Thursday, May 21, 2015

XOM Eager To Tap Into Iran -- May 21, 2015

For the archives; so many moving parts, so many story lines -- Biz Journal is reporting that Exxon hired a lobbying firm founded by Oklahoma Republican Don Nickles, a former U.S. senator, to work on the sanctions.
Analysts say companies such as Exxon are eager to explore Iranian oil fields because the drilling economics are cheaper.
Just one of many, many "excuses." Economics.

[Update, one day later, May 22, 2015: Exxon denies they hired a lobbyist to do this. Whatever.]

Baltimore Update

On May 8, 2015:
The Boston Globe is reporting:
What’s more, a disproportionate chunk of the money that the city has goes to its most pressing need: public safety. While cities like Boston and New York capitalized on dramatic declines in crime to fuel urban renaissances over the past three decades, Baltimore continues to suffer from chronically high levels of violence. In 2016, Baltimore will spend about $130 million more than Boston will on policing. This makes sense and it doesn’t — Baltimore had 235 homicides in 2013. Boston had 40 that year. (Baltimore's population is slightly less than that of Boston.)
Sort of goes back to the same questions that need to be asked in Milwaukee
So, how are things going? In today's Baltimore Sun:
The city has experienced 100 homicides this year, compared with 71 at this time last year, the police department said. It's the fastest the city has reached 100 homicides since 2007. Last year, the city reached the mark on July 4. Nonfatal shootings are up more than 70 percent with at least 19 people shot on Tuesday and Wednesday.
100 homicides in 140 days (through May 21, 2015) = x homicides in 365 days; Baltimore is on track for 260 homicides in 2015

The mayor says she has faith in the police department to turn this around.

One comment: Sort of goes back to the same questions that need to be asked in Milwaukee.


If you are tired of sites like YouTube being interrupted by ads, there is a way to stop them: Adblock Plus. Google it.

Hypocrisy 101

If Michelle were serious about her healthy food schtick, she would support this.  On the other hand, the reason "this" would not work: money is fungible.

Shadows In A Mirror, Chris Isaak

Nine (9) New Permits -- May 22, 2015

Active rigs:

Active Rigs82188188209178

Nine (9) new permits --
  • Operators: Hess (4), Fidelity (4), Enerplus
  • Fields: Alkali Creek (Mountrail), Sanish (Mountrail), Heart Butte (Dunn)
  • Comments:
Wells coming off the confidential list on Friday:
  • 24695, 297, Crescent Point, CPEUSC Campbell 7-6-158N-100W, Winner, a Bakken well, t3/15; cum 15K 3/15;
  • 27749, 602, EOG, Wayzetta 51-33H, Parshall, t11/14; cum 31K 3/15;
  • 27751, 799, EOG, Wayzetta 59-3334H, Parshall, t11/14; cum 54K 3/15;
  • 28709, SI/NC, BR, Harley 11-2TFH-R, Blue Buttes, no production data,
  • 29083, SI/NC, WPX, Helena Ruth Grant 33-34HX, Reunion Bay, no production data,
  • 29384, drl/NC, MRO, Ulmer 24-21H, Bailey, no production data,
Three (3) producing wells completed:
  • 19474, 12, Fram Operating, Nailor Trust 1, Renville County, wildcat, a Madison well, t6/14; cum --
  • 27900, 955, XTO, Van Dyke Federal 44X-19E, Bear Den, t3/15; cum 3K 3/15;
  • 29256, 6, Cynosure, Glenn Paetz 4-151-89 #1, Mountrail County, wildcat, a Madison well, t2/15; cum --
Proposed Location For Fidelity Pad Noted Above

This is for my use only; I often make mistakes in these graphics. Use it any way you want but do not quote me on this or attribute this to me.  If this is important to you, go to the source.

This particular section is spaced for 640-acre wells and is part of a 2560-acre drilling unit, but is not part of any 1280-acre drilling unit.

The other four horizontals in this section noted above:
  • 17717, 292, Fidelity, 3 Jacks LLP 44-4H, Sanish, very short lateral, one section, 12 stages; 1 million lbs; t2/08; cum 175K 3/15;
  • 24857, 318, Fidelity, Van Hook 44-4H, Sanish, one section, t9/13; cum 38K 3/15;
  • 24559, 932, Fidelity, Purcell 3-4-33H, Sanish, 4 sections, t10/13; cum 92K 3/15;  
  • 24560, 870, Fidelity, 3 Jacks 3-4-33H, Sanish, 4 sections, t10/13; cum 83K 3/15; 
If on the other hand, Fidelity drills west into section 5-153-92 (2560-acre spacing, also), which is more likely, let's look at the well in that section, a short lateral:
  • 16876, 786, Fidelity, Deadwood Canyon Ranch 11-5H, Sanish, one section, t5/08; cum 154K 3/15;  this well is currently inactive.

Primer On Coiled Tubing -- May 21, 2015

Everything you ever wanted to know about coiled tubing but were afraid to ask:

A huge "thank you" to a reader.

Public Outcry = Common Sense

It's hard to believe this was even on the agenda. FEC drops idea to regulate internet sites such as The Drudge Report

The Supreme Court never would have upheld the regulations anyway. Political theater.

Nothing Really Ends, dEUS

This Is Not An Investment Site -- Stay Away! Do Not Make Any Investment Or Financial Decisions Based On Anything You Read Here -- May 21, 2015


Later, 6:04 p.m.: S & P 500 ekes out record close. The S&P 500 ended mildly higher, above its previous record close of 2,129.20 to post its 10th closing high for the year.
Original Post

The Dow is up a respectful 20 points considering it is flirting with all-time highs. The Dow's 20-points-on-the-up-side might be due to the price of oil, up 3%. I haven't read any stories why oil is up 3% today -- only two real explanations: the strength of the dollar and/or the strength of ISIS. If ISIS were not simply a JV Team, the story would be getting much more play here in the US. Consider:

  • ISIS is close to taking Iraq, having just taken Ramadi, home of Iraq's largest refinery
  • ISIS is said to control 50% of Syria, taking another city, Palmyra
  • ISIS is on its way to controlling Libya
  • ISIS is forcing Saudi to fight a war in Yemen, something new for the effete princes
  • Tunisia youth rushing to join ISIS in Syria, Iraq

Palmyra? Palmyra is on the road to Damascus, sitting about halfway between Deir ez-Zur (Syria) in the northwest and Damascus to the southeast. ISIS controls Deir ez-Zur; until ISIS captured Palmyra this area -- halfway to Damascus -- was free of ISIS.
Meanwhile, the president tells us that the US Coast Guard has nothing to fear but the fear of oceans rising, all of 0.000001 inch. If the US Coast Guard can't handle that impact on the nation's coasts, we're in more trouble than most people think.

Back to Iraq. There is so much Iraqi fatigue in this country, folks have forgotten how important Iraq is in the Middle East. Of course, it's now a balkanized country, which Joe Biden recognized ten years ago: Kurdistan, Baghdad-Basra, and "the Sunni rest." Short term, Iraq has become a non-entity on the world stage, in some kind of "no-man's land." No major power is embedded in Iraq. No global worries about Iraq's oil production going to zero. Short term, outside of the Mideast, no one cares. And as long as there is a glut of oil, no one cares about the Mideast. Long term, it depends. And in the US, "long term" no longer matters.

By the way, Vox provides 27 maps that purports to "explain the crisis in Iraq," dated August 8, 2014. The National Geographic, long known for its quality maps, should do so well. Instead we have National Geographic with this iconic cover:


Speaking of which, I need lunch. I see Yahoo!Finance has a story on the travails of McDonald's. Everyone has a suggestion on what McDonald's needs to do. Not gonna happen.
[The new CEO] said at the meeting in Oak Brook, Illinois, that he was proud of the decision announced last month to raise pay for workers at company-owned stores to $1 above the local minimum wage, as well as offer help with college tuition to workers at all stores.
Labor organizers and workers have dismissed the move on pay in part because they say it leaves so many workers out in the cold. The vast majority of the more than 14,300 McDonald's restaurants in the U.S. are owned by franchisees.
On Thursday, protesters delivered a petition of support to McDonald's that organizers said had 1.4 million signatures.
During the meeting, the company got support from at least one shareholder, who stood to note that actress Sharon Stone and CEO Jeff Bezos were among those who have worked at McDonald's. If the chain paid $15, he said, those people would still be working at McDonald's.
I'm not sure about that (that Sharon Stone would still be working at McDonald's) but had I known, I would have enjoyed working there with her. It would have been interesting to listen to her aspirations as a teenager. 

Okay, gotta go -- lunch time. But I will leave you this story on Tesla's $7,000 home battery. I'm going to stop by Wal-Mart on the way to McDonald's and see if Wal-Mart has a cheaper home battery. LOL.
For the average U.S. home to rely solely on solar panels and Tesla's new batteries, the complete system would cost roughly $98,000, according to analysis by Bloomberg New Energy Finance. Even that glum assessment assumes a house in a sunny region such as Southern California.
So defection from the electrical grid will remain well out of reach for most Americans, and even those who manage the feat will waste a lot of capacity thanks to solar panels and batteries that are rarely used to their full potential.
Apple Shares Could Rise 50%

At least that's what Morgan Stanley is saying. Analyst raises target from $190 to $195.

Grilling Chicken

Grill Companion.
Grilling Companion.

This Is What Really Makes My Day -- May 21, 2015

I have to rush off and do something, but for now, check out this link on PetroShale: first quarter 2015 operating results.

A reader sent me this link. As I told the reader:
I don't know anything about PetroShale. But I will learn. They are not found on the NDIC "well search" website which suggests to me they own mineral acres in ND, but don't do any drilling themselves (or they drill under a different name). (Unless in my haste I missed them at the NDIC website, which is always possible.)
Although the company has very, very few acres in some of the best Bakken, the company really has very, very good locations. I now nothing about the company, but this certainly suggests they know what they are buying. My hunch is that with the slump in the price of crude oil (and based on their press release above), they are picking up some nice property.

This really makes my day, vicariously enjoying what this company is doing. 

But This Is What Really Makes My Day

An Aside

Some months ago I started reading Jane Hawking's Traveling To Infinity: The True Story Behind The Theory Of Everything. It turned out to be much, much better than I ever imagined it to be. It started off a bit slowly -- wow, she gets into the weeds, telling her story -- but it simply got better and better. I was most interested in how she would tell the story of how their marriage ended. I thought I knew. Wow, was I wrong.

It's a thick book, 487 pages in small font. I was breezing long, somewhat slowly through chapter seven. Then on page 278, the fourth page of chapter seven, the dam broke, and I could not turn the pages fast enough. By page 310, I had to stop. The tension was just too much.

I will lay the book aside. I assume I will finish it. In fact, it is more likely that I will start from the beginning, and maybe never read past page 310.

Hmmm.  Hmmm. Hmmm.

Haven't Heard This In Ages

Cow Patti, Jim Stafford

From The "For What It's Worth" Department -- May 21, 2015

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.

I received a long note from an analyst in the UK -- one of many such notes I receive in the course of a  day. I normally don't read them, consign them to spam, and move on. For whatever reason this one caught my attention, and so I will post it. It's from "Jonathan Lacouture, GlobalData’s Upstream Analyst for Onshore Americas."

Of the nine short paragraphs in the analyst's comments, here are six paragraphs (the analyst based his comments on IP30 -- a well's average production over its first 30 days of active life):
While the 12 counties with Bakken production between North Dakota and Montana have lost the majority of their horizontal rigs over the last eight months, core areas of the shale play remain attractive, especially as oil prices creep towards $70 per barrel, says an analyst with research and consulting firm GlobalData.
Lacouture explains: “Mountrail and Mckenzie Counties both possess median IP30 values of 550 barrels per day, between 17% and 50% greater than the other counties which contain productive Bakken areas.
“Both counties possess break-even prices that still generate profit in the current market; however, the margin of this financial gain is dramatically lower than the same date last year. This is reflected starkly by the over 50% drop in active rigs capable of multi-stage lateral drilling in the Bakken.”
The analyst adds that rig activity will likely remain depressed until prices are up to twice their break-evens. Rig counts have already begun to level off in core areas as the price continues to slowly rise and economic returns increase with it.
Lacouture continues: “The scalable nature of the Bakken affords it a flexibility which allows marginal cost barrels to be gradually added or removed, as quickly or slowly as prices allow.
The analyst concludes: “If a given Bakken well produces over 50% of its total estimated ultimate recovery (EUR) in the first nine months of activity, withholding on drilling and completing wells by a few months to a year, until prices climb to, say, above $70 per barrel, will prove more economically fruitful than the alternative.”
Wells in the best Bakken should have in excess of 1 million bbls EUR. I am unaware of any Bakken wells have produced 500,000 bbls in the first nine months of production. I honestly don't see (m)any Bakken wells producing 50% of their EUR in the first nine months of production. Poorer Bakken wells on the edges of the Bakken with EURs of 350,000 bbls are certainly not going to produce 175,000 bbls in the first nine months of production.

But I could be wrong. Way wrong. Take what I say with a grain of salt and don't make any decisions based on what you read here or what you think you may have read here. This is simply an opinion from someone with no formal training and no background in the oil and gas industry. I blog about the Bakken simply because I am trying to understand it better and it gives me something to do when I'm not with our granddaughters.

Will The Chinese Build Another North American Railroad?

Reuters is updating:
Chinese state firms are poised to be strong contenders in the race to make high-speed trains that will sprint between Los Angeles and San Francisco, part of a $68 billion project to bring the service to the United States for the first time.
While "bullet train" manufacturers from Germany, Japan, South Korea, and France are expected to be among those jockeying for the estimated $1 billion train contract, China’s ability to offer low prices and hefty financing appear to make it the one to beat, say lobbyists and industry insiders.
Lacking experience in the technology, California must turn to foreign firms to build the trains – albeit domestically and with American workers - setting off a geopolitical race to grab a foothold in the nascent U.S. high-speed rail industry.
Germany's Siemens is expanding its rail factory in Sacramento to incorporate a “high-speed lot.” Japan has voiced its interest, boasting a record of no fatal accidents in over 50 years operating high-speed trains. France’s Alstom, which produces rail cars in upstate New York, is also a potential contender.
Awarding a piece of America’s most ambitious and expensive infrastructure project in decades to strategic rival China – over a long-term ally such as Japan - would be prone to political controversy.

Unemployment Claims Surge 10,000 -- The Spin Continues, May 21, 2015

Jobs: the spin never stops. Unemployment claims surge 10,000, "slightly more than expected," but the news is that "we're" still below 300,000. On the other hand, at the beginning of a summer construction season -- and the claims should be dropping, not surging. At 274,000, it's the highest number ... OMG ... in a month. But the four-week average fell by 5,500 to 266,250, the lowest since April, 2000. So, we'll see. The market's reaction: muted. We're up slightly. Oil remains in a trading range between $58 and $60.

Active rigs:

Active Rigs80188188209178

RBN Energy: natural gas supply and demand this summer.

Natural gas fill rate: 92 (dynamic link here). 

Weekly gasoline demand: slight rise (dynamic link here).

Weekly petroleum report at this dynamic link. Imports rose slightly. One wonders if California accounts for much of the imports as well as the Saudi-owned refinery along the US gulf coast.

Speaking of gulf, the PGA Colonial Golf Tournament will be delayed due to heavy rains in the DFW area. This morning, the course was pretty much underwater.

ISIS: Two "words" one does not like to see in the same sentence:  "ISIS" and "expands." Reuters is reporting the JV Team is one step closer to taking Libya:
Standing guard at his frontline post, Libyan soldier Mohammed Abu Shager can see where Islamic State militants are holed up with their heavy weaponry less than a kilometre away.
The militants have effectively taken over former dictator Muammar Gaddafi's home city of Sirte as they exploit a civil war between two rival governments to expand in North Africa.
Speaking of ISIS, the JV Team has taken full control of Palmyra and now controls one-half of Syria. The sparsely-populated one-half. Link here if interested; I'm not.

Wall Street Journal has an in-depth article on what it means that ISIS has taken Ramadi.

They say the cause of the Santa Barbara pipeline spill could be released today. My money is on the ground shifting. This is a major problem in southern California. The pipelines south of San Pedro are above ground, and very, very short segments to minimize breaks. A "state of emergency" has been declared.

The Los Angeles Times is asking why David Letterman got the "finale love" that was denied Jay Leno. I did not read the article, but the answer is obvious. I loved watching David Letterman in the early days but after about 2006 (maybe earlier) lost all interest. But like Rush Limbaugh, love him or hate him, it's quite an accomplishment to last decades in front of a microphone. (I don't necessarily include that former CNN talking head who is now doing infomercials on the weekend.)

Every summer we take our two granddaughters out to southern California; one of the highlights of that trip is multiple trips to Huntington Beach to go swimming. Today it is being reported that thirteen (13) young great white sharks were spotted close to shore off Huntington Beach. Memo to self: wear lots of shark repellant before swimming this summer.

And finally, this article in today's LA Times: cold weather is much more serious than extreme heat. I did not read that article either; just surprised to see the LA Times print it. Glad to see some scientists think earth is getting warmer, not colder.

Remember the Amtrak engineer who said he was cooperating fully with authorities: it took a court-ordered subpoena to get a hold of his cell phone records. This was the Amtrak accident along the northeast corridor that killed 8, injured 200. To put that in perspective, not one person has been killed in the US due to Bakken CBR.