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Lynn Helms - Director's Cut

Apr 13, 2018

Lynn HelmsOil Production
January 36,566,471 barrels = 1,179,564 barrels/day (final)
February 32,893,519 barrels = 1,174,769 barrels/day (preliminary)
(all-time high was Dec 2014 at 1,227,483 barrels/day)

Gas Production
January 64,226,435 MCF = 2,071,820 MCF/day
February 58,863,453 MCF = 2,102,266 MCF/day (NEW all-time high)

The drilling rig count was up one from January to February then increased two from February to March, and is currently up one from March 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. If WTI drops below $45/barrel for more than 30 days rig count is expected 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 5-10 rigs in the second and third quarters of 2018 depending on workforce and infrastructure constraints.

The number of well completions has become highly variable from 106(final) in December January to 57 (final) in January to 51 (preliminary) in February primarily due to weather.

Oil price downside risk is anticipated to last through 2018. OPEC met the last week of March and decided to extend production cuts to year end 2018. Crude oil futures markets appear to anticipate OPEC production cuts maintaining prices through June 2018 with US shale production resulting in slight overproduction mid-2018 through mid-2019. US crude oil inventories are now approximately equal to the long term average.

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