Wednesday, June 5, 2019

10-Year Bond Rates -- Millennials May See History Being Made In The US Bond Market -- June 5, 2019

Folks are talking about 1.75% on the 10-year bond yield by the end of the year. If so, it would be historic:


It's not that we've never seen 1.75% before, but once we hit 1.75% this time, we will stay there (or go lower) for quite some time. 

Europe has a bigger problem: addicted to negative rates. See link here to The WSJ.
For five years, European nations have been trying to jump-start their ailing economies with what was supposed to be a radical, short-term remedy—negative interest rates.

Instead, central banks haven’t been able to wean their economies off them. Increasingly, they appear to be a permanent feature of the landscape. No major bank that introduced negative rates during Europe’s debt crisis has turned main policy rates positive again.

“Overall, we are on a painkiller,” said Tamaz Georgadze, chief executive of Raisin GmbH in Berlin, which provides a platform for consumers and businesses to deposit through 77 banks in 25 countries, “and it’s very hard to get off it.”

Negative rates reverse normal lending costs. Commercial banks must pay to keep their money in central banks, rather than collecting interest on it. That means they should have an incentive to lend their money at low cost to other banks, businesses and consumers while charging some customers to deposit cash. In theory, that encourages people to borrow more, spend more and save less—stimulating the economy until negative rates aren’t needed.
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The Foodie Page

First beer can chicken of the summer.


I am absolutely convinced it's impossible to "screw up" beer can chicken. Wow, first beer can chicken of the summer turned out absolutely perfect. Sixty minutes on the grill. Perhaps, 55 minutes, maybe 50 minutes would have been slightly -- imperceptibly -- better.

The rub I used tonight: Weber Original Dry Rub: $8.99 on line; $4.99 at the local grocery store. I used to make my own rubs, but not worth the time, effort, and expense. So many from which to choose.

Recipe:
  • pat dry the chicken
  • liberal brushing with vegetable oil
  • liberal rub
  • truss: wrap twine around the legs, then around the body of the chicken, and end with the wings
  • place chicken cavity over 3/4 - 1/2 full beer can -- 12-oz or 16-oz (I used 16-oz tonight simply because it was the least expensive option at store)
  • set up grill as above
  • 60 minutes (Weber grill covered of course)

This Is Another One: I Cannot Make This Stuff Up! The Bakken Never Ceases To Amaze Me? How About 140,000 Bbls Crude Oil In One Month? Or Almost 200,000 BOE In Initial Production? -- Slawson, #31278

I"m just going to post the scout report now and then come back to this one later. When I get something this amazing, it generally takes everything out of me and I have to take a break.

In addition, I will be picking up Sophia from TutorTime in a few minutes.

The well:
  • 31278, 4,862, Slawson, Torpedo Federal 10H, Big Bend, t12/18; cum 178K in 41 days; TD: 25,490 feet;
    • cum oil: 177,855 bbls
    • cum MCF: 114,069 = 19,008 boe
    • total boe over first 41 days:  196,863 boe
The scout report:
NDIC File No: 31278     API No: 33-061-03696-00-00     CTB No: 231270
Well Type: OG     Well Status: A     Status Date: 3/15/2019     Wellbore type: Horizontal
Location: SESE 30-152-91     Footages: 635 FSL 498 FEL     Latitude: 47.950592     Longitude: -102.366822
Current Operator: SLAWSON EXPLORATION COMPANY, INC.
Current Well Name: TORPEDO FEDERAL 10H
Elevation(s): 1909 KB   1890 GR   1913 GL     Total Depth: 25490     Field: BIG BEND
Spud Date(s):  1/22/2018
Casing String(s):  9.625" 1877'   7" 10191'  
Completion Data
   Pool: BAKKEN     Perfs: 10205-25276     Comp: 12/21/2018     Status: F     Date: 12/27/2018     Spacing: ICO
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 177855     Cum MCF Gas: 114069     Cum Water: 127091
Production Test Data
   IP Test Date: 12/27/2018     Pool: BAKKEN     IP Oil: 4862     IP MCF: 1998     IP Water: 3561
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-2019291390681352729353597897794023959
BAKKEN3-2019415385156267510650604747
BAKKEN2-20190000000
BAKKEN1-20190000000
BAKKEN12-20188234022167226046966607115

Look at the completion strategy / frack:


Altogether:
  • 87 stages
  • 13.4 million lbs of proppant
  • 14.6 million gallons of water; 89.6% water (FracFocus)
Production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-2019291390681352729353597897794023959
BAKKEN3-2019415385156267510650604747
BAKKEN2-20190000000
BAKKEN1-20190000000
BAKKEN12-20188234022167226046966607115

************************* 

I verified with Slawson Exploration Company, Inc, that this is not a typo. It is an accurate number.

The second question: to the best of their knowledge is this the highest production number for any month in a Bakken well? To the best of their knowledge it is. Note:
  • it was not quite a full 31-day month; if so, it would have been higher
  • the company did note that had they not had those four days in March, the full month of April would have been even greater
  • the previous record was probably a Marathon well in Reunion Bay that had around 133,000 bbls in one month
I suppose, if one wanted, one could extrapolate the 139,068 over 29 days to 148,659 bbls over 31 days but one might say that this is gilding the lily and "it is what it is."

I suggested that "nothing special" was done (completion strategy/frack operation), and Slawson agreed: they may have let the well "rip" to see what it could do but nothing "special" was done in terms of a completion strategy. Don't take that out of context. I was asking in a general sense and not asking for specifics.

Anyway, there's a lot more to write about this well, but I do have to take a break to think about this.

From the geologist's report:
  • drilled during the coldest part of the year in ND: drilled out of surface casing on February 1, 2018
  • the lateral targeted the middle Bakken, ranging from 16' below the upper Bakken shale down to approximately 28' below the upper Bakken shale (about 12' thick)
  • gas levels ranged between 50 - 1,000 units; peaks in excess of 6,000 units while in the target zone
  • approximately 88% of the lateral was drilled within the target zone with minimal exposure out of target zone 
Congratulations to Slawson, and all the folks involved. This is really quite amazing. I would imagine there are some very, very happy "mom and pop" mineral owners.

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The MRO Well

The previous monthly record?
  • 32975, 9,166, MRO, Jerome USA 12-23TFH, Reunion Bay, t9/18; cum 372K 4/19; TD: 23,722 feet;
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-201930347673491532321761062564947196
BAKKEN3-201931520815287246748857241677162683
BAKKEN2-201922387593740135904565892194431313
BAKKEN1-20191289591136132
BAKKEN12-201829374303704840410592611545139814
BAKKEN11-201828562995657755748999043229463510
BAKKEN10-20183113371113306912444120157335899156881
BAKKEN9-2018519416192291761920980019699

Note: looking at the NDIC map, the Slawson well, under the lake, looks like the horizontal was a full three-section lateral, or a "3-mile well." The MRO wells looks like the horizontal, also under the lake, was 2.5 sections or a "2.5-mile well."

Random Update Of A Hess AN-Bohmback Well -- June 5, 2019

This well is still SI/NC (a DUC):
  • 35095, SI/NC, Hess, AN-Bohmbach-153-94-2734H-6, Antelope-Sanish, t--: cum 26K after 14 days; the well was fracked 2/3/2019 - 3/5/2019 (no typo); 8.1 million gallons of water; 84% water;
NDIC File No: 35095     API No: 33-053-08607-00-00     CTB No: 135095
Well Type: OG     Well Status: NC     Status Date: 11/7/2018     Wellbore type: Horizontal
Location: SESW 22-153-94     Footages: 295 FSL 1773 FWL     Latitude: 48.053301     Longitude: -102.755549
Current Operator: HESS BAKKEN INVESTMENTS II, LLC
Current Well Name: AN-BOHMBACH- 153-94-2734H-6
Elevation(s): 2156 GL     Total Depth:       Field: ANTELOPE
Spud Date(s):  9/7/2018
Completion Data
   Pool: SANISH     Status: SI     Date: 11/7/2018
Cumulative Production Data
   Pool: SANISH     Cum Oil: 25890     Cum MCF Gas: 41070     Cum Water: 10563
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH4-20191425890256571056341070720433866

****************** 

From the file / geologist's report:
  • spud: October 28, 2018
  • cease drilling: November 7, 2018
  • lateral gas levels averaged 279 units
  • max gas units in the lateral: 2,694 units
  • wellbore tracked throughout the middle Bakken for 100% of the lateral
This is a sister well to this well: #35093. See this post

WTI Drops Below $52; Eight New Permits -- June 5, 2019

Active rigs:

$51.636/5/201906/05/201806/05/201706/05/201606/05/2015
Active Rigs6461502582

Eight new permits:
  • Operators: Oasis (7); WPX
  • Fields: Banks (McKenzie), Mandaree (Dunn)
  • Comments:
    • Oasis has permits for a 7-well Thelen pad in lot 4/section 6-152-97, Banks oil field;
    • WPX has permits for a single Blue Racer well in section 14-149-94, Mandaree oil field;
permits canceled: pending
permits renewed: pending
producing wells (DUCs) reported as completed:

Update On Another MRO Well In Bailey Oil Field After Neighboring Well Fracked -- June 5, 2019

This well recently fracked, at 47K over 22 days, this well extrapolates to 63,777 bbls/30days:
  • 34044, 4,519, MRO, Rafter X 44-35H, Bailey, t4/19; cum 48K 4/19;
Production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-20192246770464356253230494027315
BAKKEN3-20193112680723818600785

The neighboring well after the frack is now back on line.

The well:
  • 17501, 464, MRO, Connie Connolly 21-26H, Bailey, t5/09; cum 235K 4/19; 6,208 bbls over 10 days extrapolates to 18,624 bbls/30 days:
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-2019106208610744013577705332
BAKKEN3-20190000000
BAKKEN2-20190000000
BAKKEN1-20190000000
BAKKEN12-20180000000
BAKKEN11-20180000000
BAKKEN10-2018259589472308910684
BAKKEN9-2018301194117823211060852
BAKKEN8-2018311266120124211660901
BAKKEN7-2018311217128926111840922

Random Update Of WPX Well In Spotted Horn After Neighboring Well Fracked -- June, 5, 109

This well showed significant increase in production after a neighboring wells was fracked:
  • 29445, 2,441, WPX, Emma Owner 23-14HB, Spotted Horn, t3/16; cum 495K 4/19; see production profile below;
The neighboring well that was fracked:
  • 34648, 2,498, WPX, Lead Woman 23-14HQ, Spotted Horn,  t12/18; cum 168K 4/19;
Production data of relevance:
  • 29445:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-2019301284812942103081737114603926
BAKKEN3-20193114060139951180519009145712452
BAKKEN2-20192811256113211126515219117221862
BAKKEN1-20192391329036108811234738157125
BAKKEN12-20183118159181872944524550658615551
BAKKEN11-2018417981727224524311206726
BAKKEN10-201817304530892000411618861513
BAKKEN9-20181320092039116327171562604
BAKKEN8-201831500049392380676039841789
BAKKEN7-201831539354412053729245051738

  • The Lead Woman well, #34648, had 50K+ production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-2019181703216974928620150168031201
BAKKEN3-201931242192418817978286511085114667
BAKKEN2-2019282772027746214463279428628710
BAKKEN1-20193128389283712840037379338010
BAKKEN12-201831555395567843018657032500634212
BAKKEN11-20182615404150482450618223570110874

Random Update On A Recently Fracked / Completed EOG Clarks Creek Well -- June 5, 2019

The well:
  • 32797, 2,172, EOG, Clarks Creek 72-0706H, Clarks Creek; t7/18; cum 254K 4/19;
Production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-20193069546945869339059360661044
BAKKEN3-20193174587442923640376366481220
BAKKEN2-20192882978319973345632423351052
BAKKEN1-2019311214712248128695932656218758
BAKKEN12-2018311577915766148196743164329674
BAKKEN11-201830225062251018676729485217518645
BAKKEN10-2018312691226850230258443482389372
BAKKEN9-201830410764166031383102628987442074
BAKKEN8-2018285787557802481951081029664610249
BAKKEN7-201826553105457048887843466455519700

Neighboring well:
  • 20887, 1,455, EOG, Clarks Creek 13-1806H, Clarks Creek, t3/12; cum 386K 4/19;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-2019307235725949821896017743509
BAKKEN3-2019318632859555052189520438675
BAKKEN2-2019288511848647152174920578507
BAKKEN1-20193199421000081632173120832278
BAKKEN12-2018311108111023108002287622051228
BAKKEN11-20183011868118501177224056173106136
BAKKEN10-201831127211266513299188071843182
BAKKEN9-2018301417014228179832119320451424
BAKKEN8-201818935492251549512965115711215
BAKKEN7-20180000000
BAKKEN6-201800140000
BAKKEN5-2018159669871043201219042
BAKKEN4-2018302605261326246308605216
BAKKEN3-201831271427493805693966838
BAKKEN2-201828256525489726247601310
BAKKEN1-201831287428737767172689133
BAKKEN12-201731335633605439040874748
BAKKEN11-201730419341566838863857251
BAKKEN10-20173127022724246072106642320

Random Update On A 50K+ MRO Bears Arm USA Reunion Bay Well -- June 5, 2019

The well:
  • 33664, 4,844, MRO, Bears Arm USA 41-2H, Reunion Bay, t2/19; cum 157K 4/19; 
Production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-20193043268433842884547966414133543
BAKKEN3-20192651463514003003759982492327203
BAKKEN2-20192861223612615695149943934636426
BAKKEN1-2019211787302155117101093

Neighboring wells remain off line:
  • 23029, 2,009, MRO, William USA 31-2TFH, Reunion Bay, t7/13; cum 294K 1/19;
  • 21466, 2,448, MRO, William USA 31-2H, Reunion Bay, t713; cum 461K 12/18; 

Random Look At Recently Fracked Hess EN-Thompson Well In Alkali Creek -- June 5, 2019

Recently a Hess EN-Thompson well was fracked/completed.

The well:
  • 33015, 3,581, Hess, EN-Thompson Trust-154-94-1930H-8, Alkali Creek, t12/18; cum 124K 4/19; 
Let's look at a neighboring well:
  • 21288, 1,903, Hess, EN-Thompson Trust-154-94-1930H-1, Alkali Creek, t4/12; cum 394K 4/19, recent production -- 
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN4-20191315191530208322411942047
BAKKEN3-20193138313863498061643055549
BAKKEN2-2019287502748279671267129429450
BAKKEN1-201931896289441072513729280210617
BAKKEN12-2018311751828101916201490100
BAKKEN11-20180000000
BAKKEN10-20185228214605184710
BAKKEN9-20183018461873439889739804617
BAKKEN8-20183118421844370446141465

NYC Denies Natural Gas Pipeline -- Update -- June 5, 2019

This is getting quite interesting. The story is in multiple outlets, dated June 4, 2019, yesterday.

First the backstory. The multiple New York City, New York state, and New Jersey pipeline stories are being tracked here.

So, this appears to be the third story: I think it's the same pipeline but now a different state (New Jersey) and different regulators involved.

Link to WHYY here. Data points for the June 4, 2019, story:
  • Northeast Supply Enhancement pipeline
  • $1 billion pipeline project
  • Williams Company, $926 million
  • New Jersey regulators to decide today (Wednesday, June 5, 2019) on several permits for this pipeline
This is "boiler plate" from previous stories:
Williams and its customer, the National Grid utility, say the pipeline is needed in order to get the gas to customers. The utility says without the project, it may have to declare a moratorium on gas customer hookups. It is still taking applications from potential new customers but will not process them until after the project is approved, spokeswoman Wendy Ladd said.
“The existing pipeline system currently operates at maximum capacity and is unable to accommodate demand growth driven by fuel oil to natural gas conversions, as well as new development,” Williams spokesman Chris Stockton said.
But this is what is very, very interesting:
Some objectors see an ulterior motive in the pipeline project: laying the groundwork for an offshore liquefied natural gas terminal that has repeatedly been rejected in the region on safety and environmental grounds, among others. Such a facility would allow natural gas to be loaded onto ships at sea and exported to other countries.

“This is a Trojan horse,” said Cindy Zipf, executive director of Clean Ocean Action, a New Jersey coastal environmental group. “The real money here is to have an LNG terminal to send that gas to Europe. The billions of dollars that would be possible by building an export facility would just be too enticing.”

Other environmental and fishing groups voiced similar suspicions about a liquefied natural gas terminal eventually being added to the project. Williams says it has no such plans, emphasizing that regulators are evaluating the plan solely for its stated purpose of bringing gas to New York and Long Island.

“There is zero evidence to support the false narrative that this proposal is somehow tied to natural gas exports,” Stockton said. “This pipe will be installed and operated safely, just like the other more than 230 miles of existing pipe and cable that currently safely operate in Raritan Bay.”
The biggest need for this new pipeline is due to folks switching from high-cost fuel oil to natural gas. So, faux environmentalists prefer higher-CO2-emitting fuel oil in lieu of natural gas. And natural gas exports would help wean foreign countries off coal.

Light Truck Sales -- Highest In Almost 15 Years -- Making America Great -- June 5, 2019

Light truck sales: in the US, highest since July, 2005. Link here. Stand-alone post later. Data points:
  • light truck sales: 9.92 million units in May, seasonally adjusted
  • highest rate since July, 2005 
  • April, 2019: 9.20 million units
  • May, 2018, 8.99 million units
  • major US producers Ford and GM are focusing on producing light trucks, to include SUVs and EVs, as they move away from less profitable sedans
  • GM: 80% of 1Q19 sales -- trucks and crossover vehicles
  • but look at this: light trucks including SUVs rose to 12.53 million units 

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The Book Page

Books for this next week:
  • The New York Times Book of Physics and Astronomy: More Than 100 Years of Covering The Expanding Universe, edited by Cornelia Dean, c. 2013
  • Classic Feynman: All The Adventures of a Curious Character, Richard P. Feynman, edited by Ralph Leighton, c. 2006
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The Magazine Page

Last week I mentioned that The New Yorker  seemed to be "getting better," with less evidence of suffering from Trump Derangement Syndrome. I spoke too soon. I'm glad I have not re-subscribed. The cover cartoon is of Trump -- and not in a pleasant or flattering way, and an inside joke that few will "get" this week and no one will "get" five years from now. The main article this week: on Beto. You have got to be kidding. Of all the things and all the people to review, they chose Beto?

For the record, Beto's polling less than 4%. We will check in two weeks from today and see how The New Yorker article helped him.