Monday, December 18, 2017

Futures Mean Squat, But .... Nonetheless --- December 18, 2017

NiSource: NiSource apparently plunged 7.9% today. Barron's did not have an explanation. I know nothing about the company but a quick google search certainly suggested a number of concerns these past few years involving management. Be that as it may, this is probably the real story: natural gas prices "plunged" today based on fundamentals (supply/demand -- the weather is not cooperating). Even with today's "plunge," the shares are paying only 2.65% -- at that rate might as well buy bonds. Speaking of which, with the Fed raising rates, utilities are selling off. SRE is another example.

ISO New England: at 11:00 p.m. tonight, spot price for electricity around $155/MWh.

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.

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Trump Rally (Global Synchronization Rally)

After a nice run-up in the market today, right now futures suggest more of the same tomorrow:


Later, 8:19 p.m. ET: it looks like the above numbers were a  "hangover" from today's action. Now, the Dow futures are almost flat.

Four New Permits -- December 18, 2017

Active rigs:

$57.2912/18/201712/18/201612/18/201512/18/201412/18/2013
Active Rigs524064183188

Four new permits:
  • Operator: Crescent Point Energy 
  • Field: Rainbow (Williams)
  • Comments: CPEUSC has permits for a four well Dois/Dorothy Pad
Two producing wells (DUCs) reported as completed:
  • 32902, 528, BR, Lovaas 4-8-12 MBH, Blue Buttes, t11/17; cum --
  • 32903, 595, BR, Lovaas 5-8-12 UTFH, Blue Buttes, t11/17; cum --
Ten permits renewed:
  • CLR (6): two Schroeder permits and two Marlene permits; two Sacramento permits all in Williams County; 
  • BR (3): two Jerome permits and one Merton permit, all in McKenzie County
  • WPX: one Hackberry permit in McKenzie
One permit reinstated:
  • Slawson: a Bandit Federal permit in Mountrail County
Three permits canceled:
  • CLR (3): three Rollefstad Federal permits in McKenzie County

Oasis Bakken Well Design Shows Large Increase In Oil Production -- Filloon -- December 18, 2017

I was wondering when Mike Filloon was going to get to Oasis; they have had some great wells. Also, now that Oasis has cracked the code on the Bakken, maybe they felt they could do the same in the Permian.

Link over at SeekingAlpha:
  • OAS has shown significant improvements in production per location from 2015 to 2016 and later.
  • Some improvements are due to high grading but the upside attributed to his only cover a small percentage of wells.
  • Lateral lengths have not changed from 2015 to present, but production has increased by 53 KBO and natural gas production has tripled.
  • OAS has difficulties ahead due to leverage but it will be interesting to see how that will translate in the Delaware Basin.
From the article:
Oasis has become a very good operator. It has kept costs down and improved production per foot significantly over the past few years. We pulled the production data of 91 Oasis locations in North Dakota completed after January 1st of 2016. Four horizontals produced over 250 KBO in 12 months of well life. Only one location was a one-mile lateral. The rest were between 9,000 and 10,700 feet.
In summary, OAS is performing very well and enhanced completions are pushing production per foot higher. The increase of 53 KBO is very good, and natural gas production has tripled. This was done with comparable lateral lengths. OAS is a risky play and a name we do not own. The Delaware purchase has been interpreted as bearish, but the geology is much better than any it currently holds.
OAS has been an excellent operator and done an excellent job keeping costs down. It will be interesting to see how this plays out in west Texas. We do not own OAS, and still think it has a difficult road ahead. The leverage is concerning, but if oil prices spike it could see significant upside. There is considerable risk going forward.

Flashback: WTI And The Changing Dynamics Of Global Crude Oil -- CME Group, January, 2017 -- Posted December 18, 2017

This is a must-read; too much to excerpt.

The article begins:
The new storage and pipeline infrastructure in the United States is so significant that it is likely to have a transformational impact on the crude oil market for years to come. These changes are likely to spur more trading in US domestic grades and will magnify the role of WTI has global benchmark.

The catalyst for this transformation has been the sharp rise in US oil production, and more recently, the lifting of the export ban on US crude that occurred at the end of 2015. In order for the US to turn itself from a net importer to exporter, several key pipelines had to be reversed. At the same time, oil refiners and storage operators along the Gulf Coast set about increasing the amount of available storage capacity. A number of new terminals are in the process of being built along the US Gulf Coast to handle the rising number of ships arriving to load cruse destined for the international markets. These infrastructure changes will transform the US into the marginal supplier of the world than a regional supplier. This will allow producers to take advantage of arbitrage opportunities that pre sent themselves beyond the US shores.
There are several subsections:
  • US crude oil production proves resilient
  • US exports are increasing
  • expansion of crude oil infrastructure in the US Gulf Coast
  • NYMEX WTI futures volumes outpace Brent futures
  • Brent production in decline
  • dated Brent-related derivatives remain a focus
For future reference:

ISO New England Spot Electricity Spikes To Over $220/MWh -- December 18, 2017

Link here.



Too much non-dispatchable wind and solar and not enough natural gas?

For comparison: PJM -- under $23/MWh. See comments below:
For comparative purposes, the wholesale spot pricing in 13 state PJM region - found at PJM site/Data Shortcuts/Operational Data - is under 23 bucks.
This is why businesses all over the world are looking at relocating there. 
The problem lies in the bars at the right side of the graph:


Meanwhile, South Australia and Victoria will see spot prices for electricity hit $315/MWh later today. Link here.


Ten Wells Come Off Confidential List; Four DUCs; Two Huge Oasis Lawlar Wells -- December 18, 2017

Wells coming off confidential list over the weekend, Monday

Monday, December 18, 2017: 62 for the month; 172 for the quarter
  • 33491, SI/NC, MRO, Shoots USA 41-2H, Antelope, no production data,
  • 33331, 1,602, QEP, ND Levang 5-16-21BHD, Grail, 51 stages; 5 million lbs, t7/17; cum 72K 10/17;
  • 30237, 1,782, CLR, Alfsvaag 4-31H, Crazy Man Creek, 10 stages; 14.8 million lbs, t8/17; cum 38K 10/17; "well partially completed; will return once repairs are made"
Sunday, December 17, 2017: 59 for the month; 169 for the quarter
  • 33492, SI/NC, Mamie USA 21-1TFH, Antelope, no production data,
  • 32393, 226, Whiting, Froehlich 21-29-2PH, Bell, Three Forks, 45 stages; 9.4 million lbs, t8/17; cum 24K 10/17;
Saturday, December 16, 2017: 57 for the month; 167 for the quarter
  • 32884, 578, Liberty Resources, Nelson 158-95-20-4TFH, McGregor, t6/17; cum 28K 10/17; Three Forks, 13 stages; 3.3 million lbs;
  • 32865, SI/NC, MRO, DeMaray USA 41-2TFH, Antelope, no production data,
  • 32696, SI/NC, Petro-Hunt, USA 153-95-18B-4H, Charlson, no production data,
  • 31632, 1,762, Oasis, Lawlar N 5199 42-23 5T, North Tobacco Garden, Three Fork B1, 50 stages; 10 million lbs; t7/17; cum 130K 10/17;
  • 31631, 2,083, Oasis, Lawlar N 5199 42-23 4B, North Tobacco Garden; 50 stages; 10.1 million lbs; t7/17; cum 161K 10/17; 
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Monthly Production

For #31632:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-2017312426724274268354068723233217
BAKKEN9-2017292323723259288593900736680203
BAKKEN8-20172625671256982913041292333917733
BAKKEN7-20173143858438314939071530628368526
BAKKEN6-20172012533125043391319563193950

For #31631:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-2017313336733373286485894640876217
BAKKEN9-2017302534525372292824405141737210
BAKKEN8-20172630913309413030949788399019753
BAKKEN7-20173147432474284374870873616539086
BAKKEN6-20171624335242782181033414332800

Economic Data As We ComeTo The End Of The Year -- December 18, 2017 -- T+331

As We Head To The End Of 2017

There will be a lot of economic data released this week prior to Christmas weekend at the end of the week. 

Single-family housing starts, permits hit 10-year high. Posted December 19, 2017. Link here

Home builder sentiment at the highest since July, 1999. Link here.

Wow, wow, wow! Existing home sales for November, 2017, jumped 5.6%; expectation? 0.7% Posted December 20, 2017.

The market since Trump has been elected, including a list of stocks that have doubled since his election.

All three indices are likely to close at new records today. Some confusion on CNBC but apparently if the Dow 30 sets a new record today, the index will have set a record for the number of times the Dow has hit a new high in one year.

And on CNBC so far this morning (December 18, 2017), the phrase "President Trump" has not been mentioned. If it has, it has not been mentioned in connection with the stock market rally. The stock rally is due to "synchronous global growth."

"If you got a business, you didn't build that," What A Doofus
 
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A Strong Obama Supporter

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He saved us from Hillary -- Trumping the left! December 12, 2017.


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A Millenial Job Interview

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The Market And Energy Page
Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on anything you read here or think you may have read here.  

Apple: runs out of AirPods. Can't keep up with demand. Posted December 19, 2017.

ATT: raises dividend; annual payout now $2.00/share.

PFE: announces $10 billion stock buyback plan; hikes dividend.

ETP: gets FERC okay for additional Rover drilling

Random Look At A Mini-Re-Frack -- December 18, 2017

The well:
  • 20319, 113, Whiting, Koala 2-25-36-15H, Poe, t12/11; cum 294: 10/17; not re-fracked according to FracFocus; See production data below.
  • 20413, 702, Whiting, Koala 2-25-36-14H3, with three fracks:
    • first frack, Three Forks, 18 stages, 2.3 million lbs
    • second frack, Three Forks, 13 stages, 1.9 million lbs
    • third frack, Three Forks & Upper Bakken Shale, 1 stage, a 27-cycle re-frac using diverter; a continuous stimulation was performed on 6/6/17;
Reference well:
  • 32546, 2,774, Koala Federal 31-25TFH, Poe, t8/17; cum 24K 9/17; (#21303; #20319; #20413). three wells off-line; need to be checked in late 2017;

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Production Profiles For Two Wells Noted Above

Recent Monthly Production Data for #20319:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20173199941002212999791050082809
BAKKEN9-201719537553549325658247011826
BAKKEN8-201714417441177120495018183093
BAKKEN7-2017001530000
BAKKEN6-20170000000
BAKKEN5-201721754582518216215
BAKKEN4-20173030342895133433302834406


Recent Monthly Production Data for #20413, a single stage, a continuous stimulation, 6/17, with 2.2 million lbs proppant:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-2017311691172056911400837470
BAKKEN9-201730255625651247616471122436
BAKKEN8-201715340733618707355012992210
BAKKEN7-20170000000
BAKKEN6-20170000000
BAKKEN5-20170000000
BAKKEN4-201700640000
BAKKEN3-20170000000
BAKKEN2-20170000000
BAKKEN1-201722462440370708465179
BAKKEN12-2016316446954571146768285
BAKKEN11-201630585577359769515164
BAKKEN10-20162154850653944136417

The White Butte Jore Federal Wells

Updates

May 4, 2018: map updated. Compare this map with the map in the original post.


Original Post 

The White Butte Jore Federal wells.

The other wells in that section:
  • 28747, 2,592, Slawson, Jore Federal 2-12H, Clarks Creek, one section, 21 stages 4.8 million lbs, t9/14; cum 188K 10/17; shut in most of 6/17 - 10/17; probably due to neighboring wells being fracked?
  • 31194, conf, Slawson, Jore Federal 1-12H, no production data,
  • 31193, conf, Slawson, Jore Federal 13-12TF2H, no production data,
  • 31192, conf, Slawson, Jore Federal 6-12TFH, no production data,
  • 31191, conf, Slawson, Jore Federal 24-12TF3H, no production data,
  • 31190, conf, Slawson, Jore Federal 14-12TF2H, no production data, 
The new permits from December 11, 2017:
  • 34372, 23-12TF3H,
  • 34373, 11-12TFH,
  • 34374, 15-12TF2H,
  • 34375, 3-12H,
  • 34376, 22-12TF3H,
  • 34377, 10-12TFH
  • 34378, 4-12H,
  • 34379, 16-12TF2H 
The new permits from December 13, 2017:
  • 34386, 7-12TFH,
  • 34387, 19-12TF3H,
  • 34388, 6-12H,
  • 34389, 18-12TF2H,
  • 34390, 8-12TFH,
  • 34391, 20-12TF3H,
  • 34392, 5-12H,
  • 34393, 17-12TF2H,
  • 34394, 21-12TF3H,
  • 34395,  9-12TFH,
So far: 24 wells planned for this one section
  • middle Bakken: 6 wells 
  • TF, 1st bench: 6 wells 
  • TF, 2nd bench: 6 wells 
  • TF, 3rd bench: 6 wells
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The graphic for illustrative purposes only; 
not drawn to scale and there may be errors on the map.



Futures Surge -- Is This The Week The Tax Bill Passes? December 18, 2017, T+331

Note: the NDIC map server appears to be slightly "degraded" this morning. The permit numbers for pad wells appear not to be posting.  I assume this is a temporary problem.

A no-show: it's being reported that Senator John McCain will not be able to vote on the tax bill. He is recovering at home from a recent hospitalization secondary to his brain cancer. It looks like the bill will be signed, but it's still not a slam dunk. 

$100 billion should make this chart look better. It is now being reported (in The New York Times) that Prince Salman hopes to "recover" at least $100 billion from the rich tycoons he rounded up earlier this autumn. In the graph below, the kingdom was losing about $5 billion month-over-month in foreign reserves. It will be interesting to see how this graph changes.

Link here, Saudi Arabia foreign exchange reserves:

Break-even (again): From What's Up With That:
Number of the Week: $56.60: According to Platts (subscription required), the energy consulting firm Wood Mackenzie estimates the “weighted average break-even” for a barrel of crude produced from North Dakota shale is $56.60. Generally, the estimates include a modest profit.
Areas with higher estimated costs include: Niobrara (Rockies), $75.5; Canada Oil Sands, $70; Deepwater US, $63; Deepwater Angola, $73; Offshore Nigeria, $64; and Shallow Water Europe, $60. The estimates reviewed did not include Texas. No doubt, the petro-states of OPEC are concerned with hydraulic fracturing in the US. 
The math doesn't work: break-even cost for oil for Canadian oil sands: $70. Canadian oil sands is now selling for $30. Previously posted.

Blockchain: link here.

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Back to the Bakken

Active rigs:

$57.6112/18/201712/18/201612/18/201512/18/201412/18/2013
Active Rigs534064183188

RBN Energy: why condensate flipped from cheap to expensive and why it may flip back.
The combination of rising condensate demand as new splitter capacity came online and falling conde supply resulted in just what you’d expect — higher conde prices. Worse yet for the companies that made throughput commitments for those new splitters, the once-favorable price differentials between conde and light-crude benchmarks West Texas Intermediate (WTI) and Louisiana Light Sweet (LLS) have been turned on their heads, and a number of splitters are operating at far less than capacity.
Today, we continue our look at the roller-coaster world of conde, this time focusing on conde prices and differentials, and on the forces that may change the conde market once again.
Crude oil and condensate are categorized by their API gravity (API standing for American Petroleum Institute), which is a measurement scale (in degrees) of a petroleum liquid’s specific gravity — the lighter or less dense the crude, the higher its API gravity number.
Superlight crude oil and condensate (or, as it’s commonly called, conde) is at the far end of the crude-oil spectrum, with an API gravity of 50 to 55 degrees for superlight and more that 55 degrees for conde (according to the gravity breakdown used by the Energy Information Administration, or EIA, in its Crude Oil and Lease Condensate Production by API Gravity data series). As we said earlier in this blog series, superlight crude and conde can either be refined, exported or blended with heavier crudes — or (for conde) run through a splitter. A splitter uses atmospheric distillation to separate conde into its component fractions to produce intermediate, semi-finished blend stocks like naphthas and distillates that are processed further at refineries.
A major resurgence of superlight/conde production like this would only require crude prices staying pretty much where they are now — and the development of new conde-related infrastructure. If it happens, there would be more than enough condensate to meet the demand for existing splitters (and a 35-Mb/d splitter that Targa Resources is building at its Channelview, TX terminal), refinery appetite for super-light material, and significant volumes of neat conde exports or crude blends that include conde and/or superlight crude.