Monday, September 15, 2014

News We Will Be Reading Tuesday -- September 15, 2014

Might the Washington Post have the story that puts the final nail in the Keystone XL coffin tomorrow morning? Never mind; story was hyped by both Drudge and The Washington Post. On refrigerants; voluntary; speed up the process. A non-story.

The Wall Street Journal

Alibaba could make select firms very rich. Lead story.

Posted earlier, different source: thousands likely to lose ObamaCare health insurance.

Study rethinks danger of large quakes from deep-sea faults. Most deep-sea faults in the Pacific Ocean may be capable of generating earthquakes greater than magnitude 9.0, according to new research.

Firm strikes it rich with fracking sand. Insight Equity Holdings owns about 30% of Emerge Energy Services, which started out of supplying sand to golf courses but has done well mining the silica crystals for energy companies.

The Los Angeles Times

Op-ed: Obama is rushing into war against Islamic State. Wow, the president can't satisfy anyone.

No Comment
NoTricksZone is reporting:
It’s obvious that neither journalists and nor NASA scientists have been looking at what is really happening. Antarctica has spent much of the current year smashing one daily maximum sea ice record after another. Today we see that Antarctic sea ice has totally smashed the all-time satellite-era record (see chart above). So far not a peep on that from the German mainstream media.
IceAgeNow is reporting: record Antarctic sea ice is more than twice the size of the continental United States.

Wedding Bell Blues, Laura Nyro

Thirteen (13) New Permits -- North Dakota; Only Two Wells Coming Off Confidential List Tuesday -- September 15, 2014


September 16, 2014: an astute reader noted that CLR used all ceramic in the big well noted below. The reader suggested that using all ceramic made for a very expensive well. That would have been true in the "old days," and is probably still true, but one wonders with the high cost of transportation now, whether the full cost of sand vs ceramic is that big a deal. I don't know; just wondering.  (After the reader pointed out the "all-ceramic angle," I updated the original post below.)

Original Post 

Here's how to get everyone well past the minimum wage. When you get to this link, scroll down to the "workers wanted" sign. You might be surprised. Of course, regular readers won't be surprised.


Note: follow-up on that "huge" well CLR is reporting near Divide County:
  • 27545, 739, CLR, Knox 1-16H, Winner, middle Bakken at 9,655 feet; 30 stages; 3.4 million lbs sand + ceramic; t6/14; cum 33K 7/14; interesting: neither unusual number of stages OR unusual amount of proppant (all ceramic: 1,185,692 lbs of 40/70 ceramic & 2,262,574 lbs of 30/50 ceramic); geology report not yet filed. Production for first three months at this post.
Active rigs:

Active Rigs199178193200146

Wells coming off the confidential list today, this weekend, were posted earlier; see sideabar at the right.

Wells coming off the confidential list Tuesday:
  • 26667, 563, Emerald Oil, Ty Webb 1-1-12H, Sheep Butte, t3/14; cum 32K 7/14;
  • 27226, drl, Hess, BW-R Peterson-149-99-1102H-3, Cherry Creek,
Thirteen (13) new permits --
  • Operators: Whiting (5), KOG (4), OXY USA (2),  Denbury Onshore, American Eagle
  • Fields: Hay Creek (McKenzie), Nelson Bridge (McKenzie), East Fork (Williams), Manning (Dunn), Cedar Hills (Bowman), Colgan (Divide)
  • Comments:
Two (2) producing wells completed:
  • 26409, 1,964, BR, CCU Corral Creek 11-28MBH, Corral Creek, unitized, t8/14; cum --
  • 26962, 1,283, BR, NOrman 11-4TFH, Fancy Buttes, 4 sections, t8/14; cum --
Fifteen permits canceled. EOG cancels four "Fertile" permits in 3-151-90. XTO cancels three Sorenson permits in 28-150-98. Samson Resources cancels five permits.

Operator transfer: five wells in Williams County from QEP to Triangle Petroleum.

Putting The Bakken Into Perspective

  • ConocoPhillips is auctioning its 24% stake in the Clair oil field in the U.K. North Sea and hopes to bring in $2B-$3B, FT reports.
  • The project, which sits in Scottish territorial waters, is one of the U.K.’s most prized oilfields, and FT says COP's interest in exiting the project is a sign of the challenges facing the North Sea oil industry.
  • Some campaigners for a Yes vote in Thursday’s referendum on Scottish independence have argued that Clair could generate income and tax revenues that would sustain Scotland’s public finances for decades, but industry sources have emphasized the technical difficulties of extracting the oil.
  • BP is operator of the field and owner of a 28.6% stake; Royal Dutch Shell also owns 28.6%, while Chevron owns 19%.
The Sting

Previously reported; this is another report. CNBC is reporting:
Up to 115,000 people stand to lose Obamacare health insurance coverage by Sept. 30, and another 336,000 people are at risk of losing federal subsidies to pay for that coverage, officials revealed Monday.
The 115,000 people failed to show valid proof of citizenship or legal residency for the insurance plans they bought through, a top federal official revealed Monday.
The IRS will go after those folks who lied about their incomes.


12:03 p.m. CDT -- off the net for awhile. Active rig count: 199.

See first comment: on further review -- it turns out that the actual count is well less than 199 due to some "double counting" or "double reporting."

Micro-, Mobile-LNG Plant 

A reader sent this to me some time ago; I've been so busy I forgot to post it:
Dresser Rand is set to introduce into the market shortly the world's first micro, mobile LNG plant.they are calling it LNGo.
More can be found at this link.


We've been at 199 active rigs in North Dakota for the past 72 hours. My hunch is that Lynn Helms is in McKenzie County right  now cheering the roughnecks on, maybe even in flame-resistant Carhartt coveralls and steel-tipped boots and a hardhat helping to get another rig up and running before another one comes down. I'm sure there's a phone call into CLR's Harold Hamm to delay taking down any active rigs. All we need is a few more hours. Closer than 4th down and inches in an NFL game.


The Texas oil and gas industry is in its golden age
Lebas pointed out to the Energy Resources Committee that jobs in the oil and gas production sector rose above the 400,000 level last year for the first time, at an average wage ($125,000) that is three times the state average.  Tax collections from the industry via the sales and production taxes exceeded $13 billion during 2013, and will be even higher this year.
Oil and gas development also helps to create jobs in other industries.   The advent of massive new reserves of affordable domestic natural gas has in recent years led to a nascent manufacturing renaissance in the U.S.   Industries that use natural gas as a feedstock  – fertilizers, chemicals, clothing, plastics, steel, and many others – have begun to invest tens of billions in new plant and equipment here in the U.S., creating domestic jobs that had been sent overseas over the last quarter century.
For the state’s government, this Golden Age in oil and gas has also led to a bit of a Golden Age in the state’s fiscal situation.  Prior to the boom’s beginnings in 2010, Texas state government had been in a state of chronic budgetary shortfalls for about a decade.  In fact, when the legislature convened in January 2009, that shortfall was estimated to be as high as $25 billion for the following  2 year budget cycle.  In 2007, the legislature and Governor had to figure out how to close about a $10 billion shortfall.
When the legislature convenes in January of 2015, Lebas estimates that it will enjoy a budgetary surplus in the vicinity of $7 billion.  In addition to that, Lebas agrees with the Comptroller’s estimate that the state’s Rainy Day Fund will have a balance of about $8.4 billion, and that is assuming that Texas voters approve a ballot initiative in November that would allocate about $1.7 billion in Rainy Day Fund money to the Texas Department of Transportation to help pay for road improvements and repairs.   Guess how the Rainy Day Fund is funded:  via severance taxes levied on oil and natural gas.
For The Archives: Negawatts

Chicago Business is reporting:
The decision has significant pocketbook ramifications. Eliminating negawatts to meet peak demand would tend to raise prices because it would force consumers to buy from less-efficient, higher-cost power plants that otherwise wouldn't qualify for capacity payments. The independent market monitor for PJM, which plays a market-referee role for the power grid stretching from Chicago across all or parts of 13 states to North Carolina's Outer Banks, estimated late last month that—if the court ruling stands—the annual cost to reserve enough power capacity to meet demand during peak periods would rise as much as 124 percent from today's levels.
A Red Line "Among The Greens"

Yahoo!Finance is reporting: President Obama says that if Syria shoots an American airplane out of the air, that means WAR! So I guess we have another red line:
Apparently Obama now has a red line in the sky. He's put red lines in the yellow sand, red lines in the Black Sea, and now a red line in the blue sky. Quite artistic, he is. But he loves green the best. As in the "greens" at Martha's Vineyard.
The Great Unraveling. From The New York Times, no less. The Obama legacy. 

Apple Confirms Four Million iPhones Sold First 24-Hours, September 15, 2014; Holding At 199 Active Rigs In North Dakota; CLR Reports A Rare Dry Hole In The Bakken; Support Grows For ObamaWar

Link here for the Apple story.

That's just the first day. The current poll concerns the entire weekend, and then the entire first week to include both weekends on either end.

Active rigs:

Active Rigs199178193200146

Almost set another record: "we" came within two wells of setting a record that could never be broken, at best only tied -- eleven wells came off the confidential list today. Nine of them went to DRL status. One was dry; the other was a huge CLR well. But nine wells out of eleven (9/11) going to DRL status. The number of wells waiting to be completed at any given time in the Bakken continues to increase; I noted this two months ago. The NDIC director commented on it in the most recent Director's Cut.

Old news, but over at Seeking Alpha:
Carl Surran, SA News Editor
  • North Dakota's daily oil production jumped 5% in July to an all-time high 34.4M barrels (~1.1M bbl/day), state regulators say, although the number was lower than expected as producers worked to meet aggressive flaring-reduction targets.
  • Natural gas production hit 1.3B cf/day, also an all-time high, but the percentage of natural gas flared in the state fell to 26% in July from 30% in June.
  • In an effort to curb flaring, state regulators issued strict goals earlier this year with key benchmarks for flaring percentages each month; for October, for instance, the state's oil producers cannot flare more than 74% of natural gas produced.
"The amount of crude oil produced was lower than expected." My hunch is that mineral owners will see less return on their wells; certainly less than what was expected; a bbl of crude is going for $50 - $75; natural gas, $3? But everyone will feel better not seeing those flares.


CLR reports a rare DRY well in the Bakken:
  • 27832, dry, CLR, Jersey 29-6H, Alkali Creek, a 4-section well; no production data, nothing yet in the file report that might explain what happened; the scout ticket:
NDIC File No: 27832     API No: 33-061-03000-00-00
Well Type: OG     Well Status: DRY     Status Date: 4/4/2014     Wellbore type: Horizontal
Location: SENE 6-153-93     Footages: 2033 FNL 584 FEL     Latitude: 48.104684     Longitude: -102.679215
Current Well Name: JERSEY 29-6H
Elevation(s): 2046 KB   2030 GL     Total Depth: 1995     Field: ALKALI CREEK
Spud Date(s):  3/13/2014
Casing String(s): 9.625" 2018'  
Completion Data
Pool: BAKKEN     Comp: 4/4/2014     Status: DRY     Date: 4/4/2014


The Wall Street Journal

Support grows for ObamaWar. Turkey says "no." Iraq says "limited air strikes." Arabs are confused. Iran says "no." UK (with or without Scotland), Australia are on board.

India's economy? Look back at China in 2001.

Long legs for the US energy boom.  Current top well produces five times as much as record setter a decade ago. And both Mr Schumer and Mr Obama want to ban fracking in New York based on my reading of the tea leaves.


Ahead of the tape: industrial production's strength is masked by weather. What? Did "they" really say that. Another bad month blamed on the weather? You have got to be kidding. But that's what they are saying. Due to "cool weather" -- I thought it was all about "global warming." 2 C. 400 ppm. 2100.
Sometimes a chill wind just means cool weather.
Investors taking the U.S. economy's pulse have to keep that in mind when August's industrial-production data are released Monday.
Economists, and especially executives, love to use the weather as an excuse when numbers are weaker than expected. In the case of this important indicator, though, an unusually mild summer means that an already upbeat result understates the good news.
Electric utilities see peak residential and commercial demand in the summer as air conditioners hum. But in July, and to a lesser extent in August, demand for artificial cooling was far weaker than normal.
For example, New York City had no heat wave this summer—defined as three days of 90-degree-plus temperatures—for the first time in a decade. Normally steamy Atlanta hit 95 degrees once, versus 11 times typically. And Chicago had only three days above 90, compared with a more-usual 17.
The upshot was that the utilities component of industrial production, which carries a lot of weight in the index, fell by 1% in July versus a year earlier. As it was, the overall index registered 5% growth, its quickest pace since the winter of 2010-2011.
Subcomponents such as mining, business equipment and construction rose by 8.6%, 7% and 5.3%, respectively. Economists polled by The Wall Street Journal expect the index to post a a slightly weaker 4.7% year-over-year gain in August. That may be too conservative. Even if it isn't, the fall months, which are less affected by temperatures, may present a stronger and truer picture of industrial strength. 
Global warming? What global warming? 400 ppm, 2 C, 2100 is the mantra.

A while back I said that it appeared to me that this summer was cooler than usual ....

The Los Angeles Times

That story of methane in drinking water in Texas is a non-story but it will get lots of press. For one day.

The New York Post

The scientists have thrown in the towel on global warming; they've turned it over to Hollywood and politicians.  Their words, not mine. If you didn't hear about the record amount of Antarctic sea ice reported last week you've haven't been paying attention.