Friday, August 28, 2015

Seven (7) New Permits; XTO Reports Two High-IP Wells -- North Dakota, August 28, 2015

Active rigs:

8/28/201508/28/201408/28/201308/28/201208/28/2011
Active Rigs76195181191199

Seven (7) new permits --
  • Operators: Hess (5), HCR (2)
  • Fields: Beaver Lodge (Williams), Antelope
  • Comments: 
Two (2) producing wells completed --
  • 30215, 2,622, XTO, Thompson 44X-20B, Blue Buttes, t8/15; cum --
  • 30217, 2,353, XTO, Thompson 44X-20A, Blue Buttes, t8/15; cum --

With An IP Of "5" This Well Turned Out To Be Pretty Good -- August 28, 2015

This is a South Red River B well in the southwest corner of North Dakota. It turned out to be a pretty good well, despite the IP and the fact the well was not stimulated:
  • 28264, 5, Denbury Onshore, CHSU 24-23NH 15, Cedar Hills, unitized, a South Red River B well, not fracked/not stimulated (form: "No stim treatments were performed."), drilling unit, 54,799 acres, KOP 8,790 feet; TD, 9,352 feet (lateral about one mile long), t8/14; cum 17K 6/15;
Previously NC/SI, Abraxas reported a nice well a while back:
28323, 917, Abraxas, Stenehjem 27-34-4H, North Fork, t12/14; cum 105K 11/14;
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21st Century Crime

Earlier this morning I happened to read an op-ed in the Los Angeles Times about the 20% increase in crime in the Los Angeles area over the past year or so. I forget the particulars. The usual list of reasons was provided.

I was reminded of that op-ed while reading a very, very long article in The New Yorker, "Class Notes," discussing "what really happens" when a school closes. It has to do with Jamaica High School in Queens, NYC, which closed in 2014. At one time, Jamaica High School was the largest high school in the United States. The article doesn't say (at least as far as I've read) when the school opened  but it says the school, as it exists "now," was designed in the 1920's so I assume it opened early in the 20th century.

In 2011, the NYC Department of Education announced that the school would be closed, citing persistent violence and a graduation rate of around fifty percent.

Early in the article, the writer, a graduate of Jamaica High School, writes:
[F]or much of its time, Jamaica was a gemstone of the city's public-education system.
In 1981, the schools chancellor, Frank Macchiarola, decided to take on the additional role of an interim high-school principal, in order to better appreciate the daily demands of school administration.
He chose Jamaica, and was roundly criticized for picking such an easy school to lead.
Four years later, the US Department of Education named it one of the  most outstanding public secondary schools in the nation. Alumni include Stephen Jay Gould (one of my "heroes"), Attorney General John Mitchell (one of RMN's "heroes" until things went badly), Representative Sheila Jackson Lee, Walter O'Malley, Paul Bowles and three winners of the Pulitzer Prize: Gunther Schuller, Art Buchwald, and Alan Dugan. Bob Beamon, who set a world record for the long jump in the 1968 Olympics, graduated with the class of 1965.
Sheila Jackson Lee, an alumnus,  is the U.S. Representative for Texas's 18th congressional district, serving since 1995.

Walter O'Malley, another alumnus, went to Jamaica High School from 1918 to 1920 before completing high school and graduating from Culver Academy. O'Malley brought professional baseball to the West Coast, owning the Brooklyn / Los Angeles Dodgers from 1950 to 1979.

It will be interesting to see if The New Yorker writer ruminates on how Jamaica High School went from one of the most outstanding public secondary schools in the nation to a school that needed to be closed due to persistent violence and a graduation rate of around fifty percent. If he does, it will be interesting under what mayor this occurred and maybe a bit of background of the chancellor and the leadership of the city's department of education.

ObamaCare Co-Op Failure(s) Compared To Solyndra -- August 28, 2015

It's funny how things turn out. This morning I posted a story I happened to come across in The Boston Globe about the huge health care premium increases scheduled for Massachusetts in 2016, after huge increases already in 2014 and 2015.  I didn't know if I really wanted to post it / link it but in the end decided to do so. Now, I get this link from Don: another ObamaCare co-op "bites the dust," this one in Harry Reid's backyard. Investors.com is reporting:
On Wednesday, the Nevada Health Co-Op announced that it will go out of business at the end of the year. This is the third out of the 23 ObamaCare-created nonprofit health plans to fail, but it isn't likely to be the last.
After getting $69.5 million in government-sponsored startup loans, Nevada's co-op saw enrollment come in far lower than expected, and claims costs far higher, resulting in a $15 million loss last year.
The co-op was seeing the same dismal results this year, making it impossible to provide "quality care at reasonable rates."
Democrats who designed ObamaCare created these nonprofit co-ops in the belief that they could provide price competition in ObamaCare exchanges. To get them off the ground, the federal government pumped more than $2.5 billion in startup loans and $355 million in solvency loans when things started to turn sour last year.
More:
Before calling it quits, Nevada's co-op was asking for hikes as high as 27.53%.
A recent audit found that enrollment in most of the state co-ops was significantly below expectations, and costs were far higher. All but one of the 23 co-ops lost money in 2014 — more than half saw losses that were higher than Nevada's.
Earlier this year, CoOpportunity — which served members in Iowa and Nebraska — ceased operations, and the Louisiana Health Cooperative announced it would close its doors at the end of the year. Tennessee's coop had to freeze enrollment this year amid mounting losses.
The three failed co-ops received a total of $310 million in federal startup and solvency loans. Overall, $2.9 billion in federal loans is at risk.
For perspective, Solyndra — the solar panel company that famously failed early in the Obama administration — cost taxpayers $500 million.
Anyone who doesn't think the current president will go down in history as the worst US president since WWII simply isn't paying attention. 

That Was Easy -- Federal Judge Blocks EPA's Water Rule -- August 28, 2015

Being reported everywhere, but this is from The Hill:
A federal judge in North Dakota acted late on Thursday to block the Obama administration’s controversial water pollution rule, hours before it was due to take effect.
Judge Ralph Erickson of the District Court for the District of North Dakota found that the 13 states suing to block the rule met the conditions necessary for a preliminary injunction, including that they would likely be harmed if courts didn't act and that they are likely to succeed when their underlying lawsuit against the rule is decided.
The decision is a major roadblock for the Environmental Protection Agency (EPA) and the Army Corps of Engineers, who were planning on Friday to begin enforcing the Waters of the United States rule, expanding federal jurisdiction over small waterways, like streams and wetlands. 
But the Obama administration says it will largely enforce the regulation as planned, arguing that the Thursday decision only applies to the 13 states that requested the injunction.
Those who snooze, lose.  The 13 states (sort of like the original 13 colonies): Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming.

Notable states that failed to join the original 13: Minnesota, Texas, California, Washington, Oregon, Florida, IowallinoisIndiana (think pig farmers who probably started this entire "mess"), Vermont, New Hampshire, and Maine.

"New Kind Of Storage Of Crude Oil In The Bakken" -- Not Really; Folks Are Simply Catching Up With Reality: DUCs -- August 28, 2015

This is cool. We've talked about this many, many times. Now it's being tweeted:
Wells underground in ND, TX & CO can be brought on line in few days are new kind of storage, says Dave Ernsberger.
Regular readers have known this for ... like forever....

Random Look At Source Of Oil Production In The US -- August 28, 2015

Updates

Later, 11:52 a.m. Central Time: the story in Oil & Gas Journal -- a fascinating article with timeline of hurricanes and tropical storms and how they affected oil production in the Gulf of Mexico, from 2005 to 2015. In 2005, for example, pre-Katrina, 1.5 million bopd; trough due to Katrina, 0.5 million bopd, returning to baseline of 1.3 million bopd through 2008. Hurricane Gustave dropped production to 0.3 million bopd, subsequently rebounding to 1.75 million bopd and then waxing and waning to current 1.5 million bopd today. Hurricane Ida (2009), TS Bonnie (2010), Tropical Storm Lee (2011), Hurricane (barely) Isaac (2012), and Tropical Storm Karen (2013) resulted in very little disruption. No production was affected during the 2014 (last year's) hurricane season.

Original Post
 
This little nugget helps me immensely -- see the EIA "energy cookie" below. I assume off-shore oil for the US comes from West Coast (problematic); East Coast ("none");  Gulf Coast (decreasing); and, Alaska (stable to decreasing). (Actually the data was easily retrievable elsewhere -- the EIA note today didn't tell anything we didn't already know, but it gave us a chance to look at the tea leaves going forward.)

Alaskan North Slope oil production is decreasing, at best stable. California -- the tea leaves suggest production is not going to increase significantly. At $45 oil, operators are circling the wagons to focus on only the best plays (the Bakken, the Permian, and the Eagle Ford).

So, when I put this all together, it looks like bulk of US oil production comes from the three shale plays and the Gulf of Mexico. There's not a lot of slack.

Now the EIA "energy cookie":
Hurricane-related risk to total U.S. crude oil and natural gas production has decreased over recent years as the share of total U.S. production originating in the Gulf of Mexico has declined sharply. In 2003, 27% of the nation's crude oil was produced in the Gulf of Mexico; by 2014, that share had declined to 16%. The Gulf of Mexico's share of natural gas production has also declined from a high of 26% in 1997 to 5% in 2014. --- EIA
If I did the math correctly, the US produces about 8.7 million bopd (2014).

The Bakken produces about 1 million bopd which works out to about 11% of total US production. Which isn't a whole less than the 16% that comes from the Gulf of Mexico.

The Bakken, it seems is sort of the Tesla in the oil and gas industry: from almost "0" in 2007 to over 10% of the nation's production some seven or eight years later.

For The Archives: Random Update On President Obama's Clean Power Program -- August 28, 2015

For the archives, the StarTribune is reporting that Minnesota and North Dakota must work together to meet President Obama's Clean Power Program.

If one get past the emotion and politics, this is an incredible opportunity for North Dakota.

Some data points:
  • states required to start cutting greenhouse gas emissions by 2022
  • states must comply by 2030
  • compliance standards vary from state to state
  • North Dakota: cut CO2 emissions by 40% from coal-fired generators (from projected 2020 levels)
  • Minnesota: a 27% drop (but Minnesota has a "cleaner energy mix" already)
  • details still being worked out
  • states have until 2018 to submit plans; otherwise EPA will step in and "help them"
  • North Dakota will get an opportunity to see how things might go in a case currently being appealed by Minnesota with regard to a Minnesota law that bans imports of "new" coal-based electricity (North Dakota won the first round in a lower federal court, but it is now before the Eighth US Circuit Court of Appeals)
As this plays out, there will be winners and losers, as there always are, but the Federal government is giving  us three years to sort out who the winners / losers might be.

It's buried in the article, but it appears that investment in wind farms in the short term is most problematic due to uncertainty in the new regulations. 

But this is where it gets very exciting. Look at the shift in the source of electricity production between 2004 and 2015. I think the oil and gas industry in North Dakota is likely to come out a winner when it's all said and done.

Random Note On Refined Products From Crude Oil -- August 28, 2015

I don't know if I interpreted this note correctly from a reader, but it appears he sent me an update of what refiners are getting from a barrel of oil, or what consumers are paying for barrel of oil after it's been refined. The figures come from the EIA.

From one barrel of crude oil, as an example:
  • 30%: 12.3 gallons of gasoline = $35.67
  • 19%: 8 gallons of jet fuel = $14
  • 23%: 9 gallons of diesel = $27
  • 22%: 8.5 gallons of fuel  oil = $21.25
Total, 94% = $97.92 of refined product per bbl of crude oil.

The other 6% is "petroleum coke" and "fuel gases."

Gasbuddy also provides a breakdown of refined products.  I assume the percent of refined products varies significantly based on many, many factors.

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Seeing Stars

I see Buzz Aldrin, age 85, is working on a master plan to colonize Mars by 2040. I assume Elon Musk will be joining the staff at the new Buzz Aldrin Space Institute, Florida Institute of Technology, as soon as he figures out how he can get the federal government to fund the entire institute.

Buzz says they will get to Mars using "cycling pathways." Bike paths to Mars.

The Whiting Obrigewitch Wells In Stark County

Original Post (production numbers are updated)
 
I see Whiting has a rig working in Bell oil field, Stark County.

Three Forks (Pronghorn Member) is often the way the payzone for these wells is described. The Pronghorn is the upper portion of the Three Forks. Note the very small amount of proppant used for one of these wells back in 2011 (#19623 below).

Whiting Obrigewitch wells in southwestern North Dakota:
  • 31907, 616, Whiting, Obrigewitch 24-9PH, Bell, t5/17; cum 158K 9/18;
  • 31160, 584, Whiting, Obrigewitch 44-19PHU, Bell, t3/16; cum 148K 9/18; 
  • 31159, A, Whiting, Obrigewitch 24-20PH, Bell, t -- ; cum 310K 9/18;
  • 31158, 1,097, Whiting, Obrigewitch 11-29PHU, Bell, t2/16; cum 185K 9/18;
  • 31157, 855 , Whiting, Obrigewitch 21-29-2PH, Bell, t4/16; cum 126K 9/18;
  • 31153, 975, Whiting, Obrigewitch 31-29PH, Bell, t3/16; cum 150K 9/18;
  • 30640, 457, Whiting, Obrigewitch 44-8PHU, Bell, 4 sections, 45 stages, 5.1 million lbs, t6/17; cum 168K 9/18;
  • 30634, 1,362, Whiting, Obrigewitch 34-20PH, Bell, t3/16; cum 341K 9/18;
  • 30343, 985, Whiting, Obrigewitch 44-20PHU, Bell, 14 days, t11/15; cum 280K 9/18;
  • 30342, 1,536, Whiting, Obrigewitch 41-29PHU, Bell, 14 days, t11/15; cum 229K 9/18;
  • 22864, 1,890, Whiting, Obrigewitch 41-17PH, Bell, t11/12; cum 222K 9/18;
  • 25454, 1,614, Whiting, Obrigewitch 11-29PH, Bell, 30 stages, 2.3 million lbs, t9/13; cum 133K 9/18;
  • 25453, 2,027, Whiting, Obrigewitch 21-29PH, Bell, t9/13; cum 169K 9/18;
  • 25452, 1,171, Whiting, Obrigewitch 41-29PH, Bell, t9/13; cum 140K 9/18;
  • 23468, 1,244, Whiting, Obrigewitch 11-16PH, Bell, t12/12; cum 215K 9/18;
  • 22864, 1,890, Whiting, Obrigewitch 41-17PH, Bell, t11/12; cum 222K 9/18;
  • 22287, 1,738, Whiting, Obrigewitch 41-16PH, Bell, t11/12; cum 281K 9/18;
  • 21018, 1,517, Whiting, Obrigewitch 11-17TFH, Bell, t2/11; cum 298K 9/18;
  • 20079, 2,760, Whiting, Obrigewitch 21-16TFH, Bell, t2/12; cum 372K 9/18;
  • 19623, 1,075, Whiting, Obrigewitch 21-17TFH, 7 stages, 6,848 lbs (no typo), Bell, t4/11; cum 281K 9/18;
The graphic:


August 28, 2015 -- Part III

First: another huge "thank you" to the reader who caught my huge mistake in a posting yesterday. The reader sent me a comment, which I posted, and then left the post up overnight, but then took it down this morning. It was a doozy of a mistake. Again, I really appreciate readers letting me know when I make a mistake (don't write me about typographical errors, unless they are really bad or need immediate correcting -- I make a lot of typographical errors; I try to catch them later).

Tweeting now: No. 1 reactor at a nuclear power plant in Fessenheim, France, shutdown due to a failure of unknown cause - @Lebienpublic. [Comment: I can only imagine.]

Warmists and the White House are desperately hoping for a devastating Hurricane Erika to hit on/near the anniversary of Hurricane Katrina -- ten years ago -- but not much is happening (dynamic link shows not much movement; not much wind, at least compared to storm off west coast of Mexico).

Friday, August 26, 2015 -- Part II; McDermott Receives Record Contract From Saudi Aramco; Massachusetts Health Policy Premiums To Double Rise In 2015; Triple Rise In 2014

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.

Rigzone is reporting that McDermott was awarded a record services contract by Saudi Aramco for work in various fields offshore Saudi Arabia. No other details were provided in that short note. The press release said not much more.

This site has blogged several times about Saudi's $35 billion, 5-yera program announced in 2012, to grow crude oil production. Saudi recently announced one or two new refineries with total capacity of 800,000 bopd, IIRC, and which I simply round to 1 million bopd of new crude oil requirements for Saudi's domestic use.

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The Apple Page

Macrumors is reporting that Apple Watch sales totaled 3.6 million units in 2Q15, putting it in second place following Fitbit. Fitbit sells their heart rate wrist monitors for $70. Apple's least expensive Apple Watch is around $400.

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Trainwreck

So much for all those Reuters, Bloomberg, and, AP stories telling us ObamaCare would control health care costs. The Boston Globe is reporting:
Health insurers in Massachusetts will boost rates more than 6 percent for small businesses and individuals in 2016, a troubling sign that costs are once again accelerating.
The increase, approved by the state Division of Insurance last week, is more than double the rise in premiums at the beginning of this year and triple the rise in 2014
In case you missed that: the rates approved for 2016 will double the rise in premiums in 2014 and will triple the rise in rates that occurred in 2014.

More from the linked article:
The new rates will affect about 300,000 people who buy health insurance on their own or work for small businesses with 50 or fewer employees and will renew plans in January.
The increases will hit only a small slice of the state’s overall commercial insurance market of about 4 million, analysts said, but they may be a precursor to premium increases in the broader market, representing a setback to efforts to contain the state’s already high health care costs.
They far exceed the state’s goal of keeping total health care spending growth below 3.6 percent a year. Next week, officials will report whether the state’s health care industry is meeting that target.
This could be a problem,” said Barbara Anthony, the state’s former undersecretary of Consumer Affairs and Business Regulation, now a senior fellow at the Harvard Kennedy School and the Pioneer Institute, a Boston think tank. “If the benchmark means anything, and if we’re trying to keep the growth of health care expenditures under control, a number like that presents challenges.”
This report is in line with earlier reports this year about the horrific rise in premiums across the United States. 

Friday, August 28, 2015

Is the decision / announcement finally coming next week? There are rumors that President Obama will make it official next week, before the Labor Day weekend, that he will deny a permit for the Keystone Pipeline. If so, it looks like he's milked that story for all the campaign funds he felt he was going to get. 

Bloomberg is reporting:
If there was any question over whether this year’s oil crash would give rise to a new era of energy megadeals, there isn’t anymore.
Schlumberger Ltd.’s proposed purchase of gear maker Cameron International Corp. for about $15 billion helped make the last 12 months the most active in decades for global energy mergers.
Three of the last five quarters have exceeded $160 billion in deal volume, surpassing even the late 1990s, a period when many of the world’s largest energy corporations were formed.
Exxon Mobil Corp., BP Plc, Chevron Corp. and Total SA all expanded by absorbing smaller rivals towards the turn of the century, becoming what some now call the "supermajors." U.S. crude averaged about $21 a barrel from 1998 to 2000, bottoming out in December 1998 near $10. Adjusted for today’s dollars, the fourth quarter that year saw about $157 billion in deals including the combination of Exxon and Mobil. In the second quarter of this year, there were about $258 billion in global energy deals announced.
Active rigs:


8/28/201508/28/201408/28/201308/28/201208/28/2011
Active Rigs76195181191199

RBN Energy: update on moving US LPG to Mexico. (Archived.)
There are four ways for U.S. sourced LPG to reach Mexico: by ship, by pipeline, by rail or by truck. Given all the expansions at U.S. export terminals, it should come as no surprise that the vast majority of the LPG being exported from the U.S. to Mexico is moved by ship, or that the future of U.S. LPG sales to Mexican distributors will likely involve bigger vessels (armadas of which are now being built).
The largest U.S. export facility is the Enterprise LPG export terminal on the Houston Ship Channel; the facility, whose current loading capacity is 300 Mb/d (or 9 MMb/month), was running flat-out, until the new ETP/Sunoco Nederland terminal came online.  Now volumes are down slightly, but will probably be coming back up soon.  Later this year  its capacity will increase to more than 500 Mb/d (just over 16 MMb/month).
The second largest U.S. export dock is owned by Targa, that can export up to about 240 Mb/d of propane and/or butane (7 MMb/month) from its recently expanded Galena Park Marine Terminal, also near Houston, and third largest Sunoco’s new Nederland, TX export terminal (an element of its larger Mariner South project) can handle up to 200 Mb/d (6 MMb/month).  
The newest entry in the Gulf Coast race to export is Occidental Petroleum’s new Ingleside LPG export terminal (near Corpus Christi), which when fully operational will be capable of loading up to 100 Mb/d, and then in the second half of 2016 Phillips 66 hopes to start up a new, 145 Mb/d export terminal in Freeport, TX.
There are LPG exports in the works on the U.S. West Coast. Petrogas Energy owns and operates an LPG export terminal in Ferndale, WA that is capable of handling up to 30 Mb/d, but two other proposed LPG export projects have hit major snags and may need to be re-sited. In March 2015, the plan by Sage Midstream’s Haven Energy Terminals subsidiary to build a 47 Mb/d export facility in Longview, WA, was rejected by port officials, and in May 2015 the mayor of Portland, OR withdrew his support for Pembina Pipelines’ plan for a 37.5 Mb/d terminal there. (Yet another project was unveiled on July 30, 2015; AltaGas said it’s considering a possible LPG export facility in British Columbia whose initial phase could handle up to 25 Mb/d.)