Thursday, September 4, 2014

Iraq To Reduce Production Goals -- Reuters -- September 4, 2014

Some interesting information in this article by Reuters via Rigzone:
Iraq signed revised contracts with foreign oil companies for two southern oilfields on Thursday that reduced their production targets and extended the life of the deals, Iraqi oil officials said.
The revised deal with oil major BP for Iraq's giant Rumaila oilfield cut the planned plateau level to 2.1 million barrels per day from 2.85 million bpd.
Iraq also agreed with China's CNPC to slash the final output target from the Halfaya oilfield to 400,000 bpd from 535,000 bpd.
Iraq had set an overall production capacity target of 12 million bpd by 2020, which would rival that of top oil exporter Saudi Arabia, after it signed service contracts in 2009-2010 to develop its southern oilfields.
But crumbling infrastructure, red tape and a lack of clear oil legislation have stunted investor interest. Iraq has repeatedly failed to reach its ambitious targets, and current output from the southern fields is around 3 million bpd.
Baghdad has reduced the overall capacity target to 8.5-9 million bpd and returned to the negotiating table to discuss revised plateau production rates with oil companies.
Does this really surprise anyone?

European Bonds Providing Investors A Negative Return -- September 4, 2014; The Albino Asp Captured

Being reported tonight by Reuters: "Euro under water as ECB opens liquidity tap."
The Euro was deep under water on Friday having suffered its steepest daily fall in three years after the European Central Bank stunned markets by cutting interest rates and embarking on a trillion-euro asset-buying binge.

The aggressive shift sent short-term bond yields into negative territory in Germany, France, the Netherlands, and Austria, giving investors an overwhelming incentive to sell euros for higher yigher yielding assets elsewhere.
Hmmm....sounds like the US Fed some years ago.

How's that renewable energy program working out? Or the Russian sanctions?

The Wall Street Journal

Putin offers Kiev peace ... on his terms. That was yesterday. Today: Russian troops move on port, shattering hopes for a truce.

US, UK, and France will form international coalition to fight ISIL (aha, a strategy is being developed). Better late than never, but I thought the US military was strong enough to do it alone.

Teachers unions are fighting back against a California ruling that gutted two things they hodl sacred: tenure and seniority. But they face an uphill battle.

Please tell me this isn't true: Jeb Bush sends signals about 2016 presidential bid.

Fast-food workers strike for $150 minimum wage. Error: $15.

Shell oil company won't set production-growth targets: more concerned abou tcash flow to keep its dividend going. Okay.

 Wow, who would have guessed. Lego is now #1 toy company, pushing ahead of Mattel, in both revenue and profit. Go Lego.

Sugar prices drop to 7-month low. Something tells me consumers won't see this reflected in their candy bars.
The Los Angeles Times

And this is sad, the top story: Joan Rivers.  

Lava flows toward homes in Hawaii; emergency declared.

BP may face $18 billion in gulf spill fines. Bankruptcy next?

Reported elsewhere yesterday, but a big story in LA: electrified car sales stall as buyers back away from hybrids.

That albino cobra captured after 4-day search. Albino cobra hissing LA non-albino militarized  police of harassment. Hissing harassment.

Newly discovered giant dinosaur weight as much as seven (7) T-Rexes.

Thursday, September 4, 2014; CLR Trades At A New 52-Week High; And, A Race To The Bottom

For investors only -- this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

CLR traded at a new high, but will finish the day down if the trend continues.

The market started out strong, then lots of profit taking, no doubt, and has pulled back significantly. However, the list of companies trading at new highs is quite long (again): BRK.B, CAH, CFN, CLR, CVS, DIS, EEQ, UNP, WPX.


Active rigs:

Active Rigs196188192198146

Wells coming off confidential list Friday:
  • 26393, drl, CLR, Limousin 3-3H, Sanish, no production data,
  • 27131, drl, BR, CCU Corral Creek 31-28TFH, Corral Creek, no production data,
  • 27276, drl, SM Energy, Vincent Trust 16-21HS, Big Dipper, producing,
Wells coming off confidential list today were posted earlier; see sidebar at the right.

Eight (8) new permits --
  • Operators: QEP (6), Oasis, Hunt,
  • Fields: Grail (McKenzie), Blue Ridge (Williams), Sanish (Mountrail)
  • Comments:
One (1) producing well completed:
  • 28036, 713, Whiting, Ness 41-21-2XH, Sanish, t8/14; cum --
The following wells transferred from KOG to Emerald Oil (these appear to be in Mondak oil field, southwest McKenzie County, a relatively poor-to-fair location)
  • 19362, East Grizzly State 4-16-15-8H,
  • 20939, East Grizzly Federal 16-9-4-2H,
  • 21956, Grizzly 147-103-16-21-16-2H,
  • 23175, Grizzly 147-103-14-22-15-3H,
  • 23976, Grizzly 147-103-16-21-16-1H,
  • 25140, Grizzly 147-103-3-17-20-13H3,
  • 25141, Grizzly 147-103-3-17-20-14H,

The Race Is On
Race To The Bottom


October 5, 2014: President Obama clinches it -- worst polling in history; worse than Clinton, Bush -- according to Gallup:
Angry and frustrated voters are planning to use the midterm elections in one month to tell President Obama they oppose his agenda, the highest “no vote” percentage in the last 16 years measured by Gallup.
The polling outfit found that 32 percent of voters want to send a message of opposition with their vote, compared to just 20 percent who are sending a signal of support.
That is 13 points higher than in 1998 when former President Clinton was headed to impeachment for lying about his sex affair with a former White House intern and even a smidge higher — 2 points — than in 2008, when Americans were tired of President Bush’s military actions in Iraq and Afghanistan.

Original Post 

George W. Bush's "lowest approval rating, ever": 38% (October, 2011)

Today, President Baraq O'Bama, Gallup approval rating, ... drum roll ... 38%.
The Race Is On, George Jones
 Wild sunflowers in the Bakken.

Natural Gas "Summer Fill Rate" -- September 4, 2014

On July 31, 2014, I posted:
It appears, that in round numbers, the industry needs to inject 100 billion cubic feet of natural gas into storage every week to meet this winter's expected demand. Don sent me the number for the most recent week: 88. That's the net change: previous week plus newly injected minus withdrawal. 
Today's number: 79.

Meanwhile, in merry olde England, the authorities have already forecast shortages of natural gas for this winter. IceAgeNow is reporting:
Power crunch worsens – Emergency measures introduced to prevent the lights going out this winter.
Offices and factories will be offered compensation to undergo 1970s-style energy rationing and shut down for up to four hours a day to prevent households being plunged into darkness.
Under the powers, businesses that sign up will be ‘bribed’ to shut down between 4pm and 8pm on any day between November and February.
In addition, ‘National Grid announced yesterday that it would begin recruiting out-of-action power plants (closed but not yet dismantled), which would be paid to ensure they could start up if needed as a “last resort”.   It had said in June that the emergency plan to boost power supplies would not be needed this year.’

PSX To Build New CBR Terminal In The Bakken; Location Not In This Story -- September 4, 2014


November 21, 2014: update on the Sacajawea Pipeline and Palermo Rail Terminal. To be on-line in first quarter 2016. 

September 5, 2014: see first comment. Looks like this may be at Palermo, ND, about 10 miles east of Stanley, ND, one of the hottest areas in North Dakota. Palermo was mentioned in this posting last year.
Original Post

I track CBR terminals here. To the best of my knowledge this PSX announcement is separate from the just-announced Plaza CBR terminal.

Argus Media is reporting:
Phillips 66 will build a rail-loading facility permitted to handle up to 200,000 b/d of Bakken crude, the first time a US refiner has directly owned a North Dakota origination terminal. The company will also buy 500 rail cars, bringing its total fleet to 3,700.
"We have permits in hand in engineering to construct a new rail-loading facility. This is permitted up to 200,000 b/d. We'll probably do about 160,000 b/d" and build about 300,000 bl in storage.
Refiners like Tesoro, Phillips 66 and PBF Energy have been keen to source crude by rail but so far largely invested in refinery-side or destination unloading facilities while taking out capacity, without owning or building the facilities, on the origination side. Producers like EOG Resources and Hess have invested in terminals on the origination or oilfield side.
Phillips 66 is working to bring more advantaged crudes to its refineries and invest more in shale crude logistics, including dropping midstream assets into a master limited partnership (MLP). It is adding another Jones Act vessel for a total of three in its fleet in January, and looking to bring more advantaged crudes to its 250,000 b/d Alliance refinery in Belle Chasse, Louisiana.
The company last year took order of 2,000 new railcars and put in an additional order of 1,200 general purpose rail tanker cars for receipt from summer of 2014 through early 2015 for a total rail-owned fleet capacity of 160,000 b/d.
Phillips 66 unloaded its first unit train on 5 August at its new 70,000 b/d crude-by-rail facility at its 250,000 b/d Bayway refinery in New Jersey. It also has capacity to take 50,000-75,000 b/d from a Global Partners facility, and can also receive crude from the Texas Gulf coast via its two Jones Act vessels.
Garland also sees "a lot of opportunity" around condensate-related infrastructure, including gathering, splitting and dock facilities. "More to come on that in the future," he said.
A 30,000 b/d rail unloading facility at the company's 96,000 b/d refinery in Ferndale, Washington, will be online in the fourth quarter.
With all the environmental activism in the Pacific Northwest I was surprised to see that last line, Ferndale, Washington. I think I posted the story some time ago, but have long forgotten.

And then the very next line in the story:
"We're disappointed" in the slow permitting process for the company's planned 40,000 b/d Santa Maria rail unloading facility, which would serve the company's San Francisco refining complex, but "it just takes time in California to get things permitted," Garland said. The company has also contracted for 20,000 b/d of capacity out of Plains All American Pipeline's upcoming rail terminal in Bakersfield, California.
It is counter-intuitive but that's good news for the Bakken that the company is having problems in California. The dollars that can't be spent in California will be spent elsewhere until California gets the permitting process completed.  

For Newbies: Look At All These "High-IP" Wells Being Reported Across The Bakken -- September 4, 2014; "The" Restaurant In Williston

Link here to see several good wells reporting today.

Also, Shell's discovery in the Utica (Pennsylvania) is getting a lot of play. New Yorkers must be going nuts.

I got a late start this morning. I stayed up late last night watching the new vampire movie (2nd time in three days to watch it; will watch it again tonight).

Fairfield SunTimes with photo and story on mega-load in the Bowman, ND, area -- and guess what -- no protestors.

For investors -- this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

The market surprised me (again) this morning. Pulled back a bit but there are still going to be a lot of companies trading at new highs. I don't think there's any really good explanation for this market, but I'm sure the talking heads are all over it. Halcon has had a couple of great days. Remember, WTI is dropping in price; the Permian is sending a tsunami of oil to the Gulf Coast. No Bakken crude oil derailment in last 24 hours; knock on wood. UNP is surging. They say BNSF is struggling, causing Warren problems. CN apparently the real winner, financially this past quarter or two.

Bakken Economy: "The" Restaurant In Williston

The Dickinson Press is reporting:
Since opening in December, the club has gathered 93 memberships, a mix of individuals and corporations.
On the corporate deal, four members of the company are in the system for charging food at the three-chef restaurant drinks at the “Member’s Bar,” and they can bring whomever they want.
“Everybody knows what it’s supposed to be like in there. It’s never noisy, there’s a dress code, and you treat it as… a business environment,” said Brom Lutz, an oilfield consultant who serves on the club’s advisory board.
The exclusivity comes partly from the membership fees — starting at $5,000 for an individual and $15,000 for a corporation, plus monthly food minimums. The $25,000 “founding membership” includes signage within the club, a spot on the advisory board and other perks.
Of course, The Dickinson Press led with:
In Williston, where bars and strip clubs are common, but corporate go-tos like Starbucks are far from the reality, Joel Lundeen saw an opportunity to fill a niche.
I was just in Williston for 7 days. I drove everywhere. I did not see one strip club and the only "bar" I saw was an upscale bar and grill on the west side. Of course, the only two strip clubs in Williston (that I am aware of) are on South Main -- which is now closed off for major infrastructure work. At least I heard there were two strip clubs; there may be only one. I really don't know. I assume there are two. And I assume there the old bars in that area are still there, but wow, if that's the perception The Dickinson Press has of Williston, the editors are missing some huge stories. I guess they haven't seen the plans for Northstar Center -- and that's just the "newest" excitement.

I read The Williston Herald every day while visiting the Bakken; I didn't see one advertisement or news story or gossip column on strip clubs in Williston. 

With all the driving I did, I didn't even see any dust, but then I didn't get farther east to Stanley or Parshall. What I did see, was some huge flares. Huge. Not many, but when I did see a flare, it was huge.

I also saw some of the widest roads that exist anywhere in North Dakota. From a man who should know:
Next time you come here you will be driving on the Watford City bypass, the single largest NDDOT project in its history and for Knife River too
Alexander bypass will be completed this year also. 

Then you will find construction at the Missouri River bridge until 2016.
I posted video of the Alexander and the Watford City bypass; they are truly incredible. 

But Williston was surprisingly calm this trip. There are NO MORE TRUCKS on the 2&85 bypass west of Williston. Okay, there are were a couple, but compared to last year and before, when the stream of 18-wheelers was non-stop, there was one or two, maybe. When I mentioned that to Willistonites, they were surprised; they had not noticed. But it's true. Where have all the trucks gone? To the truck reliever routes, the new bypasses, to Watford City area, they are all spread out.

The problem with traffic in Williston, now, is not the 18-wheelers but all the pick-up trucks. And unlike all the other oil basins outside the US, no semi-automatic guns or mortar launchers mounted in the beds. 

Last year, the water depot on the southwest side of town invariably had 6 - 10 trucks waiting to get fresh water to frack. This visit, I saw exactly one truck, and that truck was simply parked there, not getting water.

I was quite impressed: the Willistonites seemed to have weathered the storm -- the boom -- quite well. Now it's one to sustained "manufacturing." A new high school ready to break ground. A new elementary school is planned.

Active Rigs Back Up To 196; New Jobs Down -- September 4, 2014

Active rigs:

Active Rigs196188192198146

RBN Energy: Enbridge Line 9 reversal.
Enbridge expect their Line 9 reversal to be complete in October 2014. By the end of 2014 this pipeline will deliver 300 Mb/d of mainly light crude to two refineries in Quebec. But the Line 9 reversal will likely not have capacity to ship any crude for export – either from Canada’s East Coast or via the Portland-Montreal pipeline to Maine. Significant crude deliveries east of Quebec will have to wait for TransCanada’s Energy East pipeline in 2018. Today we explain why in the final episode of our series on feeding crude to eastern Canadian refineries.
Job Watch: same ol', same ol' -- claims up; economy on course. Hiring slows but Obama press says growth remained consistent with a sturdy economic performance.
U.S. companies hired fewer workers than expected in August, but the trend in job growth remained consistent with a sturdy economic performance in the third quarter.
That view was reinforced by other data on Thursday showing only a slight increase in the number of Americans filing for unemployment benefits last week and a decline in the trade deficit to its lowest point in six months in July.
The numbers: 
  • New jobs, expectation -- a gain of 220,000 jobs; actual: 212,000 jobs
  • Unemployment claims increased unexpectedly, up 4,000 to 302,000 
Several headline data points at Drudge today regarding jobs:
  • nearly 1 in 10 workers in California are illegally here in the United States
  • all job gains in North Carolina since 2000 went to immigrants
  • Obama signs agreement with Mexico to ensure "workers rights" regardless of legal status