Friday, February 1, 2019

How Are Those Record IP Wells Doing? -- February 1, 2019

This page will not be updated. Let's see what some of those "record IP" wells have done. These are the "record IP" wells from this post. Cumulative data updated:

February 1, 2019
    • 34428, 7,993, MRO, Klaus 11-28H, runs south, API: 33-025-03422, 9.3 million gallons; 89% water by mass; Bailey, t12/18; cum --; tracked here; (#23980, #17883 -- both off-line)
  • January 11, 2019
    • 31774, 5,058, Bruin, Fort Berthold 151-94-26B-35-15H, 4 sections, 55 stages; 14.4 million lbs, Antelope-Sanish; a staggering well; t7/18; cum 294K 11/18;
  • January 6, 2019
    • 31774, 5,058, Bruin, Fort Berthold 151-94-26B-35-15H, Antelope-Sanish, t7/18; cum 344K 12/18; a staggering well;
  • January 4, 2019
    • 34668, 6,640, MRO, Drake 44-16H, Jim Creek, t11/18; cum 41K over 20 days which extrapolates to 62K over 30 days; #17999; #17374;
    • 34666, 6,012, MRO, Northrop 34-16H, Jim Creek, t11/18; cum 34K over 23 days;
      #17999; #17374;
    • 34892, 5,851, MRO, Gloria 24-16H, Jim Creek, t10/18; cum 57K over 38 days; #17999; #17374;
    • 34667, 5,713, MRO, Veddy 44-16H, Jim Creek, t10/18; cum 90K over 38 days --
  • November 27, 2018
    • 33943, 6,396, MRO, Sibyl USA 44-19TFH, Reunion Day, t9/18; cum 172K 11/18;
    • 33942, 6,516, MRO, McDonald USA 44-19H, Reunion Bay, t10/18; cum 78K 11/18;
    • 33941, 6,943, MRO, Rue USA 44-19TFH, Reunion Bay, 33-061-04120, t10/18; cum 63K 10/18:
    • 33943, 6,396, MRO, Sybyl USA 34-19TFH, Reunion Bay, Three Forks B1, only 45 stages; 6.6 million lbs, 33-061-04122, t918; cum 118K 10/18; years ago Lynn Helms said TF wells would be most likely be better than middle Bakken wells.
  • November 21, 2018: MRO wells in Reunion County; incredible IPs
  • November 20, 2018: 33413, 8,475, MRO, Chauncey USA 31-2H, Antelope, Sanish, t3/18; cum 305K 9/18;
  • November 20, 2018: 33415, 7,572, MRO, June USA 31-2H, Antelope, Sanish, t3/18; cum 317K 9/18;  
  • November 20, 2018: 30541, 4,871, Bruin, Fort Berthold 151-94-26A-35-4H, Antelope, 55 stages; 14.4 million lbs, an incredible well; staggering, t6/18; cum 292K 9/18; see this post;
  • 32973, 9,061, MRO, Joshua USA 13-23TFH-2B, Three Forks B2, 56 stages; 11.4 million lbs, Reunion Bay, t9/18; cum 152K 11/18; 11.6 million gallons of water; 89% by weight; see this post with production profile;
October 16, 2018: 32972, 8,887, MRO, Lamarr USA 13-23TFH, Reunion Bay, fracked 6/25/2018 -- 7/9/18; 10 million gallons water; 88% water by weight 11% sand by weight, t8/18; cum -- ; (19446 - TAT USA 13-23H); see this post;
September 12, 2018: 32971, 8,702, MRO, Whitebody USA 14-23H, Reunion Bay, fracked 7/9/18 - 7/25/18; 10 million gallons water; 88% water by weight12% sand by weight, t8/18; cum -- ; (19446 - TAT USA 13-23H); see this post; t8/18; cum 212K 11/18;
August 9, 2018: a number of MRO wells in Bailey oil field with huge IPs.

August 2, 2018: MRO with an IP of 7,448 -- Reunion Bay; see this post.
August 1, 2018: still on confidential, but for first full month of production, 95,959 bbls of oil; #30541, Bruin, Fort Berthold 151-94-26A-35-4H, Antelope; see this post; t6/18; cum 374K 12/18; a huge well, still going strong;
June 29, 2018: Whiting, #33120 and #33121, with 70K+ and 80K+ in first unconstrained month; t5/18; cum 316K 12/18; and, t5/18; cum 211K 12/18;
May 3, 2018: Marathon, #33493, 8,160, MRO, Mark USA 11-1H, Antelope, Sanish pool, t4/18; cum 290K 11/18; huge, huge well; still doing well;
May 2, 2018: Marathon -- a number of records, it appears
April 18, 2018:
  • 33415, 7,572, MRO, June USA 31-2H, Antelope, Sanish pool, API - 33-053-07958; 9.4 million gallons; 84%, t3/18; cum 347K 11/18; huge, huge well; still going strong;
December 31, 2017:
  • 33398, 3,291, WPX, Hidatsa North 14-23HX, Reunion Bay, huge well; if this is not a typo, could be a new record: 83,607 bbls in the first full month; t9/17; cum 465K 12/18; huge, huge well; still going strong;
December 22, 2017:
  • 32888, 6,278, MRO, Forsman USA 44-22H, Antelope, Sanish, 45 stages; 15 million lbs, t12/17; cum 394K 11/18; huge, huge well; still going strong; 
From the Whiting 1Q15 transcript: The Flatland Federal 11-4TFH well (#27520) produced at an initial rate of 7,800 BOEs per day during a 24-hour test of the Three Forks formation, making this the very best well in the basin. The Flatland Federal 11-4HR (#27521) well produced at an initial rate of 7,100 BOEs per day during a 24-hour test of the Middle Bakken formation.
From a November 11, 2014, post (see also the November 25, 2014, post, same subject); The first well, in the Middle Bakken formation, was completed with 94 stages and was flowing 7,120 BOE/d on October 10, 2014, according to the operator. When the well was completed, it established a world record for number of stages in a single well; t10/14; cum 640K 12/18; just came off-line, 12/18;
Soon after, an offset well in the Upper Three Forks formation was completed with 104 stages. This well was flowing 7,824 BOE/d on October 11, 2014. This was a hybrid completion comprising 97 NCS GripShift cemented casing sleeves, with seven NCS BallShift cemented ball-drop sleeves in the lower section of the well. In both wells, all stages were successfully fractured; t10/14; cum 462K 12/18;
More to follow: in 2Q14 earnings report, WLL: Tarpon Well Completed in 2nd Bench of Three Forks Flowing 6,071 boepd. Not a record in the Bakken -- see Statoil's #23992. But still, this is huge for the second bench; t8/13; cum 400K 12/18;
*Statoil reported an IP of 5,417 on September 26, 2013: #23992, Beaux 18-19 7H, Banks oil field. Based on its IP for natural gas (9,663), this well had an IP of 7,083 boepd; t8/13; cum 400K 12/18; a very strong well; had a huge jump in production 11/17;
Statoil reported an IP of 5,387 on July 19, 2013: #23387, Beaux 18-19 4H, Banks oil field. This might be a new record (this is the IP for crude oil only); t6/13; cum 273K 12/18; petering out; needs to be re-fracked/re-worked;
The initial production of any well, self-reported by the producer, is becoming less meaningful over time. Having said that, it looks like the record IP for a Bakken well is now 5,200a Newfield well (July, 2011): 18691, 5,200, NFX, Wisness Federal 152-96-4-2H, Westberg, Bakken, t7/11; cum 420K 11/18; had a big jump 3/18; doing very well;
Statoil reported on July 10, 2013: 23385, 5,070, Beaux 18-19 6H, Banks, t6/13; cum 300K 12/18, doing okay but steep decline rate; 7 days to drill the lateral; I did not see completion data; 31 swell packers planned; 
Two earlier wells: a Whiting well which had an IP of 4,761 boepd: file #17612, 4,761 boepd IP, Whiting, Maki 11-27H, Mountrail County, Sanish field.  This is still current as of February 20, 2010; t10/09; cum 869K 12/18; still a very good well. Since then, BEXP claims to have set a record with the Sorenson 29-32 1-H, #18654, with a 24-hour flowback of 5,133 bopd. However, the NDIC reported an IP of 4,335. BEXP also reported the Jack Cvancara 19-18 #1H (this site is down) in the Ross project area with a 24-hour flowback of 5,035; for #18654, t4/10; cum 483K 12/18; doing okay;
New record in the Bakken, November 3, 2011The Tarpon Federal 21-4H (#20589) is a Whiting  Petroleum operated well and had a 24-hour initial production (IP) rate of 7,009 barrels of oil equivalent (BOE), setting a new Williston Basin record for a Bakken well; Twin Valley; t10/11; cum 627K 12/18; production petering out; needs to be re-fracked/re-worked;
Whiting said this was a record TFS well at the time, early 2012, file #20526, Smith 34-12TFH, 2,446, 102K in first 4.5 months; Park oil field; t9/11; cum 387K 12/18; comments: steady Eddy;

MRO May Have A Record In The Bakken -- February 1, 2019

It looks like MRO may have a record well in the Bakken:
  • 34428, 7,993, MRO, Klaus 11-28H, runs south, API: 33-025-03422, 9.3 million gallons; 89% water by mass; Bailey, t12/18; cum --;
  • 34429, 3,644, MRO, Otis 11-28TFH, runs south, API; 33-025-03423, 8.6 million gallons; 91% water by mass, Bailey, t12/18; cum --; (#23980, #17883 -- both off-line)
More to follow.

Record IPs are tracked here. MRO has a few wells with a 24-hour IP greater than what's being reported above, but I'm interested in the six-month initial production number.

It's possible there's a typo but something suggests to me this is not a typographical error for the IP being reported for #34428. Time will tell. 

Davis Refinery Permit -- Appeal Dismissed With Prejudice -- February 1, 2019

I knew the most recent ruling was in favor of the refiner. I did not know the appeal "was dismissed with prejudice." From the Bakken oil report:
Meridian Energy Group, Inc., the emerging growth refining firm and leading innovator in advanced technology and environmentally-beneficial full-conversion petroleum processing facilities, announced on January 25, 2019 that a North Dakota District Court has upheld the Permit to Construct (“PTC”) for the Davis Refinery that was issued on June 13th, 2018 as a Synthetic Minor Source. The PTC issued by the North Dakota Department of Health – Air Quality Division was challenged after a thorough 18-month review process one in which involved numerous governmental agencies.

Meridian continues to make big strides, as all of the four appeals have been ruled in favor of the Company.
Four appeals. All upheld in favor of the company.


So, what does "dismissed with prejudice" mean?

From uslegal:
A dismissal with prejudice is dismissal of a case on merits after adjudication.The plaintiff is barred from bringing an action on the same claim. Dismissal with prejudice is a final judgment and the case becomes res judicata on the claims that were or could have been brought in it.
Also from uslegal:
A court has inherent power to dismiss an action with prejudice if it is vexatious, brought in bad faith, or when there has been a failure to prosecute it within a reasonable time. When a plaintiff who has commenced an action fails to comply with discovery devices, a court, which has issued the order of compliance, may sua sponte dismiss the case with prejudice. [sua ponte: his/her own accord; doesn't require prior motion from either party]
What does res judicata mean?

From the "dictionary":
  • a matter that has been adjudicated by a competent court and may not be pursued further by the same parties

Williams County Public School District No. 8 Moving Forward On Missouri Ridge School -- February 1, 2019

From the Williston Wire / Williston Herald:
The Williams County Public School District No. 8 board approved moving forward with a third and final phase at Missouri Ridge School, which opened this fall.
The school was originally approved by the board in March 2017 as a middle school to replace Stony Creek Middle School, an aging facility that sat on leased land.
In January 2018, the board approved a second phase of construction as a step toward accommodating elementary school students at the site as well.
That addition is set to open in fall 2019.
The third phase, approved Monday with a 5-0 vote, will cost about $2.2 million and bring the school's total capacity to 450 students.

Too Many Irons In The Fire? Even A Major Oil Company Can't Do It All -- February 1, 2019

Updates

February 6, 2019: project gets "green light."

Original Post 

COP pulls out of import/export terminal, Golden Pass.  RBN Energy had a blog devoted to the Golden Pass story on October 3, 2018.

From oilprice:
Exxon and Qatar Petroleum will proceed with a US$10-billion expansion of their Golden Pass LNG import terminal in Texas to turn it into an export facility as well.
The third partner in the venture, ConocoPhillips, however, will not be joining them in the expansion and has decided to sell the 12.4-percent interest it holds in Golden Pass, the sources also said, adding that Exxon, which has a 17.4-percent stake in the project, is the most likely buyer. Qatar Petroleum is the majority shareholder in the venture with 70 percent.
If interested, be sure to check out the RBN blog on the Golden Pass.

Jingle Bells -- WTI Trading At $55 -- February 1, 2019; MRO May Have A Record Well In The Bakken

WTI: up almost 3%; up $1.53; trading over $55 now. Put that in your pipe and smoke it.


Active rigs:

$55.322/1/201902/01/201802/01/201702/01/201602/01/2015
Active Rigs64584045146

Two new permits:
  • Operator: MRO
  • Field: Bailey (Dunn County)
  • Comments: MRO has permits for a two-well Herbert/Pletan pad in section 14-145-94. 
    • Pletan bottom hole: swsw 24-145-94; 2560-acre spacing
    • Herbert bottom hole: sese 23-145-94, 2560-acre spacing
    • producing wells in the area: poor to moderate to one very good well
Nine producing wells (DUCs) reported as completed:
  • 32529, 1,201, Petro-Hunt, USA 153-95-4A-9-8H, Charlson, t1/19; cum --;
  • 35495, n/d, CLR, Burian 4-27H1, St Demetrius, t1/19; cum --;
  • 34428, 7,993, MRO, Klaus 11-28H, Bailey, t12/18; cum --;
  • 34429, 3,644, MRO, Otis 11-28TFH, Bailey, t12/18; cum --;
  • 33676, 1,585, Whiting, Bibler Federal 41-5-6H, Stockyard Creek, t6/18; cum 135K 12/18; the P Bibler and Bibler Federal wells are tracked here;
  • 33639, 3,576, MRO, Gretchen USA 11-30H, Antelope-Sanish, t12/18; cum --;
  • 33675, 1,108, Whiting, Flint 41-5-6TFHU, Epping, t6/18; cum 102K 12/18;
  • 33677, 2,107, Whiting,  Flint 41-5-6H,  Epping, t5/18; cum 148K 12/18;
  • 33674, 2,248, Whiting, Flint 41-5-1HU, Epping, t5/18; cum 173K 12/18;
One permit renewed:
MRO, a Storedale permit in Dunn County

February 1, 2019 -- Will It Be A Trifecta? Yes It Is

Earnings: COP and XOM -- blowout earnings. Will CVX follow suit? I don't know but CVX is surging. Up over 3%. Pays 4%. Okay, here we go
  • 4Q18 income: $3.73 billion
  • per share: $1.95 or $2.06 depending on what you are measuring
  • apples-to-apples: EPS beat expectations; analysts looking for $1.87/share
  • revenue: $42.35 billion vs $41.63 billion forecast
  • let's see: 3.73 / 42.35 = 8.8% vs AAPL's 32% to 68% depending on what is being measured over at AAPL; and, so it goes
Super Bowl. The Big Lebowski quotes:
4. Donny was a good bowler, and a good man.
3. The Dude abides. I don't know about you, but I take comfort in that, knowin' he's out there. The Dude. Takin' 'er easy for all us sinners.
2. Quintana .. that creep can roll, man. Yeah, but he's a pervert, Dude.
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Adulting

I used to laugh at "adulting." Actually, even worse, I ignored it; I thought it ... well, ... childish.

Look at adulting over at wiki; spend some time on it.

The reason I bring it up: it's another noun that has been turned into a verb. Americans love to do that -- turn nouns into verbs. Better than the noun-turned-verb "adulting," of course, is parenting, a much better noun-to-verb example.

I had not thought about that until last night about midnight when I was reading A New Literary History of Modern China, edited by David Der-Wei Wang -- dare we wang he is at least part Chinese?

Couldn't resist.

From page 13:
The key concept for this immense display of topics, figures, objects, and events has been the idea of "worlding literary China."

"Worlding" is a term originally coined by Martin Heidegger (1889-1976). [Heidegger has a very checkered past, as they say; see wiki.]

By turning the noun "world" into an active very, Heidegger calls attention to the way in which the world is constructed and exists externally in a constantly shifting state of becoming.

Worlding is a complex and dynamic process of ever-renewing realities, sensations, and perceptions through which one incessantly works to access "the Open of the world." [I assume "Open" is a lot like "Woke."]

Insofar as worlding is always already a flux of unfolding experience, it suggests a world as familiar as it is forever fresh.

Heidegger stresses that worlding is not a task in which we engage volitionally, but emerges automatically in response to specific phenomena, or "things": "If we let the "thing" be present in its "thinging from out of the worlding world," then we are thinking of the thing as thing."
Gertrude Stein could hardly have said it better.

Continuing:
The concept of "worlding" has been adopted by critics in recent years to describe projects ranging from urban planning to comparative literature and medicinal studies. The term is often used, however, merely to refer to global or transnational projects, a far cry from the Heideggerian definition.

In his study of contemporary China, Arif Dirlik describes the end of revolutionary politics and the rie of cultural nationalism since 1978. He places these developments within a global context, ultimately making a case methodologically for "worlding" China: bringing China into the world and the world into China. Lisa Rofel takes up the recently recanonized term tianxia (under heaven) and proposes strategies for cosmopolitan, socialist "worldings."
Comments:
  • "worlding": coming into the world; becoming part of the family of nations around the world; "within and without" -- F. Scott Fitzgerald
  • "worlding": not "globalization"; but it can be; not "nationalism" but nationalism/worlding are not mutually exclusive
  • the evolution of the brain to understand "worlding": incredible; I don't care how much scientists tell me dolphins are smart and monkeys use tools which makes them more human-like, the fact is, it will be quite awhile before dolphins and monkeys talk about "worlding"
  • without wiki I would have thought Heidegger flawless; hardly; his fellow philosophers have given him a pass; a huge pass
  • "worlding" puts a whole new spin on "adulting"; millennials wearing t-shirts with that word probably have no clue, but then I was confused until I stumbled across worlding (or maybe I'm misreading the word "adulting" that one sees on those millennials' t-shirts; in other words, maybe they understand and I don't)
  • Bill Murray probably thinks about "worlding" a lot; he's that kind of guy; LeBron James? probably not so much. Tom Brady? Not even in the same league. LOL.



We're Producing The Wrong Kind Of Oil -- Bloomberg -- February 1, 2019

XOM: profits tops estimates. Nothing but good news for ExxonMobil today. Earlier it was reported that Rystad Energy named ExxonMobil the oil, gas explorer of 2018. Back to its earnings:
  • excluding the impacts of tax reform, revenues from to $6.4 billion from $3.73 billion a year ago
  • production: 4 million bopd
  • the Permian: up 90% over one year ago (considering its production there was minimal, this was not a tough metric to beat)
  • EPS: $1.41 vs $1.08 forecast
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.

Oil: And, yes, we  have a nominee for the 2019 Geico Rock Award: Javier Blas has just noticed that "we" are producing the wrong kind of oil. We've been talking about that for years. That's what the Keystone XL was all about.

Over at Bloomberg:
The shale boom has created a world awash with crude, putting a lid on prices and markedly reducing U.S. dependence on imported energy. But there’s a growing problem: America is producing the wrong kind of oil.
Texas and other shale-rich states are spewing a gusher of high-quality crude -- light-sweet in the industry parlance -- feeding a growing glut that’s bending the global oil industry out of shape.
Refiners who invested billions to turn a profit from processing cheap low-quality crude are paying unheard of premiums to find the heavy-sour grades they need. The mismatch is better news for OPEC producers like Iraq and Saudi Arabia, who don’t produce much light-sweet, but pump plenty of the dirtier stuff.
The crisis is Venezuela, together with OPEC output cuts, will exacerbate the mismatch. The South American producer exports some of the world’s heaviest oil and Trump administration sanctions announced this week will make processing and exporting crude far more difficult. American refiners are scrambling for alternative supplies at very short notice.
I used to be concerned about this. No longer.

Chevron has made the first move.

WTI: By the way, WTI solidly above $54 now. Nice to see.

Market: strong again today.

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.

Christmas Eve stock market low, a generational bottom? Link here.

American Girl and Tupperware: falling by the wayside.


Government Shutdown? What Government Shutdown? -- February 1, 2019

From Yahoo!Finance:
However, the BLS said in a statement, “There were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours and earnings from the establishment survey.”
This is consistent with trends from other significant government shutdowns: Headline unemployment rates during the 16-day shutdown in 2013 and the three-week-long shutdown from the end of 1995 to early 1996 were not impacted by those respective government shutdowns. The most recent shutdown lasted 35 days.
I was unaware that shutdowns had been going on that long -- all the way back to 1995? From wiki:
The United States federal government shutdowns of 1995 and 1995–96 were the result of conflicts between Democratic President Bill Clinton and the Republican Congress over funding for Medicare, education, the environment, and public health in the 1996 federal budget.
Nothing new under the sun, as they say.

Jobs Numbers Suprise; More Jobs Than Expected; No Wage Inflation -- February 1, 2019

Yesterday I mentioned that CNBC completely misread the weekly jobs report. Wow, was I correct on that one! Wow!

 
By the way, these are the four signs I see most often in Texas:
  • no warning shots
  • stop signs (advisory)
  • DQ signs (Dairy Queen)
  • "now hiring all shifts"

From the linked article:
The January jobs report shows the U.S. labor market is still chugging along.
The U.S. economy added 304,000 non-farm payrolls in the first month of 2019, ahead of consensus expectations of 165,000. This compares to a downwardly revised 222,000 in December, from 312,000 in the previous report.
The unemployment rate rose to 4%. December’s unemployment rate was left unchanged from 3.9% previously.
Average hourly earnings rose 0.1% over December and 3.2% over last year. This compares to consensus estimates of a 0.3% increase and 3.2% increase, respectively, for January average hourly earnings. In December, wage growth increased 0.4% month-over-month and 3.3% year-over-year, after revisions. Hourly earnings are closely watched as a key gauge of inflation.
Did you all catch that intro to the third paragraph: no wage inflation. Repeat, in case Steve Liesman fails to mention it: no wage inflation. Okay, maybe some.

Recession? What recession?

Tell me again why we're supposed to be "resisting" or what we are "resisting"?

I tracked "jobs numbers" for several years. I then quit. I "understood" the methodology and the data and I got bored with the numbers. But if interested, one can start here. I provided what I called the "magic numbers" when I posted the "jobs report" the first time, and then updated it when the mainstream media moved the goalposts when Trump was elected president. Before the goalposts were moved, the magic numbers were defined by the mainstream press as:
First time claims, unemployment benefits: 400,000 (> 400,000: economic stagnation)
New jobs: 200,000 (however, now I see that the goal posts have been moved to 120,000) --  
Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters.
The Magic Numbers (change with Trump administration -- see this post)
First time claims, unemployment benefits: 275,000 (> 250,000: economic stagnation)
New jobs: less than 150,000 (less than150,000 new jobs: economic stagnation)
Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters.
Tell me again why we're supposed to be "resisting" or what we are "resisting"?

By clicking on this tag, "jobs," one can see how an "unexpected 304,000 jobs" compares with data points from the past.

COP's 4Q18 Earnings Call -- As It Pertains To The Bakken

For newbies: in the Bakken, the "proxy" for COP is BR. BR is the operator for COP in the Bakken. And, no, BR is not a reference to the cold weather in North Dakota. It is "shorthand" for Burlington Resources. 

Note: when I first started the blog some twelve years ago (the first two years of posts were deleted in a fit of insanity -- but that's another story) -- when I first started the blog some twelve years ago, COP/BR competed for bragging rights as the biggest producer. I haven't seen those rankings in the last year or so, but the top producers in North Dakota fluctuate among: COP/BR; Whiting, CLR. Other operators of note: MRO, WPX, EOG.

Quotes from the transcript:

Q&A, from Paul Cheng:
Just curious that it seems like you still have running room in the Eagle Ford and probably -- I knew it would be less --  than in Bakken -- I presume. Based on what you see today, I don't know whether, you can actually, you are saying that, oh, this is what is planned. Is the plateau one way going to be on those two basins? And once you get there and how fast you can get there, and once you get there, what kind of rig program you need to sustain in and how long that you can sustain at that peak production?
Response, from Ryan Lance:
In fact Bakken had an outstanding year into 2018. We reached some plateau and suggested that to the marketplace and we outperformed in 2018 and we see some similar opportunities there as we go forward. Matt can maybe provide a little bit extra color for you there.
And, from Matt Fox:
We were running six rigs in the Eagle Ford. We actually dropped a rig at the beginning of the year in Eagle Ford to optimize the ratio of our rigs to completion crews.
And we're running three in the Bakken and two in the Permian. But if we run those rigs continuously, we'd ultimately reach a plateau and we'd be able to hold that plateau for well over a decade, maybe two decades. In the Bakken we, as Ryan said, we thought we were at plateau, but we've had some improved results from our drilling and completions there and we had more partner-operated activity. And so, we're now at higher rate than we anticipated and that can probably be sustained close to that rate for a decade and more. And then of course, in the Permian, we're very early in the life cycle there, so that's several years of growth ahead of it before it reaches a plateau.
Regarding reserves, from Matt Fox:
... we're about 50% booked in the Bakken, 20% in the Eagle Ford, less than 15% booked in the Permian and less than 1% booked in the Montney. So there's a long period ahead of us of continuing to add SEC reserves as we work through this resource base.
Back to the "plateau" concern, from Matt Fox:
So I would say Scott, in the Bakken, we were essentially at plateau. That is not our ambition to grow Bakken further. We can sustain level around where we are just now for a long time. We're used to running two or three rigs and we're comfortable with that in the Bakken.
Emphasis moving from IPs to EUR, again Matt Fox:
So Vintage 5 really isn't focused on trying to improve IP.
It's really focused on trying to improve recovery factor. The big increases in commercial production that we've disclosed from Vintage 1 through Vintage 4 is really not what we are targeting here. This is a more fundamental improvement in the EUR across any given dropped volume. So that's what Vintage 5 is about.
That's why it's going to take several months after these wells were brought online to truly understand how the type curve is evolving and how interference with other wells is behaving. And so, it will have a different characteristic of improvement than Vintage 1 through Vintage 4. So far across the rest of our plays, Bakken, Permian and Montney, we're really implementing completion techniques similar to Vintage 4. Just now we're testing Vintage 5 in the Eagle Ford and a similar test in the Permian also. 

Today's Bakken Graphic -- February 1, 2019



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Ahem.... Al..Al? Over Here

From a reader:



USS Algore Commissioning Will Be Delayed -- Reuters, Bloomberg, Multiple Outlets -- February 1, 2019; Frazil Ice? Slurpees.


Re-posting from earlier:
From a reader, from ZeroHedge:
After the Arctic polar vortex brought temperatures in parts of Canada to record lows that, in some places, rivaled the temperatures on the surface of Mars (not to mention leaving nine people dead), the infamous Arctic air has notched another milestone: It has shut down a nuclear reactor due to an extremely rare phenomenon called 'frazil ice'. 
Never heard of frazil ice? Neither had we.
Public Service Enterprise Group, shut a reactor early Thursday at unit at its Salem nuclear plant in southern New Jersey after screens on its intake froze over, restricting the flow of water needed to cool off the reactor, according to spokesman Joe Delmar.
A second unit at a station on the Delaware river was temporarily closed for the same reason.
From a reader regarding frazil ice: in North Dakota we simply call it "slush." But that would be pretty embarrassing if nuclear engineers were flummoxed by "slush." Best to come up with a bit of obfuscation to confuse the regulators. From a reader, regarding "slush" -- or as nuclear engineers call it, frazil ice -- it sinks:
Unlike solid ice, however, frazil ice doesn’t float.
The small crystals give it what experts call “ineffective buoyancy,” meaning that water currents can carry it to the bottom very easily. There, the crystals can quickly increase in number, and will start to adhere to objects in the water, such as intake structures, especially if the objects themselves are at a temperature below the freezing point of water. The buildup can restrict or even fully block water flow. It’s a cold-weather chain reaction.
Rocks don't have effective buoyancy either but I digress. 

Now, on the other hand, the water plant folks in Sheboygan, MI -- these would be your blue collar folks with no advanced degree who solved this problem years ago:  they backflush the lines at night to prevent clogging.

By the way, completely off topic. but I can't resist. Years ago, our younger daughter and I were on a cross country trip -- we lived in Texas and she was going back to South Dakota for college. We were listening to the nocturnal news reports coming out of Minneapolis, MN, about the I-35 bridge across the Mississippi that collapsed, resulting in a number of deaths. It was during active reporting that this statement was made, and I'm paraphrasing: the death toll would have been higher, but authrities released new criteria defining death. I can't make this stuff up.

So, now we have frazil ice.

Remember those articles -- probably apocryphal -- how many words the Eskimos have for snow. I guess that's the same for slush. In North Dakota we must have a half dozen words for slush. Snirt. Frazil ice. Slush. Slurpees. Shaved ice. Sno-Cones. [Sno-cones? check out the video below, fast forward to 5:10 regarding sno-cones. An admonition from the narrator: there is no connection between sno-cones and frazil ice. I don't know. I will have to ask Sophia.]

Frazil Ice, Yosemite
 
Don't you just love the sound of ice breaking up in the spring?
 

February 1, 2019 -- The Market -- The Best Of Times, The Worst Of Times

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.

EPD: nice article over at SeekingAlpha. Some data points:
  • just announced a $2 billion unit buyback program
  • its operating margin and leverage ratio improved materially last year
  • yields 6.3% which is considered very safe by the writer
And then, look at this:
It is possible that the company will once again boosting its payout by a serious amount by 2020 when its turnaround process will largely be completed, or it may prefer to instead allocate more cash flow to unit buybacks.
I continue to opine that the biggest disappointment I had with Apple, Inc, was not returning more of its $500 billion in cash to its shareholders. Yes, I know "everyone" says Apple's cash horde is only $250 billion but one can argue it is/was closer to $500 billion.

Market: I haven't followed the market since the current correction began a few months ago. I won't get back to the market to any great extent until the volatility moderates. I didn't check in at all for several weeks, but I am starting to check in every so often now that the worst seems to be over. Not necessarily the worst for the investor but the worst regarding the headlines. Fine distinction, I know. I continue to actively invest; I just don't pay as much attention to it as I used to, but with the earnings calls coming out regarding GE, AAPL, MSFT, FB, etc., things are starting to get interesting again.

Back to EPD, from the linked article. This is what excites me about the energy sector and investing. We are seeing similar results from many energy companies:
Last year, Enterprise Products grew its revenue by 25% year-over-year to $36.5 billion, while its operating income climbed by 38% to $5.4 billion. Even better, Enterprise Products' operating margin climbed from 13.4% in 2017 to 14.8% in 2018, indicating the firm is steadily becoming a more efficient and ultimately more profitable enterprise.
The firm's net income rose 49% year-over-year to $4.2 billion in 2018. That was more than enough to offset a marginal increase in its outstanding unit count as its earnings per unit climbed up to $1.91 last year, up sharply from $1.30 in 2017. Enterprise Products' average outstanding unit count grew by under 2% to just below 2.2 billion last year.
2019: could be a great year for energy investors. And, of course, perhaps not.

Fed: that's the biggest news. The tea leaves suggest Jay Powell doesn't want to be blamed for the coming recession. Or has that crazy talked ended. Haven't seen many recession headlines lately.

Google: recession January 2019 --
  • Italy falls into recession as eurozone economy struggles; I believe the Italian economy is the 4th largest in the EU; could be wrong; 
    • Italy slips into recession for third time in a decade
  • nine minutes ago: "clear risk of recession for UK manufacturing" -- The [London] Guardian
  • US: no recession signaled by iM's business cycle -- SeekingAlpha -- yesterday
  • recession odds spike to their highest in three years -- CNBC -- consider the source
  • expect a recession -- last hit, first page -- but look at the date -- March 7, 2018 -- one year later, no recession

February 1, 2019, T+30 -- Nothing About The Bakken

Fake news: all that Mueller talk about "illegal" phone calls between the Trumps and the Russians. It turns out to be bogus. Top Trump critic admitted as such on MSNBC. No link. The story might be difficult to find.

Voluminous: by the way, speaking of which, can you imagine how thick the Mueller report will be? In fact, I think that will be the headline story somewhere -- the size of the report -- the Mueller report will be in multiple volumes, perhaps a dozen volumes, each the size of the "old" New York telephone book.

Off the rails: I've quit listening to/watching Scott Adams. He has completely gone off the rails.

Talk radio: this needs to be fact-checked. It took 24 special ops folks to take out Osama bin Laden. It took 27 FBI agents to take out Roger Stone. And, now, you can't compare the numbers of support folks behind both operations. I assume the 27 FBI agents who took out Roger Stone will be submitted for Congressional Gold Medals.


Super bowl: the betting down here in north Texas that the Super Bowl will be won by the team that scores the most points -- assuming the refs don't blow it.

Super bowl: speaking of which. The commissioner raises the possibility of adding an eighth ref on the field after the Rams-Saints fiasco. OMG! That's the last thing anyone wants. Without question, a flag could be thrown after each play: there is so much pushing, tripping, holding, taunting, unsportsmanlike conduct during each play. Adding an eighth ref will simply guarantee more calls, more flags, more penalties, and a much longer game. And the latter is the least of the NFL problems. The owners and the players, especially, don't want more refs. Using this logic, why don't we just put eleven refs on each side of the line, so that each player can be watched? I have a much better solution but that an $2.11 will get you a tall Pike Place at Starbucks.

Politics: speaking of which. Any update regarding Starbucks CEO running for president. Most likely this story will simply fade away.

Adulting. I used to think "adulting" was one big joke, but it turns out there may be more to it. I'll talk about it later, when I get home where I have the book from which I can quote. The book was way to thick to take with me to work this morning.

Comments on the blog: occasionally I "turn off" the comments capability. If I do that, I do it overnight when I cannot monitor the blog. There are periods when I get dozens of spam comments, and I worry about "denial of access" attacks on the blog. It is amazing that by doing that -- simply turning off the comments app for a few hours at night I've almost completely eliminated such spam. This suggests to me the spam is coming from a site(s) that is twelve hours away the central time zone. When it's night here, it's daylight where the spammers are located. Glad to see they've bookmarked the blog; sad to see they're sending bogus comments.

And now the weather report: beautiful. Reporting from north Texas.

Top Story All Day ! -- Ya Gotta Love It -- Beware: Clickbait -- February 1, 2019

Shocked! I'm shocked!


Actually, I'm more shocked by the headline. Again, clickbait.

From oilprice:
Canada’s government negotiated a price to buy the controversial Trans Mountain Pipeline at the higher end of estimates, while further delays in the expansion project would reduce the final price that the federal government can obtain when it re-sells it, Canada’s Parliamentary Budget Officer (PBO) said in a report on Thursday.
The Trans Mountain expansion has become one of the most controversial pipeline projects in North America as it pitted two provinces—Alberta and British Columbia—against each other. Alberta’s heavy oil producers need more pipeline capacity as their production grows, but pipeline capacity has stayed the same. British Columbia, however, is against any new oil pipelines. The fierce opposition in British Columbia has forced Kinder Morgan to reconsider its commitment to expand the Trans Mountain pipeline, and to sell the project to the Canadian government in August 2018.
Canada bought Trans Mountain Pipeline, the Trans Mountain Expansion Project, and related assets for US$3.35 billion, while PBO estimates that the TMP and TMEP have a value of between US$2.74 billion and US$3.5 billion, assuming that the pipeline is built on time and on budget. PBO’s valuation could be understated, if all related assets are included.
Are you kidding! That's the headline. Here is the story condensed to two lines:
  • watchdog: pipeline valued at $2.74 billion to $3.5 billion
  • government paid: $3.35 billion 
Sounds like things came in just about right.

Reason #48 Why I Love To Blog -- February 1, 2019

Talk about serendipity? Is that the best word? Coincidence? Prescient? Whatever.

But this is why I love to blog.

Early in the day yesterday I gave a shout-out to Exxon -- how it seemed to keep to its knitting -- making few missteps despite a really tough environment.

Now this, just a few hours later, from Rigzone: ExxonMobil named top oil, gas explorer of 2018 by Rystad Energy.
The designation was given to the U.S. supermajor based on three performance measurements: the number of exploration wells, net discovered resources and the value creation from wildcat exploration during 2018.
Fueled by substantial investments in Guyana, ExxonMobil tops the list. In 2018, the company drilled 2.7 net wildcat wells in Guyana and discovered almost 2 billion barrels in additional gross resources in the Stabroek block.
Hess Corporation and CNOOC – both partners in ExxonMobil’s Stabroek block – ranked at second and third, respectively, in terms of value creation in 2018. Rystad maintains that they also benefited from Guyana’s success.
Total S.A. came in as the second-best oil major, having created about $2.2 billion in valuation from 2018 exploration.
UK-based Savannah Petroleum held the highest value creation per barrel of oil equivalent in 2018, thanks to its work in Africa. Rystad believes the resources discovered in Niger Block R3/R4 have a net present value of more than $10 per barrel of oil equivalent.


Too Cold For Cooling Water To Cool Nuclear Reactors -- February 1, 2019

From a reader, from ZeroHedge:
After the Arctic polar vortex brought temperatures in parts of Canada to record lows that, in some places, rivaled the temperatures on the surface of Mars (not to mention leaving nine people dead), the infamous Arctic air has notched another milestone: It has shut down a nuclear reactor due to an extremely rare phenomenon called 'frazil ice'. 
Never heard of frazil ice? Neither had we.
Public Service Enterprise Group, shut a reactor early Thursday at unit at its Salem nuclear plant in southern New Jersey after screens on its intake froze over, restricting the flow of water needed to cool off the reactor, according to spokesman Joe Delmar.
A second unit at a station on the Delaware river was temporarily closed for the same reason.
From a reader regarding frazil ice: in North Dakota we simply call it "slush." But that would be pretty embarrassing if nuclear engineers were flummoxed by "slush." Best to come up with a bit of obfuscation to confuse the regulators. From a reader, regarding "slush" -- or as nuclear engineers call it, frazil ice -- it sinks:
Unlike solid ice, however, frazil ice doesn’t float.
The small crystals give it what experts call “ineffective buoyancy,” meaning that water currents can carry it to the bottom very easily. There, the crystals can quickly increase in number, and will start to adhere to objects in the water, such as intake structures, especially if the objects themselves are at a temperature below the freezing point of water. The buildup can restrict or even fully block water flow. It’s a cold-weather chain reaction.
Rocks don't have effective buoyancy either but I digress. 

Now, on the other hand, the water plant folks in Sheboygan, MI -- these would be your blue collar folks with no advanced degree who solved this problem years ago:  they backflush the lines at night to prevent clogging.

By the way, completely off topic. but I can't resist. Years ago, our younger daughter and I were on a cross country trip -- we lived in Texas and she was going back to South Dakota for college. We were listening to the nocturnal news reports coming out of Minneapolis, MN, about the I-35 bridge across the Mississippi that collapsed, resulting in a number of deaths. It was during active reporting that this statement was made, and I'm paraphrasing: the death toll would have been higher, but authrities released new criteria defining death. I can't make this stuff up.

So, now we have frazil ice.

Remember those articles -- probably apocryphal -- how many words the Eskimos have for snow. I guess that's the same for slush. Snirt. Frazil ice. Slush.

Frazil Ice, Yosemite




The Road To New York -- February 1, 2019

I've lost the bubble but it's my understand that New York continues to ban fracking, and is making it difficult to bring natural gas in from Pennsylvania. 

Re-posting from an earlier note, from a reader. We've talked about this one before. I find it simply amazing, considering all the natural gas available in their area. This is from a reader:
New York Regulators to Analyze Downstate Natural Gas Shortages -
The New York Public Service Commission said this week it plans to analyze and report on the changing market conditions that prompted Consolidated Edison Co. (Con Ed) to impose a moratorium on new natural gas customers in Westchester County.
The PSC said it would develop recommendations to ensure utilities across the state are able to meet customer needs in a way that is consistent with Democratic Gov. Andrew Cuomo’s aggressive energy conservation goals.
“Specifically, staff will analyze short-term and long-term market conditions, along with the capacity of natural gas infrastructure and alternatives, and their role in aiding the transition to a clean energy economy,” the commission stated.
Con Ed said this month that it could no longer accept applications for new natural gas service in Westchester County as demand is quickly outpacing pipeline-constrained supply.
The utility warned that the moratorium would remain in effect until sufficient supply is available to meet the region’s needs.The report and recommendations are to be submitted to the PSC and State Energy Planning Board by July 1 for review and assessment of policies, programs and regulations to ensure reliable energy is available for customers and economic growth, while also aiding the state’s renewable energy goals.
Those steps, the commission added, would aid broader efforts to help lower gas demand. Con Ed said it “made every effort” to explore alternatives, including solutions to cut gas use and employ compressed or renewable gas.
However, the utility said those alternatives aren’t enough to meet demand. National Grid has also warned of a similar supply squeeze on Long Island if Transcontinental Gas Pipe Line Co.’s Northeast Supply Enhancement Project is not approved. That project has already had difficulties with state regulators during the application process for a water quality certification, which has slowed it down.
So many stories and observations.

The item that caught my attention was this. Supposedly this is a news article. Why would the writer have to note that the governor is is a Democrat?

The really big question is why there is this sudden demand for natural gas energy in Westchester County? What happened? My hunch is that it has to do with state policy, nothing to do with the utility.

And, then of course, the last sentence in the story:  That project has already had difficulties with state regulators during the application process for a water quality certification, which has slowed it down.

Why does that not surprise me. 

In Michigan, Grid Instablity Expected To Last Through End Of Week -- Polar Vortex -- February 1, 2019

This is a long note, from a reader.

Although it's long, I will post the entire note.

This is in reply to my post regarding Xcel earlier. It wasn't just Minnesota that had energy / grid issues. Add Michigan.

Consumers Energy, DTE ask customers to turn down thermostats -
In the midst of a polar vortex that has brought record-breaking low temperatures to Michigan, Consumers Energy has called for customers to reduce their natural gas usage and DTE Energy is asking customers to reduce electricity usage. Consumers Energy sent an urgent text alert on cellphones shortly after 10:30 p.m. urging utility customers to lower thermostats and reduce energy usage or risk a dangerous gas shortage in the wake of record-breaking cold.
The temperature in metro Detroit hovered at minus 11 degrees at 10:30 p.m., smashing the record for Jan. 30 of minus 4 degrees set in 1951.And the Michigan Public Service Commission has ordered a suspension of all utility shutoffs during the cold spell, according to a news release from the Lansing regulators.  In addition to individual residential customers, General Motors has been requested by Consumers Energy to suspend operations at several manufacturing sites. GM operations are suspended at the following SE Michigan locations:
  • Orion Assembly
  • Pontiac Stamping
  • Flint Assembly, Flint Stamping, Flint Engine and Flint Tool & Die
  • Lansing Delta Township Assembly, Lansing Grand River Assembly, Lansing Regional Stamping, and Lansing Grand River Stamping
  • Warren Transmission and the Warren Tech Center
Appeals flood consumers: Use less gas after utility fire
Consumers Energy said its customers' reduced gas usage is helping it deal with a hobbled gas compressor station in Macomb County. "Consumers Energy greatly appreciates conservation efforts by all natural gas customers across Lower Michigan to assist with a supply issue on the company’s gas distribution network," officials with the energy company said Thursday in a statement.
"Conservation, even by gas customers served by other utilities than Consumers Energy, is making a difference." The news comes hours after the company's top executive called on the company's customers to cut usage after a Wednesday morning fire at its Ray Compressor Station. She also said there would be brief, localized shutoffs if customers ignored the request.
"This truly is an unprecedented crisis,"
Consumers Energy CEO Patti Poppe said Wednesday. "We have never been in this situation before." The governor and the public service commission also urged customers to cut gas usage due to the fire. On Thursday, the company said it was "cautiously optimistic that our public requests to reduce gas use are having a positive effect." Still, it pleaded with customers to continue conservation measures through the end of the day Friday because of Thursday’s historically cold weather.
"Repairs at our Ray Compressor Station are ongoing and the station is partially in service, providing natural gas to our distribution system," officials said. "However, we are asking that all customers continue to conserve until the end of the day Friday, Feb. 1, to allow for temperatures to moderate and additional repairs to the Ray Station."
GM halts operations at 11 Michigan plants after utility's urgent appeal
(Reuters) - General Motors Co said late on Wednesday it will temporarily suspend operations at 11 Michigan plants and its Warren Tech Center after a utility made an emergency appeal to users to conserve natural gas during extreme winter cold.
Fiat Chrysler Automobiles NV also said it had canceled a shift on Thursday at both its Warren Truck and Sterling Heights Assembly plants and was considering whether it would need to cancel additional shifts. GM said it had been asked by Consumers Energy, a unit of CMS Energy Corp, to suspend operations to allow the utility to manage supply issues after extreme cold temperatures and a fire at a compressor station. It said workers were told not to report for the shifts at its Orion Assembly, Flint Assembly, Lansing Delta Township Assembly and Lansing Grand River Assembly plants, as well as other stamping and transmission plants on Wednesday evening and early Thursday.
GM said it was still assessing when employees could return to work. Workers at its Warren Tech Center were also told to stay home on Thursday. In a video message posted on Facebook, CMS Energy Chief Executive Patricia Poppe said large companies, including Fiat Chrysler, Ford Motor Co and GM, had agreed to “interrupt” production schedules through Friday to tackle the issue prompted by a fire at a Michigan facility and the record-breaking cold. Poppe said the usage cuts by large businesses were not enough, and urged 1.8 million Michigan customers to turn down thermostats as much as they could to cut natural gas use in order to protect critical facilities like hospitals and nursing homes. “I need you to take action right now,” she said.
Ford Motor said it had also taken steps to reduce energy use at its four Michigan plants supplied by Consumers Energy, but added the situation remained fluid. A spokeswoman said it had reduced heating levels at Livonia Transmission and Van Dyke Transmission, stopped heat treatment processes at Sterling Axle and shut down the paint process at Michigan Assembly.
New York Regulators to Analyze Downstate Natural Gas Shortages -
The New York Public Service Commission (PSC) said this week it plans to analyze and report on the changing market conditions that prompted Consolidated Edison Co. (Con Ed) to impose a moratorium on new natural gas customers in Westchester County.
The PSC said it would develop recommendations to ensure utilities across the state are able to meet customer needs in a way that is consistent with Democratic Gov. Andrew Cuomo’s aggressive energy conservation goals.“Specifically, staff will analyze short-term and long-term market conditions, along with the capacity of natural gas infrastructure and alternatives, and their role in aiding the transition to a clean energy economy,” the commission stated.
Con Ed said this month that it could no longer accept applications for new natural gas service in Westchester County as demand is quickly outpacing pipeline-constrained supply. The utility warned that the moratorium would remain in effect until sufficient supply is available to meet the region’s needs.The report and recommendations are to be submitted to the PSC and State Energy Planning Board by July 1 for review and assessment of policies, programs and regulations to ensure reliable energy is available for customers and economic growth, while also aiding the state’s renewable energy goals. Those steps, the commission added, would aid broader efforts to help lower gas demand. Con Ed said it “made every effort” to explore alternatives, including solutions to cut gas use and employ compressed or renewable gas.
However, the utility said those alternatives aren’t enough to meet demand.
National Grid has also warned of a similar supply squeeze on Long Island if Transcontinental Gas Pipe Line Co.’s Northeast Supply Enhancement Project is not approved. That project has already had difficulties with state regulators during the application process for a water quality certification, which has slowed it down.

Two Wells Come Off Confidential List Today -- February 1, 2019

Wells coming off confidential list today -- Friday, February 1, 2019: 2 wells for the month; 104 wells for the quarter
  • 35102, 135, Resonance Exploration, Resonance Lodoen 4-6H North, Sergis, target: the Madison, t9/18; cum 2K 12/18;
  • 34458, drl, Hess, CA-E Burdick-155-95-2017H-6, Capa, no production data,
Active rigs:

$53.802/1/201902/01/201802/01/201702/01/201602/01/2015
Active Rigs65584045146

RBN Energy: part 2, pipe expansions, reversals remaking the St James crude hub.
Imagine a crude oil hub with all this: a central location near the Gulf Coast; pipeline, waterborne and rail access to a wide range of imported and domestic crude; tens of millions of barrels of storage capacity; direct connections by pipe to nearly a dozen major refineries; and the ability to load “neat” or blended barrels of oil onto Aframax-class vessels for export. You’ve conjured up the hub in Louisiana’s St. James Parish, which is fast-becoming an even more significant market player, with even broader access to U.S. and Canadian crude supplies and, very likely, direct outbound links to one or more export terminals capable of fully loading VLCCs.
Today, we continue our series on St. James with a look at its storage assets and at the pipes that flow into and out of the hub.