Oil And Gas Industry Job Loss In Canada Could Reach 185,000 -- June 16, 2015

Rigzone is reporting:

Since late last year, oil and gas companies globally have fought to sustain the drop in oil prices … layoffs ensued and companies large and small were affected.

And according to a new study released by the Petroleum Labour Market Information Division of Enform, a safety association for upstream oil and gas in Canada, there’s a prediction that 185,000 jobs will be lost in Canada this year due to the drop in oil prices.

According to the study, in 2014, the oil and gas industry spent nearly $125 billion on exploration, development and production – which supported more than 720,000 direct and indirect jobs in Canada. About two-thirds of these jobs were concentrated in Alberta.

185,000 / 720,000 = about 25%.

*******************************

But Gloom And Doom Is Not Everywhere

Rigzone is reporting:

Shell Chemical Appalachia LLC has closed on its acquisition of a site in Monaca, Pa., where it may build a world-scale plant to process the natural gas liquid ethane into the petrochemical building block ethylene, previous site owner Horsehead Corp.

Horsehead used to operate a zinc smelter facility at the site, which is located along the Ohio River in Beaver County northwest of Pittsburgh.

Shell has considered the site for its proposed ethane cracker since 2012, when it signed a land option agreement with Horsehead. Demolition of existing facilities began at the site in 2014, and last fall Shell announced its decision to purchase the site. Should it decide to build the cracker, Shell has said that it would source ethane feedstock from the nearby Marcellus and Utica shale formations.

Just one more example of the "stuff" going on in the oil and gas industry in the United States while France bans fracking; Germany returns to coal; Spain asks "WTF" happened to solar; the Mideast blows itself up; and, Russia can't get anything going.  It's not even going well for the Norwegians.

The Norwegian Petroleum Directorate’s (NPD) preliminary production figures for May 2015 have revealed that average daily production (ADP) of oil, NGL and condensate hit its lowest point last month since September 2014.

ADP of oil, NGL and condensate was around 1.86 million barrels for May, which was 85,000 barrels per day, or 0.4 percent, less than in April 2015.

The last time daily production figures were lower than in May this year was September 2014, when preliminary production figures indicated an average daily oil, NGL and condensate production of around 1.83 million barrels. Compared to May 2014, the latest figures from the NPD seemed positive. Last year’s preliminary May figures revealed an average daily production of around 1.66 million barrels of oil, NGL and condensate, which was 282,000 barrels per day, or 14 percent, less than April 2014’s figures.

****************************

Previously Posted But I'm In A Good Mood

Reuters over at Rigzone is also reporting:

Imperial Oil Ltd said it has begun production at its Kearl oil sands expansion project in Alberta, Canada, ahead of schedule. Production is expected to reach 110,000 barrels per day, bringing total production to 220,000 barrels per day which is majority-owned by Exxon Mobil Corp.

This is what put me in a good mood: the project came in ahead of schedule. Party time in Alberta this weekend.

*********************************

The Ride

Long-time readers -- really, really long-time readers -- know how much I hate automobiles. I prefer to bike everywhere. I used to write about that every once in awhile, a long time ago. But I haven't talked about it much lately. In fact, the last time I wrote about cars, I said I was actually enjoying "my" Honda Civic. Gasoline was relatively inexpensive and the car is sporty enough. I wouldn't drive a car at all if I didn't have to but I do the majority of driving the granddaughters to their soccer games and their swimming. Last week I drove them to computer camp, both going and returning. This week I'm driving the 8 y/o to soccer camp every day; the oldest one is in out-of-town, in Austin, on a leadership "camp."

So, I do a lot of driving, way more than I expected at this point in my life. Driving gives me a lot of time to listen to music. 

For whatever reason, I've been listening to Lana Del Rey's Born To Die album quite a bit. I think it was with "Million Dollar Man" it finally hit. Lana Del Rey is the female, 21st century version of the poet/songwriter/singer Leonard Cohen.

Writing and singing autobiographically is nothing new, nothing unique, but Cohen and Del Rey are two of the best. Roy Orbison's songs were autobiographical and personal, but generic; they could be covered by others. But when you listen to Cohen's and Del Rey's songs they sound way too personal; they can be covered by others, but their songs are their songs. As personal as Leonard Cohen's songs are, however, they do not compare to Del Rey's -- wow, she goes beyond what one expects.

She really exposes herself emotionally.

I wonder what Hunter S Thompson would have said?

This is what NPR had to say, one year ago, June 20, 2014. 

I Tried Watching The Game But Could Not Stand All The Commercials -- June 16, 2015

But checking out  the score on the internet, it looks like a blowout. With less than 5 minutes to go, 94 - 77; and then moments later 94 - 81, so it's Golden State's game to lose. And in the NBA it can happen.

****************

At less than 50 seconds to go, 100 - 94, it looks like a blow-out, and it's even possible Stephen Curry won't be the high scorer on the winning team. Curry is having a bad night: misses one of two free throws when it matters most, in the last 40 seconds.

****************

I spoke too fast; 4 points separate the teams with an eternity to play, 30 seconds. Time for at least eight more time-outs and eight more 2-minute commercials. Stephen Curry at the line.

********************

Curry hit both free throws. 6-point lead, but Cleveland at the free throw line.

********************

7-point lead with 10 seconds; Cleveland at the free throw line (again).

*********************

Must be over. LeBron James has left the game. Left the game with 10 seconds to go. The second-guessing begins. Who will be the MVP? I would go with Curry.

*********************

Yup, a blowout. Stephen had an off-night; did not score the most points for his team; tied with teammate Andre Iguadala for that honor, 25 points apiece. Curry with only three 3-pointers. Bummer.

********************************

Meanwhile

US women soccer take Group D with win over Nigeria. Advance. 

BR's Downspacing Test And Extended Reach Horizontals In Corral Creek; Black And Blue And Red All Over -- June 16, 2015

Updates

March 7, 2020:

June 18, 2015: see first comment (which I've brought up here so it is google-searchable). From a reader regarding the post below:

The blue lines mean directional legs—so if you uncheck the "directional leg" box on the right side of ND's ArcIMS, those lines will disappear.

I looked at the well file for File No 28352 and it shows the well profile, with a vertical portion down to 2500' depth, then directional drilling at an angle down to around 11,000' depth, then a typical length of horizontal within the Three Forks.

I checked one of the wells that did not have a blue directional marked (File No 28365). Looking in the well file, it has the same kind of directional drilling before reaching the target in the Three Forks. So it looks like sometimes there might be directional legs that are marked on the map as horizontal.

Both of these wells I checked had a typical length of horizontal within the target, about 10,000 feet.

Original Post

While looking for something else, I came across this little gem. I don't know if I am correct on what I think I see, but I will put it out there and then let readers correct me.

First, this graphic:

I don't think this is my imagination. Segments of these horizontals appear "blue" rather than the usual "black."

Then, the second graphic.

Note the eleven (11) extended reach horizontals. The wells are sited a couple hundred feet from the south line (FSL) in section 18-147-95 and end just short of the north line (FNL) in section 6, passing through section 7. These horizontals are "3-sections long." Extended reach laterals have been drilled in the Bakken but are rare.

Corral Creek is a unitized oil field so these are not 640-, 1280-, or 1920-acre drilling units. In fact the application states that the size of the drilling unit is 30,884 acres (unitized, the size of Corral Creek oil field).

Interestingly, even though the field is unitized, the operator, in this case Burlington Resources, states that these extended reach horizontals, even though they traverse the entire section 18 where they are sited, will only be producing from sections 7 and 6 (the latter is where the horizontal ends).

It's possible the "blue" line means absolutely nothing; I don't know. But it is interesting that the blue line starts and ends in section 18 (the second from which the wells will NOT be producing); the horizontal is black in sections 6 and 7 from which it is producing.

Background

There is a long, long story associated with Corral Creek. This chapter begins in March, 2014, when BR proposed a spacing test for calendar year 2014

"to determine optimal distances between laterals, involving eleven (11) CCU Pullman wells to be drilled from three pads located in Section 18-147-95, with the actual producing laterals in Sections 6 and 7 of 147-95. BR's proposal [would modify their] previous quarterly update for 1Q14 by adding three (3) new wells and one new pad (Pad FF). The eight (8) CCU Pullman wells identified in the 1Q14 were to be renamed to provide a consistent naming pattern."

The Pads Of Interest: Pad U, Pad V, Pad FF -- Part of the Downspacing Test (note: there may be typographical errors)

Pad U: a new quad pad-staked in SESW 18-147-95

• 28352, 2,445, CCU Pullman 1-8-7TFH, t2/15; cum 271K 12/19; off line 1/20; cum 313K 11/22;
  
• 28353, 2,405, CCU Pullman 2-8-7MBH, t2/15; cum 309K 12/19; off line 1/20; cum 348K 11/22;
• 28354, 2,445, CCU Pullman 3-8-7TFH, t2/15; cum 137K 10/19; off line 10/19; remains off line 10/19; cum 172K 11/22;
  
• 28355, 2,244, CCU Pullman 3-8-7MBH, t2/15; cum 203K 11/19; off line 11/19; remains off lie 1/20; cum 247K 8/22; off line 9/22;
  

Pad V: a new quad-well pad staked in SESE 18-147-95

• 28369, 2,766, CCU Pullman 6-8-7MBH, t3/15; cum 198K 1/20; cum 256K 11/22;
  
• 28368, 2,004, CCU Pullman 7-8-7TFH, t3/15; cum 89K 1/20; recently back on line -- lousy well; needs to be re-fracked; cum 106K 11/22;
  
• 28367, 2,886, CCU Pullman 7-8-7MBH, t3/15; cum 214K 1/20; cum 272K 11/22;
  
• 28366, 1,403, CCU Pullman 8-8-7TFH, t3/15; cum 165K 1/20; cum 193K 11/22;

Pad FF: a new tri-well pad staked in SWSE 18-147-95

• 28363, 2,160, CCU Pullman 5-8-7TFH, t2/15; cum 192K 1/20; cum 221K 11/22;
• 28364, 2,160, CCU Pullman 5-8-7MBH, t2/15; cum 221K 1/20; cum 254K 11/22;
• 28365, 1,320, CCU Pullman 6-8-7THF, t1/15; cum 162K 1/20; cum 190K 11/22;

Now the interesting part: note that the initial segment of some of the extended reach laterals are not "blue," but are "black" from beginning to end. So perhaps the "blue" does not mean anything. Perhaps no one else sees the "blue." Maybe I am imagining things. Regardless, this little exercise gave me a bit more insight into the Bakken and BR's downspacing testing in a unitized field.

I should have labeled the horizontals as MB or TF wells but I forgot to do that, and I'm not going to go back now and do that. However, it should be noted that it may not matter a whole lot. The seams are only 20 - 60 feet thick (vertically). For all practical purposes it's all about the horizontal separation (500 feet; 750 feet; 1,000 feet), although there are still discussions about communication between the TF and the MB and fracking. See Filloon.

$1.41 Million Loan For 22-Acre Development Site, Sidney, Montana -- June 16, 2015

Remember that story -- the one about no active rigs drilling in Montana, implying, certainly, that things were pretty quiet in eastern Montana.

A reader sent me this link. I find it absolutely remarkable.

If Williston is not at the end of the world, one can certainly see the end of the world from Williston. And if Williston is remote, Sidney is even more remote. Smaller, rural, quieter -- but the Bakken economy keeps moving along.

I find this quite remarkable. A press release:

Kennedy Funding Financial LLC has closed a $1.41 million loan to American Land Development-Sidney, LLC, owner of a 22.59-acre development site along E. Holly Street in Sidney, Montana.

The property consists of a total of 18 lots within the Sunrise Village subdivision in Sidney, with 11 lots currently zoned residential and the remaining seven lots for commercial use. The location is in east central Montana, near the state's border with North Dakota, within the oil-rich Bakken Formation and marks Kennedy Funding Financial's third loan in that region.

The site was zoned agricultural and utilized as a sugar beet farm and had no access to city water, sewer or services when it was acquired by American Land Development in 2013.

"The proceeds of the loan will be utilized to complete improvements to the road frontage as required by the Montana Department of Transportation," said Wolfer. "It is anticipated that the loan will be repaid from the sale of lots. This is also the third loan we have completed in this Bakken region, where the oil industry has spurred a sharp rebound in the housing market.

Previously, Kennedy Funding Financial had closed a $3.5 million loan for a multifamily property in Watford City, ND, as well as a $2.4 loan secured by a 96-acre industrial park in Killdeer, ND, within the Bakken Region.

Does that work out to $60,000 / acre?

Much more at the link. 

By the way, for those interested, it's an incredibly beautiful drive from Williston to Sidney in the spring, early summer when the sugar beets start to show, with the broad river valley -- the Yellowstone River just south of he confluence -- and the river to the east. I've taken that drive often with my dad.

Setting Us Up For $200 Oil -- Reuters, June 16, 2015

Over at Bakken.com Reuters is reporting:

Deepwater oil projects and complex gas facilities worth around $200 billion have been canceled or put on hold worldwide in recent months due to the sharp drop in oil prices over the past year.

Further project cuts and delays are likely as the industry braces for an extended period of lower oil prices as a result of a supply glut.

The delays in multi-billion dollar projects that can take up to 10 years to develop, and needed to support rising global demand for energy, could create a shortage in the future.

Meanwhile, the Bakken is producing at 1 million bopd and by the end of 2016 will easily be able to ramp up to 2 million bopd if the price is right, if the demand is there. 

Statoil Reports Five (5) Big Wells; XTO With Two Nice Wells; Three (3) New Permits -- June 16, 2015

Active rigs:

	6/16/2015	06/16/2014	06/16/2013	06/16/2012	06/16/2011
Active Rigs	79	187	185	214	171

Three (3) new permits:

• Operators: Zavanna (2), Whiting
• Fields: Stony Creek (Williams), Poe (McKenzie)
• Comments: Stony Creek is updated;

Wells coming off the confidential list Wednesday:

• 26854, 1,014, Whiting, Finsaas 34-9-3H, Hay Creek, t12/14; cum 36K 4/15;
• 27840, 1,314, Whiting, Finsaas Federal 31-16-4H, Hay Creek, t12/14; cum 46K 4/15;
• 27841, 730, Whiting, Finsaas Federal 31-16-3H, Hay Creek, t12/14; cum 24K 4/15;
• 29269, 231, Hunt, Sioux Trail 160-101-35-26H-1, Sioux Trail, t2/15; cum 6K 4/15;
• 29463, SI/NC, BR, Teton 7-8-10MBH, Camel Butte, no production data,
• 29883, 39, Denbury, CHSU 42-24SH 15, Cedar Hills, a South Red River B well, t2/15; cum 4K 4/15;
• 29889, SI/NC, Enduro, LDCMU 9-32-H1, Little Deep Creek, no production data,
• 29957, drl/NC, XTO, Eckert 41X-6H, Indian Hill, no production data,
• 30128, SI/NC, EOG, Fertile 60-0410H, Parshall, no production data,

Nine (9) producing wells completed:

• 23752, 1,914, Statoil, Irgens 27-34 3H, East Fork, t5/15; cum --
• 23753, 2,756, Statoil, Judy 22-15 3H, East Fork, t5/15; cum --
• 23754, 2,741, Statoil, Irgens 27-34 3H, East Fork, t5/15; cum -- 
• 27954, 453, CLR, Scottsdale 3-31H1, Indian Hill, t6/15; cum --
• 28508, 3,335, Statoil, Judy 22-15 5H, East Fork, t5/15; cum --
• 28509, 2,013, Statoil, Judy 22-15 6TFH, East Fork, t5/15; cum --
• 28593, 564, Zavanna, Simmental 2-11 3H, Long Creek, t5/15; cum --
• 28776, 1,505, XTO, Ranger 21X-18G, Tobacco Garden, t5/15; cum --
• 29155, 1,008, XTO, Hanson 11X-12E, Murphy Creek, t4/15; cum 2K 4/15

HRC renewed two permits, Fort Berthold wells, Dunn County (#28628 and #28629)

Only one permit canceled, Fram Operating, Murphy #2, #25580

Random Update Of Production Profiles For Four QEP Moberg Wells -- June 16, 2015

The other day I posted a note on how operators cut back on production during the slump in oil prices. I did not particularly care for that post, but had put too much effort into it to simply delete it. The data was correct; the point I was trying to make was legitimate, but it was not written well and might have confused some folks. The landmen in the Bakken were probably disappointed, or worse, were laughing at the post. Be that as it may, here are some better examples. Look at these wells and their production profiles:

• 28019, 2,509, QEP, Moberg 4-20-21BH, Grail, t11/14; cum 133K 4/15; being choked back, did not flare two most recent months:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2015	25	21784	21761	10903	33025	32844	0
BAKKEN	3-2015	21	14441	14541	14409	22215	22092	0
BAKKEN	2-2015	18	19212	19008	9376	16791	15262	1386
BAKKEN	1-2015	25	30148	30524	10937	40107	15581	24369
BAKKEN	12-2014	31	43899	43490	19670	48792	26351	22254
BAKKEN	11-2014	27	3537	3433	1102	4737	3353	1344

• 28020, 2,325, QEP, Moberg 3-20-21TH, Grail, t11/14; cum 135K 4/15; being choked back; no flaring most recent two months:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2015	19	12067	12184	6085	18509	18409	0
BAKKEN	3-2015	19	15803	15796	9360	26427	26292	0
BAKKEN	2-2015	18	14421	14298	6865	14404	13107	1190
BAKKEN	1-2015	25	29218	29581	13827	38951	15132	23667
BAKKEN	12-2014	31	42474	42594	21008	46748	25246	21321
BAKKEN	11-2014	27	20905	20289	8008	26722	18908	7580

• 28021, 2,529, QEP, Moberg 3-20-21BH, Grail, t11/14; cum 134K 4/15; being choked back, no flaring most recent two months:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2015	26	15281	15495	6644	22641	22514	0
BAKKEN	3-2015	30	23962	23822	9543	40016	39812	0
BAKKEN	2-2015	18	14570	14442	6290	30811	28147	2555
BAKKEN	1-2015	25	28777	29136	11426	38536	14971	23415
BAKKEN	12-2014	31	41952	41730	19607	62163	33605	28380
BAKKEN	11-2014	27	9108	8840	7245	12547	8884	3561

• 28022, 2,566, QEP, Moberg 2-20-21TH, Grail, t11/14; cum 134K 4/15; being choked back, did not flare most recent two months:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2015	25	14002	14223	6355	20551	20435	0
BAKKEN	3-2015	30	23493	23301	11084	37759	37559	0
BAKKEN	2-2015	18	11223	11148	4969	10340	9402	854
BAKKEN	1-2015	25	27301	27696	11662	37475	14560	22773
BAKKEN	12-2014	31	44475	44343	20818	62511	33788	28534
BAKKEN	11-2014	27	13143	12756	5343	18132	12838	5147

The Data Is There -- If You Don't Mind Ads And Unrelated Links; 101 New Non-Bakken Wells? OilPrice -- June 16, 2015

Link here. OilPrice has the most recent NDIC data.

If you like ads and a lot of unrelated links crowdsourcing articles, you will love that link.

The most interesting data point that I had not seen before was near the end of the article, except I don't know what it means:

Bakken wells producing increased by 107 while North Dakota wells producing increased by 101.

Yes, that's exactly what it said. Here's the screen shot:

The Bakken extends into Montana and Canada and although I know Montana did not have any new Bakken producing wells, I can't say the same for Canada, but I assume the writer is talking about Bakken wells in North Dakota only.

And "North Dakota wells increased by 101" when Bakken wells increased by 107 doesn't make sense either. If the writer means that there were 107 new producing Bakken wells in North Dakota and 101 new producing non-Bakken wells that seems interesting. Tyler wells? No. Spearfish wells? No. Three Forks wells? Probably. Whatever.

By the way, on another note, from that same linked article:

153 new wells went on line in April, or 5.1 wells per day. That compares to 188 that went on line in March or 6.06 per day. Those 188 new wells brought production up 12,371 bpd while those 153 wells saw a decline of 21,866 bpd. It would have taken about 175 new wells to have kept production flat.

That's very, very interesting. I believe "175" is the very same number Lynn Helms has said is the number of new Bakken wells required to maintain production.

**********************

A Note to the Granddaughters

From Leroi's The Lagoon, p. 156:

The traditional Greek conception of soul was Homer's.

Patroclus falls at Troy and his disembodied soul takes wing for the House of Hades.

Perhaps this explains why the Greek name for a butterfly is the same as that for 'soul' -- psychē -- for, as the soul flees a corpse at death, so a butterfly clambers from its chrysalis. 

And on the origin of 'cybernetics', page 176:

In the 1940s Norbert Wiener formalized homeostasis as the product of regulatory systems that contain negative feedback circuits. Coining the term 'cybernetics' for the science of such self-regulating systems, Wiener argued that they solved the problem of teleology.... Searching for a name for his new science, Wiener began with 'governor', the name given to the device that regulates a steam engine. This led him to its Latin ancestor, gubernator, an then, via an etymological trail, to the word's ultimate Greek ancestor kybernētēs or 'pilot' which he considered particularly apt since the steering devices for ships were especially good examples of negative feedback control systems. From kybernētēs came 'cybernetics.' It was a felicitous choice since the steersman is an ancient metaphor for control used by both Plato and Aristotle in the context of political hierarchies.

Fracklog -- June 16, 2015

From today's list of wells coming off the confidential list (complete data is here):

• 26453, drl/NC 
• 27853, 392
• 28862, drl
• 29322, 1,121 
• 29462, SI/NC 
• 29851, SI/NC
• 29876, SI/NC 
• 30066, SI/NC
• 30129, SI/NC 

Nine wells came off the confidential list today. Only two reported an IP. The "SI/NC" wells stand out like a  .... red thumb. I'm not quite sure what the difference is between SI/NC and drl/NC. I think it's mostly an administrative thing. 

Bottom line, 7/9 wells coming off confidential list were not completed. Before the slump in oil prices, wells that were not completed were simply put on the DRL list and would be completed as soon as possible. Now, these wells are being "shut in" and won't be completed until ... well, no telling when.

And that's why the "fracklog" on the Director's Cut that will be released this week is the most anticipated data point. [The second most anticipated data point: price folks are getting for Bakken oil vs WTI.] 

Under "normal" circumstances during the boom, the number of wells waiting to be fracked was in the neighborhood of 250. When it went to 450, it caught people off-guard, to some extent.

Sevenhundredfifty wells waiting to be completed ... unheard of. And then last month: 900. It's hard to believe the number won't be higher in the next report when one sees lists like the one above.

By the way, the #27853 well is a "high-IP" producer.  At 54 stages and 14.4 million lbs of sand, I will let you guess the operator. The production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2015	30	10525	10358	19536	7008	6524	0
BAKKEN	3-2015	24	13778	13971	20430	6567	6208	0
BAKKEN	2-2015	28	36266	36605	44408	22185	21733	0
BAKKEN	1-2015	29	43004	42486	72664	19963	19499	0
BAKKEN	12-2014	13	6256	6122	24826	2251	2041	0

Fees, As A Percentage, More Than Doubles To "Manage" North Dakota's Legacy Fund, OMG; Investing In High-Risk Equities, OMG -- June 16, 2015

April 16, 2013, I posted:

The Bismarck Tribune is reporting.

Some of these data points were provided at the linked article:

• the Legacy Fund gets 30 percent of the state's oil tax collections
• none of the Legacy Fund money can be spent until 2017; will require 2/3rds vote of legislature to spend it
• the money is stashed under a mattress; it is not invested
• April deposits were $80.5 million.
• the fund was begun in September, 2011 -- about 18 months ago, I guess
• the fund is slightly ahead of projections: original projections -- $620 million by June 30, 2013

Any safe utility pays 3%. Three percent of $1 billion = $30 million per year. Otter Tail pays 3.8%; MDU pays 2.8%.

So, not investing this money is costing the state $30 million per year.

Flaring is costing the state $26 million in tax and royalties per year.

And so it goes. 

I posted more than once that the state's decision not to invest Legacy Fund money was crazy. I never used the word "criminal."

Someone must have gotten the message. Today, The Dickinson Press is reporting:

A more diversified investment strategy is paying off for North Dakota’s $3.2 billion trust fund for oil and gas tax revenue, bringing a higher rate of return for the state but also higher fees paid to investment managers, officials said Monday.

After management fees were paid, the Legacy Fund earned 5.72 percent for the year ending March 31, up from 3.93 percent the previous year.

That’s still below the long-term goal of 6.4 percent that was set when the board adopted the new investment strategy in July 2013, hoping to see a better annual return than the 1.6 percent earned in each of the fund’s first two years.

More:

Lawmakers can’t spend the fund until July 2017, and even then, spending the principal will require two-thirds approval in each chamber of the Legislature.

As of April 30, 2015, the fund had collected more than $3 billion in deposits and about $242 million in investment earnings, for a total market value of $3.26 billion.

Management fees climbed from roughly $1.1 million to $4.9 million between fiscal years 2013 and 2014, which translates to an increase from 0.13 percent to 0.27 percent of the fund’s average market value.

Maybe it's just me, but the writer's fascination with a 0.27% fee seems a bit misplaced. I would love if all my investment fees were that low. [The fees are expected to increase to 0.5% next year.]

And then, of course, those pesky higher-risk equities, like ATT, MDU, and GE:

The transition from short-term bonds to higher-risk stocks, bonds and real estate wasn’t completed until January, and the 5.72 percent annual return through March was better than the 5.39 percent benchmark for that time period.

A Typical EOG 1920-Acre Overlapping Unit -- June 16, 2015

This is the "standard" EOG overlapping 1920-acre siting and horizontal:

It might be a little hard to see. I will watch for a better graphic. Whatever. It's a 3-section, L-shaped drilling unit. Of the few that I have bothered to check, these 1920-acre overlapping units have all started in the southeast section and drilled to the northwest. This particular one cuts into the northeast section a bit more than others I have seen. In some, the horizontal barely -- and I mean, barely -- cuts the lower left hand corner of the northeast section. The horizontal is a typical long lateral -- if anything, a bit shorter.

Someone owning 10 mineral acres in the far southwest of the northwest section will participate in this well. Pretty exciting for a lot of small-time mineral owners who never thought they would ever get a well.

Spin -- Tuesday, June 16, 2016

When I saw the headline, I was confused. That was not the story I had read an hour earlier. Here's the headline: U.S. Building Permits Soared to Their Highest Level in Nearly Eight Years -- a BloombergBusiness headline. But then this lede:

The U.S. home-building industry enjoyed its best two months in more than seven years as it headed into its busiest season, even as it began work on fewer houses last month following an April surge.

While housing starts declined 11.1 percent to a 1.04 million annualized rate, it followed April’s revised 1.17 million pace to cap the best back-to-back readings since the last two months of 2007, the Commerce Department reported Tuesday in Washington. The median estimate of 81 economists surveyed by Bloomberg called for 1.09 million. Permits for future projects climbed to the highest level in almost eight years, indicating activity will probably pick up.

The data show the residential real estate market was sustaining gains after sporadic advances earlier in the year that reflected bad weather and a slump in overall U.S. growth. Hiring momentum and bigger paychecks amid still-cheap borrowing costs are brightening Americans’ moods and could lift home purchases in the second half of 2015.

" ... even as it began work on fewer houses last month ..."
" ...while housing starts declined 11% ..."
" ... activity will probably pick up."

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The Fed

Which brings us to Janet Yellen.

Any sign of inflation? No. None. Nada. Zilch.

Any sign of recovery? Hardly.

Any reason to raise rates? No.

But let's check GDPNow, updated June 11, 2015, and in real-time:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2015 was 1.9 percent on June 11, up from 1.1 percent on June 3. The nowcast for second-quarter real consumer spending growth was revised up from 2.1 percent to 2.4 percent following last week's release on motor vehicle sales from the U.S. Bureau of Economic Analysis, and from 2.4 percent to 2.9 percent following this morning's retail sales report from the U.S. Census Bureau.

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New Link

I can't recall if I've highlighted this link before. If not, it caught my eye this morning. Lots of graphs. 538.

Tuesday -- June 16, 2015

Active rigs:

	6/16/2015	06/16/2014	06/16/2013	06/16/2012	06/16/2011
Active Rigs	78	187	185	214	171

RBN Energy: another great post today -- it will be archived. Overview of source of oil for US refineries.

Regular readers know the reason for that large green slice of pie along the Gulf Coast.

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Oil Glut

From Bloomberg: The World Is Facing Its Longest Oil Glut in at Least Three Decades --

The world is on the brink of the longest-lasting oil glut in at least three decades and OPEC’s quest for market share makes it almost unavoidable.

Oil supply has exceeded demand globally for the past five quarters, already the most enduring glut since the 1997 Asian economic crisis, International Energy Agency data show. If the Organization of Petroleum Exporting Countries were to keep pumping at current rates it would become the longest surplus since at least 1985 by the third quarter, the data show.

For another view: peak oil myth or reality. 

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Another Energy Spin-Off

Babcock & Wilcox announces the Form 10 registration statement relating to the spin-off of its subsidiary, Babcock & Wilcox Enterprises, has been declared effective :

• Co announced that the Securities and Exchange Commission has declared effective the Form 10 registration statement filed by Babcock & Wilcox Enterprises.
• As previously announced, the co will change its name to BWX Technologies ("BWXT") on the date of the spin-off. 

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As If We Did Not Have Enough

ExxonMobil announced that production at its Kearl oil sands expansion project in Alberta, Canada, started ahead of schedule and is expected to double overall capacity to 220,000 barrels of bitumen a day.

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But 

Statoil announces next phase of restructuring; to cut 1,100 - 1,500 employees by end 2016.

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And

Fiat Chrysler reports a 9% increase in passenger car sales in Europe in May. All run on fossil fuel, no doubt.