Wednesday, March 1, 2017

The Market And Energy Page, T+40 -- March 1, 2017; Hi-Crush Buys Enough Sand To Frack 25,000 Wells

Sand: Hi-Crush Partners to acquire Permian Basin Sand. Over at Aggman:
  • Permian Basin Sand Co; a 1,226-acre sand reserve with more than 55 million tons of sand
  • $275 million
  • largest acquisition ever for Hi-Crush
  • $275 million / 55 million tons = $5 / ton; retail $25 - $35 / ton
  • 55 million tons x 2000 lbs/ton = 110,000 million lbs / 10 million lbs (per frack) = 11,000 wells; at 5 million lbs/frack, 22,000 wells
  • will provide frack sand for drilling activity in West Texas
  • Hi-Crush has already sold out of sand in the first quarter of 2017 because of increased fracking activity
  • most of Hi-Crush: prior to acquisition, most of its existing sand reserves are Northern White sand from Wisconsin 
  • Google: Hi-Crush on the blog; quite interesting 
The Market

Mid-day trading: insane. The Dow is now up over 300 points. Up 303 points; at 21,117. WTI with 8th consecutive week of build in crude oil stocks; WTI is down about a dime, just under $54/bbl, a long way from what Saudi wants ($60) and even farther from what Saudi needs ($80) and what they really, really need ($100). 

Mid-morning: trading in McDonald's shares are halted; annual investors' day; company expected to return money to shareholders;

Opening: up 200 points. This is quite incredible. 

Futures: futures up almost one hundred points. Follows President Trump's first speech to Congress last night. [At 7:30 a.m. Central Time, Dow futures up almost 175 points; consumer spending and income up; in line with expectations.]

WTI: oil prices slip as rising US supplies offset OPEC cuts. Over at Reuters.
U.S. crude stockpiles have been rising for seven consecutive weeks, and forecasts of an eighth build of 2.9 million barrels last week fueled worries that demand growth may not be sufficient to soak up the global crude oil glut.
Russia may speed up oil output cuts. Over at Reuters.
Russia had said it would cut oil output by 200,000 barrels per day (bpd) by the end of the first quarter compared with October's levels, and by a further 300,000 bpd in April as part of the global deal.

ND Weather Affects Production

This is an older story, published some days ago, but I was behind. Simply catching up now. This is for the archives. This is ONEOK's 4Q16 and full year report.
"ONEOK reported strong 2016 financial performance as a result of ONEOK Partners' adjusted EBITDA increasing nearly 18 percent compared with 2015, driven by higher fee-based earnings in all three business segments," said Terry K. Spencer, president and chief executive officer of ONEOK and ONEOK Partners.
"ONEOK maintained its healthy dividend coverage throughout 2016, ending with full-year coverage of 1.31 times and approximately $250 million in cash.
"The natural gas gathering and processing segment's 2016 adjusted EBITDA increased 40 percent compared with 2015, driven by higher average fee rates from contract restructuring efforts primarily completed in 2015 and benefiting 2016 earnings," continued Spencer. "The natural gas liquids and natural gas pipelines segments also reported higher full-year 2016 results, largely from increased fee-based exchange and transportation services, respectively. Higher natural gas volumes processed and higher natural gas liquids (NGL) volumes fractioned also helped increase full-year 2016 earnings.
"We experienced lower than expected natural gas and NGL volumes in the fourth quarter primarily due to increased ethane rejection and severe winter weather in the Williston Basin and Mid-Continent in December, impacting 2016 results by an estimated $15 million," he continued. "However, despite weather impacts, natural gas volumes processed continued to increase in the fourth quarter, compared with the third quarter 2016. While heavy snowfall and severe weather in the Williston Basin impacted our operations early in the first quarter of 2017, February volumes have rebounded significantly.

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