Friday, July 31, 2015

Friday Night Meanderings -- July 31, 2015

That was easy. It appears the avian flu outbreak is over and things are returning to normal. I stopped by Albertson's on the way home to check the prices of whole fryers this evening. The refrigerator cases were overflowing with fryers and they were selling for 69 cents/pound.

For newbies, this was quite an incredible day in the Bakken. First, there were sixteen new permits, and the permits were for multiple operators. But even more remarkable: look at the IPs for the nine (9) producing wells that were completed. Nine completed producing wells is not trivial, either.

In the summer of 1972, the year between my junior and senior year in college, I spent a summer on the North Slope of Alaska doing research. I remember listening to Lynn Anderson's I Never Promised You A Rose Garden on the Armed Forces Network. But the big song that summer was Donna Fargo's I'm The Happiest Girl In The Whole USA. The sun was up 24 hours/day during the middle of the summer and I stayed up until the wee hours of the morning listening to the radio and doing my research. It was reported that Lynn Anderson died sometime in the past 24 hours.

I'm The Happiest Girl In The Whole USA, Donna Fargo

Without question, the biggest story being talked about among the techies today is the report that IBM is switching -- the entire corporation is switching -- to Apple. That is absolutely huge. Think about it. The comments at Macrumors are absolutely enlightening. I was looking for Meg Whitman's comment on the HP computer when she took over as HP CEO, but this is the best I could do (after a very short search):
While HP's new products certainly have a more consistent look and feel that is far from the "brick" of a laptop Whitman said she received on her first day at HP, it's hard to deny that HP's new look bears more than a passing resemblance to Apple's MacBook and iMac lines. Whitman even said that "Apple taught us that design really matters," and feels that HP has "made a lot of progress" with its new lineup. While the company may have an attractive line of new products that will help show off Windows 8 when it launches this fall, it's hard to look at HP's latest as anything but excessively Apple-inspired.
I can see why so many folks in the USA are overweight. I have never had a Cheesecake Factory cheesecake in my entire life until this past week. My daughter, bless her heart, bought a slice of Oreo cheesecake for me from the Cheesecake Factory. It is incredibly delicious, and the single slice is huge. I have a small portion of that one slice for five desserts so far this week, and it looks like I have one or two desserts left from that same portion. I would never be able to have a full dinner at Cheesecake Factory followed by dessert -- I assume they serve meals -- I don't know -- I've never visited a Cheesecake Factory even though there is one right next door to the Barnes and Noble in Southlake (Texas) that I visit almost every week. (I've bicycled to that Barnes and Noble for the past three consecutive days.

Folks may be interested in the status of permits so far this year, on the last day of July, 2015. Pretty impressive, considering all the headwinds.

My wife loves iced coffee, particularly Starbucks iced coffee. I see that one can buy ready-to-drink Starbucks iced coffee at grocery stores, like Albertson's. I will buy her the Starbucks iced coffee when she gets back to Texas after a long summer in southern California. As for me, I haven't been to Starbucks since I returned from California, about two weeks ago, and plan never to visit Starbucks again but when absolutely necessary when traveling and needing wi-fi. But I simply won't pay the increased prices that Starbucks recently announced.

When Minyard's bought the Tom Thumb store next door, they replaced the Starbucks coffee shop with Peet's. I haven't bought coffee at Peet's but I assume it's about as expensive as Starbucks when Peets advertised "$2.00 Tuesdays." If coffee is $2.00 when sold at a discount, I can only imagine the regular price. I now have coffee at home, and I buy Peets at Minyard's, $7.99 for a package of ground beans vs $9.99 for same size package of Starbucks ground coffee.

I bought a chocolate Babka at Southlake's Central Market to go with my morning coffee. I had never heard of Babka until watching a rerun of Seinfeld. I think cinnamon Babka would be better with morning coffee.

Are we done here? Yup.

Sixteen (16) New Permits; Nine Huge Producing Completed Wells Completed -- North Dakota -- July 31, 2015

Active rigs:


7/31/201507/31/201407/31/201307/31/201207/31/2011
Active Rigs74193180208184

Sixteen (16) new permits --
  • Operators: EOG (8), Newfield (4), Enerplus (2), XTO (2)
  • Fields: Lost Bridge (Dunn), Antelope (McKenzie), Grinnell (Williams)
  • Comments: the two Enerplus permits and the eight EOG permits are all for Antelope oil field; there is one other EOG Hawkeye well in the section where EOG is proposing these 8 new wells, see below.
Zavanna canceled four Meriwether permits, all in Williams County; Whiting canceled three Chameleon State permits in McKenzie County, and Oasis canceled a Vor permit in Williams County.

Nine (9) producing wells completed:
  • 28549, 1,841, XTO, Schettler 14X-9G, Cedar Coulee, t6/15; cum --
  • 28550, 1,991, XTO, Schettler 14X-9D, Cedar Coulee, t7/15; cum --
  • 29173, 1,527, XTO,Granli 34X-20BXC, Arnegard, t7/15; cum --
  • 29174, 1,334, XTO, Granli 34X-20C, Arnegard, t6/15; cum --
  • 29211, 2,929, MRO, Doll USA 12-14H, Reunion Bay, ICO, t6/15; cum --
  • 29673, 1,987, XTO, Werre Trust 44X-34G, Bear Creek, t6/15; cum --
  • 29789, 2,028, Enerplus, Euphorbia 149-92-35B-05H, Heart Butte, ICO, t7/15; cum --
  • 29819, 1,623, Enerplus, Rebutia 149-92-35B-05H, Heart Butte, ICO, t7/15; cum --
  • 30009, 2,426, MRO, CK USA 31-6H, Murphy Cree, t6/15; cum --
The EOG well in the drilling unit where EOG has permits for eight (8) new wells:
24337, 2,519, EOG, Hawkeye 3-2413H, Antelope, 2 sections, 28 stages, 9.7 million lbs sand, t5/13; cum 514K 5/15 (choked back); the scout ticket says this is the Sanish pool, though the application and stimulation said "Bakken." 

Note the production profile for the past nine months, paying particular attention to a) number of days on-line; and b) the volatility in flaring:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH5-20151650085355108089856802493
SANISH4-2015308268789114021661012386782
SANISH3-2015317822782215051600811718776
SANISH2-2015196373643014162241119693702
SANISH1-20153014054141662983481473034614498
SANISH12-2014261202912840276130080206137091
SANISH11-20141689628816242622651126618550
SANISH10-2014311303412257326955690431619010
SANISH9-20143014109144063349503553380213126

18,000 Posts -- July 31, 2015

A milestone: over 18,000 single stand-alone posts at "The Million Dollar Way."

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The Apple Page

IBM will buy 200,000 Macs annually, with 50 - 70% of employees ultimately switching from Lenovo.  I don't know if folks recall what Meg Whitman, CEO of HP said about HP computers when she first came on board, but I bet Ginni Rometty, over at IBM, had the same thought.

I'm going swimming with our one-year-old right now. If I can find the quote from Meg Whitman later, I will post it. Something about a "brick."

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Rest In Peace 
Born September 26, 1947 in Grand Forks, North Dakota

I Never Promised You A Rose Garden, Lynn Anderson

Kuwait's New Oil And Gas Strategy Copies Saudi Arabia's: Produce And Refine -- July 31, 2015

Read this story in light of recent reports that Saudi Arabia has taken a strategic turn from producing and exporting oil, to producing and refining oil. Now it's Kuwait:
Kuwait National Petroleum Co. has let a series of contracts to groups of oil and gas service providers to build the planned 615,000-b/d Al-Zour refinery complex in southern Kuwait as part of the company’s Clean Fuels Project.
KNPC officially awarded four contract packages worth an estimated $11.5 billion for the grassroots refinery on July 28, with a fifth contract package due to be awarded in the coming weeks, the state-run company confirmed in a series of posts to its social media accounts.
KNPC let a $4.1 billion lump-sum turnkey contract to a consortium of Spain’s Tecnicas Reunidas SA, China’s Sinopec Engineering (Group) Co. Ltd., and Hanwha Engineering & Construction Corp. of South Korea to provide engineering, procurement, construction, and commissioning for main processing units at the plan.
Note the contractors: Spain, China, and South Korea.

I guess America's job is to provide security while Kuwait gets the necessary engineering from Europe and Asia. Incredible.

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 Are Refineries Worth It?

MPC just raised its dividend from 25 cents to 32 cents.

PSX: Phillips 66 beats by $0.02; increases quarterly dividend 12% to $0.56/share.

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A Note For The Archives

A few weeks ago when we were out in California, I was talking to my brother-in-law about the Bakken. Unbeknownst to me, our 12-year-old granddaughter was taking notes on our conversation, but in a "graphic" way.

She was using the back of a Yahtzee score sheet. Today, when opening up one of the books I had started reading out in California, the drawing fell out. I annotated it to highlight some of the things she noted from our little discussion.

Active Rigs Increase By One After Days Of No Movement; Also, Break-Even Prices In The Bakken; California Reliance On Foreign Oil, Bakken Oil -- July 31, 2015

Active rigs:


7/31/201507/31/201407/31/201307/31/201207/31/2011
Active Rigs74193180208184

So, what's the breakeven price for drilling for crude oil in North Dakota? NDIC has this to say about that with link herehttps://www.dmr.nd.gov/oilgas/BreakevenHistorical.pdf.

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Exhibit A: Why Feds Won't Stop CBR
90% Of California's CBR Comes From The Bakken

Exhibit A is at this EIA link.
Bakken crude oil production from the Midwest (PADD 2, Cushing) is the major source of rail shipments to the West Coast (PADD 5), accounting for nearly 90% of West Coast crude-by-rail receipts in 2014. Relatively small shipments from other domestic regions have also increased. Shipments from the Gulf Coast (PADD 3, Texas-Louisiana) tripled from 2013 to 2014, and Rocky Mountain (PADD 4) shipments quintupled. These increases in crude-by-rail movements occurred only after West Coast crude-by-rail unloading infrastructure was significantly expanded.
And there's more, look at this headline, from June, 9, 2015: Crude by rail provides the West Coast with supply as regional crude oil production falls --
While total U.S. crude oil production increased by nearly 3.2 million barrels per day (b/d) from 2010 to 2014, production in the West Coast region (PADD 5) decreased by 0.1 million b/d, continuing a long-term decline. With no major crude oil pipelines connecting the West Coast to other parts of the country, refineries on the West Coast adjusted to the declining in-region production by increasing imports of foreign crude oil, reaching an average of 1.1 million b/d over the past five years. Shipments of domestic crude by rail (CBR) to the West Coast have also increased, from an average of 23,000 b/d in 2012 to 157,000 b/d in 2014. In the first quarter of 2015, West Coast CBR movements averaged 191,000 b/d.
There's a nice graph of PADD crude oil capacity at this link

Wind Energy Unable To Meet California's EV Demands -- July 31, 2015

Back on June 12, 2011, I posted:
Nissan realizes that recharging electric vehicles is going to disrupt the neighborhood grid. It's my understanding that the transformers you see hanging on the utility lines in your neighborhood are not rated to handle more than one or two rechargeable electrical vehicles in your neighborhood. Once electric vehicles catch on, General Electric will have to build enough transformers to replace all those we currently have. 
In today's news, sent to me by a reader -- the Bay Area is already experiencing the problem:
With more and more plug-in cars hitting the roads, there's been growing concern over the strain these vehicles will have on the nation's overtaxed power grid. BMW thinks it may have a solution in California.
The German automaker has partnered with utility Pacific Gas & Electric Co. for an 18-month pilot program in the San Francisco Bay Area that's just getting underway. The trial, dubbed BMW iChargeForward, gives $1,540 in gift cards to 100 owners of i3 hatchbacks to charge their vehicles during off-peak times.
Most automakers' electric vehicles already include app-based timer functions to allow owners to charge their vehicles during less-costly off-peak hours.
Charging EVs overnight may solve the "grid" problem, but more than two or three EVs in one neighborhood, and the transformers are going to be need upgrading.

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Apple, BMW

A year or so ago, Apple made a big splash by buying Beats, the headphone company. At the time, I thought it was smart of Apple -- a luxury brand, urban cool, and it seemed to fit the Apple music business.

But, looking back, that was truly small potatoes. Tim Cook and Apple need to be looking at much bigger ways to affect change. They need to take a page from Elon Musk's playbook. Whether one "believes" in Elon Musk (and I don't), he has certainly defined himself -- or let the mainstream media define him -- as "transformational." He's on the cover of The New York Review of Books this week.

Apple needs to be seen, again, as transformational. Evolution in mobile devices is becoming more and more irrelevant by the day. Apple TV is yet to be what it needs to be, and if it does come, it, too, in hindsight will be seen as small potatoes.

I am therefore thrilled to see that talks between BMW and Apple are back on. I think Apple has lost four or five years, stagnating with iPhone updates and needs to be seen as doing something much, much bigger. Reuters has this story, but I prefer this link over at Macrumors

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A Note to the Granddaughters

My roots are in North Dakota. I don't know much about New York City but it holds a special attraction for me because of the one summer I spent working in a "bedroom community" for New York City on the New Jersey side of the river. Until recently I had never heard of Delmonico's but now the name of this very famous, very elegant NYC restaurant pops up in two books I'm reading, This Side of Paradise by F. Scott Fitzgerald, and Appetite for America, the story of Fred Harvey, by Stephen Fried.

The question is: how could I possibly have missed Delmonico's with all these movie references:

Delmonico's

Fitzgerald uses Delmonico's in Chapter 5, "The Egotist Becomes a Personage," to emphasize the delta that exists between the fantastically rich and the impoverished state Amory was in by the end of the book. [His impoverished state was both financial and emotional, having lost the love of his live to someone else.]

Delmonico's is mentioned three times in Appetite for America but its main entry comes early in the book:
There, in 1830, the legendary Delmonico's morphed from just another coffee and pastry shop into the first full-service restaurant in the United States. New York, like other major American cities, had always had hotels that fed their guests from a set menu, as well as oyster bars, coffeehouses, and carts for quick, modest far. But the idea of eating in a full-service restaurant -- where patrons could order what they wanted from a broad and varied menu, à la carte -- was still novel.
Restaurants ahd existed in France for some time, but in British culture, which still heavily influenced life in America, dining in a public place was considered uncivilized, gauche. The success of Delmonico's in the 1830s heralded a new chapter in American dining. with its authentic French cuisine and choice American beef -- all served with its signature potatoes, grated into long strands and then oven baked with butter, Parmesan, and a touch of nutmeg -- Delmonico's became the country's gold standard for eating out.
I had not heard of Delmonico's. I assume there's a few New Yorkers who have have not (yet) heard of the Bakken.

Delmonico's

Friday, July 31, 2015; After Two Years, FRA Issues Final Ruling To/For Warren Buffett -- Phone It In -- Part IV

Like this will make any difference. LOL. FRA issues final ruling on preventing unattended Bakken crude oil trains from rolling downhill into Canadian towns. The ruling: phone it in.

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As If

Reuters/Rigzone is reporting: OPEC suggests price stability.
OPEC expects increasing oil demand to prevent a further fall in prices and sees a more balanced market in 2016, its secretary-general said on Thursday, the latest sign the group is sticking to its policy of defending market share.
Oil has dropped about 15 percent this month and halved in value in the past year but neither OPEC nor Russia, the world's top producer, have cut output to support prices, hoping cheaper oil will hit U.S. shale and other rival sources. "I would not expect they (prices) are going to fall because demand is growing," OPEC Secretary-General Abdullah al-Badri told reporters in Moscow. OPEC pumps around 40 percent of global oil production.
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Highway Song, Blackfoot

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The Race Is On

Electricity from natural gas surpasses coal for first time, but just for one month. From EIA.

Friday, July 31, 2015 -- Part III

 Updates

August 1, 2015: the wing has arrived at a French facility The linked story is dated August 1, 2015, but no time-stamp was placed.

Original Post
 
Is it just me or does it seem we are being slow-rolled on the investigation of that piece of wing found off Madagascar (Reunion Island), thought to be part of a Boeing 777? Only one Boeing 777 has ever been lost. This morning, a news story on the radio reported that the wing part is being flown to some military installation where it will be studied.

Call me naive, but you can't tell me that Boeing couldn't have had a team on the ground by now, and verified "yes/no" it was part of a Boeing 777?

This seems to be dragging out much longer than seems reasonable.

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Lost Decade

From AEIdeas: Lost Decade? The US is about to have its first 10-year period since World War II without at least one year of 3% growth. [Another reason, no doubt, the Obama administration decided a few months ago to revise the formula for calculating the nation's GDP.] This will be the legacy President Obama leaves us. 

If you read the Bloomberg article, which I doubt any will do, just remember that President Obama presided over the second lost decade. (The first lost decade, 1998 - 2008; the second lost decade, 2008 - present).
`This has been a uniquely slow period of growth that's delivered very little for low- and middle-income households,'' said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities in Washington and former chief economist for Vice President Joe Biden. ``We need to grow faster and more equitably.'' 
The last time America expanded at 3 percent-plus for the year was 2005, according to Commerce data.  That means the nation is on track to miss such growth for an entire decade, a first in the post-World War II era. Why?
Notice the words that were not seen in the linked article: TrainWreck, ObamaCare, Keystone, wind energy, solar energy, Solyndra, trillion-dollar stimulus, Fed rate.

Notice the phrase in the linked article: " ... a uniquely slow period of growth." Unique = one.

And this phrase: "... that's delivered very little for low- and middle-income households." Very little? How about nothing?

At the same that story was being read, Reuters reported that GE may ship $10 billion in work overseas as U.S. trade bank languishes. Not much more needs to be said. 

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Native Americans Didn't Read The Act Either

NativeAmericans on the hook for big fine from US government for "avoiding" OabamaCare.

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American Pie, Don McLean

Friday, July 31, 2015 -- Part II

This is not an investment site.

This is a huge day for earnings releases by energy companies. I won't get to all of them very quickly. Eventually they will all be posted.

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Enbridge

But let's start with some great news: Enbridge beats 13 cents and reaffirms FY 15 earnings. Reuters says Enbridge's profit "rises as shipments increase."
Canada's largest pipeline company, reported a higher-than-expected rise in quarterly adjusted profit, helped by increased throughput as producers moved more oil by pipes than on rail.
The company, whose Mainline system moves the bulk of Canadian crude exports to the United States, added further capacity over the last 12 months to meet demand.
Mainline shipped an average of 2.07 million barrels per day (bpd) in the second quarter ended June 30, compared with 1.97 million bpd a year earlier.
The company, which has been shielded from a slump in global crude prices because of its fee-based contracts, is currently in the midst of a C$44 billion growth program to fund new projects.
Bloomberg, sounding a lot like The Dickinson Press reports that Enbridge's profit declined 24% amid rising capacity.
Enbridge Inc., Canada’s largest pipeline company, said second-quarter profit fell as the downturn in the energy industry affected how much oil and natural gas the company processed and shipped.
Net income was C$577 million ($443 million), or 67 cents a share, compared with C$756 million, or 91 cents, a year earlier, the Calgary-based company said in a statement on Marketwire Friday. Excluding one-time items, per-share profit was 60 cents, higher than the 47-cent average of 12 analysts’ estimates compiled by Bloomberg.
Enbridge’s earnings were weighed down by the impact on its customers of lower oil prices. West Texas Intermediate, the U.S. benchmark, averaged $57.95 in the second quarter, down 44 percent from a year earlier, according to Bloomberg data.
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 COP

Some more great news. COP

Bloomberg/Rigzone is reporting that COP, the third largest energy producer in the US, reported better-than-expected results.
Excluding certain items, Houston-based ConocoPhillips had a profit of 7 cents a share, which was 3 cents higher than the average of 21 analyst estimates compiled by Bloomberg. Production that was the equivalent of 1.595 million barrels of oil a day in the second quarter was the same as a year earlier.
The company can maintain its current rate of production “for a long period of time” if spending is cut to as low as $8 billion, Chief Executive Officer Ryan Lance told analysts and investors Thursday on a conference call.
“They are, like everybody else in the industry, achieving more efficiencies,” Pavel Molchanov, an analyst at Raymond James in Houston, who rates the shares the equivalent of a hold and owns none, said by phone. “They’re getting cost savings from their oilfield service suppliers. That’s why they’re able to keep production the same.
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Exxon

I'll get back to XOM later, but this helps put the Bakken into perspective.

Note the last paragraph in this short Bloomberg article:
Even as Tillerson cut spending and re-evaluated whether some multi-billion dollar projects make economic sense with oil around $50 a barrel, the company has discovered a field off the coast of Guyana that the government said may hold the equivalent of more than 700 million barrels of crude. Such a prize would be worth about $40 billion at current oil prices. 
700 million bbls total? And XOM is counting on that to save them? The Bakken, at 1 million bopd, produces 365 million bbls in one year and more than that 700 million in less than two years. And Bentek predicted several years ago, that unfettered, the Bakken would produce 2.2 million bopd, or more than the 700 million bbls in one year.

Friday, July 31, 2015

Active rigs:


7/31/201507/31/201407/31/201307/31/201207/31/2011
Active Rigs73193180208184

It appears it was on July 24, 2015, active rigs in North Dakota jumped from 70 to 73 (after hitting a post-boom low of 68 some days earlier), and since July 24, the number of active rigs (73) has not changed. This is the longest period of time when the number of rigs did not move at least one rig up or down, to the best of my recall.

RBN Energy: making propylene from natural gas.
A proposed BASF plant in Freeport, TX - that would make propylene from natural gas – is expected to be the subject of a final investment decision in 2016. If the plant is built it will have a similar purpose to another 6 Gulf Coast plants being built or planned in the next few years to make propylene from propane. All these plants are designed to make up for lower propylene output from U.S. petrochemical steam crackers using ethane, which yields less propylene from the cracking process. Today we discuss why using natural gas as a feedstock instead of propane might make sense.
There’s an awful lot of new petrochemical infrastructure being built along the Gulf Coast these days – most of it designed to process abundant supplies of natural gas liquids (NGLs) extracted from rich gas. Our latest Drill Down report “It’s Not Supposed To Be That Way” details 10 expansion and new capacity projects for petrochemical steam crackers. Those new facilities will mostly use ethane feedstock to produce ethylene. Our “Son of a PDH Man” series detailed six new plants along the Gulf Coast being built to produce “on-purpose” propylene by propane dehydrogenation (PDH).
There are other petchem plants being developed to use natural gas as a feedstock to produce petrochemicals.  We have documented more than a dozen methanol mega-projects in various stages of planning, design and construction, most of them along the Gulf Coast that (if they are all built) could increase US methanol production capacity more than 10-fold and consume as much as 2.4 Bcf/d of natural gas feedstock (see Skyrockets in Flight). Another chemical derived from natural gas is ammonia – that is mostly used as fertilizer and is now being manufactured again in the U.S. for the first time in years (see Fertile Prospects for Natural Gas).
We have also posted blogs on plans by SASOL and Shell to build two huge plants converting natural gas to liquids (GTL) in Louisiana (see Jumping Jack Gas) – both of those projects have subsequently been put on hold in the wake of lower oil prices. This time we take a closer look at a project proposal that advanced a step in March of this year when BASF selected Freeport, TX as the site for a new world-scale methane-to-propylene plant. The BASF plant – the first of its type in the U.S. would produce 475 thousand metric tons per year of propylene – subject to a final investment decision (FID) by BASF in 2016.

Thursday, July 30, 2015

Saudi Arabia Begins Buying New Patriot Missiles From The US -- July 30, 2015

This is where  I track Mideast geo-politics in light of the slump in oil prices which I date from October, 2014.

The Weekly Standard reports that Saudi Arabia is requesting more missiles from the US:
Just two weeks after Western nations and Tehran struck a deal to limit Iran’s nuclear program, the Pentagon says Saudi Arabia wants to buy 600 new Patriot missile interceptors.
This “$5 billion-plus purchase is likely just the first of many more as America’s Middle Eastern allies arm themselves in response to the nuclear deal, which would lift Iran’s conventional-arms embargo sanctions in five years and sanctions on long-range missile projects in eight.”
Turkey, meanwhile, is shopping for its antimissile defenses in China.
So one immediate consequence of the deal is … an arms race.
Prior to all this, Saudi's budget was based on "$100-oil." Now that the US is no longer responsible for Saudi's security (the Obama Doctrine), something tells me that Saudi is about ready to quit giving away its oil for $50/bbl. 

XTO Donates $5 Million For Affordable Housing For Teachers, Police, In Three Bakken Communities

The Dickinson Press is reporting:
XTO Energy announced Monday a $5 million donation that will help provide affordable housing for teachers, police and other essential personnel in three of the state’s busiest oil communities.  

The oil company’s contribution to North Dakota’s Housing Incentive Fund will support four housing projects in Williston, Watford City and Killdeer. Half of the 287 multi-family units are targeted for low-income residents or employees of cities, counties, medical facilities, school districts or law enforcement.
XTO, a subsidiary of ExxonMobil with more than 100 employees in North Dakota, selected which housing projects would receive the funds.
XTO is now the largest contributor to the Housing Incentive Fund, a program created in the 2011 legislative session that provides low-cost financing to developers of affordable multi-family housing. Individuals and businesses who contribute to the fund receive a dollar-for-dollar state income tax credit.
Some readers are waiting for the FPL, one of the largest renewable energy providers in the state, to make a contribution. 

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He's Back

Brian Williams will join MSNBC as a breaking news anchor. He will, no doubt, add some credibility to the network.

Two (2) New Permits -- North Dakota -- July 30, 2015

Wells coming off the confidential list Friday:
  • 24158, 954, Whiting, Pronghorn Federal 11-15PH, Park, Three Forks, 40 stages, 5.5 million lbs all sand, t2/15; cum 40K 5/15;
  • 24159, 1,195 Whiting, Pronghorn Federal 14-10PH, Park, Three Forks, 40 stages, 5.3 million lbs all sand, t2/15; cum 42K 5/15;
  • 28524, 315, EOG, Parshall 151-1608H, Parshall, 40 stages, 8 million lbs sand, t2/15; cum 66K 5/15;
  • 29492, drl, XTO, Rita 44X-34G, Tobacco Garden, no production data,
  • 29613, drl, WPX,Olive Mae 7-8-9HX, Van Hook, no production data,
  • 29972, drl/NC, Enerplus, Quilt 149-93-04D-03H, Mandaree, no production data,
  • 30340, drl, XTO, Lundin 14X-33EXF, Siverston, no production data,  
Active rigs:


7/30/201507/30/201407/30/201307/30/201207/30/2011
Active Rigs73191181206183

The number of active rigs has held at exactly "73" for several days now. I wonder if the individual who inputs this data is on vacation?

Two (2) new permits --
  • Operator: SM Energy
  • Fields: Skabo (Divide), Frazier (Divide)
  • Comments:
Seven (7) producing wells completed:
  • 26221, 2,446, BR, Harley 41-2MBH, Blue Buttes, ICO, t6/15; cum --
  • 27518, 1,117, XTO, Guy Federal 24X-35F2, Grinnell, t7/15; cum --
  • 28664, 1,921, MRO, Kerkhoff 14-8H, Murphy Creek, 4 sections, t7/15; cum --
  • 28694, 1,799, MRO, Wehrung 150-99-13-23-5H, South Tobacco Garden, t7/14; cum 91K 5/15;
  • 28695, 1,639, MRO, Hazel 14-8H, Murphy Creek, t7/15; cum --
  • 28711, 2,124, BR, Harley 31-2TFH-R, Blue Buttes, ICO, t7/15; cum --
  • 29210, 2,900, MRO, Tony Lun USA 12-14TH, Reunion Bay, ICO, t6/15; cum -

Natural Gas Fill Rate -- July 30, 2015; "Grid Alert" In Texas Because Wind Energy Not Reaching Nameplate Capacity

NG fill rate (dynamic link): the numbers are wrong, the fill rate adds up to 51, not 52. There are a couple of addition / subtraction errors in the "Producing / Salt / Nonsalt" part of the table - at least two simple arithmetic errors.

In the East Region, stocks were 60 Bcf below the 5-year average following net injections of 42 Bcf.

I assume a lot of natural gas is being used to replace coal, and that there is a lot of demand for air conditioning today.

Note the arithmetic errors in this very simple spreadsheet -- maintained by the same government that predicts dire consequences of global warming 100 years from now. (It's possible these numbers are rounded from raw data resulting in the errors.)


**************************************
Grid Alert In Texas

By the way, there's a "grid alert" in north Texas today. Folks are being asked to minimize use of electricity today; the grid is having trouble keeping up .... and part of the problem --- the wind is not blowing hard enough to for turbines to reach nameplate capacity. By the time the backup natural gas / coal power plants are ramped up, the "grid alert" will be over.

Thursday, July 20, 2015 -- Part IV

This is not an investment site.

Yet to report:
EEP: some time today
HK: press release here

**********************************
I'm Confused

COP beats by 3 cents.

This is a screenshot of a Bloomberg headline, but the link is broken is Bloomberg writing their stories before the story is known?):
So, that Bloomberg headline says very clearly that COP reports better-than-expected profit, but then the AP reports that COP reported a loss in 2Q15. 

But it is confusing. The AP says ConocoPhillips lost $179 million in the second quarter, but reported that earnings came to 7 cents/share. Whatever.

From a Seeking Alpha contributor:
ConocoPhillips is among the first of the big oil companies to release second quarter earnings. ConocoPhillips said today it had second quarter revenues of $8.7 billion, which was 41% less than the $14.7 billion the company reported in the second quarter of fiscal 2014.
ConocoPhillips had a 2Q15 net loss of $179 million after squeezing out a profit of $272 million in 1Q15 and $2.1 billion in the year ago quarter. On a per share basis, ConocoPhillips reported a net loss of $0.15 per share, which compares against a profit of $0.22 per share in the previous quarter and a profit of $1.67 per share in 2Q14.
On an adjusted basis, ConocoPhillips pulled in $0.07 per share, which was significantly lower than last year's $1.61 per share, but the company beat the analyst consensus estimate of $0.05 per share.
***************************
There Must Be A Story Here

Zacks is reporting:
Anadarko Petroleum Corporation reported a second-quarter 2015 adjusted earnings of 1 cent per share. The Zacks Consensus Estimate was at a loss of 54 cents. This amounted to a positive earnings surprise of 101.9%. In the second quarter of 2014, the company had reported earnings of $1.32 per share.
************************
Okay, Not So Bad

Carbo Ceramics: reports Q2 (Jun) loss of $0.41 per share, excluding $7.6 million, or $0.33 per share, of after-tax costs primarily associated with slowing and idling production, $0.27 better than the Capital IQ Consensus Estimate of ($0.68); revenues fell 58.5% year/year to $73.3 mln vs the $70.37 mln consensus.

*************************
Nice

Helmerich & Payne beats by $0.13, beats on revs: Reports Q3 (Jun) earnings of $0.27 per share, excluding non-recurring items, $0.13 better than the Capital IQ Consensus Estimate of $0.14; revenues fell 30.7% year/year to $659.7 mln vs the $607.25 mln consensus.

***********************
OXY

Occidental Petro misses by $0.01, misses on revs : Reports Q2 (Jun) adj. earnings of $0.21 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.22; revenues fell 32.4% year/year to $3.47 bln vs the $3.59 bln consensus. From the press release:
"Our second quarter production increased to 658,000 BOE per day from last year's 580,000 BOE per day, an increase of 13 percent with 78 percent of the increase from oil. The increase was led by Permian Resources, which delivered a 51 percent increase to 109,000 BOE per day, of which oil production grew by 31,000 barrels a day. Operating costs in the U.S. were down to $13 per BOE from $14.50 in 2014. Our second quarter capital was about $250 million lower than the first quarter and over 25 percent lower than the same period last year. Higher production volumes, improved well performance in the Permian, and higher product prices resulted in an increase of about $400 million in operating cash flow before working capital compared to the first quarter.
************************
Valero

Valero beats on earnings. Earnings per share from continuing operations came in at $2.66, above the Zacks Consensus Estimate of $2.41

Wow, Natural Gas Kills Nukes -- July 30, 2015, Part III

In addition to the war on coal, there is also the war on nukes. And in both cases, natural gas seems to be winning. Crain's is reporting:
Looks like Exelon's Quad Cities nuclear plant is a goner come September.
Chris Crane, CEO of the Chicago-based utility giant, which also is the largest nuclear plant operator in the country, made clear on a conference call with analysts today that he doesn't see a way to keep money-losing Quad Cities open in the absence of a state law to charge ratepayers throughout Illinois more to bolster revenues at Exelon's nukes. Exelon says that three of its six Illinois plants are losing money as wholesale power prices remain historically low due in large part to the low cost of natural gas.
Exelon has established September as the time it must decide the future of Quad Cities, and an anticipated revenue windfall for Exelon's nukes courtesy of a regional power-plant auction set for next month almost certainly won't be enough, Crane said.
That auction, conducted by regional grid operator PJM Interconnection to set the price of “capacity” paid by all utility customers to qualifying power plants, is expected to materially hike electricity rates beginning in June 2018, as well as revenues for big power generators like Exelon.
PJM has changed the rules of the auction to virtually ensure that companies will get paid more and energy prices for customers will rise. Exelon's Illinois nukes are in line to see hundreds of millions in additional revenue beginning in mid-2018 from the changes.
There are so many story lines in that article. Much, much more at the link. Times are a'changing. 

A Passing Fad -- July 30, 2015

 From The Los Angeles Times today, a passing fad?

Tesla sold 8,950 cars in the US during the first six months of this year -- holy hot car, Batman -- the goal was to deliver 55,000 cars this year, wasn't it? -- down 1.6% from the same period a year earlier.
Tesla deliveries are falling during a year when auto industry sales have risen 4.4% and are on track to have their best showing since 2001.

Analysts say the Tesla rebate program is basically a cash-back incentive meant to boost business at a time when Tesla could be reaching its saturation point in the luxury car market.

"It signals that the first segment of consumers, the early adopters willing to pay a premium for an electric vehicl, may be coming to an end, or is slwoing down at least."

With regard to the rebate: "Money isn't that big a deal to [the ultra rich]. All the people who really wanted a Tesla have one, and no one else is really interested in buying one."
That is pretty much the definition of a fad.

And that was in The Los Angeles Times.

***************************
Miscellaneous
 
Tesla is now offering rebates. Previously reported.

In addition, some folks in California wonder why the state gives rebates back to the ultra-rich who buy the luxury cars. Bloomberg is reporting:
California’s incentives to purchase electric vehicles are under attack, as data shows most of the money goes to consumers who earn twice the national average yet collect cash rebates on Tesla Motors Inc.’s luxury models.
“It’s hard for the average Californian to understand why someone buying a $100,000 car should get a (state) rebate,” said California state Senator Ted Gaines, a Republican who has proposed eliminating rebates on cars that cost more than $40,000.
With almost a fifth of California payments applied to Tesla vehicles priced higher than $71,000, its regulators also are drafting rules to ration incentives based on income.
While the state accounts for 40 percent of the U.S. plug-in market and has doled out more incentive cash than any other, such rebates are being scrutinized from Washington to Georgia.
The incentives are intended to rid the roads of gas-guzzling vehicles that spew carbon pollution by making electric cars more more affordable to a broad range of consumers. Surveys indicate that 77 percent of buyers in California earn more than $100,000 a year.
Like the government (GDP) and NOAA (global warming), could Tesla be fudging their data or is it simply analysts misreading the numbers? International Business Times is reporting that Tesla's 2015 "delivery number" included deliveries made in 2014. 
In the few days since Tesla Motors Inc. (TSLA) said it delivered a record number of Model S luxury electric cars in the first three months of the year, investors have added 6.41 percent to the company’s share price. But the record first quarter deliveries includes 1,400 cars that were delayed in December due to unforeseen circumstances.
On Friday, Tesla said it delivered 10,030 cars to its customers in the first three months of the year, a 55 percent increase from the same period last year. But 1,400 of those deliveries could have taken place in December, according to a Feb. 11 letter to shareholders.
“Delivering those cars was physically impossible due to a combination of customers being on vacation, severe winter weather and shipping problems (with actual ships),” the letter signed by CEO Elon Musk and Chief Financial Officer Deepak Ahuja said.
******************************
Rolling Over

A great example of a magazine unafraid to take on any subject ... except itself. Rolling Stone declined to be interviewed for this story.

Thursday, July 30, 2015 -- Part I

Updates

July 31, 2015: from Reuters --
Next Friday's jobs data is expected to show the U.S. economy created 225,000 new jobs in July, just a tad more than in June, what was deemed a fairly disappointing report, according to economists polled by Reuters. The unemployment rate is expected to hold steady at 5.3 percent.
Later, 12:47 p.m. Central time: remember, the US changed the formula for calculating the GDP because of persistently "low numbers." I can't make this stuff up. 
The way some parts of U.S. gross domestic product are calculated are about to change in the wake of the debate over persistently depressed first-quarter growth.
In a blog post published Friday, the Bureau of Economic Analysis listed a series of alterations it will make in seasonally adjusting data used to calculate economic growth. The changes will be implemented with the release of the initial second-quarter GDP estimate on July 30, the BEA said.
Although the agency adjusts its figures for seasonal variations, growth in any given first quarter still tends to be weaker than in the remaining three, economists have found, a sign there may be some bias in the data. It’s a phenomenon economists call “residual seasonality.”
The Obama administration will give the mainstream media any number they want. Apparently it didn't work as planned: the 1Q15 GDP when revised revealed a slight contraction in the economy. Maybe the revision of the revision hasn't been completed.
 
Original Post

Yesterday, I wrote: Second, the rush to EVs seems to have peaked, another passing fad. Today, The Los Angeles Times confirms: EVs seem to have peaked, another passing fad. Tesla offering $2.000 credit. Hope to lure luxury car buyers. Really? With a $2,000 credit for a $160,000 car? Okay. The Times notes that Tesla "deliveries" have decreased this past year while overall car sales have increased. Tesla sold 8,950 cars in the US during the first six months of this year -- holy hot car, Batman -- the goal was to deliver 55,000 cars this year, wasn't it? -- down 1.6% from the same period a year earlier.

24/7 Wall Street headline: SolarCity posts big loss, forecasts bigger loss next quarter. Wow.

GDP: 2.4%. The Fed can now increase "the interest rate" to keep the economy from overheating.

But now the AP is reporting that the US economy grew more slowly over the past three years than the Obama administration had previously reported. Anyone surprised? Coming from the Obama administration? LOL.The economy expanded at just a 2 percent annual rate from 2012 through 2014, down from a previous estimate of 2.3 percent. Nearly all the weaker-than-expected growth occurred in 2013, when the government now says the economy expanded just 1.5 percent, much less than its previous 2.2 percent estimate. I guess now that the Obama administration is coming to an end, it's safe to start reporting "the truth." But only some of the truth, I suppose. The worse expansion since WWII was even worse than originally reported.

Reuters reports that jobless claims increase, but "still near" cycle lows. Actually, the number surges, up 12,000. The four-week average fell 3,750 (due to last week's anomalous report) to 274,750. 

Active rigs in North Dakota:


7/30/201507/30/201407/30/201307/30/201207/30/2011
Active Rigs73191181206183

The number of active rigs in North Dakota has remained at 73 for quite some time now; one wonders if the person in charge of updating active rigs is on vacation.

RBN Energy: the physical-financial relationship behind the US natural gas benchmark.
The set up of the physical delivery mechanism at Henry Hub has successfully met all of these criteria. With its many interconnects, ample receipt and delivery capacity, proximity to gas production, access to long-haul takeaway pipes that reach demand markets and trading structures, Henry has stood the test of time over the past 25 years.
Given the importance of the link between the physical and futures market, the challenge for Henry Hub today and going forward is the drastic changes now underway in the physical market. Offshore gas production volumes coming into Henry from the Gulf of Mexico have declined, in turn reducing physical flows at the Hub.
And, Henry is fast turning from a supply point to a demand-driven hub that will redistribute Marcellus/Utica supply to Gulf Coast LNG export terminals and other new demand facilities in the region. To understand these changes and how they could impact the futures contract, we need to understand what truly goes on in the physical market at Henry Hub and how it maintains its liquidity. Next time, we’ll dive into interconnect capacities and pipeline flows through Henry.

Wednesday, July 29, 2015

Oasis Proposes To Put Nine (9) Wells Inside City Limits, East Side Of Williston -- Juy 29, 2015

In the NDIC August, 2015, hearing dockets, Oasis proposes to place up to nine wells on the east side of Williston:




One of my dad's best friends lived in this area. He would have been quite excited to have seen this come to fruition. Wow, there were a lot of great men and women from the greatest generation in Williston when I was growing up.

Notice the wells that already exist inside the city limits. Williston will give Tioga a run for it's "Oil Capital of North Dakota" moniker.

Music video

How A Maze Of Pipelines Saved The Country's Largest Shale Play -- Bloomberg, July 29, 2015

Bloomberg is reporting:
(Bloomberg) -- To understand why U.S. oil production is so resilient, it helps to consider the maze of pipelines running out of Midland, Texas.
New lines have relieved a chokepoint in America’s biggest oil-producing area. A massive supply glut had forced producers to offer discounts of more than $20 a barrel below the U.S. benchmark last year. This month, prices have been at an average premium of 78 cents, the most in records going back to 1991.
Magellan Midstream Partners LP, Plains All American Pipeline LP and Sunoco Logistics Partners LP finished work in the past year that added more than 750,000 barrels a day of capacity, while output grew by only 400,000. With an outlet to Gulf Coast refineries, the Permian has been the only major U.S. shale region to keep growing as prices dropped by more than half to less than $50.
“Putting in those pipelines and connecting the Permian to the Gulf directly allowed that premium to develop,” John Auers, Dallas-based executive vice president at Turner Mason & Co., an energy consulting firm, said by phone on July 27. “When you talk about these price levels, $5 to $10 is the difference between putting rigs back to work or shutting down.
Much, much more at the link. Archived.

Crying "Uncle"? -- Saudi Arabia To Cut Production At End Of Summer -- Sources, WSJ -- July 29, 2015

This was just sent to me by a reader. I wouldn't have noticed this article until tomorrow morning. Huge "thank you" to the reader. The Wall Street Journal is reporting:
The world’s top crude-oil exporter, Saudi Arabia, is planning to pull back from record-high levels of production at the end of the summer when domestic energy demand subsides, according to people with knowledge of the matter.
The reduction could begin as soon as September and would amount to about 200,000 to 300,000 barrels a day, bringing production to about 10.3 million barrels a day, the people said. Saudi Arabia told the Organization of the Petroleum Exporting Countries that it produced 10.56 million barrels a day in June, a record high.
“It is purely based on the [domestic] demand situation,” one of the people said, adding that “production is likely to hover around” 10 million barrels until the end of the year.
It's not a huge cut (250,000 bopd) but a) the headline; and, b) remember, Saudi Arabia has two new refineries, requiring about 800,000 bopd (together). For my purposes, I round that to one million bopd.

Compare the statement: "... production is likely to hover around" 10 million bopd, with the graph at this link and then recall that the Saudis announced a $35-billion, 5-program back in 2012 to increase oil production, and all it got them in the most recent reporting period was a 1% increase month-over-month.

But most interesting is what was not said: "production is likely to hove around 10 million bbls until the end of the year" ... and then what?

***************************

If Saudi cuts back, who's gonna fill their shoes?

Who's Gonna Fill Their Shoes, George Jones

QEP Proposes Up To 24 Wells In Each Of Several Drilling Units In Deep Water Creek Bay -- July 29, 2015

Deep Water Creek Bay

This is a moderately sized field ("moderate" for the Bakken), about the size of two townships. Currently (July 30,2015) it is composed of 81 sections, about half of which are under the river or nearly under the river. It lies entirely within the Fort Berthold Indian Reservation.

It is bordered on the north by the very prolific Parshall ("owned" by EOG); by Van Hook and Heart Butte on the west; not much else to the immediate south or to the east of this field.

Interestingly enough, section 2-150-90 which should be in Deep Water Creek Bay is in the Parshall oil field.

It appears the western half of this oil field will be most productive; the eastern half appears to be a lot less promising.

**************************************
Permits

2015
31111,  conf, SHD,
31110,  conf, SHD,
31109, conf, SHD,

2014 (list is complete)
29570, conf, SHD,
29569, conf, SHD,
29568, SI/NC, SHD,
29567. drl, SHD,

2013 (list is complete)
None.

2012 (list is complete)
24421, 562, QEP, MHA 5-32-31H-150-90, t1/14; cum 93K 9/15;
24420, 792, QEP, MHA 2-32-31H-150-90, t2/13; cum 86K 9/15;
24419, 667, QEP, MHA 6-32-31H-150-9-, t1/14; cum 117K 9/15;
24078, PNC, MRO, Vorwerk USA 24-34H,
22785, 810, MRO, Thomas Miller USA 21-28H, t8/12; cum 91K 9/15;
22718, 963, QEP, MHA 5-29-30H-150-99, t8/12; cum 132K 9/15;
22557, PNC, MRO, Mink USA 11-15H,
22489, 1,181, MRO, Thomas Miller USA 11-28H, t7/12; cum 169K 9/15;

Prior to
21853, 294, 106K 9/15
21852, 1,526, 160K 9/15
21824, 814, 86K 9/15
21765, 182, 106K 9/15
21764, 673, 101K9/15
21286, 246, 81K 9/15
21211, 1,026, 227K 9/15
21116, 952, 112K 9/15
21093, 878, 153K 9/15
21092, 436, 90K 9/15
21091, 499, 98K  9/15
20658, conf,
20494, 197, 108K 9/15
20454, 1,005, 202K 9/15
20291, 777, 246K 9/15
20290, 553, 256K 9/15
20289, 702, 276K 9/15
20284, loc,
20274, 1,253, 247K 9/15
20271, 592, 150K 9/15
19957, 1,379, 201K 9/15
19683, 766, 167K 9/15
19630, 916, 213K 9/15
19467, 617, 128K 9/15
19296, 2,388, 211K 9/15
18991, 1,053, 192K 9/15
18956, loc,
18930, PNC
18886, 1,456, 198K 9/15
18885, 1,101, 224K 9/15
18316, 1,197, 228K 9/15
18158, 780, 135K 9/15
17940, 1,217, 261K 9/15
17929, 546, 89K 9/15
17434, 880, 171K 9/15


*******************************
News

July 29, 2015: In the NDIC August, 2015, hearing dockets, this case:
  • 24381, QEP, Deep Water Creek Bay-Bakken, establish 2 1280-acre units, 24 wells on each; establish a 1120-acre unit, 24 wells the unit; establish a 960-acre unit, 24 wells on the unit; establish a 1600-acre units, 24 wells on the unit; 24 additional wells on each of four 1920-acre units, Dunn, McLean.
Two of the proposed drilling units in this case, the 960-acre unit, and the 1600-acre unit:


The expectation of the NDIC that if the request is approved, the operator will begin work sooner than later. [The graphic is not perfect; the dividing line between the two drilling units should split section 6 exactly in half, an east half and a west half.]

48 wells across four sections

NDIC Hearing Dockets, August 26 - 27, 2015

Disclaimer: these summaries are for my personal use only; you are free to read them; don't quote me on them; there will be typographical and factual errors.  If this is important to you go to the source. Link here. Highlights here.

Past dockets are archived here.

Note: a change in today's summary. I am not listing the "continued" cases.

Wednesday, August 26, 2015
9 pages -- half the number of pages seen during the boom

24367, Murex, Alkabo-Stonewall, redefine the field, Divide
24368, Hess, Davis Buttes-Bakken, redefine the field, Stark
24369, CLR, Beaver Creek-Bakken, redefine, Billings, Golden Valley,
24370, HRC, McGregory Buttes-Bakken, complete a specific well, Dunn
24371, Whiting, Moccasin Creek-Bakken, establish a 640-acre unit, Dunn
24372, Whiting, Twin Buttes-Bakkekn, establish a 1920-acre unit, 8 wells, Dunn
24373, Whiting, Twin Buttes-Bakken, establish a 2560-acre unit; 8 wells, Dunn
24374, Whiting, Twin Buttes-Bakken, establish a 5120-acre unit, 16 wells, Dunn
24375, Whiting, Twin Buttes-Bakken, establish a 1280-acre unit, 4 wells, Dunn
24376, Whiting, Twin Buttes-Bakken, establish a 1280-acre units, 4 wells, Dunn
24377, QEP, Van Hook and Heart Butte-Bakken, establish 2 overlapping 1280-acre units; establish 2 overlapping 1920-acre units; 1+ wells in each; Mountrail, Dunn
24378, QEP, Heart Butte and Mandaree-Bakken, establish 3 overlapping 1280-acre units, 1+ wells each, Mountrail, Dunn
24379, QEP, Heart Butte-Bakken, establish 8 overlapping 1280-acre units, 1+ wells in each, Dunn
24380, QEP, Heart Butte, Twin Buttes, and Moccasin Creek-Bakken, establish 7 overlapping stand-up 1280-acre units; 1+ wells in each, Dunn
24381, QEP, Deep Water Creek Bay-Bakken, establish 2 1280-acre units, 24 wells on each; establish a 1120-acre unit, 24 wells the unit; establish a 960-acre unit, 24 wells on the unit; establish a 1600-acre units, 24 wells on the unit; 24 additional wells on each of four 1920-acre units, Dunn, McLean
24382, Oasis, Todd and Catwalk-Bakken, establish a 1280-acre unit, 9 wells; establish a 1280-acre units, 3 wells; to establish a 2560-acre unit, 12 wells; establish 2 overlapping 2560-acre units, 2 wells on each, McKenzie, Williams
24383, Petro-Hunt, Keene-Bakken/Three Forks, define stratigraphic definition, McKenzie
24384, Hess, pooling,
24385, Hess, pooling,
24386, Lime Rock Resources III-A, Stanley-Bakken, 3 wells on each of two 640-acre units; 6 wells on an overlapping 1280-acre unit; 7 wells on a 1280-acre unit; 6 wells on each of two 1280-acre units; 5 wells on each of two 2560-acre units; Mountrail
24387, BR, Sand Creek-Bakken, 16 wells on a 2560-acre unit, McKenzie
24388, BR, pooling,
24389, HRC, commingling
24390, HRC, commingling
24391, HRC, commingling
24392, HRC, commingling
24393, HRC, commingling
24394, HRC, commingling
24395, HRC, commingling
24396, HRC, commingling
24397, QEP, commingling
24398, Whiting, Twin Buttes-Bakken, 4 wells on a 1280-acre unit, Dunn
24399, pooling,
24400, Oasis, SWD
24401, Oasis, SWD
Thursday, August 27, 2015
11 pages

24402, North Plains, Alexandria-Bakken, 8 wells on a 1280-acre units; Divide
24403, CLR, Barta-Bakken, redefine the field, Dunn, Billings
24404, CLR, Ukraina-Bakken, redefine the field, Dunn, Billings
24405, XTO, revoke a BR permit, Mcransom 1-8-31UTH-ULW, McKenzie
24406, XTO, complete the Maddy wells, McKenzie
24407, Statoil, Spring Creek-Bakken, redefine the field, McKenzie
24408, XPX, Heart Butte-Bakken, establish an overlapping 2560-acreunit; 1 well, Dunn
24409, WPX, Spotted Horn-Bakken, establish an overlapping 1280-acre unit, 14 wells, McKenzie
24410, EOG, Alger-Bakken, establish a 1280-acre unit, multiple wells, Mountrail
24411, Sinclair, Lone Butte-Bakken, establish a 1280-acre unit, 7 wells, McKenzie
24412, SHD, Deep Water Creek Bay and HEart Butte-Bakken, establish an overlapping 1920-acre unit, multiple wells; Dunn, McLean
24413, SHD, Deep Water Creek Bay-Bakken, establish an overlapping 1920-acre unt; multiple wells, Dunn, McLean
24414, SHD, Van Hook, Deep Water Creek Bay and Heart Butte-Bakken, establish an overlapping 4160-acre unit, fifteen wells, Dunn, McLean
24415, Sinclair, pooling
24416, Sinclair, risk penalty legalese,
24417, Liberty Resources, pooling,
24418, Liberty Resources, pooling
24419, Liberty Resources, pooling,
24420, Liberty Resources, pooling,
24421, Liberty Resources, pooling,
24422, Liberty Resources, pooling,
24423, Liberty Resources, pooling,
24424, EOG, pooling,
24425, EOG, pooling,
24426, EOG, pooling,
24427, CLR, Elm Tree-Bakken, 20 wells on an existing overlapping 2560-acre unit, McKenzie
24428, CLR, Antelope-Sanish, 13 wells on an existing 1280-acre unit, McKenzie
24429, CLR, pooling,
24430, CLR, pooling,
24431, CLR, pooling,
24432, CLR, pooling,
24433, CLR, commingling
24434, CLR, commingling
24435, CLR, commingling
24436, WPX, pooling,
24437, WPX, flaring,
24438, Statoil, commingling
24439, Statoil, commingling
24440, Enduro, commingling
24441, XTO, commingling
24442, Hanna, SWD
24443, Hanna, SWD

Whiting To Go With Six Drilling Rigs In The Bakken -- July 29, 2015

Back on July 25, 2015, I counted nine (9) active rigs drilling Whiting-operated wells. Apparently Whiting plans to cut  the number of active rigs in the Bakken to six and in the Niobrara to two.

A couple of weeks ago, Whiting has raised its CAPEX for FY 2015 to 2.3 billion, but has revised it a bit, back to $2.15 billion.

I bet the change in the number of rigs will have no effect on production. Whiting's production in the Bakken will depend on any number of factors -- I bet I could come up with 12 factors if I had to -- and the number of rigs will be the least of their concerns. And think of all the money they save by having 6 rigs in the Bakken instead of 9. Smart operators.

6/8 * 2.15 billion = $1.6 billion CAPEX to be spent in North Dakota. By one company. I can live with that.

Record-Setting Stockpiles Of US Diesel -- July 29, 2015

Platts is reporting record-setting stockpiles of diesel:
US ultra-low-sulfur diesel stocks rose to a record high for the fourth straight week, as East Coast stocks also hit a record for the fifth straight week.
Total US stocks of ULSD rose about 2 million barrels in the week that ended Friday to 123.91 million barrels, the highest level since EIA began collecting the data in 2004.
US stocks have risen to a record each of the last four weeks, with most of the stock builds concentrated in the East Coast.
East Coast stocks of ULSD rose 2.32 million barrels to 41.02 million barrels, the highest ever. Stock builds in the East Coast also have set records in each of the last five weeks.
ULSD stocks typically build this time of year in the East Coast ahead of peak winter demand season, with stocks rising last year to a then-record 33.27 million barrels.

Eleven (11) New Permits, North Dakota -- July 29, 2015

Active rigs:


7/29/201507/29/201407/29/201307/29/201307/29/2013
Active Rigs73192179179179

Only one (1) well coming off the confidential list Thursday:
  • 29665, drl/NC, Newfield, Olson 152-96-30-31-11H, Westberg, producing,
Eleven (11) new permits:
  • Operators: CLR (6), Petro Harvester (3), Hess (2),
  • Fields: the six CLR permits for for Cedar Coulee wells; Petro Harvester permits are for wells in Portal oil field;
  • Comments:
Five (5) producing wells completed:
  • 27516, 647, XTO, Guy Federal 24X-35F, Grinnell, t6/15; cum --
  • 27514, 1,316, XTO, Guy Federal 24X-35E, Grinnell, t6/15; cum --
  • 27515, 2,178, XTO, Guy Federal 24-35A, Grinnell, t7/15; cum --
  • 27517, 2,832, XTO, Guy Federal 24X-35B, Grinnell, t7/15; cum --
  • 29393, 2,240, QEP, TAT 5-35-26BH, Grail, t7/15; cum -- 

August Dockets, August, 2015 -- A Quick Run-Through

Disclaimer: these summaries are for my personal use only; you are free to read them; don't quote me on them; there will be typographical and factual errors.  If this is important to you go to the source. Link here.

Past dockets are archived here.

Highlights. These are just the cases that caught my eye the first time through. This was done very, very quickly; it was not proofread. There will be factual and typographical errors. The full summary is here.

For newbies, these are "case numbers," not permit numbers. 

Wednesday, August 26, 2015
9 pages -- half the number of pages seen during the boom

24373, Whiting, Twin Buttes-Bakken, establish a 2560-acre unit; 8 wells, Dunn
24374, Whiting, Twin Buttes-Bakken, establish a 5120-acre unit, 16 wells, Dunn
24375, Whiting, Twin Buttes-Bakken, establish a 1280-acre unit, 4 wells, Dunn
24376, Whiting, Twin Buttes-Bakken, establish a 1280-acre units, 4 wells, Dunn
24377, QEP, Van Hook and Heart Butte-Bakken, establish 2 overlapping 1280-acre units; establish 2 overlapping 1920-acre units; Mountrail, Dunn
24378, QEP, Heart Butte and Mandaree-Bakken, establish 3 overlapping 1280-acre units, Mountrail, Dunn
24379, QEP, Heart Butte-Bakken, establish 8 overlapping 1280-acre units, Dunn
24380, QEP, Heart Butte, Twin Buttes, and Moccasin Creek-Bakken, establish 7 overlapping stand-up 1280-acre units; Dunn
24381, QEP, Deep Water Creek Bay-Bakken, establish 2 1280-acre units, 24 wells on each; establish a 1120-acre unit, 24 wells the unit; establish a 960-acre unit, 24 wells on the unit; establish a 1600-acre units, 24 wells on the unit; 24 additional wells on each of four 1920-acre units, Dunn, McLean
24382, Oasis, Todd and Catwalk-Bakken, establish a 1280-acre unit, 9 wells; establish a 1280-acre units, 3 wells; to establish a 2560-acre unit, 12 wells; establish 2 overlapping 2560-acre units, 2 wells on each, McKenzie, Williams
24386, Lime Rock Resources III-A, Stanley-Bakken, 3 wells on each of two 640-acre units; 6 wells on an overlapping 1280-acre unit; 7 wells on a 1280-acre unit; 6 wells on each of two 1280-acre units; 5 wells on each of two 2560-acre units; Mountrail
24387, BR, Sand Creek-Bakken, 16 wells on a 2560-acre unit, McKenzie

Thursday, August 27, 2015
11 pages

24402, North Plains, Alexandria-Bakken, 8 wells on a 1280-acre units; Divide
24409, WPX, Spotted Horn-Bakken, establish an overlapping 1280-acre unit, 14 wells, McKenzie
24411, Sinclair, Lone Butte-Bakken, establish a 1280-acre unit, 7 wells, McKenzie
24428, CLR, Antelope-Sanish, 13 wells on an existing 1280-acre unit, McKenzie

Commentary On $5 Gasoline In California -- July 29, 2015

I think everyone is aware that California has unique gasoline requirements and that refineries from outside California do not refine oil to meet California's gasoline specifications. Some Asian refineries will bring "California" gasoline to the state when it is cost-effective, which appears to be about $4.50 at today's exchange rate.

I think one could argue that, for the most part, California's gasoline supply comes from in-state refineries.

Hold that thought.

Based on newspaper reports coming out California over the past ten years or so, it appears that Californians are no more inclined to build new refineries or expand capacity any more than the rest of the country (North Dakota is somewhat of an anomaly with its new Dickinson refinery).

At the same time, there was probably no need to think about new refineries in California because the Los Angeles Times has been reporting for the past decade that coal-powered vehicles would become the norm in California, and that the few Californians driving gasoline-powered cars would be downsizing to compact and sub-compact cars. It all made any argument for more California refineries moot.

But a funny thing happened on the way to the forum.

First of all, Californians are driving more than ever.

Second, the rush to EVs seems to have peaked, another passing fad.

Third, gas-guzzling SUVs and big Ford pick-up trucks are back in vogue.

Hold all those thoughts.

Everyone, by now is quite aware that California, especially southern California, is being hit with $5 gasoline and in a news report of July 17, 2015, it did not sound like things were going to turn around very quickly.

With a crude oil glut and oil prices down to $47; with gasoline across the rest of the nation as low as $2.59, folks in California are understandably wondering why their gasoline is priced at $4.59 for regular unleaded (premium will be a lot more expensive due to the alkylate "shortage").

One of the explanations for the "shortage" of gasoline in California is the explosion at the Exxon refinery in Torrance (south Los Angeles), which is operating at 20% capacity and will continue to do for quite some time (based on that July 17, 2015, story).

I was aware of a few other reasons in addition to the Exxon explosion, but it sure sounded like that was the main reason.

I'm not so sure any more. I did not notice this until this morning, in a graph I posted yesterday. I will explain what I'm talking about but see if you see the same thing I'm seeing:


Yes, gasoline stockpiles in California are at 10-year lows this year (red line), and the averages this year have been hugging the 10-year low. However, it was actually worse last year from week 15 through week 28 (or thereabouts). 

Maybe I'm reading too much into this, but if there are no new refineries being built in California, if Californians are driving more than ever, if EVs are a passing fad (at least not growing as fast as anticipated), if Ford is having record quarters with larger SUVs and larger F-150's --

If one looks at the wild swings in the 2014 stockpiles, one gets the feeling that the situation is somewhat chaotic. 

Again, maybe I'm over-reading this, but it certainly appears last year was worse than this year -- until the Exxon refinery explosion.  If that reading is accurate, one would assume that by 2018 the situation could be much, much worse. Certainly the $5-gasoline driving season will start earlier in the spring and last longer into the autumn all things continue to trend the way they are now.

One wonders if the new refineries in Saudi Arabia (about 1 million bbl daily capacity) will be optimized to produce "California-spec" gasoline.

Note: I often misread things. I often misread graphs. I could be completely way off on this. If this information is important to you, go to the source. Do not use this site to make any investment, financial, or transportation decisions.