | July 13, 2020

(Petrolytics) - Before we get to the assorted articles for the morning, a few highlights: US crude inventories: 539.2 mmbo (+5.7 from June 26) US crude imports: 7.4 mmbopd (+1.4 from June 26) US refinery input: 14.3 mmbopd @ 77.5% operable capacity (+315 kbopd from June 26) US rig count: 258 (-…

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deluge of asset impairments beginHondo Lane | July 12, 2020

(Petrolytics) - As crude continues to flirt with the $40/bbl WTI level, majors and independents alike continue to dance around write-downs. Dominating headlines are significant impairments: Shell writes-down $15-$22 billion BP sells petrochemical business and expects a** $17.5 billion write-down…

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rig counts don't tell the whole storyHondo Lane | July 10, 2020

(Petrolytics) - Here are the assorted links for Friday. Mexico's Energy Ministry + Talos - Talos is given 120 days to develop plan for carrying out JV development of the Zama field. Zama has roughly 670 Mmboe in 2C reserves Cloudy oil demand forecast - IEA improved global oil demand outlook but…

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petroleum engineering and geoscience studentsHondo Lane | July 09, 2020

(Petrolytics) - Few local stats before diving into the morning highlights from the TX RRC: 312 original drilling permits issued in June 2020 vs 1,001 in June 2019 Conversely, ~1,500 completions were processed in June 2020 compared to ~850 in June 2019 2020 YTD completions processed is ~7,90…

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shutdown of DAPLHondo Lane | July 08, 2020

(Petrolytics) - With the shutdown of the DAPL, it appears as though the Bakken might be shut-in for awhile longer. Even with pipeline access, the well-level economics will most likely struggle to compete with other opportunities (although the strike-down definitely isn't helping operators in North…

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another day, another major writing-down assetsHondo Lane | July 07, 2020

(Petrolytics) - Another day, another major writing-down assets. This go around, it's Eni. We'd expect a deluge of impairments given the opportune timing. If one is going to write-down under-performing assets, now is the time to do it. Everyone is expecting bad news; and if there's anything that…

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berkshire acquires dominion energy gasHondo Lane | July 06, 2020

(Petrolytics) - Hope everyone had a good long weekend. Quick recap of overnight trading: WTI opened last night $40.20/bbl - currently battling for $40/bbl Nat gas opened at $1.73/mmbtu Henry Hub - currently trading at $1.85 (after making new lows two weeks ago Dominating the headlines this morning…

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implications of sustained gas productionHondo Lane | July 03, 2020

(Petrolytics) - As expected, it's a slow news day heading into the long weekend. While the post this morning will be brief, we wanted to leave you all with a little food-for-thought. The headline plots illustrate US crude oil production on a per field basis and current US rig counts compared to 201…

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economically driven shut-insHondo Lane | July 01, 2020

(Petrolytics) - A few interesting items for you all this morning. The Texas April 2020 oil and gas production figures were released the other day. We're down roughly 700 kbopd (16%) in oil production and 2.6 Bcfpd (7%) in gas production when compared to the official figures from April 201…

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the three e'sHondo Lane | June 30, 2020

(Petrolytics) - Appears as though WTI is interested in cruising past the $40/bbl mark, although for how long is anyone's guess. $XLE, the SDPR energy fund, has slowly retreated from a pivot high. Appears to be a some divergence, for whatever it's worth. Obviously this is not a recommendation to…

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lng exports crashHondo Lane | June 29, 2020

(Petrolytics) - A few highlights from last Friday: WTI inched up 2% last week to close at $38.66. Trading opened lower last night roughly 1.7% at $37.82 Natural gas closed slightly higher to end the week at $1.45/mmbtu, but opened last night at $1.57/mmbtu US rig count was down 1 rig to 265 (we were…

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energy demand treading waterHondo Lane | June 26, 2020

(Petrolytics) - We've noticed an increasing number of articles describing nothing less than a pending cataclysmic event in the oil and gas sector. Similarly, we've noticed a number of articles similarly describing renewables, albeit with a more positive tone. It appears as though most energy sectors…

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covid-induced market melt-upHondo Lane | June 25, 2020

(Petrolytics) - Looks like we're in for another cycle of COVID-dominated headlines. The situation in Houston definitely appears to be on a grim trajectory in terms of ICU capacity. Only time will tell. We're hedging by wearing masks and avoiding unnecessary gatherings. Similarly, the markets have…

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amazon's renewable pledgeHondo Lane | June 23, 2020

(Petrolytics) - Wanted to kick off your Wednesday with a few stories we found particularly interesting. Nothing too exciting going on in the oil markets overnight, however, WTI did crack the $40 mark. As expected, starting to see a number of bankruptcy filings fly across the wire. Big news yesterday…

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first half 2020 housekeepingHondo Lane | June 23, 2020

(Petrolytics) - Before getting into the morning digest, we wanted to do a bit of housekeeping. We're in the process of revamping the newsletter to integrate the feedback we've received. The purpose (and our core philosophy) is to keep the assessments as simple as possible. We aim to recognize the…

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