Wednesday, July 10, 2013

EOG Hit A New High Today

Although it dropped back by the end of the trading day, EOG hit a new 52-week high today.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you thought you might have read here.

Statoil Reports A Huge IP

From the FAQ page:
What is the record IP to date in the Williston Basin?
Again, 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.
Statoil reported on July 10, 2013: Well file #23385, 5,070, Beaux 18-19 6H, Banks, t6/13; cum -- ; 7 days to drill the lateral; I did not see completion data; 31 swell packers planned.
I have not kept up with this metric, and it's very possible there is another Bakken well that holds the IP record. But this is what I had in my data base.


By the way, it will be interesting to follow at least three other  Beaux wells.
  • 23388, drl, BEXP, Beaux 18-19 3TFH, Banks,
  • 23387, drl, BEXP, Beaux 18-19 4H, Banks, 
  • 23386, drl, (ros - 1/13), BEXP, Beaux 18-19 5TFH, Banks, 
  • 23385, 5,070, Beaux 18-19 6H, Banks, middle Bakken development well, t6/13; cum -- ; 7 days to drill the lateral; I did not see completion data; 31 swell packers planned;
Active rigs:  186 (steady, trending up)

Five (5) new permits --
  • Operators: Murex (2), Whiting, SM Energy, Hess
  • Fields: Sanish (Mountrail), Garrnet (Divide), Little Knife (Dunn)
  • Comments: Murex has two wildcats in Divide County
Wells coming off the confidential list were posted earlier; see sidebar at right.

Three (3) producing wells completed:
  • 23385, 5,070, Beaux 18-19 6H, Banks, t6/13; cum -- ; 7 days to drill the lateral; I did not see completion data; 31 swell packers planned;
  • 23561, 535, Crescent Point Energy, CPEUSC Reed 10-3-158N-100W, Winner, t6/13; cum --
  • 24060, 256, CLR, Colter 3-14H-2, Bear Creek, t6/13; cum --

RIgzone Has Article On Increasing CBR; OGJ Also Has Story

Rigzone is reporting:
With U.S. crude oil producing at record amounts and outstripping pipeline capacity, the country is relying heavily on railroads to move new crude oil to refineries and storage centers, reported the U.S. Energy Information Administration (EIA) Wednesday.
The total amount of crude oil and refined products being transported by rail is close to 356,000 carloads during the first half of 2013, up 48 percent from the same period last year, according to Association of American Railroads.
“U.S. weekly car loadings of crude oil and petroleum products averaged nearly 13,700 rail tankers during the January to June 2013 period. With one rail carload holding about 700 barrels, the amount of crude oil and petroleum products shipped by rail was equal to 1.37 million barrels per day during the first half of 2013, up from 927,000 barrels per day during the first six months of last year. Crude oil accounted for about half of the 2013 daily volumes," reported AAR.
"Increases in rail transportation multifactor productivity can be traced to technical progress, such as improved capital inputs and technological changes in the form of improved methods of service delivery. Improved technology for locomotives, freight cars, and track and structures have increased reliability and reduced maintenance needs," added the United States Department of Transportation.
A large portion of the produced crude oil is from North Dakota where there is not enough pipeline capacity to move supplies, therefore dependency on delivery of oil by rail is substantial. North Dakota currently ranks as the second largest oil producing state after Texas, reported EIA.
Oil & Gas Journal is reporting:
Increased shipment of crude oil by rail is making the US Department of Transportation examine its tank car standards, and possibly could result in a proposal for new requirements by the yearend, an American Petroleum Institute official said.
Cindy Schild, API’s downstream operations senior manager for refining and oil sands, said the effort was under way before a runaway train carrying Bakken crude to a Canadian refinery derailed early on July 6 in Lac Megantic, Que., resulting in fires and explosions that killed at least 15 people and left another 60 people missing.
A spokesman for DOT’s Pipeline and Hazardous Materials Safety Administration confirmed that the agency is considering amendments to current regulations that would enhance rail safety, including for the DOT Specification 111 tank cars, and further clarify the regulations.
“This is a tragic incident, and we sympathize with all the losses there. It’s important to learn from such events,” Schild said. “DOT is evaluating new specifications for tank cars transporting combustibles including crude oil, and we will be working with them on it.”

SM To Sell Its Anadarko Basin Properties

Rigzone is reporting:
Denver-based SM Energy Co. announced Wednesday it will seek to market all of its Anadarko Basin properties, including its interest in the Granite Wash.
The company has hired an advisor to market assets that include approximately 56,000 net mineral acres and production of just over 9,000 barrels of oil equivalent per day, including 75 percent natural gas. The production from these assets represents approximately 8 percent of the company’s total production in first quarter 2013.

Rigzone Has Long Article On That Runaway Train

Rigzone is reporting.

Normally I post a snippet, but this article is too long, too many story lines. So, this time, just the link.

Minimal Blogging Today; Oil Continues To Surge -- Libya Is The Reason

I will be at "Soak City" all day with the granddaughters and two of their California cousins. No rain, but overcast (good), and fairly warm.

EOG is trading at a new high. Disclaimer: this is not an investment site; do not make any investment decisions based on anything you read here or think you have read here. 

This may be why oil continues to surge, as reported by Platts:
Crude oil output from the Organization of the Petroleum Exporting Countries (OPEC) fell to 30.45 million barrels per day (b/d) in June from 30.57 million b/d in May, as lower volumes from Libya and Iraq more than offset an increase from top producer Saudi Arabia, a Platts survey of OPEC and oil industry officials and analysts showed Tuesday.

“What’s notable about this month’s figures is not the Libyan decline, because that was known since the start of June, but the way the Saudis stepped right in to fill that gap,” said John Kingston, Platts global director of news. “The Saudi role as swing producer becomes more significant every month, as the kingdom puts oil into the market when it’s needed, and takes it out when it’s not. It has been particularly aggressive in this role in recent months.”

Libyan production, which had recovered to around 1.4 b/d in May, plunged by 200,000 b/d in June amid continuing political unrest that has included protests at key oil fields across the country.
We talked about his on July 7, 2013, when we said "Libya is getting out of the oil business."

Reuters is reporting the OPEC will lose market share to North American shale oil in 2014. Somehow that doesn't seem to be a news story. I haven't watch television in quite some time; I certainly have not seen any CNBC so I don't know what the talking heads are saying, but I am quite surprised how few stories (as in "none") there are about the fact that oil futures are pegging oil at $105, moving toward $106. When I last tuned into CNBC some weeks (months?) ago, every talking head seemed to be saying that oil was headed toward the $70's again. Whatever.

There was a huge, huge North Dakota storm in the past 24 hours; severe enough it should affect July production numbers. If interested, the regional papers, The Dickinson Press and The Bismarck Tribune will report the stories. We won't see July production numbers until September; the next North Dakota production numbers, probably released on/about July 15, will be for May, 2013. May was also a challenging month for operators: muddy roads and road restrictions kept operators out of the oil patch much of that month. We'll get an idea how much pipeline has been put in based on production numbers.

For all the grief The Drudge Report gets, it certainly aggregates news nicely. What I get a kick out of is this: Drudge reports no news. He simply links the stories that folks are reading in various areas of the country which are not being seen by those who don't get those newspapers. Perhaps the most interesting and most timely article he links today is the vote on a "living wage" vote in the District of Columbus set for "today." (Drudge refreshes his stories at glacial speed so one never news what "today" is on Drudge.) Wal-Mart planned to open a store (or stores) in DC but has told the district it won't open any Wal-Marts in the district if the district council votes to mandate a "living wage." It will be interesting to see how this goes. My hunch: some compromise will be reached. Much more is at stake than Wal-Mart. I don't know if folks have been to DC, but the city shuts down on weekends and the summer. Sure, there are a lot of tourists there during the summer, but these tourists are not buying hardware, books, Starbucks, etc. The locals, the few that can afford cars, will shop outside the district if retail prices surge due to "living wage" costs and O'Bama Care.

The Daily Beast has a nice story on our US ambassador to Egypt: Anne Patterson. That must have kept the Islamists off-balance, having to deal with a ....a....a... woman.
But while her American defenders credit Patterson with taking a realistic approach to a volatile situation, many in the Egyptian opposition regard her as the person responsible for America’s close embrace of Islamists in Egypt. During the protests that led to the fall of Morsi’s government, her face, crossed out with a red X, became the symbol for many Egyptians of what they saw as U.S. discouragement of their efforts.
 “Some say that street action will produce better results than elections,” Patterson said in a June 18 speech. “To be honest, my government [the US, I presume] and I are deeply skeptical.”
To many in Egypt and some in Washington, Patterson’s comments were only the latest example of her failure to recognize the Morsi government’s bad behavior and her reluctance to use her office to publicly press it to address the grievances of the Egyptian people.
“Rather than understand and remedy the perception that the U.S. is supporting the Muslim Brotherhood, Ambassador Patterson is continuing the age-old U.S. practice in Egypt of being the last man standing to support an authoritarian regime. In so doing, the U.S. is once again putting itself in an increasingly lonely camp, contributing to ongoing instability, and hurting its own image and credibility with the Egyptian people,” Egyptian activist and lawyer Dina Guirgui wrote at the time.
Reuters is reporting that a federal judge has ruled that Apple conspired to raise e-book prices and damages will be assessed. Bad news for Apple. Worse news for the Nook. Oh, I forgot. The Nook is dead. So, I assume e-book prices will now fall, resulting in even less royalties for authors. Oh, well.

From the Platts report linked above:
OPEC kingpin Saudi Arabia boosted output by 250,000 b/d to 9.65 million b/d, the highest volume since November 2012 when output was estimated at 9.82 million b/d, the survey showed. Saudi output typically climbs in summer to meet increased demand from domestic power stations for direct-burning crude. Saudi production was estimated at an average 10 million b/d during May, June, July and August last year.
The latest survey indicates OPEC is overproducing its official 30-million-barrels-per-day ceiling, which has been in place since January 2012, by 450,000 b/d. Adherence to the ceiling, however, is informal as OPEC has not set individual country quotas. This effectively leaves the management of the market to Saudi Arabia, the only country with the ability to make significant adjustments to output.

Wednesday Morning Links, News, And Views

Active rigs: 184 (up, steady)

Wells coming off confidential have been posted; scroll down.

RBN Energy: US natural gas to Mexico

WSJ Links

Nothing in Section D (Personal Journal). We must be moving into the summer doldrums. There was a story yesterday of six barrels of natural gas that had leaked into the Gulf of Mexico which will all evaporate, but the operator called in the professionals to stop it, after early efforts failed. That's how hard reporters are working to get the next big oil spill story.

This is interesting, in Section C (Money & Investing): with oil flirting with $105/bbl, one would have thought the dollar was getting really, really, really weak. But then this: "euro falls to 3-month low vs the dollar; no link. The headline tells me as much as I need to know, especially during the summer doldrums.

Maybe that Gulf oil leak is a bigger story than I thought: it's in Section B (Marketplace). Nah.
But speaking of big stories, whatever happened to Syria? Whatever happened to all the O'Bama scandals?

In The Front Section, a huge story on a train wreck in the making: US struggles to meet health-law dedeadline. The federal government has NOT written key rules guiding employers.
When Obama administration officials delayed a central plank of the new health law—requiring that big employers offer health insurance to workers—they said it was to help businesses pleading for more time.
Left unsaid was the federal government hadn't written key rules guiding employers, according to current and former administration officials, and computer systems that were supposed to run the program weren't operational.
The delay has opened the door for critics and allies alike who are now raising questions about the administration's ability to implement the biggest domestic policy initiative in a generation.
Oh, this is not good. The South Dakota Native American Reservation at Pine Ridge is considering lifting a ban on alcohol sales.
Robin Tapio has struggled with alcohol for much of her life. The father of her children died after years of drinking and their middle son lost his life after driving off a road on this vast Indian reservation. He was 16 years old and high on drugs and alcohol.
In June, Ms. Tapio, a member of the Oglala Sioux's tribal council, voted in favor of holding a public referendum to try something new to address the excessive drinking linked to crushing poverty and crime here: make alcohol legal.
So, we'll see how this goes. 

Oh, the answer to that question: whatever happened to Syria? The war has moved to Lebanon.

This story was posted earlier, late last night: that runaway Bakken crude oil freight train? It sustained a fire a few hours earlier in the day before it really caught on fire. The railroad's fortunes had turned around with CBR.

For those in favor of aligning the minimum wage with inflation: if the minimum wage tracked inflation, it would be $4.07 per hour. I'm sure it depends on when the two were first aligned. But facts never got in the way of Joe Biden's politics (nor any other politician's politics).

WTI-Brent Spread

This is a dated article, posted about a month ago, at Market Realist, but it has some good data points regarding the WTI-Brent spread. In addition, it has some great graphics.
  • A huge surge in oil production in North Dakota has caused differentials between Bakken crude (priced at Clearbrook, MN) and WTI Midland crude to fluctuate and blow out at several points over the past several years as takeaway structure had lagged production.
  • Recently, the differential between Bakken and WTI crudes had stabilized and closed in as newly finished infrastructure has come online. Bakken differentials to WTI had generally remained below $2.00/barrel since March, signaling sufficient takeaway capacity from the basin. Additionally, usage of rail rather than pipelines into Cushing have allowed Bakken crude to reach refining markets without having to pass through a crowded hub.
  • More stable Bakken based crude prices and a lesser risk of the differential blowing out to ~$20+/barrel again is a positive for producers operating in the region.
  • From May 30th to June 10th, the spread changed by $9 per barrel, in a positive catalyst for producers with Bakken assets, such as Continental Resources (CLR) and Whiting Petroleum (WLL).

This Is Quite Incredible: North Dakota, South Dakota Rank 3rd, 1st In America's Top States for Business for 2013

Yahoo!Finance is reporting:
South Dakota has climbed to the top of America's Top States for Business for 2013.
It is the best finish yet for the Mount Rushmore State, which has always been a quiet contender in our annual study, rarely finishing outside the Top 10. But more impressive, South Dakota's point total this year-1,639 out of a possible 2,500-is the highest logged by any state since we began keeping score in 2007.
The top five:
  • South Dakota
  • Texas
  • North Dakota
  • Nebraska
  • Utah/Virginia -- tied for fifth
North Dakota jumped from fifth to third this year. 
North Dakota, a historic economic success story, improves on last year's fifth place finish to come in third this year with 1,592 points. The Peace Garden State ranks second-just behind Texas-in Economy and in Infrastructure. But North Dakota is, in some ways, held back by its own prosperity. With the nation's lowest unemployment rate, workers are in short supply. That raises wage costs. And North Dakota's growing pains leave the state with some of the most expensive rental costs in the country for industrial space. North Dakota finishes 12th in Cost of Doing Business, and near the bottom-46th-for Technology & Innovation.

Wells Coming Off Confidential List Wednesday; Fidelity With A Huge Well

22752, 1,064, Fidelity, State 34-33-28H, Stanley; t1/13; cum 79K 5/13;
24352, 287/IA, CLR, Gibb 1-24H,  Beaver Lodge, t3/13; cum --; produced for one day, then went IA;


22752, see below, Fidelity, State 34-33-28H, Stanley:

DateOil RunsMCF Sold

Nine (9) New Permits -- The Williston Basin, North Dakota, USA; Statoil With Two Nice Wells

Active rigs: 185 (steady, up)

Nine (9) new permits --
  • Operators: Whiting (3), Petro-Hunt (3), Baytex (2), Murex
    Fields: Ambrose (Divide), Little Knife (Dunn), Pleasant Hill (McKenzie), Sanish (Mountrail)
  • Comments: Murex has a wildcat in Divide County
Wells coming off the confidential list were ported earlier; see sidebar at the right.

Two producing wells completed:
  •  22805, 1,971, Statoil, Wright 4-33 2TFH, Alger, t6/13; cum --
  •  23859, 2,909, Statoil, Wright 4-33 5H, Alger, t6/13; cum --