Thursday, October 23, 2014

Active Rigs At Recent High -- 195; CLR With Some Nice Wells In SCOOP; Initial Unemployment Claims Surge; Thursday, October 23, 2014

It's going to be a busy, busy day. The market is up big, which means there must be a lot of news to cover. Headline: GM, CAT earnings drive stocks higher as "biggest day of 2014" gets underway." Apparently CAT "brightens outlook."

UNP surges, hitting a new 52-week high.

AAPL surges to a new all-time high.

Sears closing 100 stores, laying off 5,500 employees. 

This is not an investment site. Do not make any investment, financial, or relationship decisions based on anything you read here or think you may have read here. 

CLR Press Release: Four New Springer Wells In SCOOP
Short Lateral EURs: Almost a Million BOE
Long Lateral EURs: As Much As 1.6 Million BOE 

From a press release:
The four new wells had an average horizontal lateral length of approximately 4,475 feet. Continental expects estimated ultimate recovery (EUR) of 940,000 gross Boe per well in the oil fairway of the play for a well with a 4,500-foot lateral section. In November 2014 , Continental plans to commence drilling its first extended lateral well in the Springer play, with a planned lateral length of 7,500 feet. The Company expects an average EUR of approximately 1.6 million gross Boe for extended lateral wells of this length, reflecting the 67% longer lateral. Continental reported that the average completed well cost this year has been in line with earlier projected cost of $9.7 million per well. The four newest wells were drilled to an average vertical depth of approximately 12,625 feet and average total measured depth of approximately 17,650 feet.
The UPI talks about the SCOOP here.


Jobs Report

Isn't this an interesting on the jobs report? Was last week's incredible drop to 264,000 an anomaly? What was that all about? Today, the number is back up to 283,000 -- almost as if last week did not happen. Analysts had expected today's number to rise to 281,000. The four-week average, they say, "fell further," to 281,000 from 284,000 last week. Well, of course it did when the number last week unexpectedly plunged to 264,000.

All I can say is "strange," to say the least.

Oh, and this concluding remark from the linked article, in bold: "The labor market is still strong an any slack remaining is just a figment of the Federal Reserve's imagination." I wonder what color the sky is in their universe?


RBN Energy: first in a series on diluent for West.
Demand for diluent range light hydrocarbon materials such as natural gasoline and condensate that are used to reduce the viscosity of heavy Canadian bitumen crude so that it can flow in pipelines, is forecast to increase from 380 Mb/d in 2014 to 685 Mb/d by 2019.
Increasing bitumen crude production in the Western Canadian oil sands region drives that demand.
New large scale bitumen projects in Alberta requires two pipelines – one to ship crude production to market and one to ship in diluent for blending. Today we start a new series detailing the expanding western Canadian diluent distribution network.
RBN has frequently detailed the challenges that producers in the Western Canadian sedimentary basin (WCSB) have faced transporting heavy bitumen crude from the Alberta oil sands formations to market.
Bitumen crude that is not first upgraded by partial refining (to make light synthetic crude oil or SCO) cannot flow in pipelines unless it is diluted by blending with as much as 30 percent of lighter hydrocarbons (known as diluent) or heated up. Heating is used infrequently for short distances but diluent blending is the preferred method for most Canadian producers that ship such heavy crude by pipeline.  Our analysis to date has mostly focused on the longest part of the bitumen crude journey – from pipeline hubs in Edmonton and Hardisty to refineries in the U.S. Midwest and on the Gulf Coast.
 Today's RBN Energy post, by the way, features the Blondie album, "Parallel Lines."


Active rigs in North Dakota:

Active Rigs195181181188196

Earnings On Tap Today

All result in:
  • Amazon, expectations, a loss of 74 cents, after hours; actual, a loss of 95 cents; horrendous; shares plummet; phone flops; predicted;
  • CAT, forecast, $1.36; reported $1.63 with "belt-tightening: but revenue did exceed expectations slightly; shares surge 5%;
  • Edward Lifesciences, forecast 73 cents, after market close: beats by 8 cents; shares surge;
  • Flowserve, after market close, forecast, $1.00; misses by 7 cents; shares down 6%
  • General Motors beats by $0.03, beats on revs 
  • Occidental Petroleum (OXY), forecast $1.57 before market open; misses by a penny; shares up nicely; reports record domestic production of 282,000 bopd
Natural Gas Fill Rate

The magic number is 100. Today's number: 94. See comment below. [Update: the "magic number" of 100 was set several weeks ago; as we get closer to peak withdrawal, the magic number should increase -- we are getting closer to winter and the gap (see graphic below) is not narrowing [if it is narrowing, it is almost imperceptible]. With less time to get back to historical averages, the "magic number" rises.]

At Yahoo!In-Play:
"Natural gas futures spiked to a new session high, and into positive territory, following inventory data."
Update: The quote is theirs, not mine.

See first comment below.

This is what I'm watching: the gap. I lose track of things but it is my impression that things got a bit out of hand last winter when the northeast almost ran out of natural gas. I'm looking at "Last Year" and then comparing "The Gap" going into this year. If it's a mild winter, no big deal. If it's a severe winter, it appears to me, we are entering the season with a relative deficit compared to previous years (5-year historical averages).  I am new to the world of natural gas, and I'm certainly new to the world of natural gas in the northeast, so I am learning as I go along. I find this quite fascinating to be able to watch this play out in "real time."


1 comment:

  1. The magic number gets lower this time of year. 94 is a great fill for late OCT. Much above average.

    Prices jumped because of the difference in expectations (from 3.60 to 3.65) of the report, not because the report was bad.

    Also, anything below 3.7 is outstanding and much better than earlier in the year or even last summer.