Thursday, February 1, 2018

Some Willistonites Probably Noted There Was Recently A Work-Over Rig On This Well -- Results? -- February 1, 2018

This well is back on line after being off line since September, 2015. Background:
  • #20282. Has been off-line for two years; was recently on IA status. Seven wells around it have recently been fracked. Name: Williston Airport 2-11 1H; Todd Field.
Now it's back on status; recent work-over to get it back on line after shut in for so long. The well:
  • 20282, 2,671, Statoil, Williston Airport 2-11 1-H, Todd, t10/11; cum 337K 3/19;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN3-20193133393329791558045398225
BAKKEN2-20191511271041368918391327400
BAKKEN1-20192641104172633477576819830
BAKKEN12-2018223356336254431750162488
BAKKEN11-20183059586032826556904707912

Production since 4/15:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-2017256503631617513000
BAKKEN11-2017140017081758058411739
BAKKEN10-201711006379789634155
BAKKEN9-2017300012427000
BAKKEN8-201731000000
BAKKEN7-201731000000
BAKKEN6-201730000000
BAKKEN5-20177000000
BAKKEN4-20170000000
BAKKEN3-20170000000
BAKKEN2-20170000000
BAKKEN1-20170000000
BAKKEN12-20160000000
BAKKEN11-201630000900
BAKKEN10-20160000000
BAKKEN9-201630000000
BAKKEN8-20160000000
BAKKEN7-20160000000
BAKKEN6-20160000000
BAKKEN5-20160000000
BAKKEN4-20160000000
BAKKEN3-20160000000
BAKKEN2-20160000000
BAKKEN1-20160000000
BAKKEN12-20150000000
BAKKEN11-20150000000
BAKKEN10-201511007504271061060
BAKKEN9-201530227723492587245624533
BAKKEN8-20153121562171271323562104252
BAKKEN7-20153123812566285727212431290
BAKKEN6-201530295927822840258314281155
BAKKEN5-20152318161536227021441778366
BAKKEN4-20152726662473272323951864531

Northwest Of Williston, Does Anyone Know What Is Being Built Here? Thank You, We Have An Answer -- February 1, 2018

Answer: A Richie Brothers Auction site. See first comment. I forgot to go over to Google maps; I was using an EIA source an apparently they don't identify sites. A huge "thank you" to the reader.


Original Post

Does anyone know what is being built along the truck bypass northwest of Williston? See graphics below. A new natural gas processing plant? Screenshots taken from the EIA interactive map of tight oil and shale gas plays in the "lower 48."







After-Hours -- Tech Giants -- February 1, 2018

Amazon:
share price: $1,476
P/E: 354
yield: N/A
"surges after hours" -- CNBC

AAPL:
share price: $174
P/E: 18
yield: 1.51%
"reversal after hours" -- CNBC


GOOG:
share price: $1,140
P/E: 39
yield: N/A
"sinks after hours" -- CNBC

******************************
Apple

Apple posts records results ever with fewer iPhones sold. That's the headline.

Wow, all afternoon I'm hearing stories about how Apple sold less iPhones this past quarter compared to a year earlier. So, finally I get to see the numbers: Apple said the number of iPhones it sold actually fell 1% to 77.3 million units.

[Later: someone said -- "today’s quarter report is over 13 weeks. Last year (same period) was over 14 weeks." If that's accurate, 13/14 is 93%. Had Apple had one more week, another 7% might have been sold. 1.07 x 77.3 = 82.7. Maybe the analysts forgot the quarter was one week shorter. By the way, I don't believe the iPhone was available until early November; in other words, the iPhone was only around for about half the quarter. Of course, I could be wrong on all of this.]

[Later: that is accurate about the 13-week quarter. From MacRumors:
Apple beat out all other smartphone vendors including Samsung, Huawei, OPPO, and Xiaomi, but its overall iPhone shipments were down from 78.3 million in the year-ago quarter. It's worth noting, however, that Q4 2017 was a 13 week quarter, while Q4 2016 was a 14 week quarter.]
Yes, this was during the holiday quarter. So, a decline is not good in this period. But I was certainly under the impression that the number of Apple smartphones sold had dropped by 20 to 25% based on all the headlines. LOL.

Having said that, the stocking stuffers really sold well: Apple Watches and Air Pods.

Something tells me, Apple will do just fine.

Disclaimer: this is not an investment page. 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.

Six New Permits; WTI Has Nice Gain -- February 1, 2018

Active rigs:

$66.112/1/201802/01/201702/01/201602/01/201502/01/2014
Active Rigs584045146192

Six new permits:
  • Operator: Hess
  • Field: Long Creek (Williams)
  • Comments:
Five producing wells (DUCs) reported as completed:
  • 30131, 2,420, MRO, Blue Creek USA 24-22TF-2B, Sanish, t1/18; cum --
  • 30134, 3,503, MRO, Rough Coulee USA, 24-22TFH, Sanish, t1/18; cum --
  • 31511, 439, CLR, Dolezal 5-5H, Chimney Butte, 4 sections, t1/18; cum -- (#17372, #19728)
  • 31512, 307, CLR, Dolezal 6-5H1, Chimney Butte, 4 sections, t1/18; cum --
  • 32891, 4,093, MRO, Begola USA 34-22H, Antelope, Sanish pool. t12/17; cum --
No permits canceled.

No permits renewed.

New permits:
34538, Hess, SC-JW Hamilton, Long Creek,
34539, Hess, SC-JW Hamilton, Long Creek,
34540, Hess, SC-JW Hamilton, Long Creek,
34541, Hess, JC-JW Hamilton, Long Creek,
34542, Hess, SC-JW Hamilton, Long Creek,
34543, Hess, SC-JW Hamilton, Long Creek

*********************************
History

The first North Dakota oil well, at this link

Early Video Of The Bakken -- From 2016

I've never seen this video before even though it was posted back in 2016.

See if you note something that no one has ever mentioned before regarding what you see in this video.

[See comments: no need to "guess" any more.  A reader burst my bubble. I thought the big pads suggested the operators knew from the beginning that there would be multiple wells on each pad. A reader reminded me that the big pads were needed for the frack spreads, and he was absolutely correct. Again, I saw something that wasn't there; readers were smarter than I. LOL. But it did generate a few thoughts. Thank you.]

[However, having said that, the big pads do mean that there is plenty of room for additional wells. Should make mineral owners excited.]

The Market And Energy Page, Part 2, T+11 -- February 1, 2018; Another Huge Oil Discovery In The Gulf; Mike Filloon Updates The Niobrara

COP: by the way, a huge "thank you" to a reader -- I missed it. I had not seen that COP increased its dividend. Whoo-hoo! Meets forecasts. Income of $1.58 billion vs a loss the same quarter one year ago. EPS of 45 cents were right in line. Press release: ConocoPhillips reports fourth-quarter and full-year 2017 results; increases quarterly dividend by 7.5 percent and planned 2018 share repurchases to $2 billion; announces preliminary 2017 year-end reserves and bolt-on transaction in Alaska.

Peak oil? What peak oil? I assume this is a different "major" oil discovery than the one reported earlier today. From a press release:
Shell oday announced one of its largest U.S. Gulf of Mexico exploration finds in the past decade from the Whale deep-water well. The well encountered more than 1,400 net feet (427 meters) of oil bearing pay. Evaluation of the discovery is ongoing, and appraisal drilling is underway to further delineate the discovery and define development options.
"Deep water is an important growth priority as we reshape Shell into a world-class investment case," said Andy Brown, Upstream Director for Royal Dutch Shell. "Today's announcement shows how, through exploration, we are sustaining a strong pipeline of discoveries and future projects to sustain this deep-water growth."
Whale is operated by Shell (60%) and co-owned by Chevron U.S.A. Inc. (40%). It was discovered in the Alaminos Canyon Block 772, adjacent to the Shell-operated Silvertip field and approximately 10-miles from the Shell-operated Perdido platform. 
And, look at the thickness of this play: more than 1,400 net feet. Compare that to the earlier story being reported by Chevron: 670 net feet of play.

*************************
Niobrara Update

FWIW, Mike Filloon updates the Niobrara over at SeekingAlpha.

How Huge Was The Trump Tax Cut? Remember, It Kicks In This Year -- Withholding Cuts Begin Today -- February 1, 2018 -- GDP Forecast To Double -- From 2.6% To 5.4%

GDP Now, link:
Latest forecast: 5.4 percent — February 1, 2018 --
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 5.4 percent on February 1, up from 4.2 percent on January 29.
The forecast of real consumer spending growth increased from 3.1 percent to 4.0 percent after this morning's Manufacturing ISM Report On Business from the Institute for Supply Management, while the forecast of real private fixed-investment growth increased from 5.2 percent to 9.2 percent after the ISM report and this morning's construction spending release from the U.S. Census Bureau. The model's estimate of the dynamic factor for January—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—increased from 0.42 to 1.37 after the ISM report.
Remember, a lot of folks will be receiving their $1,000-bonuses this month and many more will be seeing wage increases.

On another note: Rush Limbaugh? A national treasure. And apparently a lot of people agree, based on the news that came out today.

****************************
For Investors, Take Advantage Of Rare Buying Opportunities

February 4, 2018: Asian demand for commercial aircraft -- 16,000 aircraft. 

February 1, 2018:
  • 1Q18 GDP now forecast by some to hit 5.4%. Anywhere close to 5.4% will be ... mind-boggling
  • US crude oil production hits record high, 10 million bopd
  • US oil companies calling back as many as 100,000 workers
  • Warren Buffett, Jeff Bezos, and Jamie Dimon enter the health care insurance market
Posted earlier: Eight more reasons why the stock market is surging:
  • the two parties in Congress are singing "Kumbaya"
  • NOKO and SOKO are singing "Kumbaya"; risk of nuclear confrontation lowered for several more years
  • IMF publicly admits that the Trump tax will boost global growth to 3.9%; privately, the forecast is for much greater
  • there really is a Trump infrastructure plan (it was "leaked" today); the $1 trillion plan will be centerpiece of his SOTU address
  • still no talk of a recession
  • still no talk of a bear market (the only thing that ends a bull market is a bull market, they say)
  • it looks like Trump is serious about tariffs on China where appropriate (First Solar surged today)
  • France is crying "uncle"; wants to link arms with Germany on banking; France-Germany knows they can't compete with the US' lower corporate tax rate; EU will have to become more tax-friendly if it wants to compete with the US; enhances the "synchronized global economy"
  • Germany walks away from the Paris accords; others will follow; frees up a lot of money for reinvestment
  • the "snowball" effect
Posted even earlier: sixteen reasons -- why the market is surging, sixteen reasons:
  • easy money
  • regulatory environment: an about-face
  • Fed remains cautious 
  • lower tax rates, literally overnight -- and lowered significantly -- really significantly
  • great corporate earnings environment
    • JPM surprises
  • Fiat Chrysler: NAFTA is dead
  • many sectors did not participate in rally during 2017
  • consumer confidence at 17-year highs
  • cheap, accessible energy
  • geopolitical risks dialed way back
    • mideast relatively quiet
    • Trump sounds more "optimistic" about North Korea
  • infrastructure discussion beginning
  • WTI flirting with $64 again today
  • one week until partial government shut-down
  • P/E nowhere near euphoric conditions 
  • big companies with huge cash holdings: Buffett with more cash than ever
  • $1,000 - $2,000 / employee across the spectrum; huge amount of money going back into economy (the government did this in 2008: The package will pay $600 to most individual taxpayers and $1,200 to married taxpayers filing joint returns, so long as they are below income caps of $75,000 for individuals and $150,000 for couples. There is also a $300 per child tax credit)
 Disclaimer: this is not an investment site. Do not make any investment, financial, relationship, job, or travel decisions based on anything you read here or think you may have read here.

The Market And Energy Page, T+11 -- February 1, 2018 -- Models S+X Sales Way Down; Model 3 Sales Really Disappoint -- Aren't We Supposed To See 5,000 Units/Week Being Delivered?

From Bloomberg: US consumer comfort highest since 2001 on optimism for economy. Didn't President Trump tell us that just the other night? Since 2001? Let's see, finally are the two "lost decades" -- the Bush decade, and the Obama decade -- behind us? We can only hope.

**************************
Let's See If That Optimism Extends To January Car Sales

Numbers will be reported over the next couple of days.

Someone is getting a head start on Tesla over at SeekingAlpha.
  • Model S+X estimated to show huge sequential quarterly declines
  • Model 3 estimated progress leaves a bit to be desired
  • If the numbers are correct, Q1 off to tough start
Since it is the first of the month, we now have third-party automotive sales estimates starting to trickle in. Unfortunately for Tesla, that isn't a good thing this time around, as January deliveries seem to be disappointing. As EV competition gets ready to soar, the situation gets more perilous for the company as we approach next week's quarterly earnings report.
Let me start with the Model 3, which is probably what most really care about at the moment. In its January 2018 plug-in scorecard, InsideEvs estimated 1,875 deliveries for Tesla's newest model. That's up a bit more than 800 units over the December level of 1,060 units, but as the InsideEvs scorecard says, the January number was "not as high as projected or expected" (their statement in the scorecard linked above). While the chart below does show growth rising at a sharp pace month-to-month, the Model 3 remains well behind its original schedule.
EV sales are tracked here.

Oh, my goodness, model S+X way down -- total of the two, down to 1,500 for the month of January. Down slightly year-over-year (January sales) but absolutely slumped month-over-month.

Model 3, self-reported deliveries: 1,875 -- weren't we supposed to be up to 5,000/week by now, or 20,000/month? But Elon Musk is selling a lot of flame throwers. Tesla sold 1,060 Model 3 vehicles in December, 2017, so they almost doubled output. Tesla shares? The religious cult is hardly concerned: down barely a percent.

Perhaps a bigger story: Nissan Leaf sales have plummeted. It looks like GM (Chevrolet Bolt / Volt) has the EV mojo right now.

Nissan, even worse than I thought:
  • $30K, stripped down model (but upwards of $40K if one wants the best version)
  • 151-mile range -- great for commuters, nothing else
  • 8 hours required for full charge

Chevron Announces A "Major" Oil Discovery In US Gulf Of Mexico -- February 1, 2018

Before we get to that "major" oil discovery announcement, let's look at the here and now. From Bloomberg, US shale oil could bail out Caribbean oil storage owners about to go under because of dwindling Venezuelan oil supplies:
Caribbean oil terminals hurt by dwindling Venezuelan supply and a market that encourages traders to pull oil out of tank may get a shot in the arm from U.S. shale.
Supply cuts by OPEC and its allies helped shrink global stocks over the past few months, lifting near-term contracts above those for later delivery and reducing the incentive to store crude. Venezuela’s oil output fell by 14 percent over the past year.
Blending more U.S. oil at the terminals may help offset the loss of some Venezuelan supply and the emptying of tanks by companies that had stored crude last year to sell later at a higher price. Traders looking to ship shale oil economically to Asia can bring smaller cargoes from around the Americas to fill up a supertanker in the Caribbean for the long journey.
The Caribbean is home to more than 140 million barrels of commercial storage for crude and refined products.
Ratings agency Moody’s on January 22, 2018, changed its outlook for Caribbean storage owner Limetree Bay Terminals LLC from stable to negative because of the company’s "difficulties" in securing new long-term contracts.
Now, back to that "major" oil discovery being announced by Chevron.

From Rigzone:
Chevron Corporation announced Wednesday that a ‘major’ oil discovery has been made at the Ballymore prospect, located deep offshore in the U.S. Gulf of Mexico.
The Ballymore well reached a total measured depth of 29,194 feet and encountered more than 670 feet of net oil pay with ‘excellent’ reservoir and fluid characteristics, Chevron said in a statement on its website. A sidetrack well is currently being drilled to further assess the discovery, which is already deemed commercially viable.
Located approximately three miles from Chevron’s Blind Faith platform, the Ballymore prospect is situated in water depth of about 6,540 feet, 75 miles from the Louisiana coast, and covers four blocks in the Norphlet play.
No other specifics.

********************************* 
Shell Sweeps Nine Of 19 Blocks Awarded In Oil Auction

Wow, this has been a huge week for Shell. First, its incredible earnings report, and now this, from Reuters:
Royal Dutch Shell snapped up nine of 19 oil and gas blocks awarded in Mexico's prized Gulf of Mexico deep waters, emerging the clear winner in the country's biggest auction since the energy sector was opened up to foreign oil firms.

The stakes are high for Mexican President Enrique Pena Nieto and his ruling party, which is keen to showcase the results of the liberalisation ahead of a presidential election in July.
Shell focused on blocks in the Perdido and Salina basins, which were expected to be the most competitive of the 29 areas on offer in the auction. Perdido is close to U.S. waters where oil firms already operate.
Much more at the link.

*******************************
A Note To The Granddaughters

This is really quite fun to see what the three-year-olds are doing at Tutor Time today. All last week they studied space and space travel; it was mostly didactic. Today, hands on, moon rover, space rocket, interior:





Today, on the way into Tutor Time, I asked Sophia if she would be seeing Isabelle, Garrett, Sloan ....

She said, yes, but then she asked, "Grandpa, how do you know the names of all my friends?"

She really enjoys using her English. She is very, very verbal.

WPX Reports A Huge Well -- February 1, 2018

This page won't be updated. WPX is reporting this well today:
  • 33381, 3,433, WPX, Mandan North 13-24HW, Reunion Bay, Three Forks, 51 stages, 8.6 million lbs, a huge well; 75K in first full month; 65K in second full month; t10/17; cum 186K 11/17;  
*********************************
US Natural Gas Reserves
A Huge Natural Gas Draw And "It Wasn't Even Cold"

From John Kemp via Twitter. This is really quite amazing when you think about. Despite the Marcellus/Utica, the US was unable to keep up with natural gas stores due to one or two short weeks of severe cold, mostly in the northeast.



Mother Nature has scheduled the next "polar vortex" to hit sometime in the next few days. Usually, Mother Nature schedules these weather events to begin on the weekend when other news is relatively slow.

First Time Unemployment Claims Pretty Much In Line -- A Bit Less Than Expected -- February 1, 2018

I didn't see much change in the unemployment claims (see below) but surprise, surprise -- CNBC actually wrote a Trump-friendly headline: US jobless claims unexpectedly fall as job market strengthens. 

From econoday: first time unemployment claims --
  • prior: 233K
  • prior revised: 231K
  • consensus forecast: 235K
  • Actual: 230K
  • New claims, change: down 1,000
Market today: anticipating Apple, Inc, earnings report after market close today

Making America great again: add Lowe's to the list --
  • will give some employees bonuses of up to $1,000
  • will expand benefits
  • specifically cites tax reform 
Shell reports earnings: several stories, different headlines regarding surging proficts
  • WSJ: Shell profit triples but cash flow disappoints 
  • The Telegraph: Shell 'transformation' doubles profits as recovery takes hold
  • Bloomberg: Shell's best profit in three years marred by surprise cash-flow drop
  • will maintain same dividend; around 5% for an annual rate; scrapping scrip, paying cash
Mastercard: lands Cabela's credit-car business; to be issued by Capital One; M/C up 2% in early trading today. Cabela’s was the 15th largest credit-card issuer in the U.S. as of June 2017, about three months before it completed its sale to Bass Pro. Purchase volume on the Cabela’s card totaled roughly $10.7 billion during the first half of last year.

Meanwhile, it's being reported that eBay will soon replace PayPal. 

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


WTI And Active Rigs In North Dakota Hold Steady; NOG Posts Earnings -- February 1, 2018

Active rigs:

$65.452/1/201802/01/201702/01/201602/01/201502/01/2014
Active Rigs594045146192

RBN Energy: Rocky Mountain bets on Canadian crude beat waxy wagers.
Rockies refineries have enjoyed higher margins than their counterparts anywhere else in the U.S. except California over the past four years, despite being typically smaller and less sophisticated plants. Attractive margins resulted in new investment by their owners — concentrating on the flexibility to process different crude types rather than just boosting capacity — because regional product demand is relatively stagnant. Today, we describe how some of those investments have paid off handsomely so far while others aren’t looking so savvy.
Previously, we detailed record 3-2-1 crack spread margins for refineries in Petroleum Administration for Defense District (PADD) 4 over the past four years, with refiners in the Rocky Mountain region processing imported Canadian crude enjoying the highest average returns in the country and those processing domestic crude performing second only to California. The main reasons for the robust performance of Rockies refineries, which are less complex than those in other regions, were access to abundant crude supplies and higher-than-average prices for refined products. In this second installment, we take a deeper look at the success of two Rockies refinery upgrade plays in recent years.
NOG earnings: fourth quarter highlights --
  • daily production in the fourth quarter exceeded prior guidance, increasing 9.3% sequentially and 22.3% year over year to average 16,742 barrels of oil equivalent per day, for a total of 1,540,237 boe Northern beat its prior expense guidance with lower production expenses, production taxes, and general and administrative expenses on a per Boe basis 
  • fourth quarter oil differential was $3.51 per barrel, an improvement of $2.71 per barrel compared to the third quarter 
  • Northern added 7.1 net wells to production during the fourth quarter, bringing year-to-date well additions to 16.9 net wells 
Harold Hamm talks smack. I was curious if Harold Hamm would respond to a remark made by a CNBC anchor the other day. He certainly did
Flashback? USGS -- how much oil and gas is actually in the Bakken Formation?
  • USGS estimated that there may be 4.4 to 11.4 billion bbls of undiscovered, but technically recoverable oil in the Bakken formation (2013 survey)
  • mean estimate of 7.4 billion bbls
  • approximately 450 million bbls of oil were produced from the Bakken and Three Forks formations between 2008 and 2013
  • ratio: 7.4 billion bls/ 450 milllion bbls over six years =  16.4
  • today: 2,190 million bbls (over six years) x that ratio = 35,916 million bbls (35 billion bbls)
  • 35 billion bbls is very much in the ballpark of 50 billion bbls (10% primary recovery of a 500-billion reservoir)