Tuesday, October 20, 2015

Nine (9) New Permits -- North Dakota -- October 20, 2015

Active rigs:

Active Rigs68191184186195

One well coming off confidential list Wednesday:
  • 29771, 112, Crescent Point Energy, CPEUSC Goldsmith 15-22-158-101, Little Muddy (Williams County), a Bakken well, 35 stages; 5.2 million lbs, t6/15; cum 12K 8/15;
Nine (9) new permits --
  • Operators: EOG (4), BR (4), Berenergy Corporation
  • Fields: Alger (Mountrail), Corral Creek (Dunn), Chatfield (Bottineau)
  • Comments: Berenergy has been in North Dakota since the 1970s, but this is only their second permit in the "modern era"; their earlier permit was #29622, Borstad 30-3, also in Chatfield oil field; it remains on the confidential list. 
Note: no producing wells were reported as completed. Yesterday, there were two producing wells completed, and that covered three days (weekend, plus Monday). The number of producing wells reported as completed over the past two weeks (wells not completed, add to the "fracklog"):
  • Monday, Oct 19: 2
  • Friday: 1
  • Thursday: 0
  • Wednesday: 0
  • Tuesday: 1
  • Monday, Oct 12: 5 (3-day history)
  • Friday: 1
  • Thursday: 4
  • Wednesday: 0
  • Tuesday: 2
  • Monday, Oct 5: 0
Comment: in the daily report, posted each morning (and in the Daily Activity Report later), one can see that most new wells are going to DUC/DRL status and very, very few drilled (producing) wells are being reported as completed. The fracklog was up to 993 in August, 2015 (Director's Cut, October 14, 2015), which was an all-time record. It's hard to believe it won't be significantly higher in the September data (to be released in November).

See poll at sidebar at the right; it remains open.

Saudi Crude Oil Inventories Reach Record High -- October 20, 2015; Consumer Reports Withdraws Recommendation For Tesla Model S

Oilprice.com is reporting: Saudi Arabia oil inventories reach record high as demand wanes --
JODI data over the weekend highlighted that Saudi Arabian crude stocks have reached a record high of 326.6 million barrels in August. As Saudi continues to keep production elevated, and as it struggles to find a home for all its exports amid a highly-competitive global market (awash with crude), this extra oil is finding its way into stockpiles as exports ease.
Saudi Arabia crude oil inventory:
  • Currently: 325 million bbls in storage
  • 4Q14: 310 million bbls
  • 4Q13: 285 million bbls 
The world consumes around 93 million bopd; produces around 94 million bopd.  Source: IEA.

More at this July, 2014, article.

And Not Even A Decade Old?

Reuters is reporting:
Owners of vehicles with advanced fuel-saving technology and digital multimedia systems, including the Tesla Model S sedan, are hurting reliability, Consumer Reports magazine found in its annual survey of vehicle reliability.
That was a weird sentence -- cutting out all the middle stuff, subject verb, object only: "Owners ... are hurting reliability." What? What do they mean, "hurting reliability"?

Having said that, this is easy to understand:
There is “an emerging trend of increased troubles” with many vehicles that use new transmission technology to boost mileage, the magazine said Tuesday. The latest reliability survey was to be presented by the magazine's editors at a meeting of Detroit's Automotive Press Association.

One of the most technologically adventurous cars on the market, the Tesla Model S, registered a worse than average reliability score based on survey responses from 1,400 owners, Consumer Reports found. The battery powered Model S P85D was recently lauded by the magazine’s editors for racking up the best scores ever in its performance tests. But owners complained of rattles, leaks, and problems with the charging equipment, drivetrain and center console displays, the magazine said.
I've always said re-sale value will become an issue, starting with battery replacement.

Wow! Just after posting the above, I see The Los Angeles Times has a long article on same subject:
Consumer Reports withdrew its recommendation for the Tesla Model S — a car the magazine previously raved about — because of poor reliability for the sporty electric sedan.

The turnabout comes after the influential consumer magazine handed the luxury car a “worse-than-average” rating in its annual report on the predicted reliability of new vehicles issued Tuesday.

The news sent Tesla Motors stock down as much as $23.77, more than 10%, to $204.33 in mid-day trading.

Consumer Reports surveyed 1,400 Model S owners “who chronicled an array of detailed and complicated maladies” with the drivetrain, power equipment, charging equipment and giant iPad-like center console. They also complained about body and sunroof squeaks, rattles and leaks.

“As the older vehicles are getting up on miles, we are seeing some where the electric motor needs to be replaced and the onboard charging system won’t charge the battery,” said Jake Fisher, Consumer Reports’ director of automotive testing. “On the newer vehicles, we are seeing problems such as the sunroof not operating properly. Door handles continue to be an issue.”
Fisher said the flaws could signal future problems for the brand, which plans to roughly double production next year. It has just begun deliveries of a second vehicle, the Model X electric crossover, and intends to introduce the Model 3, a smaller, less expensive electric car, in 2017.
Through the first nine months of the year, the automaker has delivered only 33,117 vehicles. Current Tesla models sell for about $100,000.
Notes to the Granddaughters

I was in my Hemingway phase after reading Selected Letters of Martha Gellhorn, so I went back to read Islands In The Stream. I don't recall liking it the first time I read it, and I liked it even less this time. I was barely able to get through the first third, "Bimini." I finished "Bimini" and then hung it up. I can't decide whether to throw it out or keep it on the Hemingway shelf. It was written in 1950 - 1951. Hemingway put in a Havana bank vault at that time and then who knows where/when his fourth wife, Mary, found the manuscript. She had it published in 1970, after Hemingway had died. Remember that date, 1950 - 1951.

For some reason I wanted to read -- actually re-read Catcher in the Rye. Perhaps I wanted to compare Salinger with Hemingway. I bought a new copy of Catcher about two months ago, waiting for a moment when I was "ready" to read it again. This will be my third reading. I don't recall much about it from my earlier two readings. This time I will remember it forever. According to his biographer, Salinger had the first six chapters written when he was called to war, landed in Normandy -- D-Day? I can't remember -- and then worked on the book while an intelligence office in Europe. The book was published in 1951 according to most sources, but it was copyright 1945, 1946, and 1951 (and then renewed in 1970 by Salinger).

I am about two-thirds of the way through Catcher. One can read Catcher in one sitting. I'm taking my time. I will read it in three sittings; two days, maybe three days. It will be finished tonight.

I mentioned to our oldest granddaughter that I was reading it. She asked if she could read it after I was finished. I was non-committal -- purposely vague -- I couldn't remember if it was "suitable" for a 14-year-old. It may not be. I will not bring it up again, but recommend that she read it as a sophomore or junior in high school. It would be a good book for a young girl to discuss with peers and responsible adults.

But I digress. Having read Islands In The Stream and Catcher, I can say that the former was truly, truly awful. I don't get it. One might say that having not read all of it, I cannot judge, but I read the reviews, and the reviewers were as ecstatic with the "Bimini" as the rest of it. I have no idea what those reviewers must have been reading; certainly not Hemingway. Catcher? One of the funniest books I've read.

Holden was by times depressed, manic, but always "crazy," as he himself says. After screwing up a potentially wonderful date, he was a bit "down." He wanted to talk to someone -- in fact, throughout the book, throughout the story which only takes place over a couple of days, Holden wants to talk to someone. He takes out his address book. Page 176 - 177:
... but her phone didn't answer, so I had to hang up. Then I had to look through my address book to see who the hell might be available for the evening. The trouble was, though, my address book only has about three people in it. Jane, and this man, Mr. Antolini, that was my teacher at Elkton Hills, and my father's office number. I keep forgetting to put people's names in.
Funny, sad, poignant, coming-of-age, all at one time. I'm sure Hemingway read the book. That's probably why he put Islands In The Stream in a bank vault and never looked at the manuscript again.

Tuesday, October 20, 2015; Update On A Bakken Blow-Out


October 21, 2015: The Dickinson Press reports the spill at 756,000 gallons. Crude oil is always measured in "bbls" unless it's a spill reported by faux environmentalists, and then it's reported in gallons. 756,000 gallons is 18,000 bbls. Note the first paragraph of the linked article: 
The amount of oil and brine recovered from an oil well near the White Earth River reached 756,000 gallons Tuesday, though officials said 99.9 percent of the contamination was contained to the well pad.
An estimated 18,000 barrels of oil and brine water has been recovered so far, but the total amount spilled is still under investigation, said Department of Mineral Resources spokeswoman Alison Ritter.
Hilarious. Predictable. Ball of dust.
Original Post 

Initially reported late last night, The Grand Forks Herald has an update (this story is also in Rigzone, and thus getting national/international attention): "Significant" oil, brine spill affecting White Earth River in northwest North Dakota:
The well: known as Helling Trust 11-15H, permit #17636.
Bill Suess, spill investigations program manager for the Department of Health, said about 1,760 barrels of oil and 2,000 barrels of brine water had been recovered from the Oasis Petroleum North America well site by 5 p.m. CDT Sunday, but that as of 3:30 p.m. Monday, the company hadn't regained full control of the well.
"It's a significant leak," Suess said, adding, "flow from the well had diminished by a third" since the leak was first reported. Oasis reportedly lost control of the well, about 15 miles south of White Earth and less than 5 river miles north of Lake Sakakawea, about 11 p.m. Saturday.
Oasis said in a statement that there were no injuries. "This one is a little different than the typical blowout," Suess said. "Most blowouts tend to shoot up in the air. So far, we've been lucky on this one. It's been coming out of the wellhead at a slight downward trajectory." [An earlier story said this blowout was due to a neighboring frack.]
He said that helped with recovery efforts, though it remains unclear exactly much oil and brine have spilled. Suess said he expected the well to be shut down by late Monday and spill estimates to be released after that.
The well experienced a tank overflow on Jan. 23, according to a Department of Health spill report. About 130 barrels of oil and 60 barrels of brine were spilled, all of which was recovered.

Active rigs:

Active Rigs66191184186195

RBN Energy: continuation of the series on the Williams - Energy Transfer deal.

The acquisition of Williams Companies by Energy Transfer will create a midstream behemoth. The deal is expected to close during the first half of 2016 subject to regulatory approval. Once complete the main holding company Energy Transfer Corp (ETC) will be a C-Corp entity sitting atop Master Limited Partnerships (MLPs – containing the assets of Energy Transfer Partners (ETP), Williams Energy Partners (WPZ), Sunoco LP (SUN) and Sunoco Logistics (SXL). The combined natural gas pipeline network will carry as much as 45% of U.S. Lower 48 dry gas production. Today we take a look at the natural gas infrastructure assets in the deal.

Not Ready For Prime Time


October 27, 2015: Russia burning through cash; could exhaust one rainy day fund as early as next year. 

Original Post
In response to a reader talking about $30 oil in the near future, I had this reply:
The problem I see is that Russia can't survive on $30 oil, and now getting into a shooting war, they will spend even more money.

Maybe a year of stability ($30 oil) but once Russia has eradicated those fighting Assad, Putin can look at the bigger picture: Russia/Iran/Syria vs Saudi Arabia.

It might take awhile, but I have trouble believing Putin is in as deep as he is in Syria just because he "likes" Assad. As someone else said, Obama handed Putin the "key to the Mideast" and I think Putin will take advantage of that -- Pan-Shia Persia (90-95% of Iranians are Shi'a and 5-10% are Sunni [Wiki]).

Persia is chomping at the bit to be the Mideast leader once again. Putin is chomping at the bit to be the "Lawrence of Arabia Putin of Persia" and/or Alexander the Great. There's probably already a Hollywood writer fleshing out the movie script.
I had no plans to post that (which I wrote last night) but then this story popped up this morning:
Saudi Arabia's foreign minister on Monday urged Iran to stop "meddling" in the affairs of the kingdom's neighbours, warning that Riyadh stood ready to confront Tehran's actions
Iran openly backs President Bashar al-Assad in the Syrian war and is accused of also being behind rebels who overran large parts of Yemen last year and early this year.
Also, this story was linked/posted a few days ago: Saudi Arabia is waging an oil war with Russia, reported in The Chicago Tribune:
President Vladimir Putin tries to restore Russia as a major player in the Middle East, Saudi Arabia is starting to attack on Russia's traditional stomping ground by supplying lower-priced crude oil to Poland.

At a recent investment forum, Igor Sechin, chief executive of Rosneft, Russia's biggest oil company, complained about the Saudis' entry into the Polish market. "They're dumping actively," he said.

Other Russian oil executives are worried, too. "Isn't this move a first step toward a redivision of Western markets?" Nikolai Rubchenkov, an executive at Tatneft, said at an oil roundtable Thursday. "Shouldn't the government's energy strategy contain some measures to safeguard Russia's interests in its existing Western markets?"

European traders and refiners confirm that Saudi Arabia has been offering its oil at significant discounts, making it more attractive than Russian crude. And, even though most eastern European refineries are now technologically dependent on the Russian crude mix, Russia's oilmen are right to be worried.
Wage Increases Are The Least Of Wal-Mart's Problems

AFP posts this story: Wal-Mart woes revive minimum wage debate.  I agree that government-mandated minimum wage mandates are bad, bad news, but Wal-Mart has a lot more problems than their recently-announced wage increases.

They need to start with clarifying whether their name is Wal-Mart or Walmart. I do believe the latter is "now" correct.