Wednesday, January 18, 2017

Reason #1 Why I Love To Blog -- The Links Readers Send Me; 59 Degrees Below Zero In Alaska -- Thank Goodness For Global Warming (Otherwise A Lot Colder) -- January 18, 2017

This may be the best story I've seen in a long, long time.

A huge thanks to the reader who sent me this. This is really "good" on so many levels.

Link to "My North Dakota Now" here.

Something tells me this idea may work for moving some of the equipment that is being moved on "sleds" out on the oil well pads.

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Miscellaneous
Cleaning Out The "In-Box" Before Calling It A Night

The Wall is being built: the Obama Wall. Good fences make good neighbors. I guess "open borders" are good as long as they are in Texas.

Fox News ratings soar as Tucker Carlson takes over for Megyn. Don't you just love seeing "soar," "ratings," and Fox News all in one sentence."

Global warming is saving Alaskans from - 60 degree weather. Link here. From The Drudge Report:


Kinder Morgan (pipeline) misses estimates; shares plunge. 3%.

UnitedHealthcare 4Q16 EPS surge 64%on increased enrollment. Does the GOP really want to scrap ObamaCare? Once the big insurers figure out ObamaCare ... oh, that's right ... wasn't United Healthcare one of the first to start scrapping ObamaCare. Can't remember. Need to check, but I think I'm right.

George Michael killed by "crack cocaine." Did anyone not already suspect that?

Some folks are upset that some of Trump's cabinet nominees have limited government experience. Wasn't this the extent of the current POTUS' government resume: "junior senator from Illinois; one term." Can't remember. Need to check, but I think I'm correct. If not, not far off.

Seven years, 363 days into Obama's presidency: the "Fed" gives the US economy a "clean bill of health." Okay to start raising rates. Fast and furious. 

Two Wells Coming Off Confidential List Thursday -- January 18, 2017

Active rigs:



1/18/201701/18/201601/18/201501/18/201401/18/2013
Active Rigs3849157187187

Wells coming off confidential list Thursday:
  • 32528, SI/NC, Enerplus, Finch 148-92-22A-21H, Heart Butte, no production data,
  • 32736, SI/NC, Newfield, Lost Bridge Federal 148-96-9-4-4HLW, Lost Bridge, no production data, 
One new permit:
  • Operator: Marathon
  • Field: Antelope (McKenzie)
  • Comments:
Four producing wells (DUCs) completed:
  • 29507, 160, Zavanna, Shepherd 3-11 1H, Stony Creek, t1/17; cum --
  • 29508, 139, Zavanna, Shepherd 3-11 2TFH, Stony Creek,  t12/16; cum --;
  • 29509, 125, Zavanna, Sheperd 3-11 3H, Stony Creek, t1/17; cum --
  • 29510, 48, Zavanna, Shepherd 3-11 4TFH, Stony Creek, t1/17; cum -- 
Stony Creek oil field: the page needs to be updated, but Stony Creek oil field is tracked here

One permit canceled:
  • QEP: an ND Levang permit in McKenzie County; it was also noted that QEP is changing the target formation on one ND Levang well from the Three Forks third bench to the middle Bakken based on name change (#33267: the ND Levang permit that was 3-16-21T3HD is now ND Levang 7-16-21BHD).

Netflix Smashes Expectations; Shares Surge -- January 18, 2017

This is really, really, cool. I will get back to it later. for now, Reuters is reporting that "Netflix blows past international subscriber estimates; smashes expectations; shares spike.

Disclaimer: this is not an investment site. This is being posted simply because of how I first started following this company. It was the first company I mentioned over at "The Next Big Thing," first posted March 21, 2013. I never bought shares in Netflix, and never plan to.  I just think it's interesting.

It's fun to go back and read that entire note, the original post and some of the updates.

The Ray Area -- January 18, 2017

I'm posting this to simply jog my memory of what's been going on around the Ray, ND, area.

Tioga, the "oil capital" of North Dakota is located about ten miles to the east-north-east.

Also, the oldest active well in North Dakota is in this region:
  • 35, 263, Hess, Beaver Lodge-Devonian Unit H-310,  Devonian, t3/60, cum 2.1 million bbls 11/16; (active since 1960 -- about 57 years old)
  • 35, 503/PNA, Hess, Beaver Lodge-Devonian Unit H-310, Madison, t4/52, cum 216K 2/60 -- now PNA (about 8 years of production)
The Clarence Iverson "discovery" well is located about eight (8) miles south of Tioga. I discussed it, with links, at this post. I see that some of the links are broken; I will try to fix them later. It is located just south of #35.

Enduro Operating -- Two Posts To Recall -- January 18, 2017

Enduro Operating with three permits for re-entry, January 10, 2017.

Enduro Operating has permit for water injection, enhance oil recovery, November 3, 2016.

Also, this comment from that same date, November 3, 2016.
Comments regarding a renewed permit:

  • it appears that #3440, was an old Spearfish/Charles well drilled back in 1963, and abandoned back in 2008; and is now going to be converted to a water injection well (an enhanced recovery well); the application was initially submitted in February, 2014;
    • 3440, loc/30, Enduro Operating, NSCU K-709, Newburg oil field, Spearfish/Charles pool, t10/63, cum 327K 2/08; 

Tracking President Trump's Executive Orders And Other Related Actions

April 26, 2017, T+95: executive order regarding Federal government interfering with states' rights on education.

April 25, 2017, T+94: executive order promoting agriculture and rural prosperity in America.

April 3, 2017, T+72: the US will end UN funding for the UN Population Fund. Trump reinstated the so-called Mexico City Policy that withholds US funding for international organizations that perform abortions or provide information about abortion.

March 28, 2017, T+66: executive order "unwinding" President Obama's climate change policies. Also at The Washington Post.
  • to roll back most of Obama's climate-change legacy
  • emphasis on coal mining
  • takes aim at a suite of narrower but significant Obama-era climate and environmental policie
  • includes lifting a short-term ban on new coal mining on public lands
Monday, March 6, 2017, T+45: revised travel ban signed. 

Thursday, February 9, 2017, T+20: President Trump signs three more executive orders
  • break up crime cartels
  • task force on violence on blue
  • another crime-related EO
Monday, January 30, 2017
  • regulatory freeze; each new regulation requires removal of two existing regulations; cost analysis must be done -- new regulation cost must match cost of two existing regulations. 
Saturday, January 27, 2017: three --
  • five-year lobbying ban on administration officials
  • reorganization of the National Security Council and the Homeland Security Council
  • 30-day deadline for military leaders to present plan to defeat ISIS
Friday, January 26, 2017: temporary ban on immigrants from seven countries.

Thursday, January 26, 2017: none. He had said he would sign an EO on voter fraud, but late in the day it was reported he will "delay" signing that EO.

Wednesday, January 25, 2017: coming -- regarding the UN -- from The New York Times -- two executive orders coming --
  • the first:
    • "Auditing and Reducing US Funding of International Organizations"
    • to terminate funding for any UN agency or international body that meets any one of several criteria
    • any activity that gives full membership to the Palestinian Authority or Palestine Liberation Organization 
    • any activity that supports programs that fund abortion 
    • any activity that circumvents sanctions against Iran or North Kore
    • any organization that "is controlled or substantially influenced by any state that sponsors terrorism
    • any organization that is blamed for the persecution of marginalized groups or any other systematic violation of human rights
    • to enact "at least a 40% overall decrease" in remaining US funding toward international organizations
    • Comment: it sounds like the "40% overall decrease" is in addition to the 100% non-funding for activities as specifically outlined, but I could be wrong on that.
  • the second:

    • "Moratorium on New Multilateral Treaties"
    • calls for a review of all current and pending treaties with more than one other nation
    • asks for recommendations on which negotiations or treaties the US should leave
    • see link for further detail, background
Wednesday, January 25, 2017: two executive orders --
  • construction of a "large physical barrier on the southern border"
  • reinstate the Secure Communities Program, which Immigration and Customs Enforcement (ICE) uses to "target illegal immigrants for removal" 
    • directs the State Department to withhold visas or take other measures to ensure countries take back deported undocumented immigrants
    • strips federal grant money from sanctuary cities that harbor undocumented immigrants

Tuesday, January 24, 2017, announced, I haven't see the specifics yet, will affect:
  • Keystone XL
  • DAPL
  • Pipelines in America: made in America
  • streamlining permitting process for domestic manufacturing
  • expediting environmental reviews/approvals for high-value infrastructure projects
Monday, January 23, 2017, first full day of work in the White House:
  • shut the door on negotiating Trans-Pacific Partnership
  • re-negotiate NAFTA
  • hiring freeze except for military
  • "Mexico City" order -- to defund International Planned Parenthood
Friday, January 20, 2017, inauguration day: two EOs. I already forget the first one; the second one, some bizarre anti-ObamaCare EO, which no one will be able to understand. My hunch is it could lead to a lot of mischief. No problem: a new EO. [Later: here it is, his first EO over at USA Today: -- almost as bizarre as the second EO -- it will block an Obama administration policy change that would have reduced the cost of mortgages for millions of home buyers.
In the first hour of Trump's presidency, the U.S. Department of Housing and Urban Development sent a letter to lenders, real estate brokers and closing agents suspending the 0.25 percentage point premium rate cut for Federal Housing Administration-backed loans.
Much, much more at the link.]

Thursday, January 19, 2017: It begins this Friday, immediately following his inauguration. Just think, at least 60 US Democratic congressmen and senators are going to miss this historic event. Cupcakes. Snowflakes. The good news: more room for Trumpers to be there.

Meandering Comments On Saudi Arabia Energy Minister's Comments That OPEC Cut In Production Could End In June, As Originally Planned -- January 18, 2017

Updates

January 19, 2017: wow, talk about a country in disarray -- now the Saudi energy minister suggests there may be need for another production cut in 2017

Later, 3:42 p.m. Central Time: be sure to read the first comment about Saudi's seasonal production before reading the original post.
 
Original Note
 
We didn't get a chance to discuss the announcement that the Saudis recently made, from Bloomberg:
  • comments made by Saudi Arabia Energy Minister, as paraphrased by Bloomberg
    • OPEC probably won’t need to extend a deal it reached with other crude producers to cut output, given compliance with the reductions and the outlook for an increase in global demand
    • the re-balancing of the oil market should take place by the end of the first half of the year
    • demand will pick up in the summer, and OPEC wants to make sure markets are well-supplied
  • direct quote, though: "Of course, there are many variables that can come into play between now and June, and at that time we will be able to reassess.”
The original goal: to reduce global inventory by about 1.8 million bbls / day.

There are indications that some OPEC, and some non-OPEC countries, are cutting even more than agreed (not necessarily because they actually wanted to).

Some comments / observations:

1. If we take this at face value, it suggests the energy minister is simply looking at summer driving gasoline demand in the US:
1a. See the crack cocaine analogy at this post.
1b. If that is accurate, it suggests the energy minister feels the US shale industry can't meet the summer driving demand. The EIA seems to suggest otherwise (link to follow, if I remember). In January, 2017, US crude oil production rose slightly more than 40,000 bopd, month-over-month; the EIA projects a 71,000 bopd increase in February. I assume they mean 71,000 bbls over the previous month's rise of 41,000 bopd but I could be wrong. But if so, that represents about a 110,000-bbl increase, during the winter, and in the very early days of increased production.
[Added later, see first comment: 1c. By the way, the energy minister's comments are very disingenuous. In fact, Saudi will have to increase production in July/August to meet its own domestic requirements for air conditioning. See first comment; I had completely forgotten. Throwing that into the equation may make this entire exercise/this entire note moot. The Saudi energy minister may simply be saying that in July, to meet its own domestic needs, Saudi, will, of course, increase production. Well, duh.]
2.  The Saudis maintain they have a dual mandate when it comes to oil: a) their own interests; and, b) global interests: smoothing the global supply/demand curve. The energy minister is speaking to the second mandate.
2a. See "game's on": the Saudis don't think US shale industry can meet summer driving demand; Saudi doesn't want to risk a supply shortfall.
2b. The negotiated OPEC cut is to last for six months, taking us through the month of June. By the first of July, the US driving season is well on its way; by July there will be a 30-day gasoline supply in the US.

2c. Some (including Bloomberg) argue that going back to the way things were in July, 2017, will be a bit soon, probably way too soon.
Bottom line: why did the energy minister make this statement at this time? I think it was for these two reasons:
3. It was a message to US shale companies -- moderate your CAPEX. If you want to take advantage of OPEC's decision to cut back, OPEC can return with a vengeance; we can flood the markets again.

4. It was a message to other OPEC countries: don't cheat. This will all work out fine if everyone stays the course. And if you cheat, Saudi can make it really, really rough on you again as soon as this summer.
Regardless, it was wishful thinking.
5. Ninety percent (90%) of Saudi Arabia's revenue comes from oil. Their 2017 budget is said to be based on $80-oil (wink-wink). At $50 oil, they simply can't make it. They are on track to hitting an all-time low in foreign reserve assets in about nine (9) months (that is this year), and, although it's hard to believe, Breitbart had a story some time ago (linked earlier at the blog) that at the current rate of decline, Saudi's foreign reserve fund could be depleted in as little as four years.

On top of that, the IMF has estimated that Saudi's GDP growth, at 0.4% this year, will be essentially flat.
This country is in dire straits.
Meanwhile, the price of WTI continues to fall, now down to $51.53 or thereabouts.

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Platts Take On This

Shortly after the above was posted,  Platts  posted a note:
  • OPEC expects demand for its own crude oil will fall but "is mindful" that return of US shale could dent positive early signs of non-OPEC compliance 
    • OPEC appears to "be serious": says it will produce 33.085 million bopd in December, down slightly more than 220,000 bopd from November (do recall that OPEC pumped as much as it could leading up to the cut)
    • OPEC projects crude oil production in 2017 to be held at 32.10 million bopd, just below the target of 32.5 million bopd
  • US oil production has been revised upward by 230,000 bopd
  • non-OPEC oil production will grow to an average 57.26 million bopd in 2017 vs 57.14 million bopd in 2016; this is a 180,000 bopd smaller increase than previously forecast (Russia, Norway, China, Kazakhstan, Congo)
  • Saudi Arabia:
    • Saudi leading the way, estimates: production down to 10.474 million bopd (December) from 10.623 million bopd (November) -- but again, max production prior to cut
    • Saudi told OPEC it had produced 10.465 million bopd (December), a seven-month low
    • Saudi's commitment: 10.06 million bopd between January - June, 2017
    • Yes, here it is: "Saudi's output rose to record levels last year, reporting production above 10.6 million bopd for five successive months. In 2015, output averaged 10.193 million bopd
    • in fact, it was reported that Saudi hit an all-time high of nearly 10.7 million bopd in December
  • Meanwhile, Iraq:
    • second largest OPEC producer
    • December: record high 4.83 million bopd, up 30,000 bopd from November; secondary sources say Iraq produced 4.632 million bopd in December
    • under the OPEC deal to cut, Iraq's goal: 4.351 million bopd
To me, this looks like a lot of smoke, and not a whole lot of fire:
  • the numbers are not particularly remarkable
  • OPEC produced at max rates going into negotiations
  • agreed cuts appear to bring everyone back to "normal" 
  • no one believes the "official" numbers: that's why we have "secondary sources"
  • I thought I read somewhere that Saudi was below 10 million bopd production -- yes, here it is, over at Zacks
I guess one can come up with any number one wants.

And, then of course, we have all that oil sloshing around in tankers and pipelines from Timbuktu to Toronto.

Re-Posting A Most Spectacular Graphic -- Gasoline Demand -- January 18, 2017

Updates

February 24, 2018: in the graphic below, the change in miles driven is "against" the left-hand x-axis, from -4% to +6%. The graph appears to go through the end of 2016. Gartman, a frequent commentator on CNBC said that Uber was the top threat to oil. Apparently, Uber is not a threat yet. Whether or not the increase of miles driven impresses anyone, US "gasoline demand" set more records in 2017 (will be posted later).

How did miles driven for 2017 in the US stack up compared to previous years. Link at Federal Highway Administration.  
  • July, 2017: 0.8% increase year-over-year; cumulative travel for 2017 through July, 2017, increased 1.5%.
  • December, 2017: 0.7% increase year-over year. The cumulative estimate for the year is 3,208.5 billion vehicle miles of travel. 
Original Post

Gartman: Uber is top threat to oil. That was March 29, 2016. One year later:
Some important data points about the graphic:
  • the individual green bars represent year-over-year growth; left hand axis is 4 - 6% for the 2014 - 2016 surge
  • this graphic goes back all the way to January, 2008, the last year of George W Bush's presidency
  • the graphic encompasses the years of the entire Obama presidency; this is not political; this has nothing to do with Obama; it just puts the timeline in perspective for me
  • the Saudis opened the crude oil spigots on/about October, 2014 -- their $1 trillion mistake
  • by January, 2015, only three months later, gasoline demand (proxy for miles traveled) surged to highest year-over-year growth  in almost a decade, and possibly the greatest surge in modern history
  • and then it spiked even higher in early 2016
  • the year-over-year growth continued to surge throughout the next two years of the Saudi crude oil surge
  • some pundits have suggested that gasoline is like crack cocaine: bring the price down, get more people hooked, demand will persist even as the price is brought back up 
  • Saudis are now suggesting that they may be able to open the spigots again, as soon as five months from now  

Riding The Wave? Or Making A Wave? -- January 18, 2017

This is not our Sophia, but it certainly could be. Sophia knows my laptop keyboard well enough to watch Princess Sophia videos on YouTube -- volume, selecting new episodes, pausing, playing, dimming, brighten; etc:

"11" is not eleven, it's "pause."

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The other day I asked whether PEOTUS Trump was riding the wave, or if he was making a wave.

Today, NBC News is suggesting that PEOTUS is simply riding the wave: GM's $1 billion investment was not driven by Trump and likely dated back to 2014.
But several GM officials stressed that the latest moves were in the works for months and, in some cases several years, and were not a reaction to criticism by president-elect Donald Trump who, earlier this month, had threatened to impose "a big border tax" on GM for importing the hatchback version of its compact Chevrolet Cruze model from Mexico.
During an appearance at the North American International Auto Show in Detroit last week, GM Chairman and CEO Mary Barra said the automaker would not alter its global manufacturing strategy to comply with political pressure, and GM General Counsel Craig Glidden this week echoed the position in an interview with the Wall Street Journal.
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The Market

In all the "noise" yesterday, everybody heard the Permian/XOM headline: $6.6 billion Permian deal. The third leg of that footstool was widely reported but I think a lot of folks missed the most important part of the story: this doubled XOM's footprint in the Permian. No, that was not the most important point. The most important point: this was XOM doubling down in the Permian. 

Quick notes that popped up across the screen while looking at the news today. Shares in:
  • TGT: pummeled
  • GS: surged
  • Netflix: surging 
Disclaimer: this is not an investment site. Do not make any investment, financial, relationship, job, or travel decisions based on what you read here or what you think you may have read here. TGT caught my eye because I was in and out of that stock over a six-month period (very happy); I have never owned any shares in GS (and no plans to do so) but it gets a lot of attention. Likewise, I have never owned any shares in Netflix (and no plans to do so) but it was one of the first (if not the first) company I mentioned years ago when talking about the "next big thing." 

Active Rigs Steady At 38 -- January 18, 2017

US industrial output rises 0.8%. Utilities surge

Gartman: Uber is top threat to oil. That was March 29, 2016. One year later:
 
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Back To The Bakken

Active rigs:


1/18/201701/18/201601/18/201501/18/201401/18/2013
Active Rigs3849157187187

RBN Energy: natural gas production trends in the SCOOP and STACK, part 3.

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Time To Say Goodbye

#18 in the 20-song countdown and the 20 songs that will be played continuously over the 3-day celebration.

Time To Say Goodby, Sarah Brightman & Andrea Bocelli