Thursday, May 7, 2015

Well, That Was Cool: A 4.0 Earthquake Hit DFW Area -- May 7, 2015

The Dallas New is reporting:
Parts of North Texas just experienced the most powerful earthquake so far to rumble through this part of the world: a 4.0-magnitude temblor in Venus, just south of Mansfield and west of Midlothian. According to the U.S. Geological Survey — and countless reports on Twitter and via email — it occurred at 5:58 p.m.
No surprise: The USGS confirms that’s the largest quake to strike North Texas. And, it was a shallow temblor, occurring about two miles deep. The most recent quake reported in that part of Johnson County was a 3.4M in November. Dallas and Irving haven’t experience a quake larger than 3.6M, which occurred during a day of shaking in early January.
The largest quake ever recorded in Texas occurred in 1931 — a 5.8M near Valentine in far West Texas. There was a 5.7M near Alpine in 1995, and a 4.1M in far East Texas in 2013.
Venus, TX, is about 40 miles south of us, on the southeast side of Ft Worth.

Nope, I did not feel it. I was watching the youngest granddaughter.

Thoughts On Hunt's Scorio Well, #28660? -- May 7, 2015

Over at the Discussion Group, a reader asked whether this well is a good well:
  • 28660, 355, Hunt, Scorio 159-101-15-22H-1, Zahl, 25 stages, 2.9 million lbs, t1/15; cum 14K 3/15, production profile -

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Zahl oil field is on the Williams County - Divide County line, north of Williston. This appears to be a fairly typical middle Bakken well in this area.

Any other thoughts on this well to help the reader would be appreciated.

Tracking The Wrong Metrics -- The Milwaukee Experiment -- May 7, 2015


August 15, 2016: Milwaukee spiraling out of control after a black police officer killed a black criminal with a long rap sheet, carrying a stolen gun with 27 rounds of ammunition while on probation; a gun that had been stolen in a burglary in March. People burning down their own city over low-life like this. Milwaukee is the nation's most segregated city.
Original Post
This week's issue of The New Yorker has an in-depth article (generally, all New Yorker Magazine articles are 'in-depth") on the judicial system (I guess you would call it that) in Milwaukee County, led by the District Attorney, John Chisholm.

It's a long article, and like most New Yorker Magazine articles it tends to meander; the writing is excellent but it is easy to lose sight of the facts.

What I get from the article is this: in 2007, John Chisholm became the District Attorney for Milwaukee County. The primary job of a district attorney is to decide which cases will be tried, which will be dropped, and of those that will be tried, how to proceed: plea bargaining or trial.

Chisholm was concerned about the high rate of "black" incarceration and wanted to see if the district attorney of a county could make a difference. So, he initiated his experiment, which can be described as "catch and release" except for "truly violent crimes." Stealing cars, for example, is not a "truly violent crime."

In the author's own words, p. 30, "Chisholm [the district attorney] has an aversion to incarceration."

Near the end of the article we are provided with the results of Chisholm's experiment:
The vast majority of the murders in Milwaukee take place on the north side, which is overwhelmingly African-American, with an unemployment rate above forty per cent. In 2014, there were eighty-seven homicides in Milwaukee, which has a population of just under six hundred thousand.
If New York City had Milwaukee’s murder rate, there would have been more than twelve hundred homicides in 2014; the actual number was three hundred and twenty-eight.
In Milwaukee, this year has got off to a dismal start. By the end of April, there were forty-eight homicides. As the Milwaukee Journal Sentinel noted in a recent headline, “How Could This Happen? No Easy Answers to Milwaukee’s Spiraling Violence.”
Chisholm told me, “This last patch has been a tough one.”
Eighty-seven homicides in Milwaukee in all of 2014 (four times the NYC rate) and in the first four months of 2015, there have been 48 homicides in Milwaukee County. That rate annualized is 144 homicides for 2015 which is an increase of 66%, year-over-year.

The last paragraph of the article:
To explain this year’s crime rise, as well as the persistent racial disparities, Chisholm cites forces beyond his control—poverty, hopelessness, lack of education, drug addiction, and the easy availability of guns. In this way, Chisholm’s greatest lesson may have been in humility. “We redesigned our system, but we learned that no individual actor can change the dynamics of what goes on in a complex larger system like a city,” he said.
The question not asked: why is the homicide rate so much lower in NYC? The second question to ask is whether NYC has a "catch and release" program similar to Milwaukee's?

One could argue that his experiment did work if the goal was to reduce incarceration.

A third question should be asked: who are the homicide victims? Maybe the experiment is more successful than we realize; maybe we are simply tracking the wrong metrics.

Perhaps The Police Have Been Ordered To "Stand Down"

Tweeing now: 9 people shot in 7 shootings Thursday in Baltimore, police say; 2 victims died, local media reports.

Twenty (20) New Permits -- May 7, 2015

Active rigs:

Active Rigs85191184212177

Twenty (20) new permits --
  • Operators: BR (8), Slawson (5), XTO (4), EOG (2), CLR
  • Fields: Elidah (Mckenzie), Clarks Creek (McKenzie), Lost Bridge (Dunn), Parshall (Mountrail), Jim Creek (Dunn)
  • Comments: see graphic below for the 8 new BR permits
Three (3) producing wells completed:
  • 27901, 857, XTO, Van Dyke Federal 44X-19B, Bear Den, t3/15; cum 4K 3/15;
  • 28468, 660, Hess, EN-Rehak-155-93-0718H-7, Alger, t4/15; cum --
  • 28919, 1,497, Hess, BB-Belquist-150-95-1110H-9, Blue Buttes, t4/15; cum --
Wells coming off the confidential list Friday:
  • 23159, SI/NC, Triangle, State 154-102-25-36-9TFH, Rosebud, no production data,
  • 27589, 1,771, Enerplus, Swallow Tail 152-94-32D-29H, Antelope, Sanish pool, Three Forks 2nd bench, 39 stages, 9.4 million lbs, t11/14; cum 161K 3/15; the scout ticket is in error;
  • 28512, 994, Triangle, Britt 151-102-4-9-3H, Elk, 31 stages; 3.7 million lbs, t11/14; cum 52K 3/15;
  • 28567, dry, CLR, Wiley 6 PA, Pershing, casing would not hold, (I wonder if the "PA" -- permanently abandoned is the new name of the well; the application had the name of this well as "Wiley 6-25H3")
  • 29543, 132, Enduro, NSCU R-709-H2, Newburg, Spearfish/Charles, t12/14; cum 3K 3/15;
Oasis puts four wells on temporary abandon list: 29741 - 29745, State 5792 wells in Cottonwood oild field, Mountrail County. I assume the wording is similar for all four wells: the well was previously drilled to 2,208 feet. Oasis is currently evaluating the well given current economics and plans to finish drilling it in the future."

About 70 older wells were transferred from Encore Energy Partners Operating, LLC, to Vanguard Operating LLC; none were part of the current Bakken boom.


27589, see above, Enerplus, Swallow Tail 152-94-32D-29H, Antelope:

DateOil RunsMCF Sold

 28512, see below, Triangle, Britt 151-102-4-9-3H, Elk:

DateOil RunsMCF Sold

The Eight (8) New BR Permits 

19883, 1,603, BR, Abercrombie 44-12H, middle Bakken, 20 stages; 3 million lbs, t7/11; cum 140K 3/15; recent production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare


By the way, the Enerplue Swallow Tail well noted above is on a two-well pad. How is the sister well doing? The other well on that 2-well pad:
  • 27590, conf, Enerplus, Viceroy 152-94-32D-29H TF, Antelope:

DateOil RunsMCF Sold

Not too shabby.

Record Federal Tax Haul In Month Of May, 2015

The Washington Times is reporting:
The federal government set a record tax haul in April, taking in nearly a half-trillion dollars in one month alone.
April is always a busy month with the tax deadline on April 15, but this year’s haul was historic, totaling $472 billion, far outstripping the previous monthly record, set last April, of $414 billion.
Spending, meanwhile, was a more modest $317 billion, leaving the government with a surplus for that one month of $155 billion — also a record.
Overheard in the halls of Congress: how are we going to spend all that money?

Is Drudge The 2nd Most Influential Man In America?

The Hill asks.


The Drudge Report is simply an aggregator of news. It simply links articles printed by other media. From what I can tell, The Drudge Report writes no stories of its own. The Drudge Report is simply an internet periodical library.

Many of the links are to The New York Times and The Washington Post.

This is Not An Investment Site: Do Not Make Any Investment Or Financial Decisions Based On What You Read Here Or Think You May Have Read Here -- May 7, 2015

Northern Oil and Gas, Inc. today announced 2015 first quarter results.
  • Production averaged 16,988 barrels of oil equivalent per day, for a total of 1,528,919 Boe, a 28% increase over the first quarter of 2014
  • Oil and gas sales including settled derivatives totaled $90.4 million
  • Approximately 3.0 million barrels of oil are hedged for the remainder of 2015 at an average price of $89.56 per barrel
  • Northern added 98 gross (6.6 net) wells to production during the first quarter
  • The borrowing base under Northern's revolving credit facility was reaffirmed at $550 million
Northern's adjusted net income for the first quarter of 2015 was $6.0 million , or $0.10 per diluted share.  Adjusted net income was negatively impacted by the significant deterioration of natural gas, NGL and oil prices.  GAAP net loss for the first quarter of 2015, which was impacted by a non-cash impairment charge, was $229.7 million , or a loss of $3.79 per diluted share.  Adjusted EBITDA for the first quarter of 2015 was $67.5 million.

Those Kids That Can't Find Jobs ....

.... now they're blaming their parents for the wrong skill set. I can't make this stuff up. The talking head at the link looks really, really concerned. I did not turn the volume up; for all I know she's talking about the increased pay McDonald's will soon be paying.

This Is Not An Investment Site; It Is Not A Weather Site; It Is Not A Travel Site -- May 7, 2015; Higher Domestic Crude Oil Production Leads To Less Imports -- EIA

Do no make any investment or financial decisions based on what you read here or think you may have read here.

Do not make any travel plans based on what you read here.

There's an interesting op-ed in the WSJ today: it looks like Congress is looking at "taxing" mutual funds, which could cost investors up to 25% of their gains over the lifetime of their investment. This has the hands of Pocahontas all over it. The editorial:
An open letter to all mutual-fund investors:
You may be subject to a new “tax,” and it has nothing to do with the presidential election cycle. Rather, the levy would be decided by a consortium of financial regulators who can designate your mutual fund or mutual-fund firm as posing a “systemic risk” to the financial system.
In the years since the global financial crisis, lawmakers and regulators have worked to stabilize the markets and economy. They identified risks to the financial system and took steps to ensure that Main Street would not be on the hook—again—for bad bets placed by Wall Street. Now regulators might place that burden squarely back on Main Street mutual-fund investors without any solid evidence that the funds or their managers could bring on another panic.
Under the 2010 Dodd-Frank Act, all banks with more than $50 billion in assets are designated as systemically important financial institutions (SIFIs). If one fails, all other SIFIs will be responsible for bailing it out. The U.S. Financial Stability Oversight Council and the global Financial Stability Board are considering measures to designate mutual funds as SIFIs, which would impose the same bailout obligations on their investors. If that happens, the 90 million Americans invested in mutual funds for retirement, education or a new home could be forced to once again bail out “too big to fail” Wall Street firms
More at the link. 

The market was up nicely yesterday until Ms Yellen spoke, suggesting the market was over-valued. Then the computers took over and the market fell. Right now, the market is up nicely; let's hope Ms Yellen doesn't have another speech planned.

21st Century: It Will Be All About Energy And Water

Today's RBN Energy post on South Korea and Japan is very, very interesting. Both are considering increasing their use of coal to supply their energy needs. Going to coal is the option of last resort in today's "political correctness" climate. This speaks volumes about the insatiable need for energy worldwide, but especially in China, India, South Korea, and Japan.

Today's "Energy Cookie"

From the EIA:
In all cases considered, higher domestic crude oil production leads to a decline in crude oil imports, an increase in refinery runs, new investments to expand processing capacity, and higher crude oil and petroleum product exports.
However, the magnitude of the changes and the complexity of the new processing units added vary across the scenarios….While most of the ultimate uses of increased production are similar in the two cases developed using the higher domestic crude oil production path, there is one key difference. Under current policy, where U.S. crude oil exports are restricted, a significant amount of new refining capacity is built. However, if export policy restrictions were relaxed, almost 2.3 million barrels of crude oil could be exported by 2025. --- EIA
I think that's pretty profound: "Higher domestic crude oil production leads to a decline in crude oil imports, an increase in refinery runs, new investments to expand processing capacity, and higher crude oil and petroleum product exports."

No Smiles On Shoppers' Faces
No Smiles On Investors' Faces

Warren Buffett noted that he saw no smiling faces on folks shopping at Whole Foods. I assume he would see no smiling faces on those who invested in Whole Foods recently. The shares are down 10% in recent trading despite record 2Q sales and EPS. 

Thursday, May 7, 2015; Jobs, Quarterly ND Lease Sales

Weekly gasoline demand: slight increase; unremarkable; about 350,000 bopd more than last year at this time. The link is a dynamic link.

Crude oil supplies in the US. When I first started blogging, the usual number of days of crude oil storage was 22 to 24 days in the US; now it is slightly over 30 days. Most recent data (released May 6, 2015), link is dynamic:

Natural gas fill rate: 76, right at the 5-year average. Dynamic link

Active rigs in North Dakota:

Active Rigs85191184212177

RBN Energy has a particularly interesting post on natural gas exports to South Korea and Japan. Posted here.

Jobs: so uninspiring that the weekly report is hardly a story any more. Jobless claims increased by 3,000, fewer than expected, to 265,000. The four-week average fell to 279,500.

Quarterly North Dakota oil lease sale: data can be found here.
  • Billings County: per acre, mostly $5 to $20 bonuses.
  • Burke County: per acre, mostly $20 to $130 bonuses.
  • Divide County: per acre, max at $33; as little as $1.
  • Dunn County: per acre, almost all $1 tracts.
  • McKenzie County: per acre, some $625 - $725 bonuses; very few tracts overall.
  • Mountrail County: very few tracts; max at $540/acre.
  • Renville County: two tracts, per acre, $20 bonuses.
  • Stark County: with one exception ($4), per acre, all bonuses $1 to $2; appear to have sold most acreage among all counties
  • Williams County: Ancient Sunlight Resources (active throughout the Bakken) paid $7,200/acre for an 80-acre tract, 14-154-101; Northeast Energy paid $50 to $60 per acre bonus for five other tracts, all 160-acre tracts, except one 80-acre tract.
The Bismarck Tribune provides overview here:
More than $1.7 million in bonus payments were secured during a quarterly mineral acre lease auction Tuesday at the state Capitol.
The auction, overseen by the North Dakota Department of Trust Lands, consisted of 23,145 mineral acres between nine counties. The auction brought in $1.77 million, up from the $1.15 million netted in the state’s February auction.
The Dickinson Press is reporting that the Weydahl Field airport north of Killdeer is one step closer to completion:
The Dunn County Commission voted Wednesday to chip in the final funding for a new fuel system at Weydahl Field airport north of Killdeer.
Dunn County Airport Authority Chairman Michael Schollmeyer asked for more than $110,000 in funding necessary to install a much-needed fuel system at Weydahl Field.
Schollmeyer said runway construction is complete and five to seven aircraft land there a week. But he said pilots continue to ask when a fuel system will be put in place.
Schollmeyer said that O’Day Equipment has already won the bid to build the system.

He said the state is willing to fund 50 percent of the cost. The new fuel system, he estimated, would cost $444,930. Schollmeyer said the city of Killdeer had pledged 25 percent, or $111,233, and asked the county to match that.

Update On Natural Gas Exports To Japan And South Korea -- RBN Energy -- May 7, 2015; Japan, South Korea Back To Coal?

This is a very, very interesting post. Many, many data points. The post will be archived at the source, by the source.

Some data points from today's RBN Energy posting:

Japan’s effort to restart most of its idled nuclear fleet has not been going well. As of May 2015, none of Japan’s nuclear units is back online, though it’s possible Kyushu Electric Power may finally get the OK to restart two units at its Sendai station as soon as June.
The overall outlook for nuclear in Japan remains pretty bleak—odds are, only a handful of idled nuclear units will return to service in the next two or three years.
It’s possible that half or more of Japan’s nuclear units will never be restarted—it may simply cost too much to bring them up to the nation’s new, tougher earthquake and other standards.
With nuclear unlikely to provide more than 10 or 15% of Japan’s power needs, the Land of the Rising Sun is turning to renewables (mostly wind and solar) and to more fossil-fired generation, initially in the form of more gas-fired units but possibly (according to a new government plan unveiled in April 2015) with several new coal units.
The bottom line is that Japan’s LNG imports are expected to remain pretty much where they are (in the 90 MTPA range) for the next 10 to 15 years.
South Korea:
Korea in 2014 imported more LNG (38 MTPA; 4.8 Bcf/d) than China and India combined (China received 19 MTPA; 2.4 Bcf/d and India 14.5 MTPA; 1.9 Bcf/d).
But LNG imports into Korea were off 7% last year from 2013, due in part to milder-than-normal weather and in part to the Korean government’s efforts to rein in power costs (and become more competitive generally) by using its nuclear and coal units more (and using its gas-fired units less).
The 2014 drop in LNG imports appears to be an anomaly, though, and very gradual growth in imports seems likely over the next few years.
Several thousand megawatts of new gas-fired generating capacity is under construction, and state-run Korea Gas (KOGAS) is expanding its LNG import, regasification and gas pipeline network to handle an expected increase in LNG demand.
Like its Japanese counterparts, KOGAS (which gets well over one-third of its LNG from one source—Qatar) has been on a diversification/hedging kick, contracting for U.S.-sourced, Henry Hub-indexed LNG (KOGAS has signed up for a total of 3.5 MTPA—or 450 MMcf/d—of liquefaction capacity at Sabine Pass LNG’s trains 3 and 4, which come online in 2016-17).
As the world’s largest LNG buyer (at least until the Tepco-Chubu alliance ramps up and edges KOGAS out of the top spot), KOGAS also is pressing its long-term LNG suppliers for oil-index and destination-flexibility changes to its contracts—again, to cut costs and prepare for that Whole New World.