Wednesday, October 31, 2018

Absolutely Staggering -- Nothing About The Bakken -- October 31, 2018

From the October 30, 2018, NYC presentation:


********************************
Post-Halloween Evening Out


This is the last year of trick-or-treating for all in this picture except for Sophia. It's kind of sad. Kind of sad? Very sad.

It is the evening of the day. I sit and watch the children play. Smiling faces I can see but not for me. I sit and watch as tears go by ... wow ... life is too fleeting ...

As Tears Go By, Marianne Faithfull


************************************
Ordinary Low Water Mark

Years ago, while stationed in Germany, we visited Normandy often ... but not enough. This is one of my favorite Monet paintings. It hangs in the Kimbell Museum here in Ft Worth -- we were down there today for a Halloween outing.



From the Kimbell webpage:
This beautiful beach scene near Le Havre, where the artist grew up, was one of two landscapes that launched Monet’s career when exhibited in 1865 at the Paris Salon, the vast, well-attended survey of contemporary art sponsored by the French government.

Where's Newfield? -- October 31, 2018

Updates

Later, 9:12 p.m. CDT: immediately -- and I mean immediately -- after post the note below, asking where Newfield was, and suggesting that MRO had bragging rights in the Bakken, a reader immediately -- and I mean immediately -- responded with THE list (see first comment):

1. Continental
2. Oasis
3. Marathon
4. Bruin
5. WPX
6. Kraken (Selling Williams, bought out Kaiser-Francis in Mountrail)
7. XTO
8. Petro-Hunt, LLC (Charlson Field is amazing!)
9. Whiting
10. Newfield
Dead last: Hess Corp. for under producing on each well.
Murex doesn't drill.
Zavanna hardly ever drills.
 Original Post

We'll get back to Newfield later (perhaps) but while looking something up I came across this from the blog, from October 12, 2011:



Isn't that quaint? An IP of 3,731 and look how excited I got. These days an IP of under 4,000 in the Bakken barely gets my attention. Take the IP to 7,000 and I still get excited, but 4,000? Ho-hum.

But look at that. That was back in 2011, and it was a short lateral. It really was a good well.

I'm really not sure what Newfield is doing in the Bakken any more.

To the best of my knowledge it is still active in the Bakken, but I sure haven't heard much about it.

Earlier this year:
But I didn't pay much attention to the article. I never would have thought of Newfield being the best producer in the Bakken. Right now, I'm thinking those bragging rights belong to MRO right now. 

**************************************
For Halloween

It's Good To Be Alive, Imelda May

The Energy Gap Between The EU And The US Will Continue To Widen -- October 81, 2018

Over at "the big stories," there is a link, "Europe at a tipping point." One begins to wonder if Europe has passed the point of "no return."

On our drive to Ft Worth (Texas) this morning I mentioned to my lovely wife that the gap between the US and Europe -- at least regarding energy -- is going to only get wider and wider. I don't think she was listening to a word I was saying.

Whatever.

Tonight, this article over at oilprice.com:




Data points:
  • rising oil and energy prices have sent inflation in the EU to the highest in nearly six years
  • annual energy prices are soaring; now up 10% yoy
  • the annual inflation rate in the EU is now the highest since December, 2012
  • Germany: inflation in the EU's biggest economy -- the highest in more than 6 1/2 years
  • the IEA is worried about "demand destruction" for energy products
Comments:
  • when it's freezing outside this winter I doubt we will hear much about "demand destruction"
  • whatever happened to renewable energy?
  • we were stationed in Germany for seven years back in the 1980s and 1990s. We found heating oil then "prohibitively" expensive even then compared to what we were used to paying in the US; I can only imagine how expensive heating oil has gotten in Germany;  
But think about this:
  • the price of oil has been trending down for the past six months; and even at its recent high, it wasn't all that bad; imagine how Europe will do when the price of oil really begins to surge;
  • there's a reason the Europeans want the US to embrace the "global warming" scam -- that's the only thing that can slow the US down when it comes to energy

Absolutely Staggering: New Petroleum / Natural Gas Records Being Set By The US -- October 31, 2018

Fast and furious: I was out and about all day so I am behind in my blogging. Now with Halloween this evening, I will be delayed even further. There is a lot of stuff to blog so it's going to be a long, long night.

Unedited (okay, maybe just a little): I was going to post a similar story as the one below but when I got home I saw that a reader had already done it (the story) for me. Read this slowly; let it sink in; think about what this means (there will be a short quiz following):
  • the US has (again) broken records for oil and gas production, adding over 0.4 million bopd last month to break past 11.3 million bopd based on today's 914 monthly report (covering August)
  • Texas, GOM, ND, CO, OK, AK, WY, NM all up strongly
  • natural gas is also setting new records, with over 2 BCF/d of added production. Overall gas with second month over 100 BCF/d. Lower 48 approaching 95 BCFd. 
News article: https://www.reuters.com/article/us-usa-oil-production/us-crude-output-jumps-to-record-1135-million-bpd-in-august-eia-idUSKCN1N52FH.

EIA report: https://www.eia.gov/petroleum/production/.
Interestingly, Rystad had predicted a massive increase this month, in excess of the STEO prediction. https://www.rystadenergy.com/newsevents/news/press-releases/US-oil-set-to-beat-EIAs-forecast-again-11.15-million-bpd-is-low-case-for-August/
They were the only analysts to stick up for EIA last fall, when people like Harold Hamm and Mark Papa, let alone the shale haters, were all criticizing EIA as too growth optimistic. But even Rystad underestimated how massive the month would be. We are now more than 2.1 million bopd higher in production than exactly one year ago. So much for peak oil. Amusingly, the peak oilers were dissing Rystad just a day ago: http://peakoilbarrel.com/brazil-reserves-and-production-update-1h2018/#comment-656450.
Oh...and even the Gulf of Mexico is setting records. Broke past 1.8 million bopd last month for first time. Latest EIA report is now over 1.9 million bopd.

Maybe Snopes can write an article "fact checking" the peak oilers?

Comments:

I remember very well those comments by Harold Hamm, and particularly Mark Papa, under-estimating what the Bakken was going to do. It is truly amazing. I admit it: I was swayed by Mark Papa -- after all, he's considered one of the smartest men alive when it comes to the Bakken.

Snopes? LOL.

Also, of course, my monthly memos to Art Berman and Jane Nielson.

This still remains one of my all-time favorite posts, from December 8, 2018 --
From November 30, 2017:
"Shale is not a revolution -- it's a retirement party. Shale plays were not some great new idea. They became important only as more attractive plays were exhausted." -- Art Berman.
With regard to Mark Papa, here's the post from March 11, 2018

In the note sent by the reader it was noted:
  • Texas, GOM, ND, CO, OK, AK, WY, NM all up strongly
If Proposition 112 in Colorado passes, one can remove that state from the list above. Wow, if the voters pass that proposition it will truly be a Grimm fairy tale for that state, every bit as unfortunate as the "golden goose" story.

WTI Breaks Below $65; A Whopping Nineteen New Permits Recorded Plus Two Permits Renewed; None Canceled; Net: Twenty-One Permits -- October 31, 2018

Fast and furious: I was out and about all day so I am behind in my blogging. Now with Halloween this evening, I will be delayed even further. There is a lot of stuff to blog so it's going to be a long, long night.

Active rigs:

$64.9710/31/201810/31/201710/31/201610/31/201510/31/2014
Active Rigs69533470193

Nineteen new permits:
  • Operators:
    • CLR (6): six more permits in Brooklyn field, 24-155-98
    • Liberty Resources (6): permits for six wells on an Albertson E pad in section 22-158-93
    • BR (5): permits for five Tailgunner wells in lot 1, section 18-149-96
    • Whiting (2): permits for two Sondrol wells in section 30-149-98
  • Fields: Brooklyn (Williams); Enget Lake (Moutrail); North Fork (McKenzie); and, Juniper (McKenzie)
  • Comments:
Two permits renewed:
  • Whiting: two Faiman permits in Dunn County

The Market, Energy, And Political Page, T+ 79 -- October 31, 2018

OMG. John Kemp alerts us to fact that China's purchasing managers' index fell to 50.2 from 50.8, month-over-month. OMG! Is that statistic even reproducible? Statistically significant? Worse, he points out, China is reporting the slowest expansion in activity since July, 2016. Meanwhile, US confidence is at 18-year high. Sounds like the Chinese have to make a decision. Ignore Trump or get on with business. Winners don't quit and quitters don't win.


This is rich! Megyn Kelly slams media for "invasion of privacy." The invasion: complains of paparazzi outside her home. Wow. As if. Whatever.

Happy Halloween -- October 31, 2018

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

Yellen; remains concerned the economy could overheat. A nice worry to have. The Fed can prevent that. 

Rare: I don't see this often, but oil stocks are moving in pre-market. DNR up 5%. 

GM: pops 10% in pre-market trading. See "Cramer note" below.

EPD: beats; shares up 2%.

EOG: live webcast, Friday, November 2, 2018; 9:00 a.m. central time.

Consumer confidence: US consumer confidence surged in October to 18-year high. At almost 138, it is at the highest level since September, 2000.

BP: doubles profit; best quarterly results in over five years; may be able to pay for BHP acquisition in all cash.

Cramer: last night he said the"fiscal year" for many mutual funds ends October 31. Is the fairly regular "October surprise" "manufactured" by Wall Street?

EIA: weekly crude oil inventory report -- link --
  • US crude oil inventories, increased, confirming API data yesterday: increased by 3.2 million bbls; at 426 million bbls, 2% above the five-year average for this time of yeaf
  • refineries are at operating well off their capacity; at 89.4%
  • gasoline production was slightly above my threshold of 10 million bbls per day
  • distillate fuel production right at my threshold of 5.0 million bbls per day
  • total products supplies up 5.4% from same period last year
  • gasoline product supplied relatively unchanged
  • distillate fuel supplied increased by a whopping 14.2% from same period last week
  • jet fuel product supplied down almost 4% from same four-week period last year
Gasoline demand: I'm almost afraid to look. Link here.


**************************
Back to the Bakken

Insert sad face here: there are no wells coming off confidential list today.

Active rigs:

$66.4410/31/201810/31/201710/31/201610/31/201510/31/2014
Active Rigs68533470193

RBN Energy: a new drill down report on Northeast gas takeaway capacity and basis.
The U.S. Northeast natural gas market has had a volatile few weeks. Regional gas production has surged, averaging 30.4 Bcf/d in the second half of October (2018), up 800 MMcf/d from the first half of the month and up nearly 1 Bcf/d from the September average. Normally (for the past several years), those kinds of supply gains, particularly in a shoulder month and during maintenance season, would have one result: Marcellus/Utica prices taking a nosedive. But that’s not exactly the case this year. Instead, Appalachian spot prices have been on a wild ride the past few weeks, swinging from barely $1.00/MMBtu (or more than $2.00/MMBtu below Henry Hub) on October 8, to over $3.00 (just $0.12 under Henry) on October 24 — the highest levels seen at this time of year since 2013, both in terms of outright prices and basis differentials to Henry Hub. The catalyst is nearly 3 Bcf/d of new takeaway capacity from the growing producing region that has been added in recent weeks, including, most recently, partial service on a brand-new route on Enbridge/DTE Energy’s 1.5-Bcf/d NEXUS Gas Transmission. What does this latest round of expansions and the resulting basis strength mean for the Northeast and its downstream gas markets? In today’s blog, we discuss highlights from our new 26-page report on evolving Northeast gas takeaway capacity utilization and additions, and their effects on price relationships.
For years, the U.S. Northeast gas market has been defined by rapid production growth, perpetual transportation constraints, distressed supply prices and stranded producers — a topic we’ve covered extensively in the RBN blogosphere over the years. These market conditions have had a domino effect on the broader U.S. gas market — turning a traditionally demand-driven market into a net gas supplier for the U.S., flipping regional prices on their heads and prompting massive midstream investment to reverse gas pipelines so they flow out of the burgeoning Marcellus/Utica shale.

Tuesday, October 30, 2018

Another Natural Gas Processing Plant Near Watford City -- Off The Radar Scope -- October 30, 2018

NG plants in North Dakota are tracked here by the state.

I don't see the Saulsbury Industries plant in that spreadsheet. From KFYR:
Texas based company building a Natural gas processing plant near Watford City is looking for North Dakota workers starting in 2019. Saulsbury Industries says they'll need laborers, welders, pipe fitters and electricians in March.
From the company's website:
Saulsbury secures design and build award of second cryogenic processing facility in North Dakota for Midstream Client Plant in Watford City, ND. This marks Saulsbury’s 54th cryogenic construction project.
ODESSA, TEXAS– October 29, 2018 – Saulsbury was recently awarded a contract to engineer, procure, and construct a cryogenic processing facility in North Dakota’s Williston Basin for one of the largest midstream companies in North America.
This facility, designed with a capacity of 150 MMSCFD, will be Saulsbury’s second project with the client in this region. Saulsbury will be responsible for the engineering and construction of the processing facility to include liquid stabilization, slug catcher, cryogenic gas processing, and residue gas compression. Work began in August 2018 with the site expected to be in full service on November 1, 2019.
As noted above, I don't see a greenfield 150 mmscfd cryogenic plant coming on-line in 2019 in the spreadsheet at the first link above. 

Maybe a reader knows?

My hunch: the word is out. North Dakota needs natural gas processing plants so badly, permitting and NDIC involvement is no longer needed. C'mon up; build a cryogenic plant; apply for a permit once it's completed; the NDIC will probably look the other way. Hey, I'm joking.

Later: a reader suggests it is the Kinder Morgan plant that is expanding. See first comment. Much appreciated.

************************************
They Say Everything's Bigger In Texas

Just on the other side of the fence separating our apartment complex from the high school - middle school - elementary school complex is the "Multi-Activity Center (MAC)" -- an enclosed football field with artificial turf solely for practicing. No bleachers; no games --just indoor practice when it's too hot to practice outside or too much rain.

This went up in about 18 months. It's incredible. The size is amazing, and it's simply an indoor training facility.

From twitter:

Cold Snap Could Send Natural Gas To $5 -- Oilprice -- October 30, 2018

This is pretty funny. For the past 24 hours or so a reader and I have been tossing around "what if ... cold winter ... natural gas shortage?" See this post.

I just stopped at In 'n Out for a Coke and a hamburger (no fries) and then opened the computer. And this is the headline over at  oilprice.com, I kid you not:


But OMG, $5. See this post. Five dollars is nothing. There's enough "slack" in the graphic at that post to push natural gas to $10. LOL.

I think this is going to be fascinating.

But, the betting right now: it will be a warmer winter than usual. My thoughts: it's all relative, and even if it's warmer, once winter is here, all bets are off. We'll see.

Natural gas today? Up about a percent, to about $3.22.

***********************************
For The Record

I finished Zen and the Art of Motorcycle Maintenance. Again. Perhaps one of the most difficult books to slog through, on so many levels.

Three hundred seventy three pages long -- an incredible slog -- so much of it must be re-read, but I can only read a few pages at a time. Years ago the word "heavy" was used to describe such writing; I don't know if folks use that word any more. But if you want to experience "heavy" read this book.

You slog through it, wondering how it will end. And there it is. Not only does the book end, with a real ending, a real conclusion, but the reader is amply rewarded for sticking with it. Sort of the same feeling I had when I read the climax in The Great Gatsby.

It's a great book for grandfathers to read while watching their grandchildren grow up with their father.

As much as four-year-old Sophia and I are joined at the hip, Sophia's father is the one true real man in her life. LOL. Father-daughter. Father-son. Really, really special relationships.

To some extent that's what Zen and the Art of Motorcycle Maintenance is all about. And yet, reviewers and critics never seem to mention that. If pages 369 - 373 don't move you, the reader, emotionally, I don't know what will.

On another note, time for some music.

I'm sure everyone is familiar with Bobby Vinton's recording of Blue Velvet. I never thought about Bobby Vinton's version until I heard Lana Del Rey's version. Compared to the latter's version, Vinton's version is just a bit too upbeat considering the theme.

I heard Del Rey's version some years ago and was blown away; it seemed she interpreted the song perfectly. Interestingly, if I remember correctly, it was one of two songs that seemed to just be added to her "Paradise" album/CD -- not really meant for the album. One wonders why she put it on the album. I always thought it was just a "throwaway" -- a karaoke Del Rey added for some reason.

Tonight, in the mood, I read the wiki entry regarding the song. Many, many people have covered it. But get this, the Del Rey version takes up an entire section of the wiki entry. Who would have thought? One wonders if Del Rey even wonders how her version got so much emphasis considering all those who have covered it, including the one who brought it to #1, Bobby Vinton. As it is, the Bobby Vinton section in the wiki entry seems to be about a third of that given to Del Rey.

There must have been a reason for Apple to have featured Lana Del Rey earlier today -- the NYC, October 30, 2018, event.

Ironically, after writing all that, Del Rey's Blue Velvet doesn't seem to fit right now.

Instead, and if you know the history of the Seekers, this is incredibly poignant.

The Carnival Is Over, The Seekers

From wiki:
"The Carnival Is Over" is a Russian folk song from circa 1883, adapted with English-language lyrics, written by Tom Springfield, for the Australian folk pop group The Seekers in 1965.
The song became The Seekers' signature recording, and the band have customarily closed their concerts with it ever since its success in late-1965. At its 1965 sales peak, The Seekers' single was selling 93,000 copies per day in the UK and is No.30 in the chart of the biggest-selling singles of all time in the United Kingdom, with sales of at least 1.41 million copies in the UK alone. The track spent three weeks at No.1 in the UK Singles Chart in November and December 1965.
As I listen to it (again, for the umpteenth time), I think of Vera Lynn and "We'll Meet Again." Wow, the Brits and music. 

Hess Reports A Huge DUC; Active Rigs Up One; Huge Build In US Crude Oil Inventories (Again); Zavanna With Seven New Permits -- October 30, 2018

Weekly crude oil inventories: again, another huge build, up almost 6 million bbls -- API; link here More at oilprice.com.

WTI: down 62 cents at $66.42.

Active rigs:

$66.4210/30/201810/30/201710/30/201610/30/201510/30/2014
Active Rigs68523470190

Seven new permits:
  • Operator: Zavanna
  • Field: Poe (McKenzie) -- seven miles northeast of Alexander; tracked here;
  • Comments: Zavanna has permits for a 7-well Stranger pad in section 28-151-100; these are the first new permits in Poe field since 2016; there were no new permits in Poe field in 2017;
Four permits renewed:
  • EOG: three Hawkeye permits in McKenzie County and one Van Hook permit in Mountrail County
Seven permits canceled:
  • Enerplus: the "solar system" well permits were canceled -- Mars, Venus, Saturn, Rocket, Copper, Jupiter, and Pluto, all in Dunn County
Nine producing wells (DUCs) were reported as completed:
  • 32379, 1,112, XTO, Werre Trust 21X-3E, Bear Creek, t8/18; cum 12K after only 9 days;
  • 33531, 5,872, Hess, AN-Gudbranson-153-94-2215H-10, Elm Tree, t10/1; cum -- ; the Gudbranson wells are tracked here;
  • 34283, 1,162, Abraxas, Lillibridge 20-17-12H, Pershing, t7/18; cum 59K 9/18;
  • 34282, 1,032, Abraxas, Lillibridge 20-17-11H, Pershing, t9/18; cum 43K 9/18;
  • 34281, 1,017, Abraxas, Lillibridge 20-17-10H, Pershing, t7/18; cum 57K 9/18;
  • 34328, 718, Abraxas, Lillibridge 20-17-9H, Pershing, t9/18; cum 44K 9/18;
  • 34005, 2,212, CLR, Radermecher 5-22H, Camel Butte, t9/18; cum --
  • 31478, 785, Slawson, Serpent Federa 4 SLTFH, Big Bend, t9/18; cum 8K after 22 days;
  • 31394, 265, Slawson, Serpent Federal 1 SLH, Big Bend, t7/18; cum 5K after 18 days;

***************

The geologist's report, for the well:
  • 33531, 5,872, Hess, need to confirm; 33-053-07997;
  • spud June 11, 2018
  • curve began on June 14, 2018
  • curve landed at June 15, 2018
  • TD, June 20, 2018
  • fracked, 8/22/2018 - 8/25/2018; sundry form not scanned
  • FracFocus: small - moderate frack; 5.5 million gallons of water; 84.2% water by weight
  • neighboring wells: 19538; 21312; 

ONEOK 3Q18 Earnings

Link here, press release, OKE:
  • operating income jumps 40%
  • adjusted EBITDA jumps 28%
  • guidance raised
  • results jumped on higher volumes in Williston Basin and STACK/SCOOP
  • income: 75 cents vs 43 cents yoy
  • income, nine months, almost doubled yoy
  • note CAPEX: $694 million 3Q18 vs $135 million 3Q17
Zacks estimates, here:
  • earnings: 74 cents, and that was a recent "bump"
********************************* 
Two Entirely Different Companies

DNR vs NOG
  • both are currently active in North Dakota
  • one is a pure play tight oil
  • one was mostly seen as an EOR (CO2 injection) but now has sizeable position in Eagle Ford
  • neither pays a dividend
  • both trading under $4
earnings for DNR:
Denbury Resources Inc. is estimated to report earnings on 11/06/2018. The upcoming earnings date is derived from an algorithm based on a company's historical reporting dates.Our vendor, Zacks Investment Research, might revise this date in the future, once the company announces the actual earnings date. According to Zacks Investment Research, based on 4 analysts' forecasts, the consensus EPS forecast for the quarter is $0.11. The reported EPS for the same quarter last year was $0.04.
earnings for NOG:
Northern Oil and Gas, Inc. is expected* to report earnings on 11/08/2018 after market close. The report will be for the fiscal Quarter ending Sep 2018. According to Zacks Investment Research, based on 6 analysts' forecasts, the consensus EPS forecast for the quarter is $0.11. The reported EPS for the same quarter last year was $0.04.
DNR
  • trading at $3.36
  • 52-week range: $1.13 - $6.75
  • market cap: $1.5 billion
  • p/e: 7.3
  • enterprise value: $4.92 billion
  • total cash: $116K
  • total debt: $2.8 billion 
NOG
  • trading at $2.92
  • 52-week range: $0.72 - $4.49
  • market cap: $1.12 billion
  • p/e: n/a
  • enterprise value: $1.6 billion
  • total cash: $201 million
  • total debt: $845 million 
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 what you think you may have read here.

US Oil Exports -- October 30, 2018

Graphic (link here): in thousands of bbls/day, US crude oil exports --



Chart (link here): in thousands of bbls/day, US crude oil exports --

*****************************
News and Updates

November 3, 2018: Iranian sanctions kick in. 

October 30, 2018: historical -- Mexico takes first delivery of Bakken oil.

May, 2018: US sets record -- 2 million bopd exported.

2018: western Canadian sands remain landlocked; Trans Mountain Expansion sidelined; WCS selling at $45 discount to WTI;

Trump Prevails: Iraq Agrees To Honor Iranian Sanctions -- October 30, 2018

Yesterday, when it was being reported that Iraq expected a exemption from the Iranian sanction, I wrote :
Iran sanctions: Iraq expects exemption. Which, of course, makes no sense. Trump calls out Germany for buying natural gas from Russia, and then Iraq expects exemption for helping Iran? The swamp.
Today: Iraq gives into President Trump ... Trump bullies Iraq ... or Iraq sees the writing on the wall .... whatever .... Iraq will stop oil exports to Iran in compliance with US sanctions. Wow. Iraq will halt its crude swap deal with Iran in order to comply with US sanctions. Wow.

Link here.

How trivial is this in terms of volume of oil? It is really, really trivial and it's all by truck: 30,000 bopd. One huge truck might carry  200 bbls, so we're talking at least 150 trucks / day. We probably need to confirm this some day -- that really seems like a lot of trucks going back and forth every day ... even in a country that relies on trucks. Whatever. 30,000 bopd is all we're talking.

Nice link here discussing volume of oil carried by various modalities.

The Market, Energy, Political Page, T+76 -- October 30, 2018,

The real question: which company will need a bailout first? Tesla or GE?
GE: cut its 24-cent dividend to 12 cents in September, 2017; today it cut its 12-cent dividend to one penny; this will save the cash-starved company around $4 billion; but, it's actually worse than it looks;  misses on both revenues and earnings; a loss of $1.15 vs earnings of 39 cents yoy; adjusted, earnings were 27 cents but that still missed estimate of 28 cents (wow); revenues? $31 billion for the quarter but missed estimates of 32 billion. GE shares dropped another 8% today and is now trading at around $10.22.

CLR Has Posted Its 3Q18 Presentation

Link here.

"First-look" highlights as I scroll through quickly.

Bakken:
  • 35 slides
  • 20 - 24% annual production growth yoy; Bakken, up 23% yoy
  • production, record CLR quarter: 167,643 boepd; 128,497 bopd
  • "2018 ramp": up to 70% Bakken wells yet to be completed; these 70 wells would represent about40% of CLR's total for 2018 -- wow!
  • CLR says it has lowest cost structure among 12 peers
  • Bakken returns better than ever
    • all CLR top-10 30-day rate Bakken wells were drilled in the past 12 months
    • 42 completions in 3Q18: 3,013 boped average per well
  • EUR-type curves with optimized completions: 1.2 million boe
    • compare with 980K in 2017; 800K in 2015; 603K in 2014; and, 409K in 2011
  • 8 rigs drilling in the Bakken; an increase of two since last report
  • 2 stim crews working; will have 4 stim crews at YE 2018
  • in the Bakken, CLR is the #1 producer
    • producing 12% of ND Bakken production
    • produces about 150,000 bopd
    • next nearest producer: 105,000 bopd
  • 800,000 net reservoir acres
  • 4,000+ Bakken wells in inventory
  • two more 30-day rate Bakken wells added to top ten list
  • Wiley 8-25H (#33112) -- Pershing -- see below
  • Mountain Gap 3-10H (#33557) -- Rattlesnake Point -- see below
  • wow, the 60-stage completions are now exceeding the 1,200 mboe EUR type curve (slide 8)
  • more and more wells in the Bakken producing greater than 100 mboe in 90 days 
SCOOP/STACK
  • 3Q18 production: 120,246 boepd
  • 1.2 mboe EUR-type curves; some exceeding even those incredible rates
**********************************

Mountain Gap 3-10H (#33557) -- Rattlesnake Point, t7/18; cum 79K after 1.5 months:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-2018314475544888421394919248687100
BAKKEN7-201818326493218432629347612149713029
BAKKEN6-20180000000
BAKKEN5-20180000000
BAKKEN4-20186172217226867193301933


Wiley 8-25H (#33112) -- Pershing (still confidential):
DateOil RunsMCF Sold
8-20184511479898
7-20185293090387
6-20181211319086
5-201821280
 

Lana Del Rey! Apple Live Streaming To Begin Momentarily -- 9:00 A.M. CDT -- October 30, 2018

Updates

October 31, 2018: from the presentation --


October 31, 2018: More, at Macrumors.com, link here --

Later, 2:01 p.m. CDT: CNBC's take on the new Apple products

Original Post
Purely coincidental:



Note: many factual and typographical errors; done on the fly to make sure I stay focused.

Link here: https://www.apple.com/apple-events/livestream/.

And it begins.Tim seems almost embarrassed. Huge, rock-star-like NYC welcome.

At the Brooklyn Academy of Music.

Starting immediately with the Mac.
  • 51% of new Mac owners are new to Apple
  • 76% of new Mac owners are in China
  • 100 million Macs
  • MacOs Mahogany recently released
  • "Stack" app built in: cleans up desktop
  • one Mac in particular is their favorite: MacBook Air; much clapping
    • I agree -- it's phenomenal
    • changed the industry
    • first portable with all-day battery
    • redefined the modern notebook
    • most beloved notebook ever; much clapping
  • so, what's new?
    • a new MacBook Air -- even more enthusiastic response
  • retina display
  • and, a whole lot more
  • Tim is really, really excited
  • two "ports" on the left side; that's all?
  • VP of hardware engineering to tell us all about it 
  • everything re-engineered, refined
  • #1 feature customers wanted: retina display, but much better
  • display glass to the edge; 13.3" display; aluminum bezel of old Air removed
  • another 3/4" display all the way around
  • pixels quadrupled
  • FaceTime camera still at the top even with loss of the aluminum bezel
  • #2 feature customers wanted: TouchID
  • comes with T2 security chip; most secure storage of any portable
  • #3 feature: latest generation keyboard; each key backlit; Force Touch trackpad and 20% bigger
    • can click anywhere on the trackpad -- this is also huge
  • #4 feature: audio 
  • #5: most versatile in/out port
  • CPU: up to 16GB memory -- doubles previous; 60% faster
  • all-day battery life
  • portability -
    • 17% less volume -- wow!
    • 15.6 mm thin; 10% thinner
    • weighs 2.75 pounds; a quarter-pound lighter 
  • Aluminum: alloy
    • huge breakthrough
    • 100% recycled aluminum
    • every MacBook Air is now !00% recycled aluminum -- huge enthusiastic response
    • "greenest" Mac ever
  • three finishes
  • 8 GB; 1.6GHZ; 128GB SSD
  • $1199 -- wow! That's incredible; about what they cost now ($999)
  • $1199 seems to be a price point that Apple likes for their most requested products;
  • this price point hasn't gone up much at all over the years
  • can order starting today; will be available next week, November 7, 2018
  • just in time for the holidays
Mac Mini? An almost-one-more thing moment from Tim.

This looks incredible.

The new Mac mini.
  • biggest update ever
  • space-grey finish
  • processors: with 4-core and 6-core, 5x faster
  • memory: 
  • 32 GB
  • but also
  • can go up to 64 GB
  • Storage: all flash storage; up to 2TB
  • new cooling system; 
  • connectivity: four Thunderbolt 3 ports; HDMI;
  •  Paramount using Mac mini to film "Rocketman" (Elton John bio)
  • $779
  • can order starting today; will be available next week, November 7, 2018
  • also, 100% recycled aluminum
  • carbon footprint reduced by 50% 
Today at Apple: Angela. Wow. Great reception. Educational sessions in store. Apple is clearly widening the gap between itself and others. I am not aware of any other brand doing this. One concern: over-promise and under-deliver. These sessions are going to be way over-subscribed. Stores will look a lot different in the future. Apple University Village in Seattle just opened. The new Pris flagship will open soon. All facilities now run on 100% renewable energy (I am not sure of the specifics). 3,000 "pros" and 70,000 associates -- that know their computers.

The reception that Tim is getting in NYC is amazing. He says he is moving to NYC. LOL.

iPad.
  • 400 million sold
    • sold more last year than all of the laptops sold by all competitors last year
    • therefore, most popular tablet as well as the most popular computer in the world
  • three models: Mini, iPad, and Pro
  • a new iPad Pro today -- wow
    • no home button
    • LCD stretches from top to top, bottom to bottom
    • rounded corners
    • liquid retina display
    • ideas taken from iPhone
    • 10.5" Pro now -- new --> same footprint but now an 11" display
    • also 12.9" display -- huge
    • about the very same size as an 8.5 x 11-inch piece of paper
    • 5.9 mm thin
    • 15% thinner than before
    • 25% less volume
    • Apple thinks people will move to the larger Pro; it seems so much smaller
    • Face ID; will unlock with simple glance
    • no longer a home button
    • swiping gets you everything
    • split view
    • A12X Bionic -- a monster -- huge audience reception
    • A12 in latest iPhones
    • an "X" chip -- no other manufacturer has been able to make this jump
    • 7-core GPU; 8-core CPU
    • up to 90%
    • faster than 92% of all portable PCs; and this is a tablet, not a laptop
    • all-day battery life
    • neural engine: 5 trillion operations per second
    • 1TB storage capacity
    • USB-C -- wow!  -- so you can hook it to  your printer
    • can charge your iPhone from the iPad Pro 
  • Pencil
    • 2nd generation pencil
    • attaches magnetically
    • automatically recharges immediately and wirelessly
    • always charging, so always ready to go
    • tapping on the pencil actually changes function of the pencil
  • Smart Keyboard Folio 
    • attaches to keyboard
  • no other devices offers the flexibility of the iPad
  • best device ever for AR
  • software
  • wow -- as they are going through the capability, it seems way beyond any desktop, much less any tablet; one easily forgets this is a tablet, not a desktop
  • gaming
    • ultimate gaming platform: wow, the gaming looked real --- it was simply downright scary; rivaling consoles
    • every NBA player is rendered perfectly down to the pinholes on the jerseys
    • you have to see this to believe this; pretty amazing 
  • working close with Adobe 
    • Photoshop
  • iPad Pro: $999
  • can order starting today; will be available next week, November 7, 2018
So far, the presenters, about 7 women for every 3 men.

IO12: unbelievable start; installed in more devices in first month than any previous update
  • 12.1 shipping today
  • 32 friends on Group Face Time 
  • 78 (?) more emojis
Finishes with ... Taylor Swift? Let's see who it is?

NY native.

Lana del Rey.

WOW. WOW. WOW.

This is truly incredible. Who would have thought?

Can't swear so can't give name of new album.

"How to Disappear" from the new album.

The new album title: "Norman F****** Rockwell." Due out in 2019.

Wow, this is really quite incredible. I never would have guessed Lana Del Rey tie-up to this extent with Apple. Speak volumes.

Seriously can anyone compete with Apple. Clearly "outside the box."

Second song she sings, again, cannot provide the name due to "G" rating required by Apple for this performance.

It's kind of ironic: the mainstream press is all upset about language being used today, and yet, Apple can't even let Lana del Rey mention the names of her songs or album.

I'm impressed that Lana Del Rey acceded to these requests. Good for her.

Big hug between Tim Cook and Lana del Rey. Standing ovation; I think but can't tell for sure with the lighting.

Iran's Worse Nightmare -- Oilprice -- October 30, 2018

The sanctions go into full effect next weekend, Sunday, November 4, 2018.

From oilprice.com, some comments and data points:
  • it is clear that President Trump is serious about these Iranian sanctions
  • when oil was trending toward $100 a few weeks ago, pundits said that Trump has gone too far; his sanctions would result in $100-oil or worse
  • in fact, WTI is now trending toward $65 oil
  • worse, the IEA and others are now forecasting a downtown in economic growth and a slowdown in oil growth demand going forward (for calendar year, 2019)
  • Trump stuck to his horses, despite $100-oil talk, and Trump was "right" again (no pun intended)
  • with the Khashoggi overhang, Saudi Arabia could be in deeper trouble than it was a few years ago: the price of oil has dropped well below $80 (Brent/OPEC basket) and investors are wary of photo ops with MbS

At Risk Of Beating A Dead Horse -- US Natural Gas Projections -- Winter, 2018 - 2019

I've gone back and re-read the post on natural gas sent by a reader.

After reading it again, I've taken the liberty to add a line on the graphic to project where "we" could be if the winter of 2018-2019 is anything like the winter of 2013 - 2014. I am unaware of anyone making that comparison yet, but it's a scenario that needs considering.

The reader's note is long and involved but it can be summed up in three points. Only that in bold needs to be read.

1. We should know where "we" stand by the end of the second weekend in November. Generally, max natural gas storage in the US is seen at the end of injection season, historically the first weekend in November, but the reader suggests that based on recent history, the injection season could go an additional week this year, i.e., the second week in November.

2. Going into the heating season, when natural gas in storage starts to decline, our current storage is at record lows, last seen in 2005, thirteen years ago.

3. If the winter of 2018 - 2019 approaches the severity of the winter of 2013 - 2014, US natural gas storage could drop to well below 200 bcf. Note that US natural gas in storage has never dropped below 900 bcf. The graphic is worth a thousand words.

This is my interpretation of what the reader wrote. I take all responsibility if I have misinterpreted what he was saying.

The graphic:


***********************************
The Top Three Stories That Fascinate Me Right Now

I first posted this list October 26, 2018, only four days ago:
  • Proposition 112 in Colorado
  • Saudi Arabia -- the Crown Prince's recent investment conference was a dud
  • News today that the NDIC is raising the flaring issue once again
It's amazing how fast things change. The list is now changed a bit, and expanded:
  • Proposition 112 in Colorado
  • the growing alliance between Russia and Saudi Arabia
  • how Iran responds when pushed into a corner
  • flaring policy in North Dakota

Four EIA Dashboards

EIA dashboards:

Voters And E15, The Road To Iowa -- October 30, 2018

E15: I'm impressed voters are watching so closely. From the linked poll:
President Trump recently instructed the U.S. Environmental Protection Agency (EPA) to take steps that would allow gasoline blends containing up to 15 percent ethanol (E15) to be sold year-round rather than just eight months out of the year.

When it announced the move, the administration claimed that expanding the availability of E15 “will strengthen America’s domestic energy production and provide a boost to America’s farmers.” According to the results of a new national poll commissioned by the American Petroleum Institute (API), most voters surveyed have reservations about the administration’s E15 proposal.

“Consumers are speaking loud and clear,” API Vice President of Downstream and Industry Operations Frank Macchiarola said in a written statement outlining the results. “E15 is a symptom of the broken Renewable Fuel Standard (RFS) and it’s time for real reform. There is bipartisan agreement that the RFS is a failure and we urge the administration to support consensus legislation to significantly reform the RFS for the benefit of all consumers.”

The telephone survey of 1,001 registered voters, conducted Oct. 12 through 16, 2018, by Harris Poll, concluded that:
  • 79 percent of voters are concerned about expanded E15 sales and vehicle incompatibility
  • 83 percent of voters are concerned that consumers could pay higher pump prices if fuel retailers need to invest in new infrastructure to accommodate certain fuel types
  • 68 percent of voters are concerned about consumers accidentally using E15 and subsequently damaging their engines
  • 81 percent of voters are concerned that government requirements could exceed the 10-percent level of ethanol in the U.S. fuel supply and, according to API, could raise gasoline prices by up to 26 cents per gallon

The British Isles, Fracking, And Seismic Events -- October 30, 2018

The British earthquake story is quite fascinating. From oilprice.com, "UK fracking has paused again."

Four links to begin:
Quick: on the Richter scale, how "low" can earthquakes go?

When I first started reading about these pauses in fracking due to seismic events, I was confused, and wrong to some degree with regard to fracking and earthquakes.

I now feel that I understand the issue a whole lot better after reading the articles at the links above. 

WTI Breaks Below $67 Despite Iranian Oil Coming Off Global Market -- October 30, 2018; Miexco Makes History: Takes First Shipment Of Bakken Oil

Apple, Inc: to announce hardware updates this morning; 10:00 a.m. ET/9:00 a.m. CT -- from NYC

Earthquakes: British update later this morning; should be fun

Eagle Ford: link to EIA's dashboard will be added to the blog's featured links.

E15: I'm impressed voters are watching so closely.

COP: SeekingAlpha and COP shares.

Putin - MbS alliance, from twitter:

Mexico cancels new airport: wow. This is what the populist mandate killed:
  • one of the world's biggest, most modern airports in the world
  • ability to handle 100 million passengers / year
  • lots of dollar figures; a bit confusing; data below may be incorrect; see linked article
  • contracts awarded so far; now null and void: $7.7 billion; work on new airport is 30% complete
  • alternative plan: to add two runways to current airport;
  • current airport is 20 percent completed; required $14 billion; about $3 billion has been invested so far
  • independent analysts suggest the decision will cost $6 billion 
  • new Mexican president says the country will save $50 billion
  • one word: Venezuela 
  • a decision to kill a bullet train, I would understand; a decision to kill this project seems beyond the pale; suggests to me that Mexico's finances are in a world of hurt -- especially in light of Mexico now importing Bakken oil
**********************************
Back to the Bakken

Wells coming off confidential list today -- Tuesday, October 30, 2018:
  • 34510, SI/NC, MRO, Monteau USA 34-7H, Van Hook, no production data;
  • 34346, 401, Nine Point Energy, Sigma Lee 155-103-14-23-6H, Squires, 50 stages; 10 million lbs, t5/18; cum 43K 8/18; :
  • 34321, 420, Nine Point Energy, Sigma Lee 155-103-14-23-7H, Squires, 51 stages; 10 million lbs, t5/18; cum 52K 8/18; 
  • 34227, 1,269, Kraken Operating, Redfield-Colfax LE 24-13 1TFH, Lone Tree Lake, Three Forks, 60 stages; 15million lbs, t5/18; cum 78K 8/18;
  • 34186, 1,131, Kraken Operating, Redfield East 24-13 2TFH, Lone Tree Lake, Three Forks, 60 stages; 15.3 million lbs, t5/18; cum 67K 8/18;
  • 34185, 1,371, Kraken Operating, Redfield East 24-13 3H, Lone Tree Lake, 60 stages; 15.4 million lbs, t5/18; cum 88K 8/18;
  • 34184, 1,130, Kraken Operating, Redfield East 24-13 4TFH, Lone Tree Lake, Three Forks, 60 stages; 15.4 million lbs, t5/18; cum 77K 8/18;
  • 34183, 1,403, Kraken Operating Redfield East 24-13 5H, Oliver, 60 stages; 15.4 million lbs, t5/18; cum 97K 8/18;
  • 34182, 1,663, Kraken Operating, Colfax 19-18 4H, Oliver, 60 stages; 15.4 million lbs, t5/18; cum 87K 8/18;
  • 34181, 1,150, Kraken Operating, Colfax 19-18 5TFH, Oliver, Three Forks, 60 stages; 15.3 million lbs, t5/18; cum 78K 8/18;
The comments below are from geologists' reports at Terra Guidance. These are some of the best, if not the best, reports I have seen coming in from the Bakken. Others have great reports, but the reports seem to keep getting better. A great "public library" of information is building with regard to the Bakken. It will soon rival the fabled library at Alexandria, Egypt.

Comments regarding these seven Kraken wells, from #34181:
  • a seven-well pad
  • Three Forks target was 21' thick, with the top of the target window 11' below the top of the Three Fork and the bottom of the window set 21' below the top of the Three Forks
  • total lateral length of 9,909'
  • above target: 2.17% (215')
  • in target: 60.2% (5,962')
  • below target: 37.7% (3,732')
  • gas units: one gas unit equals 100 ppm
  • gas detection system measures: C1, C2, C3, IC4, NC4, H2S, CO2
  • gas sensors: from 0 to 10,000 gas units
  • trip gas maxed at 9,911 units
  • spud date: November 12, 2017
  • landing point: November 18, 2017; intermediate casing point, November 19, 2017
  • total depth reached: November 24, 2017
Comments regarding these seven Kraken wells, from #34185:
  • a seven-well pad
  • middle Bakken target was 44' thick, with the top of the target window 15' below the top of the middle Bakken and the bottom of the window set 25' below the top of the middle Bakken
  • total lateral length of 10,200'
  • above target: 10.43% (1,064')
  • in target: 81.65% (8,328')
  • below target: 7.92% (808')
  • gas units: one gas unit equals 100 ppm
  • gas detection system measures: C1, C2, C3, IC4, NC4, H2S, CO2
  • gas sensors: from 0 to 10,000 gas units
  • max daily gas: 4,006 units
  • spud date: December 15, 2017
  • landing point: January 12, 2018; intermediate casing point, January 13, 2018
  • total depth reached: January 16, 2018
Note: in a long note like this, there will be factual and typographical errors. If this information is important for you, go to the source.

Active rigs:

$66.5810/30/201810/30/201710/30/201610/30/201510/30/2014
Active Rigs67523470190

RBN Energy: oil flows across the Gulf of Mexico no longer a one-way street. Archived.
Phillips 66 loaded its first Panamax tanker for export to Mexico over the weekend. Late on Sunday night, the SCF Prime signaled that it was headed for Pajaritos, Mexico, after loading at Phillips' terminal in Beaumont, TX.  Mexico is making history with this pivotal first purchase of Bakken crude from Phillips 66 at the U.S. Gulf Coast (USGC). Up until now, the crude oil trade between the U.S. and Mexico had been a one-way street, with oil moving from Mexico to the U.S. and not the other way around. But now, as Mexico’s state-run oil company PetrĂ³leos Mexicanos (Pemex) faces dwindling oil production and refinery outputs, importing light, sweet crude from the U.S. is a new avenue to revive Mexico’s refinery utilization. Today, we examine the new shift in the traditional flows of crude oil across the Gulf of Mexico.

Monday, October 29, 2018

A Reader Weighs In On Likely Impending Natural Gas Shortage(s) This Winter -- October 29, 2018

My "comments were restricted" the past few days because I was getting too much spam. A regular reader who understands the natural gas sector way better than I do took advantage of "restricted comments" by sending a lengthy note instead. This might be more than most want to read, but for those following natural gas this winter, this is well worth your time.

For now, I will just copy and paste what the reader wrote. Hopefully you will find it as fascinating as I did. Hopefully the reader does not mind that I took this route. If the reader wants it removed, just let me know.

From a reader:

Comments Are Turned Back On -- October 29, 2018

I've turned "comments" back on. Assuming I checked the correct boxes and saved the changes.

Periodically I have to turn off the "comments" because I'm getting too much spam. I apologize for the inconvenience.

Back To Denbury And That News Earlier Today -- October 29, 2018 -- It Appears DNR Just Swapped 196,000 Acres In The Bakken For 84,000 Acres In Eagle Ford?

Over at "Bakken operators," recent entries regarding Denbury, prior to today's announcement:
  • July 20, 2016: Denbury sells the remaining non-core Bakken assets for $58 million; buyer not identified; amount of acreage not identified;
  • October 2, 2013: corporate update; their production in North Dakota is their biggest 
  • September 20, 2012: XOM to buy all DNR acreage in the Williston Basin Bakken (North Dakota and Montana); $1.6 billion deal; 196,000 Bakken acres; but DNR gets XOM acreage in Wyoming and Texas; see XOM below;
  • August, 2012, corporate presentation (dynamic link)
  • ~ 200,000 acres (August, 2012, corporate presentation); according to "anonymous," DNR has 66,000 acres in Ward County, too far east for the Bakken; whether they still have the acres or not is unknown; but off the books, and the rig there will not be kept (will let contract expire)
  • Back to 266,000 net acres (Enercom Conference, August 16, 2011); note -- previously planned to add 7th rig by January, 2012; now by end of 2011 (not much difference, but moved up) -- nope, now down to 4 rigs  (1Q12 conference call); back to six (6) rigs through 2012; see below, 4Q11 -- 4 rigs ("wrote off" 66,000 acres in the Almond prospect)
  • 266,000 net acres (April, 2011; IPAA conference presentation)
  • 275,000 net acres in the Bakken (January, 2011; agrees with corporate presentation)
  • Cherry Prospect: Siverston field, 
  • Fields, SW of the river: Camp, Cherry, Lone Butte, Bear Creek, Charlson, and Murphy Creek
  • Field: NE Foothills in Burke (+/- value)
  • Field: Almond in Ward County (76,000 acres; almost no proven value yet) Update: 4Q11 -- removed from inventory; no value; removed the one rig that was there
  • Analyst's number: 300,000 net acres (December 31, 2010)
Note: DNR had around 275,000 net acres in the Bakken at one time; in 2012, it was announced that XOM would buy all DNR acreage in the Bakken (operator would be XTO).

So, DNR very likely sold 275,000 net acres of Bakken for around $5,000/acre (a "WAG" as they say), or $1.4 billion and now a few years later spend about that much money to buy 84,000 net acres in the Eagle Ford. [My bad: I see now that the deal was spelled out  -- XOM would buy 196,000 Bakken acres from DNR fro $1.6 billion.]

Today's news: buys Penn Virginia assets in Eagle Ford for $1.7 billion; 84,060 net acres.