Sunday, July 29, 2018

Running Out Of Drilling Locations In The Bakken? -- July 29, 2018

A few months ago someone opined that "they" were running out of drilling locations in the Bakken.

Once we start seeing this throughout the Bakken, I'll buy into that.

Disclaimer: I am inappropriately exuberant about the Bakken.




In the above graphic, the following two wells will be coming off the confidential list August 6, 2018:
  • 30529, conf, CLR, Burr Federal 20-26H, Sanish, 35K in first full month;
  • 30528, conf, CLR, Burr Federal 24-26H2, Sanish, 22K in first full month;
The Burr Federal wells are tracked here

An older well was fracked back in 2016. What does its production profile look like now that neighboring wells are being fracked:
  • 30492, 506, CLR, Burr Federal 9-26H1, Sanish, t3/16; cum 271K 5/18; 
Production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20183129706298404844138564326125583
BAKKEN4-201828228622271442221278991674510844
BAKKEN3-201883968372336911595886652
BAKKEN2-20180000000
BAKKEN1-20180000000
BAKKEN12-20170000000
BAKKEN11-20170000000
BAKKEN10-20170000000
BAKKEN9-2017002740000
BAKKEN8-2017142388255711691150943142
BAKKEN7-20173153385355280028581939814
BAKKEN6-20173053115228321721821960127
BAKKEN5-2017266219634033133549337054
BAKKEN4-20172370446840491482297870108
BAKKEN3-2017301167112610771516192144471492
BAKKEN2-2017281262712195836217947166551071
BAKKEN1-20173118050173821101015273368311380
BAKKEN12-201610418744772306283611061697
BAKKEN11-20162386588648477469496175694
BAKKEN10-201627141691421872381230611159990
BAKKEN9-20163015949160538556138061362816
BAKKEN8-2016311992419893101831970319373330
BAKKEN7-201631154461557295341279312551242
BAKKEN6-20163020907207741288219752187461006
BAKKEN5-20163118772185421283118856136985158
BAKKEN4-201630134431348090061212097112409
BAKKEN3-2016291287012560939512302100372265
BAKKEN2-20160000000
BAKKEN1-20160000000
BAKKEN12-20150000000
BAKKEN11-201524043790118101181
BAKKEN10-20150000000
BAKKEN9-201528988980262502625

The Burr Federal wells are monsters after neighboring wells were re-fracked. Her is another example:
  • 30503, 759, CLR, Burr Federal 14-26H, Sanish, t12/15; cum 231K 5/18:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20183126794268883116226753226293869
BAKKEN4-20182523386231842058823079138528970
BAKKEN3-20185117010451113253714091037
BAKKEN2-20180000000
BAKKEN1-20180000000
BAKKEN12-20170000000
BAKKEN11-20170000000
BAKKEN10-201700630000
BAKKEN9-20171874106779230
BAKKEN8-20172133633491260458224772719
BAKKEN7-201731618962064290878459602502
BAKKEN6-20173061325987282371716443417
BAKKEN5-2017316370617727265471519583
BAKKEN4-2017162725268317332729261036
BAKKEN3-20173160036514372169346187639
BAKKEN2-20172867836463378766026127394
BAKKEN1-201731771376684256475611473544
BAKKEN12-201631937896034909553421593311
BAKKEN11-2016301068210247536991828160917
BAKKEN10-20161129683098123421891984176
BAKKEN9-201625747073233734679567078
BAKKEN8-201662477283111252477243542
BAKKEN7-201631122381202970431195511729226
BAKKEN6-20162467876798459279357531404
BAKKEN5-201631805180814826995072282722
BAKKEN4-2016301261612754720113045104522593
BAKKEN3-20163116348165101050515553126892864
BAKKEN2-2016291487614803122551257596422933
BAKKEN1-2016311650316910130121394044259515
BAKKEN12-20152212864119749483201094020069
BAKKEN11-20150000000
BAKKEN10-20150000000
BAKKEN9-201516576570148001480
 

Amazon HQ2 -- Final Five + A Wildcard -- July 29, 2018

This is from USA Today, April 30, 2018:

Three betting sites.

British online betting site Oddsmakers:
  • Virginia
  • Austin
  • Boston
  • DC
  • Atlanta
Irish bookie site PaddyPower:
  • Boston
  • Austin
  • Atlanta
  • Montgomery Co., Maryland
  • Pittsburgh
Canada's Bovada betting site:
  • Virginia
  • Austin
  • Boston
  • DC
  • Atlanta
Toronto gaining popularity at the Canadian betting site.

My two cents worth: it will be in northeast US, not Texas. Texas is a great site for fulfillment centers and tech support, but Austin is not a financial or political center.

Austin makes all three lists, but DC makes only two lists. Boston makes all three lists, and is a financial center. With 25 universities and colleges in the Boston area, I think Boston is a no-brainer for a corporate headquarters. Atlanta, also, makes all three lists, but I just don't see it.

*************************************
Energy Demand By Source

Coal isn't going away.

Crude oil will continue to grow.

Renewables will really grow, but remember: renewable energy includes hydroelectric power.


Nuclear power doesn't grow much either. And then this, US nuclear power industry on verge of collapse, July 12, 2018.

It's hard to read, but I do believe the rate of growth of natural gas is actually steeper than renewable energy in the out-years.

This Might Be The Graph Of The Year -- July 29, 2018

Updates

Later, 7:21 p.m. CDT: I mentioned Iran below, in the update,  but now I see this regarding Iran -- Iran's rial hits record low -- 100,000 rials to $1.
Iran's currency hit a record low on Sunday of 100,000 rials to the dollar amid a deepening economic crisis and the imminent return of full US sanctions.
Later, 5:22 p.m. CDT: if this is the GDP story for Saudi Arabia, imagine what it must be for Iran, and even possibly for Russia. President Trump knows that data, and that's probably why he was so incensed that Germany continues to bail out Russia (Nord Stream 2) -- a project that apparently the US mainstream media supports, based on the negative coverage they gave Trump on this issue.

Original Post

 Earlier I posted this note but it needs to have its own stand-alone post. This is what got my attention -- in the note below I highlight the challenges Russia must be having -- in the last ten years Russia has increased production by only 500,000 bbls -- just a half-million bopd -- North Dakota has practically matched Russia on growth. I grew up thinking oil in Siberia was a never-ending story. Hmmm.

But now, look at this, Saudi Arabia. Look at GDP growth year-over-over for Saudi Arabia.


It's hard to read the graph but it appears that Saudi has recorded a negative budget three years in a row, something never seen before except perhaps in the early 1990s but the budget deficit then was near the break-even mark, followed by spectacular revenue years from 2003 to 2011.

By the way, this graph seems better than what I generally see -- now I know why -- it came from ZeroHedge.

More from the article and ZeroHedge:
It wouldn't be the first time: two years ago, Saudi Arabia turned to the international debt markets for the first and has since raised at least $40 billion in sovereign debt to fuel spending. In doing so, it has increasing its debt to GDP ratio to 19 percent, but in comparison to the rest of the world's insolvent nations, that ratio makes the Saudis look outright frugal. Saudi Arabia has set itself a limit to clear its fiscal deficit by 2023, although once you pop (your bond market cherry), you don't stop. With or without Aramco, Riyadh is expected to raise billions more in debt this year.
The same goes for Aramco, which -for now - has only a modest debt load compared to other global oil giants, such as Exxon Mobil and Royal Dutch Shell, making it relatively easy for the Saudi firm to borrow cheaply, even though Aramco doesn’t disclose financial results and just like China, nobody really has any clue what is on the company's books. In fact, the risk of opening itself up is why Aramco decided against the IPO in the first place.
I don't know about "you," the reader, but this graphic is absolutely stunning. With all the headwinds -- terrorism; Yemen; Iran; US shale; Salman's Vision 2030; outlay for SABIC -- it's hard to believe Saudi can report a balanced budget any time soon. Remember, last year, Saudi said they needed $70-oil this year.  "Everyone" talks their book which suggests to me Saudi really needs  $80-oil or better.

************************** 
The Gap Grows

Peak oil? How US shale flipped the script in global oil markets. Over at oilprice.com again. Again, I've archived the entire piece in case the post disappears. Again, this article links to the 2018 global energy review by BP.
But the future played out differently than it seemed it would in the summer of 2008. Unbeknownst to most people, oil producers were experimenting with a marriage between two established oil drilling technologies — horizontal drilling and hydraulic fracturing.
The success of this marriage would unlock oil in tight oil and shale oil deposits that had previously been too expensive to recover, and would result in one of the greatest oil booms the world had ever seen. In fact, the “fracking revolution” caused U.S. oil production to turn upward in 2009, and then rise over the next seven years at the fastest rate in U.S. history.
While it is still true that OPEC produced 42.6 percent of the world’s oil in 2017, the majority of new oil production since 2008 has come from the U.S.
As I read that, my thoughts turned to the comments from two readers over at The WSJ:
The shale boys saved Obama from a total economic meltdown - now they shift into high gear. Amazing what creative people combined with private property can do. Meanwhile our "carbon footprint" keeps declining thanks to natural gas and not the government.
The shale drilling did save Obama from a complete economic meltdown - but he spent much of his 8 years fighting the pipelines to deliver the oil, he kept the USA from exporting LNG for 7 out of 8 years - but he worked really, really hard to make sure Iran pumped as much oil as possible ( so much for global warming) - makes one wonder whose side he was on? 
Wiki says the US oil and gas sector makes up 8% of the US GDP.

I've read recently that the oil and gas sector provides a third of Russia's revenues.

I assume, oil and gas contribute nearly 100% to Saudi's revenues.

I think it's important to consider that data when one looks at the graphs below, and when one does that, I think both Saudi Arabia and Russia face huge economic challenges going forward.

A third point: there's nothing to suggest that the graphic won't become even more remarkable when it's re-drawn ten years from now.

I have a bit of difficulty reconciling the above graph with the graph below which has been posted numerous times when it comes to Russia ... and then one looks at the x-axis on the graph above. Over ten years, Russia's production has only increased by one-half million bopd.
I've talked about this on numerous occasions over at "The Big Stories."

By the way, in the graphic at the top, what major continent/region is not even represented? Yup, Europe/the EU. One wonders with all the cutbacks on the continent whether the EU/Europe actually showed a decline. Of course, there's Great Britain and Norway -- but as I've noted a long, long time ago, Europe is truly at a tipping point. The most recent linked story at that site: Europe is importing a record amount of coal (February 22, 2018 -- earlier this year).

*********************************
The Katie Ledecky Page
Three Races, Three Wins

Final report from the national championships, two weeks before the Pan Pacific championships.
Ledecky prevailed by 3.12 seconds in the 400m freestyle on Saturday night and scratched out of her last event, Sunday’s 1500m freestyle. Don’t worry, she is still eligible to swim the 1500m free at this year’s major international meet, the Pan Pacific Championships in Tokyo in two weeks.
Ledecky, who holds the 11 fastest 400m free times ever, added the victory in 3:59.09 to her 200m and 800m free titles earlier this week. While Kathleen Baker broke the 100m backstroke world record later Saturday night, Ledecky was under world-record pace through 200 meters.

Wells Coming Off The Confidential List This Next Week -- July 29, 2019

For newbies:
  • one has to go back a long way to find this many wells coming off confidential list in one week
  • this will be seen more and more often -- 6 to 9 wells coming off confidential list on one day -- due to pad drilling
  • look at the number of operators; more than usual
  • generally wells with no production data suggest DUCs but not always; but I do expect to see (excepting the Kraken Operating wells), 50% to 75% of wells coming off the confidential list going to DUC status
  • there are a couple of Charlson wells; they may be DUCs but when they start producing, they should be huge wells
  • the WPX wells and the Enerplus wells will be nice wells; could initially be DUCs
  • through November, 2018, we should see similar weekly lists 

You May Have Missed It This Year, But Next Year: Get Your Pow Wow On -- July 29, 2018

What do New Mexico and North Dakota have in common?
  • lots of sun in the summer;
  • oil (Permian -- New Mexico; Bakken - North Dakota);
  • beautiful scenery; and, 
  • pow wows.
A reader keeps me updated on "pow wows" in New Mexico and North Dakota. If I posted everything I've been sent on "pow wows" over the past two years I would have to start another blog.

But to bring you up to speed, three links:
Regular readers of the blog should recognize that third link, Twin Buttes. It's an incredibly good oil field in the Bakken and it's a featured oil field. At the link, scroll down to Twin Buttes and click.

The "pow wow" reader wanted to point out that the oil boom in North Dakota has really meant a lot to Native Americans fortunate enough to share in the largess. One wonders if Standing Rock would have been better off had they worked with DAPL rather than taking the alternate path. But I digress.

The Albuquerque PowWow is the biggest pow wow in the United States (at least that's my understanding).

Added: photos from the 2018 Twin Buttes pow wow at this link to the Dunn County Extra

I was unaware that dancers, singers, drummers, actually competed for prize money. Wow.

But look at this.

The prize money at the nation's largest pow wow pales in comparison to that now being paid for the Twin Buttes, North Dakota, pow wow.

Albuquerque, $5,000 for first place, singer:

Twin Buttes, at $15,000 for first place, 3x that of Albuquerque, and even fifth place pays more than 1st place in New Mexico:

Note: there appear to be as many spelling / capitalization variations of "pow wow" as there are of "fracking." If I've offended anyone, let me know.

Also, I do these posts quickly and there are bound to be factual and typographical errors. If any errors affect the story, let me know.

Albuquerque, population: 560,000 (2016)

Twin Buttes, population:  18 (2016)

Twin Buttes is 12 miles north-northeast of Halliday, if that's of any help for out-of-towners. Set your GPS to 7°30′59″N 102°14′47″W


From the Crazy Horse Museum in the Black Hills, South Dakota:
Beads were very likely from Venice, Italy.

Could This Be The End Of Renewable Energy Growth In The EU? -- July 29, 2018

The other day I posted a note that suggested -- in Australia -- that if the country simply completely cut off all solar/wind energy at peak demand (late in the afternoon) no one would even notice -- except perhaps investors in solar and wind.

Now, this from cleanenergywire:
The German energy ministry considers limiting the feed-in priority for renewable power to reduce the costs of managing grid bottlenecks, Stefan Schulze writes on Spiegel Online.
“Green power plants could generally become part of bottleneck management,” an unpublished analysis for the ministry says, according to Schulze.
By throttling down wind and solar power supply when the grid is overloaded, costs could be reduced “substantially” as opposed to the current scheme where coal and other fossil power plants are throttled down first, according to the analysis.
Costs of managing grid bottlenecks --- this was predicted some years ago.

A "thank you"to a reader for this link and comment.

The downside?
However, limiting the feed-in priority for green power, a key policy instrument for establishing renewables in the country, would increase carbon emissions from power plants by approximately one percent.
Oh, give me a break.
  • Germany is importing record amounts of coal, previously reported, after shutting down nuclear plants
  • even if that "one percent" figure is accurate -- and you can probably get whatever number one wants -- GIGO -- one percent is inconsequential -- compare with what China and India are emitting
  • Germany would have done a lot better going to natural gas (like the US did) rather than go to renewables which require fossil-fuel backup anyway
If Germany ends its policy on giving renewables priority feed-in and levels the field, it pretty much means the beginning of the end for renewable energy growth in the EU.

The Germans must be reading the blog, "Europe at a tipping point."

Regardless of what this means for renewable energy in the EU, this is the important takeaway for me: the Europeans are finally looking at renewable energy from a rational, rather than an emotional, point of view. 

The Political Page, T+59 -- Trump's Steel Tariffs Starting To Have Desired Effect -- Op-Ed -- July 29, 2018

Updates

Later, 5:26 p.m. CDT: wow, look at this headline and story from CNN. Scott Adams noticed this past week that CNN seems to have changed its "tone." I'm seeing the same thing. This is quite interesting. And, then, of course, the publisher of NY Times requesting a meeting, and then getting a meeting, with President Trump. Trump simply wants credit where credit is due.


Original Post

Trump's steel tariffs: I have no idea who Jan van Eck is nor how reliable he might be but I assume he reports what he sees just as I report what I see.

From oilprice.com. I've archived the entire piece in case the post disappears.

************************** 
The Gap Grows

Peak oil? How US shale flipped the script in global oil markets. Over at oilprice.com again. Again, I've archived the entire piece in case the post disappears. Again, this article links to the 2018 global energy review by BP.
But the future played out differently than it seemed it would in the summer of 2008. Unbeknownst to most people, oil producers were experimenting with a marriage between two established oil drilling technologies — horizontal drilling and hydraulic fracturing.
The success of this marriage would unlock oil in tight oil and shale oil deposits that had previously been too expensive to recover, and would result in one of the greatest oil booms the world had ever seen. In fact, the “fracking revolution” caused U.S. oil production to turn upward in 2009, and then rise over the next seven years at the fastest rate in U.S. history.
While it is still true that OPEC produced 42.6 percent of the world’s oil in 2017, the majority of new oil production since 2008 has come from the U.S.
As I read that, my thoughts turned to the comments from two readers over at The WSJ:
The shale boys saved Obama from a total economic meltdown - now they shift into high gear. Amazing what creative people combined with private property can do. Meanwhile our "carbon footprint" keeps declining thanks to natural gas and not the government.
The shale drilling did save Obama from a complete economic meltdown - but he spent much of his 8 years fighting the pipelines to deliver the oil, he kept the USA from exporting LNG for 7 out of 8 years - but he worked really, really hard to make sure Iran pumped as much oil as possible ( so much for global warming) - makes one wonder whose side he was on? 
Wiki says the US oil and gas sector makes up 8% of the US GDP.

I've read recently that the oil and gas sector provides a third of Russia's revenues.

I assume, oil and gas contribute nearly 100% to Saudi's revenues.

I think it's important to consider that data when one looks at the graphs below, and when one does that, I think both Saudi Arabia and Russia face huge economic challenges going forward.

A third point: there's nothing to suggest that the graphic won't become even more remarkable when it's re-drawn ten years from now.

I have a bit of difficulty reconciling the above graph with the graph below which has been posted numerous times when it comes to Russia ... and then one looks at the x-axis on the graph above. Over ten years, Russia's production has only increased by one-half million bopd.
I've talked about this on numerous occasions over at "The Big Stories."

By the way, in the graphic at the top, what major continent/region is not even represented? Yup, Europe/the EU. One wonders with all the cutbacks on the continent whether the EU/Europe actually showed a decline. Of course, there's Great Britain and Norway -- but as I've noted a long, long time ago, Europe is truly at a tipping point. The most recent linked story at that site: Europe is importing a record amount of coal (February 22, 2018 -- earlier this year).

********************************
The Apple Page

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 what you think you may have read here.

Our oldest granddaughter has/had a very, very old iPhone 6. It's a "hand-me-down" from one of the parents, and may in fact be twice handed down before it got to her. It had a cracked  screen and was no longer holding a charge when she brought it to the local Apple store to have the battery replaced and the screen fixed.

When the Apple folks opened the iPhone they noted that the battery was "swollen" and completely distorted. They talked to the store manager and he said to just give Arianna a brand new out-of-the-box iPhone 6 at no charge. Not even charging what they could have for a) fixing the screen; and/or, b) replacing the battery. A brand new out-of-the box iPhone 6 at no charge.

I was quite impressed.

At the strategic level, corporate headquarters is giving local managers a lot of leeway.

At the tactical level, this tells me that boxes of iPhone 6's are still widely available but customers are moving up to newer models. If there was a shortage of iPhone 6's they would not easily give them away.

It will be interesting to see if this is validated in Apple's earnings, due to be reported after the market closes on Tuesday, July 31, 2018. Earnings forecast: $2.18.

If AAPL meets consensus, it will be the second best showing for the 3Q in the last several years: