Thursday, January 31, 2019

North American Shale -- Latest Edition; BTU Analytics -- January, 2019

North American Shale here: lots of articles on the Bakken, of course.

BTU Analytics: how deep does $45 oil cut in the BakkenArchived.

Slawson's Submariner Federal Wells In Big Bend Oil Field

The Submariner Federal wells:
  • 32275, conf, Submariner Federal 10 SLTF2H, Big Bend, no production data,
  • 32271, conf, Submariner Federal 10-23-20TF2H, Big Bend, no production data,
  • 19368, 115, Slawson, Submariner Federal 1-23-24H, Van Hook, t8/11; cum 421K 4/19;
  • 32274, SI/NC, Submariner Federal 2 SLH, Big Bend, no production data,
  • 32272, SI/NC, Submariner Federal 2-23-20H, Big Bend, no production data,
  • 31562, SI/NC, Submariner Federal 3-23-29H, Big Bend, no production data,
  • 34958, 2,075, Submariner Federal 4-23-20H, Big Bend, t12/18; cum 70K after less than 3 months;
  • 31563, SI/NC, Submariner Federal 5-23-20TFH, Big Bend, no production data,
  • 31561, SI/NC, Submariner Federal 6-23-20TFH, Big Bend, no production data,
  • 32273, SI/NC, Submariner Federal 7-23-20TFH, Big Bend, no production data,
  • 31844, PNC, Submariner Federal 9-23-24TF2H, Big Bend, no production,
The graphic:

Wait Until Minnesotans Get Their January, 2019, Utility Bills -- Is This A Joke? Timing Is Everything, And Timing Was Atrocious -- January 31, 2019


Chevron Notes -- January 31, 2019

First, answering the two questions posed earlier:
  • The definition of ophiologist? One who studies a branch of herpetology concerned with the study of snakes.
  • Extra credit if you know the only movie ever to have used that word. The Lady Eve (1941).
Now, back to Chevron.

Re-posting because this is really, really cool. Some time ago I was going to post a note asking rhetorically when the US majors would start / consider building new refineries to process light oil. It looks we might have an answer to that rhetorical question I was remiss in posting. Re-posting from earlier today:
CVX: will buy Brazilian refinery along US coast; will pay $350 million for the Petrobras refinery
Chevron will acquire all the outstanding shares and equity interests of Pasadena Refining System, which includes the Texas refinery with 110,000 b/d of nameplate capacity and associated trading arm PRSI.
The deal is expected to close by June 2019.
"This expansion of our Gulf Coast refining system enables Chevron to process more domestic light crude, supply a portion of our retail market in Texas and Louisiana with Chevron-produced products, and realize synergies through coordination with our refinery in Pascagoula," said Pierre Breber, Executive Vice President of Chevron Downstream and Chemicals.
In February 2018, Petrobras launched the sale of Pasadena along with associated crude and products storage of 5.1mn bl and maritime terminal, logistics and inventory. An adjacent 143 acres that is also part of the Pasadena package could be used to build additional processing units, terminalling or storage capacity.
Speaking of Chevron, quick! How long has Chevron been in the Permian? I thought I posted this story earlier. I may have; I can't find it now. If I did not post the story it was because I thought it was another "ho-hum" story. In the big scheme of things it is, I suppose, but the factoid about how long Chevron has been in the Permian is mind-blowing. At the linked article:
Unlike many oil and gas firms who had given up some of their acreage in the Permian before the shale revolution, supermajor Chevron and its legacy companies have been sticking with the huge acreage position in the basin since the early 1920s.
Ms Paraskova references Chevron at this link. I think that's' amazing -- discovering the Permian one hundred years ago and holding on to it all these years. Simply amazing.

January 31, 2019, T+29, Day 6 Of Open Border Negotiations

Notes from all over except the Bakken.

Fool me once, shame on you. Fool me twice, shame on me. First, and this is quite amazing. First of all, it was not fake news as Scott Adams says it was. In fact, the governor of Virginia double-downed on his support for infanticide / fourth-trimester abortions. A Virginia co-sponsor of the bill the bill says she had not read the bill when she signed on as a co-sponsor, did not know it went that far, and how "taken back" her support. Sounds like the ObamaCare bill when we were told we would know what was in it once it was passed. I guess voters are getting a tad smarter. No link. Story easily found.

Last one out turn out the lights. And just leave the bill on the table. I can't make this up. The new  Connecticut governor now proposes taxing groceries and prescription drugs. Considering the high price of the latter, if his proposal passes, it should be more than enough to balance the Connecticut budget and leave room for cutting taxes on yachts. No link. Story easily found.

Alexa: I never knew Slim Whitman had so many songs. About two hours ago, I asked Alexa to play "Slim Whitman." Now, almost two hours later, Alexa continues to play Slim Whitman and to the best of my knowledge, none have been repeated, and I have not even heard some I know that are yet to be played.

From wiki:
In 1955, "Rose Marie" was a hit for the American country singer Slim Whitman.
Produced by Lew Chudd, of Imperial Records. Whitman's recording of the song spent 11 weeks at number one in the UK Singles Chart - setting a record which was not beaten until 1991, when Bryan Adams spent 16 weeks at the top of that chart with "(Everything I Do) I Do It for You". The previous year, in the US, Whitman had peaked at number five on the Best Sellers in Stores chart.
Comment: unsaid -- by 1991, the Beatles were "history," which means that Slim Whitman's "Rose Marie" beat every Beatles song for longevity as #1 on UK Singles Chart.
Watch at our own risk.

Slim Whitman, mix
 
A whistler, too.  I knew he could yodel. I did not know he could whistle.


Ten New Permits; Five DUCs Reported As Completed -- January 31, 2019

A huge shout-out to the NDIC folks in Bismarck and throughout the Bakken staying open and doing what appears to be an incredible job during the recent cold spell. Business and government offices in many other northern tier states shut down due to the polar vortex, but it appears the NDIC soldiered on, not missing a beat.

Active rigs:

$53.791/31/201901/31/201801/31/201701/31/201601/31/2015
Active Rigs65594045146

Ten new permits:
  • Operators: CLR (5); WPX (4); Whiting
  • Fields: Jim Creek (Dunn County); Eagle Nest/Squaw Creek (McKenzie); Sanish (Parshall)
  • Comments: CLR has permits for a 5-well pad in Jim Creek, section 18-146-96; WPX has permits for a four-well Bison pad in 27-149-94; three of the Bison wells will be Squaw Creek wells, one will be an Eagle Nest well; Whiting has a permit in the Sanish, section 33-154-91;
Five producing wells (DUCs) reported as completed:
  • 34958, 2,075, Slawson, Submariner Federal 4-23-20H, Big Bend, t12/18; cum 19K after first 25 days; (#19368)
  • 34922, 504, Whitmore 3-7-6H, Parshall, t12/18; cum --;  (#17354)
  • 34147, 3,550, Hess, SC-TR Slette-153-98-1819H-4, Truax, t12/18; cum --;  (#19189, #23299, #23485)
  • 34148, 2,660, Hess, SC-TR Slette-153-98-1819H-5, Truax, t1/19; cum --;
  • 34150, 2,759, Hess, SC-TR Slette-153-98-1819H-7, Truax, t1/19; cum --; 

Bakken Cowboy To Compete In North Texas -- January 31, 2019

Wow, a little bit of northwestern North Dakota here in Arlington, TX -- home of the Dallas Cowboys. From The Williston Herald:
When the Professional Bull Riders Global Cup kicks off at AT&T Stadium in Arlington, Texas, next week, a Trenton native will be among those vying for international bragging rights against some of the best bull riders in the world.
Stetson Lawrence, a 2007 graduate of Trenton High School, is slated to be one of those participants in the Global Cup. He has been a professional bull rider for the last seven years, and during that span, Lawrence has been ranked as one of the top 35 riders in the world. In 2015, Lawrence was ranked as high as ninth in the world.
As the professional bull rider and former oil worker shares, being regarded as one of the top riders in world took plenty of practice.
Lawrence says some of his first experience with animals as a youngster in Whitehorse, South Dakota, where his grandfather owned a ranch. As early as 5 years old, Lawrence got started in the sport of mutton busting; a rodeo style competition where children ride sheep. “That was a lot of fun. Then from there, I moved up to calves and steers, and kept at it,” Lawrence states. “It’s such a great sport, I’ve had a chance to travel the world doing something that I love and I wouldn’t trade it for anything.”

Quick: When You Think Of Washington, DC, What Do You Think Of That District's Biggest Problem? Crime? Rats? Opioid Deaths? Nope -- Think Outside The Box

Updates

Later, 1:44 p.m. Central Time: see first comment. A reader suggests a 12-step program to help those addicted to the plastic straw.

Original Post

Crime rate in Washington, DC, from wiki: Looking at violent crime specifically, Washington, DC has a violent crime rate that is  148% higher than the national average. For property crime, Washington, DC is 76% higher than the national average.

Rats in Washington, DC:
Opioid epidemic? Highest rate of overdose deaths in the USA is in Washington, DC. Some right-wing rhetoric? Nope, NPR.  

So, what is Washington, DC, worried about these days? Straws. I cannot make this stuff up. From, of all places, Anchorage Daily News:


From the linked article: 
Washington has become the latest city in a nationwide movement to ban plastic straws, and it's up to Rybarczyk, an inspector for the D.C. Department of Energy and Environment, to enforce the new law.
The straw cop left the rattled cashier at Lotus Express with a warning that if the store was still using plastic straws by July, when a grace period expires, it could be fined up to $800.
Looks like a good job for a millennial.

So, dad, what did you do during the war on global warming (WOGW)?

I was a plastic straw inspector. Wage: minimum. $15/hour.

The millennials are the first generation to not understand that cities have finite resources (the federal government does not; it can print money). Every dollar spent on policing plastic straws is one dollar less than spent on fighting violent crime; property crime; police and fire response time; #MeToo phone calls; poop patrol; pest control (we're talking about rodents, now legislators, but I repeat myself). All things being equal.

The bigger question, of course, is: why would The Anchorage Daily News be interested in this story? Let's check:

Wink To Webster -- January 31, 2019

Updates

February 6, 2019: see this note. 

Original Post 

Wow, this just never quits.

I think of the mismanagement of GE, and then go to Exxon -- despite a few missteps -- seems to be keeping to its knitting.

It overpaid for the Permian, but that's water under the bridge.

Now this: Exxon Mobil will create three exploration and production companies. The entire story:
Oil major Exxon Mobil Corp said on Thursday it would create three new separate exploration and production companies, effective April 1, in an effort to double its profit by 2025.
The three new companies will be called ExxonMobil Upstream Oil & Gas Co, ExxonMobil Upstream Business Development Co and ExxonMobil Upstream Integrated Solutions Co, the company said.
Last year, the world's largest listed oil company devised a plan to boost its operating cash flow and profit as well as deal with sagging output.
Exxon outlined a growth strategy to increase earnings by more than 100 percent to $31 billion by 2025.

Disclaimer: this is not an investment site. 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.

Back to the linked Exxon/Permian pipeline article:
ExxonMobil, Plains All American Pipeline, and Lotus Midstream will build a pipeline capable of transporting more than 1 million barrels per day of crude oil and condensate from the Permian in West Texas to the Texas Gulf Coast.
Exxon, Plains All American, and Lotus Midstream decided to proceed with plans to build the Wink to Webster pipeline system, with origin points at Wink and Midland to multiple locations near Houston, including Webster and Baytown, and with connectivity to Texas City and Beaumont.
The companies have formed a joint venture, Wink to Webster Pipeline LLC, and have already ordered 650 miles of domestically sourced 36-inch-diameter line pipe.
The project is the result of a “significant volume of long-term commitments” and is targeted to start operations in the first half of 2021, Plains All American said.
Lotus? From a press release, August 8, 2018:
Crude oil logistics provider Lotus Midstream, LLC today announced it has entered into a definitive agreement to acquire the Centurion pipeline system and a Southeast New Mexico crude oil gathering system from Occidental Petroleum Corporation.
The transaction is expected to close later in the third quarter of 2018, subject to customary closing conditions. 

The "Grid" Did Not Hold For Everyone -- The Poster Child For Wind Energy, Xcel, Threw In The Towel -- Forced To Shut Off Natural Gas To Some -- January 31, 2019

Wind utility forced to resort to space heaters. In America. In the 21st century. This wasn't supposed to happen. I do not ever recall seeing this before we started talking about global warming. But I am very biased. Generally by facts.

 

And I tried so hard to be optimistic about the grid. LOL. 

A reader wrote me after I said the "grid" held:

Headline: Xcel says demand forced shut-off of natural gas to dozens of homes. Link here:
From the link: 
Xcel Energy moved dozens of customers east of St. Cloud to hotels as natural gas was shut off in response to unanticipated demand. The utility also asked all Minnesotans who use its natural gas to conserve and turn down the heat. [Minnesota public radio failed to mention that Xcel asked all customers to turn the thermostat down to 55 degrees.]
Jon Audet, one of the customers whose gas was cut off, and his son Mathias took advantage of the change in routine.
"I promised my 4-year-old here, if he came with me one last time to check the heaters we could get into the pool," Audet said.
Audet lost the heat at his house in Blue Hill Township, just west of Princeton. He spent most of Wednesday driving between the hotel and his house, double checking space heaters set up to keep pipes from freezing. 
"It's colder than we anticipated. There is more draw, more demand on the system than we could accommodate," Xcel spokesperson Mark Osendorf said. "We made the decision to isolate, to impact as few as possible, and unfortunately 150 or so customers are without gas."
Sounds like Xcel spent too much time lobbying legislators on wind energy and not preparing for the polar vortex -- which, like, happens, like, every, a, four or five years. 

Poster child for wind energy? Fake news? I don't know. Let's do a google search. Result: 903,000 hits:

To put the number of hits (903,000) in perspective, the number of hits for Bakken oil January 2019 was only 515,000 hits.

Peak Oil? What Peak Oil? -- Peak Oil Redux -- January 31, 2019

Earlier today, this post: The Oil Shock That Never Was --
From Bloomberg:
Three years ago, influential figures in the oil industry were sounding a clear warning: prices were too low, investment was collapsing and by the end of the decade the world would face a shortage. 
In reality, the market today is looking at several more years of plenty, so much so that OPEC is beginning its third year of production cuts just to prevent a surplus.
“We’re in an age of abundance,” said Ed Morse, head of commodities research at Citigroup Inc. in New York. “A supply crunch is not likely at all.”
Wow, I remember all the discussions on the blog and elsewhere: doom and gloom -- major oil companies were not spending enough on CAPEX and we were going to run out of oil by 2018 ... or 2019 ... or 2020.
Now this, from COP's earnings call today, link here:



Natural Gas Update -- January 31, 2019

Natural gas, from Platts:
US natural gas in storage decreased 173 Bcf to 2.197 Tcf in the week that ended January 25, the US Energy Information Administration reported Thursday.
The withdrawal was well below the expectations of an S&P Global Platts' survey of analysts, which called for a 197 Bcf pull. The draw was completely outside of the range of survey responses. The lowest response was for a 176 Bcf withdrawal.
The withdrawal was considerably above the 126 Bcf pull reported in the corresponding week in 2018 as well as the five-year average draw of 150 Bcf, according to EIA data.
As a result, stocks were 14 Bcf, or 0.6%, under the year-ago level of 2.211 Tcf and 328 Bcf, or 13%, below the five-year average of 2.525 Tcf.
Natural gas futures on the news: dropped 2 cents per million BTU. Why? Because the worst is over and the "grid" held.

****************************
The Word Page

First, answering the two questions posed earlier:
  • The definition of ophiologist? One who studies a branch of herpetology concerned with the study of snakes.
  • Extra credit if you know the only movie ever to have used that word. The Lady Eve (1941).
I vividly remember the day we learned about this subject in graduate school, but the professor used a different word, not ophiologist. 

Best quotes from the movie (link to follow):

********************
Charles : And I have no right to be in your cabin.
Jean : Why?
Charles : I'm married.
Jean : But so am I, darling. So am I.

********************
Charles : Do you think they're dancing anyplace on board?
Jean : Don't you think we ought to go to bed?
Charles : You're certainly a funny girl for anybody to meet who's just been up the Amazon for a year.
Jean : Good thing you weren't up there two years.

********************
Jean : What were you doing up the Amazon?
Charles : Looking for *******. I'm an ophiologist.
Jean : I thought you were in the beer business.
Charles : Beer? Ale!
Jean : What's the difference?
Charles : Between beer and ale?
Jean : Yes.
Charles : What I am trying to say is - only I'm not a poet, I'm an ophiologist - I've always loved you. I mean, I've never loved anyone but you. Charles : My father'd burst a blood vessel if he heard you say that. There's a big difference. Ale's sort of fermented on the top or something, and beer's fermented on the bottom, or maybe it's the other way around. There's no similarity at all. You see, the trouble with being descended from a brewer, no matter how long ago he brewed it, or whatever you call it, you're supposed to know all about something you don't give a hoot about.

Sorry, But I Have Got To Take A Break -- January 31, 2019 -- 9:24 A.M.

I am absolutely overwhelmed with "stuff to report."

I cannot keep up.

On top of that, I'm in an incredibly good mood. For me, that is not a good combination, especially when I am off my meds.

The news coming out of the energy sector is incredible, and the market is doing incredibly well, and the tea leaves suggest the trend will continue.  CNBC, of course, completely misread the jobs report.

The most important financial news for investors: guidance from the Fed. I don't watch CNBC any more but I assume Steve Liesman will talk about that for the entire week. It's an open book test.

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.

Scott Adams has gone off the rails, which means I now have a lot more free time for reading. I won't be listening to him any more, at least not any time soon.

The Big Lebowski tie-in to the Super Bowl -- I have no idea who thought of that -- was brilliant. The Coen brothers are noted for their "regional" movies -- Fargo, being perhaps one of the best -- and if one movie captured Los Angeles in the 60's it was The Big Lebowski. 
Over the course of the Rams' 71-year history, they have won 15 division titles. They have appeared in the postseason 27 times, winning three NFL Championships. During the Super Bowl era, they have played in three Super Bowls, winning one.

Super Bowls the "Rams" played in (note: the year is the season, the Super Bowl is played in the following calendar year):
  • LA: XIV, 1979: lost to the Steelers, 19 - 31
  • St Louis: XXXIV, 1999, won, beating the Titans, 23 -16
  • St Louis: XXXVI, 2001, lost to the Patriots, 17 - 20
And now:
  • LA: LIII, 2018, pending
My copy of Camille Paglia's Provocations showed up at the doorstep yesterday; two days, free shipping.

The book I carry with me now for reading when I stand in line:
  • The Life and Sciecne of Richard Feynman, James Gleick, c. 1992.
Making room for new books on my limited bookshelves, these books are being given to one of the local high schools today:


Original cost: well, I suppose, a reasonable estimate would be $10/book x 30 books, or about $300.

Re-selling to Half-Price Books, I might get $7.50.

My next book: The Landmark Herodotus.

Getting Ready For The Super Bowl -- January 31, 2019

Super Bowl: Continuing with the best of The Big Lebowski quotes:
7. Jackie Treehorn Presents. The Dude. Maude Lebowsi. In Gutterballs.
6. Strikes and gutters, ups and downs.
5. Dude, let's go bowling.
Natural gas fill-rate/withdrawal: link here -- so far, except for spot shortages, it looks like the natural gas situation "held":




Cold. I talked about this the other day.
When I was growing up in Williston, ND, we did not have much money. But I never once heard my parents complain about the cost of electricity (to heat the house in the winter). We never experienced a black-out or loss of power in the winter due to too much demand. We never once worried whether we would have electricity. We were never, never, ever advised to turn our thermostats down to conserve energy. Williston, ND, up in the northwest corner of the state seldom got above zero degrees during the month of February. It was certainly as cold as anything the US is experiencing this week.
That was back in the 1950's -- less than a decade after WWII. And now, 60+ years later with all that technology and a glut of natural gas in the US we are unable to meet power demands for a cold spell that will last less than 72 hours

And yet, these two headlines (among many). From CBSLocal, Minneapolis, probably not excelling today:

From Bloomberg:
The three largest automakers in the U.S. suspended operations, or dialed them back, at several plants on the coldest day of the year after a fire at a natural gas facility in Southeast Michigan drastically reduced how much heating fuel the utility could supply.
CMS Energy Corp.’s Consumers Energy utility sends gas to about 4.1 million people in 45 counties in the region, including much of the auto manufacturing sector, according to its website.
The fire occurred in a facility that accounts for about 64 percent of the utility’s gas supply, and company officials were urging all customers -- residential, industrial and commercial -- to cut back on their use of the fuel.
When I was growing up in North Dakota, energy was available, dependable, dispatchable, and affordable.

We now have an energy source that is no longer dependable, dispatchable or affordable. So what happened?

Hillary: we'll put a lot of coal miners out of work.  

And the sad thing: neither the politicians who legislated this nor the utilities who promoted this will be held accountable.

****************************
For The Archives
The Three-Day Winter Of 2019

Had it not been for global warming, it might have lasted four days.

From SFGate:
Temperatures dove more than 30 degrees below zero Thursday morning in the Midwest in this polar vortex outbreak's last gasp, driving wind chills to dangerous levels and clobbering long-standing records.
After a bitter-cold morning with temperatures that sank all the way to minus-48 in northwest Minnesota, with wind chills down to minus-65, the air ostensibly "warmed" Wednesday afternoon, to readings such as minus-18 in Grand Forks, North Dakota, and minus-22 in Rockford, Illinois.
But it didn't take long into the late afternoon for the mercury to plummet again to readings well below minus-20, minus-30 and in some locations in north-central Minnesota, minus-40 by Thursday morning.
The cold snap is smashing all-time records in northern Illinois. Moline hit a new low late Wednesday night - the lowest temperature the city has ever recorded. The weather station at the Moline Quad-City Airport sent a reading of minus-29 degrees at 11:19 p.m., which was enough to break the record, and then continued to drop even further through the early-morning hours Thursday. As of 7 a.m., the lowest temperature Moline had reached was minus-33 degrees, a full five degrees lower than the old record of minus-28 set in 1996.
All I know is that it was much colder when I was growing up in Williston, ND, and I had to walk to school uphill both ways and in six-foot snow drifts.


And, as I replied to John Kemp, climate forecasting is even better. We know that the earth will be 2.7 degrees warmer one hundred years from now. Even bartenders-turned-congresswomen know that.

Busy, Busy Thursday Morning -- January 31, 2019

Disclaimer: this is not an investment site. 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.

Biggest story I've read in the past 48 hours: the 6th largest company (by revenue?) in the US -- McKesson -- will move its San Francisco headquarters to the Dallas-Ft Worth Area.

COP: huge earnings report. On the radio: "COP hit is out of the ballpark." Slides here.

Shell: full-year profits surges to four-year highs; beats expectations. [Note: I don't often do this, but I am so thrilled with myself -- LOL -- I can't resist -- Shell was one of two energy companies I started buying about one year ago and kept accumulating.] Shell pledges to do it all. Archived.


Facebook: surges; headline said the company "smashed" forecasts.

GE: huge miss on earnings -- but shares surging, according to the headline; apparently GE shares are up 20% year-to-date

CVX: will build a million-bopd pipeline in the Permian; at least I think that's what I saw

M/C: huge earnings report according to the headline.

CVX: will buy Brazilian refinery along US coast; will pay $350 million for the Petrobras refinery
Chevron will acquire all the outstanding shares and equity interests of Pasadena Refining System, which includes the Texas refinery with 110,000 b/d of nameplate capacity and associated trading arm PRSI.
The deal is expected to close by June 2019.
"This expansion of our Gulf Coast refining system enables Chevron to process more domestic light crude, supply a portion of our retail market in Texas and Louisiana with Chevron-produced products, and realize synergies through coordination with our refinery in Pascagoula," said Pierre Breber, Executive Vice President of Chevron Downstream and Chemicals.
In February 2018, Petrobras launched the sale of Pasadena along with associated crude and products storage of 5.1mn bl and maritime terminal, logistics and inventory. An adjacent 143 acres that is also part of the Pasadena package could be used to build additional processing units, terminalling or storage capacity.
*********************************
The Oil Shock That Never Was

From Bloomberg:
Three years ago, influential figures in the oil industry were sounding a clear warning: prices were too low, investment was collapsing and by the end of the decade the world would face a shortage.

In reality, the market today is looking at several more years of plenty, so much so that OPEC is beginning its third year of production cuts just to prevent a surplus.
“We’re in an age of abundance,” said Ed Morse, head of commodities research at Citigroup Inc. in New York. “A supply crunch is not likely at all.”
Wow, I remember all the discussions on the blog and elsewhere: doom and gloom -- major oil companies were not spending enough on CAPEX and we were going to run out of oil by 2018 ... or 2019 ... or 2020.

So what happened?
Oil’s biggest slump in a generation earlier this decade forced companies to slash spending, leading to a flurry of warnings that there wouldn’t be enough growth in oil supplies to meet rising demand and also offset production lost from aging fields.
Investment in oil and gas production collapsed by about $350 billion, or more than 40 percent, from 2014 to 2016 -- the sharpest contraction since the 1980s -- after crude fell from over $120 a barrel to less than $30, according to the International Energy Agency.
The number of new projects approved in 2017 dwindled to the lowest in 70 years, the Paris-based agency said.
And here is it ... In November 2015, the IEA cautioned that supply growth outside OPEC would grind to a halt by 2020.
Three months later the EIA was ringing “alarm bells” for a coming crisis. Total SA Chief Executive Officer Patrick Pouyanne foresaw a shortfall of as much as 10 million barrels a day, about the volume Saudi Arabia was pumping at the time. The concerns were echoed across the industry, from Royal Dutch Shell Plc executives to hedge fund veteran Andy Hall.
Instead, supply has turned out to be plentiful. The U.S. is estimated to produce about 12 million barrels a day of crude this year, a level it was earlier forecast to reach only in 2042. Russia has raised output to a record and Iraq’s is near unprecedented levels. Brazil is set to pump at the fastest pace in at least 15 years in 2019, according to the IEA.
Bank of America Corp. estimates three-quarters of non-shale projects over the next five years will be profitable at just $40 oil, bringing new crude from the North Sea to Guyana even if prices stay low.
More at the link. But, wow, what a story.

My takeaway? The EIA, a government agency, doesn't understand free market capitalism. 

As far as the Bloomberg story: it hardly mentions the "shale." If you go to the story, count the number of time shale appears (non-shale does not count).

"Fracking" -- not mentioned once in this two-page story.

Busy, Busy Thursday Morning -- January 31, 2019

Busy, busy morning. Reminders:
  • COP
  • CVX/Permian
  • GE
  • M/C
  • Straws
  • Smash
  • NG
  • 55 degrees
  • The Big Lebowski
  • Permian pipeline
  • Chevron refinery
  • The oil shock that never was
Jobs report: government shutdown? Claims surge; nearly a one-and-a-half year high. CNBC's analysis:
  • The report could raise concerns that the labor market is slowing.
  • The surge could reflect filings by non-federal government workers who were temporarily unemployed during the partial government shutdown that recently ended.
************************************
Back to the Bakken

Only one well coming off the confidential list today -- Thursday, January 31, 2019: 102 wells for the month; 102 wells for the quarter
  • 33539, SI/NC, CLR, Sakakwea Federal 1-19H2, Elm Tree, minimal production prior to frack;
Active rigs:

$54.371/31/201901/31/201801/31/201701/31/201601/31/2015
Active Rigs65594045146


RBN Energy: WhiteWater midstream's latest Permian gas pipeline project
While Permian natural gas pipeline announcements came fast and furious last year, it had been relatively quiet on that front the past few weeks. Leave it to the folks at WhiteWater Midstream to break the lull, which is exactly what they did with the recent announcement of a binding open season for a new interstate pipeline in the heart of the Delaware Basin. Named Steady Eddy, the pipeline would originate in an underserved corner of the Permian and provide access to the Waha Hub, where a number of planned greenfield pipelines leaving the Permian will begin. Today, we look at the details of WhiteWater’s proposed Steady Eddy pipeline project.
2018 was an eventful year for Permian natural gas infrastructure, a frequent blog topic here in the RBN blogosphere. Natural gas production surged in the basin, topping 9 Bcf/d by the end of the year and sending prices in the region into negative territory as takeaway constraints worsened.
On the infrastructure front, some major projects took significant steps forward and more greenfield pipelines were proposed that would eventually alleviate those constraints. Among projects that advanced their development last year, Kinder Morgan began construction on the Gulf Coast Express Pipeline (GCX), a 42-inch-diameter, 1.98-Bcf/d greenfield pipeline that will originate at the Waha Hub in the Permian and extend to the Agua Dulce Hub in South Texas. GCX is owned by a partnership that includes Kinder, DCP Midstream, Targa Resources and Altus Midstream. Kinder Morgan also reached a final investment decision (FID) on another greenfield pipe: the Permian Highway Pipeline (PHP). PHP is another 42-inch-diameter pipeline that will be built by Kinder Morgan and is jointly owned by Kinder and EagleClaw Midstream; Altus Midstream also has an option to become a 20% equity owner in the project.
Besides those two projects reaching important milestones, two other potential greenfield natural gas projects were announced last year. Williams announced its Bluebonnet Market Express Pipeline, a potential 2-Bcf/d pipeline from Waha to the Katy, TX, area that could go into service by late 2020. There was also an announcement from WhiteWater Midstream; the company, along with partners Targa and MPLX, in August announced the 2-Bcf/d Whistler Pipeline, which would consist of about 450 miles of 42-inch-diameter pipeline from Waha to the Agua Dulce Hub. Whistler is also proposed to have an approximately 27-mile extension into the Midland Basin via a 30-inch pipeline lateral.
Now for some details on WhiteWater’s most recently announced project. As proposed, Steady Eddy would consist of approximately 25 miles of 24-inch-diameter pipeline extending from Eddy County, NM, to northern Culberson County in West Texas.
Go to the linked article for the rest of the story.

Wednesday, January 30, 2019

The Oasis Lawler Wells In North Tobacco Garden Have Been Updated -- January 30, 2019

The wells are tracked here.

This page won't be updated.

These wells are really nice wells. One example:
  • 31645, 548, Oasis, Lawlar N 5199 44-23 12TX,  North Tobacco Garden, t8/17; cum 211K 11/18;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-20183044534498918941433371543799
BAKKEN10-201831571456991050945229436801053
BAKKEN9-2018305560525310487454043185613068
BAKKEN8-20183165646578117834069317840019
BAKKEN7-2018317308729413453411862687313817
BAKKEN6-2018307794779414116421122259719035
BAKKEN5-201831886888681554354852449019455
BAKKEN4-201830107101071017317613153870922126
BAKKEN3-20183116689168911974367003568379670
BAKKEN2-20182817908177062125739964310628454
BAKKEN1-20183134830349883277549755492590
BAKKEN12-20172414506143481680827167209445839
BAKKEN11-20173019140191402438040950339796491
BAKKEN10-20173126668266683347449043473341213
BAKKEN9-2017271855818569300613006129005624
BAKKEN8-201725541053991957911500110680

Another Fortune 500 Company Moves To DFW Area -- January 30, 2019

Old news. I completely missed it. A reader sent me the story.

McKesson -- a Fortune 500 company -- has moved its headquarters from San Francisco to Dallas.
McKesson topped the the list of largest San Francisco-based companies, based on revenue. McKesson ranks No. 6 on the Fortune 500. The second-largest San Francisco-based company, based on revenue, is Wells Fargo, which is exempt from the city’s gross receipts taxes, as required by state law. The city declined to identify specific companies that get the exemption.
Third on the list of largest San Francisco-based companies is payments giant Visa, which moved its headquarters officially to One Market St. several years ago. Visa did not respond to a question on whether it’s subject to the city’s gross receipts taxes.
Sounds errily like Toyota North America moving its headquarters from Los Angeles to Plano, on the north side of DFW.

As I've said many times on the blog, I've never seen so much construction as I'm seeing on the north side of DFW.

Link here to the McKesson story; and, here. Because of other things going on in San Francisco (like tech and Silicon Valley) and the size of Los Angeles, I doubt either city will miss one or two big companies. But the reader notes that a city like Portland, OR, can hardly afford the loss of (m)any downtown businesses. And it's our shared belief that Portland is looking to San Francisco for guidance on how to "run" a city.

By the way, no wonder Warren Buffett likes Wells Fargo: the company is exempt from San Francisco's gross receipts taxes. Wow, what a deal.

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AAPL vs TSLA

Tesla and Apple both reported in the last 24 hours: Apple, Inc.,  reported yesterday; Tesla reported today. Apple looks stronger than ever. Tesla? The tea leaves suggest 2019 will be "the year," one way or the other.

Disclaimer: this is not an investment site. 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.

Note: I am the original Apple Fanboy. Fanboy #3 to be exact.

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We Can See Clearly Now

Tesla - 4Q18 Earnings -- Pretty Big Miss On EPS But At Least Profitable

Updates

January 31, 2019: Elon must have been unhappy with how the earnings call was handled. LOL. From Bloomberg this morning: Tesla's bombshell CFO exit spoils pivot to more sober Musk.  
Elon Musk appeared to be putting the days of unpredictability in the rearview mirror. Then he spooked Tesla Inc. investors with another surprise executive exit.
The chief executive officer vowed on an earnings call to cut costs and manage Tesla’s cash as it enters a slower-growth period. Instead of madcap Musk, investors heard from a more measured CEO who had just missed analysts’ estimates for quarterly profit. He even made multiple mentions of the possibility there could be a recession.
But after all the talk of tougher times and tightening the wallet, Musk’s penchant for blindsiding shareholders reemerged. With mere minutes left on the call, he revealed Chief Financial Officer Deepak Ahuja will retire a second time, reinforcing Tesla’s reputation for having an active revolving door of top executives. 
The electric-car maker’s shares dropped as much as 2.8 percent shortly after the open of regular trading Thursday.
“The CFO’s surprise retirement just adds to a wave” of recent departures, said Michael Dean, an analyst with Bloomberg Intelligence.
Original Post

Link here.
  • shares were up almost 4% during the day; some profit-taking after hours, down 1%
  • earnings/revenue
    • quarterly revenue: topped expectations - $7.23 billion vs $7.12 billion
    • EPS: missed - $1.93 vs $2.20
  • debt
    • $1.5 billion in convertible debt that matures this year
    • almost another $1 billion due for repayment in March, 2019
    • says it will be able to meet the March, 2019, payment
  • reports $3.7 billion in cash / cash equivalents at the end of 4Q18
  • says it will be profitable in every quarter in 2019
See graphics from November 22, 2017 to put the numbers above in some context. Compare the earlier EPS losses with those most recently:
  • 4Q16: - 74 cents
  • 1Q17: -$2.04
  • 2Q17: -$2.03
  • 3Q17: -$3.73
  • 4Q17: -$4.03
  • 1Q18: -$4.19
  • 2Q18: -$4.23
  • 3Q18: +$1.86
  • 4Q18: +$1.93
Free cash flow through 2Q18.

Most recent data available for free cash flow.


We should know later the free cash flow as of the end of December, 2018, later this evening.

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. 

Number Of Active Rigs Holding Steady Through The Polar Vortex -- January 30, 2019

The polar vortex has not stopped the roughnecks in the Bakken. The number of active rigs hold steady.

Active rigs:

$54.231/30/201901/30/201801/30/201701/30/201601/30/2015
Active Rigs65573845146

Two new permits:
  • Operator: Lime Rock Resources
  • Field: Heart Butte (Dunn County)
  • Comments: Lime Rock Resources has permits for a two-well Two Shields Butte pad in lot 2, section 7-149-92; 
Five permits canceled:
  • MRO: the five following MRO permits are all in McKenzie County -- Robin USA; St Pierre USA; Black USA; Cavanaugh USA; and Winnie USA
Five permits renewed:
  • Murex (2): a Patricia Ann and a Michael Douglas permit, both in Williams County
  • Slawson (2): two Armada Federal permits, both in Mountrail County
  • Hunt: a Patten permit in Mountrail County 
  • Comments: it's hard to believe but back on Christmas Eve, 2015, I blogged:
    • Murex renewed two permits, Michael Douglas and Patricia Ann, both in Williams County (a little trivia: Patrician Ann ("Tisha") Sterling played opposite Michael Douglas in PBS Playhouse, one episode, 1969).
Twelve producing wells (DUCs) reported as completed:
  • 32897, n/d, CLR, Colter ...
  • 32895, n/d, CLR, Colter ...
  • 32894, n/d, CLR, Colter ...
  • 32893, n/d, CLR, Colter ...
  • 32892, n/d, CLR, Colter ...
  • 34910, 1,546, Abraxas, Rav-Wiley 2H, 
  • 33954, 1,819, Abraxas, Rav-Wiley 1H, 
  • 33953, 1,432, Abraxas, Ravin 14H, 
  • 33952, 2,3365, Abraxas, Ravin 13H,
  • 32531, 1,134, Petro-Hunt, USA 153-95-4A-9-6H, 
  • 32533, 946, Petro-Hunt, USA 153-95-4B-9-4H,
  • 34613, 3,146, WPX, Benson 3HC; follow up on neighboring wells -- 27070, 27068, 27069, and particularly, 18948, and 22629; some are still off-line; one showed no jump in production; one shows a subtle jump; need to check dates; all to be done later;

Gasoline Demand Spikes -- January 30, 2019

Link here.

A graphic is worth a thousand words ...

... but I put a few words on the graphic....


As Far As I Can Tell, The Farmers' Almanac Did Not Predict The 2019 Polar Vortex

Updates

Later, 6:29 p.m. Central Time, today on Facebook:


Later, 4:01 p.m. Central Time: just minutes after posting the note below, I see that the WeatherChannel has re-framed their question. I guess the producer(s) were told that the game inside a stadium with a retractable roof because the new question is: will they retract the room on the dome? Wow, talk about sophomoric.
Original Post 

Before we get started, the dumbest question that WeatherChannel reporters are asking this week?

Before guessing, remember: the WeatherChannel is based out of Atlanta, tends to focus on Atlanta, and the Super Bowl will be played in Atlanta this Sunday.

The question: how will the weather affect the Super Bowl this Sunday?

Well, duh, the polar vortex will have swung through Atlanta well before the weekend. The forecast is for 62 degrees and dry.

Oh, yeah, and one other thing: helllllooooo.... the game is indoors -- but the roof of the dome can be retracted .... but if it's really, really cold, and/or raining, why would they want to do that?

Now back to The Farmers' Almanac

Link here.

The top seven hits when asked if The Farmers' Almanac predicted the 2019 polar vortex:
  • most said it would be a warmer than usual, wet winter
  • the ones that predicted that it would be colder than normal, also said lots of snow (which did not occur with this polar vortex)
  • not one mentioned the polar vortex in its predictions
  • only one even mentioned "polar vortex" but it was in a sidebar and not a prediction


Less than six months before we got hit with the polar vortex, no one predicted it ... as far as I can tell, and yet we know that the earth will be 2.7 degrees warmer one hundred years from now. The science is settled.

Reason #35 Why I Love To Blog -- January 30, 2019

I have edited my original note regarding this subject. My position has not changed, but after receiving correspondence from reader(s), I thought it best to remove the "emotional" component of my original note.


This is the #1 reason why I was disappointed to learn that the Williston school bond issue was defeated.


The faint print in the caption: "The Williston High School Wonderettes dance team, who qualified for the finals in jazz, pom, and hip-hop for the first time ever in statewide competition, will soon be taking their skills to nationals. Let's wish these ladies good luck!"

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G-Technology

Someone asked me about "g-technology.

From wiki:
G-Technology is a brand of external storage products designed and marketed for the Macintosh, creative pro, photography and A/V markets. Its USB, FireWire, eSATA, SAS, SCSI Thunderbolt, and Fibre Channel systems support all levels of audio/video production. It is owned by HGST, a subsidiary of Western Digital.
Macintosh, of course, everyone know: Apple, Inc. Steve Jobs, et al.

But "FireWire"? Yup. Apple, also. From wiki:
IEEE 1394 is an interface standard for a serial bus for high-speed communications and isochronous real-time data transfer. It was developed in the late 1980s and early 1990s by Apple, which called it FireWire.
The 1394 interface is also known by the brands i.LINK (Sony), and Lynx (Texas Instruments).
The copper cable it uses in its most common implementation can be up to 15 ft long.
Power is also carried over this cable, allowing devices with moderate power requirements to operate without a separate power supply.
FireWire is also available in Cat 5 and optical fiber versions. The 1394 interface is comparable to USB, though USB requires a master controller and has greater market share.
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Can You Imagine?

From Genius: The Life and Science of Richard Feynman, James Gleick, c. 1992. 

In 1948, the world's top physicists met in Pocono, Pennsylvania.

At the time, they had built "the bomb" but they did not understand the physics. The mass of the electron was unknown. A quick glance gave a reasonable number but a hard look gave infinity -- nonsense. The very idea of mass was unsettled: mass was not exactly "stuff," but it was not exactly "energy," either.

As the Pocono meeting began, Oppenheimer had reached the peak of his public glory, having risen as hero of the atomic bomb project and not yet having fallen as the antihero of hte 1950s security trials.

He was the meeting's nominal chairman, but more accomplished physicists were scattered about the room:

Niels Bohr, the father of the quantum theory, on hand from his institute in Denmark; Enrico Fermi, creator of the nuclear chain reaction, from his laboratory in Chicago; Paul A. M. Dirac, the British theorist whose famous equation for the electron had helped set the stage for the present crisis.

It went without saying that they were Nobel laureates; apart from Oppenheimer almost everyone in the room either had won or would win this honor. A few Europeans were absent, as was Albert Einstein, settling into his statesmanlike retirement, but with these exceptions the Pocono conclave represented the whole priesthood of modern physics. 

January 30, 2019 -- T+28, Part 2, Day 5 Of Open Border Negotiations

Cold: a note for the granddaughters.

When I was growing up in the northwest corner of North Dakota it was "normal" to expect February to be the coldest month of winter, and generally it never got above zero degrees (32 degrees below zero) for the entire month, day or night. Above zero degrees it was relatively nice.

Once it got below minus ten degrees it really didn't matter how cold it got. It all felt the same. I find it interesting that I really don't remember the cold weather. Sort of like hearing that women don't remember childbirth. (I doubt that's entirely true.)

For the most part, it was very, very cold in February in North Dakota, but it was dry, no precipitation (no snow). Because it was below freezing from the get-go (as they say), from December on, and because it didn't "rain" in the winter in North Dakota, we did not have any problem with "black ice" or any color ice for that matter -- except icicles, which were not a problem but just something interesting to watch.

I remember, vividly, how warm our houses and stores were. I never thought about where that energy came from; we were very, very fortunate that when I was growing up, energy was dispatchable, available, and affordable. It is interesting to look back that we never, never, never had a power outage during the middle of the winter. The utilities, I suppose, MDU and REA, did an incredible job.

Disclaimer: I had a summer job with MDU the summer between my freshman year and sophomore year at college. Wow, I was treated well. Dad got me the job; he had connections. Was it fair that he got me the job through his connections? Probably. I've always felt a little bit guilty about that, but on the other hand, he was paying for my college and he was looking out for himself as much as he was looking out for me. Life is not fair.

Time for some music.

The Class of '57, The Statler Brothers

If there is any song that "defines" my growing up in Williston, that was it.

Where was I? Oh, that's right: cold, utilities, no power outages.

What I enjoyed most watching out the front window during the coldest stretches: the one or two (cedar or Bohemian) waxwings that would flit in among the "evergreen" hedges along the house. How they survived the winter, I will never know. I don't recall throwing out birdseed for them. My hunch is that Mom did not have the extra "pin" money to buy bird feed. I would have been five or six years old. My brother would have been in the playpen that was placed in front of the picture window; it seems we always had a playpen in our living room when I was growing up.

Now, one of my favorite things to do every morning before I take Sophia to school -- put out a couple slices of bread and lots of wild bird seed on the patio outside her window. I put two pair of binoculars on the window sill which she really enjoys. The highlight of the morning is when a pair of cardinals show up.

Wow, what a digression.

Again, for the granddaughters.

List of birds found in North Dakota. At the link, I did not see any reference to "snow birds." Those are the birds that fly to Phoenix every winter.

US Crude Oil Inventories Week-Over-Week Change: Flat -- January 302, 2019

Link here.

Data points:
  • weekly US crude oil inventories: flat -- inventories increased by 0.9 million bbls from previous week
  • weekly US crude oil inventories: 7% above five-year average and the five-year average continues to trend upward
  • WTI: up about 1.75%; trading right at $54
  • imports: interesting -- imports were down by 1.1 million bopd from the previous week; not trivial
  • imports: averaging about 7.7 million bopd, 4.5% less than the same four-week period last year
  • refineries operating at 90.1% capacity -- it will be interesting to hear analysis of this; I don't know why but this is very, very, very low
  • gasoline and distillate production "in line"
  • jet fuel supplied was down about a percent
Gasoline demand spikes: link here.

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South Korea's US Energy Picture

Data points, link here:
  • South Korea: world's fourth-largest oil importer
  • 2018: 
    • US exported almost 60 million bbls to South Korea 
    • US exported almost 5 million tons of LNG to South Korea
    • US has become South Korea's sixth-largest supplier overtaking Iran (sanctions) and Russia
    • US is South Korea's third-largest LNG supplier
    • South Korea is now the US' largest LNG customer 
  • 2019:
    • the numbers will increase
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