Sunday, July 22, 2018

Tesla: Blue Eyes Cryin' In The Rain -- July 22, 2018

TeslaTesla apparently asking for money back from suppliers on work already completed. Truly bizarre. Tesla confirms it has done this, saying it's common practice in automobile world. If so, news to me.

Two just because I love the guitar playing by Willie Nelson:

Blue Eyes Crying in the Rain, Shania Twain and Willie Nelson


Blue Eyes Crying in the Rain, Willie Nelson

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Cost of Renewables

Idle Rambling -- #16952 -- MRO's Christensen 34-33H In Bailey Field

I noted this last summer, Septembert, 2017, I suppose:
  • 16952, MRO, a nice well; candidate for re-frack; off-line these last two months (9/17);
So, let's see what came of this well. LOL.

First, the production profile since then:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20183114514143631143580779825988
BAKKEN4-2018301730417336139719922197876
BAKKEN3-20182519238191241591111003318771
BAKKEN2-2018211167511788998370311835488
BAKKEN1-2018312450724442232451432649306591
BAKKEN12-2017171587616004137121063236325214
BAKKEN11-201724133041310411367896107399
BAKKEN10-20172824230242681055916308013557
BAKKEN9-20170000000
BAKKEN8-20170000000
BAKKEN7-20170000000
BAKKEN6-2017127022013010
BAKKEN5-20173065464920248835205
BAKKEN4-20173076274220956729611
BAKKEN3-20173180380822060430628
BAKKEN2-20172868069719451325616

It's an MRO well in Bailey oil field, so the odds are that it was a re-fracked well. Let's check FracFocus, API - 33-025-00699: yup, re-fracked, 9/18/17- 9/30/17. From FracFocus: 4.1 million gallons water (moderate re-frack); 85.7% water.
  • 16952, 508, MRO, Christensen 34-33H, Bailey, t6/08; cum 332K 5/18
From the operator's sundry form:
  • new IP: 1,550
  • test: 10/8/2017
  • middle Bakken
  • 45 stages
  • 5.5 million lbs (a medium frack)
  • 123K pounds/stage (less than the usual 200,000 lbs/stage)
Neighboring wells:
  • 22658, taken off-line during the re-rack but no jump in production;
  • 18681, not taken off-line for this frack, but a very, very nice well; jump in production back in 12/14; perhaps I will check up on that later;
  • 18842, another huge jump in production, but it was obviously re-fracked; maybe I will check up on it later;
The MRO roughnecks are monsters -- slamming the Bailey with these re-fracks.

The Bakken: It's A Family Affair -- July 22, 2018

From The Dickinson Press:
I have no dog in this fight. I'm glad I'm not the one who has to make the decision. But I know how I would go about making the decision. Smart folks in North Dakota will sort this one out.

Idle Rambling -- MRO Re-Fracks In Bailey -- Incredible -- July 22, 2018

Wow, it just never quits. Last year (2/2017)  I noted:
  • 16735, a nice well; off-line since 2/17; neighboring MRO wells about to be fracked?
Checking up on this well tonight, let's look at this production profile. But before we do that, time for a video:

Lonesome Friends of Science, John Prine

Now, back to the production profile of #16735. Is this not awesome! "Predicted" one year ago -- I doubt any other blogger did that. LOL:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-201828740373923052879736424588
BAKKEN4-2018309347952441721271458385753
BAKKEN3-2018311537115287752321218447014926
BAKKEN2-2018281427814218100001465536509356
BAKKEN1-2018271363613798928018486421212339
BAKKEN12-20172815647156461394623239493415971
BAKKEN11-2017232346823376130021991880199779
BAKKEN10-2017282807428339200463189011228664
BAKKEN9-20172932764331511700636248132612
BAKKEN8-2017914776138320727605629
BAKKEN7-20170000000
BAKKEN6-20170000000
BAKKEN5-20170000000
BAKKEN4-20170000000
BAKKEN3-20170000000
BAKKEN2-20179171335372190167
BAKKEN1-2017318548921709230646
BAKKEN12-20163190710381275750292
BAKKEN11-2016308819311445660292

Regular readers know the first thing we need to do.

CHECK FracFocus, API - 33-025-00649: yup, re-fracked, 7/9/17 - 7/27/17; 4.2 million gallons of water; 84.55% water. Only 4.2 million gallons -- about half what they usually use in an initial frack. According to the operator, data for re-frack:
  • date of test: 8/30/17
  • new IP: 2,257 (nice)
  • middle Bakken
  • 45 stages
  • 5.7 million lbs (medium re-frack)
  • only 127K lbs of proppant per stage (generally, an initial frack uses 200K sand / stage)
So, again, another MRO-re-frack in Bailey oil field. This is so predictable one wonders if MRO has a VP for re-fracking old Bailey wells. If so, whatever she is being paid, she's not being paid enough. LOL. Wow, these wells must give Art Berman and Jane Nielson heartburn. Tums.

Neighboring wells:
  • 30550, 4,516, MRO, Brush 24-8H, Bailey, t9/17; cum 209K 5/18; a 50K+ well (see below);
  • 16677, 101 (no typo); MRO, Beck 24-8H, Bailey, t12/07; cum 125K 5/18; (see below);
  • 29634, 4,048, MRO, Double H 34-8TFH, Bailey, t9/17; cum 243K 5/18; huge well, see below;
  • 29633, 2,400, MRO, Hammel 44-8TFH, Bailey, t4/15; cum 195K 5/18;
  • 29632, 2,794, MRO, Wilbert 44-8H, Bailey, t4/15; cum 236K 5/18;
30550:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-201831154861517126464250861061013212
BAKKEN4-201813514952396071667136072437
BAKKEN3-20182581548355798018411418913184
BAKKEN2-201828199902000818145402251039927342
BAKKEN1-201831252952558729202434671222828429
BAKKEN12-201731287002819539597434531268227131
BAKKEN11-20172012272124302492530171499821955
BAKKEN10-2017253450335140360424487013239963
BAKKEN9-2017265858257628062703256224
BAKKEN8-201716626200167095

16677, originally drilled back in 2008; off-line for seven years, from 2/10 to 9/17:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-2018261474514691919915616014372
BAKKEN4-20182817019174631333619434017252
BAKKEN3-20183133092324232287133177029293
BAKKEN2-20187609660222943565704952
BAKKEN1-201831286229303665274049
BAKKEN12-201731467647446724295102517
BAKKEN11-20172911181112061527617459376412583
BAKKEN10-20171720016198090214856919394
BAKKEN9-201715251047041
BAKKEN8-20170000000
BAKKEN7-20170000000
BAKKEN6-20170000000

29634:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20182914139140341361719546833810089
BAKKEN4-201825136741382511979250361161411715
BAKKEN3-20183017981180021806527267572019396
BAKKEN2-20182822690228401720134461856823180
BAKKEN1-201831367283685434783482181264231742
BAKKEN12-201727295202919225044284521015116010
BAKKEN11-20172524310243293188721525812311158
BAKKEN10-2017314011440444395754506414740479
BAKKEN9-2017234393943192213642597237738

Which brings us to another song: I would rather die young than to live without you, I would rather go hungry than to eat lonesome stew; .... once in a lifetime, and it won't come again .... it's here and it's gone ... on a magnolia wind ....

Magnolia Wind, John Prine and Emmylou Harris
Limerence.

Wow, these Bakken wells have a story to tell. 

For newbies: these Bakken wells will produce for seventy years -- and during their lifetime: re-works; mini-re-fracks; neighboring wells will be fracked; major re-fracks; re-entry to go after different formations; etc; etc.

Disclaimer: I am inappropriately exuberant about the Bakken. 

NASCAR -- Great Race -- Kevin Harvick Pushes Kyle Busch Out Of The Way; Wins His 6th Race This Year -- July 22, 2018


The Sports Page

The Open: the final day -- the front nine, incredibly exciting; Tiger Woods appeared to be in the running; the back nine: boring! Molinari of Italy came out of nowhere (sort of) and easily won the tournament.
NASCAR: New Hampshire one-mile oval. Last 44 laps now. Should be over in 22 minutes if no cautions (in a caution now).

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The Ledecky Page

Katie Ledecky is featured on the current issue of National Geographic. More later.


Heart of Glass, Blondie

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The Book Page

I returned the biography of the Mitford girls to the library. I bicycled to the library, about 4 miles each way; the temperature was 103 degrees. But it was a dry heat. Wow, that's hot. Biking is easier than running, and probably even easier than walking. I did not break a sweat, but I did wear a broad-brimmed safari hat.


My "consequential" book for the next week: The Victorians, A. N. Wilson, c. 2003. The heft and feel of the book is awesome. I love the feel of the paper, and love the pitch and font. This should be a fun book; it is a continuation of my "China phase."

Time period:
  • parliament burned down in 1934
  • Charles Darwin on the HMS Beagle, nearing Tierra del Fuego, 1934
  • Charles Dicken: Pickwick mania
  • Thomas Carlyle's French Revolution; Carlyle -- perhaps the best-loved author of the day
  • Princess Victoria becomes queen: 1837
  • 1837 - 1844: the worst economic depression that had ever afflicted the British people; and,
  • the question: why no revolution in Great Britain; 1848 is known as the Year of Revolutions on the European continent
  • and, so I begin.

Carpe Diem -- North Dakota Sets All-Time Crude Oil Production Record -- July 20, 2018

From Mark Perry over at Carpe Diem:


The most recent data is two months. So, when the most recent was released July 13, 2018, the data was from May, 2018.

The US Is The Swing Producer -- I.E., The Shale Operators Are The World's Swing Producers -- July 22, 2018

Updates

July 25, 2018: Saudi Arabia suspends crude oil shipments through Red Sea after attacks on two VLCCs. Attack on this "swing producer": price of OPEC basket of crude oil rose .... 16 cents/bbl.

Original Post

For awhile there -- some months ago, one or two years ago -- there was a lot of debate whether the US was now the swing producer. The consensus at that time: Saudi Arabia remained the swing producer.

That argument has changed in the past 48 hours. Most everything below was previously posted in the last few days.

Exhibits A - E. [To prove a point, only three "exhibits" are needed, but I wanted to make sure the point was not lost on those on the east and west coasts.]

Exhibit A, July 21, 2018, from Rigzone:
U.S. production of crude oil and natural gas liquids (NGL) hit unprecedented levels in June 2018.
According to API, crude oil production hit 10.7 million barrels per day (MMbpd) in June and NGL production reached 4.2 MMbpd during the same period.
[The API] noted that domestic oil production has supplied all of the growth in global demand so far in 2018 and has helped to compensate for production losses among some OPEC member nations. [Memo to Art Berman, Jane Nielson.]
Exhibit B, July 21, 2018:
Saudi Arabia: hits "pause button" on higher oil output. For newbies, "everyone" talks about Saudi's production, not their exports. This is another article: emphasizes "production." Four points:
  • I've never thought much of Saudi's ability to significantly increase production
  • Saudi Arabia always increases production in summer to meet summer domestic consumption needs (a/c demand; electricity from oil in the Saudi Arabia)
  • Prince Salman is now adding refinery capacity in his country which increased the country's domestic consumption 
  • President Trump has asked Saudi Arabia to increase production, with a threat to release oil from the US SPR if the price of gasoline does not come down
Now, this:
Oil prices held steady on Thursday and in early trading on Friday after a top Saudi official said that oil production would remain flat in July compared to June and that Saudi Arabia does not want to oversupply the market. Previous comments suggested that Saudi Arabia would ramp up to 10.8 million barrels per day (mb/d) in July, but instead the Saudis will keep output at 10.5 mb/d.
I find it interesting that at a point in time when Saudi Arabia should be increasing production, the country is actually cutting back. I think there's more to the story we are not hearing. Drones over Riyadh can't be comforting.
Exhibit C (same link as above): Italy: needs US oil to make up for Libyan shortfall. What more proof does one need -- wouldn't a country desperately short of gasoline turns to the swing producer? So, Italy desperately needs gasoline -- where do they turn. Not to Saudi Arabia.
Libya’s oil disruptions would normally wreak havoc in Italy—one of Libya’s top oil consumers—but the United States is serving as a pinch hitter in the wake of civil unrest in the troubled African nation.
Italy’s imports of US crude spiked as Libya struggled to ship oil under force majeure in recent months.
In June, Italy imported a record 4.93 million barrels of crude oil from the United States, or 165,000 barrels per day. That represents a noteworthy increase to the 3.3 million barrels shipped from the US to Italy in May and 1.9 million barrels in April. [One analyst] predicts that 2.14 million barrels are set to ship from the US to Italy in July.
On the flip side, Libya’s shipments to Italy were 9.73 million barrels in May, followed by a drastic decrease in June to 3.45 million barrels.
Exhibit D: EPD to build massive crude oil export terminal off-shore, Houston, TX.

Exhibit E: US sets milestone -- 11 million bopd crude oil production.

This Is Not An Investment Site -- Do Not Make Any .... July 22, 2018

Fitzsimmons on Chevron over at SeekingAlpha:
  • integrated global energy giant is hitting on all cylinders (production, refining, & chemicals), yet the stock has been relatively weak
  • that presents an opportunity for investors prior to the upcoming Q2 EPS report, which is due out this coming Friday
  • current Q2 consensus EPS estimates have risen $2.10/share, but I think the company could earn $2.45+
  • the current $4.48/share annual dividend yields 3.6%. Blue chip Chevron is a BUY and I raise my end-of-year price target by $5 to $145
At the moment, CVX is trading for 122 and change. An end-of-year price of $145 ... well, what can I say?

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For All Those Bernie Sanders / Alexandra Ocasio-Cortez Supporters 

Funny how things work out. Yesterday I posted three "international" stories -- for the archives, to keep the Bakken in perspective -- and then this, from The WSJ: oil-rich Iraq can't keep the lights on.

Does this sound familiar? Think Venezuela.

From the linked article:
Temperatures across southern Iraq are so high in the summer months that birds drop dead from the sky due to heat exhaustion. And tap water runs piping hot.
So when Iraq’s power supply faltered this month as a heat wave ramped up air-conditioning demand, it ignited an angry question: Why can’t one of the world’s top oil producers keep the power on?
Protests have rippled through Iraq’s oil-rich south for over a week as demonstrators railed against the government’s failure to provide basic services like electricity, health care and clean water. They have posed a serious enough risk that authorities have shut down the internet and sent in troops to quell the unrest.
More:
Iraq had been purchasing electricity from Iran for several years, but Iran cut the power citing unpaid debt and electricity shortages of its own. Ministry of Electricity spokesman Mosaab al-Modares said Iraq has the money to pay, but can no longer transfer the funds without violating U.S. sanctions on Iran.
The biggest problem, however, isn’t electricity generation, but distribution. As much as 65% of the power supply is consumed by people who illegally tap into the grid or don’t have electricity meters, according to the Ministry of Electricity. Fee collection is also weak. In 2015, its best year to date, the ministry said it collected just 12% of fees.
The government tried in 2015 to collect more fees and stop illegal power consumption, but a popular backlash stalled it. Among the biggest opponents, Mr. Modares said, were private power generator owners, who he says collectively make around $10 billion in annual profits from the government’s failure to provide electricity.
This comment hit the nail on the head:
“Iraqi electricity demand has grown to 23,000 megawatts at peak summer demand, but the country can only produce 15,900 megawatts, according to Iraq’s Ministry of Electricity.”
“…private power generator owners, … make around $10 billion in annual profits from the government’s failure to provide electricity.” 
A few questions.
The “make around $10 billion in annual profits” number?
Is the number credible? We don’t know because we don’t know if the source’s data was reviewed for accuracy. The source, a government official, might have a reason to provide an inaccurate number.
How much of the production deficit (23,000-15,900=7,100), if any, is produced by the privateers?
How much does it cost the privateers to produce the energy?
In some worlds the privateers would be considered entrepreneurs. 
Maybe the importance of the article is to point out that governments’ bureaucracies are, in fact, inefficient everywhere.
Maybe Iraq should privatize its government electric company. 
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The Golf Page

For the golfers who did not qualify for The Open this week, there was the Barbasol Championship in Nicholasville, Kentucky, where Brittany Lincicome played
Lincicome [was] only the sixth woman to ever play in a PGA TOUR event, and just the second to break par [once, on the second round; six over on the first round].
Only two women have completed 72 holes in official TOUR events: Babe Didrikson Zaharias at the 1945 Phoenix Open and the 1945 Tucson Open and Shirley Spork at the 1952 Northern California-Reno Open.
So, how did she do?

She missed the cut, ending tied for third or fourth. From last.

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The Book Page

Some weeks ago I was in my "China phase" -- among several books I read included two regarding the "opium wars," one fiction, one nonfiction.

Now, this book, of all things -- Barons of the Sea, Steven Ujifusa, c. 2018.

Reviewed at The WSJ.

For me, many, many dots connected, again.
But there is a dark side to the story. The Delanos, Forbeses and other American shipping fortunes were made not simply by importing tea to the U.S. but by smuggling opium from India into China. While there were no legal restrictions on opium in the U.S. at the time, the drug had been banned in China by imperial edict in the late 18th century on account of its disastrous social consequences.
Addiction was rampant, having spread from the wealthy to every stratum of Chinese society. “The Chinese government was nervo us about using force to crack down on the trade,” Mr. Ujifusa writes. “Craving for the drug had overwhelmed all means of enforcement. So had bribery.” For British and American traders, however, the profits to be made by smuggling far outweighed any moral considerations; a single shipload of opium was worth tens of millions of dollars in today’s currency. Mr. Ujifusa’s “barons of the sea” were, in essence, America’s first drug cartel.
By the way, completely unrelated, the "opium wars" helps me put the current US-China trade war into perspective. It will be interesting to see if some writer at The WSJ can connect the dots. LOL.

BR Lillibridge Wells Have Been Updated -- July 22, 2018

The BR Lillibridge wells in Johnson Corner (near Watford City) and Blue Buttes (east of Johnson Corner) have been updated. These wells are tracked here.

Much to see at the update, but take a particular good look at the well that started it all, the BR Mary Ann well at this post. Note that this well, drilled back in 2008, was a Three Forks 1st bench well. This would have been one of the first Three Forks wells drilled in the Bakken. Be sure to scroll through the production profile. There is no evidence this well has been re-fracked.

Note: there was a lot of data to go through, and I was working under less-than-ideal conditions, so there may be typographical and factual errors. If this information is important to you, go to the original source.

Also, deep into the weeds, note the number "41' in the legal name of this well:
  • 28347, 1,656, BR, Lillibridge 41-27MBH, Johnson Corner, 4 sections, t3/15; cum 287K 5/18;