Thursday, January 24, 2019

Reason #34 Why I Love To Blog -- January 24, 2019

They must be reading the blog. Last night I posted a note suggesting that we are about to see an increase in Canadian CBR. This morning RBN Energy has a post on increased CBR coming out of the Bakken. Close but no cigar.

But here's the cigar! LOL. Platts/S&P Global headline: Canadian CBR hit a record 330,402 bopd in November, 2018. Wow. This is only the second time ever Canadian CBR has toppped 300,000 bopd since the Canadian government started keeping records on CBR.

Would it be going out on a limb to predict 400,000 bopd by end the end for 2019 for Canadian CBR? Right now at 330,000 bopd. A unit train carries around 85,000 bbls. We're talking one additional unit train every day to get to 400,000 bopd.

NOG: drops about 3% today. WTI holds steady, actually increases a bit on news that US crude oil inventories increased significantly week-over-week.

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 think you may have read here.

Wandering Star, Lee Marvin

Eight Permits -- January 24, 2019

North Dakota: it took awhile but the weather channel is finally airing video footage with the crawler -- "Breaking news: cold in the Dakotas."  Undated photograph from twitter but probably taken last August:

Mexico: completes purchase of 670 fuel trucks as fuel shortages occur across several states. Data points:
  • can move up to 144,000 bbls of refined products
  • total cost: $92 million or about $135,000 / truck
  • it will take a few months to take full delivery
  • Pemex has 1,400 fuel trucks with total capacity of 176,000 bbls
  • Guadalajara, Mexico's second largest city: only 15% of the city's 500 retail states were open
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Back to the Bakken

Active rigs:

$53.161/24/201901/24/201801/24/201701/24/201601/24/2015
Active Rigs64563847157

Eight new permits:
  • Operators: Hess (6); Whiting (2)
  • Field:  Sanish-Antelope (Mountrail); Glass Bluff (McKenzie)
  • Comments: Hess has permits for a 6-well AN-Mogen Trust pad in the Sanish-Antelope, one of the best fields right now, in section 29-153-94; Whiting has permits for a 2-well Martell pad in 36-151-103
Five producing wells (DUCs) reported as completed:
  • 34737, n/d, Whiting, Renbarger Federal 24-33-2H, Banks, t-- ; cum --;
  • 34736, 2,068, Whiting, Renbarger Federl 24-33-1TFH, Banks, t1/19; cum --;
  • 34734, 2,433, Whiting, Renbarger 24-33TFH, Banks, t12/18; cum -- ;
  • 34232, 480, Cresent Point Energy, CPEUSC Lloyd 3-27-34-157N-100W, Marmon, t1/19; cum -- ;
  • 34648, 2,498, WPX, Lead Woman 23-14HQ, Spotted Woman, t12/18; cum 15K 11/18;

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The Cyrkle

At wiki.

Red Rubber Ball, The Cyrkle

Hess To Put Fourteen Wells On A Drilling Unit Outside Of Epping, ND -- January 24, 2019

Hearing dockets, Wednesday, February 20, 2019:
  • Case (not permit) 27291, Hess, Wheelock-Bakken, amend, establish an overlapping 2560-acre unit; 14 wells, Williams; sections 18, 19, 30, and 31 - 156-98;
The graphic:

The wells will likely be sited along the section line between section19 and section 30; half of the wells will probably run north; half will run south. The drilling unit is outside of Epping (seen on the graphic) and just a short drive from Williston to the southwest. The drilling unit is just north of the noteworthy CLR Brooklyn field.

Current, producing wells inside that drilling unit:
  • 19395, 778, Hess, Haug 14-19H, t4/11; cum 219K 11/18;
  • 20391, 824, Hess, GO-Haug-156-98-30-31H-1, t9/11; cum 250K 11/18; 
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Old Rivers, Walter Brennen

My dad and I took a lot of "drives" up to Epping and Wheelock over the years. Along the way, my dad would reminisce about his boyhood days on the farm just south of Newell, SD. He told me how his dad would plow the field behind two horses. Every time I hear this song, I think of my dad and my granddad. If I could live my life over, I would spend more summers with my granddad. Maybe I would have talked my parents into letting me live on that farm for a year or so. I doubt I would have survived.

I remember visiting the farm one summer when I must have been about five years old -- maybe Sophia's age. I wandered into the barn and struck up a conversation with a hired hand who must have been about sixteen years old -- maybe younger, I don't know. When one is five years old, all older kids look about sixteen. We talked for awhile; he was fixing a piece of equipment. His hands were all grimy and oily. He said "his dad kicked the can." I did not know what that meant at the time. I took the phrase literally; wondering why that was important enough to mention.

Since then I've always thought he said that to tell me how fortunate I was to know my granddad. I think about that a lot with Sophia.

"Bananas" If True -- Crudehead -- January 24, 2019

From twitter today/ArgusMedia:
Canadian crude producers roughly doubled government targets for output cuts that began this month, according to US independent refiner Phillips 66.
Producers reduced output by 600,000-650,000 b/d in response to provincial government efforts to address logistical constraints backing up production and forcing deep discounts in Alberta.
Alberta imposed rules seeking a 325,000 b/d, or 9pc, reduction in a program that also pursued railcars to swiftly clear the backlog of especially heavy sour production in the province. 
"Crudehead" tweets:
******************* 
Just Saying
See this note. I think Canadian crude is going to move sooner than later by CBR. US gulf refiners need heavy oil. 

**************************************** 
2018: First Year With No Violent Tornadoes In The US

Link here.
For the first time since modern record-keeping began, the U.S. went a calendar year without any violent tornadoes.
The Storm Prediction Center in Norman, Oklahoma tracks tornadoes in the country, with records dating back to 1950.
The only reason I posted that story was to give me a reason to post this video.

Telstar, The Tornados

A Shout-Out To Iron Ore, LLC.

From the "Bakken operators" post:
Iron Oil: first mentioned on the blog, July 18, 2017
This is purely ... well ... returning a "shout out" to a company for sending me an occasional nice e-mail. Much appreciated.

The company currently has 25 wells/permits in the Bakken or thereabouts; two on confidential list; and one permitted location according to "well search at the NDIC."

A quick look at the NDIC map suggests Iron Ore is active in the area just south of the US Highway 85 curve south of Alexander, SD. Slowly but surely, this will end up being a very active area in the Bakken.

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.

Big Iron, Marty Robbins

What Condition Is My Condition In? -- January 24, 2019

This is quite incredible.

I normally google "bakken oil blog" or "bakken oil blogs" to see where my blog stands.

Including "blog/blogs" certainly skews the results of the search.

In the past I have googled "bakken oil" which is about as general as one can get and the "million dollar way blog" won't show up for pages if it even shows up at all.

Today, on a whim I decided to check again, googling just "bakken oil."

Wow, lookeee here.

First page of hits, #7 on that page. Amazing.


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Right On!


US Crude Oil Inventories Increase By A Whopping 8 Million Bbls -- One Of The Biggest Increases In Recent Memory -- WTI? Flat -- January 24, 2019

US weekly crude oil inventories: link here.
  • US crude oil inventories increased by a whopping 8 million bbls (exactly as predicted late last night)
  • WTI: drops a penny
  • US crude oil inventories now at 445.0 million bbls
  • US crude oil inventories now 9% above the five-year average; and the five-year average has been rising for the past several years -- so going back to historical norms, we are well above the 9%
Does anything else in the report matter?
  • gasoline production increased a bit last week but still under 10 million bpd
  • distillate production decreased a bit last week but still above 5 million bpd
  • oil imports increased slightly -- as would be expected with all that light WTI
  • refineries are operating at 92.9% capacity; on the low side; not operating "flat out"
  • everything else "white noise"
Re-balancing to 400 million bbls in storage:

Week
Date
Change w-o-w
In Storage
Weeks to RB to 350 Million Bbls
Week 0
November 21, 2018
4.9
446.9
N/A
Week 1
November 28, 2018
3.6
450.5
N/A
Week 2
December 6, 2018
-7.3
443.2
N/A
Week 3
December 12, 2018
-1.2
442.0
Never at this rate
Week 4
December 19, 2018
-0.5
441.5
Never at this rate
Week 5
December 28, 2018
0.0
441.4
Never at this rate
Week 6
January 4, 2019
0.0
441.4
Never at this rate
Week 7
January 9, 2019
-1.7
439.7
A long, long time
Week 8
January 16, 2019
-2.7
437.1
Won’t happen in my life time
Week 9
January 24, 2019
8.0
445.0
Won’t happen i my life time







0.3



From oilprice after the report was released:


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Natural Gas Fill Rate / Withdrawal



*************************************
Later: Oilprice Reports WTI Tumbles 
After US Crude Oil Inventories Surge

Venezuela Suspends Its Crown Jewel In The US -- January 24, 2019

There may be a reason the president quickly moved to tweet that he was postponing the SOTU address to Congress.

Funeral arrangements for a Supreme Court justice?

I digress.

From oilprice:
Venezuelan PDVSA’s crown jewel, U.S.-based refiner Citgo, has idled a gasoline production unit at a small refinery in Corpus Christi, Texas.
The sources said the closure had been motivated by economic reasons, since the unit was not making any profit, while Citgo itself said in a regulatory filing it had idled the unit for “non-operational reasons.”
Citgo has been running its refineries at lower than usual rates as a result of lack of spare parts, underinvestment, and low flows of light crude that refineries need to mix with Venezuelan heavy crude to produce fuels and other products.
Citgo has been in the spotlight recently as the only profitable unit of the troubled Venezuelan oil company, which a Canadian miner is seeking to take control of in lieu of financial compensation for the forced nationalization of its operations in Venezuela by the late Hugo Chavez’ government.
Okay, so this was Venezuela's "crown jewel" and it was not making any profit. Am I missing something here?

Wow! Economists Thought Jobless Claims Would Surge To 220,000; In Fact, Plummetted By 13,000 -- January 24, 2019

US weekly jobless claims: lowest level since 1969. But Reuters questions the accuracy -- LOL.
  • previous week: revised lower by 1,000
  • forecast for most recent data: to climb to 220,000
  • actual data: jobless claims dropped 13,000
  • seasonally-adjusted: 199,000 for week ended January 19, 2019
  • seasonally-adjusted: lowest level since mid-November, 1969 (197,000 applications)

From the linked article (really, really good critical analysis in this one paragraph -- LOL)
This suggests last week’s surprise decline in claims probably exaggerates the labor market’s health. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 5,500 to 215,000 last week. [How's that again?]

February, 2019, Hearing Dockets Have Been Posted

NDIC posts the hearing dockets here.

Dockets are tracked here

The usual disclaimer applies. As usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source.

Wednesday, January 20, 2019

27290, Hess, Wheelock-Bakken, amend, establish an overlapping 2560-acre unit; 1 wells, Williams
27291, Hess, Wheelock-Bakken, amend, establish an overlapping 2560-acre unit; 14 wells, Williams; sections 18, 19, 30, and 31 - 156-98;
27292, Whiting, Sanish and/or Parshall-Bakken; amend, establish an overlapping 3840-acre unit, 2 wells; Mountrail
27293, Whiting, Big Bend-Bakken, amend, establish a 2560-acre unit; 2 wells; Mountrail
27294, MRO, Reunion Bay-Bakken; amend, establish an overlapping 3200-acre unit; 2 wells; McKenzie, Mountrail
27295, MRO, Reunion Bay-Bakken, amend, establish an overlapping 2560-acre unit; 1 well; McKenzie, Mountrail
27296, MRO, Reunion Bay-Bakken, amend, i) reduce setback; ii) 8 wells on a 1280-acre unit; Mountrail
27297, Hess, pooling
27298, Hess, pooling
27299, Hess, Capa-Bakken, amend, 10 wells on a 1280-acre unit; Williams County
27300, Oasis pooling
27301, Whiting, commingling,
27302, Whiting, commingling,
27303, BR, commingling,
27304, MRO, Reunion Bay-Bakken, amend, 10 wells on a 1600-acre unit; McKenzie, Mountrail
27305, MRO, Reunion Bay-Bakken, amend, 9 wells on a 1280-acre unit; Mountrail
27306, MRO, Reunion Bay-Bakken, amend, 2 wells on each of two 2560-acre units; Dunn, Mountrail
27307, MRO, Reunion Bay-Bakken, amend, 8 wells on each of two 1280-acre units; Dunn, Mountrail
27308, MRO, Chimney Butte-Bakken, amend, 8 wells on a 1280-acre units; Dunn
27309, MRO, commingling,
27310, MRO, commingling,
27311, Lime Rock Resources, pooling,
27312, Lime Rock Resources, pooling,
Thursday, January 21, 2019

27313, NDIC, confiscaion, Vast Operations, Bottineau
27314, NDIC, confiscation, Vast Operations, Bottineau
27315, NDIC, confiscation, Vast Operations, Bottineau
27316, NDIC, confiscation, Vast Operations, Bottineau
27317, NDIC, confiscation, Vast Operations, Bottineau
27318, NDIC, review permit; treating  plant, Little Knife Disposal, McKenzie
27319, NDIC, review permit; treating plant, White Owl Energy, McKenzie
27320, Equinor, Camp-Bakken, establish an overlapping 2560-acre unit; 1 well; McKenzie
27321, CLR, East Fork-Bakken, establish two overlapping 2560-acre units; 1 well; Williams
27322, WPX, Heart Butte-Bakken, establish two overlapping 2560-acre units; several wells, Dunn
27323, WPX, Mandaree and/or Heart Butte-Bakken, establish an overlapping 2560-acre; or an alternative, 1 well; Dunn
27324, WPX, Squaw Creek and/or Mandaree-Bakken, establish an overlapping 2560-acre unit or an alternative, 1 well; McKenzie
27325, WPX, Squaw Creek and/or Mandaree-Bakken, establish an overlapping 2560-acre, or an alternative, 1 well; McKenzie
27326, RimRock Oil & Gas, Twin Buttes-Bakken, establish an overlapping 1280-acre units, 2 wells;allow the heel and toe of the lateral to be located not less than 200 feet to the exterior boundary of the Twin Buttes Indian Exploratory Unit, Dunn
27327, RimRock Oil & Gas, Heart butte, Twin Buttes, and/or Wolf Bay-Bakken; establish an overlapping 2560-acre unit; same language as #27326, Dunn
27328, CLR, pooling,
27329, CLR, pooling,
27330, CLR, pooling,
27331, CLR, SWD
27332, Slawson, pooling,
27333, Slawson, SWD,
27334, Sinclair, pooling,
27335, RimRock, pooling,
27336, XTO, pooling,
27337, XTO, commingling,
27338, WPX, pooling,
27339, WPX, pooling,
27340, WPX, pooling,
27341, WPX, pooling,
27342, WPX, pooling,
27343, WPX, pooling,
27344, WPX, pooling,
27345, WPX, commingling,
27346, Equinor, commingling,
27347, Equinor, commingling,
27348, Hunt, commingling,
27349, Hunt, commingling,
27350, White Butte Oil, flaring,
27351, White Butte Oil, flaring,
27352, White Butte Oil, flaring,
27353, Ballantyne Oil, rework #22064, temporary injection, North Souris-Spearfish, Bottineau
27354, SWD
27355, SWD

Friday, January 22, 2019

27356, CLR, unitizing the Long Creek-Bakken; Williams, McKenzie
27357, CLR, unitizing the Long Creek-Bakken; Williams, McKenzie

Supplement, Wednesday, February 20, 2019

27359, MRO, Antelope-Sanish and/or Reunion Bay-Bakken, amend, establish an overlapping 1280-acre unit; 2 wells; Mountrail, McKenzie 

Renewable Energy -- Nothing About The Bakken -- January 24, 2019

Link at NOAA



Clearing off the desktop.

1. The best overall blog for issues in general: Powerline. Run by a retired lawyer a few years younger than I am.

2. The best blog on renewable energy: not a lot of people know that.

3. Falmouth, reposting: Remember Falmouth, MA? That was the bellwether city in Massachusetts that led the state into wind energy. I blogged about it often in the early days of the blog. One can find posts about the two wind towers in Falmouth at this link. From The Boston Globe today: "Green energy blues" in Falmouth. The city will tear down the two wind towers that cost $10 million to install. Will cost $2 million to take down. City of 450 people see huge debt for many, many years. Developers said the wind turbines would eventually return $1 to $2 million to the city annually. If unable to get past the paywall, many other links to the story, including this one.

4.  EVs and Rube Goldberg.

5. Why I know the AGW crowd is not serious. More jets than ever to Davos, and they are getting bigger.

6. China coal output hits highest in three years.

7. Flashback, 2017: Hot summer temperatures in California led to periods of high electricity demand, which neared record hourly levels in the late summer. Wholesale prices during peak hours averaged $55/MWh in August, 42% higher than in the same month in 2016. On September 1, day-ahead electricity market prices in the California ISO were higher than $200/MWh for four hours and reached $770/MWh in one hour.
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South Dakota Shark

Prehistoric shark  discovered alongside the most famous Tyrannosaurus -- the fossil, not the living animal, of course. Link here.
Fossilized shark teeth were discovered in what is now modern-day South Dakota and were found in the same deposits as Sue the Tyrannosaurus rex, perhaps the famous T. rex specimen fossil ever unearthed. The freshwater shark had odd triangle-shaped teeth and, due to its resemblance to the spaceships in the 1980s video game "Galaga," it's been dubbed Galagadon nordquistae.
Discovered by a volunteer digger.
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Miscellaneous

1. Dutch Orchestra Walks Out on Muslim guest conductor .
When the most liberal country in Europe pulls the plug on Islam, the world is beginning to see the light.
Queen Beatrix of The Netherlands attended a concert in the capital, Amsterdam. The Guest Conductor, who just happens to be Muslim, proceeded to give the Queen a lecture on the "beauty" of Islam.
The entire orchestra got up and walked out, refusing to be associated with someone lecturing their Queen. The staff of the music hall escorted the conductor off-stage, and after questioning, out of the building.
Now that took courage.
Good for the people of Holland. Watch the walk out. Bet you didn't see this on your local news or the ABC. 
No date is given for this story. The link. Something tells me the orchestra didn't like this guy from the very beginning and knew what was going to happen if they let this nut direct.
2. The Midwest takes their drinking seriously.The link. Red dots represent locations where there are more bars than grocery stores, based on results from the Google Maps API. The Midwest takes their drinking seriously.
3.  From one of the three greatest American science fiction writers, from To Sail Beyond the Sunset, published 1987, link here:
“But there seems to have been an actual decline in rational thinking. The United States had become a place where entertainers and professional athletes were mistaken for people of importance. They were idolized and treated as leaders; their opinions were sought on everything and they took themselves just as seriously — after all, if an athlete is paid a million or more a year, he knows he is important … so his opinions of foreign affairs and domestic policies must be important, too, even though he proves himself to be both ignorant and subliterate every time he opens his mouth. (Most of his fans were just as ignorant and unlettered; the disease was spreading.)”
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Trump And SOTU

Not ready-for-prime-time. It will be interesting to see how Scott Adams spins this one.
Huge mistake by Trump to have canceled the SOTU address.

Huge mistake.

I agree with Trump: no venue outside of the US House of Representatives would have been appropriate.

But he should have simply sent a written transcript of his SOTU address to the House and Senate and moved on. But this will now hang over him. When he finally does deliver the SOTU it will be a spectacle in the House with crazies and signs.

But he really blew. He lost his base and didn't gain anything in exchange.
Scott's spin:


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Next

Trump now needs to do something quickly to change the narrative. Something very, very big. He will probably wait until the two US Senate bills go down to defeat. But he needs to do something very, very big.

Bakken CBR Is Back! -- RBN Energy -- January 24, 2019

Spring is here? The robins have now returned to north Texas. I saw many of them early this morning in the DFW area. 

ISO Australia: heat wave continues. Electricity at $300/MWh now and will spike to $14,500/MWh at peak demand today.

Remember Falmouth, MA? That was the bellwether city in Massachusetts that led the state into wind energy. I blogged about it often in the early days of the blog. One can find posts about the two wind towers in Falmouth at this link. From The Boston Globe today: "Green energy blues" in Falmouth. The city will tear down the two wind towers that cost $10 million to install. Will cost $2 million to take down. City of 450 people see huge debt for many, many years. Developers said the wind turbines would eventually return $1 to $2 million to the city annually. If unable to get past the paywall, many other links to the story, including this one.

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Back to the Bakken

Wells coming off the confidential list today --

Thursday, January 24, 2019
  • 35035, drl, XTO, FBIR Youngbear 31X-9D, Heart Butte, no production data, 
  • 33972, 1,126, Enerplus, Lead 147-93-16B-21H-TF, 33 stages; 6 million lbs; 20/40 sand; Moccasin Creek, a very nice well, a "heavy metal" well,
  • 30051, SI/NC, WPX, Good Voice 34-27HU, Spotted Horn, no production data, 
Active rigs:

$52.551/24/201901/24/201801/24/201701/24/201601/24/2015
Active Rigs63563847157

RBN Energy
: Brent-WTI spread spurs gulf coast crude shipments to PADD 1 refineries.

Earlier this decade, East Coast refineries found it cost-effective to ramp down their crude imports and turn to the price-advantaged U.S. shale oil they could rail in from the pipeline-constrained Bakken or send up by tanker from the crude-saturated Gulf Coast.
Things changed, though.
New southbound crude pipelines out of the Bakken came online, the ban on most crude exports was lifted — providing a new outlet for Texas crude production — and the economic rationale for railing or shipping in domestic crude to PADD 1 refineries withered.
Now, things have changed again.
Most important perhaps, is that the price spread between WTI and Brent has widened, and once more it can make financial sense for these refineries to revert to crude-by-rail out of the Bakken and to shipping in crude on Jones Act tankers from Corpus Christi and other Gulf Coast ports. Today, we discuss these recent trends, what’s driving them, and how long they might last.
The nexus of East Coast refineries’ crude supply, including CBR from North Dakota (PADD 2) to PADD 1 refineries, and shipments of Eagle Ford, Permian and other light, sweet crude from the Gulf Coast to PADD 1, has been a frequent topic in the RBN blogosphere — especially in the early years of the Shale Era.
Bakken production growth in the early 2010s far outpaced the addition of new pipeline capacity, and building rail-loading terminals represented a logical, near-term fix. For one thing, these terminals could be constructed quickly and at relatively modest cost; for another, using the rails gave shippers destination flexibility (allowing oil to be moved to wherever the netbacks were highest). The East Coast turned out to be a logical market — refineries there were set up to process light, sweet crude, the vast majority of which they imported from West Africa and other foreign sources, generally at prices tied to the Brent benchmark. If the delivered cost of price-discounted Bakken crude (including the cost of transportation by rail) was lower than the cost of imported crude — and it was — why not rail in more Bakken crude and back off on the volumes being imported?
Archived. See also this note.