Thursday, May 10, 2018

US Crude Oil Production Efficiency Continues To Improve -- EIA -- May 10, 2018

We've talked about this before. I don't plan to re-open the discussion; it is what it is. Here's the link. Here's the graph:


How Sharp WIll The Upturn Be? -- May 10, 2018

Updates

Later, 11:12 p.m. PDT: see first comment. A reader who certainly knows more about natural gas than I do also noted the sharp upturn.
Regarding the gas re-injection rate, many people will be closely observing the trajectory as several significant, underlying factors should be revealed.
The biggest will be just how quickly operators can 'open up the valves' along with the state of midstream efficiencies.
Although I have yet to be able to verify this, the CEO from Cabot said their production increased 3% from 4 Qtr 2017 to 1 Qtr 2018 without bringing a single new well online.
Absolutely remarkable resources they posses in northeast Pennsylvania. 
Original Post 

Is this the fastest "turn" we've seen in decades with regard to "turning the corner" when it comes to winter/summer natural gas fill? I don't know -- but the curve today seems to be fairly sharp. Nothing subtle here.



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Hubbert Peak Theory. This Wasn't Supposed To Happen.
Sort Of Like The Global Warming Theory

Link.

The Williston Basin and the Permian Basin both peaked some time ago. Now, they are peaking again.


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Connecting the Dots

See graphic above. Now this:  Emerge Energy is reporting that frack sand prices are up on record demand and Northern White is sold out.

Link here. I've noticed some operators using some ceramic instead of all sand to frack wells. I used to think there may be a "geologic" reason to use ceramic; it now appears that operators may be using ceramic in some cases to "conserve" Northern White.

Based on what I've seen, there seems to be marginal benefit of using ceramic unless it's cost effective.

On The Day Iran And Israel Go To War -- May 10, 2018


Here, hold my Coke.

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The US press, in early reporting, does not mention "Trump."

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Everyone Looks Pretty Happy


By the way, look who showed up at "two in the morning." LOL. I wonder if the press will mention the shoes she wore.

CNN getting it right for once.

Based on what I'm reading in the mainstream press, MSNBC et al are upset that the Americans were released. Apparently this was not supposed to happen.

While the alt-left is writing "obits," the president keeps on trucking.

The Market, Energy, And Political Page, T+2 -- May 10, 2018

Scott Adams has great periscope on Israel and Iran:
  • the war between Iran and Israel has begun
  • Putin gave Israel the green light to take out Iranian forces in Syria
  • Putin and Netanyahu 
  • Syria is no longer "it's own country"; it's now a Putin satellite
  • Putin wants Iranian forces out of Syria
  • Putin wanted ISIS out of Syria and got the US to help in that successful endeavor
  • unlikely that Iran has the willpower or the strength to "continue" the war 
  • feels very, very strongly that Iran is incredibly weak right now, militarily and spiritually
  • the Iran question is "ripe" for a solution
  • Trump: high risk profile and lots of experience; in a league of his own
Now, to the sources.
My comments, tactical: 
  • Scott Adams was right on target
  • Trump has completely upset the status quo in the Mideast
My comments, strategic:
  • elections matter
  • I don't think Americans understood how coy the Obama/Hillary administration was getting with Iran
  • Valerie Jarrett's story is important to review
  • Trump understood/understands the two greatest rogue threats to the US: North Korea and Iran
  • both were getting stronger and stronger under previous administrations but really accelerated under Obama/Hillary/Jarrett 
  • Trump came along at just the right time in the view of many (it doesn't take a rocket scientist to know where "we" would be today if Hillary and Valerie in power; one wonders if Valerie would have been SecState
  • Iran will try to wait Trump out; Israel and Putin have a two-year window to "destroy" Iran as a viable player in the Mideast
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Word Of The Day

Colleen is a common English language name of Irish-American origin and a generic term for Irish women or girls, from the Irish cailĂ­n (caile, countrywoman).

The Market, Energy, And Political Page, Part 3, T+1 -- Wednesday, May 9, 2018

Top conventional wells to watch in 2018 -- WoodMac -- over at Rigzone:
A full list of the most anticipated conventional wells this year can be seen below:
  • Pemex – Yaaxtaab-1
  • Repsol – Bon Bini-1, Ivela
  • Repsol & Shell - Boyuy, Jaguar
  • Kosmos Energy – Anapai-1, Requin Tigre-1
  • Statoil – Guanxuma, Aru Trough
  • BP – Aspy, Peroba
  • Eni – Santola-1, RD-1, 4118-4-1, Calypso-1, Cuttlefish
  • Siccar Point Energy – Lyon
  • Total – Tucano-1, Paddavissie-1, Tepat, Antelope South-1
  • Far Limited – Samo-1
  • Tullow Oil – Cormorant-1
  • Statoil – Gjokasen
  • Rosneft – Maria-1
  • Gazprom – Bautinskaya-1
  • Petro Matad – Takhi-1
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Global warming: this was in the Philadelphia Inquirer so it must be true --  it was the coldest April in 20 years across the United States, feds say.
Temperatures in the contiguous United States were 2.2 degrees below 20th century averages last month, making it the coldest April in 20 years, according to the government analysis released Tuesday.
Overall it was the ninth-chilliest April on record in Pennsylvania in records dating to 1895, said the National Center for Environmental Information.
In Philadelphia, 21 of the 30 days were cooler than normal, and coincidentally the official temperature at Philadelphia International Airport also finished 2.2 degrees below the 30-year average in a month that featured a significant snowfall.
Summer energy -- from Drudge Report today:
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The Literature Page

I'm still in my "China" phase.

These are the four books I have recently read:
  • 1421, Gavin Menzies, c. 2008; softcover; Powell's in Portland, OR
  • 1434, Gavin Menzies. c. 2009, softcover; Half-Price Bookstores;
  • A New Literary History of Modern China, edited by David Der-Wei Wang, c. 2017
  • The Opium Wars: The Addiction of One Empire and the Corruption of Another, W. Travis Hanes, c. 2004
I am now reading:
  • Tai-Pan: The epic novel of the founding of Hong Kong, James Clavell, c. 1966 
And, I am ordering The Chinese Typewriter, from Amazon next week. Powell's had a hard copy for full price ($35) and one can get hard copy from Amazon for about $28 (free shipping) or a softcover for much less. 

After I mentioned that I was in my "China" phase and had just completed The Opium Wars, a reader highly recommended that I read James Clavell's Tai-Pan. I bought a copy today at Powell's in Portland, OR, and have started reading it. I am taking my time to read it; reading it very, very slowly. When I first read the subtitle ("The epic novel of the founding of Hong Kong") my hunch was that this was an "Ayn Rand novel set in China." Wow, having just read the first 15 pages, my hunch seems right on.

I was very fortunate to have read The Opium Wars first; this novel makes so much more sense knowing the background.

So, to the reader who recommended that I read Tai-Pan, thank you.

Thursday, May 10, 2018

Jobs. Link.
  • consensus forecast: 220,000
  • actual: 211,000
  • same as previous week, so "no change"
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Sanctions

Sanctions, implications: "Buyers seek US waivers to buy Iranian oil amid new sanctions." -- over at Reuters
South Korea said on Wednesday it would seek U.S. exemptions to buy Iranian oil, a path many big oil consumers are likely to follow in the wake of new U.S. sanctions on Tehran, which will tighten world oil markets and push up prices.
Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) and a key supplier, especially to refiners in Asia.
The United States plans to impose new unilateral sanctions after abandoning an agreement reached in late 2015 which limited Iran's nuclear ambitions in exchange for removing joint U.S.-Europe sanctions, which included strict curbs on crude oil exports.
New U.S. sanctions will include measures aimed at its oil and shipping sectors, with a six-month "wind down" period "to allow companies to end contracts, terminate business, (and) get their money out", according to the U.S. State Department.
Also at Reuters: Serica evaluating impact of Iran sanctions on British gas field.
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Back to the Bakken

Active rigs:

$71.115/10/201805/10/201705/10/201605/10/201505/10/2014
Active Rigs61502884192

RBN Energy: the potential for intrastate gas pipeline expansions at Waha.
The basis blowout at the Waha Hub in the Permian Basin arrived in full force over the last few weeks, with natural gas prices reaching discounts to the Henry Hub not witnessed since 2009.
Available takeaway capacity has been quickly eroding on the existing pipeline corridors out of the basin, leaving many in the market pondering where all the incremental gas production will go before a new greenfield expansion pipe relieves the market in late 2019.
Last week, a partial answer came in the form of a pipeline expansion project by Enterprise Products Partners and Energy Transfer Partners slated for completion later this year. While the project’s estimated size is far too small to preclude additional greenfield pipelines beyond 2019, it does highlight the attractive economics of brownfield expansions on the Texas intrastate pipelines at Waha. Today, we analyze announced and possible intrastate pipeline projects around Waha.