Friday, February 19, 2016

Random Update On DUCs From 4Q15 -- February 19, 2016

I'm still trying to get a handle on whether DUCs are such a big deal or not. I really don't know. I struggled with that question back in December.

Tonight, I updated the wells that came off the confidential list in 4Q15. One can scroll through that list and see how many wells are still SI/NC (DUCs).

Since the last update (and I don't recall when that update was done), these are the DUCs that have been completed (I may have missed a few but, if so, I will pick them up next time):

30940, 2,405, BR, CCU Bison Point 34-34MBH, Corral Creek, t12/15; cum 7K 10 days;
30938, 2,445, BR, CCU Bison Point 24-34MBH, Corral Creek, t1/16; cum --
30937, 2,164, BR, CCU Bison Point 24-34TFH, Corral Creek, t1/16; cum 3K 15 days;
31004, 207, XTO, Rita 44X-34HXE, North Tobacco Garden, t1/16; cum --
30788, 679, XTO, Rita 44X-34D, Tobacco Garden, t1/16; cum --
30673, 503, Hess, BL-Odegaard-165-95-2116H-7, Beaver Lodge, t12/15; cum 8K 14 days;
30674, 458, Hess, BL-Odegaard-156-95-2116H-8, Beaver Lodge, t1/16; cum --
30672, 565, Hess, BL-Odegaard-156-95-2116H-7, Beaver Lodge, t12/15; cum 12K 21 days;
31245, 825, XTO, Sorenson 31X-28D, Siverston, t11/15; cum --
30671, 619, Hess, BL-Odegaard-156-95-2116H-6, Beaver Lodge, t12/15; cum 13K 26 days;
30167, 423, Hess, AN-Prossr-152-95-1102H-10, Antelope, Sanish pool, t1/16; cum 8K 17 days;
30164, 1,113, Hess, AN-Prosser-152-95-1102H-7, Antelope, Sanish pool, t12/15; cum 24K 12/15;
30165, 1,376, Hess, AN-Prosser-152-95-1102H-8, Antelope, Sanish pool, t12/15; cum 31K 28 days;
31177, 329, CLR, Jefferson 10-17H1, Crazy Man Creek, t12/15; cum 2K 13 days;
30166, 1,134, Hess, AN-Prosser-152-95-1102H-9, Antelope, Sanish pool, t12/15; cum 29K 25 days;
31175, 359, CLR, Jefferson 8-17H1, Crazy Man Creek, t12/15; cum 6K 20 days;
29278, 945, Hess, BL-Iverson C-155-96-1423H-5, Beaver Lodge, t11/15; cum 42K 12/15;
31098, 444, Hess, BL-Iverson C-155-96-1423H-2, Beaver Lodge, Devonian, t12/15 cum 12K 29 days;
30913, 2,453, XTO, Johnsrud Federal 34X-14F, Bear Den, t1/16; cum --
29862, 2,035, XTO, Johnsrud Federal 34X-14AXB, Bear Den, t1/16; cum --
29861, 2,661, XTO, Johnsrud Federal 34X-14A, Bear Den, t1/16; cum --
30684, 1,005, MRO, Charlie 24-10H, Reunion Bay, t12/15; cum 6K 12 days;
30041, 2,240, XTO, Deep Creek Federal 43X-5G, Lost Bridge, t11/15; cum 16K 21 days;
30043, 2,238, XTO, Deep Creek Federal 43X-5H, Lost Bridge, t12/15; cum 14K 18 days;
28896, 1,486, Zavanna, Blackjack 24-13 1H, East Fork, t12/15; cum 4K 10 days;
28895, 1,135, Zavanna, Blackjack 24-13 2TFH, East Fork, t1/16; cum --
30047, 1,186, XTO, Thorp Federal 11X-28E, Little Knife, t10/15; cum26K 12/15;
30046, 1,686, XTO, Thorp Federal 11X-28A, Little Knife, t9/15; cum 30K 12/15;

Remember, these are wells that came off the confidential list between October 1, 2015 and December 31, 2015, inclusive. It is not yet the end of February and these wells have already been completed.

Three trends:
  • pad drilling
  • Hess is keeping on top of things, as is XTO, other operators in the Bakken, not so much
  • some great IPs
Also note: EOG is not on the list.

Not Ready For Prime Time -- Thoughts On DUCS -- NY Times And Comments -- December 27, 2015

Note: this has been sitting in draft for two months now.  I didn't know what to do with it. It rambles. It is very poorly written. It is not ready for prime time. It was a response to a reader some months ago who sent me a New York Times article. But I'm tired of sitting on it, so I will post it to simply get "rid of it." 

This was my unedited reply to a reader regarding an article in the New York Times on the subject of DUCs. Prior to posting, the reply will be edited for punctuation, grammar, etc., but I plan to keep the basic observations unchanged:
Another great article in the Times. Years ago, once I realized that the front page of the Times was their op-ed page, it was much more enjoyable to read the newspaper. They really do write well, and if weren't so dang expensive (something like $7.00 now) I would subscribe to the Sunday edition.

The Sunday Times was required by our 10th grade social studies teacher for which I am eternally grateful.

Nice, nice article on DUCs. Many, many story lines.

1. This article suggests DUCs can be brought on line quickly; others say not. I'm in the camp that DUCs can be brought on very, very quickly. Anyone who says otherwise, in my mind, has not been paying attention and/or following the Bakken very closely. In this case the Times got it right.

2. The writer says this but I don't think he/she offers his/her own conclusion:
Some analysts say oil companies like Anadarko, EOG Resources and Continental Resources may collectively risk suffocating the very price revival they anticipate by releasing abundant new supplies once prices inch up. Others say the eventual impact would be small and short-lived, but since the industry has never used this strategy before, no one can be sure. 
There are two issues here.

The first issue has to do with profit, price, etc. The price one sells oil for does not matter: the only two things that ever matter is survivability and profitability, and profitability is based on margins, not the price of oil. Right now, the only issue is survivability.

The second issue has to do with volatility of the price of oil and the geopolitics of oil (using oil as a weapon which the Mideast has historically done): the US is now the swing producer for light oil and as such, especially with all those DUCs, and all those fields not now being exploited.

Barring a major geopolitical event anywhere -- but particularly in the Mideast -- and especially now with the ban on US crude oil exports repealed -- it's hard not to see the global oil market as a much more efficient market, responding much better to real supply and demand, rather than responding to rhetoric from self-serving dictators and oligarchies, which was often the norm in the past. Saudi simply had to say it was going to increase / decrease production and commodity markets reacted even before anything "concrete" had happened.

3. I think the Times writer focused on the profitability and survivability of US oil companies (the article is in the "energy and environment section"; it seems as if the article should have been in the business / finance section). In the "energy and environment section" the article should have been focused on a bigger picture -- what DUCs mean for the global energy environment. I have little interest in individual companies in the oil and gas industry (with regard to the blog) except as a means of following the industry to see how this will all play out.

4. I'm surprised we haven't seen more articles on what inexpensive energy means to growing economies and to the US. All this natural gas and all this oil at really inexpensive prices is coming from a reliable source, and from a country with a democratic model of government. This should be an incredibly good news story and yet this seems to be another article on whether individual companies will survive, or how they will survive, and their profitability.

5. I plan to write a post on whether "DUCS" in the Bakken are that big a deal. I was going to post the question / essay this weekend, but I need at least one more month of data from the Director's Cut -- to see the status of Bakken DUCs after another month. As you know, NDIC gave operators an additional year to complete their wells. And yet, after reviewing the SI/NC (DUCS) for the past year, I don't think DUCs mean a thing in reality. Allowing an extra year was incredibly important to the oil companies in North Dakota "just in case," but in fact it appears that companies are not delaying completion all that long. In the good ol' days, they drilled a well and completed it as quickly as logistically possible and NDIC / operators crowed optimistically how fast they could get oil to the market from the initial spud -- often measured in weeks. It looks like the little I know about it, the DUCs are adding a few months; big deal. Not.

6. The DUCs also solved another problem: the perception that the US was running out of storage space. That turned out not to be true, and even if it was, it is now resolved with the repeal of the ban on US crude oil exports. There is a huge amount of storage capacity globally and if Cushing starts to fill up again, there are many places to store it overseas. Vitol with its new storage facilities in South Africa is that story. In the old days, oil arriving at the Gulf Coast, was transported north by pipeline to Cushing. Now, new pipelines and flow reversal of existing pipelines mean that Cushing oil is now going to the Gulf Coast.

7. This is a great story for New Yorkers who had not yet heard of DUCs, unlike those who have been following the US shale story closely. But as the writer said, "... since the industry has never used this strategy before, no one can be sure" -- or another way of putting it: we are in uncharted water.

8. I think it's a fascinating story. At the end of the day, it's not about the price of oil, it's about the margin. This is a great time to be a privately-held company in the oil and gas industry if one has the deep pockets and/or financial backing of bankers/private investors (hedge funds) to keep going for the next year or two. Publicly-traded companies are looking at each quarter and that has to be very, very challenging.

A Human Interest Story On The Bakken Boom And Bust -- The Chicago Tribune -- February 19, 2016

For the archives, from The Chicago Tribune -- a human interest story on the Bakken boom and bust.

Many, many story lines. In the big scheme of things it probably would not have made much difference but killing the Keystone XL and delaying other interstate pipelines probably didn't help much, either.

And in the big scheme of things, I am very, very optimistic about the Bakken. Five more permits issued today. Upwards of 1,000 wells that have been drilled and waiting to be fracked.

There will be winners and losers.

Just Don't Step In The Elephant Poop -- February 19, 2016

I will apologize in advance. It is very possible that for the next few months -- until this works itself out of my system -- I will make references to Ayn Rand. I recently finished Anne Heller's wonderful biography of Ayn Rand, c. 2009. I must have been the only person in the world coming of age in the 1960s and 1970s who had not heard of Ayn Rand, much less read either of her two most famous novels. Maybe I had heard of her, but simply forgot. Who knows?, he asked rhetorically.

I was reminded of this twice in the past month. The first time was by my snarly wife when I mentioned something about Ayn Rand -- it seems to me "Ayn Rand" is one of those names in which you have to print both when referring to her unlike two-named personalities everyone knows by one name: Willie, Elvis, and Cher. One-named personalities, like Prince and Madonna, are still different, and then, of course, there are the one-named personalities that might not even refer to them but rather the group to which they belong, like Blondie. I think other personalities whose two names always need to be linked like Ayn Rand's include Bob Dylan, Anais Nin, and maybe even Jimi Hendrix. Others only go by initials (JFK, LBJ) and some may have monikers that are better known than their real names, e.g., Tricky Dick.

But I digress. Where was I? Oh, yes, that's right. To clarify: my wife was not snarly. Her comment only seemed to suggest she was snarly. And now looking up the definition of that word, that's not the best word to describe her reaction, anyway.

My wife was surprised I had not heard of Ayn Rand. My wife says she "grew up" with Ayn Rand or something to that effect and that "everyone in the 60's knew Ayn Rand." I didn't. I was apparently not among the "everyone" group.

On the eve of my departure from the Bakken last week, my closest high school friend asked if I wanted to join him at The Williston Brewing Company to "exchange" book lists -- the list of books that we had recently been reading.

When I mentioned Ayn Rand he said that her novels had been among his favorite when he read them back in the 60s or 70s. I assumed he read them when he was in college which would have been in the early 70s. I assumed they were a required reading assignment, but, no, he read them on his own. I was thrilled to be able to answer his question, "which one was John Galt in?" Atlas Shrugged. That friend is now an incredibly successful founder of a tech company partnering with international tech companies; his company is headquartered in San Diego, with wholly owned subsidiaries in Charleston, SC; Columbia, NC; and Sydney, Australia.

He says Ayn Rand had a huge influence on him during his coming of age years.

Needless to say, I am absolutely blown away by Ayn Rand. It was particularly interesting reading that biography at the same time I was reading a "new" history of the Spanish Civil War. I was completely unaware of the controversy surrounding the free market / capitalistic theory during the first half of the 20th century which continued even after WWII. That war -- the war between capitalism and socialism has already been fought -- numerous times -- but to my surprise it is now being fought again in the Democratic primaries. Reading Ayn Rand and the history of the Spanish Civil War simulataneoulsy helped me put everything in perspective.

But perhaps nothing puts things into perspective as well as this paragraph written by Jill Lepore in The New Yorker's The 50's: The Story of a Decade as an introduction to the section on "Shifting Grounds."
In a Profile of Dorothy Day (the founder of the Catholic Worker movement, "advocating a Utopian Christian communism"), Dwight Macdonald described the Catholic Worker movement this way: "Politically, the Catholic Workers are hard to classify. They are for the poor and against the rich, so the capitalists call them Communists; they believe in private property and don't believe in class struggle, so the Communists call them capitalists; and they are hostile to war and to the State, so both capitalists and Communists consider them crackpots."
That's about how I see things today. We have Pope Frank hugging the Castro brothers, praising them, and telling us Donald Trump is not a Christian because the latter advocates building walls. Never mind that the Frank's Church is one of the richest (and most capitalistic) institutions in the world and resides in perhaps the biggest walled city-state in the world. (It's interesting to see how Reuters "treats" the Castros on this issue. LOL. Dwight Macdonald would be smiling.)

There are days when I get depressed / irritated / frustrated / angry / suicidal reading about the craziness in Washington, DC. But reading The 50s: The Story of a Decade puts everything into perspective. I realize I can change very little -- perhaps nothing -- but I can have a great time watching the circus.

I just have to make sure I don't step in the elephant poop.

Five (5) New Permits -- February 19, 2016

Active rigs:


2/19/201602/19/201502/19/201402/19/201302/19/2012
Active Rigs38127186182199


Five (5) new permits --
  • Operators: EOG (3), BR (2)
  • Fields: Parshall (Mountrail), Blue Buttes (McKenzie)
  • Comments: 
EOG canceled five (5) permits (#21737 - #31740, inclusive), Hawkeye permits in McKenzie County.

Two (2) producing wells completed:
  • 29535, 702, Hess, EN-Sorenson B-155-94-326H-4, Alkali Creek, t1/16; cum --
  • 31406, 466, Hess, EN-KMJ Uran-Lw-154-93-2733H-2, Robinson Lake, t2/16; cum 4K 1 day;
************************************** 
Notes for the Granddaughters

The middle granddaughter had a soccer game so this gave us a great opportunity to go out for sushi. The middle granddaughter does not like sushi, but the older one loves it. So the four of us went out: the two grandparents, the 12-year-old, and the 19-month-old.




 The 19-month-old needed almost no help and complained if anyone tried to help her. The photographer forgot to turn on the flash on the iPhone so the pics are a bit dark.

Random Update On The 2016 Chevrolet Volt -- February 19, 2016; The Chevrolet Now Gets 53 Miles On A Single 4.5 Hour Charge

I can't remember if I posted the EV sales for last month, January, 2016. Here they are:

Compare Chevrolet Volt sales in January, 2016, compared to one year ago, and also with December sales (in graphic below).

But even more interesting, look at the total number of EVs sold in the US in 2015 compared with total number of EVs sold in the US in 2014 (in the very, very small print):


If the print is too small to see, regarding total US EV sales in the past two years:
  • in 2014, total US EV sales were 122,438 units
  • in 2015, total US EV sales were 116,099 units
Year-over-year, January, 2016, vs January, 2015:
  • monthly sales increased marginally year-over-year, from 6,057 to 6,291
For the Chevrolet Volt:
  • month-over-month, sales of Chevrolet Volts fell from 2,114 to 996 units
  • year-over-over, sales of Chevrolet Volts nearly doubled from 542 units to 996 units
For the Tesla Model S:
  • month-over-month, sales of the Tesla Model S fell from 3,600 to 850 units (delivered)
  • year-over-over, sales of the Tesla Model S fell from 1,100 to 850 units (delivered)
I track the Chevrolet Volt here.

I was reminded of all this after Don sent me an ad disguised as a story talking about the "new" Chevrolet Volt:
However, the Volt is just several thousand dollars more than one of its major competitors - Ford C-Max Energi - and close to $3,200 more than the Toyota Prius plug-in. It's good to know with all three vehicles that you save $7,500 through a federal income tax incentive and there could be additional state and local incentives as well.
Forget about how the Volt looks. Let's face it, people buy a hybrid for the gas savings. The Volt delivers quite a bit in that department, upping its electricity-only total by 25 percent to a 53-mile range. It takes approximately 41/2 hours to recharge a fully depleted battery (from a 240-volt power). The new gasoline engine gets 42-43 mpg and a full tank should lead to roughly 420 miles.
This would be a great time to post a poll on this. I'm curious. I would love to have an EV. If I had all the money in the world, as they say in this neck of the woods, and a charging station in the garage, I would love to have an EV. It is my understanding these are incredible cars in terms of responsiveness and pleasure to drive.

And that's why I think the focus on gasoline mileage to sell a hybrid is misplaced. If the only reason folks buy a Chevrolet Volt is to save money on gasoline, these folks have not been paying attention.

So, the poll: would you buy an EV/hybrid because you think it's going to save you money on gasoline or because you like the "feel" of an EV compared to a conventional gasoline engine? Obviously most people make their decision based on a combination of factors. But in the "ad" above, the writer says "Let's face it, people buy a hybrid for the gas savings." I'm not so sure that's how Chevrolet should 
 focus the campaign.

In fact, having said that, I'm about ready to nominate the writer of this ad for the 2016 Geico Rock Award for not having noted how inexpensive gasoline is right now and will likely be for quite some time.

But don't let me influence your vote.

Calumet Has Completed Its Expansion At The Great Falls, Montana, Refinery -- February 19, 2016

Oil & Gas Journal is reporting:
Calumet Specialty Products Partners LP, Indianapolis, has completed a long-planned project to more than double crude processing capacity at subsidiary Calumet Montana Refining LLC’s refinery in Great Falls, MT.

The refinery’s 25,000-b/d crude unit is now on stream and scheduled to reach full operating capacity by the end of March, 2016.

Initially intended to lift crude processing at the refinery to 20,000 b/d from its original 10,000-b/d capacity, the $400-million expansion also was to include installation of a 25,000-b/d mild hydrocracker (MHC) to convert gas oil to higher-value distillates, a hydrogen plant to support the MHC, and a treatment unit to handle increased fuel gas production from the MHC.

Alongside expanding overall capacity, the crude unit is designed to process heavy sour crudes to enable Calumet to benefit from nearby access to cost-advantaged heavy Canadian crudes.
Years ago when traveling cross-country, I passed through Great Falls. The amount of oil-truck traffic intrigued me; I did not know why; now I know. Great Falls is another city that would fascinate Ayn Rand.

From a recent presentation (2016) by Calumet:

Keep the graphic above in mind when you read the following excerpts from MDU and Calumet 4Q15 transcripts:

 From the 4Q15 transcript for MDU:
Our refining segment includes the company's 50% interest in the Dakota Prairie Refinery which began commercial operations just in May of last year. Our share of 2015 refining results is an adjusted loss of $20.5 million. Earnings were impacted by unplanned outages in October and November due to equipment problems that have since been repaired. Economics have also been affected by historically low Bakken differentials from the West Texas Intermediate pricing, which has reduced the discount for our oil feedstock.
In addition, reduced oilfield activity in the Bakken has decreased the demand for diesel fuel along with the slowdown in Canadian tar sands development has also reduced the demand for naphtha. Our share of projected 2016 EBITDA is at a minus $25 million to zero. As we talk about our overall guidance for 2016, you will see that refining has been moved from the pipeline business to a separate segment. This will provide investors with transparency both on the refinery and the value of our regulated pipeline business.
We're excluding it from adjusted guidance because the refining industry tends not to give earnings guidance due to the volatility and unpredictable nature of the key commodity assumptions supporting its financial results. We believe this approach to adjusted EPS allows for a narrower, more meaningful range for investors, while still providing sufficient guidance for investors to evaluate the refining segment. We are initiating 2016 adjusted guidance in the range of $1 to $1.15 per share. Adjusted earnings guidance includes results from the utility, pipeline, and midstream and construction businesses.
GAAP earnings per share guidance, which includes results from the refinery, is expected to be in the range of $0.85 to $1.10 per share.
Q & A on the refinery:
Q: On the refinery, I know market conditions have been tough there. There seemed to be lot of moving parts, though, this quarter, and in terms of the unplanned outages, is there a way we can think about the drag on earnings this quarter for that segment?

A: Yes. Brent, we were down almost approximately a month. It was all related to the hydrogen plant and we are past that. We're probably going to have some issues with our vendor on that plant, but ultimately we think we've got that handle. So, on a go-forward basis we're really happy with where operations are in terms of operating the plant day-to-day. I would characterize what we put out there as a 90% target in terms of about 21 days maybe for the year outage, and so that's the guidance. I hope that helps. 
And: 
Q: Okay, and then a follow up, and excuse me if this sounds like a stupid question, but you mentioned the guidance includes an expectation for 90% utilization in 2016. I guess that just seems high to me given kind of the demand outlook. I guess why would you expect it to run at these levels or why does it make sense to continue running at these levels if we're going to continue to see losses?
A: Well, there is still a margin on diesel. It's not as robust as it was. So ultimately that is – as long as there is a margin we will continue to operate at a percentage. If we don't see it, we would obviously take it down. Our marketing group has also been having some success taking some diesel out of the basin also. So we think that over the whole year period, we think we'll probably be able to attain those levels, but obviously one of the things you see in our guidance is we have given a range based on pricing because that's one thing we've learned over the years we can't control, and so you've got to operate as well as you can and react to when it's there. So, obviously, if we are having negative pricing, we would turn down the plant.
And finally:
Q: That's helpful and I guess it would also be helpful to get your current thoughts kind of longer term strategically thinking about how the refinery fits in with your longer term plans?
A: Yeah, obviously longer term – short-term, we are working on optimizing where the plant is at. Longer-term, you know this is a business you have to get in on scale, not just one refinery, you have to have several or else you would exit. Obviously, we may not be the right long-term owner but at this point that decision hasn't been made.
********************************


Regarding the Dickinson refinery: 
We do have local niche markets that we believe we are advantaged for in the long-term. I think what we saw in the fourth quarter was as the Bakken drilling was the slowing down, as diesel demand continued to drop in that North Dakota region, obviously that impacted our DPR Refinery significantly. We also saw some carry on effects in both our Montana, and specifically our Superior refiners.
So what’s happening is as diesel demand was extremely high one or two years ago, it was pulling diesel in from those out of state markets, and as the diesel demand started coming back in, what we saw was a backing up of the diesel back into those respective production areas. And so we saw a significant drop in the fourth quarter at both our Superior racks, as well as our Montana rack. As we continue to launch that, we've seen that the inventory is starting to clear, and the Superior racks in particular have rebounded significantly here in the last week or two. So we’re hopeful that as the inventory has been run off, that we’re going to return back to the more typical supply demand balances that we have seen in those local regions.
And more:
Let's start with the last one on Dakota Prairie. You know, clearly that has been weighing on our earnings in the fourth quarter as the Bakken field has slowed down significantly. We've made several -- we've taken several steps to improve the profitability of that operation. Remember in the first place that we just started that plant up in the middle of last year, and as we work through some of the startup kinks, I think we're in a position now where our reliability has been significantly improved, and we hope to be able to realize an improvement 2016 based on that improvement.
We have also taken some leadership changes, just to be frank at the plant, and we think that has made a significant change. We've already seen the difference here in the last couple of months. And one example of that is we were running a diesel yield at the plant somewhere in the 32%-33% range, and after we brought in some additional resources from some of our other assets that were more familiar and experienced with distillation columns, we were able to make some significant moves to increase our diesel yield to 44% or in that range.
So those are some of the significant opportunities that we believe we still have to take at our Dakota Prairie refinery. Our objective is to be cash flow neutral during this bottom of cycle condition. I would tell you we're not there yet, but we have many more steps that we're trying to execute on today to get us into that position. At that point, once we become cash flow neutral, then the role that an asset like Dakota Prairie refinery has in my portfolio is it's a call. It's a call on future increases in crude price, and that has some value in my portfolio.
Vision:
So when I say we have a vision of becoming a premier specialties petroleum products company in the world, what I mean is going forward that's what we're going to be focusing on in terms of our growth strategy. It doesn't mean we're going to try to fire sale any of our assets that are currently in our portfolio, because they do have value to me. However, in the event that someone else views any one of our assets in our portfolio with a higher valuation than what we view it at, of course we would consider selling that asset. That would include any of our field assets, any of our specialty asset, any of our oil sub services assets to the extent that it has higher value to someone else because their portfolio has different synergies or competitive advantages that could take advantage of that asset, we would certainly consider moving that asset out.
And what I would say Christina, is in the past I don’t think we really held that view. We pretty much held on the assets until like they were in our portfolio for good. And I think what I'm bringing to the discussion now is an openness to say hey, maybe other people view these assets at a higher valuation than we do. So that's our philosophy going forward.
Now, go back to the graphic above. Note that the MDU-Calumet refinery in Dickinson is not even listed. Not listed. Not loved. Just a matter of time for ...

It's Just a Matter of Time, Brook Benton

Perhaps it's just me, perhaps it's just this recording, but all of a sudden I long for the good ol' days when we had the 1950's wooden cabinet "hi-fi" and the vinyl records.  And the living rooms the children were not allowed to go into.

Frank, Tear Down Your Wall -- Trump, February 19, 2016

From CNN: the walls are there, but people are free to walk in and out of the Vatican grounds. The doors are always open.

I'm sure the wall that the Donald is proposing will also have doors that are always open. Revolving doors. Trump will put Disney in charge of a) line management; and, b) tickets. I envision a "3-day hopper" in which folks can save money by purchasing a ticket that allows them to hop back and forth between the two countries (the US and Mexico) for three days. Latinos will call the "3-day hopper" the "tres-dias-conejo" -- the Spanish word for rabbit is conejo. Not to be confused with mules which move drugs across borders.

Wow, when The Donald gets going, one never knows where things will lead. Now we see that a pre-historical builder of walls -- no doubt, a conservative -- was building walls in the Holy Land, or at least very near the Holy Land. Whatever. But no sooner do Pope Francis and Donald Trump get into argument about walls and Yahoo posts a story on that wall:
A new map of an ancient wall that extended 93 miles (150 kilometers) in Jordan has left archaeologists with a series of mysteries, including questions over when the wall was built, who built it and what its purpose was.
Known today as the "Khatt Shebib," the wall's existence was first reported in 1948, by Sir Alec Kirkbride, a British diplomat in Jordan. While traveling by airplane in Jordan, he saw a "stone wall running, for no obvious purpose, across country."
Archaeologists with the Aerial Archaeology in Jordan (AAJ) project have been investigating the remains of the wall using aerial photography. The researchers found that the wall runs north-northeast to south-southwest over a distance of 66 miles (106 km). The structure, they found, contains sections where two walls run side by side and other sections where the wall branches off.

Random Note On Size Of New Wind Turbines -- February 19, 2016

Posted earlier: sometime later this year it will be quite a spectacle to see 75 wind turbine towers, and 225 blades roll out from east of Williston to north of Tioga for the new wind farm there.

The Houston Chronicle discusses the increasing logistical challenge of moving these incredibly big structures. The new blades are in excess of 200 feet long. A football field is 300 feet long. But one does not get a true feeling for how big these blades are until a truck hauling one passes you at 75 mph on the freeway.

Meanwhile, Bloomberg reports:
General Electric Co. is shutting down a factory that produces towers for wind turbines in Brazil that it picked up as part of its acquisition of Alstom SA’s energy assets.
The plant in Rio Grande do Sul state employs about 80 people.
GE is the biggest turbine maker in North America, and typically buys towers from outside suppliers instead of making them in-house. Closing the Brazil plant will continue that strategy.

Friday, February 19, 2016

Active rigs:


2/19/201602/19/201502/19/201402/19/201302/19/2012
Active Rigs38127186182199

Man-camp update in Williston, North Dakota: arguments did not sway commission. Williston commission still on track to require man-camps within one-mile of city limits to be closed by July 1, 2016. So many story lines. But it certainly suggests that even the folks in the oil and gas industry (HAL) were broadsided by the incredible shale revolution. In hindsight, it seems the writing was on the wall, but no one was paying attention. Except that part about the "global economic slowdown."

RBN Energy: central Oklahoma shale crude oil still attracting new investors.
Crushing oil prices are hitting U.S. shale producers hard and the outlook for 2016 shows little sign of a let-up. Production has continued to prove resilient but the odds are that something has to give at these prices. However there are still sweet spots in U.S. shale plays where producers are increasing acreage and drilling new wells. The headline plays that many analysts talk about are the Delaware and Midland basins in the West Texas Permian but as we outline in today’s blog there is also continued interest in the relatively less well-known central Oklahoma SCOOP and STACK plays.
The Anadarko basin covers approximately 60,000 square miles centered in the western part of Oklahoma and the Texas Panhandle and extending into western Kansas and southeast Colorado. Like the Permian Basin in West Texas, the Anadarko is certainly not a “new” oil and gas basin but has been extensively and successfully exploited since the 1920s using conventional vertical drilling technology. Over the past four years the basin has been successfully targeted by producers using horizontal drilling and fracturing technology to extract unconventional oil and condensates from shale. The Anadarko basin is also similar to the Permian Basin in that it contains multiple layers of oil-bearing formations that can be exploited by drilling at different depths. 
The Anadarko basin encompasses four main shale era plays - the Mississippian Lime to the northeast, Cana Woodford to the southeast, Granite Wash to the southwest and Cleveland/Tonkawa to the northwest. The Anadarko shale is less consistent and harder to “unlock” hydrocarbons from as compared with the bigger plays like the Bakken or the Eagle Ford. However - as we have discussed in previous blogs – it has been the subject of much excitement in the drilling community with huge wells coming in that promise rich rewards. We talked about some of these opportunities back in December 2012. We also referred to the ingenuity of Anadarko producers in cracking the code back in October 2013.
The Apple Page: can the federal government force Apple to create something that does not exist?