Goodbye 2011 – Part I

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Market Sentiment Watch: Next to the last post of the year. In today's first post please the natural gas storage and oil inventory reviews and the Natural Gas Supply Slide Show with data through October 2011 (dismal data for the gas bulls). I will post my 2012 thoughts in a separate post after this one and will be hosting the normal comment section under that post as the final comment section of 2011.  Thanks for reading and participating and have a safe and Happy New Year's Eve and of course an oily and prosperous 2012 and beyond.

Ecodata Watch:

  • No data release scheduled.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Inventory Review - Another record level for this week of the year.
  4. The Natural Gas Supply Slide Show
  5. Oil Inventory Review
  6. Stuff We Care About Today - SSN, ----
  7. Odds & Ends

Holdings Watch:

  • No trades yesterday

Commodity Watch:

Crude oil inched up $0.29 to close at $99.65 yesterday, more than recovering from an early, inventory report based selloff. The report looked bearish on the surface but actually was imports driven and essentially helped to partially reverse out the prior week's drop in crude stocks. Stocks at Cushing OK actually fell again and gasoline demand ticked up off seasonal lows due to the holiday. As the data was parsed, traders began to slowly buy and the stout equity market helped on what was otherwise a boring day in the markets. Early this morning crude is trading just under $100.

Natural gas fell $0.09 to close the day at $3.03 yesterday after a smaller than expected, mild weather, over supply induced, withdrawal. The release of gross U.S. production numbers later in the day could not have helped bull's moods either (see the Natural Gas Supply Slide Show below). Early this morning gas is trading a penny over key psychological support at $3.

Natural Gas Inventory Review

ZComment: Ugly. The combination of mild weather and sky high production levels leading to weekly records in storage at a time when we really need to be eating into inventories. This spells much weaker prices in the Spring unless we go Arctic in first quarter.  Partial offset will be more fuel switching away from coal in the States. Summer 2012 is going to be a very good time to market CNG vehicles.

Natural Gas Slide Show - October shows another jump in marketed production


Oil Inventory Review

ZComment:  Imports driven numbers this week as they were last week. Good to see Cushing continue to decline as it shows more oil is missing out on getting stranded with no well priced market and instead is escaping to the coast via pipe and rail to obtain better pricing. Bodes well for prices for next year when demand begins to recover.


Stuff We Care About Today

SSN Operations Update

  • Australia II (their first operated Montana Bakken well)
    • Drilled to TD, lateral stayed in zone for full length.
    • “excellent oil and gas shows”
    • samples from the lateral are consistent with those taken in the vertical part of the well in the m Bakken which was porous and permeable.
    • trying to hire a “mainstream” pumping firm, look for the completion in mid February.
  • Defender (first Niobrara shale well)
    • Down hole pump damaged and must be replaced,
    • Still flowing back the frac fluid (40% recovered),
    • too early to talk oil although they have had some in the well. Obviously not a gangbuster well.
  • Spirit of America (first conventional well in Goshen WY) –
    • bailout zone in the J sand appears to be tight… no oil, a little gas,
    • basically dry hole but they will watch it for awhile.
    • They plan to twin this one early in 2012
  • Everett (well #6 in ND) – frac in process, sanded up mid way through, will complete early next year.

Nutshell: Glad to hear about the shows in the Australia II well, otherwise pretty much a non event press release aside from some delays. Too bad on the J sand at SOA but that’s not an original objective for the well so it doesn’t condemn any part of the play.

Odds & Ends

Analyst Watch:

  • TBA in comments.

8 Responses to “Goodbye 2011 – Part I”

  1. 1
    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Goodbye 2011 Part II, Hello 2012 Says:

    […] Stuff  Print This Post « Goodbye 2011 – Part I 30 […]

  2. 2
    elijahwc Says:

    Z you have a quick back of the envelope for SSN w/o any credit for the Niobrara?

  3. 3
    zman Says:

    re 2 – I’m going to field question over on today’s second post but here’s a stab at it:

    I think its premature to write it off but it would be between $3.25 to $3.75.
    This is derived by
    Cash of $0.40 to $0.60 per share depending on how much you assume they have now.
    North Stockyard of about $1 mm or 0.15 per share
    20,000 net acres in Montana, assuming 75% works with EUR average of 500 MBOE gross per well and an NRI of 20% for 18.7 mm boe or $2.80 ish per share on a $15 / barrel in the ground case.
    some small value for non Rockies assets.
    If they are successful the Ft Peck Indian group will back into the 20,000 acres, reducing SSN’s working interest but SSN can still pick up an additional 70,000 net acres very cheaply so there’s that to consider as well.

  4. 4
    elijahwc Says:

    TY – pool diving time then

  5. 5
    zman Says:

    Hear ya, let’s move to the next post to keep from confusing me, lol.

  6. 6
    elijahwc Says:

    I must be cross-eyed. Is TRGL threatening to cross it’s 200 day on the way to $7?

  7. 7
    zman Says:

    Please post on the new post.

  8. 8
    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » 2011 Wrap (In Progress) Says:

    […] If you missed the Goodbye 2011 post with last free looks at the Natural Gas Storage situation, the Oil Inventories update, and the Natural Gas Supply Slide Show please click here. […]

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