Wednesday, November 22, 2017

Public Service Announcement -- November 22, 2017

If you are having trouble connecting through Verizon, you are not alone. The "Verizon down-detector" is picking up a lot of reports that the system is down.

Update, November 23, 2017, 8:34 a.m. Central Time: Verizon was "okay" overnight but is starting to show problems again this morning. It looks like Spectrum is in even worse shape. ATT outage looks a lot like Verizon's. 

The Lougheed Wells

The Lougheed wells have been completed:
  • 31980, 2,137, Statoil, Lougheed 2-11 XE 1TFH, Todd, t6/17; cum 77K 10/18;
  • 31979, 2,830, Statoil, Lougheed 2-11 5H, Todd, t6/17; cum 151K 10/18;
  • 31978, 2,008, Statoil, Lougheed 2-11 5H, Todd, t7/17; cum 103K 10/18;
  • 31977, 2,279, Statoil, Lougheed 2-11 3H, Todd, t7/17; cum 193K 10/18;
  • 31976, PNC,
  • 31975, PNC,
  • 31974, 2,578, Statoil, Lougheed 2-11 7H, Todd, t7/17; cum 175K 10/18;
  • 31972, 3,072, Statoil, Lougheed 2-11 XW 1H, Todd, t7/17; cum 161K 10/18;
  • 31973, 1,613, Statoil, Lougheed 2-11 8THF, Todd, t7/17; cum 117K 10/18;
Todd oil field is tracked here but needs to be updated.

*********************************
Why I Love To Blog -- Notes To The Granddaughters

This note will make no sense to anyone but myself and one reader who sent me some interesting notes. It all began with this note.

My father is 95 years old, or thereabouts, in good health physically and mentally doing okay. He served in WWII in the US Navy on a troop ship.

From my notes:
Dad’s tally of his cruises during the war:
17 round trips to Liverpool, England
3 round trips to France, including one to Marseilles
2 round trips to Naples, Italy
6 trips in the Mediterranean
4 round trips across the Pacific, including China
In all, he completed 44 trips across the Atlantic, six across the Mediterranean, and four across the Pacific.
One of my dad's more memorable cruises took place in November 1945, when they picked up 5000 US Marines at New Port News, Virginia. From there they traveled to China through the Panama Canal. They refueled in Hawaii and arrived in China in February 1946. While in China they made port calls at Tensing and Sing Tau. They anchored off shore in the Yellow Sea, about 30 miles out because the Yellow Sea is a very shallow body of water. The US Marines and sailors were taken ashore in landing barges. After discharging the combatants-turned-occupation troops, the USS Wakefield picked up another 5000 US Marines destined for rest and reassignment. After about a month in San Diego they took the rested marines to Guam where battle-weary Marines there were picked up and brought back to San Diego. (Dad has a very good memory. The actual date of departure from Guam on March 13, 1946.)
After nearly four years at sea Dad was discharged. Honorably.
I never understood why the US Navy was transporting US Marines in and out of China after WWII had ended. I never bothered to do the research -- not knowing where to start. Then, out of the blue tonight, a reader sent me a note about this history of post-WWII conflict in China.

At least I now know where to start my search on this part of that history.

China Marine: Shanghai & Peking were once Corps' most desired duty 
 
China Marine: Shanghai & Peking were once Corps' most desired duty
 
China Marine: Shanghai & Peking were once Corps' most desired duty

Practically A New Well In 2017 After Being First Drilled In 2012 -- November 22, 2017

[Note: I track "similar" wells here.]

According to FracFocus this well has not been re-fracked but it's in the middle of seven or eight other wells that have been recently fracked. The well:
  • 18797, 1,743, XTO, TAT State Federal 14X-36F, Bear Creek, API: 33-025-01065, 24 stages; 2.7 million lbs, t3/12; cum 289K 9/17; 
Recent production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN9-20172915468155122057618162180170
BAKKEN8-2017211641216460215922055120086319
BAKKEN7-20174324830133402345834040
BAKKEN6-20170000000

Prior to that, the well was inactive for almost two years. Production just prior to going inactive:

BAKKEN12-20150000000
BAKKEN11-20154139455483680107
BAKKEN10-20153134263502708364703358
BAKKEN9-2015284205392487745202284230
BAKKEN8-201518208722934921697975611
BAKKEN7-2015242457256059319811071762
BAKKEN6-2015222498231265522221121972
BAKKEN5-201520320530001097326917371413
BAKKEN4-20150000000
BAKKEN3-201539081058557350715
BAKKEN2-2015262144201900
BAKKEN1-201511473501900
BAKKEN12-2014117771818725223211
BAKKEN11-20143045294369102752874591416

For newbies: a lot of wells were shut in when the Saudi opened the taps from November, 2014, to November, 2016.

When OPEC decided to cut production in November, 2016, a lot of Bakken operators began fracking again.

For Investors: Is This The Time To Get Back In? -- November 22, 2017

Updates

December 28, 2017: SandRidge calls off proposed merger with Bonanza Creek Energy.

Original Post 

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. And for heaven's sake, if you are a US senator or congressmanperson, do not send me any nude selfies.

Carl says "no": SandRidge is not an operator in the Bakken but during the height of the onshore shale boom SandRidge popped up in the news often.

Now, this evening, I see that Carl Icahn has a 13.51% interest in SandRidge. This comes up because Carl has said he would vote against the company’s proposed acquisition of Bonanza Creek Energy Inc. See this post from last week.

I wonder if Carl can still boogie?

Yes, Sir, I Can Boogie, Baccara

Four New Permits; Four DUCS Completed -- November 22, 2017 -- Note WTI -- US Driving Records Will Be Broken; Keystone Pipeline Shut Down


$57.9811/22/201711/22/201611/22/201511/22/201411/22/2013
Active Rigs543665191184

Four new permits:
  • Operators: Nine Point Energy (2); Whiting (2)
  • Fields: Squires (Williams); Heart Butte (Dunn)
  • Comments:
Four producing wells (DUCs) reported as completed:
  • 28462, 1,894, Petro-Hunt, USA 153-96-24C-13-3H, Keene, t10/17; cum --
  • 33326, 1,814, MRO, Spring 21-15TFH, Bailey, t11/17; cum --  (#16964, #20321)
  • 33325, 5,072, MRO, Chapman 31-15H, Bailey, t10/17; cum -- (#16964, #20321)
  • 33324, 2,282, MRO, French 31-15TFH, Bailey, t10/17; cum -- (#16964, #20321) 
  • Comment: see update of #16964 at this link)
****************************
Price of Crude Oil

This is a strange time of the year to see the price of crude oil rising. Remember all that talk about $20 oil?

I thought everyone said fossil fuel was dead now that everyone is driving EVs. From John Kemp, Reuters oil analyst based in London who probably has as good an understanding of the US oil sector as anybody, just tweeted this earlier today: US refiners are pouring seasonal record amounts of crude into their cauldrons and still struggling to meet demand for gasoline and diesel.

It is being forecast that Americans will set a driving record going back a dozen years this Thanksgiving -- one wonders if the refiners a) saw this coming; and/or b) are still catching up from the two hurricanes this past summer. Regardless of the reason, it looks like US will set records for gasoline and diesel fuel for part of 2017 if not all of 2017.

That's the "demand" side for US refiners.

On the supply side:
  • Canadian heavy oil at risk due to the Keystone being shut down
  • Venezuela sources may be at risk due to  ... well,  you know
  • Saudi Arabia cutting deliveries to the US

TDS: Tesla Derangement Syndrome -- November 22, 2017

Updates

November 24, 2017: from Business Insider -- the Model 3 is putting Tesla in dangerous territory.
The Model 3, meanwhile, is a production disaster. And it is sort of unprecedented in the auto industry — in two ways. First, because Tesla has 500,000 pre-orders for the vehicle, something that's never happened before for any automaker. Second, because if any other automaker had half a million pre-orders for anything, it would be moving heaven and Earth to get those vehicles to market. There's nothing intrinsically exotic about the Model 3, either. It's a midsize sedan. Toyota could build a million next year without breaking a sweat.
Original Post 

As mentioned earlier, I suffer from TDS - Tesla Derangement Syndrome. I am simply fascinated by the company. 

From Investopedia, July 31, 2017, from an investor "long" on TSLA:

How did estimates compare to actual results? Actual results were posted at this link. It seems there are a number of different "numbers" provided for actual earning results: GAAP: non-GAAP: fantasy; the company numbers; and so on.

Ignoring 3Q16, there were only three quarters in which the forecast for the quarterly loss beat the actual number (and then, just barely). Perhaps worse, in 4Q15, analysts had forecast a small gain, but actual results were the worst up to that point on the graph above.


And then look at that: the "experts" suggested that the loss in 3Q17 would be less than that in 2Q17. In fact, the loss in 3Q17 came in a $3.70/share vs $2.04, the previous quarter. What is that? An 81% worse loss month-over-month and that was supposed to be when things started getting better.

And "the market" blew that off. TSLA shares just kept on appreciating.

Burning through $8,000/minute works out to:
  • $11.52 million / day
  • 345.6 million / month
  • $1.04 billion / quarter
Of course their automobiles are only part of their business, but --
  • 5,000 cars/month with a $10,000 profit margin on each car = 
  • $50 million / month
  • $150 million / quarter
If they get to 10,000 cars/month with a $10,000 profit margin on each car =
  • $100 million / month
  • $300 million / month
Plus $250,000 for the new roadster x 2,000 orders =
  • $500 million -- a one-time good deal
So, I was curious. It seems there's a bit of a gap between burning through $8,000/minute and anticipating an income of $300 million + $500 million. The EPS forecast in the graphs above was back in July, 2017.

What is the current EPS forecast for 4Q17 for Tesla. Here's the link; don't hold your breath: a loss of $3.75/share, much worse than the -$1.50 forecast in the graph above.

At that same link, Tesla's yearly earnings are forecast to be a minus $11.38 (for the year). So far,
  • 1Q16: -$1.25
  • 2Q17: -2.04
  • 3Q17: -3.70
  • Sub-total: -$6.99
Yearly forecast at the link: -$11.38.

The delta between $11.38 and $6.99 is $4.39 which is slightly different, but in the same ballpark as the estimate of a $3.75 loss for the December, 2017, numbers.

This continues to be a fascinating story to watch.

Disclaimer: the usual disclaimer applies. I often make simple arithmetic errors.

By the way, in this article, November 1, 2017, this comment by the writer, albeit in a link from one of his earlier posts:
With Model 3 anticipation high, Tesla is still selling record numbers of Model S and X. In Tesla’s just-released Q3 2017 earnings report, the company announced that in the same quarter that the much-antipated Model 3 was (soft-)launched, they’ve still managed to produce and deliver record numbers of the Model S and X. This is despite Tesla’s recent focus on “anti-selling” the Model 3, for fear that the upcoming product will negatively affect current S/X sales.
Fact check:

Total number of Model X and Model S sold/delivered in the following months:
  • June: 2,200 + 2,350 = 4,550
  • July: 1,650 +1,425 = 3,075
  • August: 1,575 +2,150 = 3,725
  • September: 3,210 +4,860 = 8,070
  • October (most recent data): 850 +1,210 = 2,060
Only if one averages September and October sales (5,065) does one get "record number of sales on a monthly basis.

I can only assume October was an anomaly, and that November sales will be "out of this world. "

The Williston Wire -- Who Wudda Guessed? -- A Seasonal Golf Shop Opening In Williston -- November 22, 2017

From the Williston Wire.

New, bigger locations (note how "big" the street numbers are, "8923) and "2124"
  • FedEx: 8923 Oil Avenue
  • Real Deals on Home D├ęcor: 2124 2nd Ave Went
  • Fresh Palate: from the upper level to street level in the Downtown Plaza
  • Rugby Homes & RV Center has expanded into the former Coates RV location at 321 Gate Avenue; the Rugby-based company has had a satellite lot in Williston for 11 years (the ND Bakken boom began in 2007; the Montana mini-Bakken boom began in 2000)
New:
  • the Links of North Dakota has opened a seasonal golf shop on Main Street
The Pro Shop

Super Hogs: Devon And EOG -- Filloon - November 22, 2017

Over at SeekingAlpha: summary --
  • EOG is the king of the Super Hog story, but many other operators are expanding well design and production per foot including Devon
  • Devon has some very good producers in the Eagle Ford, much like EOG's recent results
  • the Eagle Ford and Austin Chalk are emerging as top US intervals, and uniquely situated for newer well designs
  • we are seeing a much larger percentage of wells producing well above the industry average. A couple of years ago, many attributed this to sweet spots or dumb luck. This is starting to become a trend as we have asserted. This has decreased payback times and improved overall well performance. We believe this will continue as most operators have not fully moved to these designs. If EOG's results are any indicator, operators still have a ways to go to meet its standards
Comments: most interesting -- his comments about "sweet spots."

EIA's Weekly Report Released; Re-Balancing Drops To 42 Weeks -- November 22, 2017

Link here.
  • crude oil inventories: decreased by an insignificant 1.9 million bbls; currently at 457.1 million bbls
  • still in a hole with regard to distillate fuel inventories
  • refineries operating at 91.3% capacity, not much change
  • gasoline production increased a bit last week, now averaging 10.4 million bbls/day
  • distillate production also increased a bit last week, now averaging 5.3 million bbls/day
  • overall, a mixed report with little change
From John Kemp, Reuters oil analyst:  US refiners are pouring seasonal record amounts of crude into their cauldrons and still struggling to meet demand for gasoline and diesel.

The API reported a decline of 6.356  million bbls but I use EAI data for the following table.

Re-balancing, drops from 43 weeks to 42 weeks:

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
52
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
Week 27
November 1, 2017
2.4
454.9
38
Week 28
November 8, 2017
-2.2
457.1
42
Week 29
November 15, 2017
1.9
459.0
43
Week 30
November 22, 2017
1.9
457.1
42