Wednesday, October 25, 2017

Throw The Book At Him; If "No Book," Then Throw A Bbl Of Oil At Him -- October 25, 2017

This should generate an e-mail from my "legal" expert living in an undisclosed location in Arizona, along with a score of other ND snowbirds. LOL.

From PennEnergy: oil pipeline opponent uses "necessity defense" after being indicted for citing a riot.
An American Indian activist and former U.S. congressional candidate in North Dakota accused of inciting a riot during protests against the Dakota Access oil pipeline says he'll seek to present a "necessity defense" — justifying a crime by arguing it prevented a greater harm.
Chase Iron Eyes has pleaded not guilty to inciting a riot and criminal trespassing.
He could face more than five years in prison if convicted at trial in February. The pipeline has since begun carrying oil from North Dakota through South Dakota and Iowa to Illinois.
Ah, yes, the noble savage. From Inforum (Fargo Forum), April 2, 2016: this is the bio of the Democratic nominee for ND congressional seat --
  • unable to pass one bar, he found another bar that he didn't pass
  • kicked in door; carried out two cases of antique shotguns; his defense: "blank-out drunk"
  • served 10 months in minimum-security Missouri River Correction Center in Bismarck for four Class C felony charges: burglary, preventing arrest, theft of property, criminal mischief; charged in federal court with felony possession of stolen firearms, interstate commerce
  • Mr Iron Eyes released from parole in March, 2007
  • during that time graduated with a law degree from the University of Denver's Strum College of Law
  • now licensed to practice in state and federal court in South Dakota, and federal court in North Dakota
  • so, now back to being a "social justice activist" -- sort of like a community organizer -- except he doesn't have much of a community; but, as far as organizing goes, he does pretty well;
  • if elected to Congress perhaps he will organize a new party
  • but before that, will go to court charged with inciting a riot
  • but apparently now sober, he admits the selfie of him nude is real; the allegations of an affair, he denies; a Twitter fan at one time
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Sad Commentary

I visit several news aggregator sites throughout the day. When I find an interesting headline I click on the link. As soon as I see the source, I already know whether the news will be fake or slanted. If the news aggregator takes me to NBC, ABC, or CBS, I generally just return to the news aggregator. I assume the NBC, ABC, or CBS story will be "fake" or slanted. If neither, it will be dumb-downed for a sixth grader and incredibly superficial.

This is truly amazing, if true: Dubai-based Emirates, which operates the world's busiest airport for international travel. It is being reported by NBC so who knows whether this is true or not. One would think London's Heathrow would be at or near the top.

No link. Not worth the effort. 

BHP Finds 5 Trillion Cubic Feet Of Natural Gas Off Trinidad -- October 25, 2017; Update On ExxonMobil And Vaca Muerta

I cannot keep up with natural gas discoveries. So, I have to cut and copy this from previous posts:
From an earlier post regarding natural gas reserves:
Now, let's go back and re-run the numbers that were posted earlier:
  • October 18, 2017, Haynesville: USGS survey -- 300 trillion cubic feet of natural gas, up from roughly 70 trillion cubic feet in its last survey in 2010.
  • Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
  • Qatar: 800 trillion cubic feet, wiki, conversion
I did all that to post this story: BHP finds 5 Tcf of gas off Trinidad. In the area where this was discover the Trinidad energy minister said this: The blocks hold an estimated 10 trillion-40 trillion cf of gas and 2bn-8bn bl of crude. So, better than the Bakken, but then the Bakken is an oily play.

*****************************
Vaca Muerta Update

To quote Dorothy Parker, "What fresh hell is this?"

Day in, day out, it's bbls of crude oil. But not for ExxonMobil in South America, apparently. For them, it's "cu m/day: which I assume is cubic meters per day.

So, now the conversion at this site or this site:

11 cu m/day = 69 bbls/day

So 11 million cu m/day is 69 million bbls/day. I guess.

69 million bbls/300 horizontal wells = 230,000 bbls/day/well. Really?

Whatever.

Here's the article from The Oil & Gas Journal:
ExxonMobil Corp. is to launch a Vaca Muerta pilot project that could lead to a staged development of about 300 horizontal wells with an estimated production of 11 million cu m/day once completed.
Argentina’s Neuquen province has approved the company’s 35-year development for Los Toldos I South Block 85 km northwest of Anelo and 175 km northwest of Neuquen City. Initial project investment is $200 million, said ExxonMobil Exploration Argentina SRL (EMEA), which will operate the block with 80% interest. Gas y Petroleo del Neuquen SA and Tecpetrol each hold 10%.
And then this:
The initial investment calls for a pilot project that brings as many as seven wells to production, the construction of production facilities, and development of export infrastructure.
So, $200 million for the initial investment gets one seven wells.

$200 million / 7 wells with infrastructure = $30 million / well.

But 230,000 bbls @ $50/bbls = $12 million / day / well --- in three days the well will be paid for.
  
I can only assume my calculations are off.

It is said that Vaca Muerta has the world’s second-biggest reserves of shale gas and fourth-biggest of shale oil. When I update the Vaca Muerta, I update it here.

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And In Russia, It's Tonnes

From Reuters:
Russia will increase its oil output by 3.5-4.0 million tonnes in 2018 if a global deal between OPEC and non-OPEC producers to reduce production is not extended, Energy Minister Alexander Novak said on Wednesday.
Conversion? Maybe later. But probably not.

Refiners Shrug Off Hurricane Harvey; Will Report Huge Profits -- Bloomberg -- Oct 25, 2017

From Bloomberg via Rigzone:
  • per-share profit gains from 48% to 154% among top five refiners
  • Phillips 66
  • Valero Energy
  • Marathon Petroleum 
  • Andeavor (formerly Tesoro)
  • HollyFrontier
  • crack spread is the reason; from the linked article:
Gasoline prices in the U.S. surged to the highest level in more than two years and distributors tapped storage tanks to keep deliveries flowing to filling stations. The crack spread, a rough measure of how profitable it is to process crude into fuels, jumped to $27.35 a barrel on Sept. 1, compared with $18.64 the day before Harvey’s landfall.
Bloomberg wrote the following, not me (don't blame me for this; again, this is from Bloomberg, and, if it's from Bloomberg, it must be true):
Still, one sticking point remains for some oil processors: federal biofuel mandates. Refiners are required to add ethanol and biodiesel to gasoline and diesel to satisfy annual quotas. Those that can’t blend the biofuels themselves must purchase credits known as renewable identification numbers, or RINs. Acquiring RINs can exact millions in extra costs for refiners.
The promise of relief for refiners faded when President Donald Trump was said to have directed the Environmental Protection Agency not to weaken the mandate. 
“RINs remain a mystery,” Brad Heffern, an analyst at RBC Capital Markets LLC, said in a research note. “Optimism on RINs has faded, but there are both potential negatives and potential positives on the horizon.”’
If Bloomberg says this ... 

CLR With Eight (8) New Permits -- October 25, 2017

Active rigs:

$52.1610/25/201710/25/201610/25/201510/25/201410/25/2013
Active Rigs543568194182

Eight new permits:
  • Operator: CLR
  • Fields: Camel Butte (McKenzie); Fancy Buttes (McKenzie)
  • Comments: permits for a 4-well pad in Fancy Buttes, section 5-150-96 (see below); and permits for a 4-well pad in Camel Butte, section 22-151-96 (see below)
Thirteen permits renewed:
  • HRC (6): two Helstad permits, and two Johnson permits, a Sylte Mineral Trust permit; a Borrud permit, all in Williams County
  • Hunt (4): two Trulson permits in Mountrail County; a Cook permit in Dunn County; and a Halliday permit, in Dunn County
  • Slawson (3): three Gobbler (just in time for Thanksgiving) permits, all in Mountrail County
One producing well completed:
  • 28030, 492, Oasis, Twobins 5501 13-29 2T, Missouri Ridge, t10/17; cum -- (#19482 -- neighboring well, still off-line)
***************************************************
Camel Butte Pad



***************************************************
Fancy Buttes Pad


 Existing well:
  • 19380, 497, CLR, Norway 1-5H, Fancy Buttes, t3/11; cum 217K 8/17;

Daimler Unveils Electric Truck Weeks Ahead Of Tesla; The Energy And Market Page, T+277 -- October 25, 2017 -- Why I Love To Blog -- New Home Sales Growth Surges To 25-Year High

 Breaking News

Updates

Later, 10;07 p.m. Central Time: from a reader with regard to that big electric toy truck -- Bravo, good news for the German lignite coal industry...keep them coal burning trucks goin!
 
Original Post 

Daimler unveils big electric truck weeks ahead of Tesla. Maybe that's why TSLA dropped over $11/share today. By the way, watching Chipotle today is a huge warning shot across the bow for anyone shorting TSLA. Or holding TSLA long. LOL.
The truck is called the E-Fuso Vision One. Bloomberg reports that it can carry up to 11 tons a distance of 220 miles before it needs a recharge. This model is just a prototype, but the company says it can have the truck on sale within four years in the US, Japan and Europe.
It's ideal for shorter trips between cities, rather than cross-country hauling.
Tesla was set to unveil its truck tomorrow, October 26th, but the company delayed the announcement because of Model 3 production issues. It's worth mentioning that even that date was delayed, as the original reveal was targeted for September. You can bet that Elon Musk is not thrilled with Daimler AG today.
*********************************
Original Post 

I was out and about all day. I turned on CNBC and the first thing I caught (at 2:58 p.m. CT) was the anchor noting that WTI was "down today" (all of 20-some cents, but still above $52) due to a surprising build in US crude oil inventories.

Wow, I mentioned that last evening and again this morning that US crude oil inventories increased -- it was not much, but it was going the wrong direction. For those expecting the price of WTI to go up any time in the near term, I would suggest looking at these data points:
  • RBN Energy analysis suggesting that US oil companies will be increasing/maintaining CAPEX this next year (2018) and by extension, increasing/maintaining production
  • John Kemp's stunning graph this morning of all the crude oil the US is exporting -- despite all the oil being exported, US inventories increase
  • OPEC and everyone else counting on "demand" (not supply) to drive the price of oil going forward (despite the fact that the US driving season -- the demand season -- is coming to an end for this year)
One thing that might drive US crude oil inventories down: if refinery utilization improves (US refining utilization is still below 90%).

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.

Housing sales: huge jump in September for new home sales. Up almost 20%. Rick Santelli on CNBC this morning was absolutely shell-shocked, or so it seemed (but then he always seems shell-shocked) about the number. I thought the housing number would help the markets but it did not. Story at WSJ.

The Political Page, T+277 -- October 25, 2017

Updates

Later, 638 p.m. Central Time: Obama-appointed San Francisco federal judge refuses to block Trump's order to end ObamaCare subsidies. Huge story. The judge says a) not only is Trump's action likely legal; but, b) he questions all the concerns the plaintiffs have brought, saying in effect, "where's the beef?"


Later, 6:22 p.m. Central Time: the DNC-paid-for-dossier story is moving so fast, Drudge Report had to re-fresh his page twice today -- waiting for the flashing red light!


"Baloney": that's all Hillary has had to say about this story so far. The Hillary War Room will be burning the midnight oil tonight so that "Morning Joe" will have his talking papers in the morning. The dots are starting to connect. During the campaign and after the campaign, Trump never mentioned "the Russians" until well after Hillary mentioned "the Russians." It now makes sense. The DNC and/or her handlers had copped an incredibly great story -- and if it backfired -- blame it on Trump. Trump was blindsided at first because he had no clue what she was talking about. Now it makes sense for everyone involved.

The Los Angeles Times is not reporting the "DNC dossier" story. Wow.


Later, 3:35 p.m. Central Time: it seems journalists for the mainstream media complain about everything President Trump says or does. But I have not heard one journalist complain about Trump's decision to allow the classified JFK-assassination papers to be released tomorrow. Barring any last minute "stay" by some liberal judge, the papers should be released tomorrow. It's my understanding that there really is no mechanism for stopping a president from declassifying classified material. I learned that from the Obama years, but the link is to an article on president Trump. So, we'll see.

Later, 2:31 p.m. Central Time: earlier today a reader sent me a note regarding my link to the Bloomberg article on ethanol (see below). That reader had different views of ethanol than I do, and that's fine. We all have our opinions. Life goes on. But it bothered me that I might have stepped on some toes. I went out for lunch with my wife but that note still bothered me; I hoped I had not been too harsh in my reply.

On return, I found this note in my e-mail (a screenshot):



And so it goes. 

Original Post 

My brother-in-law in California often asks me why gasoline prices remain so high despite the "glut" of oil and how inexpensive oil has become.

I suggest that folks who have that same question read this article. If this link is broken, google Bloomberg Iowa King Corn biofuels RFS.

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The Silence Is Deafening

This is a whopper of a story broken by The Washington Post:


I "never" listen to radio/NPR but today I've had it on all morning to see how they would report this story. So far, radio/NPR has talked about absolutely everything but has not mentioned on word about this whopper of a story. 

If there is one story NPR is focused on today it is Flake's decision to not run for re-election, an anti-Trumper RINO with some saying he has 18% support in his home state. NPR noted that Flake was facing a very, very tough primary after speaking against Trump for the past year. It's not being said that Flake did not want to lose a primary to a woman.

Making America Great -- Graph Of The Day -- October 25, 2017

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The Artist's Page


"Dragonfly" by Sophia, age 3
Watercolor
October 25, 2017


Earlier in the day, walking in the park, Sophia was mesmerized for a short period of time by a very, very large dragonfly that had landed on the sidewalk. When we came home, she asked if she could paint. We also saw two small turtles in the creek, but apparently she was more impressed by the dragonfly.

Death By A Thousand Cuts -- Venezuela -- Natural Gas Shortage Shuts Down State-Owned Petrochemical Plant -- October 25, 2017

Since Venezuelans don't have the money to buy anything anyway it probably won't be noticed that one of Venezuelans giant petrochemical plants has shut down due to a lack of natural gas. Apparently, shut-downs are hardly new. Story over at ArgusMedia:
Venezuela's shortage of natural gas has forced state-owned petrochemicals firm Pequiven to almost completely shut down the 3mn t/yr El Tablazo complex in Zulia state, according to a recent internal report obtained by Argus.
The Pequiven report on El Tablazo's operational status dated September 2017 shows that state-owned oil company PdV's failure to supply El Tablazo has cascaded across the complex.
El Tablazo's biggest operational problem is a lack of reliable gas supplies, the report says. Frequent plant equipment breakdowns, regional power outages and a critical shortage of hard currency to finance equipment and feedstock imports are also major factors in El Tablazo's operational paralysis.
El Tablazo's two olefins plants shut down on 24 July and 13 September, respectively, because of insufficient propane/ethane feedstock, the report notes. Lack of gas also forced Pequiven to shut down MVC and PVC production at about mid-year.
Pequiven's polypropylene and polyethylene units at El Tablazo, including Polinter, Propilven and Pralca, have also been forced to suspend production because of the gas shortage.
Much more at the link. 

Number Of Weeks To Re-Balance Increases By Two Weeks; Back Up To 39 Weeks -- October 25, 2017

This is what was reported last night:
We will get the EIA data tomorrow, but tonight the API is reporting:
  • a small build in US crude oil inventories (519,000 bbls)
  • but, S&P Platts is forecasting a 425,000-bbl drawdown
Either way, less than a million-bbls change one way or the other is inconsequential.

Meanwhile, API reports a huge drawdown of gasoline:
  • a drawdown of 5.753 million bbls
  • forecast: a much smaller draw of 2.3 million bbls
WTI/Brent prices up initially on talks of global conflict, but "then reality set in, as robust supply capacity from OPEC and US shale loomed large in skittish investor minds."
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Let's See What The EIA Reported
Weeks To Re-Balance Increases

  • crude oil increased by 0.9 million bbls -- so much for re-balancing efforts; now at 457.3 million bbls (the API was close: the API estimated a build of 519,000 bbls)
  • refinery utilization: still only 88% but increasing
  • gasoline production decreased last week, averaging 9.9 million b/d
  • crude oil imports increased slightly
  • total products supplied over the last four-week period averaged over 19.6 million b/d, down by 3.6% from same period last year (OPEC is counting on demand bailing them out -- not seeing that yet)
  • we will see the graph for gasoline demand tomorrow
  • after the report, WTI was down minimally, down about 0.5% in price 
Number of weeks to re-balance:

Week
Date
Drawdown
Storage
Weeks to RB
Week 0
Apr 26, 2017

529.0
180
Week 1
May 3, 2017
0.9
528.0
198
Week 2
May 10, 2017
6
522.0
50
Week 3
May 17, 2017
1.8
520.2
59
Week 4
May 24, 2017
4.4
515.8
51
Week 5
May 31, 2017
6.4
509.9
41
Week 6
June 7, 2017
-3.3
513.2
60
Week 7
June 14, 2017
1.7
511.5
57
Week 8
June 21, 2017
2.5
509.0
62
Week 9
June 28, 2017
-0.2
509.2
71
Week 10
July 6, 2017
6.3
502.9
58
Week 11
July 12, 2017
7.6
495.3
47
Week 12
July 19, 2017
4.7
490.6
43
Week 13
July 26, 2017
7.2
483.4
38
Week 14
August 2, 2017
1.5
481.9
48
Week 15
August 9, 2017
6.5
475.4
35
Week 16
August 16, 2017
8.9
466.5
30
Week 17
August 23, 2017
3.3
463.2
29
Week 18
August 30, 2017
5.4
457.8
27
Week 19
September 7, 2017
-4.6
462.4
32
Week 20
September 13, 2017
-5.9
468.2
39
Week 21
September 20, 2017
-4.6
472.8
46
Week 22
September 27, 2017
1.8
471.0
46
Week 23
October 4, 2017
6.0
465.0
41
Week 24
October 12, 2017
2.8
462.2
40
Week 25
October 18, 2017
5.7
456.5
37
Week 26
October 25, 2017
-0.9
457.3
39

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Graphic Confusion

This is an accurate graph, of course, and it is very dramatic, but it can also be a bit confusing. Some folks may have to spend some time looking at this graph a) to figure out what it is saying; b) what it means going forward; and, c) to figure out the point of the graph in the first place:




Random Update Of Whiting's Huge, High-Intensity Fracked Well Reported Today -- October 25, 2017

This page won't be updated. I track new wells elsewhere.

But I wanted to point this one out: a huge well following a high-intensity frack. It is located not far from Willison. The well is northeast of Boomtown.

The well:
  • 33079, 2,217, Whiting, Northern 31-30-1H, Springbrook, 45 stages, 12.9 million lbs, t4/17; cum 114K 8/17; 
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20173025734255774033630228282301908
BAKKEN7-20173120245205413661422815190443680
BAKKEN6-20173029872297744466432291272864915
BAKKEN5-20173132307325445177732827290293705
BAKKEN4-20178601152252672442444017206

Now, a bit more about the location. One neighboring existing well did not show any halo effect, but another one did:

This well was to the east; this well runs in the opposite direction from the new well. This well runs south to north, whereas the new well runs north to south. FracFocus has no data to suggest this well was re-fracked. The well:
  • 25530, 1,383, Zavanna, Sylvester 32-29 2H, Springbrook, t11/14; cum 311K 8/17; 
Recent monthly production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20173156405497173881818317512209
BAKKEN7-2017315698519219936169101636187
BAKKEN6-20172462386240198161378213277147
BAKKEN5-2017301024310235376011664915908294
BAKKEN4-20179319722471227625182109275
BAKKEN3-20170000000
BAKKEN2-2017916211615183472276716377
BAKKEN1-2017314861486168352969628775459
BAKKEN12-20163150214565670424642219132267

Another well, #25529, farther to the east, was taken off-line while the new well was fracked but did not have any jump in production. The jump in production did not last very long and may not make up for the amount of time the well was taken off-line.

But there's more. While looking at this area on the NDIC map I was blown away by how big Williston has become since the boom -- not necessarily in population but in land area. If I run across an old screen shot showing the size of Williston when the boom began, I will post it, but regular readers and older folks will immediately notice how "huge" Williston's footprint has become.


 Google maps has not updated Williston's limits. Google maps continue to show "the old Williston."