Monday, November 23, 2015

Holiday Travelers Warned: Huge California Snowstorm Could Close Sierra Nevada Roads -- LA Times; Three People Shot Near Bakken Lives Matter Protest -- November 23, 2015

While preparing for their trip to cover the global warming conference to be held in Paris, Los Angeles Times reporters took time to file this report: Holiday travelers are warned: a huge snowstorm could block Sierra Nevada passes.
Nearly 20 inches of snow could fall on the Sierra Nevada from Yosemite National Park to north of Lake Tahoe this week. Drivers could find blocked and buried mountain passes this Thanksgiving holiday.

A massive storm, reaching across about half of the state, is expected to move in Tuesday and peak Wednesday, where it will drop up to 18 inches of snow on mountain summits from Shasta County and Lake Tahoe to Yosemite, said Nathan Owen, a meteorologist with the National Weather Service in Sacramento.
And so it goes.

All Lives Matter

Minneapolis StarTribune is reporting that three people were shot near the site of Bakken Lives Matter. Oh, my bad. Not Bakken Lives Matter. Black Lives Matter. 


The governor of New York will order state regulators to mandate that by 2030 half of all power consumed by New Yorkers be generated from renewable sources. One would think that in a democracy, the people's representatives would write the law and the governor would ensure the law is followed.

But I guess in New York, the governor can tell the regulators what to do even if no law exists. Maybe I'm missing something.

Or petulant?

The governor is doing this because "he is frustrated by the pending shutdown of two nuclear power plants on Lake Ontario."

I can't make this stuff up.

The New York Times reports the story. That's all I'm going to write. It tells me about all I need to know about "Governor" Andrew Cuomo of New York. I have better things to do, like watch Midnight In Paris and The Big Lebowski.

At least he's not doing what Angela Merkel in Germany did: she closed down the nuclear reactors and returned to coal to produce electricity. Something tells me New Yorkers will need a lot of wood chip power plants to make up for the loss of two nuclear reactors. I understand North Carolina has a lot of wood chips. 

Katie Ledecky Named Female Athlete Of The Year -- A Three-Peat -- November 23, 2015

TeamUSA is reporting:
Katie Ledecky won three trophies, including female athlete of the year, and Michael Phelps earned male athlete honors at the Golden Goggle awards as USA Swimming honored its top performers.
Ledecky beat out open water swimmer Haley Anderson and Missy Franklin for female athlete Sunday night at the 12th annual gala in downtown Los Angeles. The 18-year-old swimmer from Bethesda, Maryland, also won the award the last two years.
She towered over presenter Victor Espinoza, who rode Triple Crown winner American Pharoah.
"With Thanksgiving coming up, we all have a lot to be thankful for," Ledecky said. "We're all pretty blessed."
Ledecky won female race of the year for her 200-meter freestyle victory at last summer's world championships in Kazan, Russia. She earned nominations for two of her other winning races in Kazan. She shared the relay performance of the year award with Franklin, Leah Smith and Katie McLaughlin for their victory in the 800 free relay in Kazan. Ledecky won a record five golds at the world meet.
Three-peat or hat trick?

West Capa And Parshall Oil Fields Have Been Updated

West Capa oil field has been updated.

The Parshall oil field through 2014 permits has been updated.

Still Confidential But Looks Exciting For This 2nd Bench Three Forks Well -- November 23, 2015

30404, conf, QEP, Kirkland 6-7-12T2HD, Croff, a 1280-acre unit, a Three Forks second bench:

DateOil RunsMCF Sold

For The Archives

Of the 30 "worse" highway bottlenecks in the entire USA, Los Angeles has ten of them. The Los Angeles Times reports the top ten in the US and their national rankings (with my comments in parentheses):
  • #2: The 405 Freeway between the 22 and 605 freeways, in Seal Beach (right where my brother-in-law / wife live)
  • #3: The 10 Freeway between Santa Fe Avenue and Crenshaw Boulevard (haven't been there in ages; I avoid the I-10 as much as possible)
  • #4: The 405 between Venice and Wilshire boulevards (yup; a real pain when going to the Getty)
  • #5: The 101 Freeway between Franklin Avenue and Glendale Boulevard (very rarely; when going to the observatory / the park)
  • #6: The 110 Freeway between Exposition Boulevard and Stadium Way (the museums in south Los Angeles)
  • #7: The 101 between Sepulveda and Laurel Canyon boulevards (I don't recall being on that one -- north of Ventura Blvd; heading to Sherman Oaks Galleria)
  • #11: The interchange between the 5 and 110 freeways between the 101 and North Mission Road (unfair, hitting below the belt; for heaven's sake, it's an interchange, near Dodger Stadium; I'm surprised there are ten locations worse than this one)
  • #13: The 10 between La Brea Avenue and National Boulevard (as noted above, I try to avoid I-10 at all costs)
  • #14: The 5 Freeway between South Eastern and Euclid avenues (near Disneyland?)
  • #29: The 405 between Burbank and Ventura boulevards (the entire 405 is a challenge; the 405 by itself could have had all 30 spots)
  • #30: The 101 between the 110 and Alameda Street (well, duh, north of central LA, passes Union Station)
A Note For The Granddaughters

I've mentioned before that I love reviewing products over at I recently reviewed Cuties Baby Wipes. 
We take care of our 15-month-old granddaughter 24/7 when the parents are at work / at school. Next to the parents, we are the primary caregivers for her, our third granddaughter. These wipes are absolutely perfect. I had not used them before but now that I am introduced to them, I will look for them when shopping.
So that was my simple review; not much.That was about a month ago. Last week my daughter told me that she was no longer required to provide baby wipes for our 17-month-old granddaughter -- the daycare center would provide them -- and free of cost. Most interesting, they were switching to the ones we bring: Cuties Baby Wipes.

So I updated the review:

Update, November 23, 2015: this is really quite impressive. We started packing Cuties Baby Wipes in our granddaughter's daycare bag about a month ago, I suppose (time goes by quickly). The daycare center is part of a major daycare center franchise here in the Dallas-Ft Worth metroplex. Last week I learned that the daycare center has just begun using Cuties Baby Wipes exclusively. Whether it had to do anything with our preference or whether it was entirely coincidental, it speaks volumes about the quality and affordability of this product. The daycare center is also providing these wipes free of charge; we don't have to bring our own in any more. This also speaks to the affordability. Just saying.

Four (4) New Permits -- November 23, 2015

Active rigs:

Active Rigs65191185183202

Wells coming off the confidential list Tuesday:
  • 30165, SI/NC, Hess, AN-Prosser-152-95-1102H-8, Antelope, no production data,
  • 31009, SI/NC, EOG, Shell 44-3229H, Parshall, no production data,
  • 31177, SI/NC, CLR, Jefferson 10-17H1, Crazy Man Creek, minimal production to date;
Four (4) new permits --
  • Operators: EOG (2), Whiting (2)
  • Fields: Parshall (Mountrail), Park (Billings)
  • Comments:
Seven (7) producing wells completed:
  • 30111, 1,408, XTO, Raymond 21X-5AXB, Dollar Joe, t11/15; cum --
  • 30110, 43 (no typo), XTO, Raymond 21X-5E, Dollar Joe, Three Fork first bench, t9/15; cum --
  • 30109, 1,422, XTO, Raymond 21X-5A, Dollar Joe, t11/15; cum --
  • 30112, 999, XTO, Raymond 21X-5FXG, Dollar Joe, t11/15; cum --
  • 30700, 1,754, Statoil, Irgens 27-34 7TFH, Irgens 27-34 7TFH, t10/15; cum --
  • 26043, 810, CLR, Kuhn Federal 4-12H1, Camp, t11/15; cum --
  • 26041, 742, CLR, Patterson Federal 4-13H1, Camp, t11/15; cum --
  • 21791, 989, Statoil, Jay 24-13 1H, in McKenzie County, Banks, t9/12; 26K 10/13;
  • 22997, PA, OXY USA, Thunderbird 1-15-22H-141-94, in Dunn County, no surprise; never any production, a wildcat
Temporarily abandoned:
  • 21814, TATD, Statoil, Cheryl 17-20 1H, Banks, no production,

USA Today On Oasis -- November 23, 2015

From USA Today:
With oil prices down roughly 50% over the past year, some oil producers are simply trying to survive. Then there's a second group that's just trying to tread water by focusing on pushing costs down to balance cash flow with outflows for capex and dividends. Finally, a third group has emerged in what's really an elite class of oil companies that are thriving in the current environment because they're generating free cash flow while still managing to grow their production. Topping that list are Suncor Energy, Oasis Petroleum, and ExxonMobil. Here are the secrets to their success.
The Bakken gem

Oasis Petroleum is generating free cash flow during the current environment even after investing to grow production, and it expects those trends to continue next year, even a $50 oil price. Its secret sauce is lower costs, thanks in part to its own vertical integration and its strong hedge portfolio.
That hedge portfolio helps insulate some of Oasis' cash flow from weak oil prices, much as Suncor's refining assets do for its cash flow. However, it's when this strong cash flow shield is added to Oasis Petroleum's vertical integration that we see the real key to its success. Oasis has a midstream services segment and a well services segment, which work together to improve operational and financial performance by cutting out key middlemen. This advantage enabled Oasis to reduce its well costs and operating costs by 30% and 35%, respectively, year over year. So despite its smaller size, the compelling combination of production growth and free cash flow generation really puts Oasis in an elite class.
Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on what you read here or thought you may have read here. This information is posted only to help me better understand the Bakken. If this information is important to you, go to the source. 

Mexico To Get Record Payout Due To Collapse In Oil Price -- November 23, 2015

I've talked about this occasionally -- even with low oil prices, those in the oil and gas sector can make money. Here's a great story about Mexico reporting a huge windfall due to low oil prices. Bloomberg/Rigzone is reporting that Mexico is set to get a record payout of at least $6 billion from its oil hedges this year.
The Latin American country locks in oil sales as a shield against price declines through a series of financial deals with banks including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc. For 2015, Mexico guaranteed sales at almost $30 a barrel higher than average prices over the past year.

The 2015 payment, due next month, is set to surpass the record from 2009, when the Mexican government said it received $5.1 billion after prices plunged with the global financial crisis. The country’s crude has fallen by almost half over the hedging period so far this year. Crude sales historically cover about a third of the government budget.

"The windfall is huge," said Amrita Sen, chief oil analyst at Energy Aspects Ltd., a London-based consulting company. "This gives Mexico breathing space."

The hedge, which runs from Dec. 1 to Nov. 30, covered 228 million barrels at $76.40 each for the Mexican oil basket, according to government documents and statements. With less than two weeks to the end of the program, the basket has averaged $46.61 a barrel over the period.
By the way, the most important data point in that article might be this one: crude sales historically cover about a third of the government budget.

Back to the windfall. I assume to do this again in 2015, Mexico needs to lock in $40-oil and then hope for oil to drop to $20/bbl. Yes, I know. Don't even get me started.

Phillips' Largest Shareholder? Warren Buffett -- Owns Almost 12%

From Motley Fool:
On Monday, Berkshire Hathaway filed its quarterly report of stock holdings for the third quarter. The most prominent new addition was Phillips 66, and Warren Buffett did not do things halfway: Berkshire is now Phillips' largest shareholder, with a 11.5% stake worth $4.7 billion at the end of the quarter. Phillips 66 is one of only two energy sector holdings, along with Suncor Energy Inc. Surely the drubbing the energy sector has suffered has created opportunities to for a patient, value-driven investor.
What might be on Warren's energy shopping list? The linked article provides three names, but two are picks of blind-folded dart throwers, and the third suggestion is simply common sense.

By the way, back to Suncor. The company primarily focuses on developing petroleum resource basins in Canada's Athabasca oil sands; explores, acquires, develops, produces, and markets crude oil and natural gas in Canada and internationally; transports and refines crude oil; markets petroleum and petrochemical products primarily in Canada; and markets third party petroleum products. It operates in Oil Sands; ....

From USA Today:
With oil prices down roughly 50% over the past year, some oil producers are simply trying to survive. Then there's a second group that's just trying to tread water by focusing on pushing costs down to balance cash flow with outflows for capex and dividends. Finally, a third group has emerged in what's really an elite class of oil companies that are thriving in the current environment because they're generating free cash flow while still managing to grow their production. Topping that list are Suncor Energy, Oasis Petroleum, and ExxonMobil. Here are the secrets to their success.
The Canadian powerhouse

Through the first three quarters of this year, Suncor Energy has generated C$5.5 billion in cash flow. While Suncor plowed roughly C$2 billion of that amount back into maintenance and used another C$2.7 billion to fund growth projects, the company has still managed to generate C$875 million in free cash flow. In fact, it's generating so much free cash flow that it actually increased its dividend at a time when most oil producers are at best holding dividends flat. Further, Suncor Energy has even restarted its stock buyback program while also going on the offensive in making two notable acquisition overtures. Suffice it to say, Suncor Energy is thriving under the current conditions.
Its secret is simple. First, its integrated business model has really provided a lift to cash flow, with its refining and marketing segment kicking in 42% of its cash flow last quarter, which is up from 22% in the same quarter of last year. In addition, Suncor Energy has pushed its costs down to its lowest level in years, with its oil sands operating costs declining to levels not seen since 2007. When we add those factors to its growing production profile and strong balance sheet, and it puts Suncor in an elite category.
Piling On

I am cleaning out my e-mail backlog. There have been a glut of stories on ObamaCare in the past few days. The current run of articles culminates with this article from The Fiscal Times: the thrill is gone for ObamaCare as health-care approval fades.
The administration’s Obamacare enrollment projections for the coming year are down, the projected cost of premiums and out of pocket costs are up, nearly half of the insurance co-ops associated with the program are going out of business, and UnitedHealth Group, the nation’s largest health insurer, said it may withdraw from the government marketplaces in 2017.
Polling shows Americans broadly disillusioned with ObamaCare. I wonder why?

From, $7,150 ObamaCare deductible coming in 2017 -- HHS.
The backlash over ObamaCare deductibles will only intensify as customers shopping for 2017 plans a year from now face bronze-plan deductibles as high as $7,150.
The Department of Health and Human Services on Friday detailed many key ObamaCare parameters for 2017, including a $300, or 4.4%, rise in the maximum out-of-pocket expense for covered medical bills — not including premium payments — from $6,850 in 2016.
Some of the lowest-cost bronze plans for 2016 are setting deductibles and out-of-pocket limits at the $6,850 ceiling to hold down premiums, which still rose by about 12% over 2015, on average.
That means that landing in the hospital could wreck the finances of many modest-income bronze plan enrollees.
This means this isn't even high-cost catastrophic health insurance any more. It's simply high cost.

By the way, maintains a list of employers who have cut workers' hours below the 30-hour-per-week threshold at which the employer mandate kicks in. I get a particular joy out of this one; the MDW was the first non-ad supported blog that noted this and talked about it at length before mainstream media noted the new federally mandated workweek - 30 hours.

Peak Oil. What Peak Oil? US Increased Its Proved Reserves For Sixth Year In A Row; This Time By Almost 10% -- November 23, 2015

EIA's energy "cookie" today:
U.S. crude oil proved reserves increased in 2014 for the sixth year in a row with a net addition of 3.4 billion barrels of proved oil reserves (a 9% increase), according to U.S. Crude Oil and Natural Gas Proved Reserves, 2014, released today by the U.S. Energy Information Administration (EIA). U.S. natural gas proved reserves increased 10% in 2014, raising the U.S. total to a record 388.8 trillion cubic feet (Tcf).
At the state level, Texas had the largest increase in proved reserves, 2,054 million barrels (60% of the nation’s total net increase) in 2014. Most of these new oil reserves were added in the Texas portion of the Permian Basin and the Eagle Ford Shale play.
North Dakota had the second-largest increase—a net gain of 362 million barrels—most of which were added in the Bakken tight oil play of the Williston Basin.
Pennsylvania added 10.4 trillion cubic feet (Tcf) of natural gas proved reserves (the largest net increase for any state in 2014) driven by continued development of the Marcellus Shale play. Texas added 8 Tcf of natural gas proved reserves, mostly from the Eagle Ford Shale play and natural gas associated with the state’s gain in oil reserves in the Permian Basin. Natural gas from shale formations was 51% of the U.S. total of natural gas proved reserves in 2014.
U.S. production of both oil and natural gas increased in 2014. Production of crude oil and lease condensate increased about 17% (rising from 7.4 to 8.7 million barrels per day), while U.S. production of natural gas increased 6% (rising from approximately 73 to 77 billion cubic feet per day).
Definition: Proved reserves are those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
So, according to Peak Oil Theory, the US was in a downward decline somewhere after the 1980s, and must have reached the Hubbert Peak some decades ago, and now, what do you know, for the sixth year in a row, the US increased its proved reserves; this past year proved reserves increased by 10%. The North Dakota Bakken Boom began about six years ago; it officially began in 2007, about eight years ago. The graph at this post shows the phenomenon well, but it needs to be updated.

By the way, when you parse the definition of "proved reserves," it seems the formula would be fairly complex, with much subjectivity used in final numbers. The EURs in the Bakken, alone, have increased dramatically in just one year.

Monday, November 23, 2015

Active rigs:

Active Rigs65191185183202

RBN Energy: Implications of Recent Turbulence in the Ethane to Henry Hub Gas Ratio Ethane.
Ethane has been in the doghouse for years since the shale gas boom kicked in, with production greatly exceeding demand and hundreds of thousands of barrels per day being “rejected” into the natural gas stream – owing to the fact that netbacks for liquid ethane are lower than pipeline natural gas.
One way to understand that relationship is to track the price ratio of ethane at Mont Belvieu, TX to natural gas at Henry Hub, compared on a BTU basis.  That ratio of ethane-to-gas languished at 95% between Q1 2014 through the summer of this year, and in November 2014 dipped to only 61%.  That means that the BTU value of ethane at that point was only 61% of natural gas. Ethane that cheap is an awesome value for steam crackers using the feedstock to produce ethylene and other petrochemicals. 
But a couple of months ago (September 2015), the price of ethane started to ramp up relative to gas, blasting through 140% in late October.  Is that bad news for future ethane prices? What does that portend for ethane once all the new steam crackers being built come online and overseas exports – also coming soon -- ramp up.  Today we look at the recent rebound in the ratio of ethane to natural gas and consider whether this is a signal that ethane is out of the doghouse.

Saudi Arabia Regains Lead In Oil Sold To China -- November 23, 2015

Some data points. It looks like China imports about 4 million bopd. It appears all of it comes from Russia and the Mideast. In October, shares of imports by county of crude oil into China (numbers rounded, conversion calculator here):
  • Saudia Arabia: 3.99 metric tons / month = 29 million bbls / month = 975,000 bopd
  • Angola: 3.62 million metric tons / month = 27 million bbls / month = 880,000 bopd
  • Russia: 3.41 million metric tons / month = 25 million bbls / month = 830,000 bopd
  • Oman: 2.84 million metric tons / month = 21 million bbls / month = 700,000 bopd
  • Iraq: 2.32 million metric tons / month = 17 million bbls / month = 570,000 bopd
In the linked article, Bloomberg says Saudi regained its lead over Russia in this metric (amount of crude oil sold to China); and that Angola, also, sold more oil to China than Russia in October, 2015.

The most recent reporting period for US crude oil imports is still August, 2015 (a dynamic link), reported earlier.

Venezuela Warns Oil Could Go To Mid-$20s 

The linked article above reports that OPEC meets "next week" -- a regularly scheduled meeting. The article reports that Venezuela says oil could drop as low as the mid-$20s if "OPEC does not take action to stabilize the market. That is the third source I've seen in the past several weeks citing the "mid-$20 figure."

Meanwhile, Back in the Bakken Economy

For years, or probably as long as anyone can remember, Alexander, situated midway between Williston to the north, and Watford City to the east, has partnered with Watford City when it came to high school sports.

That may be about to change.

The Williston Herald is reporting:
Alexander has in the past partnered with Watford City’s athletic program, though due to the influx in student body, Watford City is refraining from the co-op this year so they can remain under 325 enrolled students to maintain their Class B status.
Alexander Superintendent reached out to Williston High School to see if it was possible to create that partnership for the school year that would allow their students to participate in baseball, softball, and track.
In baseball, they are only talking about 6 or 7 students.