Wednesday, March 25, 2015

Twelve (12) New Permits -- North Dakota -- March 25, 2015

Active rigs:

Active Rigs98198186206170

Twelve (12) new permits --
  • Operators: Oasis (5), XTO (4), EOG (3)
  • Fields: Alkali Creek (Mountrail), Grinnell (Williams), Parshall (Mountrail)
  • Comments:
Four (4) producing wells completed:
  • 27367, 2,477, Petro-Hunt, Brenna 152-96-23D-14-2HS, Clear Creek, 4 sections, t3/15; cum --
  • 28817, 818, Triangle, Simpson 151-102-5-8-1H, Elk, t3/15; cum 5K 1/15;
  • 29220, 2,044, BR, CCU Golden creek 44-23MBH, Corral Creek, t2/15; cum --
  • 30120, 2,266, Lois Moen 44-34HU, Arnegard, 4 sections, t3/15; cum --
Wells coming off the confidential list Thursday:
  • 27957, 498, OXY USA, William Sakowsky 2-9-4H-142-96, Manning, t10/14; cum 27K 1/15;
  • 28171, conf, Emerald, D Annunzio 3-7-6H, Boxcar Butte, producing,
  • 28703, drl, MRO, Hamilton 34-20H, Bailey, no production data,
  • 28992, drl, Hess, GO-Perdue-157-97-0112H-2, Ray, no production data,
  • 29003, drl, MRO, Victor USA 34-12TFH, Lost Bridge, no production data,
  • 29013, 953, CLR, Debra 1-2H, Stony Creek, one section, t12/14; cum 27K 1/15;
  • 29178, drl, XTO, Moses 21X-9A, Garden,
  • 29229, drl, Statoil, Heen 26-35 6TFH, Todd,
  • 29356, dry, CLR, Mary 1-16H, Ranch Creek, surface casing failed pressure testing

Below The Century Mark, Break On Through To The Other Side -- March 25, 2015

Active rigs:

Active Rigs98198186206170

From SeekingAlpha late today:
  • The number of drill rigs in North Dakota’s oil patch has slipped below 100 for the first time in five years thanks to weaker crude oil prices.
  • Only 98 rigs are now drilling in the area, 100 fewer than on the same day a year ago and the lowest since March 2010.
  • North Dakota has been producing ~1.2M bbl/day of oil, and industry officials say ~115 rigs need to be drilling to keep that level of production.
115 rigs: only if the wells are fracked; there is currently a record number of wells waiting to be fracked: 850.

Break On Through To The Other Side

Break On Through, The Doors

How Crazy Is The Bakken? In One Table -- March 25, 2015; And Folks Still Support President Obama's Foreign Policy

The original post was dated March 25, 2015, when the first month's data (January, 2015) was posted. The production profile was updated May 9, 2015.
  • 28142, 1,110, Hess, HA-Swenson-152-95-1819H-7, Hawkeye, a Three Forks second bench, t2/15; cum 54K 3/15;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Yes, 11,000 bbls in five days works out to about 66,000 bbls in a 30-day month.

And almost no water.

Nine (9) days to drill (for newbies, when I first started blogging on the Bakken back in 2007, it was taking 45 - 60 days to drill to total depth -- and then they had to bring down the rig, and move it several miles and several days later to the next pad; now they "walk" the upright rig 50 feet to the next site on the same pad).

Second bench Three Forks (TF 2).

Very little proppant required.

Virtual Treaty

Wow, this is interesting. A first. A virtual treaty.

It appears that President Obama/John Kerry have electronically signed a virtual agreement with Iran. There is no hard copy of this deal; it exists only in the minds of President Obama and John Kerry and on Hillary's hard drive.  

My hunch is that the Republican-led Senate will virtually approve the agreement.

But it's a first, a virtual agreement. As good as the paper it's not written on.

Yemen Is A Success Story -- President Obama -- Two Days Ago
ISIS Now Controls The Country; The President Has Fled By Boat
President Obama Withdrew Last 100 US Special Forces

And folks continue to support President Obama's foreign policy

If President Obama considers Yemen a success story -- ISIS is now in control -- it speaks volumes about the president. He may have been born in Hawaii, but he certainly was not raised there.


Top-Notch Negotiator

"We'll give you five terrorists in return for a US Army deserter." -- President Obama. [And four (4) US soldiers died "rescuing" this deserter.]

History Repeating Itself

Clintons loot White House on way out -- GAO report. -- NY Times

Clintons return stolen furniture from White House -- ABC News
Former President Clinton and his wife, Sen. Hillary Rodham Clinton, have sent $28,000 worth of household goods back to Washington after questions arose over whether the items were intended as personal gifts or donations to the White House.
“We have been informed that it is being shipped back, and the National Park Service is ready to receive it, take possession of it and take custody of it,” Jim McDaniel, the National Park Service’s liaison to the White House, said Wednesday.
Yemenis looting presidential compound -- witnesses -- Reuters

Peak Oil, The Hubbert Theory In One Graph -- March 25, 2015

But, like global warming, the discussion on Peak Oil is closed.

And now there's so much oil being produced, the oil industry is voluntarily cutting back production -- because the price is too low.

Gasoline Prices Here And There, Then And Now

From the March 10, 2015, EIA report (a dynamic link):
U.S. average regular gasoline retail prices have increased for six consecutive weeks to $2.49/gal as of March 9, after falling to $2.04/gal on January 26, the lowest price in EIA's weekly survey of Monday prices since April 6, 2009. Rising crude oil prices, along with several outages at refineries on the West Coast, have contributed to the recent increase in retail gasoline prices.

In February, monthly average regional gasoline retail prices ranged from a low of $1.96/gal in Petroleum Administration for Defense District (PADD) 4, the Rocky Mountain region, to a high of $2.55/gal in PADD 5 along the West Coast. EIA expects U.S. retail gasoline prices to average $2.26/gal during the first quarter of 2015 and $2.39/gal for the full year, $0.13/gal and $0.05/gal higher than in last month's STEO, respectively.
Meanwhile, in California, self-proclaimed watchdogs are asserting that the industry is orchestrating the increase in gasoline prices in California. KION is reporting:
A consumer watchdog report says California oil refineries have about half as much gasoline on hand compared to the rest of the country. Tuesday a consumer advocate told a Senate committee the situation has lead to a spike in gasoline prices for Californians.
They say when refineries go down, gasoline prices go up.  And California is the worst case scenario.
The report further explains how Californians paid $47 billion extra, or $13 million per day more for gasoline compared to the rest of America over the last ten years.

Jamie Court, President of Consumer Watchdog says, "There is about an .84 difference in gas prices with the rest of America right now. Crude oil costs the same in California. This is really oil companies making big profits. The Senate committee agrees with our report that all of this extra money, the .84 per gallon is going right back into the pockets of the oil refinery and this committee is going to be discussing what can we do to change that."

Court says his group and other advocates plan to urge the governor and the Legislature to require oil refiners to keep another week of gasoline inventory on hand to avoid gasoline price spikes in the third largest gasoline consuming economy in the world.
Court was asked what he'd do to change the status quo, " First of all, we don't have enough real time information. We did a report showing that over 10 years we've had about  10.7 days worth of supply on hand in California compared to 18 in America. So we have always been behind in supplies. So we need real time data about when refineries go down and why. And we need information as to what days the supply is on hand, that's transparency."
In other news, California environmentalists want California refineries shut down. LOL. This suggests there may be a knowledge deficit for Jay Leno's jaywalkers -- it appears Jay Leno's jaywalkers are not aware of what those big "things" do that sit between oil wells and service stations.

Data Points -- Iraq, ISIS, Cost Of Fighting An Uncivil War -- March 25, 2015; Iraq: "Missed Our Target By That Much" -- By A Third

Post Bulletin is reporting:

A lot of story lines there. The JV team is getting to be a real pain for all involved. 
Iraq's oil exports for last month were below planned levels depriving the nation of badly needed funds for its battle against the Islamic state group.
Crude exports in February averaged 2.596 million barrels a day — almost a million barrels less than planned. The exports grossed about $3.402 billion, based on an average price of $46.795 per barrel.
January's daily exports averaged 2.535 million barrels, bringing that month's revenues to $3.258 billion. Iraq's 2015 budget is based on an expected price of $56 per barrel with a daily export capacity of 3.3 million.
The nearly 119.6 trillion Iraqi dinars budget (about $102.5 billion) runs with a deficit of 25 trillion dinars (about $21.4 billion).
A reader noted: just a month ago, didn't all the pundits say we need to take a million bbls of oil out of the market ... well, there's a million bbls of oil -- and not much changed. LOL. 

Another Casino Proposed For The Bakken -- On Highway 2, Montana, 50 Miles West Of Williston, Ft Peck Reservation -- March 25, 2015

Back on December 19, 2014, I posted a link to a PDF document suggesting a new casino in North Dakota, southwest of Williston was announced:
Dave Blue, Economic Development for Turtle Mountains in attendance today to explain that the tribe has purchased some Indian Trust Land and will be building a casino west of Williston east and south of Stat Oil.
The project will cost approximately $150M.
The project will be in phases and when they start turning dirt Phase I will be completed in 14 months and cost approximately $80M. This casino will be a state of the arts casino with hotel, resort, convention center, restaurant, and outlet mall. They will provide housing for their 300 employees.
They are exempt from building permits or liquor license, but they want to be good neighbors and work in conjunction with the County.
The liquor license will have to be issued by the tribe in Belcourt. They will contact the NDDOT and help with the 4 laning of Highway 2 west. They will have their own law enforcement at first then try and get an agreement with the Sheriff’s Department to assist.
They will also do a small expansion of the casino in Trenton. The grand opening ceremony will take place October 24th beginning at noon and they are inviting the Commission to attend.
Now, The Dickinson Press is reporting another casino in the Bakken, this one on the Montana side of the state line, on US Highway 2, about 50 miles west of Williston:
The Minnesota Indian tribe that owns the popular Mystic Lake Casino Hotel near Shakopee will invest $29 million in a Hi-Line casino on the Fort Peck Reservation in northeast Montana about 40 miles from the North Dakota state line.
The Shakopee Mdewakanton Sioux Community agreed earlier this month to loan the $29 million to the Fort Peck Tribes for the $34 million project set to begin June 15.
The casino, to be named the Buffalo Rivers Casino and Lodge, will have a gaming floor with 400 Las Vegas-style gaming machines, a 400-person event center, 150-person buffet, and 75 hotel rooms. The casino will be along Highway 2 near Fort Kipp at the reservation’s easternmost corner. Highway 2 has become a key route for Bakken oil traffic. The Fort Kipp site puts the casino within 53 miles of Williston, the epicenter of the boom.

Wednesday -- March 25, 2015; Economic News Today With No Spin

Active rigs:

Active Rigs100198186206170

RBN Energy: how Saudi pricing formulas work.
Ever since crude oil prices began their precipitous fall in June 2014 market watchers have picked through the tealeaves of every OPEC statement - particularly those of Saudi Arabia - for signs of a change in policy. One widely watched signal comes every month when the Saudi’s publish differentials that determine the price customers pay for their crudes. Today we explain how Saudi pricing formulas work.
We have previously discussed how international crude pricing works in the context of the Brent physical market based on cargoes loaded each month at the Sullom Voe terminal in the Shetland Islands and the related ICE Brent futures contract traded on the ICE platform.
The Brent physical market, like the physical market for most U.S. domestic crudes is based on bilateral trades between counterparties owning physical crude. Price reporting agencies like Platts and Argus publish daily price assessments for these crudes using information traders share about deals done.
In the U.S. most crude oil transactions are priced basis the benchmark West Texas Intermediate (WTI) crude delivered to Cushing, OK. The WTI price at Cushing is in turn underpinned by the heavily traded CME NYMEX light sweet crude futures contract. In this way U.S. and international benchmark crude prices are set based on a more or less transparent spot market involving numerous counterparties.
In contrast to these open market transactions, the price of crude sold by most OPEC producer nations is now based on formulas determined by a term contract between the crude buyer and the selling national oil company. Over time the Saudis and other OPEC members have experimented with various different pricing mechanisms including administered prices and for a brief period in the mid-80’s “netback” pricing where crude prices were determined by refining margins. Since then the system of formula prices emerged to become dominant.
We have discussed one such price mechanism before in a couple of blogs - the Mexican national oil company PEMEX formulas for their heavy Maya crude that is just beginning a turf battle on the Gulf Coast against Canadian heavy crude competition. This blog takes a closer look at Saudi crude price formulas.
Hard To Put Spin On This

For third month in the last four months, orders for durable goods fell. US News & World Report is reporting:
Orders to U.S. factories for long-lasting manufactured goods fell in February for the third time in the past four months, while a key investment category fell for a sixth month.
Orders for durable goods dropped 1.4 percent in February following a 2 percent increase in January and declines of 3.7 percent in December and 2.2 percent in November, the Commerce Department reported Wednesday. A key category that serves as a proxy for business investment spending retreated 1.4 percent in February, the sixth consecutive monthly decline.
The weakness in February was widespread, with weaker demand for commercial aircraft, autos and machinery. Economists expect domestic demand to strengthen in the months ahead and hope that will be enough to offset weakness caused by a stronger dollar, which dampens export sales of U.S. companies.

But it certainly questions the wisdom of the Fed raising rates. Maybe we need more stimulus.

Tesla -- WSJ

Elon Musk has proved that a market exists for electric cars, despite their many inconveniences, especially if they come wrapped in taxpayer subsidies. He hasn’t proved he can make a profit.
His idea of an industry at scale, he would probably be loath to admit, almost certainly depends on government intervention to make gasoline-powered cars increasingly prohibited. His gigafactory, to which he will commit $2 billion to double the world-wide capacity of existing lithium-ion batteries, is a mute acknowledgment that he sees no battery breakthroughs in the offing that would transform the problems of range anxiety and recharge times.
His latest announcement at least has him no longer attacking journalists who mention the problem of range. He updated the car’s software so it will constantly tell the driver if he can hope to reach his destination or the nearest charging station. When a driver gets there, though, he’ll still spend hours, not minutes, filling up.
So what's it all about?
As the perpetually blunt Sergio Marchionne of Fiat Chrysler has pointed out, Obama fuel-economy rules virtually require car companies to produce electric cars at a loss.
Part of Tesla’s market value, then, is attributable to the likelihood that it will be acquired by another car maker needing electric vehicles to offset its gasoline-powered vehicles.
But here’s an irony: In a world where other car makers are forced to build and sell electric cars too, Tesla’s golden brand gives it a leg up, but Tesla does not have the option of forever losing money on electric cars. To fully realize its brand value Tesla might have to sell itself to an auto maker that does.
I still maintain that Tesla is a battery company depending on government mandates. 

President Obama Signs Executive Order Barring Ted Cruz From Signing Up For ObamaCare

The New Yorker is reporting:
Just hours after Senator Ted Cruz (R-Texas) told CNN that he had no choice but to sign up for Obamacare, President Barack Obama signed an executive order making Cruz ineligible for coverage under the Affordable Care Act.
“Clearly, the hardship of receiving Obamacare was causing Ted a great deal of pain,” the President said. “This should take care of that.”

Obama acknowledged that the executive order, which makes Cruz the only American expressly forbidden from signing up for Obamacare, was an extraordinary measure, but added, “I felt it was a necessary humanitarian gesture to protect Ted from the law he hates.”
Satire. Go to the link.