July 3, 2014 flyonthewall
08:35 EDT AR, GPOR, MHR Antero Utica wells look 'by far the best overall,' says RBC Capital
After the Ohio Department of Natural Resources released data on 91 net Utica wells that came online in Q1, RBC says Antero Resources' (AR) Utica wells looked to be "by far the best overall." The firm says Antero had five of the top 10 overall producers on a Boepd basis, and nine of the top 10 wells in terms of oil production alone. RBC views Gulfport Energy's (GPOR) wells as solid and notes Magnum Hunter (MHR) had the best well in the sample with a rate of 3,848 Boepd over eight days.
informative conclusion to second article that at least was not intuitively obvious
"...Once these expansion plans by EPD, Targa, ONEOK and Lone Star are complete, Mont Belvieu will likely have most (if not all) of the fractionation capacity it will need for the foreseeable future. Why? A big portion of incremental NGL production for the balance of this decade will be in the Utica and the wet Marcellus, and we think most of that new production will be fractionated close to production—that is, in the Utica/Marcellus region itself. In the next episode in this series, we will update NGL production growth, fractionator projects, and NGL-related pipelines in the Utica/Marcellus, and what it all means for Mont Belvieu...."
bry board on investorvillage
From RBN: In December 2013, Targa announced a joint venture with Kinder Morgan Energy Partners to provide fractionation services in Mont Belvieu to Utica/Marcellus producers that sign up to move mixed NGLs on a joint venture pipeline being developed by Kinder Morgan and MarkWest Energy Partners – the Utica Marcellus Texas Pipeline (UMTP). We understand that the project has yet to receive enough customer commitments to proceed – likely due to competing Utica/Marcellus fractionation. We’ll get back to this issue in a subsequent episode of this blog series. Targa and Kinder Morgan have indicated that two fractionation trains (Cedar Bayou Train 5 and Train 6) of as-yet-unannounced capacity would be built to handle both UMTP and other mixed NGLs.
Targa executives said during the company’s May 1 quarterly earnings call that, given the increasing production of NGLs in the Permian Basin, the Eagle Ford and the Mid-Continent region, there are other potential commercial needs for the two new trains planned at Mont Belvieu beyond UMTP. Like EPD, Targa is working to expand the potential for NGL-related exports, knowing that the easy ability to ship purity products from Mont Belvieu to overseas customers adds value to Targa’s fractionation service. In September 2013, Targa started commercial operation of the first phase of an export expansion project at its Galena Park Marine Terminal near Houston. Phase I of this project expanded Targa’s export capability at Galena Park to 133 Mb/d of propane and/or butane. (Included in Targa’s Phase I expansion is the capability to export international-grade “low-e” propane, which means propane with an ethane content of less than 2.5%.) Construction is underway on a project to expand Targa’s propane/butane export capacity by another 67 Mb/d, for a total of up to 200 Mb/d. Phase II is scheduled to come online within the next two or three months. By the way, Targa moves product between Mont Belvieu and Galena Park via three pipelines:...
disable so sorry about the Alzheimers. you still spell well. 1.47 for ye 2014 which is generally considered the 4th quarter which is paid in Feb 2015
Greater investment in infrastructure needed to ensure rising US NGL production reaches international markets.
see mlp or bry iv boards for article
S&P on EROC
The following is a press release from Standard & Poor's:
-- On Dec. 23, 2013, Eagle Rock Energy Partners L.P. announced a
definitive agreement to sell its midstream business to Regency Partners for
total consideration of up to $1.325 billion.
-- We believe that Eagle Rock's business profile will be weaker following
the transaction, more than offsetting improvement in the company's credit
-- We are lowering our corporate credit rating on Eagle Rock to 'B-' from
'B'. The rating on the senior unsecured notes remains 'B' and on CreditWatch
with positive implications.
-- The stable outlook reflects our expectation that Eagle Rock will
maintain adequate liquidity and that it will manage acquisitions, capital
spending, and distributions prudently.
NEW YORK (Standard & Poor's) June 30, 2014--Standard & Poor's Ratings Services
said today it lowered its corporate credit rating on Houston-based oil and gas
exploration and production company Eagle Rock Energy Partners L.P. to 'B-'
from 'B'. The outlook is stable.
The rating on the company's senior unsecured notes remains 'B'. We are
maintaining the recovery rating on these notes at '4'. The rating remains on
CreditWatch with positive implications, where it was placed on Dec. 23, 2013,
pending the close of the midstream transaction with Regency. Eagle Rock will
be transferring its $550 million of senior unsecured notes into an equivalent
amount of Regency senior unsecured notes with the same terms.
The downgrade reflects the announcement that the company has received final
regulatory approval from the Federal Trade Commission necessary for the close
of the acquisition by Regency Partners.
"The outlook is stable because we do not expect to raise or lower the rating
on Eagle Rock during the next 12 months. This assumes that the company will
maintain adequate liquidity and that production and costs will be consistent
with our expectations," said Standard & Poor's credit
Finally, Range signed two new fixed-term ethane sales agreements, one with an affiliate of South Africa's Sasol (NYSE: SSL ) for 10,000 barrels of ethane per day for a multiyear term and other to supply a planned petrochemical complex in West Virginia with 5,000 barrels of ethane per day for a term of 15 years. Both agreements are subject to successful completion of the projects.
Barclays on Condensate Export
Msg 142403 of 142412 at 6/27/2014 12:46:45 PM from bry board by
We believe condensate exports could help prevent
growing supply of light oils from overwhelming US markets and forcing US prices down
in future years. The forward WTI-Brent spread has already fallen ~$1 since the ruling
and will likely average $7-9 rather than the $12/bbl spread implied by ‘16-‘17 forward
prices. This suggests US prices will average of $3-5/bbl higher than what they would
have otherwise. We assume condensate prices will benefit by an extra +/- $2.
Most field condensates are extracted using stabilizers (i.e. distillation columns). The
Commerce Department view appears to be that the distillation process will qualify the
condensate for export. There are many uses for distillation columns – but this ruling
appears to apply only to one of the simpler uses – as a condensate stabilizer. The
condensate stabilizer creates 2 streams – a volatile gas stream (methane and ethane)
and heavier, stabilized, condensate (propane, or c3+) that is safe to transport to market.
A condensate splitter or NGL fractionation plant also use distillation columns – but the
purpose is to “split” the mixed hydrocarbon stream into several higher-value product
"... If the BIS did make such a change then the implications could run deep. For starters, if condensate can be exported after stabilization, then much of the condensate currently produced in the US – a number RBN estimates as at least 1.2 MMb/d today and expects to increase to 1.6 MMb/d by 2018 – would be eligible for export. That means producers would realize a higher price for condensate in overseas markets where demand is greater than here in the US (e.g. Asia). The change would also relieve pressure on US Gulf Coast light sweet crude prices such as Light Louisiana Sweet (LLS) that have been weighed down by a flood of light crude and condensate barrels descending on refineries not able to process those barrels easily. If the lightest crude can be exported, it would no longer compete for space in domestic refineries meaning crude prices should increase – at least initially. Many producers are hoping that this development is just the first notch in a general BIS retreat from the export ban that would end the regulations for good.
Wait and See
Of course, it is entirely possible that the special exemptions for Pioneer and Enterprise are no more than trial balloons – in effect BIS test cases to determine the market impact – and perhaps the political impact – of relaxing export regulations. But assuming some kind of change has really occurred to BIS definitions, producers and midstream companies would be well advised to wait and see the details before jumping on the bandwagon. The crude vs. lease condensate distinction requires more than a verbal definition using the word “condensate”. And a waiver of the export rules has to require more than just “processing through a stabilizer” as a condition. Otherwise, what is to stop crude producers simply putting their regular crude through a stabilizer to classify it for export?..."
for those wwithout access to rbn some points-part 1
"The implication of yesterday’s WSJ story and reported follow up statements from one of the companies that has received a ruling from the BIS – Pioneer – is that in this instance at least - the BIS may have changed or loosened or “redefined” what is meant by “processed though a crude oil distillation tower” to include a wellhead process called stabilization that is less complex and/or expensive to carry out than either a condensate splitter or a conventional refinery. In fact, condensate stabilization units are in common use at many Eagle Ford wellhead production facilities or at crude gathering points such as the Plains terminal at Gardendale, TX."
An important distinction between a condensate stabilizer and a condensate splitter in the context of this discussion is that the stabilizer is designed to make lease condensate stable and safe for transportation on pipelines and the splitter is designed to break condensate into its component fractions such as naphtha, propane, butane and distillates. A stabilizer outputs condensate, a splitter outputs condensate components. So even if condensate stabilizers are getting more sophisticated these days, they are not designed to split out component fractions.
What Does The Change Mean?
So the question of the day is whether or not the BIS has made a subtle change to the definition of what constitutes processing to transform lease condensate into a product that can be exported? In other words, can producers export field condensate once is has passed through a stabilization unit? The answer is unclear based on what we know so far because the statements made have not been specific as to the process required. As we said earlier, this whole thing could be a trial balloon from the BIS to test the waters and see what the response is....
ny agree they can modify plans if they have not already ordered the equipment as a stabilizer is cheaper to build than a splitter . that was why the kudos to mwe as they chose the simplistic cheaper route before going all in which was discussed at investor conference. ngls is my second largest holding and may not be too far along yet on splitter from recent presentation "35 Mbbl/d condensate splitter located at the Channelview Terminal expected to be completed 18 months after permitting is complete". "TRP has begun permitting, and expects the splitter to be inservice
18 months after completion of the permitting process", just hope they have not yet ordered all of the equipment
Msg 142256 of 142257 at 6/25/2014 2:04:18 PM bry bord by
Condensate Export Ruling Jeopardizes Splitter Projects: Barclays
By Barbara Powell
June 25 (Bloomberg) -- The U.S. approving stabilized
condensates for export as processed petroleum could delay
billion-dollar projects to separate ultra-light crude into
products, Michael Cohen, an analyst at Barclays Capital, says in
* Decision raises questions about viability of midstream co.-
announced condensate splitters, hydroskimming units, pre-
* Short term mkt implications support narrowing of Brent-LLS
spread; widespread lifting of crude export ban is “out of
the question” w/o lifting of Jones Act too
Condensate Export Approval-two different views WSJ (condensate) and FuelFix (after splitter/Distillation tower).
not sure which article is correct. can read both on iv bry and mlp boards
round about way PXD could accelerate drilling and producing more cassinghead gas for processing
another insticitive move by mwe initially going with a stabilizer rather than all out with a separator/splitter
EPD and PXD
Christian Berthelsen And
June 24, 2014 5:14 p.m. ET
The Obama administration has quietly cleared the way for the first exports of unrefined American oil in four decades, allowing energy companies to chip away at the long-standing ban on selling U.S. crude overseas.
Federal officials have told two energy companies that they can legally export a kind of ultra-light oil that has become plentiful as drillers tap shale formations across the U.S. With relatively minimal processing, oil shipments could begin as early as August, according to one industry executive involved in the matter.
Using a process known as a private ruling, the U.S. Commerce Dept.'s Bureau of Industry and Security is allowing Pioneer Natural Resources Co. of Irving, Texas, and Enterprise Products Partners LP of Houston to export ultra-light oil known as condensate to foreign buyers who could turn it into gasoline, jet fuel and diesel.
Both companies confirmed they had received the rulings.
40,000 bls/d and 200 mmcf/d