Friday, April 17, 2015

Rigzone Oil & Gas Targeted Job Fair, Williston, North Dakota, May 19, 2015

From Rigzone Oil & Gas Targeted Job Fairs, link here:

For The Archives -- More Oil Industry-Related Layoffs

The Business Journal is reporting:
U. S. Steel Corp. on Friday confirmed that 799 employees to date have been temporarily laid off in Fairfield. Sarah Cassella, a spokeswoman for U.S. Steel Corp. in Pittsburgh, told the BBJ on Friday that since March 29, 799 workers have been laid off at both the Fairfield Works and Fairfield Tubular facility. That's in addition to 300 previous layoffs at the company earlier this year.

ISIS Moving Toward Baghdad; Iranian "Armada" Moving Toward Yemen -- April 17, 2015


April 18, 2015: the post below bothered me overnight. In "fairness," I really think the drop in the stock market yesterday was simply an opportunity to take profits, and once the market began to drop, the computers took over. Most likely it was the Greek and the Chinese economy story that drove the market in the first place, but the Mideast is certainly heating up.

This morning I see that ISIS claims bombing in "Iraqi haven" of Erbil. This city lies a short distance southeast of Mosul, just north of Kirkuk. According to Wiki:
The Kirkuk oil field has ever since [its discovery in 1927] remained the most important part of northern Iraqi oil production with over 10 billion barrels (1.6 billion cubic metres) of proven remaining oil reserves in 1998. After about seven decades of operation, Kirkuk still produces up to 1 million barrels per day (160,000 cubic metres per day), almost half of all Iraqi oil exports.
So, that's to the north where Iraqi forces re-took the city of Mosul after a heavy investment of resources, men, materiel, and cooperation of the allies.

Much closer to Baghdad is the news coming out of Ramadi, see below.

Another story in today's WSJ is an example of how far the terrorists have come in re-drawing maps in the mideast. It turns out that terrorist groups are now in control of another provincial capital in Syria:
Syrian President Bashar al-Assad blamed Turkey in remarks published Friday for the fall last month of Syria’s northwestern city of Idlib to Islamic fighters, saying Ankara provided “huge support”—logistic and military—that played the key role in the defeat of his forces. 
Idlib’s fall was a major blow to Assad’s government. The city was captured by opposition fighters led by al-Qaida’s branch in Syria, the Nusra Front, and the ultra-conservative Ahrar al-Sham group. 
It was the second provincial capital to fall to militants during Syria’s civil war. The city of Raqqa fell in 2013 and is now in the hands of Islamic State militants.
So now we have al-Qaida (a resurgence it seems), al-Sham (new boys on the block), and ISIS.

And, of course, no update on Yemen and the Iranian "armada" that is headed there to support the rebels.
Original Post

Now that the news cycle is over for the week, it appears that the news embargo has been lifted, at least temporarily. Earlier there was a story that Greece is beginning to sell its assets to meet debt payments now due April 24th.

Now this story. The Washington Post is reporting that thousands of Iraqis are fleeing towards Baghdad as ISIS makes inroads --
Thousands of families fleeing Iraq’s western city of Ramadi choked checkpoints leading to Baghdad on Friday, after an Islamic State advance spread panic and left security forces clinging to control. 
A column of traffic several vehicles wide snaked for miles at a checkpoint in Sadr al-Yusufiyah, on the edge of Baghdad province, as minibuses, cars and trucks picked up families who crossed by foot carrying their possessions in bags and wheelbarrows. 
Suhaib al-Rawi, the governor of Anbar province, of which Ramadi is the capital, described it as a human disaster on a scale the city has never witnessed
U.S. and Iraqi officials have warned that the city is at risk of falling to the Islamic State despite seven months of airstrikes by U.S. planes in Anbar. Such a loss would be a serious blow to Iraq’s government, which recently announced a military campaign for the province after retaking the militant stronghold of Tikrit, and to the international effort to push back the militant group, whose gains in Ramadi have demonstrated an ability to create chaos even while under pressure.
Seven months of airstrikes. Something tells me the colonels at Air War College are hearing from their US Army colleagues about "boots on ground."

Time to look at the map again.

So, this is pretty much where we stand at the moment in the Mideast --
  • Iraq is no longer functioning as a "state" -- US assessment
  • ISIS is moving towards Baghdad
  • Iran is sending an "armada" of 7 to 9 ships to assist the rebels in Yemen
  • Obama promised a few days ago to expedite weapons/ammunition requested by Saudi Arabia
  • Obama's one-sided agreement with Iran provided the opening Putin needed to send missiles to Iran
The market fell almost 300 points today; the Dow is now at a loss for the year. Coincidence? I think not. Pundits said it was due to Greece and the economy in China, both of which have been known for some time. Something tells me the movers and shakers on Wall Street were getting word of ISIS moving towards Baghdad earlier today. Movers and shakers did not want to be caught holding securities over the weekend.


Right Time of the Night, Jennifer Warnes

Natural Gas Explosion In Northern California Results In Serious Injury -- April 17, 2015

No one in the US has been killed by a derailed train carrying Bakken crude oil.

Hold that thought.

KCRA out in California is reporting:
Four patients are being treated at Community Regional Medical Center's burn and trauma unit. Three of them are in critical condition and one is in serious condition. 
Four other patients were taken to St. Agnes Hospital and three more to Madera Community Hospital. 
Traffic going north and south on Highway 99 was halted by the explosion at about 2:30 p.m. 
The explosion happened at the Fresno County Sheriff's gun range, where a work crew including county jail inmates using heavy equipment apparently hit a pipe carrying natural gas. One of the workers appeared to be in critical condition.
I am not saying that CBR is safer than pipelines. I am saying that both CBR and pipelines carrying crude oil or natural gas are inherently risky but processes can be put in place to minimize risk.

Bad Omen For Microsoft Explorer -- April 17, 2015

I saw this on a website just now:
"For best results, please use Chrome, Firefox, or Safari browser."
Speaks volumes.


I think Hillary can beat any one of these.
 Possibly the guy in the lower right has "appeal" but that's about it.

More Muscle Shoals

Patches, Clarence Carter

South Texas Methanol Plant May Expand Operations -- April 17, 2015

FuelFix is reporting:
Celanese Corp. is considering expanding its South Texas chemical plant to produce methanol, the company has announced.
Building a methanol unit at the plant in Bishop near Corpus Christi would be the latest move by the Dallas-based chemical company to capitalize on an abundance of cheap U.S. shale gas. Celanese has been building a new methanol unit in Clear Lake, southeast of Houston under a joint venture with Mitsui & Co., one of Japan’s largest generally traded companies.
The project, which should be finished by October, will have the capacity to produce 1.3 million tons of methanol per year. Made from natural gas, methanol is used in a wide range of products, including plastics, paints, solvents, refrigerants and pigments.
According to projections, the world will add 50 million metric tons of new methanol capacity within the next decade, with about one-third of that coming from North America.
So, while every story in America is about growing, the Mideast continues to build up for war. The Hill is reporting:
U.S. military officials are concerned that Iran's support for Houthi rebels in Yemen could spark a confrontation with Saudi Arabia and plunge the region into sectarian war.
Iran is sending an armada of seven to nine ships — some with weapons — toward Yemen in a potential attempt to resupply the Shia Houthi rebels, according to two U.S. defense officials. 
Officials fear the move could lead to a showdown with the U.S. or other members of a Saudi-led coalition, which is enforcing a naval blockade of Yemen and is conducting its fourth week of airstrikes against the Houthis.
Iran sent a destroyer and another vessel to waters near Yemen last week but said it was part of a routine counter-piracy mission. 
What's unusual about the new deployment, which set out this week, is that the Iranians are not trying to conceal it, officials said. Instead, they appear to be trying to "communicate it" to the U.S. and its allies in the Gulf. 
The really, really good news for Iran: the US president is trying to run out the clock. His original staff is dwindling; the ones that are still there are working on their resumes for LifeAfterObama.

Idle Chatter -- April 17, 2015

I'm not from the Jamestown area, so I don't know what's going on there, and I don't see much Jamestown news that hits the regional or national news media outlets.

In late 2006, or late 2007, I contacted Menard's by phone and by mail to talk to them about an opportunity for a Menard's in Williston. Whoever I spoke to told me "No, but thank you for calling." And some boilerplate that they continue to look for retail location operations.

It was about two to three years later before "we" heard that Menard's was considering coming to Williston; this was during the height of the boom. Regular readers know how long it took for Menard's to make the decision. We're eight years into the North Dakota Bakken boom, and 15 years into the Bakken boom (beginning in Montana) and Menard's is finally opening in the Bakken this summer.

I always thought Menard's was late to the game. Menard's had a store in Minot and that's probably what kept them in the Bakken game but nevertheless, it's always been my feeling that Menard's was late to the Bakken. Of course, at that time, their challenge would have been finding quality employees.

The fact that Menard's is moving into Jamestown tells me that the movers and shakers know something big is going to hit Jamestown. We all know about the proposed fertilizer plant, but I said I will believe it when I see it. There's a lot of issues, including water, and selecting Jamestown over somewhere closer to the Missouri / Mandan surprised me. It still baffles me and makes me wonder about the likelihood of this fertilizer plant in Jamestown becoming a reality.

But, the fact that a Menard's is opening in Jamestown at the same time it is opening a store in Williston speaks volumes. Is Menard's in Jamestown a confirmation that movers and shakers think the fertilizer plant is a "go"?

Week 15: April 12, 2015 -- April 18, 2015

The big story this week continued to be the slump in oil prices; the one percent (1%) decline in North Dakota oil production month-over-month; and, the active rig count dropped to 91. The number of wells waiting to be fracked spiked to 900.  Twenty-two Bakken oil fields are in the top 100 oil fields in the US, including Alaska.

Bakken economy
Sloulin International Airport reaches new milestone
Expanding aviation industry in North Dakota: drones
Williston to take over the jurisdiction of the proposed/approved $500 million shopping hub
Williams County approves proposed $500 million shopping hub
Williston, Jamestown Menard's to open this summer

Random update of an Enerplus well with 55 frack stages
Random look at an Oasis well in Camp oil field
Agenda for the April NDIC hearing dockets 

Bakken 101

Case study suggests new flaring rules are the long pole in the tent for completing wells

Minnesota judge rules Enbridge's Sandpiper "needed"

Bakken sets new record on amount of oil shipped to California 
Monthly CBR review

Is Saudi Arabia setting us up for a huge spike in the price of crude oil?

Record Amounts Of Bakken Crude Reached California Last Year -- April 17, 2015 is reporting:
California imports of Bakken crude oil from North Dakota on barges totaled a record 1.5 million barrels last year, 27 percent greater than the amount that reached the state by rail.
The transport of Bakken crude by rail is controversial, with fiery derailments in recent years prompting safety and environmental concerns. In California, 15 cities and towns have passed resolutions opposing the trains in their towns.
But many California refineries do not have the infrastructure necessary to unload crude oil trains. Attempts to add rail extensions to those refineries have in some cases been delayed due to opposition from environmental groups.
To get the low-cost Bakken crude to California refineries, producers load it onto trains in North Dakota bound for transport terminals in the Pacific Northwest. From there it is loaded onto barges bound for California refineries, which are better equipped to receive crude from sea vessels.
The Global Partners LP transport terminal in Clatskanie, Oregon, is a key departure point for barges carrying Bakken to California.
The facility, on a small canal that feeds into the Columbia River, began quietly transshipping oil from trains to barges in 2012 and is now receiving so-called “unit trains,” mile-long trains that only carry crude oil.
Refineries such as Tesoro Corp’s facility in Carson, California, are likely destination points for the barges.
And the environmental input:
But Bakken transported on water poses unique risks since it is lighter and more volatile than other crudes, environmentalists say.
“An oil barge accident in San Francisco Bay or off the coast of Los Angeles would be catastrophic,” said Matt Krogh, a director at environmental group ForestEthics.
“Bakken is simply too dangerous to move by barge or train and we don’t need this extreme oil,” he said.
For newbies: to the best of my knowledge, there are no pipelines taking oil into California. Like Hawaii, California is "an island" when it comes to oil. 

Update On Sloulin International Airport -- Williston Wire -- April 17, 2015

A world-renowned development firm will take the lead on an 800-acre project located in the Center of Williston. The City of Williston has selected Cardon Development Group (CDG) to rehabilitate and redevelop the Sloulin Field International Airport site after its operations are moved to a proposed new location. The Williston City Commission formalized the selection committee's recommendation on Tuesday, April 14th, 2015. The City of Williston will work closely with CDG throughout the redevelopment process. Williston Mayor Howard Klug said the City looks forward to the collaboration. "This is probably the largest public-private project Williston has ever seen," said Klug. "Cardon will bring with it world-class knowledge to Williston."
Sloulin empanelments:
Enplanements in North Dakota and Sloulin Field International Airport were up slightly in March 2015 compared to one year ago. According to the North Dakota Aeronautics Commission, boardings in Williston were 29,893 compared to 27,342 in 2014. Enplanements statewide were about 500 higher than 2014 from 313,450 in 2015 to 312,918 in 2014.
McKenzie County:
With lower revenue generated from the Gross Production Tax and the unanticipated higher cost of the Law Enforcement Center project, the McKenzie County Board of Commissioners was facing a $61.8 million shortage in the projected overall General and Road & Bridge budgets over the next two years.  "After a long day and a lot of discussion at the commissioner's meeting on April 7, the commissioners passed several resolutions," said Linda Svihovec, McKenzie County auditor and acting treasurer. "The commissioners decided to finance a $60 million loan for the Law Enforcement Center project," said Svihovec.  

Let's Do The Math -- April 17, 2015; Original Price: $2.6 Million / MW -- Sold For $500K / MW


June 13, 2015: Spain is paying the price of high-cost solar
Original Post
Zacks is reporting:
ALLETE, Inc.’s subsidiary ALLETE Clean Energy, Inc. acquired a combined 97.5- megawatt (“MW”) wind generation facility, comprising the Chanarambie and Viking wind farms, from a unit of EDF Renewable Energy. The transaction was valued at $47.5 million. The two wind farms jointly have 65 turbines, manufactured by General Electric Company GE.

Including the latest transaction, ALLETE Clean Energy’s renewable portfolio has now reached 437 MW.
$47.5 million / 97.5 MW =  $487,000 / MW

This is a steal.

From an August 25, 2014, post, this is 30-second sound bite for "cost of renewable megawatt":
  • Solar: $3 million / MW
  • Wind: $2.5 million / MW
  • Natural gas: $865,000 / MW
The seller, EDF Renewable Energy, got tons of tax credits and now will take a huge loss in the sale. They will carry those losses forward for many years, I assume. 

Meanwhile, ALLETE just got a great deal -- but no tax credits, I assume. Probably done for "PR" and government mandates.

Chamarambie wind farm: Minnesota; commissioned in 2003

Viking wind farm: co-located with Chamarambie.

Chamarambie-Viking wind farms are located 20 miles away from the 104-MW Lake Benton wind farm which Allete also bought, back in January, 2014.

The original reason for the Chamarambie wind farm: 79.5-Megawatt project by Xcel Energy, Inc. (formerly Northern States Power Company) as part of Xcel's requirement to provide 425 megawatts of wind-generated electricity.

Quick: see how long it takes you before you find the original cost for the Chamarambie wind farm.

This was the best I could do:
Xcel Energy and enXco, an EDF Energies Nouvelles Company announced plans to develop 351 megawatts (MW) of wind power in Minnesota and North Dakota by the end of 2011, increasing the utility's wind power resources by more than 10% company wide. Once developed, project ownership will be transferred to Northern States Power Co.-Minnesota, an Xcel Energy company.

The agreement between enXco and NSP-Minnesota targets approximately $900 million in investment over three years. It stems from a competitive bidding process Xcel Energy launched late last year, as part of its plan to meet state renewable requirements. The agreement marks Xcel's first major wind undertaking in North Dakota.
Original cost: $900 million / 351 MW = $2.6 million -- in line with generally accepted numbers for a new wind farm. And now it's being sold for less than $500K / MW.

So, Xcel / enXco starts this back in 2011, commissioned in 2013; once built, turns it over to Northern States Power Company, a subsidiary of Xcel. Then in 2014, sells it to Allete. In the real estate business this is known as flipping, but the goal is to sell real estate for more than it was purchased. In wind power, it appears to be all about tax breaks and government mandates. The road to Germany comes to mind.

Seven (7) New Permits -- North Dakota

Active rigs:

Active Rigs93186185206175

Seven (7) new permits --

  • Operators: XTO (5), BR, Crescent Point Energy
  • Fields: Siverston (McKenzie), Cabernet (Dunn), Colgan (Divide)
  • Comments:

The Prize Is Saudi Arabia -- April 17, 2015

Nothing more needs to be said:
Military units protecting Yemen's Masila oilfields withdrew on Friday and handed over security responsibilities to local tribes, in a sign of the weakening grip of the Yemeni state over its land and resources.
While Yemen is not a major oil producer, the conflict raises concern about risks to supply from the region's major exporters, especially neighboring Saudi Arabia.
The Prize.

Payback Wal-Mart

Pico Rivera, CA
Brandon, FL
Livingston, CA
Midland, TX
Tulsa, OK

There's something fishy about the story. Interestingly enough, ZeroHedge has the most to say about it.

Someone said it might have something to do with unions; except for California, unions don't seem to be an issue.

So, what are the other possibilities:
  • plumbing: very possible. Just because there are no workers on site doesn't mean a thing; the company says it's a 6-month project; the fact that these were shut down abruptly, however, is interesting; folks should watch for Wal-Mart trucks to come in to start moving merchandise to other Wal-Mart stores
  • renovation: building something entirely new to surprise folks; maybe prepare the stores for the AppleWatch kiosks
  • payback: at least one of these stores was said to be among the first where employees struck for higher wages
  • margins: stores operating on the thinnest of margins simply won't make it if wages are raised at these stores as promised by Wal-Mart, but the abruptness doesn't make sense
Me? I think it's the latter, with the abruptness suggested by the fourth bullet.

I always tell the granddaughters: if something doesn't make sense, google it or follow the money. It's not on google yet so it's the money.

Update, 5:19 p.m. CT: this is why we love to blog. We at least have an answer to why it was done abruptly. An announcement that the store was closing for any reason some employees would become apathetic; others angry; regardless, it would not be good customer service. In addition, an announcement that the store was closing in the future for an extended period of time, and inventory would have started walking out the door. The question comes back to why were these five stores selected for closure. Tangible: probably margins. Intangible: a shot across the bow of the union ships.

Update, 9:18 p.m. CT: workers at the California Wal-Mart are accusing the company of retaliation --
Some employees accused Wal-Mart Stores Inc on Friday of closing a location in the Los Angeles area for six months in retaliation for workers demanding for better wages and benefits. The largest U.S. retailer denied the accusation, saying it was temporarily closing five stores in four states to address recurring plumbing problems. 
The closures include a location in Pico Rivera, California, that has been a center of protests by workers in recent years.
Reminder: in general, Californians vote to keep Wal-Mart out of their neighborhoods. These California closures should make Californians joyful.

Random Update Of An Enerplus Well In Spotted Horn Oil Field, 55 Frack Stages; 13 Million Pounds Sand -- April 17, 2015

In the process of updating the Spotted Horn oil field, this well caught my attention; note the number of frack stages and amount of sand:
  • 26608, 1,601, ERF, Courage 150-94-06A-18H, Spotted Horn, middle Bakken, 55 stages; 13 million lbs, t6/14; cum 236K 2/15;
NDIC File No: 26608   
Well Type: OG     Well Status: A     Status Date: 6/7/2014     Wellbore type: Horizontal
Location: LOT2 6-150-94         Latitude: 47.846804     Longitude: -102.760051
Current Well Name: COURAGE 150-94-06A-18H
Elevation(s): 2244 KB   2218 GR   2218 GL     Total Depth: 25023     Field: SPOTTED HORN
Spud Date(s):  10/6/2013
Completion Data
   Pool: BAKKEN     Comp: 6/7/2014     Status: F     Date: 6/27/2014     Spacing: ICO
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 235,740     Cum MCF Gas: 277137     Cum Water: 107774
Production Test Data
   IP Test Date: 6/27/2014     Pool: BAKKEN     IP Oil: 1,601     IP MCF: 1775     IP Water: 852
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

That's not the only one. Running through the list, one sees an EOG Three Forks well with 45 stages and 9 million lbs sand.

It was also interesting to note four Enerplus wells were completed / tested just a month ago, March, 2015; their permits were issued back in 2011:
  • 21539, 1,852, ERF, Arikara 150-94-32D-29H TF, Spotted Horn, 2 sections, t3/15; cum 2K 2/15 (1 day)
  • 21538, 2,143, ERF, TAT 150-94-32D-29H, Spotted Horn, 2 sections, t3/15; cum --
  • 21537, 1,522, ERF, Hidatsa 150-94-32C-29H, Spotted Horn, 2 sections, t2/15; cum 23K 2/15;
  • 21536, 1,348, ERF, Mandan 150-94-32C-29H TF, Spotted Horn, 2 sections, 40 stages; 10 million lbs, t2/15; cum 22K 2/15;
For newbies, a good example of an IP that did not correlate with ultimate production (if additional fracking was done later, I did not seen any report):
  • 20359, 96, WPX/Zenergy, Bear Den 24-13H2/Dakota-3 Bear Den 24-13H2, middle Bakken, Spotted Horn, 12 stages; 2.7 million lbs; gas as high as 5,000 units, but decreased near the end of the lateral; compressor placed 8/13 for sole purpose of reducing flaring; t10/11; cum 263K 2/15; choked back to 1,400 bbls over 10 days in February, 2015;

Michelle Takes Us Back To Camping In 1963 -- April 17, 2015

Most recent photo of a Michelle Obama school lunch:

No, the photo was not from North Korea.

The school blamed the unappealing photograph on "poor lighting."

I find it incredible the school administrator(s) would actually defend this lunch.

The reason school administrators who keep the Michelle Obama school lunch program like it so much: schools are making money on the school lunch program, keeping prices the same but cutting back to what we see above.

Only one song fits this story:

Hello Muddah, Hello Faddah, Allan Sherman

Today's EIA "Energy Cookie" -- April 17, 2015; Japan's CO2 Emission -- 2nd Highest On Record -- So Much For The Kyoto Protocol

Today's EIA "energy cookie:
EIA is currently in the process of updating maps of major tight oil and shale gas plays, including the Eagle Ford and Marcellus plays, which will help to better characterize the geology of key areas of production in the United States.
EIA's most recent maps focus on shale and tight oil plays, and characterize plays based on geologic characteristics, including rock type and age. Understanding geologic history and processes helps exploration and production companies reduce the risk of drilling dry, nonproducing wells and better understand hydrocarbon resource potentials. --- EIA
The Kyoto Protocol Up In Smoke

CO2 emissions second-highest on record for Japan:
Japan's greenhouse-gas emissions rose to the second-highest on record in the year ended March 2014, revised government figures showed on Tuesday, reflecting a rise in coal-fired power after the indefinite closure of nuclear power plants.
Emissions rose 1.2 percent to 1.408 billion metric tonnes of carbon dioxide (CO2) equivalent from a year earlier.
That was up 0.8 percent from 2005 and up 10.8 percent from 1990.
That compares with record emissions of 1.412 billion metric tonnes in 2007.
All of Japan's 48 nuclear reactors have been shut down since September 2013, amid rigorous safety checks required after the March 2011 earthquake and tsunami wrecked the Fukushima plant northeast of Tokyo. Nuclear power had accounted for 26 percent of Japan's electricity generation. Its loss has forced the country to import natural gas and coal, increasing its greenhouse gas emissions.
Preliminary data in December had shown the emissions were a record high in the year ended March 2014.
Don't even get me started. Rumors are Algore is flying to Japan today to have a high-level discussion with Japanese leaders.

400 PPM CO2 And Blizzards In April

NBC News is reporting:
As many as 70 vehicles piled up in one spot of a Wyoming interstate Thursday after a heavy April storm dropped almost 10 inches of snow on the area.
An almost 150-mile-long stretch of Interstate 80 remained closed in both directions Thursday afternoon between Cheyenne in southeast Wyoming and Rawlins in the central part of the state because of treacherous, slick conditions that caused accidents across the area, officials said. The worst spot was near mile post 342, between Cheyenne and Laramie, two of the state's major population centers.
Don't even get me started. Unless Mile Post 342 is 11-feet tall, it was buried. 

Idle Chatter -- April 17, 2015

Don sent me the link yesterday. My unedited, immediate reply:

From the article:
"OPEC is now collectively producing nearly 31.5 million barrels per day, well above the cartel’s stated quota of just 30 million barrels per day. The enormous increase in production...."
1.5 / 30 = 5% -- that's hardly an "enormous increase."
And then this: ".... shale operations ramp up and down much quicker than conventional drilling. But they don’t turn on and off that quickly."
Actually, I think the shale oil can be ramped up pretty quickly, considering there are 900 wells in the Bakken and 1400 wells in the Eagle Ford waiting to be fracked. The first three to six months is huge production of a shale well....and if there's a risk of $150 oil, NDIC will waive flaring rules and conditioning rules (the latter have almost no impact regardless).
For newbies: I bet they can frack 200 wells a month in the Bakken, maybe more, if given the green light. 200 new wells x 10,000 bopd for the first two months = 4 million bbls cumulative in new crude oil a the end of those first two months, or 150,000 bopd. Additional. 10,000 bopd for the first two months is on the very low side for the best of the best wells now being drilled in the sweet spots of the Bakken.

At 300 wells, 20,000 bopd for the first two months, 200,000 bopd in new oil. 

This gives me an opportunity to comment on an earlier article. On April 16, 2015, I posted:
Bloomberg is reporting:
Saudi Arabia boosted crude production to the highest in three decades in March, with a surge equal to half the daily output of the Bakken formation in North Dakota.
Perhaps I'm a bit sensitive, but to me that has the sound-bite of an east coast writer who sort of misses the point of the Bakken. All that extra production in Saudi Arabia will generate additional revenue for a handful of princes in the kingdom. Meanwhile, the Bakken is creating more and more millionaires among every-day people day in / day out.

DOW Plunges In Early Morning Trading -- April 17, 2015

We'll hear pundits all day long and read stories all day long explaining the plunge in the Dow today.  For me, this is the explanation: profit-taking.

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

GE lost almost $14 billion on finance unit sale. Too many story lines.

The Labor Department said on Friday its Consumer Price Index increased 0.2 percent last month after a similar gain in February. Price increases were fairly broad-based in March, suggesting the recent disinflationary trend had run its course. Okay. Economists polled by Reuters had expected the CPI to rise 0.3 percent from February and be unchanged from a year ago. Link here.

There's a nice article on Sempra over at Seeking Alpha today. I had pretty much forgotten about this company. I certainly did not realize it was hitting new highs.
Sempra Energy, an energy services holding company, is a solid growth story available at a reasonable price in today's overheated market. The stock price of the company created a 52-week high of $116.30 and a 52-week low of $95.88, which implies that the stock is not so volatile. I believe this is relatively a safe stock with reasonable upside left over the next one year.
Sempra's five-year growth plan is really interesting. Sempra is one of the few companies that have successfully built liquefaction facilities in North America. I'm particularly optimistic on its three liquefaction projects that are currently being developed, which are (1) the Port Arthur LNG, (2) the proposed expansion of Cameron LNG with trains No. 4 and No. 5, and (3) the liquefaction facilities at Energia Costa Azul in Baja California, Mexico. Sempra is working to prepare FERC pre-filing for Port Arthur. Octavio M. Simoes, president of Sempra LNG, said:
We have gained valuable experience working with the FERC during the permitting process for the Cameron LNG liquefaction project in Louisiana...If we are successful, this project would provide long-term economic benefits and create new jobs in the region, while strengthening America's role as a global energy leader.
On the Sabine-Neches Ship Channel, Sempra has nearly 2,900 acres of property along with 3 miles of waterfront. It also owns 1.25 miles of waterfront on the Intracoastal Waterway. The Port Arthur, Texas project will utilize a portion these properties. The proposed LNG plant and export facility in Port Arthur will consist of two natural gas liquefaction trains capable of producing 10 million tons of LNG per year, along with facilities for marine vessel berthing and loading.
Much, much more at the link. 
Apple Page

Apple may have sold another 60 million iPhones in most recent quarter. 24/7 Wall Street is reporting:
If Apple discloses that it sold anything less than 60 million iPhones, shares may drop substantially. For some, a figure less than 70 million would disappoint.
Traditionally, Apple management guides low. If that trend continues, Apple’s revenue ought to be close to $60 billion. iPhone sales will need to reach 60 million to support that level of sales.
For Apple, it is iPhone sales of 60 million or the quarter will be considered a disaster. The impression that the iPhone has made Apple invincible will get stripped away.

Apple Watch goes on display in Milan, Italy.

Apple Watch spotted in England; unique folding UK plug.

For Newbies To The Bakken - April 17, 2015

I'm really posting this for newbies. I post so much, it's easy to miss the really good stuff. This is an example of some of the really, really good stuff in the Bakken. These wells come off the confidential list today:
  • 28019, 2,509, QEP, Moberg 4-20-21BH, Grail, t11/14; cum 97K 2/15;
  • 28020, 2,325, QEP, Moberg 3-20-21TH, Grail, t11/14; cum 107K 2/15;
  • 28021, 2,529, QEP, Moberg 3-20-21BH, Grail, t11/14; cum 94K 2/15;
  • 28022, 2,566, QEP, Moberg 2-20-21TH, Grail, t11/14; cum 96K 2/15;
A Note To The Granddaughters

I've probably read as much about the Plains Indians as anyone in the DFW area, maybe, maybe not. It's hard to believe but the best "reader's digest" resource for culture, language, and tepees of the Great Plains Indians may be in Jonnie Hughes' 2011 On The Origin of Tepees.

Another snippet.

In the early 1800s, up to thirty (30) Native American tribes were using tepees. The majority were semi-nomadic and used tepees only during the buffalo-hunting season. After the buffalo-hunting season, they returned to their permanent homes in the woodlands, river valleys, and mountains.

Only twelve (12) Plains Indians tribes were fully nomadic, living permanently on the plains, hunting buffalo 24/7.

From Hughes, the twelve tribes, from north to south: Sarsi (present-day Alberta); Plains Cree (present-day Saskatchewan); Blackfoot (present-day Alberta, along the Montana-Canadian border); Assiniboine (northern North Dakota along the Canadian border); Gros Ventre (northwestern Montana); Crow (southwestern Montana); Teton Sioux (South Dakota); Northern Cheyenne (Wyoming); Arapaho (southeastern Wyoming, extending into panhandle of Nebraska); Southern Cheyenne (Colorado, extending east into Kansas); Kiowa (northeastern New Mexico extending into the panhandle of Texas; and finally, the Comanche (southeastern New Mexico extending into Odessa/Midland area of west Texas.

Allied upon contact with the Europeans:
  • Sarsi - Blackfoot - Gros Ventre
  • Plains Cree - Assiniboine - Three Affiliated Tribes of the Knife River - Crow
  • Teton Sioux -- by themselves; universally "hated"
  • Northern Cheyenne -- Arapaho -- Southern Cheyenne
  • Kiowa - Comanche
The Three Affiliated Tribes of the Knife River: Hidatsa, Mandan, and Arikara.

At Little Big Horn, the Sioux allied with the Cheyenne and the Arapaho.

Language families:
  • Plains Algic language family: Cheyenne, Arapaho, Blackfoot, and Gros Ventre
  • Arapaho and Gros Ventre closely related; only "recently" separated by language
  • Plains Cree language family: a wonderful language phenomenon known as a dialect continuum; across Canada, east-west

  • Central Algic language family: southeastern Canada -- most likely the whole Algic family (including Cheyenne, Arapaho, Blackfoot, and Gros Ventre) evolved from Central Algic
  • Isolates: Comanche, Kiowa, and the Sarsi languages are all isolates

  • Comanche closely related to the Shoshone language (Great Basin/Utah)
  • Kiowa: not related to any large language family
  • Sarsi: part of the huge language family, the Na-Dene group, which extended all the way up to Alaska
  • Sioux and Assiniboine probably developed from same common language
  • The Sioux called "Crow" the "old tongue"; Crow is a Siouan language but is not directly related to the Sioux language that Sitting Bull spoke; it is more closely related to the language spoken by the Hidatsans (a modern language; earth lodges; semi-nomadic)
Hughes hypothesis: Hidatsa, the ur-language, grew larger; expanded; the area of expansion more difficult to survive; forced to hunt buffalo year-round, fully nomadic; the tribe that left the Hidatsa behind became the Crow.
And now, on to chapter twelve, the evolution of the tepee. Why the three-pole tepee and the four-pole tepee and which came first?

Random Look At The New Whiting Pankowski Permits -- April 17, 2015

A reader asked about the wells in these permits announced yesterday:
#31086 - WHITING OIL AND GAS CORPORATION, P PANKOWSKI 153-98-4-6-7-13H, LOT4 6-153N- 98W, WILLIAMS CO., 485' FNL and 875' FWL, DEVELOPMENT, TRUAX, 20783', 9-5/8 inch , 2263' Ground, API #33-105-04031 

#31087 - WHITING OIL AND GAS CORPORATION, P PANKOWSKI 153-98-4-6-7-13H3, LOT4 6-153N- 98W, WILLIAMS CO., 485' FNL and 905' FWL, DEVELOPMENT, TRUAX, 20703', 9-5/8 inch , 2263' Ground, API #33-105-04032 

#31088 - WHITING OIL AND GAS CORPORATION, P PANKOWSKI 153-98-4-6-7-13HA, LOT4 6-153N- 98W, WILLIAMS CO., 485' FNL and 935' FWL, DEVELOPMENT, TRUAX, 20964', 9-5/8 inch , 2264' Ground, API #33-105-04033 

#31089 - WHITING OIL AND GAS CORPORATION, P PANKOWSKI 153-98-4-6-7-14H3, LOT4 6-153N- 98W, WILLIAMS CO., 485' FNL and 965' FWL, DEVELOPMENT, TRUAX, 21103', 9-5/8 inch , 2264' Ground, API #33-105-04034
This is what the area looks like now with one Pankowski well producing. 
The purple-shaded area: all 2560-acre spacing. All of the sections in the graphic above (except maybe one) are also spaced at 1280-acre.
These new Pankowski wells will be in the same general area, but it appears the new wells will be about 500 feet closer to the north line of section 6 but about 600 more feet from the west line (correct me if I'm wrong, please).
  • 20857, 1,312*/358**, Whiting/KOG, Pankowski 4-6H, Three Forks, 1100FNL 300FWL, 23 stages; 1.2 million lbs sand, t2/12; cum 162K 2/15;
*Sundry form received April 12, 2012. 23 stages, 1.2 million lbs sand.
** Scout ticket at the NDIC website. Sundry form received March 21, 2012. 13 stages, 494,000 lbs sand.

I think I'm correct on all this, but I may make errors. But from what I can tell, this first Pankowski well targeted the first bench of the Three Forks. 

The new wells are probably spaced at 1280-acres; will be sited in lot 4 / section 6 and will terminate in section 7. Based on their names, one will target the middle Bakken; two might target the third bench of the Three Forks; not sure what the "HA" targets.

Rock And Roll Hall Of Fame

Fooled Around and Fell in Love, Elvin Bishop

Richard Zeits On Topping Units -- April 17, 2015

Great article over at Seeking Alpha on topping units. Zeits writes:
Topping units have been a solution broadly used in emerging markets with limited refining capacity but existing local demand for diesel, fuel oil, jet fuel (kerosene), atmospheric gas oil, LPG and asphalt. In the context of the U.S. market where refining capacity is generally highly complex, topping units may be organically integrated into the overall system, with the less valuable by-products absorbed by refiners for deeper processing, without economic loss. It is no surprise that the largest U.S. refiners are taking steps to develop such topping capacity.
Valero Energy is currently constructing two large topping units - one at its 165,000-b/d Houston refinery (current crude processing capacity is 90,000 b/d) and one at its 325,000-b/d Corpus Christi refinery (current crude processing capacity is 205,000 b/d). The two new units will have a combined capacity to process 160,000 barrels per day of light and super-light crude produced in the Eagle Ford, with both units expected to be operational within approximately one year. Valero's total investment in the two projects is expected to be $750 million.
For updates on the diesel topping unit in Dickinson, see also:
By the way, when you go through the "refinery" tag, there is talk of other topping plants or refineries of some sort northwest of Williston; near Stanley; in Minot; and even near Devils Lake.

Friday, April 17, 2015 -- Renewable Energy Numbers -- Staggering

Chart of the day. This is from Carpe Diem, yesterday. Note that the percent of US energy from renewable sources was less in 2014 (7%) by a significant amount compared to 1950 (9%). The actual decrease is significant, but then if you add in all the money spent since 2000 to increase the amount of renewable energy, the numbers are even more staggering.  Don sent me the link. He provided the big reason why the percent of renewable energy took such a big hit over the last fifty years (see if you can figure out why -- I'll provide the answer later if I remember). Hint: think California.  Here's the chart:

I assume the delta between 90% and 100% in 2014 was mostly nuclear energy, but I don't know.


Schlumberger: I may have gotten this wrong yesterday; I can't keep up. SLB will cut another 11,000 jobs bringing total to 20,000 cut jobs in current cost-cutting environment. Bloomberg is reporting:
Schlumberger Ltd., the world’s largest oilfield services provider, will eliminate an additional 11,000 positions in a sign the industry will undergo another round of job cuts as a result of tumbling crude prices.
The latest announced reductions bring the company’s total to 20,000, making its workforce about 15 percent smaller than it was during the third quarter of 2014. Schlumberger had announced plans in January to eliminate 9,000 positions, in what was then the single largest cut in the industry.
Setting us up?  Is Saudi Arabia setting us up for a huge spike in the price of oil? I agree with the thesis at this linked article, but I think there's a bit of hyperbole in the article.

Active rigs:

Active Rigs93186185206175

RBN Energy: PAA -- getting oil to the Gulf coast.
The Plains All American (PAA) Cactus Pipeline comes online in the West Texas Permian this month (April 2015). Cactus will bring up to 250 Mb/d of crude and condensate from Midland and McCamey in the Permian to Gardendale, TX - the heart of the Eagle Ford shale – linking the two basins for the first time by pipeline.  It also forms a major component of an expanded pipeline and dock infrastructure owned by a combination of PAA and Enterprise Product Partners (EPD) set to deliver as much as 600 Mb/d of crude and condensate to Corpus Christi and 470 Mb/d to Houston by the end of 2015. Today we describe how a good deal of those deliveries will be processed condensate eligible for export.
PAA is one of the US midstream behemoths - handling about 4 MMb/d of crude oil and natural gas liquids (NGLs) as well as storage and terminal facilities for natural gas, natural gas liquids, crude and refined products. As we outlined in Part 3 of our “Come Gather ‘Round Pipelines” series last year, PAA own and operate significant takeaway capacity in the Permian – including the Basin pipeline to Cushing, the Mesa and Sunrise pipelines between Midland and Colorado City and (recently acquired) a 50% interest in the 300 Mb/d BridgeTex pipeline from Colorado City to East Houston (Magellan owns the other 50%). As we shall see, PAA also own a large crude gathering system in the Eagle Ford. Outside of Texas the company has midstream assets in the Bakken , Western Canada and the Rockies.
In the Eagle Ford, PAA operates a gathering system in the eastern section of the oil and condensate window of the play that is centered on Gardendale. In this part of the Eagle Ford, most of the liquid hydrocarbons are ultra light “lease” condensates having API gravity above 55 degrees. Lease condensate presents producers with a challenge because it has variable quality and is not favored by Gulf Coast refineries configured to process crude with fewer light end components – meaning that prices are regularly discounted. In the good old days before shale, when condensate production was low it was simply blended into the regular crude oil stream. With up to 45% of Eagle Ford “crude” production actually falling into the condensate category now, producers have struggled to find domestic markets. In the Summer of last year (June 2014) a new export market for lease condensate opened up as a result of changes in the interpretation of decades old regulations that lumped lease condensate together with crude oil and banned both from export.. Those export regulations – administered by the Department of Commerce Bureau of Industry and Security (BIS) limit the export of crude and lease condensate except to Canada and under a few special circumstances. However the BIS rules do allow exports of processed crude and condensate (i.e. refined products). As we explained in several blogs the BIS has opened up the market by blessing the export of condensate that has been lightly processed in certain distillation equipment.
 Great article; it will be archived at the source.