The Bakken Still Has Bragging Rights -- Zeits -- September 19, 2016

Note: this is not an investment site. Do not make any investment, financial, travel, job, relationship, or auto buying decisions based on what you read here or think you may have read here but I found this interesting:

• Goldman Sachs today: we never made much money on Bit Oil.
• five years ago, one could have bought Phillips 66 (PSX) at $31/share; today, PSX is up almost 2%, trading above $80; and, more stories on how much stock Warren Buffett has accumulated in this company; he now owns more than 10% of the PSX shares outstanding

Global warming in Texas: the high for today in north Texas is 99 degrees. This is eleven (11) degrees higher than "normal."

Quick work: is it just me or does anyone else note how fast law enforcement was able to find the people of interest with regard to the terrorist events on the east coast this past weekend? Twenty-four hours ago the mayor of NYC said there was nothing to suggest this was terrorism, and now the FBI has already released a photograph of a person of interest and raided a house in Elizabeth, NJ, which may be connected. It's amazing. Twenty-four hours ago: no clues. Before Good Morning America airs, we already have "people of interest." Incredibly quick work. By the same folks who couldn't find anything illegal in Hillary's 23 mobile devices connected to her private basement server. And that took the FBI about five years of investigation. Whatever. Five devices in immediate area; all used same type of "old model" cell phones; shrapnel; and Christmas lights -- mayor of NYC, others not sure the five devices are "related." No comment from President Obama which is of note considering how fast he comments when there is a police shooting involving someone that could like his son.

Poll. Link here. Trump, 48%; Hillary, 41% -- the spread increased slightly since yesterday. Two stories over the weekend: Hillary losing African-American voters and Hispanic voters. CNN has huge story reporting President Obama suggesting negativity regarding Clinton is sexist. Does not mention percent of women who won't vote for Hillary. Is that sexist when women won't vote for Hillary?

Quiz: does anyone "recognize" these numbers?

• 44
• 51
• 66
• 77
• 80

Bakken's bragging rights: Richard Zeit's most recent contribution to SeekingAlpha: the Bakken still has the best wells.

How exceptional are Pioneer's best well results in the Permian?

If I were to compare the company's well results for the 23 wells in the Sale Ranch area to that in the deep portions of the Williston Basin, where the majority of the drilling activity in the Bakken/Three Forks is currently concentrated, I must conclude that the Permian does not hold the monopoly on the best wells.

Consider the following slides that shows QEP Resources' (well results on the company's South Antelope block in the Bakken. Based on Year 1 cumulative oil production, QEP's wells highlighted on these slides appear comparable and possibly stronger.

The Fed rate: All that hand-wringing about the Fed rate? One-quarter percent. Back in 2008 when the weekly inter-bank loan reached a half-trillion dollars, a quarter-percent rate increase might have meant something. But since then the Fed has greatly extricated itself from this debacle. Now, weekly inter-bank loans are a fourth of what they were even in 2000. This graph is quite stunning. And this is the graph associated with that quarter-percent Fed rate everyone is so worried about.

But the only story on Wall Street that seems to be more important than the fiscal crisis in Greece is the concern about the Fed raising the rate a quarter percent.

Answer to quiz:

Now, those numbers above: starting about 8:00 p.m. Central Time last night and checking the Dow 30 futures every two to three hours, those were the futures for the Dow 30, gradually increasing through the night. 

Active rigs:

	9/19/2016	09/19/2015	09/19/2014	09/19/2013	09/19/2012
Active Rigs	31	67	196	182	187

RBN Energy: an update on MPLX's plan to pipe northeast condensate and natural gasoline.

More than four years after the Utica and the “wet” part of the Marcellus became a hot spot for drillers, the field condensate and natural gasoline produced there are still moved to market by barge, rail and truck.

A three-part, $500 million plan by MPLX LP and the midstream master limited partnership’s (MLP’s) subsidiaries, now well under way, will enable more efficient pipeline transport of these important hydrocarbons to Midwest refineries, Western Canadian diluent pipelines and other end-users. To hold down costs, the effort involves a creative mix of new and existing pipelines. Today we continue our review of MPLX’s plan with a look at its “Utica Build-Out Projects.”

In Episode 1 of this series we discussed the rise (and recent leveling off) in production of natural gas, natural gas liquids (NGLs) and superlight crude oil (also known as field condensate) in the Utica play in eastern Ohio and the liquids-rich portion of the Marcellus in western Pennsylvania and northern West Virginia. We noted that while most of the market’s attention goes to either natural gas or to lighter NGLs like ethane, propane and butanes, the three-state region produces sizable volumes of natural gasoline (an NGL also known as plant condensate) and of superlight crude (also known as field condensate or lease condensate), both of which are important products that have the potential for value uplift.

Plant condensate/natural gasoline is used as a gasoline blending agent, a feedstock for steam crackers and as a diluent –– that is, blended into heavy bitumen crudes in Western Canada to reduce viscosity and enable them to flow more easily through pipelines.

Among other things, field condensate can be blended into crude oil, run as a feedstock at refineries and condensate splitters, or used as diluent. Marcellus/Utica production of field condensate and natural gasoline rose sharply starting in 2013; currently the three-state region is producing about 110 Mb/d of field condensate and about 50 Mb/d of natural gasoline. To date, no pipelines are in place to move them out, leaving field condensate and natural gasoline producers with only three delivery options (tank trucks, rail tankcars, and Ohio River barges), but that is about to change.

While other efforts to develop field condensate and/or natural gasoline pipelines out of the Utica and wet Marcellus have failed or faltered, Findlay, OH-based MPLX –– a master limited partnership (MLP) formed by Marathon Petroleum Corporation (MPC) –– has hung in there, and is finishing up the first part of a three-part pipeline solution.

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For The Archives

Wind - Texas - Amazon

Link here. Data points:

Amazon's largest investment in renewable energy will be in west Texas

• West Texas wind
• Amazon will team with Chicago's Lincoln Clean Energy in this wind farm
• 253-MW Amazon Wind Farm
• east of Abilene in Scurry County
• one MW typically powers 200 homes
• slated to open by end of 2017
• 100 wind turbines
• project costs not released by Amazon, but Lincoln CEO "described" the cost as $300 million 
• $300 million / 253 MW = $1.2 million / MW
• Texas leads the nation in wind power, by far
• Lincoln developing other Texas wind projects; this project will be built and owned by Lincoln, but Amazon has pledged to buy 90% of its output 

Amazon's other activities in Texas

• Amazon has a large warehouse and customer service center located near San Antonio, in Schertz, TX
• Amazon has pledged to open a new 855,000-sq-ft distribution warehouse in north Houston
• Pinto Business Park, near I-45 and Beltway 8
• the Houston warehouse will employ 1,000 people
• this is in addition to Amazon's Prime Now warehouse hub in Humble, TX
• Amazon has just opened more than 20 "Pop Up" electronics stores nationwide; two of them are in Texas -- San Antonio and Arlington

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The Market

Early afternoon trading: the nonsense continues, "the Federal Reserve is likely to hold interest rates steady in the face of disappointing economic data over the last month ... although talk of an interest rate hike persists." And the market's reaction: quickly heading towards negative territory. After being up nearly 120 points early today, the market is now up about 20 points. 

Mid-day trading: the market is holding its gains. There was some talk this past week regarding Warren Buffett's timing/buying Phillips 66. For the year it is up slightly; over two years it's in negative territory; but look at that 5-year gain. Five years ago one could have bought PSX for $32. Today, it's up almost 2%, around $81. Today Bloomberg has a story that Goldman Sachs said it never did make much money on Big Oil. One wonders how they could have missed on that.

The Open: the numbers held -- the opening at 80 points up. It will take awhile for the effects of the past week to be forgotten. Only 63 new highs on the NYSE today:

• new highs: 63
• new lows: 11

Future: just prior to the open -- the DOW 30 is up 71 points.