Tuesday, November 26, 2019

Another Huge "Surprise" Crude Oil Build -- API -- November 26, 2019

The least "interesting" data point, at least for me, all week is the API US crude oil inventory estimate.

It's always a "surprise" it seems.

And, today, no "surprise." No surprise that it was another "surprise" build. API estimates US crude oil inventory grew by 3.64 million bbls vs a forecast of a small draw (less than half-a-million bbls).

But it is what it is. We're all waiting for the EIA data which will be released tomorrow morning. WTI held above $58, closing at $58.23/bbl.

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All Politics

One of the more "respected" pollsters has just come out with a new national democrat presidential nomination poll. Link here, Quinnipiac, 11/21 - 11/25.

Most notable: only one contender polls at zero percent. Zero percent. Steyer

Production Data And Completion Data For One Of The Slawson Torpedo Federal Wells -- November 26, 2019

The Slawson Torpedo Federal wells are tracked here. Completion strategies since 2018 are tracked here.

Here is the production data for one  of the twelve wells on this pad. The well:
  •  31275, 3,632, Slawson, Torpedo Federal 7H, 70 stages; 12.95 million lbs; Big Bend, , t12/18; cum 158K 9/19; 
Production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN9-2019131100511104102568043670065
BAKKEN8-2019303671336822342552488520429379
BAKKEN7-2019162196721908722169641445079
BAKKEN6-20193049441493804834531178210134740
BAKKEN5-20192431076312332046718438112583782
BAKKEN4-20190000000
BAKKEN3-20190000000
BAKKEN2-20190000000
BAKKEN1-20190000000
BAKKEN12-20186734067211583282300

Hess With Four New Permits -- November 26, 2019

Active rigs:

$58.4111/26/201911/26/201811/26/201711/26/201611/26/2015
Active Rigs5762533765


Four new permits, #37219 - #37222:
  • Operator: Hess
  • Field: Big Gulch (Dunn County)
  • Comments: 
    • Hess has permits for a 4-well LK-Bice pad in Big Gulch oil field, section 7-147-96; sited in section 7 but will be on the north side, and the 1280-acre drilling unit will be to the north, section 6-147-96; and, section 31-148-96. Currently in that drilling unit are two producing wells:
      • 19093, 1,960, Hess, Bice .... , Big Gulch, t10/10; cum 396K 9/19;
      • 22145, 844, Hess, LK-Bice .... , Big Gulch, t16/12; cum 347K 9/19;
Three permits canceled:
  • Slawson (3): three Gunslinger Federal permits in McKenzie County
Five producing wells (DUCs) reported as completed:
  • 35715, 2,442, WPX, Nancy Dancing Bull 1-36HW, Mandaree, t11/19; cum --;
  • 35909, 2,703, WPX, Beaver 22-21HC, Squaw Creek, t10/19; cum --;
  • 35907, 2,741, WPX, Beaver 22-21HB, Squaw Creek, t10/19; cum --;
  • 35910, 2,619, WPX, Beaver 22-21HW, Squaw Creek, t10/19; cum --;
  • 35908, 2,412,  WPX, Beaver 22-21HX, Squaw Creek, t10/19; cum --;

EOR -- Natural Gas Injection -- NDIC Approves Pilot Study -- November 26, 2019

Link here. Hess is proposing the project to target newer Bakken wells near Ross in Mountrail County. From the link:
  • foam and natural gas
  • in place of CO2 which is already used in some parts of the state
  • if it works, the idea would spread quickly
  • "would immediately end the flaring problem"

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XTO: EOR Pilot Operation -- Injection Wells

Case 28131, (not a permit) from November 21, 2019:
  • XTO
  • Cedar Coulee- Bakken
  • section 33-148-96 and section 4-147-96
  • to use existing wells in these sections as injection wells for an EOR pilot operation 
  • wells: #25332, #25333, #25334, $25335, #16914 (these area all big wells; worth taking another look)
Case 28132, (not a permit) from November 21, 2019:
  • XTO
  • Bear Creek
  • sections 27/34-148-96
  • use existing wells as injection wells for an EOR pilot operation
  • wells: #32502, #32501, #32500, #32499, #32481, #32480, #32479, #32367, #32366, #29673, #29672, #29871 (these are huge wells; worth taking another look)
Area of interest:


Notes From All Over, Part 1 -- November 26, 2019

Air traffic: soaring in North Dakota. The Bismarck Tribune.
Of the eight commercial airports in the state, seven have seen more passengers boarding planes over the previous year. The two largest operations, Fargo's Hector International Airport and the Bismarck Municipal Airport, have experienced greater than 10% growth, according to data from the state's Aeronautics Commission.
Williston experienced the largest annual growth in air travel with 20% more boardings over the past year. The city closed the more than 70-year-old Sloulin Field International Airport on Oct. 10 and opened the new Williston Basin International Airport to handle the greater demand.
Peak demand? What peak demand? Recently pundits have switched from "peak oil" to "peak demand." Whatever. From twitter today: China's Saudi crude oil imports rose 76% in October due to increasing demand. Whatever.

Trade update: last night, on twitter -- "China, US have reached broad consensus on Phase 1 trade deal, including the removal of tariffs but countries disagree on how far tariffs should be rolled back.

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

The market, pre-market, on that news:
  • Dow futures: up 34 points, extending gains from yesterday if the numbers hold
  • Other pre-market news:
    • Jeff Bezos, Bill Gates might slip in "richest-person" rankings; LVMH acquires Tiffany & Co.
    • AAPL up slightly after huge jump yesterday
    • T: had dropped back last week yesterday, up a bit today
    • EW: :huge day yesterday; no trading yet today
    • UNP: ditto
    • ABBV: nice day yesterday; up a bit today
    • OXY: might open above $40 today;

WTI Trending Toward $60 (Maybe); Only One Well Coming Off Confidential List -- November 26, 2019

First things first: how about them Ravens? And el numero ocho. Lamar Jackson.

WeWork: I never understood this story. Two articles brought me up to date:
Cost of renewables: too expensive for emerging markets -- renewable investment falls in emerging markets: mostly due to slowdown in China where recent news suggest China is on a coal-plant binge instead -- solar/wind simply not adequate to meet demand; and too expensive to boot.

Companies moving to Texas: see this post (DFW/Fort Worth/Alliance, TX). Stanley Black & Decker; also, here:
  • bought Craftsman from Sears, 2017
  • goal: "re-shore" Black and Decker; make about 70% of Craftsman tools in the US
  • Fort Worth / AllianceTexas industrial space, new facilities announced:
    • Stanley Black & Decker will open a 1-million-square-foot regional distribution center; 300 new job
    • just announced: a 425,000-square-foot-Craftsman manufacturing plant, also in AllianceTexas industrial park
  • AllianceTexas may have one of the biggest modern distribution centers in the nation:
    • strategically located between the airport and the BNSF intermodal facility
    • AllianceWestport 11: one million square feet with ability to expand to more than two million square feet
    • off the frontage road to State Highway 156
Natural gas emerging as the world's go-to fuel: Rigzone --
Natural gas today provides a rising 30 percent of the energy used in the rich OECD economies. Now, the still developing countries – which constitute 85 percent of the global population – hope to follow the Western model in making a global “dash to gas.” China and India especially have national strategies to lower their overdependence on coal and lift gas’ 8 percent share of energy supply to around 20 percent. 
Since 2000, global gas reserves have expanded over 50 percent to 7,000 Tcf. In turn, total demand since 2010 alone has risen 25 percent to 380 Bcf/d. The rapidly growing LNG trade is encouraging more gas usage, evolving this longtime regional product into a global and fungible commodity like oil. LNG continues to extend its ~15 percent share of the world’s gas consumption by connecting distant suppliers and buyers. LNG investments hit $50 billion in 2019 alone, with hundreds of billions of dollars more on the horizon.
The U.S. shale revolution itself is at the heart of the global “dash to gas.” Over the past decade, U.S. gas production has risen over 60 percent to 93 Bcf/d. Excess supply has helped the U.S. become the third largest LNG supplier in just a few years, now shipping out over 7 Bcf/d. The growth of destination-flexible, hub-priced LNG exports from the U.S. is establishing a more liquid and flexible gas market. Along with advancing systems like FLNG, this is deepening the pool of importing nations, now at 45 versus 25 five years ago.
Seaway crude oil: binding open season
  • expansion would add 200,000 bopd, light crude oil, through pump upgrades (very, very ismilar to DAPL proposal)
  • 50/50 JV: EPD adn ENB   
  • 2011 post on the Seaway Crude Pipeline
    • initially: 800,000 bopd
    • US Midcontinent to Texas Gulf Coast connections
    • originally began as a reversal of pipeline flow from oil supply hub of Cushing, OK, to the Gulf of Mexico
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Back to the Bakken

Active rigs:

$58.1911/26/201911/26/201811/26/201711/26/201611/26/2015
Active Rigs5762533765

Only one well coming off the confidential list today -- Tuesday, November 26, 2019: 89 for the month; 190 for the quarter:
  • 35640, SI/NC, WPX, St. Anthony 9-16HD, 8-pad well; Mandaree, FracFocus: no data; neighboring wells:
    • 17024, petering out, t5/08; cum 207K 9/19;
    • 17943, petering out, t11/09; cum 125K 9/19;
RBN Energy: long-term LNG export contracts lift baseload-level demand for US natural gas.
U.S. LNG export capacity has increased 40% in the last seven months, from 4.3 Bcf/d in April to about 6 Bcf/d now, and feedgas demand at the terminals already exceeds that, with more than 7 Bcf/d flowing to the facilities in recent weeks. With each new liquefaction train coming online, feedgas deliveries to export terminals have steadily climbed, and, for the most part, have sustained at rates that suggest consistently high utilization of the facilities’ capacity, particularly once they begin commercial operations and regardless of international market dynamics.
And, that demand is expected to increase further as more liquefaction capacity comes online in 2020 and beyond. The emergence of this seemingly inelastic demand with a baseload-like pull on domestic gas supplies marks an underlying shift in the U.S. gas market that, along with the rising baseload demand from power generation, will make national benchmark Henry Hub prices more prone to spikes. Today, we explain how ever-increasing LNG exports will reshape the U.S. demand profile and, in turn, Henry price trends.