PetroScout

Murphy Oil brought online the first well in its Front Runner program on the Green Canyon block 338 in the Gulf of Mexico during Q1. The A4 well encountered more than 250 ft of net pay and has outperformed expectations by nearly 2x with a gross peak rate of 7,000 boe/d. The company is evaluating a near-field subsea exploitation opportunity as a result. Front Runner was launched as a three-well program in November but was recently revised to two wells, with the third to be drilled at a later...

Occidental Petroleum’s Gulf of Mexico capex guidance was lowered to $200 million from $500 million originally. Overall guidance was cut by more than 50% to $2.4-2.6 billion. Oxy’s Q1 production from the GOM averaged 163,000 boe/d (83% oil), up 6% sequentially. After closing its acquisition of Anadarko Petroleum, Oxy said an 8-15% reduction in the cost of capital for the GOM assets was possible during 2020. Through the application of the company’s “Oxy Drilling Dynamics” optimization...

The number of rigs drilling for hydrocarbons in the Gulf of Mexico has averaged 33 during Q2 thus far, showing a nine-rig, or 21%, drop compared to the Q1 average, according to Enverus Rig Analytics. If the situation holds constant through the remainder of the quarter, this would be the lowest level of GOM rig activity in Enverus’ data, which goes back to 2Q14. After bottoming at a quarterly average of 34 in 4Q16 following the last oil bust, the count has stayed in a tight range around 40. This...

Mid-Con Energy Partners LP has completed a reorganization and recapitalization that will shift the way it does business. The company converted all of its Series A and B preferred units into common units valued at $3.12/unit. Ownership of general partner Mid-Con GP LLC has been transferred to the LP, resulting in strengthened corporate governance. The partnership will no longer operate assets, instead transferring operatorship to Contango Oil & Gas through a management services agreement,...

Bakken Differential Outlook: Watching differentials The Bakken has been one of the hardest hit basins from a curtailment perspective as the state regulator indicated over 500mbopd of production had been taken offline in May at the peak. This compares to production in February/March of ~1.45mmbopd. The drop in production alleviated pressure on Cushing and has dramatically improved in-basin pricing with spot realizations moving to a slight premium to WTI at one point. Given the...

ExxonMobil Upstream Business Development Co. president Steve Greenlee will retire July 1 after more than 38 years with the company. Linda DuCharme, president of ExxonMobil Upstream Integrated Solutions Co., will replace him, while also being elected VP of Exxon Mobil Corp. and retaining her current role. Falcon Minerals added Claire Harvey and Daniel Herz to its board as Class III directors. Harvey is the CEO of non-op E&P firm Gryphon Oil & Gas. Herz is president and CEO of Falcon....

CNX Resources is pursuing a number of measures to optimize its operations and recently noted a number of achievements in this ongoing program. In its production profile optimization effort, the company has shut in 375 MMcf/d since May 1 in order to take advantage of the large positive spread between summer and winter natural gas prices. By July 1, CNX expects curtailments to fall to 300 MMcf/d. This production profile optimization will result in more than $30 million in incremental free cash...

Matador Resources expects to reach four production milestones this year. The first came when the initial Rodney Robinson wells in Lea County, New Mexico, started up in March. These six wells, located on US Bureau of Land Management acreage in the western portion of the Antelope Ridge area, delivered record initial 24-hour rates totaling 15,000 bo/d and 25 MMcf/d—about 19,000 boe/d (78% oil), or 3,200 boe/d each— from three formations. As of late June, the wells continue to outperform...

For most plays in the US, Q1 will mark the peak of D&C activity for 2020—unless there is a robust price recovery that nobody is really forecasting. For Oklahoma, that fact is signaling a very slow year. At the beginning of Q1 there were 58 rigs running in the state, and by quarter’s end the number had fallen by 41% to 34. By the last day of May, the number dropped further to 13, or 78% less than on Jan. 1. The only companies currently running more than one rig are Continental (three rigs),...

From last November to May, US oil production fell by 1.5 MMbo/d to 11.4 MMbo/d as operators reduced D&C operations amid oil price uncertainty and a price shock, according to the EIA. The agency forecasts that US output will continue to decline to 10.6 MMbo/d by March 2021, before increasing for the remainder of 2021. Operators have announced significant curtailments in May and June as producers grapple with sub- $40 pricing, driven by coronavirus-related demand destruction. Enverus’...