Wednesday, March 25, 2020

Sinclair With Three New Permits -- March 25, 2020

DAPL in limbo: federal judge orders full environmental impact study / review of the Dakota Access Pipeline; significant win for the Standing Rock Reservation say some; unclear whether DAPL can continue to operate during the review. Well, this is one way to cap production in the Bakken. CBR still on track (pun intended).

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Daily Activity Report

Active rigs:

$24.493/25/202003/25/201903/25/201803/25/201703/25/2016
Active Rigs5068604932

Three new permits, #37471 - #37473, inclusive --
  • Operator: Sinclair
  • Field: Lone Butte (McKenzie) (see below)
  • Comments: 
    • Sinclair has permits for a 3-well Saetz Federal pad in NWSE 36-147-98, Lone Butte oil field
One producing well (a DUC) reported as completed:
  • 35438, SI/A, Hess, GO-Elvin Garfield-156-97-1918H-6, Dollar Joe, t--; cum 49K over 49 days; fracked 11/12/19 - 11/20/19; 7.5 million gallons of water; 87.83% water by mass; 0.08462 friction reducer; one of five wells on a 5-well pad; the parent well about a half-mile to the west:
    • 21931, 427, Hess, GO-Elvin Garfield-156-97-1918H-1, Dollar Joe, t6/12; cum 146K 1/20; was off line 2.5 months; production went from 600 bbls/month to 1,500 bbls/month;
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Lone Butte Oil Field

Sinclair has two other producing wells sited in this section, including one targeting the Duperow formation, the other targeting the Bakken. Neither well is particularly remarkable.

Lone Butte oil field is composed of 46 sections, roughly rectangular, straddling the McKenzie-Dunn county border in southeast McKenzie County. It it notably inactive. 

Gasoline Demand -- March 25, 2020


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Closing The Loop

The pulled pork recipe is outstanding. I made some comments regarding the recipe after making it. It turns out, that after a day of being refrigerated (and then being re-heated, of course) it is outstanding. I would not change the recipe at all. 

Highly, highly recommend toasting the hamburger buns.

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Cake Baking 101





The Next Big Thing

Page Three

Periodic updates: at this page.

This page won't be updated.


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2020

 

Lowering the driving age: if elected officials and policy makers were serious about accelerating EV penetration they would lower the age for driver's licenses. When I was growing up in North Dakota, individuals as young as fourteen years of age could get their driver's license if they lived "on the farm" and needed a driver's license to drive into town for whatever reason (generally school). Fourteen years old: high school. To get a driver's license at age fourteen, it would mean that folks as young as thirteen would have their permit to learn. Certainly autonomous driving cars are much safer than thirteen-year-old kids driving conventional pickup trucks. Another example of elected officials and policy makers unable to think outside the box, and speaks volumes about their commitment to EVs. Posted September 21, 2020.

AWS: despite all the reports to the contrary, the tea leaves suggest Amazon will spin off AWS. September 20, 2020. 

US markets: trading 24/7. Could be done by independent brokers using their own holdings and those of their clients. Posted August 22, 2020. Robinhood, Schwab, others already sell equities "by the slice." That is not the NYSE selling.

Amazon Logistics, link here.

Bucc-ees: link here.

Tectonic shift in way Americans shop, work, learn.

Wuhan Flu -- tracked here.

China

Saudi Arabia

Iraq: in a fight for its very survival. 

Western Europe

Canada

Amazon
AAPL
  • first company to reach $1.5 trillion market cap; Microsoft also at $1.5 trillion market cap (August, 2020 -- AAPL on its way to $2 trillion; already at $1.97 trillion)
    • on its radar scope: streaming services company; content company; 
    • on its radar scope: new search engine; break ties with Google
    • on its radar scope: huge wearable medical device company 
    • announced: will make its own chips
    • announced: may make its own graphics card
 TCM

Families: N - R

Nashville Wells (CLR, Catwalk)

National Parks Pad (Enerplus, Eagle Nest)

Nelson Wells (Oasis, Banks)

Nelson Federal Wells (XTO, Antelope-Sanish)

Nikolai Federal Wells (Oasis, Banks)

ND Levang Wells (QEP, Grail)

ND Winter Wells (Enerplus, Mandaree oil field)

Nordeng Wells (Oasis, Elidah, Banks)

Norfolk Wells (CLR, North Tobacco Garden)

Oakdale Wells (CLR, Jim Creek, along with the Ryden wells; plans to put 24 wells in an existing 5260-acre drilling unit in this area)

Obrigewitch Wells (Whiting, Bell oil field, Stark County, southwestern North Dakota)

Ogden Wells (Whiting, Sanish oil field)

Omlid - Ransom Wells (CLR, Elidah oil field)

Otter Woman Wells (WPX, Mandaree oil field)

Outlaw Gap Wells (BR, Sand Creek)

Outlaw Wagon Wells (BR, Sand Creek)

Oyloe Wells (Oasis, North Tobacco Garden)

P Bibler (Whiting, Epping oil field / Stockyard Creek oil field)

P Earl Rennerfeldt Wells (Whiting, Stockyard Creek, Epping oil field)

P Evitt / Evitt Wells (Whiting, Truax)

P Levang Wells (QEP, Grail oil field)

P Lynch Wells (Whiting, Stockyard Creek / Epping oil fields)

P Pankowski Wells (Whiting, Truax oil field) 

P Peterson Wells (Epping oil field)

P Thomas Wells (multiple sections, including: 33-154-98; 10-153-98; 3-153-98; and, 14-154-98)

P Vance, Vance, Vance Federal Wells (KOG, Truax oil field;  T154N R97W)

P Wood Wells (27-154-98, other sections)

Palmer / Palmer Federal (CLR, Haystack Butte)

Panther Wells (Zavanna, Stony Creek)

Panzer Wells (White Butte/Slawson, Stacked Dual Lateral, Antelope oil field)

Pasadena Wells (CLR, Banks oil field)

Patriot Pad (Enerplus, Spotted Horn)

Patsy Wells (Oasis, Siverston wells, sited in 17-151-98; run south to north)

Pepper Pad (Enerplus, McGregory Buttes)

Periot Wells (Whiting, Dollar Joe)

Periscope Federal Wells (Slawson, Van Hook)

Pittsburgh / Uhlman Federal Wells (CLR, Banks)

Pletan Wells (CLR, Pletan-Dvirnak pad, Jim Creek oil field)

Porcupine Federal Wells (XTO, Bear Creek oil field)

Precipitation Pad (Enerplus, Mandaree)

Privratsky Wells (different operators, different fields)

P-R-S-4W Pad (MRO, Reunion Bay) 

Pyramid Wells (Statoil, Williston city limits)

"Quilt Pad" (Enerplus, Mandaree) 

Rachel Wolf Wells (WPX, Squaw Creek)

Radermecher Wells (CLR, Camel Butte)

Raider Wells (BR, Twin Valley)

Ransom - Omlid Wells (CLR, Elidah oild field)

Rath Federal (CLR, Sanish, extended long laterals)

Ravin Wells (Abraxas, North Fork oil field)

Ravin Wells (CLR, Dimmick Lake oil field)

Rebel, Bandit, Snakeeyes Wells (Slawson, Big Bend/Van Hook)

Red, White, and Blue Wells (Kraken, Burg oil field)

Rehak Federal Wells (CLR, Alkali Creek)

Remington Wells (BR, Blue Buttes)

Renegade Wells (BR, Sand Creek)

Rennerfeldt Wells (CLR, Brooklyn, along with Mildred wells) 

Richard Wells (Statoil, Banks, the Cheryl-Richard pad)

Rieckhoff Wells (XTO, North Tobacco Garden oil field)

Rink Wells (XTO, Garden oil field)

Rink / Kermit Wells (BR, Pershing)

River Rat Federal Wells (Slawson, Big Bend)

Riverview Wells (EOG, Antelope oil field)

Riverview Wells (EOG, Clarks Creek oil field)

Rixey Wells (Kraken, Lone Tree Lake)

Rodney / Gale (CLR, Cedar Coulee) 

Roggenbuck / Bartleson / Burr Federal (17-well pad, Whiting, Sanish)

Rolf Wells (CLR, Brooklyn oil field)

Rolfson Wells (Oasis, Siverston; record wells)

Rolfson N Wells (Oasis, Siverston)

Rolfson S Wells (Oasis, Siverston)

Rolla Federal Unit (Whiting, Twin Valley)

Rollefstad Wells (CLR, Antelope oil field, density infill test)

Ruby / Ruby Parshall Wells (WPX, Antelope oil field)

Ruth/Jack Wells (Equinor, East Fork) 

Ryden Wells (CLR, Jim Creek, along with the Oakdale wells; plans to put 24 wells in an existing 5260-acre drilling unit in this area)

TEMPORARY POSTINGS

The Skaar Federal, Tarpon Federal, and Flatland Federal wells.  There is no guarantee these postings will stay up "forever" and they certainly may not be updated.

The Whiting Stenseth Trust Wells In Sanish Oil Field

The well:
  • 36325, SI/NC, Whiting, Stenseth Trust 11-5-2H, Sanish, t--; cum 57K over 3.5 months;  
  • from FracFocus: fracked 8/19/19 - 8/25/19; 4.8 million gallons of water; 88.6% water by mass;
The well:
  • 36392, 1,074, Whiting, Stenseth Trust 11-5HU, Sanish, t10/19; cum 77K 1/20; 19 stages; 4.1 million lbs;  
  • from FracFocus: fracked 8/19/19 - 8/25/19; 5.8 million gallons of water; 88.6% water by mass;
The third well on that 3-well pad:
  • 17072, 2,843, Whiting, Stenseth Trust 11-5H, Sanish, t7/08; cum 721K 1/20; no jump in production noted; open hole frack with 1.8 million lbs sand;
Neighboring wells:
  • 20280, 175, Whiting, Strand 11-5TFH, Sanish, t11/11; cum 133K 1/20;
  • 21758, 293, Whiting, Oppeboen 21-5TFH, Sanish, t5/12; cum 131K 1/20; F;
  • 21759, 368, Whiting, Oppeboen 21-5H, Sanish, t3/12; cum 335K 1/20; 
It's possible there was no "halo effect" due to the incredibly small fracks of the new wells.

Daily Note, Morning Edition -- March 25, 2020

Word for the day: koan.
  • definition: paradoxical anecdote or riddle, used in Zen Buddhism to demonstrate the inadequacy of logical reasoning and to provoke enlightenment. 
  • provide a video example: link here (when the video pops up, it might start playing immediately, but you need to click on volume)
  • I could listen to this all day; very, very poetic, from a great philosopher
  • count the number of times he touches his face; puts his fingers to his mouth
Phrase for the day: deep doo-doo.
  • example: Saudi oil at $3/bbl; link here.
  • HFI Research on Twitter: "The market has never faced a paper surplus of 10 mb/d in a month. Instead, shut-ins, displacements and refusal to sell well below cash cost break even going to be the name of the game. Let’s see how Saudis and Russians like it when contango blows out. $15 Brent = $3 for Saudi. https://t.co/8D6RSM1eYy" / Twitter
Saudi Arabia: deaths due to coronavirus double overight; from one death to two deaths. Countries / states to watch:
  • China
  • Italy
  • US: NY, WA, CA, TX
  • Saudi Arabia

Daily local supermarket review:
  • Sophia and I visited two neighborhood markets today: Tom Thumb and Albertson's
  • both were deserted; maybe six customers in each store
  • unlike other days when a huge number of employees were stocking shelves, there was no stocking going on today; very, very concerning;
  • the shelves are becoming more and more bare
  • non-perishable staples were non-existent
  • eggs were unavailable; milk was available
  • most produce available 
  • no butter; a few tubs of margarine
  • memo to self: need to stay ahead of this -- order off Amazon
  • we ordered flour from Amazon yesterday; at doorstep today




Eight Wells Coming Off Confidential List -- March 25, 2020

EIA weekly petroleum report, link here:
  • US crude oil in storage increased by 1.6 million bbls week-over-week
  • US crude oil in storage now at 455.4 million bbls; about 3% below the five-year-average;
  • refiners operating at 87.3% of their capacity; gasoline production decreased last week, averaging 9.0 million bpd (my threshold of interest: 10.0 million bpd)
  • distillate fuel increased last week, averaging 4.8 million bpd (my threshold of interest: 5.0 million bpd)
  • US crude oil imports averaged 6.1 million bopd, down by 422K from the previous week
  • over the past four weeks: imports averaged 6.3 million bopd, 7.0% less than the same four-week period last year 
  • total products supplies: 21.0 million bpd; up by 1.3% from same period last year
  • gas supplied over past four-week period, up by 1.2% from same period last year
  • distillate fuel dropped 5.3% over the past four weeks, compared to same period last year
  • jet fuel supplied was down 8.9% compared with same four-week period last year 
US crude oil imports:
Crude Oil Imports



Week
Week Ending
Raw Data, millions of bels
Change
Week 0
March 11, 2029
6.4
0.174
Week 1
March 18, 2020
6.5
0.127
Week 2
March 25, 2020
6.1
-0.422

Jet fuel supplied:
Jet Fuel Delivered, Change, Four-Week/Four-Week


Week
Week Ending
Change
Week 0
March 11, 2020
-12.80%
Week 1
March 18, 2020
-12.6%
Week 2
March 25, 2020
-8.9%

Re-balancing:
Week
Week Ending
Change
Million Bbls Storage
Week 0
November 21, 2018
4.9
446.9
Week 1
November 28, 2018
3.6
450.5
Week 2
December 6, 2018
-7.3
443.2
Week 3
December 12, 2018
-1.2
442.0
Week 4
December 19, 2018
-0.5
441.5
Week 5
December 28, 2018
0.0
441.4
Week 6
January 4, 2019
0.0
441.4
Week 7
January 9, 2019
-1.7
439.7
Week 8
January 16, 2019
-2.7
437.1
Week 9
January 24, 2019
8.0
445.0
Week 58
January 3, 2020
-11.5
429.9
Week 59
January 8, 2020
1.2
431.1
Week 60
January 15, 2020
-2.5
428.5
Week 61
January 23, 2020
-0.4
428.1
Week 62
January 29, 2020
3.5
431.7
Week 63
February 5, 2020
3.4
435.0
Week 64
February 12, 2020
7.5
442.5
Week 65
February 20, 2020
0.4
442.9
Week 66
February 26, 2020
0.5
443.3
Week 67
March 4, 2020
0.8
444.1
Week 68
March 11, 2020
7.7
451.8
Week 68
March 18, 2020
2.0
453.7
Week 69
March 25, 2020
1.6
455.4

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Back to the Bakken

Active rigs:

$23.873/25/202003/25/201903/25/201803/25/201703/25/2016
Active Rigs5068604932

Wells coming off the confidential list today --

Wednesday, March 25, 2020: 63 for the month; 234 for the quarter, 234 for the year:
  • 36392, 1,074, Whiting, Stenseth Trust 11-5HU, Sanish, t10/19; cum 77K 1/20; 19 stages; 4.1 million lbs; 
  • 36325, SI/NC, Whiting, Stenseth Trust 11-5-2H, Sanish, t--; cum 57K over 3.5 months; 
  • 36308, drl, Freedom Energy Operating, LLC, Oltman's Ocelot 1-21, Wildcat, target: Lodgepole:
  • 36139, 1,054, Whiting, Oppeboen 12-5-4H, Sanish, t10/19; cum 83K 1/10;
  • 34602, conf, MRO, Gerhardt USA 14-21H, Reunion Bay,
  • 34598, drl, MRO, Hanlon USA 11-28TFH, Reunion Bay,
  • 28113, drl, Slawson, Sniper Federal 6-6-7TFH, Big Bend,

Tuesday, March 24, 2020: 56 for the month; 227 for the quarter, 227 for the year:
  • 34395, drl, White Butte Oil Operations, LLC, Jore Federal 9-12TFH, Clarks Creek,
RBN Energy: Gulf of Mexico crude oil productions braced for price / coronavirus storm.
In the stormiest market environment for crude oil in many years, it’s hard to find a spot where the sailing is smooth. If even-keel conditions exist anywhere in the oil-producing world today, it might be the offshore Gulf of Mexico, where producer decisions to invest in new platforms or subsea tiebacks are based on very long-term oil-price expectations and the production, once initiated, is steady. In the second half of the 2010s, Gulf producers significantly reduced the average breakeven prices needed to justify their most promising new investments — from more than $55/bbl back in 2015 to less than $35/bbl today. Given what’s happened to crude oil prices the past few days, however, it’s logical to wonder whether any of even the best prospective Gulf of Mexico projects will be sanctioned this year. Today, we discuss how cost-cutting and efficiency improvements have made the offshore Gulf a comparatively steady, growing base of U.S. crude oil production that so far has been less vulnerable than shale output to oil-price gyrations.

Theoretical Floor For Price Of Gasoline In Oklahoma City -- March 25, 2020

Oklahoma gasoline federal and state tax:
  • federal: 18.4 cents/gallon
  • state: 20 cents/gallon
  • total: 38.4 cents/gallon

So, the federal tax on gasoline in Oklahoma City is now: 18.4 / 99 = almost 20%. Although, wouldn't is be more correct to figure it this way?
  • 99 cents - 38.4 cents = 60.6 cents
  • federal: 18.4 / 60.6 =  a 30% tax on gasoline
  • state: 20 / 60.6 =  a 33% tax on gasoline
  • combined: 38.4 / 60.6 = 63% tax on gasoline
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Mac and Cheese






The Most Colossal Debacle In The History Of Oil -- Saudi Threatening To Flood The World With Oil -- March 25, 2020

Updates

S&P Global Platt: Saudi wants to pump more way more oil than it ever has, a major test for Aramco. Summary:
  • Aramco says will pump at max 12 million b/d capacity
  • some doubt its ability to produce that much crude
  • finding buyers a challenge in distressed market
In a week's time [starting April 1, 2020], Saudi Arabia is set to turn its taps to the max and unleash a surge of crude oil that refiners increasingly say they don't want nor need.
But the kingdom has yet to prove that it can follow through on its plans to pump an unprecedented 12 million b/d of crude — almost 1 million b/d higher than it has ever produced before.
It is only recently recovered from last September's missile attack on its critical Abqaiq crude processing facility, and pumping at that volume will be a massive test of state oil company Aramco's capabilities and infrastructure.
"My sense is that they can do it but they need time to deliver the full capacity," said long-time Saudi analyst Bill Farren-Price, a director at consultancy RS Energy Group, adding that additional rigs would need to be hired to tap the kingdom's vast reserves. "The terminal and midstream capacity is there, but the wellhead capacity needs... at least 90 days to be delivered."
Saudi officials, piqued by Russia's rejection of an OPEC proposal for deeper production cuts to prop up prices, have ordered Aramco to supply a record 12.3 million b/d of crude starting April 1, flooding a coronavirus-impaired market that has seen oil demand collapse. Aramco has said 300,000 b/d of that supply will come out of its vast global inventories, leaving the remaining 12 million b/d to come from the ground, implying the company will be using its entire production capacity.
Much, much more at the link. Perhaps one of the best summaries to date where we stand.


We've been through this before. The article ends:
Saudi crude inventories have not swelled in preparation for an export rise, according to geospatial intelligence firm Ursa, standing at 100.2 million barrels as of last week, in line with the year-to-date average of 101 million barrels.
Saudi crude exports have also yet to accelerate, with March volumes averaging 6.84 million b/d, down from February's 7.19 million b/d, according to trade flow tracker Kpler.
Market realities may mean that whether or not Saudi Arabia is able to max out its production, its will to supply record volumes may run up against buyers' lack of appetite for crude.
Original Post

If everything below looks familiar, it is because I have re-posted an earlier post with new screenshots from twitter in the last 24 hours. The "shelter-in-place" orders now in effect will drop US gasoline demand to/by unprecedented levels which were never predicted in any modeling. It's impossible to predict how this plays out, but I am blown away by the timing of my original post yesterday.

From a contributor over at SeekingAlpha.
  • The reality will start to set in for everyone in OPEC+. Russian oil producers will be the first to refuse to increase oil production into a lower oil price environment.
  • With Brent trading at $27/bbl and the discount needed to match Saudi crude to Europe at $15 to $17/bbl, Russian oil producers will be forced to sell crude at close-to-breakeven.
  • But this sickening reality will start to hit the Saudis soon as well.
  • With the contango for month 1 and month 6 Brent trading at -$8.46/bbl, the Saudi OSP discount offered on top of this will guarantee profits of almost $20/bbl to any oil trading firm that has the infrastructure to hold the crude for just 6 months.
  • The takeaway from this is that this price war doesn't benefit anyone. The damage to the pocketbook will far outweigh any egos.
Something tells me Putin is not a bit happy with the Rosneft CEO who started this whole thing.

Two things with regard to my post yesterday.

First: immediately after opining that Saudi Arabia was not going to flood the world with oil as they threatened (for any number of reasons), "analysts" over at twitter started saying the same thing. See below. The country to watch today: Saudi Arabia. 


Second: the OPEC+ spat (Russia vs Saudi Arabia) has to be one of the most colossal debacles in the history of oil. Russia has blinked. The House of Saud in a fight for its very survival. Fifteen-thousand princes know that it was MBS' decision alone to flood the world with crude oil. And here we are: modeling suggesting that Brent will go well under $20/bbl. 

Updates

March 25, 2020:


March 25, 2020:




Later, 10:41 p.m. CT: isn't this interesting? After posting the note below three items from twitter:
  • "Russia no longer considering adding production."
  • "So Saudi are not ready to go to 12.3 mbpd. Also suggests they will have increase Ghawar production to achieve it. Will be interesting to see how the 70-year-old field handles the extra stress over long periods."
  • "Saudis seek to speed up repairs at Abqaiq complex."
    • you mean to tell me this complex has not yet been fully repaired; the attack was six months ago
Original Post

Before we get started:
  • Saudi Arabia reported 205 new Wuhan flu cases in the past 24 hours (March 24, 2020).
  • The day before, Saudi Arabia reported 51 new cases in 24 hours (March 23, 2020). 
  • That's a four-fold increase in one day.
  • The number of cases is obviously severely under-reported. 

Facts or at least what I think are the facts (folks can fact-check me on these). Maybe I should call these observations:
  • Saudi Arabia and Russia were quibbling about less than a million bopd one way or the other
    • the argument was whether to extend the quotas after they expire at the end of March, 2020 (one week from now)
    • the argument was less about the quotas (and price) and more about protecting one's market share
  • a digression:
    • 30% of the market share at $70/bbl vs 35% of the market share at $20/bbl -- but we need to move on
  • Saudi Arabia's budget is based on $83-oil and that is after a cut in the budget; 
    • much evidence that the kingdom has been in financial difficulty for several years, maybe starting in 2014 (previously posted)
    • at one time, not many years ago, Saudi Arabia's budget was based on $100-oil;
    • Saudi Arabia cannot print rials (as opposed to the US which can print dollars) -- actually the country can print rials but you get the point
  • so far, no increase in crude oil has reached the US from Saudi Arabia;
  • to meet its export goals, Saudi Arabia will first empty its crude oil storage tanks;
  • after Saudi crude oil in storage is exhausted, Saudi has to increase production to:
    • increase exports by one to two million bbls /day to achieve its rhetoric to flood the world with oil;
    • increase production for domestic use (occurs every summer to run air conditioners)
    • increase production from the fields to replace oil for storage
All of this just in time for Wuha flu to hit the mideast. Saudi often fell short of production goals in the best of times; it will be interesting to see what the kingdom can do with the threat of Wuhan flu looming.

It's hard for me to believe that the world will remain in "lockdown" past April 30th. If the world returns to normal / begins to return to "normal" by May 1, 2020, oil demand will increase significantly.

At that time, one could see:
  • max oil demand in the US; summer driving season; economy gets back on track;
  • US injects $2 trillion in stimulus;
  • China injects $7 trillion in stimulus;
  • Saudi storage depleted;
  • Russia can't make up the difference (for any number of reasons);
  • Saudi production stressed (see above)
Disclaimer: I am inappropriately exuberant about the Bakken. 

The above will be added to "how we got here," linked at the sidebar at the right.

Wuhan flu is tracked here