Page 14 - NorthAmOil Week 28
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NorthAmOil PERFORMANCE NorthAmOil
Diamondback scales back 2020 output forecast
PERMIAN BASIN
SHALE driller Diamondback Energy has scaled back its production forecast for 2020, citing higher-than-expected curtailed volumes in the second quarter of the year, and volatile crude prices.
e company said in a July 14 operational update that it now plans to produce 290,000- 305,000 barrels of oil equivalent per day (boepd), in a slight downward revision from its previous output guidance of 295,000-310,000 boepd.
Diamondback was one of the rst major shale players to cut drilling activity in early March, when crude prices first fell on the failure of OPEC+ talks, before the coronavirus (COVID- 19) pandemic started. resulting in lockdowns and collapsing energy demand. e company’s initial production guidance for 2020 had been 310,000-325,000 boepd, and the new figures released this week mark the second downward revision in its full-year output target.
In its operational update, Diamondback said it had cut 9,000 barrels per day (bpd) of its total production in the second quarter of this year, primarily in May. As a result, its second-quarter
output averaged 294,100 boepd, with oil accounting for 176,300 bpd of this. e company added that nearly all of its curtailed production had been brought back online in June.
Midland-based Diamondback, which focuses solely on the Permian Basin, said it had bene ted from hedging some of its output, realising total hedging gains of $211mn in the second quarter. is included $11mn from the early termination of 10,000 bpd of oil hedges for the third quarter of the year.
Diamondback averaged 13 operated drilling rigs in the second quarter of 2020 with what it described as “minimal” completion activity. It added, however, that it was currently operating seven rigs and three completion crews, with the third completion crew having begun operations this month. e company anticipates dropping one more rig this month, operating 5-6 rigs and 3-4 completion crews for the remainder of the year if current market conditions persist.
The producer said that having initially expected to pause most completions for just over one month, it ended up taking a near three- month break from completion activity.
PROJECTS & COMPANIES
Cryopeak signs BC bunkering MoU
BRITISH COLUMBIA
BRITISH Columbia-based Cryopeak LNG Solutions announced this week that it had signed a memorandum of understanding (MoU) with marine bulk fuels transporter Island Tug & Barge (ITB) to provide LNG bunkering services in the Canadian province.
Under the MoU, Cryopeak and ITB have developed a design for a 4,000 cubic metre artic- ulated tug and barge (ATB), which would enter service in 2023. e plan will leverage one of ITB’s tugs, designed and built in Vancouver, to deliver LNG as a fuel to shipping companies call- ing at ports on Canada’s West Coast.
e agreement comes as a growing number of companies and ports turn to LNG bunker- ing in an e ort to use cleaner marine fuels and reduce emissions from the shipping industry.
“ is initiative supports the Port of Vancou- ver in joining other leading ports globally in o ering LNG bunkering services,” Cryopeak’s CEO, Calum McClure, said in a July 15 state- ment. e company welcomed the project as “an important breakthrough” for the development of LNG bunkering in Western Canada. It expects
shipping companies to bene t from lower costs and a more environmentally sustainable fuel source as a result.
Cryopeak, a portfolio company of BP Energy Partners, is Canada’s leading distributor of onshore LNG, with a eet of 16 tankers oper- ating in the country, as well as equipment and technologies for storage, regasi cation and fuel dispensing. e company strategy involves being a vertically integrated and full-service provider of LNG to Western and Northern Canada, as well as Alaska, and it sees the bunkering venture as being in line with this.
e project marks another step forward on LNG bunkering for BC, which has been support- ing the development of the marine fuel. In Octo- ber 2019, the BC government teamed up with the Vancouver Fraser Port Authority and FortisBC to establish the rst ship-to-ship LNG bunkering service on the west coast of North America. As part of this partnership, the government agreed to help fund a study into the economic, environ- mental and social impacts of developing an LNG bunkering hub in the province.
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w w w . N E W S B A S E . c o m Week 28 16•July•2020
