Tuesday, March 11, 2014

Back To Some Cocktail Chatter -- EOG Nomenclature


Later, 9:13 pm central time: I was told that the "M" stands for monitoring.  The operator is likely monitoring wells that are scheduled to be fracked.
Original Post

When I first started the blog, I had a lot of fun with nomenclature regarding the names of wells; most were easy to figure out. EOG took a bit of time.

Now, for those interested, here's a new one:
  • 27850, loc, EOG, Parshall 408-15M, Duperow pool, Parshall, Mountrail County; the specific location of this well: SENE 15-152N-90W, 2410' FNL and 1275' FEL
This is the general location for the well with this permit number. If I remember, when the GIS map is updated, I will replace this with the "official" map:

Update On The CLR Atlanta 14-Well Pad Southwest Of Williston

From The Bakken Shale Discussion Group:
Just received information that 2 more wells had their first sales in February and the remaining 10 may start to produce sales in the next 30-90 days.
A lot of folks are waiting for these numbers.


The ultimate hammock: Dallas Arboretum and Botanical Gardens

For Investors Only

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you may have read here.

Chevron reaffirms strategies and future growth; expected to add over 800,000 barrels of oil equivalent per day by 2017 :
"Our upstream portfolio leads the industry in quality, breadth and depth. We have the right strategies, always adhere to a disciplined investment approach, and are constantly managing the portfolio to extract and maximize value for our shareholders. Our base business is performing exceptionally well and provides us a substantial, longer-term competitive advantage, driving continued peer-leading financial and operational performance."

"Our plan for production growth is solid and will be driven by near-term project ramp-ups as well as our larger major capital projects which begin starting up later this year....These projects are attractive, and when combined with profitable production growth from our shale and tight resource developments, are expected to add over 800,000 barrels of oil equivalent per day by 2017. We also have a deep queue of other growth opportunities which should allow us to continue growing production to the end of the decade." 

Natural Gas

The source for this is the SandRidge message board, but it's possible it was first posted elsewhere. 
Looks like we end up close to 800bcf in storage by April 1st and we may have a cold spring, at least in portions of the Midwest due to the Great Lakes being frozen over.

Average build is around 2.0tcf, we will need a 3.0tcf build to get back to last years level. Close to an extra 4.5bcfd, maybe more if Spring is cold, will be needed. I don't see that happening. Massive increases in production to the tune of 4.5bcfd plus need to come online by April 1 - good April Fools joke that the futures market is playing on us. Likely it has more to do with CFTC regulations. The spriggett doesn't just suddenly open up by 4.5bcfd just because the draw season is over, it will be a slow build and may disappoint the Bears and the EIA.

I'm the ultimate NG Bull, but don't want to see our country have serious shortages next winter. If we don't have a hot summer or a cold winter next year, things may be OK, otherwise look for rationing and curtailments. There is potential for serious problems developing. The backside of the curve needs to move to that 5.50 to 6.00 area out for two years or the country will be facing massive shortfalls in production - perhaps as soon as next winter.

Canada is having storage problems as well - don't look to see them bail us out. This could be a lot more serious than what anybody is talking about. Mexico exports coming up EOY further exacerbates the problems.

JMHO, but I pretty much nailed it so far. Anybody think that production suddenly goes up by 4.5bcfd on April 1? There are 210 days on average for refill season. At a 1.0tcf deficit that means injections need to go up by 4.76bcfd to get us back up to 3.8tcf in storage - it Ain't Gonna Happen.

If we just get an average build of 2.0tcf, its a nightmare. The country will draw 3.0tcf this year. A 2.8tcf storage going into next winter is a disaster. Cold Spring, Hot Summer, could such a thing happen that the USA has Serious NG supply problems as soon as next winter? Well, the writing is on the wall, this is definitely going to happen sometime between 2015 and 2017, and it sure looks like its going to happen sooner than later.

Stock up on the low priced natural gas producers. Low storage reserve stocks are a given, the natural gas bull market is alive and well.

US Energy Coal Policy Running Amok

I don't even know where to begin; I don't have a dog in this fight. I am simply a spectator. A spectator who is watching US policy run amok.

Read this article a couple of times. See how many story lines you can find. I find this paragraph particularly interesting:
In Pennsylvania, Attorney General Kathleen G. Kane said her office had been flooded with complaints from consumers whose utility bills had soared, in some cases tripling.
In Rhode Island, the utility National Grid received permission for a 12.1 percent electricity rate increase in January, nearly all of it because of higher prices for the gas used to make electricity.
This article is not in a "coal" journal. It's not from Rigzone. It's not from the Oil & Gas Journal. The article is from The New York Times. The editors won't admit it but they are finally starting to get it.

Going forward the incumbents have three problems:
  • ObamaCare
  • high utility costs
  • unemployment/underemployment and 99+ week-benefits not renewed
The article tries to extend this energy problem to the entire United States; to some extent it is true. But right now it's hitting the northeast hard.
In New York, Con Edison increased the price of each kilowatt-hour about 16 percent this month compared to last year. And in Ohio, energy retailers will demand higher prices from customers like Ms. Cundiff when annual contracts are renewed.
No war on coal? LOL.
Underlying the growing concern among consumers and regulators is a second phenomenon that could lead to even bigger price increases: Scores of old coal-fired power plants in the Midwest will close in the next year or so because of federal pollution rules intended to cut emissions of mercury, chlorine and other toxic pollutants. Still others could close because of a separate rule to prevent the damage that cooling water systems inflict on marine life.
So, we will see what next winter brings. Let's keep our fingers crossed it's not frigid weather caused by global warming.
For utilities, another frigid winter like this one could lead to a squeeze in supply, making it harder — and much more expensive — to supply power to consumers during periods of peak demand.
By the way, I don't know what the writers mean by "for utilities." The utilities will do just fine. The consumers won't. 

By the way, if folks think utility costs are high in Rhode Island right now, wait until the incumbents vote to increase renewable energy requirements:
Wind costs significantly more than either coal or natural gas.

Fracking Is Turning US Into Bigger Oil Producer Than Saudi Arabia

The Independent is reporting:
Even predicting future oil output isn’t the precise science you’d expect. “We keep raising our forecasts, and we keep underestimating production,” Lejla Alic, an analyst with the International Energy Agency noted recently. Last year US production reached 7.4 million barrels a day, an increase over 2012 of 15.3 per cent. A jump that large hasn’t been seen since 1951. This year the US should produce 8.3 million barrels a day.
Take another indicator – the volumes of crude being moved by trains, often a mile long, from the shale fields to refineries and terminals. In all of 2008, train companies moved 9,500 wagons of the black stuff. Last year, 400,000 of them rumbled across America.
How long America’s shale boom will last is hard to forecast also.
In Texas, which on its own is set to increase production to 4 million barrels a day this year, the drilling peak still hasn’t been reached, says Mr Gallegos. But, he suggests, “in the end it’s not the oil fields or the wells that will determine where all this goes. It’s the politicians around the world who set the price and make the markets.” Increasingly, the decisions that matter will rest with the US, as it adjusts to its new status as a glut producer.
A huge "thank you" to the reader sending me this link/story.

There are so many incredible story lines in this one article. I honestly think one could make a case that the US would be in a recession (if not a depression) if it were not for the shale revolution.

For the truckers ... a little classical music ...

Bond String Quartet

Four More EOG Permits In The Parshall Oil Field -- The Williston Basin, North Dakota, USA; MRO's Tyler Rundle Trust Comes Off Confidential Wednesday

Active rigs:

Active Rigs193187206173103

Six (6) new permits --
  • Operators: EOG (4), Enduro, Sinclair
  • Fields: Parshall (Mountrail), Mohall (Bottineau), Mary (Dunn)
  • Comments: all four EOG permits are in the Pashall
Wells coming off the confidential list were posted earlier; see sidebar at the right.

One (1) producing well was completed:
  • 24412, 3,823, Statoil, Garmann 19-18 3H, Banks, t2/14; cum --
Wells coming off confidential Wednesday:
  • 24029, 225, Baytex, Ebreck 33-28-162-97H 1NC, Bluffton, t10/13; cum 11K 1/14;
  • 24271, drl, HRC, Fort Berthold 147-94-3B-10-4H, McGregory Buttes,
  • 24560, 870, Fidelity, 3 Jacks 3-4-33H, Sanish, t10/13; cum 29K 1/14;
  • 25414, 1,701, QEP, MHA 1-10-15H-149-91, Heart Butte, t11/13; cum 30K 1/14;
  • 25536, drl, KOG, P Thomas 154-98-14-33-4HA, Truax, no production data,
  • 25990, drl, XTO, Clarence Federal 34X-7H, Haystack Butte, no production data,
  • 26223, dry, MRO, Rundle Trust 11-29TFH, wildcat, no production data,
Remember: #26223 had its problems; was replaced quickly by a new permit/new well in same section

Catching Up On News After Being Out And About All Day

PIMCO: CEO abruptly resigns; ensuing acrimony between CEO and co-founder Bill Gross.

President Obama will fly to Saudi Arabia in a few weeks to try to patch up things with King Abdullah. Another apology tour, no doubt.

New Jersey joins Texas and Arizona: Tesla cannot sell directly to consumers; must go through dealers.
The New Jersey Motor Vehicle Commission voted Tuesday to ban the direct sale of automobiles in New Jersey, forcing electric-car maker Tesla to use dealers instead.

The vote makes New Jersey makes it the third state after Arizona and Texas that will not allow Tesla to sell its vehicles directly to customers.
Tesla will no longer sell electric cars in New Jersey, effective April 1, according to Dow Jones.
When this reaches the US Supreme Court, it will be interesting to see how Ms Sotomayor "votes." 

Global Warming/ObamaCare

The nation seems to be passing through a period in which too many U.S. Senators have been elected without so much as a high school level understanding of what drives the Earth’s climate and it isn’t the 0.038% of carbon dioxide (CO2) in the atmosphere.
On Monday, March 10, some twenty of them will stay up overnight on the Senate floor, according to The Hill, “to bring attention to the impacts of climate change.”  You don’t get more idiotic than that. Climate, measured in decades and centuries, is always in a state of change. Meanwhile, the weather anywhere in the nation, determined by the changing seasons and responsive only to short-range forecasts, has turned colder thanks to a cooling cycle that is now into its 17th year.
GE to supply 213 megawatts of turbines for European wind farms -- and so it goes.

 ... but no one knows how many enrollees are actually pay their premiums....
The Obama administration said on Tuesday that 4.2 million people have signed up for private health insurance under Obamacare, and indicated that total enrollment could surpass a 6 million-enrollee forecast by the end of March.
It looks like things are going from bad to worse for the ObamaCare health exchange in Hawaii.
Hawaii lawmakers are proposing charging a fee to insurers that are not participating in the state's insurance exchange under President Barack Obama's federal health care overhaul.

The fee would help prop up the financially troubled Hawaii Health Connector. The exchange has enough money to cover its bills for this year — but not beyond that, without some help.
The Hawaii market isn't big enough for health insurers to stick around. Watch for more insurance policy cancellations if this goes into effect.

The house of cards is starting to fall (no, not ObamaCare, but global warming). Even The New York Times is coming around to that conclusion, albeit slowly.  The California drought, according to The New York Times, is not likely due to global warming.
In short, the drought gripping California has been observed before. And it has occurred principally because of a lack of rain, not principally because of warmer temperatures. Indeed, it should be quite familiar to anyone who lived in California in the mid-1970s, as I did. We can also say with high confidence that no appreciable trend toward either wetter or drier conditions has been observed for statewide average precipitation since 1895. This drought is not part of a long-term drift toward reduced precipitation over the state.
What’s different this time, however, is that the demand for water has greatly increased in the state, and it may very well be that the current stress created by the failed rains is more severe than for similar rainfall deficits 40 years ago. It is at least intuitive that growth patterns, population increases and the rising value of the state’s agricultural sector have increased California’s vulnerability to drought and reduced its resiliency — that is, the state’s ability to adapt and cope with less precipitation.

A Reminder That A Lot Of Young Journalists Are Clueless -- But Not All

I'm posting this story only for archival purposes. The comments are most interesting. I'm not exactly sure what point the reporter was trying to make. He sounds disillusioned. The AP is reporting this story.

This is not an investment site. Do not make any investment decisions based on what you read here for what you think you may have read here, but if investors had the same outlook at this reporter, they wouldn't be in investing very long.
America's plan to use more natural gas to run power plants, make chemicals, drive vehicles and heat homes may not go as smoothly as expected.
There's plenty of natural gas in the ground, everyone seems to agree. But the harsh weather this winter shows there are obstacles to producing it, and more pipelines have to be built.
The bitter temperatures boosted demand for natural gas to heat homes and businesses. But wells in some places literally froze, making it difficult for some drillers to keep gas flowing. And the high demand clogged pipelines, so even when there was enough production, the gas couldn't get where it needed to go.
I'm curious what energy source this reporter thinks would be better. Windmills? LOL.

In fact, the problem that gas couldn't get where it needed to go was self-inflicted in many (most?) cases.


An exception to the rule that many young journalists are clueless might be Kevin Chupka who wonders if President Obama might be the two-term version of President Obama. President Obama hasn't make his "malaise" speech but he is disillusioned, frustrated over the failure of ObamaCare (previously posted). I do think he should be given credit for staying cool with regard to the Ukraine. He let Putin take the Crimean, and turned a very, very risky "Cuban crisis" into a minor diplomatic row which will play out in the UN or in The New York Times. A "President Bush" would have us in another shooting war in the Ukraine, or at least the risk of doing so if Dick Cheney were running the show. So, fortunately, "no drama Obama" kept our noses out of where we don't belong and simply let Putin do what he wanted, not that Obama had many options. And so we get this Breakout story:
The ongoing crisis in Russia and Ukraine has, for some, highlighted deficiencies in President Obama’s foreign policy (or lack thereof). Breakout’s Jeff Macke likens it to the widely held belief that President Jimmy Carter was particularly weak when dealing with the Iran hostage crisis. “Apparently we stopped Putin by saying ‘you’re gonna lose all the good will you had with the Olympics,’” Macke contends. “It reminded me very much a Jimmy Carter-esque kind of scolding morality.”
Unfortunately, after that great headline and opening paragraph, the reporter sort of lost it, and made excuses for President Obama. Sad. The reporter got off to such a good start. 

Update On Bonanza Creek -- Mike Filloon

Labeled as a Bakken update, I don't believe Bonanza Creek operates in North Dakota. Mike Filloon contributes over at SeekingAlpha. Bonanza Creek operators in the DJ Basin.

A Note To The Granddaughters

We took the granddaughters to the Dallas Arboretum and Botanical Gardens yesterday and had a wonderful time. We did not have enough time to explore everything in the children's garden, and we had still not seen the main arboretum and garden. It's an incredible experience. The flowers were in full bloom -- the cherry blossoms were about the only flowers not yet on display; they come out a bit later, I guess in April, and only last a few days.

While resting, we challenged each other to name one flower starting with a letter of the alphabet, from A to Z. We were stumped on K, Q, S, and X, after seeing much of the garden. Then we saw the "snapdragons" and were a bit embarrassed we had forgotten them. I was sort of given praise for coming up with the Kumquat flower, which we agreed would satisfy "K" and "Q" but but then we saw the "Korean Rock Fern" and had the "K." [I see now there there is a flower's name that starts with X: http://www.ask.com/question/is-there-a-flower-that-begins-with-the-letter-x.] A google search will provide a number of flower names that start with "Q."

In a part of the garden, there are adult-size bird houses, as well as a "normal" bird houses. We quizzed each other on nocturnal and diurnal raptors. I had forgotten there was one diurnal owl; the older granddaughter reminded me it was the snowy owl. She also reminded me there were two families of owls: "true" owls and barn owls. Of all the raptors, only owls are nocturnal.

Tomorrow we will take the granddaughters to the Science and History Museum in Ft Worth.

Chicago May Divert CBR From Downtown To Suburbs

A reader send me this link to a video story out of Chicago.

Grumbling In California About Fracking

The AP is reporting at Rigzone:
In a year when California Democrats are worried about motivating their voters, Gov. Jerry Brown heard another unwelcome message Saturday: Some Democratic activists are bristling over his administration's policies on hydraulic fracturing, or fracking.
Appearing at a state Democratic Party convention in Los Angeles, Brown found himself forced to speak over a noisy group of sign-waving protesters in his first major campaign speech since formally declaring his candidacy last month.
"Just listen a moment," Brown pleaded at one point, as the protesters bellowed "No fracking" and waved "Another Democrat Against Fracking" signs just steps from the podium where he was speaking. State Democratic conventions can be boisterous gatherings, but the protesters provided an unscripted distraction in what was otherwise expected to be a unified show of support for the 75-year-old governor, who appears headed for an unprecedented fourth term in the heavily Democratic state.

North American Energy Revolution And Opportunities In The South

Over the weekend, I posted/linked a story on Electrolux; the company may shut down a factory in Italy due to high payroll costs, but did not mention anything about the extraordinarily high price of electricity in Italy.

Yesterday, Electrolux was in the news again. In this case, Electrolux did, in fact, close an Electrolux plant, the one in Montreal, Canada:
Stockholm-based Electrolux AB (ELUXB), the maker of Frigidaire ovens, is moving production from a factory near Montreal, where it employed 1,300 workers, to Memphis as part of efforts to consolidate its operations in Tennessee, where it is receiving financial assistance. Factory workers in Tennessee earned almost 10 percent less in 2012 than the U.S. average, according to Bureau of Labor Statistics data.
The Electrolux story is buried deeply in a story highlighting the fact that Warren Buffett closed a Heinz ketchup factory in Canada. Although the story focuses on this particularly Canadian factory, in fact, Warren Buffett closed two other plants, also, in the United States. Buffett said:
"The tomatoes are going to go to the plants that have the low production costs," Buffett said in November at an event in Detroit. "It's really a question of having an unprofitable plant and concentrating production in a more profitable plant." 
In addition:
The job cuts have come despite a pick-up in global growth and a 13 percent drop in the Canadian dollar since September 2012, raising concern that Canadian factories will struggle to compete with plants in China, Mexico, and even the U.S., where the much-touted manufacturing renaissance has been fueled by declines in real wages and two-tier pay scales that mean less money for new employees.
There are a couple of interesting story lines here that circle back to the problems in Italy, reflected by the first linked article on Electolux. Cheap energy in the United States is only of the story lines.

Tuesday, March 11, 2014

Active rigs:

Active Rigs191187206173103

Bakken watch: another day without a CLR report on the 14-well pad southwest of Williston portends bad news.

Bakken watch: seasonal load restrictions go into effect in southwest North Dakota starting tomorrow, March 12, 2014.

RBN Energy: inland crude tank barge fleet.
There are approximately 3,350 inland tank barges in the US that are all part of the Jones Act fleet. These barges move crude oil, refined products and petrochemicals along 12,000 miles of navigable inland waters – most along the Mississippi River system. Crude by barge traffic has grown 8 fold in the past three years and barges are over 90 percent utilized. Most of the increasing volume of crude moving from the Midwest to the Gulf Coast by barge is coming from Canada by pipeline and loading onto barges in Illinois. Today we review barge movements along the Mississippi River.
This blog is Episode Six in our series detailing the US Jones Act Fleet.
The Wall Street Journal

Government will investigate Government Motors over 10-year-delay in recall.

Article shows how out-of-touch the Obama-appointed Sotomayor is. In 8-1 vote she sides with government. Supreme Court rules in favor of landowner in rails-to-trails case.

The diplomatic "crisis": Putin rejects US proposal on Ukraine.

An interesting cultural phenomenon: US companies cling to writing paper checks.
U.S. companies lag far behind their counterparts in Europe, Japan and even Brazil in the world of e-payments. American businesses and consumers wrote 21 billion checks in 2012, according to the Federal Reserve. That's more than four times as many checks as were written that year in the European Union's 28 member countries, according to the European Central Bank.
A slippery slope: in fracking, more neighborliness. The story mostly has to do with overseas fracking.

McDonald's US sales slow down for fourth month. I think this has less to do with the economy but more to do with the franchise.