Monday, July 1, 2013

Five Bakken Wells With Revenues Over $17 Million In Under Two (2) Years -- Filloon

SeekingAlpha is reporting:
The data I am targeting not only aids in finding a good investment, it also helps clear up misconceptions in unconventional liquids rich plays in the United States. There are three Bakken misconceptions I believe are false, and can prove so by calculating individual variables of well design and production.
Outstanding article.

Mike goes into great detail on the three misconceptions about the Bakken.

In addition to the misconceptions there are many, many more data points that bear pointing out. But to do that now would be data overload.

Enjoy Mike's column.

Power Africa -- Power Europe -- Power America --- US Exported Record Amount Of Petroleum Coke In April; Only Once Before Was More Exported (December, 2011) -- Global Recession? What Recession?

Two articles to read/scan first:

Platts is reporting:
The US exported the second highest volume of petroleum coke ever in April, according to US Energy Information Administration data.

The EIA April data, released Friday, show exports of 17.78 million barrels, second only to December 2011, 20.44 million barrels.
Petroleum coke is a byproduct of coking, a process that takes very heavy oil and produces gasoil (a precursor to diesel or vacuum gasoil) and naphtha. The coke is used as a fuel for power plant, in a kiln in the production of concrete or, for some specialty grades, in the production of aluminum or other metals.
Recipients of US petroleum coke (numbers rounded):
  • China: 3 million barrels, its third highest volume, after December 2011's 5 million barrels and January 2013's 4 million barrels.
  • Mexico: 2 million barrels
  • Japan: 2 million barrels
  • Canada: 2 million barrels, up from only 659,000 barrels in March.
India, Turkey, Spain, Italy and others are all significant importers.

The US added substantially to its coking production capacity in 2011 and 2012:
  • Motiva in Port Arthur: from a 59,500 b/d capacity to 154,500 b/d; 
  • Marathon, Detroit: from 29,500 b/d to 55,000 b/d;
  • Wood River Refinery expansion: 65,000 b/d;
  • Total, Port Arthur: 52,000 b/d
In 2013:
  • BP, Whiting: will bring on stream 102,000 b/d coker.
Coal and petroleum coke probably don't go together in the same post, except for the fact that both have to do with US energy exports.

I don't see a "war on coal." I see a "war on coal-powered plants." The US coal industry will do just fine, as it re-orients itself to cater to Europe and Asia.

A Note To The Granddaughters

I have spent all day on bicycle, exploring our new home, Colleyville and Grapevine. Having spent so much time in Yorkshire, I am happy to see that Grapevine's sister city is West Lothian, Scotland.  It seems I have heard of West Lothian before but I am unable to place it.

Price Of Oil Up Significantly

Platts tweeted:
August crude settled $1.43 higher at $97.99/b on combo of Middle East tensions and better-than-expected European manufacturing data.

BP Distillation Unit In Indiana Up And Running

Oil & Gas Journal is reporting:
BP PLC has started up a 250,000-b/d crude distillation unit at its Whiting, Ind., refinery.
The unit returns the Whiting refinery to its 413,000-b/d nameplate processing capability and clears the way for remaining upgrades of new coking and hydrotreating units, the company said.
When those units are online later this year, the reconfigured refinery will have the flexibility to increase heavy, sour crude processing, according to Iain Conn, BP chief executive for refining and marketing.
Heavy oil -- sounds like it's getting ready for Canadian sands oil -- which can come in by rail.

Statoil Operating In The Eagle Ford

Oil & Gas Journal is reporting:
Statoil has become operator of half the acreage it holds under a 50-50 joint venture with Talisman Energy USA Inc. in the Eagle Ford play of Texas.

Statoil’s net Eagle Ford interests are 73,000 acres and 20,200 boe/d of production from about 300 wells.
The article at the link has more specifics.

I Can't Make This Stuff Up -- Wanna Know Why The Eurozone Is In Trouble? The Analysts Are Insane

This is as good as it gets in the humor department. The LA Times is reporting:
Unemployment in the Eurozone reached a record high of 12.1% in May as the 17-nation region continued to struggle against its longest-ever recession, officials said Monday.
There were 19.2 million jobless people in the region, up by 1.3 million from a year earlier, according to Eurostat, the single-currency zone's statistical office. The unemployment rate was 11.3% in May 2012.
Eurostat initially had reported a 12.2% unemployment rate for April, but that figure was revised to 12% on Monday, making May's 12.1% the new high since the Eurozone was created in 1999.
And here's the punch line:
The revisions mean the European unemployment picture is better than expected, said Howard Archer, chief economist for Europe and Britain at IHS Global Insight.
This is the chief economist for Europe at IHS Global Insight. The EU zone unemployment hits a record high of 12.1% and the chief economist for Europe for IHS says that the revision in the April unemployment rate means the unemployment rate is better than expected. That revision: from 12.2% to 12%. 

The unemployment rate is better than expected. Let's see. The rate went up. 

This is insane. 


Seriously, for the archives:
Spain had the highest May unemployment rate, at 26.9%. Greece had a 26.8% unemployment rate in March, the latest figure available for that nation.
Austria had the region's lowest jobless rate, at 4.7%, followed by Germany at 5.3%.

The Eurozone's economy has been in recession for six straight quarters through the first quarter of the year. That topped the 2008-2009 recession, which lasted for five quarters.

California Gas Tax, July 1, 2013: Highest In The Nation; Almost A Buck A Gallon; XOM Margins - Two Cents/Gallon

CBS is reporting:
Starting this week California drivers are spending more to fill up at the pump.
A 3.5-cents-per-gallon tax hike went into effect Monday.
The increase was approved by the state Board of Equalization in February, in order to make up for tax revenue shortfalls in past years.
The tax hike gives the Golden State the highest gas tax in the nation, at 71.9 cents per gallon.
Meanwhile, XOM, who puts everything at risk looking for oil, producing the oil, refining the oil, transporting the gasoline, and dispensing the gasoline, makes two cents on each gallon sold.

Almost a buck/gallon in taxes at the pump. Cue up Connie Francis.

Meanwhile, in the rest of the country, Yahoo!Finance is reporting: gas prices quietly creeping lower; a tax cut for Fourth of July travelers. Who are they trying to kid? Oil is up $1.15 in early trading today, and heading back toward $100.  

Kerry: Spying On Allies Is Not Unsual

Hillary: what does it matter?


Curley, Larry, and Moe....

Power Africa -- Power America

This is going to be a long post.

Sub-Saharan Africa and Population Centers of Interest

First, the "definition" of "Sub-Saharan Africa." Whenever I hear someone say "Sub-Saharan Africa" as opposed to simply "Africa" I know I am listening to someone who wants me to think they are smarter than the average bear. Look at the "official" definition of "Sub-Saharan Africa" and you will see what I mean. Except for very, very few countries (including Egypt, Libya, and Morocco), "sub-saharan Africa" is "all" of Africa.

Second, where do all the people in Africa, who need electricity, live? All of Africa was not created equally. South Africa is a modern nation and should be tackling its own problems. East Africa (Kenya and Uganda) is also in pretty good shape; Somalia, North and South Sudan, and Ethiopia are basket cases and can be irnored for the time-being; they won't be using iPads for awhile.

The rest of Africa? My hunch is that most of the African population lies along the coasts, and probably the west coast has the most interest for the United States. Be that as it may, it needs to be fleshed out: exactly what does the President mean by sub-Saharan Africa. For purposes of this discussion, I will be looking at the west coast of Africa from Senegal to Namibia, to include: Senegal,  The Gambia,  Liberia, Nigeria, Cameroon, the Congo, Angola, and Namibia.

Back Story

Years ago, I had a most enjoyable experience. I was one of seven crew members on a C-130 sent to Bajul, The Gambia, to provide search and rescue support for NASA shuttle launches. NASA had identified four emergency "landing" locations from Spain to west Africa for the space shuttle if it failed to reach orbit after launch from Cape Canaveral/Kennedy. One of those landing sites was the commercial airport at Banjul, The Gambia.

To provide that support, NASA required us to be in place two days before launch, and to remain there until the shuttle reached orbit. In fact, we took off as soon as the shuttle launched: we were either going to be heading home (England) or we were going to be doing search and rescue over the Atlantic.

You will recall that it was a rare NASA shuttle that launched on time. We often found ourselves holed up in Banjul for days, if not weeks, waiting for a shuttle launch. Yes, we would stay in place for up to three weeks waiting for a launch.

So, we had plenty of free time in the evenings. Rum and coke comes to mind. One night while in the bar, we lost electricity. An American with whom we were talking, not part of our team, got up and disappeared for a few minutes. About 15 minutes later, the lights came back on and the gentleman returned. He told us that electricity to The Gambia -- the entire country of Gambia -- was provided by about four diesel generators. Periodically they "hiccup" or shut down, and someone needs to go out, tap them with a hammer or whatever they do, and get them started again. He was an American contractor and his job was to a) drink rum and coke; and, b) re-start the generators every so often. We were there for about two weeks; if I remember correctly, that was the one and only time he had to fix the generator. Nice work if you can find it.

Three or four generators, back in the 1980's, providing electricity for the entire country of The Gambia.

What's The Quickest Way To Provide Electricity To Africa?

Let's go through the options.

Renewables? Wind, solar? LOL. Let's move on. Get serious.

Nuclear? Ditto. Let's move on. Get serious.

Hydroelectric, in huge dams on the Blue and White Nile Rivers?  I don't think so.

We're getting closer and closer to fossil fuel. Pox on you.

Coal-powered utility plants? A non-starter for several reasons.

That leaves us with natural gas power plants. Nope.

So, where does that leave us? What's the fastest way to get electricity to Africa.

Yup, diesel generators.

Diesel Generators

Logistics: nothing fancy needed; no large towers and transmission lines carrying electricity long distances across Africa. Some lorries to transport the diesel fuel and that's about it. The indigenous population is perfectly suited to manage that task.

Where do the diesel generators come from? Why, GE, of course. Remember, the CEO of GE is/was President Obama's economic guru. This is not rocket science. Remember this comment posted earlier:
Manufacturing may not dominate the U.S. economy any longer, but it is still a canary in the economic coal mine. Weakness can be a harbinger of recession and also equity bear markets.
Diesel fuel? The US does not allow crude oil to be exported (with exceptions) but the US exports lots of refined products including diesel and it's going to be exporting more:
The US has shifted from importing refined oil products like gasoline to exporting over 1 million barrels per day in 2012 and companies are positioning themselves to cash in on the trend.
The US has exported diesel fuel to Europe for years, which makes sense because demand for the fuel is much higher across the Atlantic than domestically, but with expanding domestic crude output and flat or declining US gasoline demand, it appears many more barrels of liquid transportation fuels will be headed to hungry overseas markets in the coming years.
RBN Energy is starting a series on this subject today.

Most of the diesel would be used within a hundred miles of where it could be off-loaded.

A Marshall-like plan, laser-focused on providing electricity to Africa would be a huge win-win for two continents: North America and Africa.

The Interior

While building out the 90% of electricity needs for Africa -- along the west coast -- a small percentage of the $7 billion could go to solar panels to the interior.  

Monday Morning News And Links

Active rigs: 189 (steady)

For newbies: there are "only" three crude oil plays in the lower 48 to be concerned with: a) Williston Basin: Bakken/Three Forks; b) West Gulf: Eagle Ford; and, West Texas Permian: multiple.  And that brings us to RBN Energy post below.

The story below does not mention "diesel" but I assume the first "episode" in a continuing series on the Permian will mention diesel. This link is another connecting dot in the answer to the question I posed earlier: what's the quickest way to bring electricity to Africa?

RBN EnergyUpdate on the Permian
We posted our first blog on West Texas Permian Basin crude production back in September 2012 . Oil production in this historic and prolific basin is now close to 1.4 MMb/d  (June 2013 – Bentek estimate) – an increase of about 100 Mb/d since that original post.
The Permian Basin has been producing since 1920 and today’s high production levels are still down from its 1973 peak of 2.1 MMb/d. A lot of recent Permian production still uses conventional drilling and enhanced oil recovery techniques, but horizontal drilling is now making its mark as well. As Permian output has rebounded in recent years pipeline takeaway capacity has come under increasing strain and midstream players have been building new pipelines and rail terminals.
Most of the new infrastructure flows crude to the Gulf Coast where it will join 1 MMb/d from the Eagle Ford and as much as 2MMb/d from Canada and the Bakken in an ever growing flood of crude looking for refineries. So it is definitely time to revisit the Permian and update our analysis of crude production, takeaway capacity and the refining market. This first episode in our new series covers the production forecast, local refining capacity and existing takeaway pipelines.

On Mondays, there is no Section D. So we move directly to Section D (Money & Investing) where we find a story on Apple's next great leap forward:
The most glaring omission is China Mobile, the world's largest wireless carrier with more than 700 million subscribers. Among them are about 80 million wealthier ones that can afford Apple's pricey smartphone, estimates HSBC analyst Tucker Grinnan. And of that elite group, more than half may be likely buyers of the iPhone, considering that Apple's market share of high-end smartphone sales in China is 55%, according to HSBC. Indeed, more than 20 million of China Mobile's customers already use "unlocked" versions of the iPhone on the carrier's aging 2G network.
For Apple, which sold 261 million iPhones in 2012, those extra tens of millions of potential unit sales represent a big opportunity. Pressure is increasing, too, as Apple's market share for all smartphones in China, high- and low-end, dropped to 9% in the first quarter from 13% in the same period a year before, according to Strategy Analytics.
Remember the question of the day: how best to quickly provide electricity to Africa? This story will be linked later at another post as one of the connecting dots: manufacturing reading may tell US misfortune:
The index's recent trajectory is chillingly similar to late 2007, when the last recession began. That December's revised reading of 49 also was the lowest in four years. In January 2008, it barely edged back into expansion before crashing into the low 30s by the autumn.
The overall trajectory of the ISM data looks vulnerable. For example, the more forward-looking new-orders subcomponent of the index dropped sharply in May, to 48.8 from 52.3 a month earlier. And the retreat Friday in the Chicago barometer for June to 51.6 from 58.7 was well below expectations and the steepest monthly fall in four years.
Manufacturing may not dominate the U.S. economy any longer, but it is still a canary in the economic coal mine. Weakness can be a harbinger of recession and also equity bear markets.
This should be fun. In Section B (Marketplace), the Journal asked a group of leading writers, retailers, and agents on what they would do if they ran Barnes & Noble. Some excerpts:
  • cater to the browser who can't find the book on the shelf
  • re-do the stores: compelling, contemporary, clear signage would be a start
  • more soft covers for budget-minded shoppers
  • more destination activities: book groups, author readings
  • more books from small presses, university presses
  • move involvement with local schools and libraries
The power of Drudge: remember those Drudge headlines about HHS drafting the NFL to help promote O'BamaCare -- scrubbed, after Drudge headlined it; the NFL is gonna go political;

There were about seven headline stories in "world news" including several on the Mideast, and not one on Syria. Now it's about Egypt imploding. Again. No links. The story is everywhere.

Having spent thirteen years in Europe, this is an interesting story: Amsterdam debates sex trade

And on that note, we end the post.

Headline Story: Health Insurance Premiums To Surge -- WSJ

"Insurance Costs Set For A Jolt" -- WSJ
Healthy consumers could see insurance rates double or even triple when they look for individual coverage under the federal health law later this year, while the premiums paid by sicker people are set to become more affordable, according to a WSJ analysis.