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Lynn Helms - Director's Cut

Jul 13, 2018

Lynn HelmsOil Production
April 36,761,728 barrels = 1,225,391 barrels/day (Final)
May 38,583,489 barrels = 1,244,629 barrels/day (Preliminary NEW all-time high)

Gas Production
April 67,262,795 MCF = 2,242,093 MCF/day
May 71,881,378 MCF = 2,318,754 MCF/day (Preliminary NEW all-time high)

The drilling rig count was up two from April to May, increased one from May to June, and is currently up four from June to today. Operators have shifted from running the minimum number of rigs to incremental increases and decreases as WTI oil price moves between $45 and $60/barrel. WTI would have to drop below $45/barrel for more than 30 days for rig count to drop. WTI has remained above $55/barrel for more than 90 days so rig count is expected to continue increasing. Current operator plans are to add 1-5 more rigs in the third and fourth quarters of 2018 depending on workforce and infrastructure constraints.

The number of well completions has become variable again due to workforce, road restrictions, and weather at 75(final) in March, 86 (final) in April, and 42 (preliminary) in May.

Oil price downside risk has diminished. OPEC approved a plan to increase production through the second half of 2018 to offset Venezuela’s export collapse and US sanctions on Iran. Crude oil futures markets appear to anticipate supply and demand remaining in balance. US crude oil inventories remain approximately equal to the long term average.

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