Monday, September 3, 2018

Outages At Norwegian Gas Fields To Cut Supplies For Up To Four Weeks -- Oilprice et al -- September 3,2018

Pardon the interruption: Tesla bonds may have dropped to an all-time low -- if not, certainly flirting with an all-time low. Link here

Now, back to the natural gas story.

Updates

September 4, 2018: so much for CO2 and global warming. The Brits are going to use a lot of coal this winter. Natural gas getting too expensive; coal is cheap. Link at Platts (beware: lots of jargon):
Bullish NBP spot and winter contract gas prices have focused the power market's attention on the UK's coal-fired power plants, which have recently become more economical to run in the summer as well as in the winter.
The gap between prompt NBP gas and the coal switching channel indicates that, if and when needed, thermal generation is going to be predominantly coal-fired this winter, with higher gas prices opening the way for increased coal-fired generation, despite a strong hike in carbon prices.
Data show 35% efficient coal-fired plants are competing with 45% gas-fired plants.
The UK month-ahead coal-switching price for 45% efficiency was 68.43 pence/therm on Monday, slightly lower than the NBP day-ahead contract assessment of 69.70 p/th.
However, UK month-ahead CSP for 50% efficiency was 78.19 p/th. Platts CSPI is the theoretical threshold at which gas is more competitive than coal in power generation.
When the gas price is higher than the CSPI, CCGTs are more expensive to run than coal-fired plants.
"Despite the gains in carbon over recent months, coal generation has been supported this week by particular strength in the gas market," according to S&P Global Platts Analytics.
"We forecast gas to lose ground this winter too, with the Q1-19 Clean Dark Spread above the Clean Spark Spread. As a result we expect coal generation to be stable year-on-year this winter, despite the closure of 2GW of capacity, while gas generation is forecast to fall more than 3 GW vs Winter-17."
Original Post 

This may be a good evening to re-read this post: Natural Gas Inventories "Dangerously Low."
August 26, 2018: Europe's natural gas prices surge to record for summer season.
Europe’s natural gas market is the most bullish it has been in years, as higher-than-expected summer demand and a tighter market drive natural gas price futures to levels last seen during this past winter’s supply crunch and to the highest for a summer season.
Natural gas prices are expected to stay strong and may still have room to rally, ahead of the next winter heating season in Europe that begins in October. 
Contrary to the typical summer lull in Europe’s gas prices, this year the front-month gas price in the UK—Europe’s biggest gas market—for example, is nearing the winter price from December 2017 when a deadly explosion in Austria’s gas hub at Baumgarten squeezed supplies throughout Europe. Immediately after the explosion, the price of gas for immediate delivery in the UK reached its highest level since 2013.
Natural gas is going to get a bit more expensive "across the pond." Numerous sources are reporting unexpected natural gas production outages in Norwegian gas fields which will cut supplies for up to four weeks.

Two more links of interest:
  • UK's energy production fell for the 11th straight year, 2013: link here
  • UK energy production production falls again, 1Q18: link here. A lot of interesting statistics. 
Which naturally leads one to ask: how is Germany doing? link here.

How Deep Is Your Love, The Bee Gees

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A Play-Doh Afternoon

I couldn't decide which one to post. Photos by Sophia's grandmother.




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The Book Page

River: One Man's Journey Down the Colorado, Source to Sea, Colin Fletcher, 1997.

The author has reached mile marker 931, at the Utah/Arizona state line, and has just re-entered the Colorado River south of the Glen Canyon Dam. The story continues:
Today, Lee's Ferry is the put-in point for Grand Canyon river-runners. (Fifty-mile-long Marble Canyon, immediately belw Lee's Ferry, is sometimes regarded as part of the Grand Canyon, sometimes not. It now lies within Grand Canyon National Par, but at the time of my 1963 foot trip the park ended at Nankoweap Creek, where Marble melds into Grand, so I tend to award Marble Canyon autonomy.)

At Lee's Ferry Ranger Station the National Park Service checks all river-running permits. There's a heavy demand for permits and the Park Service has to ration them, then control entry tightly. People who want to make a noncommercial river-run through the Canyon normally go on a waiting list and it may take years for their names to come up. I managed to short-circuit the procedure -- but one condition of my permit was that I explain why I got special treatment.

So you are hereby advised that because I had in 1963 become the first man known to have walked the entire Canyon in a single journey, and because my book about it was still in print, the Park Service felt I'd shown I could both take care of myself and also produce something worthwhile, and that they could therefore bestow on me an immediate permit for "literary research."

I was and am truly grateful for this NPS dispensation. But I must explain that phrase "literary research." It will surely provoke somebody into saying "Ah! So he went down the river just to write a book about it!" I did not. On the other hand, I knew I'd write a book if the journey generated one -- which not every long wilderness journey I'd undertaken had done.

Things have to be right.

The Market, Energy, And Political Page, T+22 -- September 3, 2018

Pre-market, Sunday night: the Dow, irrelevant, is up 50 points in futures this evening.

From tomorrow's Wall Street Journal:
Speaking of which.

This past week I linked a lot of financial sites to my bank. Wow. I can now afford Starbucks.

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The Book Page

River: One Man's Journey Down the Colorado, Source to Sea, Colin Fletcher, 1997.

From page 9: The author explains how he decided to raft the Colorado River, from the source to the ocean. And then goes on:
That done, I had to define "the Colorado."

The name originally applied only to the waterway below the junction of the Green and the Grand Rivers.

Then, in 1921 -- the year of my conception -- under pressure from booster politicians in the state of Colorado, the Grand was renamed: the main river and the former Grand became, together, "the Colorado."

But because the Green is 300 miles longer than the former Grand (it also drains a larger area), geographers regard it as the "master stream," and its headwaters in Wyoming as the source of the Colorado. I was happy to go along with the geographers -- especially as all reports had the Green wilder and less spoiled, with a source more befitting a major river.
A great time to review the geology of the Grand Canyon and the timeline of the earth.

Quick: why did the Colorado River cut a  mile-deep gorge rather than a broad valley that most rivers form? The link above answers the question. It also explains why the very small creeks in western North Dakota cut such sharp mini-canyons.

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Seasons In The Sun

Seasons in the Sun, Terry Jacks 

How Busy Is The Bakken? -- September 3, 2018

From the September, 2018, hearing dockets.

I don't recall the last time I've seen so many salt water disposal cases in the dockets:
  • 26885, Swanson, SWD
  • 26886, Swanson, SDW
  • 26887, Swanson, SWD
  • 26888, Oasis, SWD
  • 26889, Oasis, SWD
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Trust But Verify

Also from the hearing dockets, something I don't recall seeing before:
  • 26879, NDIC, Grinnell-Bakken; review the status of the leases in a 2560-acre unit to monitor the progress of developing sections 29/30/31/32-154-96; as well as sections 30/31-154-96, McKenzie, Williams
The graphic:



The wells:
  • 31044, 797, XTO, Homer 14X-32AXD, Grinnell, t1/16; cum 229K 7/18; offline as of 7/18;
  • 29761, 1,012, XTO, Homer 14X-32E, Grinnell, t1/16; cum 115K 7/18; offline as of 7/18;
  • 29762, 959, XTO, Homer 14X-32A, Grinnell, t1/16; cum 183K 7/18; offline as of 7/18;
  • 31045, 955, XTO, Homer Federal 14X-32F, Grinnell, t1/16; cum 150K 7/18; offline as of 7/18;
  • 31046, 1.018, XTO, Homer Federal 14X-32B, Grinnell, t2/16; cum 229K 7/18; offline as of 6/18;
My hunch: under the river; lots of interest by the state and the federal government; perhaps President Trump and the governor of North Dakota were both curious what the "delay" was all about.

Note: the four wells in the southeast corner of section 32 are Newfield's Sorenson Federal wells in Sand Creek; they will all run south. Those six Sorenson wells are tracked here.

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Forty-Six Minutes Of Enya

Update On XTO's Bang Federal And George Federal Wells In The Lost Bridge Oil Field -- September 3, 2018


November 28, 2018: coming back very, very strong:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20192183818371145951104022568759
BAKKEN9-2019261130112765174331418769397196
BAKKEN8-201920101738880178911315762686831
BAKKEN7-2019259419011704600456
BAKKEN6-20190000000
BAKKEN5-20190000000
BAKKEN4-201910103028199
BAKKEN3-20191674287536102401254544518076
BAKKEN2-20192814584146382110523297384919428
BAKKEN1-201923135751331016979311111480016285
BAKKEN12-20181000000
BAKKEN11-2018001070000
BAKKEN10-20181910274102671604915297425311020
BAKKEN9-20181470457352124171085612439602
BAKKEN8-20182014563142322754821379208319274
BAKKEN7-20182211020345957000


September 2, 2018: #20520, after being off-line for several years, coming back strong? The well:
  • 20520, 1,056, XTO, Bang Federal 21X-19F, Lost Bridge, not fracked since initial frack 6,12; t7/12; cum 120K 7/18; recent production --
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-20182211020345957000
BAKKEN6-2018100941000
BAKKEN5-20180000000

Off line all the way back to late 2015:
BAKKEN1-20160000000
BAKKEN12-2015174358382550
BAKKEN11-20153018282173777328316301378
BAKKEN10-2015301739155470328541972602
BAKKEN9-201530164916486582498342279
BAKKEN8-20153117481742679272413121227
BAKKEN7-2015311812166773133423037116
BAKKEN6-2015301844201978728981889828
BAKKEN5-20153121161901760306515411339

The graphic:


The wells:

  • 19185, 1,377, XTO, Alwin Federal 12X-19, Lost Bridge, t5/11; cum 234K 7/18; nice jump after being offline since 1/18;
  • 19187, 510, XTO, Elaine Federal 12X-19, Lost Bridge, t5/11; cum 173K 7/18; still offline;

  • 31964, SI/NC, XTO, George Federal 21X-19E, Lost Bridge, huge well; 16K after 8 days extrapolates to 60K for 30 days;
  • 31965, SI/NC, XTO, George Federal 21X-19A, Lost Bridge, huge well; 26K after 16 days extrapolates to 49K for 30 days;
  • 31966, SI/NC, XTO, George Federal 21X-19F2, Lost Bridge, huge well; 18K after 20 days extrapolates to 27K for 30 days;
  • 20521, 1,412, XTO, George Federal 21X-19B, Lost Bridge, t7/12; cum 196K 7/18; huge jump after being offline since late 2015

  • 20520, updated above;
  • 31963, SI/NC, XTO, Bang Federal 21X-19AXB, Lost Bridge, minimal production data,
  • 31962, SI/NC, XTO, Bang Federal 21X-19E2, Lost Bridge, minimal production data,
  • 31961, SI/NC, XTO, Bang Federal 21X-19A, Lost Bridge, minimal production data,

  • 17407, 1,273, XTO, Fenton Federal 11X-20, Lost Bridge, t6/09; cum 228K 7/18; huge jump after being offline for a few months;
  • 17424, IA/497, XTO, Robert Federal 11X-20, Lost Bridge, t3/09; cum 201K 7/18; offline since 12/15;
  • 17397, IA/1,290, XTO, Thelma Federal 11X-20, Lost Bridge, t6/09; cum 225K 7/18; offline since 12/15;
  • 17430, 591, XTO, Jane Federal 11X-20, Lost Bridge, t5/10; cum 206K 7/18; never taken offline except for a couple of months early 2015

  • 29005, 2,314, David Federal 21X-20A, Lost Bridge, t7/15; cum 276K 7/18; a nice producer from the get-go; declined to 4K/month
  • 29006, 743, David Federal 21X-20E, Lost Bridge, t8/15; cum 191K 7/18; a nice producer from the get-go; declined to 3K/month; went offline 7/18;
  • 29007, 2,009, David Federal 21X-20B, Lost Bridge, t8/15; cum 171K 7/18; a nice producer from the get-go; declined to 2.5K/month
  • 29008, 1,908, David Federal 21X-20F, Lost Bridge, t8/15; cum 193K 7/18; a nice producer from the get-go; declined to 3K/month

If It's Being Reported Today, Movers And Shakers In Washington, DC, Knew It Last Year; Change Agents Saw It Coming Three Years Ago -- September 3, 2018

Link here.


Everything runs on energy.

Many, many reasons for debt but going forward, the "debt gap" will widen, favoring those nations with energy to sell; debt will get worse for those countries that need to import energy.

China, Asia, and Africa will all be importing energy for the next 100 years.

Posted yesterday:
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Denmark

I never thought of Denmark as an exporter of oil so I was taken aback to read that Denmark has become a net importer of oil. That completely blew me away. 

This is a huge story; I don't think folks have caught on to this yet.

Going forward, global trade will become more free, less dependent on tariffs. There is no reason for tariffs on automobiles any more, for example. As free trade becomes "more free" the gap between energy-producing countries and energy-consuming countries will widen. Europe will become the only continent in the world to depend on imported energy. That's huge and that explains a lot of angst among the Europeans. They see the writing on the wall.

All things being equal -- i.e., truly "free" trade -- and the gap between the the US and the EU will continue to widen.
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Yes, Sir, I Can Boogie

Yes, Sir, I Can Boogie, Baccara

Newfield's Plan To Add 42 New Wells To Three 1280-Acre Units In Siverston Oil Field -- September 3, 2018

From the September 3, 2018, hearing dockets:
  • 26952, Newfield, Siverston-Bakken; 14 wells on an existing 640-acre unit, section 13-149-98; 14 wells on each of three 1280-acre units; McKenzie
    • the 640-acre unit: section 13-149-98, see this post
    • the 1280-acre units:
      • sections 5/8-150-98
      • sections 17/20-150-98
      • sections 18/19-150-98

EOG's Request For Drilling In Squaw Creek-Bakken -- September 3, 2018

From the September, 2018, hearing dockets:
26916, EOG, alter the definition of the stratigraphic limits for the Squaw Creek-Bakken, for the existing 1280-acre unit as described; to allow all future wells to be drilled in the stratigraphc interval from 50 feet above the top of the Bakken formation to above the top of the Birdbear formation; McKenzie County.
See stratigraphic map (linked at the sidebar at the right), here.  

Screenshot here for North Dakota Bakken:


I'm not sure what this is all about. Perhaps a reader can help me understand the nuances of this request. I don't subscribe to the NDIC rulings of these cases, so I might miss the outcome.

Canadian CBR, Slawson, The Dockets, And All That Jazz, Page 5 -- September 3, 2018

Updates
Later, 8:05 p.m. CDT: the same reader (see below) provided an update to show the "weekly estimate" vs the "monthly official" data: https://static.seekingalpha.com/uploads/2018/8/31/5006891-15357440372477696_origin.png Based on comments from the reader, I was the only one that missed that memo. LOL. I learn something new every day.

Later 7:51 p.m. CDT: a reader wrote:
The Reuters story is not dated.  It is referring to the monthly data, which has high accuracy but is a couple months old.  The weekly bpd is not even really data, but is "current".  But it is just a model (comes from the STEO model).  Weekly estimates can be off by hundreds of thousands of bpd (under or over). 
The reader is very, very correct. The Reuters story is not "dated" -- as in an "old" story. I was mistaken. I learned something new. For those who are confused:
  • the official EIA data that comes out monthly lags two months, just like the NDIC data -- lags by two months; 
  • on the other hand, the weekly data is an estimate 
Later, 2:18 p.m. CDT: wow, talk about a dated story. The Reuters story is dated August 31, 2018, and perhaps the EIA released the "official" data, but regular readers know the current record is well above 10.674 million bopd set in June. At this EIA link, US crude oil production hit 11.0 million bopd in the 2nd week of July, and has fluctuated since then between 10.9 million bopd and 11.0 million bopd. The next milestone: 12 million bopd. 
Original Post

US crude oil production hits record -- EIA. Record hit due to Texas production - Reuters.  Data points:
  • crude oil, US data:
    • June, data: US production rose 2%, month-over-month
    • June, data: US production, rose 231,000 bopd
    • June, data: 10.674 million bopd 
    • the agency also revised the May estimate to 10.4 million bopd (up 1,000 bopd from original estimate -- wow, talk about "false precision" -- 1,000 bopd)
  • Texas:
    • output climbed 165,000 bopd; or 3.9% to 4.4 million bopd
  • Gulf of Mexico:
    • climbed 10.3%, or 154,000 bopd to 1.7 million bopd 
  • US natural gas in the lower 48, June: an all-time high of 90.8 billion cubic feet, 
    • May: a prior record; 89.9 bcfd
    • Pennsylvania: second biggest gas producing state: 16.5 bcfd in June
    • The US has been the world's biggest producer of natural gas since 2009, ahead of Russia.
I did not realize that -- it's been almost ten years since the US took the lead in natural gas production, back in 2009. The US fracking revolution began in 2000; the Bakken boom began in 2007.

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Peak Oil? What Peak Oil?
Guyana Update

Guyana update, for those concerned about off-shore drilling. From Rigzone:
Following Exxon Mobil Corp.’s latest Hammerhead-1 discovery, the company’s ninth discovery offshore Guyana, it’s believed the country will create the greatest value of any offshore basin since the downturn.
.... the Hammerhead discovery as a “another play-opener” that adds to more than four billion barrels of oil equivalent of reserves through an exploration program that has a current success rate of 82 percent.
... almost 18 prospects left to pursue in the Stabroek block, the project is bound to get bigger. 
[To make this successful,] Guyana must first develop institutional and regulatory framework in order to effectively manage the emerging sector.
Guyana has hit the jackpot. If this small South American nation with a population of about 750,000 can properly manage the billions of dollars of revenue about to come its way, it may become the richest corner of the continent.

Canadian CBR, Slawson, The Dockets, And All That Jazz, Page 4 -- September 3, 2018

Profits? How good was the last quarter. Russian oil giants more than doubled their combined profits in the first half, trouncing estimates thanks to a weaker ruble and rebounding prices. And with output curbs easing, the influx of cash is set to continue. Bloomberg.

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Huge, Huge Story For Appalachia
Making America Great Again

Making America great again. As you read this story, remember, Hillary's goal was to put millions of miners out of work. Trump's goal was to put Americans back to work. Let's swing over to Appalachia. Appalachia Development Group awards contract for $3.4 billion ethane storage hub. Wow, it never quit. Link here.

First, some background (see link below):
The goal of the Research Team was to complete a geologic study of all potential options for subsurface storage of NGLs along and adjacent to the Ohio River from southwest Pennsylvania to eastern Kentucky, with a similar study along the Kanawha River in West Virginia.
This involved the mapping and identification of areas where the Salina F Salt is at least 100 feet (ft) thick and suitable for solution mining; mapping and identification of areas of the Greenbrier Limestone that are at least 40 ft thick and suitable for hard-rock mining; and mapping the thickness and extent of sandstone reservoirs in depleted gas fields and gas storage fields that could be converted to NGL storage.
The Research Team defined an Area of Interest (AOI) on both sides of the Ohio River that extends from southwestern Pennsylvania in the north as far as the Kanawha River Valley in southern West Virginia, and conducted a regional stratigraphic study of all potential storage candidate formations and reservoirs in this area. Each of the individual stratigraphic units or intervals was defined in the subsurface based on well-log patterns that marked the top and bottom of each. These log tops were then correlated throughout the AOI, enabling the construction of regional stratigraphic cross sections as well as thickness and structure maps. Individual sandstone reservoirs were identified within this regional stratigraphic framework, as appropriate.
Now, data points from the linked Rigzone article:
  • multibillion-dollar regional storage complex for NGLs
  • sourced from the Marcellus, Utica, and Rogersville shale plays
  • ADG and Parsons: joint venture: the buildout of the Appalachia Storage and Trading Hub (ASTH)
  • first phase: pre-front end engineering design (FEED)
  • subsequent phases: would include constructing the $3.4 billion project and its long-term operation
  • the ethane storage hub will act as a catalyst for more than $36 billion in follow-on petrochemicals investments and the creation of more than 100,000 long-term jobs
  • DOE: a $1.9 billion loan guarantee (I doubt Hillary's DOE would have done this -- the guarantees would have gone to her renewable energy cronies and Russian uranium friends)
  • with the $1.9 billion loan guarantee, the group now seeks $1.4 billion in private investment (so while couch potatoes are watching hundred-thousand-dollar deals with Mark Cuban, the real investors are looking at US energy)
  • this link takes you to the study: 2017 Appalachian Oil and Natural Gas Research Consortium study
Speaking of which, whatever happened to the proposed Badlands NGLs project? The last presentation was May, 2016.

On another note, a great time to re-read the New York Times reporting on natural gas shale revolution which they called a scam/hoax.

Canadian CBR, Slawson, The Dockets, And All That Jazz, Page 3 -- September 3, 2018

The September, 2018, dockets: remember, we are still in Bakken 2.5. We go to Bakken 3.0 if the "Lynn Helms' production surge (LHPS - 2018) is sustained for six months.

Slawson is back! Previously posted.

RimRock: from the dockets, September 20, 2018 -- for newbies, Heart Butte is on the reservation; west of the river, and an incredibly location -- how RimRock picked up this acreage is anyone's guess, but wow, what a great piece of "luck" (it wasn't luck. Trust me.)
26943, Rimrock Oil & Gas, Heart Butte-Bakken, 13 wells on an existing 1280-acre unit; 11 wells on an existing 1280-acre unit; 12 wells on an existing 1280-acre unit; Dunn County -- 36 wells total
  • sections 7/8-149-92: 13 wells
  • sections 16/21-149-92: 11 wells
  • sections 28/33-149-92: 12 wells  
The graphic:


For newbies, let's look at some of the wells currently sited in/near section 21-149-92:
  • 32694, loc, RimRock, Two Shields Butte 13-21-16-4HU, Heart Butte,
  • 32763, loc, RimRock, Two Shields Butte 13-21-33-13H3U, Heart Butte,
  • 32693, 3,033, RimRock, Two Shields Butte 13-21-16-3H3, Heart Butte, t12/18; cum 261K 9/19;
  • 32761, 2,023, RimRock, Two Shields Butte 13-21-33-13H, Heart Butte, t12/18; cum 174K 9/19;
  • 32692, 1,716, RimRock, Two Shields Butte 13-21-33-16-3H, Heart Butte, t12/18; cum 154K 9/19;
  • 32762, 1,103, RimRock, Two Shields Butte 13-21-33-13H3A, Heart Butte, t12/18; cum 179K 9/19;

  • 18455, 1,089, RimRock, Two Shields Butte 14-21-4H, Heart Butte, t12/10; cum 261K 9/19;
  • 18987, 223 (no typo), RimRock, Two Shields Butte 14-21-16-2HS, Heart Butte, t4/11; cum 676K 8/19; nice jump in production, 11/18;
  • 18988, 1,835, RimRock, Two Shields Butte 14-21-33-15H, Heart Butte, t12/10; cum 539K 9/19; nice jump in production;
  • 18989, 958, RimRock/Kodiak, Two Shields Butte 14-21-33-16H3, Heart Butte, t12/10; cum 323K 9/19; no real jump in production; Three Forks well; 5 stages; 500,000 lbs -- that was all;
  • 33733, 1,063, RimRock, Two Shields Butte 14-21-16-2H3, Three Forks, 46 stages; 9.8 million lbs; permit Three Forks B1; Heart Butte, t10/18; cum 238K 9/19;
  • 33734, 721, RimRock, Two Shields Butte 14-21-33-15H3, Three Forks, 46 stages; 9.6 million lbs, permit Three Forks B1, Heart Butte, t12/18; cum 126K 9/19;

  • 30641, 1,679, RimRock, Two Shields Butte 13-22-16-1H3, Heart Butte, t8/15, cum 386K 9/19; came off line 8/19; back on line, 9/19;
  • 30642, 3,572 (no typo), RimRock, Two Shields Butte 13-22-33-16H, Heart Butte, t8/15, cum 406K 9/19;
  • 30643, 3,069, RimRock, Two Shields Butte 13-22-16-1H, Heart Butte, t8/15, cum 360K 9/19;

Other Two Shields Butte wells:

Lot 2, section 7-149-92:
  • 35953, 915, Two Shields Butte 5-7-8-8H3, Heart Butte,  t9/19; 20K first full month;
  • 35954, 1,256, Two Shields Butte 5-7-8-8H, Heart Butte, t8/19; cum 17K over 30 days;
Coming off confidential list, November 2, 2019, initial production data, all great wells:
  • 35735, conf, RimRock, Two Shields Butte 9-8-7-12H3, Heart Butte,
    35734, conf, RimRock, Two Shields Butte 9-8-7-12H, Heart Butte,
    35733, conf, RimRock, Two Shields Butte 9-8-7-5H3, Heart Butte, 
    35732, conf, RimRock, Two Shields Butte 9-8-7-5H, Heart Butte, 
Canadian crude oil forecast. Previously posted. It's all about "heavy oil."

Canadian CBR, Slawson, The Dockets, And All That Jazz, Page 2 -- September 3, 2018

Canadian CBR: from SeekingAlpha. Wow, what a memory. I mentioned the other day, from recall, I thought Canadian CBR was 200,000 bopd. From the linked story:


Canadian pipelines: I've held and accumulated ENB over the decades. Long, long story how I got involved. From there, EEP. Probably lost more money than I've made -- or could have made had I invested elsewhere, but that's fine. The other day a reader asked me whether I would recommend EEP (or was it ENB? I forget) as an investment. I said I could not recommend ENB/EEP to anyone who wasn't prepared to lose it all. Line 3.

Recommendations: in fact, speaking of recommendations. I can't recommend investments ideas to anyone. Everyone's circumstances are different.

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

Canadian pipelines: back to ENB and EEP. Line 3 is a concern. Regardless how that turns out, I think one can say Enbridge = The Canadian Pipeline Company. Let's digress for a moment. The US desperately needs heavy oil. In fact, when folks talk about a supply "problem" going forward and a rise in prices, they are talking about "heavy oil." And because commodity traders can't keep the two separate, the price of "heavy" oil will drive the price of "light" oil.

US sources for heavy oil:
  • Canada, Mexico, Venezuela, Russia, the Mideast. Did I miss any?
  • Canada: landlocked; can't close a deal
  • Mexico: socialist president-elect will drive Mexico's oil industry into the ground (figuratively)
  • Venezuela: no light at the end of that tunnel
  • Russia: are you kidding?
  • the Mideast: okay
Back to Canada, Enbridge.

Want to see a spectacular map?

Link to Canadian Association of Petroleum Producers. Figure 4.1 from page 19:



Two things jump out at me on the graphic above:
  • if Line 3 does not go in, the US consumer is the big loser; Enbridge will do just fine; maybe even better; pipeline rates stay high; again, remember: the US needs "heavy oil" -- with Mexico and Venezuela out of the picture, that pretty much leaves Canada. Mideast heavy oil goes to California and Saudi's refinery o the Gulf coast
  • that orange line: Spectra. Now owned by Enbridge; that's why I say Enbridge = the Canadian Pipeline Company (the map is hard to read; I assume I am correct on this; could be wrong)
Spectra?
Spectra Energy Corp, headquartered in Houston, Texas, operated in three key areas of the natural gas industry: transmission and storage, distribution, and gathering and processing. Spectra was formed in late 2006 from the spin-off from Duke Energy. Spectra owned the Texas Eastern Pipeline (TETCo), a major natural gas pipeline which brings gas from the Gulf of Mexico coast in Texas to the New York City area, which was one of the largest pipeline systems in the United States. Spectra also operated three oil pipelines. In February 2017, Spectra Energy merged into the Canadian company Enbridge.
Time for a music video:

Massachusetts, The Bee Gees

Pipelines: in the investing world, pipelines are "moats"
  • cost prohibitive to build
  • crossing jurisdictional boundaries (state, province, international): a nightmare
  • made worse by the North American Anti-Pipeline Coalition (NAAPC)
Don't bring me down: any question why the Traveling Wilbury's were the greatest super-group ever? The harmony in this is incredible. Rosie Vela. Wow, what a career. What a great country. I was particularly happy with Rosie and Jeff's shout-out to me.

Don't Bring Me Down, ELO

Canadian CBR, Slawson, The Dockets, And All That Jazz, Page 1 -- September 3, 2018

Mark the calendar: Friday, September 14, 2018, 2:00 p.m. Director's Cut to be released. This will be July, 2018, production data. Lynn Helms said there will be a production surge in North Dakota this autumn. Why? Sixteen reasons:
  • DUCs
  • flaring issue resolved
  • pent-up cash-flow demand
  • operators sprucing up their end-of-year earnings
  • Permian-Bakken balance
  • pad drilling
  • seed corn coming in
  • through 2016, wells were being completed one at a time
  • after 2016, "families" of wells were being completed at the same time
  • re-fracks; impact of neighboring fracks
  • after the downturn, new operators hitting their stride
  • legacy operators getting back in
  • optimized completion strategies
  • beautiful weather to drill, frack
  • no issues with takeaway
  • WTI hit $7
Canadian CBR: link here.

Slawson: getting active in the Bakken again. From the September hearing dockets.
  • 26930, Slawson, Arnegard-Bakken, 9 wells on an existing 1280-acre unit; McKenzie 
  • 26931, Slawson, Baker-Bakken, 9 wells on an existing 1280-acre unit; McKenzie 
  • 26932, Slawson, Ellsworth-Bakken, 9 wells on an existing 1280-acre unit; McKenzie
  • 26933, Slawson, North Fork-Bakken; 14 wells on an existing 1280-acre unit; McKenzie
  • 26934, Slawson, Pleasant Hill-Bakken, 9 wells on an existing 1280-acre unit; McKenzie
  • 26935, Slawson, Tobacco Garden-Bakken; 8 wells on an existing 1280-acre unit; McKenzie
The Supremes: my baby love ... first song I hear at work this morning. Takes me back to my first love, more than four decades ago. Wow.

The Supremes: Kavanaugh. September.