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I will no longer be posting the “weekly and monthly reports” to the GSPE board. For those of you that found them informative or helpful, and for the convenience of the users of this board, I have organized links to these reports. If you wish to access this information, it is located in the Gulfslope Introduction page. Simply click the report you wish to view.
Mrs. Smith
Amen. Good Post. Hopefully, the mid-terms will occur before any of that gets well developed. While we are on the subject, here is an original idea on how to challenge climate change.
‘What might a climate change class action lawsuit look like?’, Released May 24, 2022, By Christopher Garbacz
https://www.americanthinker.com/blog/2022/05/what_might_a_climate_change_class_action_lawsuit_look_like.html
In two previous articles at American Thinker (here and here), I have suggested filing a climate change class action lawsuit to determine if the planet is in danger of total destruction from anthropogenic climate change and to assess dollar damages if the court concludes there is no danger. This essay examines examples of situations that might justify a lawsuit.
Defendants would be the usual suspects in government, universities, foundations, Green non-profits, renewables corporations, and their lobbyists. Greens have filed such lawsuits against governments for moving too slowly to implement the Green Agenda and against corporations for promoting disinformation about the Green Agenda.
Greens have been unsuccessful with these lawsuits because they cannot prove damages. After all, a computer model from the U.N. IPCC does not prove damages.
However, it is quite clear that the Green Agenda has damaged and will damage numerous business entities, and it's possible to reach a reasonable estimate of dollar damages.
ExxonMobile, which invests in "green" energy, provides a good example of what a suit could look like. ExxonMobil said today it is planning a hydrogen production plant and one of the world's largest carbon capture and storage projects at its integrated refining and petrochemical site at Baytown, Texas, supporting efforts to reduce emissions from company operations and local industry. … "[T]his project can play an important part in achieving America's lower-emissions aspirations[.]"
Reducing up to 30% of CO2 at the plant alone would cost $1 billion or so, and that doesn't consider the company's other "green" schemes. Pensions & Investments Research Consultants (PIRC), a British proxy adviser, has been urging shareholders to vote against five directors, including ExxonMobil's chairman, Darren Woods, for wasting money through these Green investments.
Obviously, "achieving America's lower-emissions aspirations" isn't needed if the U.N. IPCC model doesn't prove future damages from higher "earth temperatures." Therefore, the investment resources committed to this project and similar past and ongoing projects are unnecessary expenditures and directly harm shareholders.
While the PIRC does not call for vetting the U.N. IPCC modeling, this would seem to be an excellent opportunity to do so. If ousting the CEO and the directors is not successful, shareholders could go to court and make their case against the Green Agenda. Numerous other corporations could face similar suits.
The Texas electric blackout kerfuffle of February 2021 is another example of a costly, even deadly, Green Agenda item: Nobody yet knew just how widespread the blackouts would become — that they would spread across almost the entire state, leave an unprecedented 11 million Texans freezing in the dark for as long as three days, and result in as many as seven hundred deaths. But neither could the governor, legislators, and regulators who are supposed to oversee the state's electric grid claim to be surprised. They had been warned repeatedly, by experts and by previous calamities — including a major blackout in 2011 — that the grid was uniquely vulnerable to cold weather.
All kinds of excuses have been made for grid failure. Still, but for backing away from fossil fuel and heavily depending on wind, this never would have happened. How much is a life worth?
The North American Electricity Council (NERC) has warned that rolling blackouts around the country are likely this summer. The reason is that renewables have replaced fossil generation in many states. Renewables work only part of the time, so backup power (read: fossil fuel) is required for a reliable electric grid. Too much fossil fuel has already been taken offline because of the Green Agenda to save the planet. This would make for an excellent class action lawsuit as suggested.
Foundations and universities that the left captured can be sued too for essentially misappropriating funding to the Green Agenda cause, which is not scientifically proven. Board members could right the ship internally, but, if necessary, suits could be filed.
Renewable proponents could be challenged in public service commission hearings around the country. Intervene and provide testimony on the science of the U.N. IPCC modeling. This has never been done, though it seems so logical to insist on verification.
President Biden admits that his administration wants to destroy fossil fuels and replace them with renewable energy. The only reason to do so is the unfounded claim that the world will be destroyed otherwise. If this reason can be debunked with climate change class action lawsuits, America and the world will greatly benefit. It's easy to think of many other possibilities for such lawsuits.
How do you turn the Green Agenda on its head? Say, "Class action lawsuits will save the planet."
Commercial Oil inventories decreased by 1 million barrels, the Strategic Petroleum Reserve (SPR) decreased by 6 million barrels - EIA Weekly Petroleum Status Report, Release Date: May 25, 2022
Full Report with Graphs: https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
This Week in Petroleum: https://www.eia.gov/petroleum/weekly/
WTI $112.12/bbl - 12:17 pm CDT 25/05/2022: https://oilprice.com/oil-price-charts/#WTI-Crude
Summary of Weekly Petroleum Data for the week ending 5/20/2022
HIGHLIGHTS:
U.S. crude oil refinery inputs averaged 16.3 million barrels per day during the week ending May 20, 2022 which was 334,000 barrels per day more than the previous week’s average. Refineries operated at 93.2% of their operable capacity last week. Gasoline production decreased last week, averaging 9.4 million barrels per day. Distillate fuel production increased last week, averaging 5.1 million barrels per day.
U.S. crude oil imports averaged 6.5 million barrels per day last week, down by 82,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.4 million barrels per day, 8.6% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 847,000 barrels per day, and distillate fuel imports averaged 80,000 barrels per day.
The Strategic Petroleum Reserve (SPR) including non-U.S. stocks held under foreign or commercial storage agreements decreased by 6.0 million barrels from the previous week currently at 532 million barrels.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.0 million barrels from the previous week. At 419.8 million barrels, U.S. crude oil inventories are about 14% below the five year average for this time of year. Total motor gasoline inventories decreased by 0.5 million barrels last week and are about 8% below the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories increased by 1.7 million barrels last week and are about 21% below the five year average for this time of year. Propane/propylene inventories increased by 1.8 million barrels last week and are about 8% below the five year average for this time of year. Total commercial petroleum inventories increased by 0.7 million barrels last week.
Total products supplied over the last four-week period averaged 19.5 million barrels a day, up by 2.1% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, down by 2.7% from the same period last year. Distillate fuel product supplied averaged 3.9 million barrels a day over the past four weeks, down by 7.2% from the same period last year. Jet fuel product supplied was up 22.0% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $112.63 per barrel on May 20, 2022, $2.11 above last week’s price and $49.02 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $3.918 per gallon, $0.070 less than last week’s price but $1.862 above a year ago. The spot price for ultra-low sulfur diesel fuel in the New York Harbor was $4.004 per gallon, $1.335 below last week’s price but $2.007 over a year ago.
The national average retail regular gasoline price increased to $4.593 per gallon on May 23, 2022, $0.102 above last week’s price and $1.573 over a year ago. The national average retail diesel fuel price decreased to $5.571 per gallon, $0.042 per gallon less than last week’s price but $2.318 higher than a year ago.
‘FERC approves new natural gas pipeline projects to increase U.S. exports’, Released May 24, 2022
https://www.eia.gov/todayinenergy/detail.php?id=52478
‘Don’t Look to Oil Companies to Lower High Retail Gasoline Prices’, Released May 10, 2022
https://www.dallasfed.org/research/economics/2022/0510
Mrs. Smith
Federal Reserve Bank of Dallas ”Energy Slideshow”, Updated May 9, 2022
See link below for slideshow charts on Energy Prices, Global Petroleum Data, National Outlook Data, and Regional Activity:
https://www.dallasfed.org/-/media/Documents/research/energy/energycharts.pdf?la=en
Mrs. Smith
If they do not already have one, there is a possibility that Gulfslope will need a new Tau 2 Exploration Plan for SS351. No big deal. Maybe it is a good thing.
I suspect they will go for the deep pay targets this time and plan to make it as far as they can. If they happen to hit a good commercial zone, they may decide to make a well at that depth. They can always drill a Tau 3 to the deeper depths at a later time, as in Mahogany Field / 26 wells.
Yes, Delek’s financial position should be improving every day. They may not even want an additional Partner.
I think the oil and gas market is definitely red hot. And probably undervalued as well. Check out this link.
https://financialpost.com/commodities/energy/oil-gas/eric-nuttall-energy-stocks-remain-woefully-undervalued-despite-the-massively-bullish-backdrop
I believe the Republicans will make enough gains to take back control of the Congress after the mid-term elections. That will mean they are in charge of spending, and also have the ability to put a stop to much of the harmful agenda. Hoping Gulfslope can drill Tau 2 at that point.
By the way, Louisiana Light Sweet $114.23/bbl up 100%, lol.
Mrs. Smith
Other considerations for discussion from any posters with drilling expertise or sources.
There are finite resources available of the type that Gulfslope will need for drilling the Tau 2 well.
Not only the rig, but one that is Managed Pressure Drilling (MPD) capable. And BOPs of the correct size and pressure. These might be the two most important considerations in the next design plan.
Remember, the Tau 1 had many mechanical issues that caused an additional number of strings of casing to be utilized from the design (8 total). After the final episode, the hole size was just too small and the costs too high to continue with that well.
MPD may well reduce the necessity of installing some of those additional strings of casing and sidetracks. And therefore save much time and drilling dollars.
But by ‘beginning’ with larger hole sizes and larger casing in the first place, the operator reserves the ability to continue drilling to the targets by installing any additional casing strings that are necessary. This option requires the larger size BOP’s and casing at the start.
Next, higher pressures than expected were encountered in Tau 1. So casings with higher working pressures should be planned.
The lessons learned from Tau 1 are we need larger BOPs with higher working pressure at the outset, a larger hole, larger casing with higher pressure capability, and a MPD system. Hopefully that is the plan they are working on.
These options will lower the mechanical risks and the potential overall cost. Mr. Seitz knows this. The only limitations will be the actual drilling budget and the equipment availability.
There cannot be that many BOP stacks of the correct size and working pressure accessible in the GOM. I wonder how many are available for rental at this time? Any time? I just do not have the personal expertise to answer these questions.
Drill pipe of the right size, pressure, weight, type, and amount? It might be hard to get right now too. Same thing for casing and bits. Delivery times?
With only 17 rigs working GOM today, these may not become really serious issues. But say we get to 25 rigs? I would start to worry. Service companies are starting to have difficulty replacing their stock. And inflation is attacking already high prices. Better increase that drilling budget another 25%.
The ‘Breakeven’ on the Tau 2 was forecast to be $20 per barrel. Even if you double that to $40 per barrel the margin is there for vast profit.
Point is, all this takes much planning and coordination with long delivery times for items not readily available. And you cannot buy them on credit.
Although the Tau prospect will not expire until the end of 2025, I have a few concerns regarding the supply chain. We are told that the company is working on the drilling plan. And I trust they are. But these plans do not have an unlimited window of viability. I am sure the plans can be finalized quickly. Financing for partners is most likely the hold up in my opinion.
Sorry. Just rambling. Apologies.
Mrs. Smith
Spreadsheets are not only for balancing checkbooks.
Imagine a rocket just re-entering earth’s atmosphere with the intent to land on a barge in the middle of the ocean. Would it be controlled by a Mission Control similar to the one NASA uses?
No. The communication and decision times are too slow. Instead, the rocket is equipped with hundreds of sensors and instruments that are measuring literally everything, in real time, constantly, many times per second.
Results are calculated and listed in the master spreadsheet. For each result is a programmed order. “If this, then that. Or if that, then this.” The decisions are made and implemented in nano or pico seconds, because that is how quickly the rocket must be controlled.
Now say that, hypothetically, there is a stock trading program measuring inputs and categorizing them into a spreadsheet. The programming is tracking a stock and making buy/sell decisions based on programmed orders. Is this not what the human traders are up against with the MM’s trading programs?
These decisions are implemented as soon as the programmed status is obtained. The number of trades is only limited by the actual speed of the movement of the stock and the speed of the data communication. Trades can happen unlimited times per minute as long as the programming criteria is met. Which leads me back to the question from Gold80302 of “who is buying this stock” and why.
Buying TSLA or XOM would make some dollars. A small amount per trade perhaps, but with many trades per minute, cumulatively, over a trading day, it adds up. Just an observation.
Why would a commercial investment organization really be interested in a GSPE? This stock would not be a good choice since the volume is too low and erratic. And the value of an entire day’s trading might be only $25,000, or even less. The value of the time required for the trading program to be used to buy a stock like GSPE just does not make sense. Maybe as spec says, it is a lone trader’s “lotto” play. That is a better possibility.
Or might it be somebody looking to increase an ownership stake (Delek or GSPE insiders)? Or establishing an ownership stake (CENAQ insiders)? Just as likely. Perhaps more so if an investment decision is planned.
I know there is no way for us to know the answer. But it is on my mind too, and I cannot shake it. Looking for clues. Needle-in-the-haystack progress. And not enough hours to allocate. But the fact remains, somebody is buying GSPE stock at this time. And this is more significant than who is selling, as long as it is not a GSPE insider’s action.
Mrs. Smith
Seems like momentum for our side is building.
More ideas that support the premise that we need to change how we handle our energy.
For your convenience additional light reading.
https://www.americanthinker.com/blog/2022/05/when_it_comes_to_energy_production_the_midterm_elections_matter.html
https://dailycaller.com/2022/05/19/bidens-unelected-bureaucrats-greatest-threat-america-energy-security/
https://dailycaller.com/2022/05/19/biden-administration-oil-gas-drilling-permit-delays/
https://redstate.com/nick-arama/2022/05/20/must-watch-sen-sullivan-lists-what-biden-has-done-just-in-last-three-weeks-to-block-oil-production-n567587
https://www.realclearenergy.org/articles/2022/05/18/reliable_power_during_the_energy_transition_requires_natural_gas_833051.html
Mrs. Smith
Considering all the accumulated data, the Tau prospect is probably of greater interest. My guess is there are few GOM leases that hold de-risked prospects similar to Gulfslope’s Tau field. But if one can be located, and the price is right, certainly Delek would consider it.
By the way, I do not eat gold anymore either. It has a metallic after taste that even Ketchup cannot cover up.
Mrs. Smith
US Oil and Gas Rig Count up 14 reflecting 728 rigs as of 5/20/2022. GOM Offshore Rig Count remained the same from the previous week and is currently showing 17 rigs. Gulfslope’s Tau prospect is located in GOM Louisiana Offshore waters.
https://rigcount.bakerhughes.com
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
Mrs. Smith
At the start, I was of the opinion that the primary obstacle needing to be overcome in order to find a partner to drill the Tau 2 was the oil price. I am now coming to realize that, although a big part of the decision to drill, the price may not have been the biggest impediment after all. The biggest problem all along has been the arrogant, condescending, narcissistic desire of government bureaucrats to ‘fundamentally transform’ this country at all costs. Read this link and view these videos from Thursday. I think people are starting to see the monster that has been created.
https://redstate.com/nick-arama/2022/05/19/manchin-exposes-insane-biden-plan-on-oil-leases-during-haaland-testimony-n567194
I am now convinced the problem is actually government interference in the market and how government bureaucrats wish to control the choices that we have in our lives and the amount of freedom we have to make those choices. I fear that this is only the tip of the iceberg and that our lives and this country will be negatively affected going forward as corporations have noticed and are responding. It really is a sad state of affairs. And I am sad for us all, our careers, our quality of life, families, jobs, savings, and the generations following.
The insidious harm is everywhere around us. And the warnings and alarms are being ignored. Warnings such as the electric grid can not handle the move to EVs. Even if it could, there will not be enough electricity to charge all those vehicles. Renewables do not have the battery technology required to store the energy they do generate. No need to be concerned about the price tag either. But no worries, we will not need electricity at night, or in the winter, or when it is cloudy, etc. The bureaucrats will continue to shut down more gas and coal electric generating plants and outlaw ICE vehicles anyway. Forget the consequences of the agenda. Full speed ahead!
It just seems that these decisions are being made 10 or 15 years prematurely, before the technology exists to support it all. Perhaps one day soon we will find ourselves lacking the ability to maintain even basic electricity needs, much less power transportation. I hope to not be in an elevator, an EV, or on a train when it happens.
But the emotion I am mostly feeling is anger. Yes, I am angry at those politicians that have decided to cripple this country and this industry in their quest to force their vision of how we will live our lives on us. I am angry that these nitwits are bringing this non-productive and inefficient waste into my life at a time when I was hoping to be able to focus my time, effort, and energy in a totally different direction.
They now have my attention. And if they get your attention too, then we, and others, can begin the process of stopping their momentum and rebuilding the mess their naïveté has created. In between we may even see Tau 2 get drilled. Let us get serious, get focused, and get going.
Mrs. Smith
That is a good question. On this board, we regularly discuss who is selling. But I too have often wondered if who is buying is not more important.
Mrs. Smith
API Monthly Statistical Report ‘MSR’, Released 5/19/2022. API Statistics Department & Office of the Chief Economist
For Notable Chart Details and Data By Section see ‘MSR’ pdf link: https://www.api.org/-/media/Files/Publications/Monthly%20Statistical%20Report/2022-04/API-Monthly-Statistical-Report-Apr-2022.pdf
API Energy Tomorrow Blog | MSR: Record Pull for U.S. Oil Exports in April Spurred Historically Low Inventories, Released 5/19/2022: https://www.api.org/news-policy-and-issues/blog/2022/05/19/msr-record-pull-for-us-oil-exports-in-april-spurred-historically-low-inventories
EXECUTIVE SUMMARY:
* U.S. petroleum demand (19.3 mb/d) decreased to its lowest for any month since March 2021.
* U.S. production of crude oil and natural gas liquids (NGLs) together remained flat in April.
* With Russia’s war in Ukraine, U.S. petroleum net exports rose to 1.4 mb/d, their highest on record since 1947.
* U.S. crude oil commercial inventories (ex-SPR) were the lowest for April since 2014 and showed the lowest year-to-date stock building on record since 2005.
U.S. petroleum demand fell by 0.1 million barrels per day (mb/d) in March and by another 1.0 mb/d in April. Excluding the 2020-2021 pandemic, this was the largest two-month decrease since September 2008. The vast majority of the fall was in “other oils” (that is, naphtha, gasoil, propane, and propylene) that feed refinery and petrochemical operations which enable consumer products like medical plastics, films, and packaging. As motor fuel prices remained near record-high levels, however, U.S. gasoline demand remained flat (compared seasonal increases historically since 2012), and distillate fuel oil demand dropped for a second straight month. Residual fuel oil demand tripled year-on-year with fuel substitution.
U.S. crude oil production rose by 158,000 barrels per day (b/d) in April but was largely offset by a 130,000 b/d decrease in natural gas liquids (NGL) field production. Meanwhile, U.S. refinery activity remained solid with a capacity utilization rate over 90% for the second straight month. And with the potential loss of Russian crude oil and petroleum products to global markets, U.S. petroleum net exports rose to 1.4 mb/d, their second highest for any month on record since 1947. Consequently, U.S. crude oil inventories remained at their lowest for the month since 2014. Notably, U.S. commercial crude oil inventories between December and April each year on record since 2005 have historically risen by an average of more than 40 million barrels in advance of increased refining activity preceding the summer driving season. As of April 2022 year-to-date, however, U.S. crude oil inventories fell by 3.4 million barrels.
Leading economic indicators weakened. API’s Distillate Economic Indicator suggested slowed growth of U.S. industrial production and broader economic activity
Demand
U.S. petroleum demand (19.3 mb/d) fell to its lowest since March 2021.
– Motor gasoline demand (8.7 mb/d) flattened along with urban commuting.
– Distillate demand dropped for a 2nd straight month.
– Jet fuel demand continued to rise above 1.5 mb/d.
– Other oils’ demand dropped by 1.0 mb/d in April.
Prices & Macroeconomy
• Crude oil and gasoline prices receded in April.
• Leading indicators showed weaker industrial growth and consumer sentiment.
Supply
• Growth of U.S. crude oil production offset by lower NGL production.
International trade
• Global geopolitics spurred record-high U.S. petroleum exports.
Industry operations
• U.S. refining capacity utilization rate over 90% for a second straight month.
Inventories
• Crude Historically low crude oil inventories and unusually low accumulation oil inventories fell to their lowest for April since 2014.
PETROLEUM FACTS AT A GLANCE – May 2022 RELEASE
1. Total U.S. supply of crude oil, natural gas liquids and other liquids in April 2022: 18,507,000 b/d, up by 742,000 b/d compared with April 2021 (April 2021: 17,765,000 b/d) [API]
2. U.S. crude oil production in April 2022: 11,840,000 b/d (of which 440,000 b/d was Alaskan) (April 2021: 11,230,000 b/d). U.S. production of natural gas liquids in April 2022: 5,600,000 b/d (April 2021: 5,443,000 b/d). [API]
3. Total petroleum products delivered to the domestic market in April 2022: 19,284,000 b/d (April 2021: 19,459,000 b/d). [API]
4. U.S. petroleum exports in April 2022: 9,615 ,000 b/d (April 2021: 9,110,000 b/d). [API]
5. U.S. petroleum trade balance contracted by 508,000 b/d to imply April 2022 net exports of 1,351,000 b/d (April 2021: 843,000 b/d net exports). [API]
API - Proposed Offshore Energy Program Shows Disconnect Between Political Rhetoric, May 19, 2022 Press Release: https://www.api.org/news-policy-and-issues/news/2022/05/19/api-proposed-offshore-program-shows-disconnect-between-rhetoric-and-reality
WASHINGTON, May 19, 2022 — The American Petroleum Institute (API) today released the following statement from Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola in response to the Department of Interior's (DOI) proposed 5-Year Program for federal offshore leasing on the Outer Continental Shelf:
“Today’s announcement from the Department of the Interior confirms they are significantly behind in this multi-year process and will release a proposed program by June 30 - the day they should be finalizing it. The practical effect of this is that it is unlikely there will be offshore lease sales before the end of 2023. This is one more example of the disconnect between the administration’s political rhetoric and policy reality. As energy prices and geopolitical volatility continue to rise, we urge the administration to end the continued mixed signals on energy policy and remove regulatory hurdles that are hindering American producers’ ability to increase supply and meet the growing energy demand.”
API and NOIA released an analysis recently explaining how a lapse in the 5-year program could jeopardize American energy security, cost thousands of jobs and billions in lost state and local revenues. View the fact sheet here: https://www.api.org/~/media/Files/News/2022/03/API-Factsheet-Offshore-Leasing-5-Year%20Program-Report
API and NOIA Analysis here: https://www.api.org/news-policy-and-issues/news/2022/03/29/potential-lapse-in-5-year-leasing-program-threatens-american-energy-security
The Economic Impacts of a 5-Year Leasing Program Delay for the Gulf of Mexico Oil and Natural Gas Industry here: https://www.api.org/~/media/Files/News/2022/03/EIAP-5-year-Program-Leasing-Delay-Report-03-24-22
API represents all segments of America’s natural gas and oil industry, which supports more than 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our nearly 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 800 standards to enhance operational and environmental safety, efficiency and sustainability.
In the future, I will continue to review this 10-Q as time permits. But for now, a few more comments regarding Gulfslope’s March 2022 10-Q.
I, like most of us, am not a geologist. But I have been curious about the target layers known as M1A-M6. Something that had not been confirmed in 10-Qs prior to this one, and I quote, is that the “Tau prospect extends over BOTH Ship Shoal lease Blocks 336 and 351”. This statement was actually mentioned twice in the latest 10-Q, validating the idea of the existence of Recoverable Resources in both blocks. I was hoping for some clarification that this was the case, and they did.
The Tau 1 well was drilled from Gulfslope’s surface location at SS, Block 336 which is the lease that will be allowed to expire. But the remaining lease is Ship Shoal, Block 351, G36121, which will not expire until October 31, 2025. Please note, although the drill bit NEVER entered the deeper layers of SS Block 351, the majority of the Tau 1 well costs were capitalized to this block. In my opinion, this is an indication that Block 351 was determined to hold the targets with the most financial potential, or this would not have been done. This was the reason I was hoping for the clarification mentioned above.
Reminder, Gulfslope still has assets (9.1 million in Oil and Gas Properties, 13.5 million in Net Deferred Tax Assets, and some Common and Preferred Stock). So there should be a way to create more working capital while carrying over any remaining financial obligations. Also, the majority of the working capital deficit (90%) is Related Party Loans and Payables owed mostly to Mr. Seitz.
So as spec said, the game continues. On to extra innings.
Mrs. Smith
BlackRock, the largest asset manager in the world, said it will likely vote to support fewer climate proposals from companies in its investment portfolio in 2022 than it did in 2021.
https://www.cnbc.com/2022/05/11/blackrock-to-vote-for-fewer-climate-provisions-in-2022-than-2021.html
I see this as a positive development. It might mean the management of the large institutional asset managers, such as BlackRock or Vanguard, are beginning to realize that the ESG investing guidelines, supported by the Biden administration to limit investment in oil and gas projects, can have a profound negative impact on the investment earnings of their customers and clients. That could lead to lawsuits regarding loss of income and mismanagement of assets.
Mrs. Smith
Commercial Oil inventories decreased by 3.4 million barrels, the Strategic Petroleum Reserve (SPR) decreased by 5 million barrels - EIA Weekly Petroleum Status Report, Release Date: May 18, 2022
Full Report with Graphs: https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
This Week in Petroleum: https://www.eia.gov/petroleum/weekly/
WTI $109.59/bbl - June Contract, 17:00 pm CDT 5/18/2022: https://oilprice.com/oil-price-charts/#WTI-Crude
Summary of Weekly Petroleum Data for the week ending 5/13/2022
HIGHLIGHTS:
U.S. crude oil refinery inputs averaged 15.9 million barrels per day during the week ending May 13, 2022 which was 239,000 barrels per day more than the previous week’s average. Refineries operated at 91.8% of their operable capacity last week. Gasoline production decreased last week, averaging 9.6 million barrels per day. Distillate fuel production decreased last week, averaging 4.9 million barrels per day.
U.S. crude oil imports averaged 6.6 million barrels per day last week, up by 299,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.3 million barrels per day, 4.7% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 876,000 barrels per day, and distillate fuel imports averaged 114,000 barrels per day.
The Strategic Petroleum Reserve (SPR) including non-U.S. stocks held under foreign or commercial storage agreements decreased by 5 million barrels from the previous week currently at 538 million barrels.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.4 million barrels from the previous week. At 420.8 million barrels, U.S. crude oil inventories are about 14% below the five year average for this time of year. Total motor gasoline inventories decreased by 4.8 million barrels last week and are about 8% below the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories increased by 1.2 million barrels last week and are about 22% below the five year average for this time of year. Propane/propylene inventories increased by 0.3 million barrels last week and are about 10% below the five year average for this time
of year. Total commercial petroleum inventories decreased last week by 2.9 million barrels last week.
Total products supplied over the last four-week period averaged 19.5 million barrels a day, up by 1.7% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, down by 1.2% from the same period last year. Distillate fuel product supplied averaged 3.8 million barrels a day over the past four weeks, down by 6.7% from the same period last year. Jet fuel product supplied was up 28.6% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $110.52 per barrel on May 13, 2022, $0.80 above last week’s price and $45.20 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $3.988 per gallon, $0.138 more than last week’s price and $1.837 above a year ago. The spot price for ultra-low sulfur diesel fuel in the New York Harbor was $5.339 per gallon, $0.571 above last week’s price and $3.294 over a year ago.
The national average retail regular gasoline price increased to $4.491 per gallon on May 16, 2022, $0.163 above last week’s price and $1.463 over a year ago. The national average retail diesel fuel price decreased to $5.613 per gallon, $0.010 per gallon less than last week’s price but $2.364 higher than a year ago.
This is not a press release, but a 36 page 10-Q report, which contains pertinent information to comply with SEC guidelines.
Remember, companies must not mislead investors by sugar coating or hyping future plans just to have a more upbeat outlook.
The initial scan did not reveal any surprises or unexpected information. I will take a deeper look at it when I have more time.
Yes, I am still struggling with the thought that I will remain a moderator for another 2-1/2 years. The silver lining is, I will have an opportunity to improve the accuracy of my posts and the current presidential term will have ended!
Mrs. Smith
Good News!
Nancy Pelosi, Et al. are trying to pass a bill called the ‘Consumer Fuel Price Gouging Prevention Act’. This is better known as gasoline price fixing.
Link to House Bill 7688: https://www.congress.gov/117/bills/hr7688/BILLS-117hr7688ih.pdf
I think I read somewhere that Jimmy Carter tried this back when he did not have a clue either. If I remember correctly, it mostly caused gasoline shortages.
Yes. Oil companies will produce some for sale in the USA at that price. But most gasoline production will be sold elsewhere at market prices.
It is reassuring to know that if we can find gasoline to buy, we will not suffer price gouging.
While I am complaining about government incompetencies read this link below regarding renewable source electricity for charging your EV, and what this will cost us.
https://irinaslav.substack.com/p/power-renewable-power?r=evt1i&s=r&utm_campaign=post&utm_medium=email
Mrs. Smith
OPEC Featured Article - ‘Non-OPEC oil supply development’, Released May 12, 2022
OECD Composite Leading Indicators News Release, Paris, May 10, 2022:
https://www.oecd.org/sdd/leading-indicators/composite-leading-indicators-cli-oecd-05-2022.pdf
FEATURED ARTICLE: Non-OPEC Oil Supply Development
In 2021, non-OPEC supply increased by 0.59 mb/d. US liquids production increased by 0.15 mb/d y-o-y, mainly on the back of increased NGLs output from non-conventional basins and a few project start-ups in the Gulf of Mexico. At the same time, US tight crude and condensate production decreased by 70 tb/d, with all major US shale basins showing drops, except for the Permian. Output in the Permian increased by 0.2 mb/d y-o-y, supported by a lower breakeven price and higher drilling rig activities. Cumulative production in Canada rose by around 0.3 mb/d as production from oil sand basins hit a high of 3.3 mb/d in October 2021. China, Guyana, Argentina and Norway also contributed to production growth in 2021. This was offset by a cumulative supply decline of 0.6 mb/d, mainly from the UK, Brazil, Colombia and Indonesia.
Spending for oil and gas exploration and production (E&P) in non-OPEC countries increased by US$16 bn in 2021 to US$350 bn, and is expected to rise by around 14% in 2022. On a country level, E&P spending for 2022 is forecast to increase in Brazil, the US, Canada, and Norway by 36%, 28%, 15%, and 11%, respectively.
However, the overall level remains below pre-pandemic levels and significantly below the high of US$749 bn seen in 2014. Upstream spending by major international companies has increased in response to higher oil prices and world oil demand growth, but remains lower than the level seen in 2019, as major shale producers continue to focus on capital discipline to improve their balance sheets.
For 2022, non-OPEC liquids supply is forecast to grow y-o-y by 2.4 mb/d, a downward revision of 0.3 mb/d from the previous month’s assessment. This is on the back of geopolitical developments and the impact of sanctions on Russian oil imports.
Liquids output in the OECD is expected to increase by 1.6 mb/d, on the back of production increases in the US, Canada, and Norway. US crude oil production is anticipated to grow by 0.9 mb/d, y-o-y, with NGLs and biofuels production set to rise too. In the US, the oil rig count has rebounded from 287 units in January 2021 to 552 units in the last week of April 2022. Moreover, US core oil frac operations continue to show steady increases.
Canadian oil production, particularly Alberta’s oil sands, is forecast to grow by 0.16 mb/d y-o-y. Production growth in the North Sea and OECD Europe countries is projected at around 0.1 mb/d, supported by the start-up of the second phase of the Johan Sverdrup field development in 4Q22, which is projected to add 0.22 mb/d to Norway’s output.
In the non-OECD region, total liquids output growth is forecast at 0.7 mb/d y-o-y. Latin America is the key driver of this supply growth. It is forecast to increase by 0.27 mb/d y-o-y in 2022, mainly from two offshore start-ups of Mero-1 and Peregrino Phase 2 in Brazil and Liza-2 FPSO in Guyana. Kazakhstan and China’s liquids output are also expected to rise, by 0.14 mb/d and 0.08 mb/d, respectively.
Uncertainties to the forecast remain large, especially given recent geopolitical developments in Eastern Europe. Moreover, high inflation levels, coupled with labour shortages and tighter monetary policies by major central banks may also impact the cost of oil production and investment levels in the upstream beyond the short term. Ineede OPEC Member Countries and countries participating in the DoC will continue to closely monitor market developments over the course of the year and safeguard a stable and balanced market for the benefit of all oil market participants; consumers and producers alike.
May 2022 OPEC Monthly Oil Market Report “MOMR”, Released 5/12/2022
5/2022 MOMR PDF: https://momr.opec.org/pdf-download/res/pdf_delivery_momr.php?secToken2=accept
5/2022 MOMR Video: https://players.brightcove.net/34306109001/default_default/index.html?videoId=6305990837112
WTI $110.49/bbl - June Contract, 20:31 pm CDT 5/13/2022: https://oilprice.com/oil-price-charts/45 : https://oilprice.com/oil-price-charts/45
Oil Market Highlights:
Crude Oil Price Movements
Crude oil spot prices dropped in April after three-consecutive months of rises. The OPEC Reference Basket dropped by $7.84, or 6.9%, to settle at $105.64/b. Crude futures prices declined m-o-m in April, amid elevated market volatility, fuelled by persistent uncertainty regarding market outlook. The ICE Brent front month fell $6.54, or 5.8%, in April to average $105.92/b and NYMEX WTI decreased by $6.62, or 6.1%, to average $101.64/b. Consequently, the Brent/WTI futures spread widened 8¢ to average $4.28/b. The market structure of all three major crude benchmarks – ICE Brent, NYMEX WTI and DME Oman – softened significantly, but remained in backwardation. Hedge funds and other money managers kept net long positions in WTI and Brent little changed after the previous month’s sharp selloff.
World Economy
World economic growth in 2022 is revised down to 3.5% from 3.9% in last month’s assessment, following growth of 5.8% in 2021. US GDP growth for 2022 is revised down to 3.2% from 3.8%, after growth was reported at 5.7% for 2021. Euro-zone economic growth for 2022 is revised down to 3.1% from 3.5%, following growth of 5.4% in 2021. Japan’s economic growth for 2022 is revised down to 1.8% from 1.9%, after growth of 1.7% in 2021. China’s 2022 growth is revised down to 5.1% from 5.3%, after growth of 8.1% in 2021. India’s 2022 GDP growth was revised down to 7.1% from 7.2%, after 2021 growth stood at 8.1%. Brazil’s economic growth forecast for 2022 is revised down to 0.7% from 1.2%, following growth of 4.6% in 2021. For Russia, the 2022 GDP growth forecast is revised down to show a contraction of 6%, compared with a contraction of 2% expected in last month’s assessment, which follows reported growth of 4.7% in 2021. Challenges related to ongoing geopolitical tensions, the continued pandemic, rising inflation, aggravated supply chain issues, high sovereign debt levels in many regions and expected monetary tightening by central banks in the US, the UK, Japan and the euro area require close monitoring.
World Oil Demand
World oil demand growth in 2021 remains broadly unchanged from the previous month’s assessment at 5.7 mb/d. World oil demand growth in 2022 is expected to increase by 3.4 mb/d y-o-y, representing a downward revision of 0.3 mb/d from last month’s report, with 1.8 mb/d in the OECD and 1.6 mb/d in the non-OECD. Oil demand growth in 2Q22 is projected to be slower at 2.8 mb/d, compared with 5.2 mb/d in 1Q22. Demand in 2022 is expected to be impacted by ongoing geopolitical developments in Eastern Europe, as well as COVID-19 pandemic restrictions.
World Oil Supply
Non-OPEC liquids supply growth y-o-y in 2021 is broadly unchanged at around 0.6 mb/d. Total US liquids production is estimated to have increased y-o-y by 0.15 mb/d. Non-OPEC supply growth for 2022 is revised down by 0.3 mb/d y-o-y to 2.4 mb/d. Russia’s liquids production for 2022 is revised down by 0.36 mb/d. The US liquids supply growth forecast for 2022 is broadly unchanged at 1.29 mb/d. The main drivers of liquids supply growth for the year are expected to be the US, Canada, Brazil, Kazakhstan, Guyana and Norway. OPEC NGLs are forecast to grow by 0.1 mb/d both in 2021 and 2022 to average 5.1 mb/d and 5.3 mb/d, respectively. OPEC-13 crude oil production in April, increased by 153 tb/d m-o-m, to average 28.65 mb/d, according to available secondary sources.
Product Markets and Refining Operations
Refinery margins on all main trading hubs continued to soar in April, amid a continued tightening in global product balances, and lower crude prices. Favourable product demand-side dynamics, as the overall negative impact of Covid-19 further diminishes on a global level, strengthened fuel markets in general, including that of jet fuel, despite some mobility restrictions in a few Asian countries. Middle distillates were the main margin contributor over the month, while their margins spread widened further versus that of gasoline. Going forward, refinery intakes are expected to rise and that could provide partial relief to the global product shortage, and potentially de-pressure product prices.
Tanker Market
Suezmax and Aframax rates continued to outperform those in the VLCC class, with gains of 61% and 28% m-o-m. The Suezmax market was supported by a strong market in the Atlantic basin while Aframax saw from support from both the East and West markets. After a sluggish start to the year, VLCC rates finally saw a pickup of 24%. However, gains were short-lived dissipating by the end of the month amid ample availability. Clean rates continued to perform well, gaining a further 15%. The market has been supported by strength in the East and rising activity in tanker demand West of Suez, amid preparations ahead of the driving season in the Northern Hemisphere.
Crude and Refined Products Trade
Preliminary data shows US crude imports declined to an 11-month low of 5.9 mb/d in April, while exports averaged 3.4 mb/d for a gain of 5% m-o-m. US product exports strengthened for the seventh month in a row, averaging 6.4 mb/d, supported by strong flows to Latin America and increasing flows to Europe. In March, China’s crude imports averaged 10.1 mb/d, recovering from the weak performance the month before. Recently released customs data shows China’s crude imports increased to 10.5 mb/d in April, despite expectations that reduced demand due to COVID-19 lockdowns would weigh on imports. China’s product imports declined 8%, while product exports rebounded, amid unexpectedly strong gasoil outflows. With domestic demand impacted by lockdowns, China’s product outflows are likely to be higher than previously expected in April, particularly for jet fuel. India’s crude imports dipped in March, but remained near the strong performance seen over the previous four months, averaging 4.5 mb/d for the month. Product exports saw a robust increase of 26% or about 0.3 mb/d to average 1.7 mb/d in March, the highest since September 2013, as Europe sought alternatives to Russian oil product flows. Japan’s crude imports have risen steadily since the start of the year, averaging 2.9 mb/d in March, amid healthy demand.
Commercial Stock Movements
Preliminary March data showed total OECD commercial oil stocks increasing m-o-m by 10.1 mb. At 2,621 mb, inventories were 298 mb lower than the same time a year ago, 304 mb lower than the latest five-year average, and 293 mb below the 2015–2019 average. Within the components, crude stocks rose m-o-m by 12.9 mb, while products stocks fell m-o-m by 2.8 mb. At 1,265 mb, OECD crude stocks were 189 mb lower than the latest five-year average and 198 mb below the 2015-2019 average. OECD product stocks stood at 1,356 mb, representing a deficit of 115 mb compared with the latest five-year average and 95 mb below the 2015–2019 average. In terms of days of forward cover, OECD commercial stocks fell m-o-m by 0.3 days in March to stand at 57.4 days. This is 8.8 days below March 2021 levels, 8.7 days less than the latest five-year average, and 5.0 days lower than the 2015–2019 average
Balance of Supply and Demand
Demand for OPEC crude in 2021 was revised up by 0.1 mb/d from the previous month’s assessment to stand at 28.2 mb/d, which is around 5.0 mb/d higher than in 2020. Demand for OPEC crude in 2022 was revised up by 0.1 mb/d from the previous month to stand at 29.0 mb/d, which is around 0.8 mb/d higher than in 2021.
Offshore GOM Rig Count increased by 1 rig from the previous week and is currently showing 17 rigs. US Total Oil and Gas Rig Count increased by 9 reflecting 714 rigs as of 5/13/2022. Gulfslope’s Tau prospect is located in GOM Louisiana Offshore waters.
https://rigcount.bakerhughes.com
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
Mrs. Smith
In case you do not already know where I stand, full disclosure: I never supported an agenda that did not uphold the values of this great country and what it stands for.
Then we elected someone president that did not need more money or power and already had fame and fortune. Sure there was plenty of ego, and you needed to have your facts straight if you wished to challenge him.
He was hard to back down, enjoyed a good game of hardball, and was not intimidated by anyone. But he had the one thing his political adversaries lacked. He was doing it all for the COUNTRY and for the people. Not for himself. Not his family. Not the party. Not the power brokers. Not the special interests. Just the Stars and Stripes. And us. And that friends, is the critical element the politics of today is missing.
So, you are EXACTLY right. We will need that kind of leadership to get back to prosperity and energy independence.
Mrs. Smith
Yes, Obama was right. Joe has not lost his touch. As stated in my prior post, I do not trust in the lip service. I need bonafide proof. We just did not get it… or did we?
Mrs. Smith
Commercial Oil inventories increased by 8.5 million barrels, the Strategic Petroleum Reserve (SPR) decreased by 7.0 million barrels - EIA Weekly Petroleum Status Report, Release Date: May 11, 2022
Full Report with Graphs: https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
This Week in Petroleum: https://www.eia.gov/petroleum/weekly/
WTI $105.25/bbl - June Contract, 14:02 pm CDT 11/05/2022: https://oilprice.com/oil-price-charts/#WTI-Crude
Summary of Weekly Petroleum Data for the week ending 5/06/2022
HIGHLIGHTS:
U.S. crude oil refinery inputs averaged 15.7 million barrels per day during the week ending May 6, 2022 which was 230,000 barrels per day more than the previous week’s average. Refineries operated at 90.0% of their operable capacity last week. Gasoline production increased last week, averaging 9.7 million barrels per day. Distillate fuel production increased last week, averaging 4.9 million barrels per day.
U.S. crude oil imports averaged 6.3 million barrels per day last week, down by 62,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.1 million barrels per day, 6.2% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 695,000 barrels per day, and distillate fuel imports averaged 122,000 barrels per day.
The Strategic Petroleum Reserve (SPR) including non-U.S. stocks held under foreign or commercial storage agreements decreased by 7.0 million barrels from the previous week currently at 543 million barrels.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.5 million barrels from the previous week. At 424.2 million barrels, U.S. crude oil inventories are about 13% below the five year average for this time of year. Total motor gasoline inventories decreased by 3.6 million barrels last week and are about 5% below the five year average for this time of year. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 0.9 million barrels last week and are about 23% below the five year average for this time of year. Propane/propylene inventories increased by 3.4 million barrels last week and are about 8% below the five year average for this time of year. Total commercial petroleum inventories increased by 9.9 million barrels last week.
Total products supplied over the last four-week period averaged 19.4 million barrels a day, up by 1.6% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, down by 1.4% from the same period last year. Distillate fuel product supplied averaged 3.8 million barrels a day over the past four weeks, down by 5.5% from the same period last year. Jet fuel product supplied was up 26.9% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $109.72 per barrel on May 6, 2022, $5.13 above last week’s price and $44.76 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $3.850 per gallon, $0.417 more than last week’s price and $1.729 above a year ago. The spot price for ultra-low sulfur diesel fuel in the New York Harbor was $4.768 per gallon, $0.144 above last week’s price and $2.755 over a year ago.
The national average retail regular gasoline price increased to $4.328 per gallon on May 9, 2022, $0.146 above last week’s price and $1.367 over a year ago. The national average retail diesel fuel price increased to $5.623 per gallon, $0.114 per gallon more than last week’s price and $2.437 higher than a year ago.
Almost.
This administration has spent 16 months tearing down energy producers and the economy of this country, while causing huge inflation. It will take much longer to course correct.
I agree when they finally noticed what they had done, they looked around to discover that there is really nothing that they could change over the short term, so they released our SPR and sent it to the EU, I am still not sure why.
Next, they started begging other countries for more oil while still in this country failing to support domestic production. Just recently I read that Wells Fargo was to require onerous requirements to secure an energy loan, so nothing is changing.
So, until I see bonafide proof that they really want to change the dynamic for energy production in the USA, I want to be on the record saying that in my opinion they wasted not only the SPR, but the time and goodwill that it bought them. There is no excuse, and they cannot blow enough smoke to hide from the truth and that will haunt them politically.
Usually these energy projects from inception to final product could take a year or longer. I do not see the administration taking any moves to get it started any sooner. We need not only the reserves, but the equipment, manpower, tools, engineering, financing, policies, and management. So far, I am not seeing it. Any of it.
Energy producers are struggling to find the resources needed to finish current projects, so I am unsure how quickly they will actually push forward to begin new ones.
Mrs. Smith
May 2022 EIA Short-term Energy Outlook “STEO” Forecast: Release Date: May 10, 2022 | Forecast Completed: May 5, 2022
FULL REPORT WITH GRAPHS:https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf
ALL FIGURES AND DATA:https://www.eia.gov/outlooks/steo/data.php?type=figures
WTI $100.06/bbl up 1.72% June Contract, 15:38 pm CDT 10/05/2022: https://oilprice.com/oil-price-charts/#WTI-Crude
FORECAST HIGHLIGHTS:
Global liquid fuels
• The May Short-Term Energy Outlook (STEO) is subject to heightened levels of uncertainty resulting from a variety of factors, including Russia’s full-scale invasion of Ukraine. This STEO assumes U.S. GDP will grow by 3.1% in both 2022 and 2023, following growth of 5.7% in 2021. We use the S&P Global macroeconomic model to generate our U.S. economic assumptions. Global macroeconomic assumptions in our forecast are from Oxford Economics and include global GDP growth of 3.4% in 2022 and 3.5% in 2023, compared with growth of 6.0% in 2021. A wide range of potential macroeconomic outcomes could significantly affect energy markets during the forecast period. Major factors driving energy supply uncertainty include how sanctions affect Russia’s oil production, the production decisions of OPEC+, and the rate at which U.S. oil and natural gas producers increase drilling.
• The Brent crude oil spot price averaged $105 per barrel (b) in April, a $13/b decrease from March. Although down from March, crude oil prices remain above $100/b following Russia’s full-scale invasion of Ukraine. Sanctions on Russia and other independent corporate actions contributed to falling oil production in Russia and continue to create significant market uncertainties about the potential for further oil supply disruptions. These events occurred against a backdrop of low oil inventories and persistent upward oil price pressures. Global oil inventory draws averaged 1.7 million barrels per day (b/d) from the third quarter of 2020 (3Q20) through the end of 2021. We estimate that commercial oil inventories in the OECD ended 1Q22 at 2.63 billion barrels, up slightly from February, which was the lowest level since April 2014.
• We expect the Brent price will average $107/b in 2Q22 and $103/b in the second half of 2022 (2H22). We expect the average price to fall to $97/b in 2023. However, this price forecast is highly uncertain. Actual price outcomes will largely depend on the degree to which existing sanctions imposed on Russia, any potential future sanctions, and independent corporate actions affect Russia’s oil production or the sale of Russia’s oil in the global market. We completed this outlook on May 5, therefore it does not include an EU ban on oil imports from Russia. However, the bans being reported at the time of writing would likely contribute to tighter oil balances and higher oil prices than our current forecast. In addition, the degree to which other oil producers respond to current oil prices and the effects macroeconomic developments might have on global oil demand will be important for oil price formation in the coming months. We reduced Russia’s oil production in this month’s forecast compared with our April forecast, and we now expect oil markets to be mostly balanced from 2Q22 through the end of 2023. Because oil inventories are currently low, we expect downward oil price pressures will be limited and market conditions will exist for significant price volatility.
• We estimate that 97.4 million b/d of petroleum and liquid fuels was consumed globally in April 2022, an increase of 2.1 million b/d from April 2021. We forecast that global consumption of petroleum and liquid fuels will average 99.6 million b/d for all of 2022, which is a 2.2 million b/d increase from 2021. We revised down our forecast for 2022 global consumption of petroleum and liquid fuels by 0.2 million b/d from the April STEO, primarily as a result of downward revisions to consumption growth in China and the United States. We forecast that global consumption of petroleum and liquid fuels will increase by 1.9 million b/d in 2023 to average 101.5 million b/d.
• U.S. crude oil production in the forecast averages 11.9 million b/d in 2022, up 0.7 million b/d from 2021. We forecast that production will increase to more than 12.8 million b/d in 2023, surpassing the previous annual average record of 12.3 million b/d set in 2019.
Natural gas
• In April, the Henry Hub natural gas spot price averaged $6.59 per million British thermal units (MMBtu), which was up from the March average of $4.90/MMBtu and higher than the April 2021 average of $2.66/MMBtu. We expect the Henry Hub price to average $7.83/MMBtu in 2Q22 and average $8.59/MMBtu in 2H22. High forecast natural gas prices reflect our expectation that natural gas storage levels will remain less than the five-year (2017–2021) average this summer. Lower-than-average storage levels partly result from limited opportunities for natural gas-to-coal switching for power generation, which we forecast will keep the demand for natural gas for power generation high despite high prices. Natural gas prices could rise significantly above forecast levels if summer temperatures are hotter than assumed in this forecast and electricity demand is higher. In addition, we expect that U.S. liquefied natural gas exports (LNG) will remain high during the summer. We expect the Henry Hub spot price will average $4.74/MMBtu in 2023. The forecast drop in prices for 2023 reflects our expectation that the rate of natural gas production will increase next year while LNG export and demand growth slow, contributing to higher storage levels in 2023 than in 2022.
• We estimate that natural gas inventories ended April at 1.6 trillion cubic feet (Tcf), which is 17% below the five-year average. Inventories at the end of April were 190 billion cubic feet (Bcf) higher than at the end of March. This increase was below the five- year average as a result of below-normal temperatures that raised demand for natural gas for heating amid relatively flat production. We expect natural gas inventories to increase by 418 Bcf in May, ending the month at 2.0 Tcf, which would be 14% below the five-year average for this time of year. We forecast that natural gas inventories will end the 2022 injection season (end of October) at almost 3.4 Tcf, which is 9% below the five- year average. However, summer temperatures will be key to storage, and a hotter-than- normal summer that results in high electricity demand could cause inventories to be lower than forecast and result in prices that are higher than forecast.
• In April, U.S. LNG exports averaged 11.6 billion cubic feet per day (Bcf/d), slightly below an all-time peak of almost 12.0 Bcf/d set in March. We forecast that U.S. LNG exports will average 12.1 Bcf/d from May through August, which is slightly lower than our previous forecast. This forecast reflects our assumption of slightly lower LNG demand in Asia and Europe this summer compared with our previous assumption, in part because of sustained high natural gas prices. We expect U.S. LNG exports to average 12.0 Bcf/d this year, a 23% increase from 2021. Growth in LNG exports in recent years has been driven by capacity expansions. However, we do not expect any new export facilities to come online in the forecast period, and as a result, forecast growth in LNG exports slows to 5% in 2023, with LNG exports averaging 12.6 Bcf/d for the year.
• We expect that U.S. consumption of natural gas will average 85.7 Bcf/d in 2022, up 3% from 2021. The increase in U.S. natural gas consumption is a result of colder temperatures and related higher consumption in the residential and commercial sectors in 2022 compared with 2021. We also expect the industrial sector to consume more natural gas in 2022 in response to expanding economic activity. In addition, forecast natural gas consumption in the electric power sector increases in 2022 because of limited natural gas-to-coal switching despite high natural gas prices. For 2023, we forecast natural gas consumption will average 85.3 Bcf/d, down 1%, mostly as a result of assumed milder winter temperatures (based on forecasts from the National Oceanic and Atmospheric Administration) that will reduce residential and commercial consumption.
• We estimate dry natural gas production averaged 95.5 Bcf/d in the United States in April, up 0.4 Bcf/d from March. Although production in April was lower than the recent peak in December 2021, it increased in each of the past two months. Periods of below- normal temperatures and snow in some producing regions, along with seasonal maintenance on pipelines, limited the production increases in April compared with March. We forecast dry natural gas production to average 95.8 Bcf/d in May. For all of 2022, we expect that dry natural gas production will average 96.7 Bcf/d, which would be 3.2 Bcf/d more than in 2021. We expect dry natural gas production to average 101.7 Bcf/d in 2023.
Electricity, coal, renewables, and emissions
• We forecast that the annual share of U.S. electricity generation from renewable energy sources will rise from 20% in 2021 to 22% in 2022 and to 23% in 2023 because of continuing increases in solar and wind generating capacity. We forecast that natural gas will provide almost 37% of generation in 2022, which is similar to the level in 2021, and we forecast natural gas generation will provide 36% of generation in 2023. Despite significantly higher natural gas fuel costs this year compared with last year, we do not expect an increase in electricity generation from coal-fired power plants, which have in the past acted as a primary substitute for natural gas in the power industry. Along with the continued retirement of coal-fired generating capacity, the remaining coal fleet has been facing constraints in regard to fuel delivery and coal stocks. We forecast coal will provide 21% of total U.S. generation 2022 and 20% in 2023, compared with a share of 23% last year. Nuclear generation remains relatively constant in the forecast at an average share between 19% and 20%. One nuclear reactor will retire during 2022, and two reactors at the Vogtle nuclear power plant are scheduled to come online in 2023, the first new nuclear units to open in the United States since 2016.
• Planned additions to U.S. wind capacity increase wind electricity generation in our forecast. We estimate that the U.S. electric power sector added 14 GW of wind capacity in 2021. Wind capacity additions in the forecast total 10 GW in 2022 and 4 GW in 2023. The electric power sector added 13 GW of utility-scale solar capacity in 2021, and forecast solar capacity additions in the power sector total 20 GW for 2022 and 23 GW for 2023. We expect additions to solar capacity and batteries to account for more than half of new electric sector capacity in 2022 and 2023. In addition, in 2021 small-scale solar (systems less than 1 megawatt) rose by 5 GW to 33 GW. We expect that small- scale solar capacity will grow by 5 GW in 2022 and 6 GW in 2023.
• U.S. coal production in the forecast increases by 20 million short tons (MMst) (3%) in 2022 to 598 MMst and by 7 MMst (1%) in 2023. We expect production in the Western region to drive the forecast increases. The forecast increase occurs despite our expectation that coal use in the power sector will decline. We expect rising coal production will replenish electric power sector inventories in 2023 that were depleted during 2021. We also expect coal exports will remain at high levels during the forecast period as a result of high global coal prices. Although exports and inventory builds contribute to rising coal production in the forecast, labor shortages, rail congestion, and challenges obtaining equipment are expected to limit production gains.
• U.S. energy-related carbon dioxide (CO2) emissions increased by more than 6% in 2021 as a result of rising energy use. We expect a 2% increase in energy-related CO2 emissions in 2022, primarily from growing transportation-related petroleum consumption. Forecast energy-related CO2 emissions remain relatively unchanged in 2023. We expect petroleum emissions to increase by 3% in 2022 compared with 2021 before growth slows to 1% in 2023. Natural gas emissions rise by 3% in our forecast for 2022, then remain unchanged in 2023. We forecast that coal-related CO2 emissions will fall by 2% in 2022 and by 5% in 2023.
‘Report: LNG Supply Crisis Will Make Landfall in Winter 2022’
https://pgjonline.com/news/2022/may/report-lng-supply-crisis-will-make-landfall-in-winter-2022
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‘EU proposes gradual ban on Russian oil in sixth round of sanctions against Moscow’
https://www.cnbc.com/2022/05/04/eu-proposes-gradual-ban-on-russian-oil-in-sanctions-against-moscow.html
Offshore GOM Rig Count increased by 3 rigs from the previous week and is currently showing 16 rigs. A 23% increase from last week. US Total Oil and Gas Rig Count increased by 7 reflecting 705 rigs as of 5/6/2022. Gulfslope’s Tau prospect is located in GOM Louisiana Offshore waters.
https://rigcount.bakerhughes.com
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
Mrs. Smith
I suggest that you arrange for an oil and gas attorney to contact EIG just for peace of mind. Ask the attorney to request an explanation and accounting for why you and your sister are no longer receiving royalty checks. Also, ask the attorney to verify that all the conditions agreed to in the royalty agreement are being met. And, if not, to explain your legal options.
Regards,
Mrs. Smith
Total agreement with you spec. The time for lip service to end is NOW. Much of the political posturing that is being used has been shown to be counterproductive… anyone that buys into this rhetoric is only participating in the government’s lame attempt to CYA for it’s lack of competence.
Example, the recent DOE announcement calling for competitive bidding to replenish the SPR. During a time of petroleum scarcity world-wide, where crude will be sold to the highest bidder, and much will be purchased at ‘spot’ prices, our leaders wish to hold out for competitive bids when prices come down. According to the administration, look for rainbows and butterflies in 2023? We shall see.
If it was Exxonmobil or Chevron making these statements, I would pay more attention. Those are the energy professionals after all, and their board of directors and shareholders hold them accountable. These others are but political staffers trying to avoid being held accountable by the voters.
Signing off for now, the glue fumes are getting to be too much for me.
Mrs. Smith
I do agree with you. I also think Gulfslope is absolutely working on every opportunity that they find. We will, of course, stick with them.
That is all for now. Trying to hold everything together, busy searching for some glue.
Mrs. Smith
DOE Announces Buyback Plan of Strategic Petroleum Reserve, MAY 5, 2022
https://www.energy.gov/articles/doe-announces-long-term-buyback-plan-ensuring-continued-availability-strategic-petroleum
WASHINGTON, D.C. — The U.S. Department of Energy (DOE) today announced it is initiating a long-term replenishment plan for America’s Strategic Petroleum Reserve (SPR) to ensure that it will continue to deliver on its mission as an available resource to alleviate domestic and global crude oil supply disruptions. The buyback process will begin with a call for bids to repurchase a third of the 180 million emergency barrels released as part of a coordinated action with our international partners to provide a wartime bridge supporting American consumers and the global economy in response to Vladimir Putin’s war of choice against Ukraine. The call for bids will take place in the fall of 2022 to secure delivery in future years when prices are anticipated to be significantly lower than they are today, and will represent a first tranche of purchases to replenish the SPR and with more planned after these purchases are executed.
“The U.S. Strategic Petroleum Reserve, the largest emergency supply in the world, is a valuable tool to protect the American economy and consumers from supply disruptions — whether caused by emergencies at home or petrol-dictators weaponizing access to energy resources,” said U.S. Secretary of Energy Jennifer M. Granholm. “As we are thoughtful and methodical in the decision to drawdown from our emergency reserve, we must be similarly strategic in replenishing the supply so that it stands ready to deliver on its mission to provide relief when needed most.”
The Fall 2022 call for bids to purchase 60 million barrels will specify the volume and type of crude oil that SPR will purchase. The future delivery window will be based on anticipated market conditions factoring in when future oil prices and demand are expected to be significantly lower, likely after FY 2023. In addition to securing contracts for future delivery to refill the SPR, this replenishment structure also will help encourage the production we need now to lower prices this year by guaranteeing this demand in the future at a time when market participants anticipate crude oil prices to be significantly lower than they are today.
As part of this buyback plan, DOE intends to begin a rule-making proceeding to consider broadening DOE’s buyback regulations to allow for a competitive, fixed-price bid process as an alternative to the index-pricing that is traditionally used.
With the steps announced today, the Biden-Harris Administration is taking an important step to be sure that the SPR can be maintained at levels that allow it to accomplish its mission and remain the world’s largest supply of emergency crude oil. DOE will continue to work with Congress to maintain operational integrity and sufficient volume to accomplish the SPR’s mission. This includes responding to significant supply disruptions while also complying with congressionally mandated sales of as much as 265 million barrels between FY23 and FY31.
This the latest in a range of measures that the Biden Administration has taken to address Putin’s price hike and provide relief for Americans. Even before the historic authorization of 1 million barrels per day from the SPR, the President secured global cooperation on a collective release at the beginning of March right after Putin launched his further invasion of Ukraine. The Environmental Protection Agency recently announced that it is issuing an emergency fuel waiver that will allow the sale of E15 gasoline across the country this summer, in order to provide more flexibility for families to save money at the pump and build real U.S. energy independence. The President has also called on Congress to enact use-it-or-lose-it policies that would make companies pay fees on their federal leases that are non-producing as well as their idled wells on federal lands, in order to encourage more domestic production. Finally, the Administration has strengthened fuel economy standards that will make vehicles go farther on every gallon.
Department of Energy approves additional natural gas exports from Louisiana, Texas facilities, Article Released May 3, 2022
https://smcorridornews.com/u-s-department-of-energy-approves-additional-natural-gas-exports-from-louisiana-texas-facilities/
Mrs. Smith
May 2022 (MER) Monthly Economic Review
Source: Jack Kleinhenz, Ph.D., CBE Chief Economist National Retail Federation
For a clearer narrative click link to view graphs and full report: https://cdn.nrf.com/sites/default/files/2022-05/2022%20May%20Monthly%20Economic%20Review_0.pdf
SYNOPSIS | Inflation Continues to Weigh on 2022 Economy
The first whiff of the inflation we’re seeing today came in April 2021, when the Bureau of Economic Analysis reported that personal consumption had suddenly jumped by 3.6 percent over the year before. That was more than double the rate at the beginning of the year and the strongest growth in 13 years. The jump was notably high, of course, because the comparison was against weak spending during the Spring 2020 government-ordered shutdowns of most of the economy. By comparison, inflation had been at only 0.4 percent year-over-year in April 2020. We are now at a similar pivot point for much the same reason. Given the unusually high level of consumer spending at this time last year, year-over-year comparisons should be less dramatic – though still strong – as new inflation numbers come out over the next few months. Furthermore, extraordinary and expansionary fiscal and monetary policies from the government that combined with pandemic-induced supply issues to cause high inflation are coming to an end. However, the conflict in Ukraine and Chinese coronavirus lockdowns have now taken center stage, causing higher energy, food and commodity costs. Adding to the mix and potentially compounding those disruptions is the recent surge in the BA.2 mutation of COVID-19.
The BEA’s Personal Consumption Expenditures Index is the Federal Reserve’s preferred measure of consumer inflation, and eventually soared to 6 percent by the end of last year and 6.6 percent this March, the highest level in decades. And even as year-over comparisons become less stark, the median forecast by the Fed for the end of 2022 is now 4.3 percent, up from 2.6 percent forecast in December 2021.
Surging inflation is the driving factor behind the central bank’s current tightening of monetary policy. After raising rates by one-quarter of a percentage point in March, members of the Fed’s Federal Open Market Committee plan more increases and expect the federal funds rates to reach 1.875 percent by the end of the year.
This tightening will continue through 2023 and is expected to hit a range of 2.5 to 2.75 percent, the highest mark since March 2008 during the Great Recession. How much and how fast the Fed raises rates will, of course, depend on how the economy performs in the months ahead. While policymakers would like to raise interest rates gradually, more aggressive action may be needed and appears to be the direction that will be taken. The Fed is far behind the price inflation curve, and there is a need to raise interest rates by a greater degree and more often than under customary practices.
The Fed’s alarm over inflation has extended to its balance sheet as well. The Fed more than doubled its asset holdings to about $9 trillion as it made monthly bond purchases to help stabilize markets during the pandemic. The assets are made up mostly of government-backed securities and mortgage-backed securities issued by Fannie Mae and Freddie Mac. Likely beginning this month, the Fed will start reducing its holdings to slowly remove the monetary stimulus it has been providing to the economy. The reduction in holdings will likely impact long-term interest rates through its effect on bond markets. As the Fed reduces holdings, the Treasury Department will need to issue a similar amount of new securities as the old securities mature, depending on other investors to buy them. Typically, when more bonds are supplied to the market, prices fall and yields go higher to attract investors.
The sustainability of the current economic recovery continues to be dependent on the U.S. consumer since 70 percent of the strength of the economy is the result of consumer spending. Because of that, inflation is a risk to economic growth via the household sector. While consumer sentiment remains at pessimistic levels driven by inflation worries, consumers have nonetheless kept up their spending habits. Headlines about inflation and the Russian invasion of Ukraine reinforce negative views on the economy but improved household finances remain steady. Spending for retail purchases was healthy in March and was evidence that consumers have a willingness to spend. Meanwhile, their ability to spend is supported by job growth, wage gains and wealth accumulated during the pandemic, while their financial obligations relative to income are low.
The rise in inflation was caused by neither demand nor supply alone but rather by the two interacting at the same time. Demand for goods and services rebounded more quickly than supply and the labor shortage and rising transportation prices have exacerbated inflationary pressures. The Fed is facing a tough problem. Its playbook for tightening of monetary policy can exert pressure on demand. It doesn’t have a direct ability, however, to influence the supply side by producing more gas or oil, planting fields of needed crops or manufacturing microchips. Nonetheless, the Fed’s tightening has kicked off a new cycle of adjustment and the outlook for interest rates has consequences for consumers and businesses alike. Higher rates will determine payments on household mortgages and car loans, on corporate debt and on government debt. There is a growing list of uncertainties, and the risks are mounting. But underlying strength and momentum from both the consumer and business sectors are likely to continue to offset a modest slowdown and should leave the economy bustling forward this year.
There is not much information in your post. But normally a royalty is calculated by taking the amount of the production multiplied by the price agreed to as your share percentage in the contract. At first glance, it seems the price is not your issue.
Has there been any production off the lease your royalty contract covers? If yes, then the minimum I would do is hire an oil & gas accountant and an attorney for a review. If there has been no production, then that is the problem.
But it could also mean that the company the lease is with has not kept to the conditions agreed to in the lease contract. If so, perhaps you can lease to someone else. Good Luck.
Mrs. Smith
EDITED
28th OPEC and non-OPEC Ministerial Meeting May 05, 2022
https://www.opec.org/opec_web/en/press_room/6858.htm
Following the conclusion of the 28th OPEC and non-OPEC Ministerial Meeting, held via videoconference on 5th May, it was noted that continuing oil market fundamentals and the consensus on the outlook pointed to a balanced market. It further noted the continuing effects of geopolitical factors and issues related to the ongoing pandemic.
The OPEC and participating non-OPEC oil producing countries therefore decided to:
Reaffirm the decision of the 10th OPEC and non-OPEC Ministerial Meeting on 12th April 2020 and further endorsed in subsequent meetings, including the 19th OPEC and non-OPEC Ministerial Meeting on the 18th July 2021.
Reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th OPEC and non-OPEC Ministerial Meeting and the decision to adjust upward the monthly overall production by 0.432 mb/d for the month of June 2022, as per the attached schedule..
OPEC Production Table:https://www.opec.org/opec_web/static_files_project/media/downloads/press_room/Production%20table%20-%2028th%20ONOMM.pdf
Reiterate the critical importance of adhering to full conformity and to the compensation mechanism, taking advantage of the extension of the compensation period until the end of June 2022. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
Hold the 29th OPEC and non-OPEC Ministerial Meeting on 2 June 2022.
There is not much info in your post. But normally a royalty is calculated by taking the amount of the production multiplied by the price agreed to as your share % in the contract. At first glance, it seems the price is not your issue.
Has there been any production off the lease your royalty contract covers? If yes, then the minimum I would do is hire an oil & gas accountant and an attorney for a review. If there has been no production, then that’s the problem.
But it could also mean that the company the lease is with has not kept to the conditions agreed to in the lease contract. If so, perhaps you can lease to someone else. Good Luck.
Mrs. Smith
Commercial Oil inventories increased by 1.3 million barrels, the Strategic Petroleum Reserve (SPR) decreased by 3.1 million barrels - EIA Weekly Petroleum Status Report, Release Date: May 4, 2022
Full Report with Graphs:https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
This Week in Petroleum:https://www.eia.gov/petroleum/weekly/
WTI $107.72/bbl - June Contract, 12:22 pm CDT 05/04/2022: https://oilprice.com/oil-price-charts/#WTI-Crude
Summary of Weekly Petroleum Data for the week ending 4/29/2022
HIGHLIGHTS:
U.S. crude oil refinery inputs averaged 15.5 million barrels per day during the week ending April 29, 2022 which was 218,000 barrels per day less than the previous week’s average. Refineries operated at 88.4% of their operable capacity last week. Gasoline production increased last week, averaging 9.7 million barrels per day. Distillate fuel production decreased last week, averaging 4.7 million barrels per day.
U.S. crude oil imports averaged 6.3 million barrels per day last week, up by 397,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.0 million barrels per day, 3.3% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.1 million barrels per day, and distillate fuel imports averaged 91,000 barrels per day.
The Strategic Petroleum Reserve (SPR) including non-U.S. stocks held under foreign or commercial storage agreements decreased by 3.1 million barrels from the previous week currently at 550 million barrels.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.3 million barrels from the previous week. At 415.7 million barrels, U.S. crude oil inventories are about 15% below the five year average for this time of year. Total motor gasoline inventories decreased by 2.2 million barrels last week and are about 4% below the five year average for this time of year. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 2.3 million barrels last week and are about 22% below the five year average for this time of year. Propane/propylene inventories increased by 1.6 million barrels last week and are about 11% below the five year average for this time of year. Total commercial petroleum inventories increased by 2.6 million barrels last week.
Total products supplied over the last four-week period averaged 19.3 million barrels a day, down by 2.6% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, down by 1.7% from the same period last year. Distillate fuel product supplied averaged 3.8 million barrels a day over the past four weeks, down by 8.2% from the same period last year. Jet fuel product supplied was up 28.2% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $104.59 per barrel on April 29, 2022, $1.73 above last week’s price and $41.09 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $3.433 per gallon, $0.366 more than last week’s price and $1.378 above a year ago. The spot price for ultra-low sulfur diesel fuel in the New York Harbor was $4.624 per gallon, $0.523 above last week’s price and $2.705 over a year ago.
The national average retail regular gasoline price increased to $4.182 per gallon on May 2, 2022, $0.075 above last week’s price and $1.292 over a year ago. The national average retail diesel fuel price increased to $5.509 per gallon, $0.349 per gallon more than last week’s price and $2.367 higher than a year ago.