Monday, April 17, 2017

April 18, 2017

GDP Now: latest forecast --- 1Q17 -- 0.5% as of April 14, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.5 percent on April 14, down from 0.6 percent on April 7.
The forecast for first-quarter real consumer spending growth fell from 0.6 percent to 0.3 percent after this morning's retail sales report from the U.S. Census Bureau and the Consumer Price Index release from the U.S. Bureau of Labor Statistics.
The next forecast is due later today, April 18, 2017.

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Gaza's Only Power Plant Has Run Out Of Fuel

Consider this is a story from the Mideast and considering this is being reported by CNN, it's hard to say what the whole story is. A long, long time ago, I predicted that Saudi Arabil awould have to limit its foreign aid due to its own cash flow problems. I suggested that Saudi Arabi would cut aid to the Palestinian Authority and/or Hamas.

I have no idea if the fact that Gaza's only power plant has run out of fuel has anything to do with foreign aid from Saudi Arabia but it sure seems likely.

The CNN story here. The lede:
Gaza's only power plant has run out of fuel, leaving 2 million residents of the coastal enclave with only four hours of electricity a day in what the UN cautions could be the tipping point to making Gaza "unlivable."
The Palestinian Authority in the West Bank and Hamas in Gaza blame each other for the energy shortage. 
The power generating authority in Gaza says it cannot afford to buy more fuel for the plant -- mostly because of taxes imposed by the Palestinian Authority. The Palestinian Authority claims that the Hamas officials in Gaza are simply incapable of running the plant efficiently.

Haynesville

Updates

October 18, 2017: roaring back to life -- the WSJ.

May 16, 2017: Haynesville experiencing a resurgence as takeaway is bottled up in the northeast

Later, 7:38 a.m. Central Time: USGS, one word: wow.  My understanding is reserves are based on current technology (definitely) and current pricing (?). Here's the assessment, data points:
the assessment included two formations:
  • Bossier Formation: along the coast, stretching from Texas-Mexico border to Louisiana-Mississippi state line, from the coast ot about 150 miles inland
  • Haynesville Formation: inland in Texas; along the southern coast of Louisiana, extending up about a third of the state, and extending well into Mississippi, Alabama, and even a bit of the Florida panhandle (where we will never see drilling)
  • last assessment, 2010, Jurassic and Cretaceous rocks of the Gulf Coast
    • Bossier: 9 tcf
    • Haynesville: 61 tcf
  • new assessment, 2017, released last week
    • "amazing what a little more knowledge can yield"
    • updated geologic maps
    • expanded production history 
    • greater understanding
    • (by the way, one dedicated reader tells me the same thing is happening in the Utica and that USGS has not yet updated how fast things are moving in that formation)
  • long known that the two formations contain oil and gas ,but it wasn't until 2008 that production of the continuous resources really got underway
  • 2017 assessment:
    • Bossier
      • natural gas assessment ranges from 37 tcf to 224 tcf; the mean - 109 tcf;
      • oil assessment ranges from 1 billion to 5 billion bbls; the mean - 3 billion bbls;
      • natural gas liquids assessment ranges from 424 million bbls to 2 billion bbls; the mean -- 1 billion bbls
    • Haynesville: 
      • natural gas assessment ranges from 96 tcf to 341 tcf; the mean - 196 tcf;
      • oil assessment ranges from 286 million to 2.5 billion bbls; the mean - 1 billion bbls;
      • natural gas liquids assessment ranges from 304 million bbls to 1.7 billion bbls; the mean -- 1 billion bbls
Compare these numbers with:
 And still one of my favorite posts: the New York Times hoax / scam on natural gas.

Original Post
 
I've never linked the Haynesville at the sidebar at the right. When I started the blog, I had little interest in natural gas. But with RBN's update today, it seems time I have a Haynesville page. This was posted earlier. Note the USGS recent assessment of the Haynesville: 304 tcf.

RBN Energy: update on Haynesville natural gas shale play. Data points:

  • straddles the northeast Texas-Louisiana border; back in the news
    • 9,000 square miles of surface area -- extends up to southwest Arkansas
    • reserves: 75 trillion cubic feet BUT last Thursday, USGS upped the reserve estimates:
      • 304 tcf of natural gas; 1.9 billion bbls of crude oil -- recovery rate unknown
    • rig counts have doubled in the past six months
    • rig counts up more than 200% in last 12 months 
    • concentrated in two counties: De Soto Parish, LA; and, San Augustine County, TX
  • Exco Resources: divesting Eagle Ford assets to concentrate on Haynesville
  • "perpetual has-been status"? not likely
    • natural gas at $3
    • improving technologies
    • LNG export demand ramping up
    • location, location, location

Monday, April 17, 2017 -- The Haynesville: Hyperdrive

Active rigs:


4/17/201704/17/201604/17/201504/17/201404/17/2013
Active Rigs512993186185

RBN Energy: update on Haynesville natural gas shale play. Data points:
  • straddles the northeast Texas-Louisiana border; back in the news
    • 9,000 square miles of surface area -- extends up to southwest Arkansas
    • reserves: 75 trillion cubic feet BUT last Thursday, USGS upped the reserve estimates:
    • 304 tcf of natural gas; 1.9 billion bbls of crude oil -- recovery rate unknown
    • rig counts have doubled in the past six months
    • rig counts up more than 200% in last 12 months 
    • concentrated in two counties: De Soto Parish, LA; and, San Augustine County, TX
  • Exco Resources: divesting Eagle Ford assets to concentrate on Haynesville
  • "perpetual has-been status"? not likely
    • natural gas at $3
    • improving technologies
    • LNG export demand ramping up
    • location, location, location
Scott Adams: how to structure a deal with North Korea.

The Market And Energy Page, T+86 -- April 17, 2017

Shale oil will not be able to keep up in the 2020s -- Oilprice.com (consider the source) Data points:
  • 2020s: could be a "decade of disorder" (my gut feeling: 2020's will be the 1920's all over again)
  • demand will continue to grow, year after year, and shale will not be able to keep up
  • argues that shale, 2010 - 2014, brought a "lot of supply online. That subsequently, led to a price meltdown" (if I recall correctly, the price meltdown -- the $1 trillion mistake -- occurred shortly after October, 2014, when Saudi Arabia relaxed all quotas 
  • oil is volatile (yes, bust and boom cycles)
  • drastic cutback in CAPEX between 2000 and 2014: oil industry grew fivefold, from $160 billion to $780 billion
  • but, 2015 - 2016: CAPEX fell by over $300 billion (still significantly more than what was spent in 2007 -- and demand hasn't grown that much, in the big scheme of things)
  • supply shortfall could hit as soon as the 2020 - 2022 period -- (that's 3 - 5 years from now; a lot can happen in five years)
  • Barclays assumes a growth of 1 million bopd; IEA assumes a growth of slightly more than 1 million bopd
  • "all it's gonna take is a geopolitical crisis in some country, pick one -- Venezuela -- and a couple million bopd goes off the market (note: Venezuela is already history)(couple million bopd? Saudi Arabia can easily make up the difference; Bakken, Permian, Eagle Ford could easily make up the difference if we're only talking "a couple million bopd)
Haynesville: USGS releases new assessment of the Haynesville. Staggering.

WMB: Williams Partners to sell its interests in the Geismar Olefins facility, $2.1 billion in cash. Isn't that about how much Tesla burns through every quarter? Or is that every year? Whatever? WMB up in about a percent in pre-market trading.  Pays 4%.

Netflix: Netflix reports later today, I believe. Could be a bit of fireworks. [Update: incredibly good day. Up $4.33 or over 3%. Subscriber growth slowed, coming in under expectations, with 98.75 million total subscribers, up from 81.5 million a year ago. Analysts had expected 98.9% -- oh give me a break -- saying Netflix came up short - and then reporting 98.75 vs 98.5% -- really "inappropriate" headline. The company added 3.53 million international subscribers, missing its guidance of 3.7 million. Oh, give me a break. Profit easily beat forecast: 40 cents vs 37 cents forecast.]

Petrobras production: if I did the math correctly, it appears Petrobra produced about 85,000 boepd less in March than in February. It should be noted that "everyone" is going gaga over the fact that Saudi Arabia cut production around 100,000 bopd. Just saying. 

The Political Page, T+86 -- April 17, 2017

Apparently the narrative today is "paid protestors." DAPL knows all about it.