Saturday, April 25, 2015

Catching Up -- April 24, 2015; ObamaCare Could Be Dead -- Financially -- In California

I have about one hundred links waiting to be looked at, read, posted at the blog -- links sent to me by readers.

This is the first such link; it will take awhile to catch up.

Disclaimer: this is not an investment site. Do not make in investment or financial decisions based on what you read here or what you think you may have read here.

From Seeking Alpha:
  • Denbury Resources has a very low operating cost of $22.64 a barrel, and this has allowed the company to remain profitable despite weak energy prices.
  • Denbury's top line has dropped in the past year, but that could change as tensions in the Middle East and increasing oil demand could push prices to $80 a barrel.
  • Denbury has hedged 75% its production for 2015 at $85 a barrel, which will shield the company in case of a drop in oil prices.
  • Denbury's interest coverage has increased significantly and its debt-equity ratio has dropped, signifying that the company is strengthening its balance sheet. 
Also from the story:
Looking ahead, the trend is expected to continue as industry experts are of the opinion that Brent crude might trade at $78-$80 a barrel by the end of the year. This target does not look entirely out of reach, as several factors will support the improvement in oil pricing going forward, namely production cuts in the U.S. and an increase in demand across the globe.
More importantly, Saudi Arabia's war on Yemen could disrupt supplies from the region, lending more support to oil prices.
If Saudi continues to carry on airstrikes against Yemen, crude oil prices can rise further as "the Bab el-Mandeb Strait on Yemen's southern coast controls access to the Red Sea, Suez Canal and the ports of western Saudi Arabia, the world's biggest crude exporter."
Meanwhile, demand for crude oil is also anticipated to increase in the coming months as per OPEC's latest monthly market report. According to a Saudi Gazette report:
"OPEC forecasts demand at an average of 29.27 million barrels per day in the first quarter 2015, a rise of 80,000 bpd from its previous prediction made in its March report. At the same time, it said, OPEC's own total output will increase by only 680,000 barrels per day, less than the previous expectation of 850,000 barrels per day, due to lower US and other non-OPEC production."
Now, an increase in demand, coupled with lower supply, will mitigate the supply glut in the oil industry to some extent. In addition, tensions in the Middle East are another factor that could drive oil prices.
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House Of Cards

The OC Register is reporting:
After two previous extensions, the open enrollment period for Covered California ends April 30. That deadline just might prove to be the tipping point for the state’s two-year-old health insurance exchange.
That’s because this is the year Covered California is supposed to become completely self-sustaining.
Indeed, there’s no more money coming from Washington after the state exhausts the $1.1 billion it received from the federal government to get the Obamacare exchange up and running. And state law prohibits Sacramento from spending any money to keep the exchange afloat.
That presents an existential crisis for Covered California, which is facing a nearly $80 budget deficit for its 2015-16 fiscal year. Although the exchange is setting aside $200 million to cover its near-term deficit, Covered California Executive Director Peter Lee acknowledged in December that there are questions about the “long-term sustainability of the organization.”
This is why the GOP is pretty much ignoring ObamaCare. 

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House Of Cards

The Telegraph is reporting: Top scientists start to examine fiddled global warming figures.
Last month, we are told, the world enjoyed “its hottest March since records began in 1880”. This year, according to “US government scientists”, already bids to outrank 2014 as “the hottest ever”. The figures from the US National Oceanic and Atmospheric Administration (NOAA) were based, like all the other three official surface temperature records on which the world’s scientists and politicians rely, on data compiled from a network of weather stations by NOAA’s Global Historical Climate Network (GHCN).
But here there is a puzzle. These temperature records are not the only ones with official status. The other two, Remote Sensing Systems (RSS) and the University of Alabama (UAH), are based on a quite different method of measuring temperature data, by satellites. And these, as they have increasingly done in recent years, give a strikingly different picture. Neither shows last month as anything like the hottest March on record, any more than they showed 2014 as “the hottest year ever”.
Back in January and February, two items in this column attracted more than 42,000 comments to the Telegraph website from all over the world. The provocative headings given to them were “Climategate the sequel: how we are still being tricked by flawed data on global warming” and “The fiddling with temperature data is the biggest scientific scandal”.
My cue for those pieces was the evidence multiplying from across the world that something very odd has been going on with those official surface temperature records, all of which ultimately rely on data compiled by NOAA’s GHCN. Careful analysts have come up with hundreds of examples of how the original data recorded by 3,000-odd weather stations has been “adjusted”, to exaggerate the degree to which the Earth has actually been warming. Figures from earlier decades have repeatedly been adjusted downwards and more recent data adjusted upwards, to show the Earth having warmed much more dramatically than the original data justified.
So strong is the evidence that all this calls for proper investigation that my articles have now brought a heavyweight response. The Global Warming Policy Foundation (GWPF) has enlisted an international team of five distinguished scientists to carry out a full inquiry into just how far these manipulations of the data may have distorted our picture of what is really happening to global temperatures.
Meanwhile, based on the weather report for the weekend, the Kennedys may be in Colorado skiing this weekend.

Week 16: April 19, 2015 -- April 25, 2015

The big story this week might be the fact that the number of rigs has plummeted to 84.

Operations
Enduro with permits for secondary recovery operations, water injection, Spearfish/Charles
Random update of the Hess Dahl well in Hawkeye oil field
BR reports ten high-IP wells 
Halcon production results for 1Q15

Fracking
Half of all US fracking companies could be gone by year-end
Induced earthquakes in Oklahoma
"We are winning the price war by driving frackers out of business" -- Saudi Arabia

Flaring
NDIC grants huge flaring exemption

Pipelines
Bear Den Crude Oil & Produced Water Pipeline completed

Bakken economy
Williston job fair, May 19, 2015

Friday's Daily Activity Report -- April 25, 2015; Active Rigs Down To 84

I arrived Williston safely about an hour ago. Will start to catch up on blogging.

The first question I had this morning: are they fracking in Nepal?

Active rigs:


4/25/201504/25/201404/25/201304/25/201204/25/2011
Active Rigs84182186209176


Three (3) new permits --
  • Operator: Newfield
    Field: Lost Bridge (Dunn)
  • Comments:
And that was it.

Friday, April 24, 2015

Arrived In Williston Safely -- April 25, 2015

Time to get out the camera.

Friday -- April 24, 2015

Something new in South Dakota -- it caught me by surprise: 80 mph speed limit on I-90 west of Rapid City, past Sturgis. It certainly surprised me.
I stopped at Sturgis for coffee; someone left a Rapid City Journal on the table. The headline story: "I-90 Speed Limit Here Could Fall To 75 MPH." This is the back story:
"The move to lower the limit comes less than a month after the state Legislature enacted an 80-mph limit on South Dakota's two interstates. The effort was led by Rep. Grian Gosch of Rapid City, who quietly inserted the 80-mph limit into a road funding bill essentially without public or expert input."
Rep Gosch's next job: working for Hillary's foundation.

The computer says it's 10:37 here and they are still serving breakfast at McDonald's so maybe it's 9:37 local time (Mountain). We'll see. I'll be here for about 30 minutes and then head north through Newell, where my paternal grandparents homesteaded.

Then on to North Dakota.

Gasoline about $2.39 / gallon, although I forgot to look at the last stop. In some places in Nebraska it was as low as $2.19.

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EIA "Energy Cookie"

The "cookie' today:
The top 100 oil fields in the United States accounted for 20.6 billion barrels of crude oil and lease condensate proved reserves, or 56% of the U.S. total in 2013. The top 100 natural gas fields accounted for 239.7 trillion cubic feet of natural gas proved reserves, 68% of the U.S. total. Proved reserves are defined as estimated quantities of oil and natural gas that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions. --- EIA
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Economy

Bloomberg Business is reporting: Capital goods unexpectedly fall for 7th consecutive month.
Business investment is slowing and U.S. machinery makers are suffering the brunt of the damage from slumping energy exploration, a stronger dollar and tepid overseas markets. Bookings for non-military capital goods excluding aircraft, a proxy for future corporate spending on new equipment, unexpectedly dropped 0.5 percent in March, a seventh consecutive decline.
Producers of machinery, including oil-drilling equipment and turbines, saw a 1.5 percent slump in demand.
Why is this a surprise? The US oil and gas industry is in collapse and the US president is the most anti-growth, anti-business president in modern history. 

The good news: fast food workers will see a huge increase in their pay.

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Market

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

Amazon shares are soaring, up 15%, up $60. Hits new high.

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Gasoline Demand

Week ending April 17, 2015, a dynamic link. 


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A Quick Note To The Granddaughters

Lots of moving parts.

Preparing to move from apartment to house at end of month.

Daughter and older granddaughter on way to Austin, Texas, to showcase school project that took first place in Texas, and now moves to Iowa for national competition.

Olivia's "recreational" (non-professional) soccer team traveled halfway to Abilene, it seemed, yesterday when they drove to west Ft Worth. They won 3 - 1. Our middle granddaughter, age 8, scored two goals.

Zeits On Cost Control In The Bakken -- April 24, 2015

Richard Zeits over at Seeking Alpha on cost control:
The reporting season for U.S. E&P operators is about to shift into high gear next week. One of the most prominent themes this quarter will be record reductions in well costs achieved since the beginning of this year that management teams will showcase as the sector's key response to the change in the macro environment.
I expect that the average cost reduction already achieved and reflected in the leading-edge AFEs, for resource plays, will be in the 20%-25% range from the respective costs in 2014. Moreover, I expect operators to guide for additional well cost reductions of 5%-10% for the remainder of the year.
While the decline in well costs is the U.S. resource plays is of course nothing new, this earnings season will likely surprise with the magnitude of the reductions and the speed with which these reductions have been achieved. For many operators, well cost reductions will likely materially exceed guidance provided earlier this year.
For example:
Triangle Petroleum reported last week that it reduced its average gross well costs to $10.2 million on average in its fiscal Q1 2015 (three months ended January 31, 2015). This represented a ~14% year-on-year reduction. Triangle also reported that its most recent AFEs were coming in under $8 million and already exceeding the top end of the company's 10%-20% well cost reduction target for the current fiscal year.
It should be noted that Triangle's well cost remains on the high end among its peer group, but may be in part explained by Triangle's "integrated" business model whereby Triangle's wells are completed by RockPile, a sister company specializing in pressure pumping and completion logistics which is 100% owned by Triangle.
 The article will be archived at the source.

Friday, April 24, 2015 -- We Start The Day With 86 Active Rigs

Active rigs:


4/24/201504/24/201404/24/201304/24/201204/24/2011
Active Rigs86185187210175


RBN Energy: the economics of global LNG.
The international market for liquefied natural gas (LNG) is an inherently risky business where returns depend on paying back huge upfront infrastructure investments with cash flows based on volatile energy prices. Tectonic shifts in the market are giving North American LNG exporters and natural gas producers an opportunity to become pivotal players. The world is on the cusp of an LNG supply glut that may last several years, and the old order of long-term supply contracts with prices indexed to oil is being phased out in favor of a market structure that features more destination flexibility, more spot market sales—and, for U.S. and maybe some Canadian and Mexican LNG exporters—more liquefaction “tolling” deals with LNG prices linked to gas. Today, we continue our look at what these changes mean for the North American energy sector.
Only a few years ago, the U.S. was planning to import large volumes of LNG to offset declining domestic gas production, China and India were starting up a new coal-fired power plant or two every week, Japan was getting nearly one-third of its electricity from nuclear power, and Qatar was the king of LNG exporters. Qatar remains on its throne, with about 32% of the market, but the traditional business model that put it on top is shaking and shattering. 
When LNG exporting and importing began in earnest in the late 1960s, LNG prices were fixed at first, but starting with the OPEC oil crisis in 1973-74 (when oil prices soared, putting LNG at a steep discount) oil and LNG prices were linked, with the goal of mitigating the risks faced by LNG buyers and sellers—and the developers of capital-intensive LNG export facilities.
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Minnesota Declares State Emergency -- Bird Flu

Bird flu emergency. This is getting to be quite a big story

Minnesota declared a state of emergency on Thursday over a fast-spreading strain of avian flu that has led to the extermination of more than 7.3 million birds in the country. It followed Wisconsin's action on Monday.
The highly pathogenic H5N2 strain of bird flu has been identified on 46 Minnesota farms in 16 counties and affected more than 2.6 million birds in the state. 

The virus can kill nearly an entire infected flock within 48 hours. Millions of turkeys and chickens are in quarantine waiting to be culled and large flocks have already been destroyed.
Officials have said they believe wild birds are spreading the virus but they do not know how it is entering barns. 
Two bird flu strains have been discovered in the United States this year. The H5N2 strain is in Arkansas, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin. It has also been identified on farms in Ontario, Canada.
If "it" jumps to humans ....

Thursday, April 23, 2015

Odds And Ends -- April 23, 2015 -- IN PROGRESS

I'm driving from Texas to North Dakota; left about 10:00 p.m. last night -- wanted to experience the thunderstorms and earthquakes at night in Oklahoma. The thunderstorms were not particularly spectacular but would have put cattle into a stampede in the old days. I missed a 4.0 earthquake near Medford, Oklahoma by about 12 hours. I think, at 4.0, that is one of the stronger quakes; people felt it but "no" damage. We'll see.

I'm in North Platte, Nebraska, right now.  Will be here about an hour; then press on. I will sleep along the road somewhere -- Chadron, Black Hills, Belfield, Bowman, and on to Williston. 

WTI settled at $57.56 -- this is the highest since December, 2014.

NASDAQ closed at an all-time high. Dow closed higher.

Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on what you read here or think you may have read here.

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The Hillary story:
  • her foundation took millions of dollars in donations from a Russian company
  • her foundation never declared those donations
  • her foundation is now re-filing those tax returns to return those donations
  • the Russian company now owns 20% of all known uranium in the US
  • Putin: his goal -- to control the uranium market (Kazakhstan was the real target; got US rights as part of the deal
NPR interviewed one of The NYT reporters who verified the story. NPR's initial take on the story:
  • there's nothing to see here, folks; move on
  • not even interested in "failure to report; refiling"
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Amazon Stuns Wall Street With Profits

Yahoo!Finance is reporting:
Jeff Bezos decided after nine years it was finally time to disclose the financial results of his pioneering cloud business, Amazon Web Services.
And so, along with its first quarter results, Amazon disclosed that the AWS unit had revenue of $1.6 billion, up 50% from last year, and operating income of $265 million, up a more modest 8% amid growing competition from Microsoft, Google and others. 
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After Hour Reports

Amazon, Microsoft, Google. Google surges after hours. 

Southwestern Energy meets.

Good report for Starbucks; strong in after-hours trade.

Comcast will drop Time Warner deal. Once Congress got involved, it was predictable.

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Apple Page

Apple watch orders, shipments, apps going wild. There may not be big lines at the stores for the Apple Watch but the media is going wild with reports.  Australian customers to get first watches delivered to homes.
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Trip Notes
My note to Don:
I'm in North Platte; will be here about an hour. Then press on.
Great ride so far. Beautiful weather; beautiful country, but very, very dry in western Nebraska. Much worse the DFW area. Cattle and horses were in knee-high grass in DFW area. Almost no grass in western Nebraska in many places where cattle are seen.
Lots of hawks above the freeway.
If cougars are found along the North Platte river, I saw a cougar. It was a huge cat, not a dog. In the vicinity of a small herd of deer. Yes, google search -- cougars in the area.

Active Rigs Down To 86 -- April 23, 2015; MRO With Three (3) Initial High Production Wells -- IN PROGRESS

Note: be sure to check out the update regarding the previous post (http://themilliondollarway.blogspot.com/2015/04/a-reader-asked-about-hess-well-in.html). 

Active rigs:


4/23/201504/23/201404/23/201304/23/201204/23/2011
Active Rigs86187188212175

Eighteen (18) new permits --
  • Operators: Oasis (10), Enerplus (6), MRO, Ballard
  • Fields: Camp (McKenzie), Moccasin Creek (Dunn), McGregory Buttes (Dunn), Van Hook (Mountrail), Chatfield (Bottineau)
    Comments:
Permit cancellations --
  • HRC (3) -- Fort Berthold permits in Dunn County
  • Statoil (3) -- Jay permits in McKenzie County
  • Newfield (1) -- a Johnsrud well in McKenzie County
  • EOG (1) -- a Parshall well in Mountrail County
Five (5) producing wells completed:
  • 28708, 1,244, MRO, Brink 24-20TFH, Bailey, t3/15; cum --
  • 28704, 1,702, MRO, Greider 34-20TFH, Bailey, t3/15 cum --
  • 28705, 2,396, MRO, Castner 34-20H, Bailey, t2/15; cum 21K 2/15;
  • 27941, 513, Hess, GN-Cambrian-159-98-2536H-2, Big Stone, t4/15; cum --
  • 27869, 476, CLR, Skar 3-28H, Stoneview, 4 sections, t3/15; cum 2K 2/15;
Dry hole --
  • 27215, dry, Oasis, Chalmers 5301 44-24 3B, 
Wells coming off confidential list Friday:
  • 3440 (no typo), loc/30, Enduro, NSCU K-709, Newburg, a Spearfish/Charles, cumulative to date -- 337K as of 4/2008; this is a "secondary recovery injection application for a permit to "convert said well to an enhanced recovery well... injection shall be through tubing and packer with a packet set within 100 feet of the top perforation
  • 5173 (no typo), loc/INA, Enduro, NSCU J-706, same as #3440 above;
  • 27526, 1,004, Newfield, Sand Creek State 153-96-16-4H, Sand Creek, t1/15; cum 18K 2/15;
  • 28163, 94, OXY USA, Federal Bud 3-29-32H-143-96, Fayette, t11/14 cum 26K 2/15;
  • 28338, 228, American Eagle, Huffman 15-34S-164-102, Skjermo, t12/14; cum 24K 2/15;
  • 28789, drl, CLR, Melgaard 3-23H, Sadler, no production data,
  • 29046, 1,303, Hess, BB-Belquist-150-95-1110H-11, Blue Buttes, t4/15; cum --
  • 29112, drl, Hess, EN-Uran A-154-93-2215H-9, Robinson Lake, no production data,
  • 29542, 112, Enduro, NSCU R-709-H1, Newburg, a Spearfish/Charles, t12/14; cum 5K 2/15;
  • 29568, drl, SHD, Wiley 24-30H, Deep Water Creek Bay, no production data,
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Ten More Oasis Wells In Section 30-152-100


A Reader Asked About A Hess Well In Hawkeye -- April 23, 2015 -- IN PROGRESS

Updates

Later, 6:57 p.m. CT: this is really, really interesting. See first comment. I brought it up here so it is easier to google:
The fracfocus.org site shows two fracs, one starting 3/2/2012? ending 1/19/2015 and an earlier frac starting 3/07/2012 ending 3/07/2015. (the dates seem suspect)

33-053-03585-00-00 3/2/2012 1/19/2015 North Dakota McKenzie
Hess Corporation

HA-Dahl-152-95-0706H 2
47.992620 -102.887414 NAD27
33-053-03585-00-00 3/7/2012 3/7/2012 North Dakota McKenzie
Hess Corporation

HA-Dahl 152-95-0706H-2
47.990000 -102.000000 NAD83
That makes sense: they did an open hole frac when the well was completed in 2012; then in 2015, a few months ago, they went back in and re-fracked it. It will be interesting to see what kind of re-frack they did. At least that's how I would interrupt it until I get more data.

Original 
 
Note: this entire page was done quickly and not checked for errors. There will by typographical and factual errors. If this information is important to you, go to the source.

A reader asked about #20755 when it was noted there was "a huge jump in production between February and March 2015" according to the reader.
  • 20755, 381, Hess, HA-Dahl-152-95-0706H-2, Hawkeye, t3/12; cum 247K 2/15;
From the geologist's report:
"... the Three Forks & Target Zone was first seen at the end of the curve build, encountered at a measured depth of 10,890' (10,556" TVD). The Three Forks formation is directly below the Lower Bakken unconformity, with the lowermost Pronghorn Member of the Bakken absent here. ... the lateral was drilled in 220 hours.... the lateral portion of hte well was drilled with a total of 60% in the specified target zone and 100% in the Three Forks formation in a time frame of 30 days....background gas reached a pinacle at 6,611 units with average...400-2,200 units."
I don't have the production data for March, 2015. From the well file:

The most recent forms in the well file had to do with a pump a year ago: Work on the well was completed March 22, 2014, and the sundry form was received by the NDIC on April 9, 2014.

From the report a year ago: MIRU for stuck pump; resolved (either repaired or replaced; I don't understand the jargon in the paragraph; probably repaired).

This is what the production profile looked like around that time, a year ago:

BAKKEN5-20143053605418136875115127239
BAKKEN4-201430655763811761002240745948
BAKKEN3-2014915741667100975220517701
BAKKEN2-2014264466446712021469021469
BAKKEN1-2014315488549722818248018248


 The most recent production at the NDIC site:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN2-201528287385832352350
BAKKEN1-2015263484349847755747712786
BAKKEN12-201431415041342591094936810581

... and there is no production data for March, 2015, at this site, and no sundry form yet scanned in by the NDIC that might explain an increase in production in March, 2015.

I did not see the frack data at the NDIC well file, but obviously the well was fracked in early 2012 based on this initial productio profile (unless I'm wrong and this well was never fracked, it's a humdinger of a naturally-fracked area):

BAKKEN10-2012311104811057852136421063301
BAKKEN9-2012239957993070217944168791065
BAKKEN8-2012311302213135145426028231032925
BAKKEN7-201231156311554394128766260332733
BAKKEN6-201226179741797011913060329806797
BAKKEN5-201223226492252925222875728179578
BAKKEN4-201210250000
BAKKEN3-20128330132765375917745843

A pump was placed in September, 2012.

This well is on a 2-well pad; the earlier well:
  • 16825, 307, Hess,  HA-Dahl-152-95-0706H-1, Hawkeye, middle Bakken, vertical well in 10 days; lateral in about 12 days, t1/08; cum 242K 2/15;
From the geologist's report:
... this well was drilled entirely within the Middle Bakken... gas appeared to be higher than indications at possum belly or flare at times throughout the well...
Note the production profile most recently, January - February, 2015 (both with about the same number of days on-line)

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN2-201528141163102572570
BAKKEN1-20153186686113256125610
BAKKEN12-20142973772768196419640
BAKKEN11-20141147048118788780

Amazingly, this was an open-hole stimulation/frack with 16,636 bbls of Slickwater and 298,808 lbs of Ottawa Sand.

Early production profile of #16825:

BAKKEN7-20082938993899108907890780
BAKKEN6-20083041294129155933593350
BAKKEN5-20083144974497205949894980
BAKKEN4-2008305448544820910844108440
BAKKEN3-200831459945991245825982590
BAKKEN2-200829553455342271814481440
BAKKEN1-20083175867586246110574105740
BAKKEN12-20072698279827183114489144890


There was a typical Bakken decline until June, 2010:

BAKKEN12-2010319058921829519363193630
BAKKEN11-2010271072610646118920382203820
BAKKEN10-2010241030510232125523609236090
BAKKEN9-2010201389413769158324842248420
BAKKEN8-20100070000
BAKKEN7-20101686697342192219220
BAKKEN6-2010301697167170401828711147

There is a sundry form received by NDIC in July, 2010, suggesting a work-over that started about July 30, 2010. 

So there you have it.

It will be interesting if readers:
  • have production numbers for these wells for March, 2015
  • have information about the wells between February, 2015, and March, 2015.