Wednesday, August 31, 2016

It Never Quits -- More Records Broken; The Graph That Terrorizes Saudi Arabia -- August 31, 2016

More records broken;

The graph that terrorizes Saudi Arabia. If it doesn't, Prince Salman is not paying attention. Remember: WTI is under $50/bbl. Saudi Arabia cannot survive on $50 oil:

A Note For The Granddaughters

I have no idea if this is a great song or not, but Sophia (age 2 years) and I enjoy it on the way home from Tutor Time. I pick her up every day from Tutor Time, about 4:00 p.m. She goes there for the socialization. I have the wonderful task of picking her up every day. She and I are best buddies.

May and I played only classical music for the two older granddaughters, now 13 and 10 years of age. One loves classical music and is a flutist in Honors Band; the other appears to have no interest in music.

But for Sophia, it's different. Her favorite music, without question is the "early Beatles." She can recognize them immediately when I put in an early Beatles CD. Lately, I have our early Beatles CD in the other car, so I have to play something else. Lana Del Rey is way too slow and too somber.

But this song from Jefferson Airplane -- Sophia loves it. I play it loud. And she dances in her car seat.

She Has Funny Cars, Jefferson Airplane

Summary Of The September, 2016, NDIC Hearing Dockets

Summary of the September, 2016, NDIC Hearing Dockets

Note: done quickly; there will be typographical and factual errors; if this information is important to you, go to the source: Oil & Gas Hearing Docket Index

Highlighs at this post.  

Wednesday, September 28, 2016: eleven pages
25238, Statoil, Painted Woods-Bakken, establish an overlapping 2560-acre unit, 1 well; Williams
25239, CLR, Bear Creek-Bakken; two additional wells on an existing 1280-acre unit; Dunn County
25240, CLR, Oakdale-Bakken; establish an overlapping 2560-acre unit; 2 wells; Dunn County
25241, CLR, Elm Tree-Bakken, 5,120-acre unit; 6 wells; McKenzie County
25242, Liberty Resources, Beaver Lodge and/or Manitou-Bakken, overlapping 1280-acre unit; 12 wells; Williams County
25243, Enerplus, McGregory Buttes-Bakken, an overlapping 1280-acre unit; 11 wells, Dunn County
25244, Enerplus, Heart Butte-Bakken an overlapping 1280-acre unit; 9 wells, Dunn County
25245, EOG, Parshall-Bakken; establish a 1920-acre unit; multiple wells; establish two overlapping 3200-acre units; multioples well;s Mountrail County
25246, XTO, Corral Creek-Bakken, establish an overlapping 2560-acre unit; 1 well; Dunn County
25247, pooling,
25248, pooling,
25249, pooling,
25250, Liberty Resources, processing vessel vapors from a number of wells
25251, Liberty Resources, processing vessel vapors from a number of wells
25252, pooling,
25253, pooling,
25254, pooling,
25255, CLR, Oakdale-Bakken, on an existing 1280-acre unit; 14 wells, Dunn County
25256, XTO, Corral Creek-Bakken on an existing 1280-acre unit; 11 wells, Dunn County
25257, Enerplus, Antelope-Sanish, on an existing 640-acre unit, 11 wells, McKenzie
25258, Enerplus, Spotted Horn-Bakken, on an existing 640-acre unit; 7 wells; on an existing 1280-acre unit, 11 wells; 18 wells total, McKenzie
25259, EOG, Ross-Bakken; on three existing 1280-acre units; multiple wells on each; Mountrail County
25260, EOG, commingling
25261, EOG, commingling
25262, EOG, file #19210, SWD conversion
25263, EOG, file #31249, SWD conversion
25264, something I had not seen before: "on a motion of the Commission to consider rescinding Order No. XXXXX entered in Case No. XXXXX which was an application of _____________ pursuant to NDAC § 43-023-03-88.1 for an order authorizing the drilling of a saltwater disposal well to be located in ...." There are 22 such cases before the commission (different case numbers, different companies, different locations, case numbers, inclusive, from 25264 to 25285). It appears that the plan to drill 22 saltwater disposal wells is "now on hold."

Thursday, September 29, 2016: four pages
25286, NP Resources, Bicentennial-Bakken, establish four 1280-acre units; 4 wells on each; Golden Valley, McKenzie County
25287, NP Resources, Morgan Draw-Bakken, 4 wells on a 1280-acre unit; Billings County
25288, NP Resources, Elkhorn Ranch-Bakken, 4 wells on a new 1280-acre unit; Billings County
25289, Petro Harvester, Lakeside Field, extend the boundaries of said field; Lakeside-Midale/Nesson; establish two 640-acre units; 2 wells each; Burke County
25290, Petro Harvester, Carter-Midale/Nesson field; extend; establish foru 640-acre units; 2 wells on each, Burke
25291, Samson Oil And Gas, Foreman Butte-Madison; establish two 1920-acre units; 2 wells each, McKenzie County
25292, QEP, Grail-Bakken, amend field rules; reduce minimum setbacks; McKenzie
25293, Petro-Hunt, risk penalty legalese, McKenzie
25294, Hess, Beaver Lodge-Bakken, 7 wells on a 1280-acre unit, Williams County
25295, Hess, Robinson Lake-Bakken, 2 wells on an existing 2560-acre uit; Mountrail County
25296, Hess, pooling,
25297, Hess, pooling,
25298, Hess, pooling,
25299, BR, pooling,
25300, Luff Exploration, flaring waiver, Bowman County

Friday, September 30, 2016: three cases
25301, Ballantyne Oil, Glenburn Southeast-Madison Unit Area, requesting approval of a unitized plan for the field, Renville County
25302, Ballantyne Oil, Glenburn Southeast-Madison Unit Area, plan for case #25301 has been signed, sealed, and delivered by owners of interest, Renville County
25303, Ballantyne Oil, Glenburn Southeast-Madison Unit, granting an area permit for underground injection of fluids into the unitized formation, Renville County

Highlights Of The September, 2016, NDIC Hearing Dockets

Highlights of the September, 2016, NDIC Hearing Dockets

Note: done quickly; there will be typographical and factual errors; if this information is important to you, go to the source: Oil & Gas Hearing Docket Index

Full summary at this post.  

Wednesday, September 28, 2016: eleven pages
25241, CLR, Elm Tree-Bakken, 5,120-acre unit; 6 wells; McKenzie County
25242, Liberty Resources, Beaver Lodge and/or Manitou-Bakken, overlapping 1280-acre unit; 12 wells; Williams County
25243, Enerplus, McGregory Buttes-Bakken, an overlapping 1280-acre unit; 11 wells, Dunn County
25244, Enerplus, Heart Butte-Bakken an overlapping 1280-acre unit; 9 wells, Dunn County
25255, CLR, Oakdale-Bakken, on an existing 1280-acre unit; 14 wells, Dunn County
25256, XTO, Corral Creek-Bakken on an existing 1280-acre unit; 11 wells, Dunn County
25257, Enerplus, Antelope-Sanish, on an existing 640-acre unit, 11 wells, McKenzie
25258, Enerplus, Spotted Horn-Bakken, on an existing 640-acre unit; 7 wells; on an existing 1280-acre unit, 11 wells; 18 wells total, McKenzie
25259, EOG, Ross-Bakken; on three existing 1280-acre units; multiple wells on each; Mountrail County

Thursday, September 29, 2016: four pages
25286, NP Resources, Bicentennial-Bakken, establish four 1280-acre units; 4 wells on each; Golden Valley, McKenzie County
25287, NP Resources, Morgan Draw-Bakken, 4 wells on a 1280-acre unit; Billings County
25288, NP Resources, Elkhorn Ranch-Bakken, 4 wells on a new 1280-acre unit; Billings County
25294, Hess, Beaver Lodge-Bakken, 7 wells on a 1280-acre unit, Williams County

Friday, September 30, 2016: three cases
25301, Ballantyne Oil, Glenburn Southeast-Madison Unit Area, requesting approval of a unitized plan for the field, Renville County
25302, Ballantyne Oil, Glenburn Southeast-Madison Unit Area, plan for case #25301 has been signed, sealed, and delivered by owners of interest, Renville County
25303, Ballantyne Oil, Glenburn Southeast-Madison Unit, granting an area permit for underground injection of fluids into the unitized formation, Renville County

Five New Permits -- North Dakota, USA -- August 31, 2016

Active rigs:

Active Rigs3376194185192

Something suggests to me that the NDIC daily activity report was posted before it was complete. Someone must have left early to enjoy the clement weather in North Dakota this time of year.

The only item on today's daily activity report: five new permits:
  • Operator: Whiting (3), Enerplu, Crescent Point Energy
  • Fields: Banks (McKenzie), Heart Butte (Dunn), Dublin (Williams)
  • Comments:
No wells are coming off the confidential list Thursday.

At the sidebar at the right, note that Vern Whitten's summer portfolio of photographs is now the #1 site today -- less than 24 hours after it was posted, up to #1. I've always said his photographs are the most popular draw to the blog. Thank you, Mr Whitten.  The "blogger app" determines the ranking, not me.

US Gasoline Consumption Reaches All-Time High For Any Month -- Going All The Way Back To 1945 -- August 31, 2016

From the EIA today:
The U.S. Energy Information Administration's new Petroleum Supply Monthly report, which was released on Wednesday afternoon, shows that U.S. gasoline consumption in June reached an all-time high for any month at 9.664 million barrels per day, based on EIA data going back to 1945.
This is the link they provided:

I like this one. The EIA is doing the same thing I "used" to do: I equated "gasoline consumption" with "US product supplied of finished motor gasoline."

In fact, two points another reader pointed out to me:
  • "product supplied" does not necessarily mean "product consumed" 
  • "supplied blended gasoline" was significantly higher, and Americans generally use blended gasoline these days
In fact, "we've" been well over 9.664 million bbls of blended gasoline -- having hit that milestone periodically all the way back to 2013.

I do not know if "US finished motor gasoline" includes gasoline that is eventually exported -- a small amount in the big scheme of things, but could affect records.

Lots of "definitions" and a lot of qualifiers, but it must drive faux-environmentalists nuts, driving their SUVs to the local protest movement, and hearing that U.S. gasoline consumption in June reached an all-time high for any month at 9.664 million barrels per day, based on EIA data going back to 1945.

Some folks may remember what happened in 1945, and what happened in the decade following. 

Speaking of blended gasoline, did you all read the WSJ article today that said there's a glut of US corn, and prices are falling fast. By the way, did you see one of the reasons why there are record crops this year?
Clement weather this summer has fueled expectations that U.S. farmers will harvest the largest U.S. corn and soybean crops in history. The USDA earlier this month projected that the nation’s corn crop will reach about 15.2 billion bushels, and the soybean crop about 4.1 billion bushels.
So much for "extreme weather" destroying US crops. And, oh, by the way, that little bit of CO2 is doing great things for corn crops. Both "upstream" and "downstream." LOL.

A Note for the Granddaughters
Making The Rounds In Social Media Today

Making social media today:
Humans originally existed as members of small bands of nomadic hunter/gatherers. They lived on deer in the mountains during the summer and would go to the coast and live on fish and lobster in the winter.

The two most important events in all of history were the invention of beer and the invention of the wheel.

Beer required grain and that was the beginning of agriculture. Neither the glass bottle nor aluminum can were invented yet, so while our early humans were sitting around waiting for them to be invented, they just stayed close to the brewery. That's how villages were formed. The wheel was invented to get man to the beer.

These two were the foundation of modern civilization and together were the catalyst for the splitting of humanity into two distinct subgroups: 1. Liberals. 2. Conservatives.

Some men spent their days tracking and killing animals to BBQ at night while they were drinking beer. This was the beginning of what is known as the Conservative movement.

Other men who were less skilled at hunting learned to live off the conservatives by showing up for the nightly BBQ's and doing the sewing, fetching, and hair dressing. This was the beginning of the Liberal movement.

Some of these liberal men evolved into women. Others became known as girlie-men. Some noteworthy Liberal achievements include the domestication of cats, the invention of group therapy, group hugs, and the concept of democratic voting to decide how to divide the meat and beer that Conservatives provided.

Over the years, Conservatives came to be symbolized by the largest, most powerful land animal on earth, the elephant. Liberals are symbolized by the jackass for obvious reasons.

Modern Liberals like "Lite" beer (with lime added), but most prefer white wine or imported bottled water. They eat raw fish but like their beef well done. Sushi, tofu, and vegan are standard Liberal fare. Another interesting evolutionary side note: many Liberal women have higher testosterone levels than their men.

Most college professors, social workers, personal injury attorneys, journalists, film makers in Hollywood, group therapists and community organizers are Liberals. Liberals meddled in our national pastime and invented the designated hitter rule because it wasn't fair to make the pitcher also bat.

Conservatives drink real beer. They eat red meat and still provide for their women. Conservatives are big game hunters, rodeo cowboys, lumberjacks, construction workers, firemen, medical doctors, police officers, engineers, corporate executives, athletes, members of the military, airline pilots, and generally anyone who works productively. Conservatives who own companies hire other conservatives who want to work for a living.

Liberals produce little or nothing. They like to govern the producers and decide what to do with the production. Liberals believe Europeans are more enlightened than Americans. That is why most of the Liberals remained in Europe when Conservatives were coming to America. They crept in after the Wild West was tamed and created a business of trying to get more for nothing.

Here ends today's lesson in world history. It should be noted that a Liberal may have a momentary urge to angrily respond to this post. A Conservative will simply laugh and be so convinced of the absolute truth of this history that it will be shared immediately to other true believers and to just tick off more liberals.

And there you have it. Let your next action reveal your true self. I'm going to have another beer and shoot something.

Oil Price Spike Inevitable -- -- August 31, 2016

I haven't read the article yet, but the headline suggests what I have suggested for quite some time: oil price spike is inevitable. New discoveries hit seventy-year low. US onshore shale cannot possible replace deep-sea elephant fields. Mideast is (relatively) tapped out.

This is from yesterday, sent to me by a reader, thank you very much. 

This is the timeframe I'm looking at:
  • from now (mid-2016) to 2Q17: WTI pricing volatile; could it go below $40? Possibly, but I doubt it
  • summer 2017: the market will telegraph whether the inevitable spike occurs in 2018 or later
  • summer 2018: first suggestions of a spike, which could result in significantly high prices very quickly; spike to me is defined as around $100; if not in 2018, then 2019. 
If price remains in the $50 range for another full year (end of 2017), Saudi Arabia is in deep trouble.

If price remains in the $50 range for two more years (end of 2018), Saudi Arabia is toast. 

The US shale operating sector will look a whole lot different if the price remains in the $50 range for the next two years, but the US shale industry is not going away.

Canadian Economy Heading Into Recession? Fell Almost 2% 2Q16; Biggest Quarterly Decline Since 2009 -- August 31, 2016

Breaking news: Canadian economy fell 1.6% in 2nd quarter; biggest quarterly decline since 2009 largely attributed to Alberta wildfire. [Update: the falling Canadian dollar is great for its trade deficit: Canada's trade deficit shrinks on year's biggest export gain. Analysts opine this means that Canada is unlikely to lower rates.]

That was posted at "Breaking News" about 45 minutes ago.

Earlier in the week Don sent me a link to this article:
There’s trouble brewing in the Great White North.

Jared Dillian, former Lehman Brothers trader and noted financial writer, says that low oil prices have hurt the Canadian economy and the real estate market is near the peak of a massive bubble.

In a video interview with Mauldin Economics, Dillian notes he shorted the Canadian dollar almost three years ago, and has profited a great deal since then. He also says the structure of the Canadian mortgage market means that when the bubble bursts, it will look quite different than the sharp and sudden 2008 crisis in the US.
The main bullets from that interview:
  • the Canadian dollar will continue to drop
  • the Canadian housing crisis will be a long, drawn out bottoming process
  • Canadian interest rates could go negative
Something tells me the young, socialist, Trudeau will suffer a baptism of fire. At least he can blame any failed policies on the Alberta wildfire. The tea leaves suggest that much of Alberta is back on line; hampered more by lack of pipeline to the west than the wildfire. I'm not dismissing the wildfire as trivial, but a political decision not to put in a westerly pipeline is simply ludicrous. See this post: Trudeau ready to ban crude oil tankers off British Columbia; if he does, the Northern Gateway Pipeline is "thrown into question."

Of course the US can look at its own trifecta:
  • Keystone XL (outcome known)
  • Sandpiper (outcome known)
  • Dakota Access Pipeline (outcome pending)
The Drudge Phenomenon

I do not understand "the Drudge phenomenon." My journalism professor would have argued that Matt Drudge's website would be DOA.

To the best of my knowledge, the Drudge Report is the longest-lasting, unchanged mass-media blog out there. Everyone else has changed. Not Drudge:
  • boring
  • simple
  • loads incredibly fast; refreshes incredibly fast; archives kept of every refresh
  • never writes his own stuff
  • links to every mainstream (and offbeat) medium including the most liberal (LA Times, NY Times)
  • refreshes rare (not more than one or two / day)
  • incredible talent for knowing which stories will resonate
My hunch is that most journalists (and newsaholics) check in with Drudge first thing each day and then multiple times/day.

Old News

From The Huffington Post (three hours ago):
As the election of 2016 draws closer, it is not surprising that more and more articles relating to the Affordable Act of 2010 (ACA) are appearing on the front pages.
If the republicans win the Presidency, they will probably move to repeal the ACA and start a process to replace it. If the democrats win, repeal will be off the table, but changes will still be inevitable. The most pressing of several contentious issues relates to several large insurers who are planning to pull out of the health care exchanges starting in 2017 unless premiums are allowed to go up significantly.
In Tennessee, my home state, Cigna and Humana have received permission to raise premiums by 46 and 44 percent, respectively. Blue Cross Blue Shield of Tennessee, losing an estimated $500 million on the state’s exchange by the end of 2016, has been given permission to raise premiums 62 percent for 2017.
Texas Blue Cross has lost a billion dollars on the state exchange and is requesting a 60 percent premium increase for 2017. Blue Cross Blue Shield of Minnesota has pulled out of that state’s exchange as losses over the last three years are $500 million.
The average premium rise for plans being offered on the state exchanges will be 24 percent for 2017. The rates must rise to offset losses due to the risk profile of those buying insurance being much worse than originally expected.
I did not read any farther (further). I have no idea what the point of the article was. ObamaCare will either be repealed or changed so much it will either be called "thank goodness" or "HillaryCare."

A Note For The Granddaughters

I'm thinking of introducing Sophia, age 2 years old, to the drums. Any thoughts?

Vern Whitten's Photographs Continue To Exceed Expectations -- August 31, 2016

One of the most popular posts is always the updated photograph portfolios Vern Whitten sends two or three or four times a year.

The most recent portfolio was received and posted yesterday. Already it is on the top ten list of favorite posts -- based on number of hits and "pace" of hits.

Update: a couple of hours later, now 12:57 p.m. Central Time, Vern Whitten's photographs are now #3 on the list of top 10 posts. Pretty incredible how fast his photographs move up the favorite list.

The Amazon Page

I'll get back to this article later. Perhaps. From Bloomberg Business.

Did I mention the other day that I ordered three items from Amazon on Saturday, this past weekend. I placed the order after reading a book review in The Wall Street Journal, about noon Saturday. On Sunday, Prime Shipping, the USPS brought the book to our apartment complex -- less than 24 hours later. Delivery was guaranteed to be no later than two days, Monday night by 8:00 p.m. It was at the apartment complex by noon Sunday.

A Note For The Granddaughters
The Human Genome
Nature: The Human Genome
Editor: Carina Dennis and Richard Gallagher
c. 2001
DDS: 599.935 HUM

Pages 892+.
It is noteworthy that CRISPR-cas9 is not mentioned in this book.

Thousands of human genes produce noncoding RNAs (ncRNAs) as their ultimate product. Examples of ncRNAs:
  • transfer RNAs (tRNAs)
  • ribosomal RNAs (rRNAs)
  • small nucleolar RNAs (snoRNAs)
  • small nuclear RNAs (snRNAs)
  • humans have both a major and a minor spliceosome
    • major: U2 snRNA-dependent spliceosome, splices most intron
    • minor: U12 snRNA-dependent spliceosome, splices a rare class of introns that often have AT/AC dinucleotides at the splice sites instead of the canonical GT/Ag splice site consensus
  • telomerase RNA
  • 7SL signal recognition particle RNA
  • a large Xist transcript implicated in X dosage compensation; enigmatic function
  • small vault RNAs found in the bizarre vault ribonucleoproten complex, which is 3x the mass of the ribosome but has unknown function
Other notes regarding ncRNAs
  • ncRNAs are very, very difficult to find using current techniques; even if the complete finished sequence of the human genome were available, discovering novel ncRNAs would still be challenging
  • BLASTN technique: used to identify genomic sequences that are homologous to known ncRNA genes

EIA Must Have Read The Blog -- Will Report "Some Stuff" In Near-Real Time; Price Of WTI Falls 3%; Back Below $45 -- August 31, 2016

See energy data below: price of oil falls 3%; now below $45 again. 

From the EIA today:
Starting with today's release of the Weekly Petroleum Status Report, EIA is now publishing weekly petroleum export and consumption estimates based on near-real-time export data provided by U.S. Customs and Border Protection (Customs).
EIA previously relied on weekly export estimates based on monthly official export data published by the U.S. Census Bureau roughly six weeks following the end of each reporting month.
This new methodology is expected to improve weekly estimates of petroleum consumption (measured as product supplied) by improving estimates of weekly exports of crude oil, petroleum products, and biofuels, which increased from 1 million barrels per day (b/d) in 2004 to nearly 5 million b/d in 2015. --- EIA
I've been talking about the issue of delayed reporting for quite some time.

For the record: I lost a huge bet some years ago when I said the US would never allow oil to be exported. That may be one of the biggest energy stories in my lifetime. I never thought I would see that in my lifetime, again.

Data points from today's EIA report (some numbers rounded):
  • crude oil refinery inputs: not much change from previous week
  • crude oil imports: 9 million bopd; up slightly from previous week
  • crude oil imports, average over past four weeks: 8.5 million bopd; more than 10% greater than last year, same period
  • Motor gasoline supplied (includes blended): 9.7 million bbls; up slightly
John Kemp's energy tweets today:
  • US commercial crude oil stocks rose 2.3 million bbls; still well above historical peaks
  • although not much change from previous week, the almost 9 million bopd imported crude oil is the fastest rate since September, 2012
  • US gasoline stock surplus versus 2015 and 10-year average continues to narrow (slowly)
  • John Kemp also noted the historic move by EIA to report in "near-real" time

Big, Big Deal For North Texas -- Grapevine -- Nothing About The Bakken -- August 31, 2016


February 19, 2018: TexRail is moving along very, very quickly. Three very visible things happening now, getting ready for TexRail to open by the end of 2018 --
  • new rail and rail ties are being laid down; the ties are made of a composite that will end the clickety-clack of the train; smooth as silk
  • new rail crossings for roads and highways -- between Ft Worth and DFW being done simultaneously
  • the new trains are arriving -- photo below -- this train is on the rails at the south end of Main Street, Grapevine, TX, where the Grapevine Depot will be

Original Post 

Grapevine is at the apex of an equilateral triangle with the other points being Ft Worth and Dallas (or DFW). It is also the center of three major highways:
  • US-114: Los Angeles to Dallas
  • US-121: Ft Worth to Plano/Frisco
  • US-360: Grapevine to Arlington
One could argue it is the "northern gateway to DFW."

After ten years of construction on "integrating" those three major highways, the next step in area transportation is about to begin. This is a huge, huge story for those of us in the Ft Worth area.

Two years from now a new light-rail system will be in operation connecting Ft Worth with DFW with intermediate stops in two suburbs, including Grapevine.

From a press release:
Fort Worth Transportation Authority’s celebrated three groundbreakings for the TEXRail project in one day. The celebrations were held at Fort Worth’s historic Texas & Pacific Station, which will be the beginning of the route, as well as in Grapevine and North Richland Hills. The new 27-mile commuter rail line will run from downtown Fort Worth to the airport.
TEXRail’s line will feature four stations in Fort Worth and five other stations, including two in North Richland Hills and one in Grapevine.
The rail line will operate 44 diesel multiple unit (DMU) passenger trains per day. Service will begin in late 2018, and more than 9,000 daily riders are expected to use the line by the end of the first year of operation. That number is projected to grow to 14,000 riders by 2035.
This will be the "Acela of the South."

Comment: too many stops runs the risk of making for a very lengthy commute. Two minutes at each stop could add as much as 20 minutes to the Forth Worth travelers beginning at the first stop.

Zacks' Recap Of Week's Most Important Stories -- August 31, 2016

Zacks recap of the week's most important stories:
  • the world's largest publicly traded oil company, Exxon Mobil, has decided against investing further in the proposed Alaska LNG facility
  • Royal Dutch Shell will sell all US-based properties in the Gulf of Mexico
  • Chevron entered a deal with a Chinese distributor for shipping LNG from the company's existing projects in Australia
  • Petrobras received government permission to sell 49% stake in its natural-gas distribution unit to Japan's Mitsui & Co
  • Chinese energy giant PetroChina reported huge decline in earnings and revenue
  • Not mentioned by Zacks, but it was also announced this past week that Chinese oil production may be facing "peak oil" production

I thought Norway was doing well. Maybe not. From CNN Money:
Norway's offshore oil, gas and shipping activity shrank by 1.4% in the quarter, while mainland GDP grew just 0.4%.
The government has been forced, for the first time, to tap the nation's huge sovereign wealth fund. Norway's central bank said the country might be forced to withdraw more than $9 billion from the $888 billion pension fund in 2016 to make up for the collapse in oil revenue.
Job Watch

  • added "a solid" 177,000 jobs in August
  • "hiring remains healthy" after two months of strong gains 
  • gains in service jobs, retailers
  • cuts in construction, manufacturing
Remember, these were the "magic numbers" BEFORE the Obama administration (link here):
First time claims, unemployment benefits: 400,000 (> 400,000: economic stagnation)
New jobs: 200,000 (< 200,000 new jobs: economic stagnation)

How The Exxon Case Unraveled -- August 31, 2016

The market:

Closing: recovers a bit. Now down about 55 points. NYSE:
  • new highs: 101 -- add WPX Energy;
  • new lows: 14
Mid-day trading: the market continues to follow the computer algorithms -- down 114 points (Dow 30). NYSE:
  • new highs: 82 (not sure why it could be less than earlier reporting, although it's probably because the previous report included the "hangover" from Tuesday)
  • new lows: 23
Opening; down a bit, and then kept heading down. Down 61 points (Dow 30) by late morning. NYSE:
  • new highs: 169 -- BRK-B (a big whoop; now holding over $150); Loews; OXY (another big whoop); Yelp
  • new lows: 6 (including our old favorites, ITT and Noble Energy)

Saudi says it won't flood market with oil prior the September talks. Yahoo!Finance --
Saudi Arabia, the world’s biggest oil exporter, won’t boost output to capacity and flood the market, the kingdom’s Energy Minister Khalid Al-Falih said weeks before OPEC meets to discuss ways to stabilize prices.
Saudi Arabia isn’t concerned about global demand in spite of a drop in oil prices and a slower economy, Al-Falih said in an interview with Al-Arabiya television. The country is able to pump as much as 12.5 million barrels a day of oil, he said in comments broadcast during an official visit to buyers in Asia, its biggest market, including China.
There are so many story lines here, but it's not worth spending time on them. It is what it is.

Let's not forget Uganda oil. Bloomberg. Data points.
  • three oil companies to begin drilling in Uganda in 2020
  • London-based Tullow Oil; Paris-based Total SA; Chinese-owned CNOOC
  • $8 billion
  • 500 wells, pipeline infrastructure, central processing facilities ($16 million / well and support)
  • 1.7 billion bbls recoverable oil (at 1 million bopd -- the Bakken rate -- the play will last less than five years
  • 230,000 bopd
  • companies will make final decision within 18 months; licenses would run for 25 years (with option for nationalization without compensation, no doubt)
Back to the Bakken

Active rigs:

Active Rigs3376194185192

RBN Energy: what will it take to break Canada's infrastructure logjam?
Western Canada has extraordinary oil and natural gas resources, but producers there have been suffering from a long list of woes. Oil sands producers need higher oil prices to justify expansion projects, and face shortfalls in pipeline takeaway capacity to refineries in Eastern Canada and export markets on both coasts. Natural gas producers can move gas east, but face stiff competition from the Marcellus and Utica plays; meanwhile, their efforts to expand LNG exports from British Columbia have been stymied by the new glut in worldwide LNG supplies and low LNG prices. Today we discuss the challenges in advancing Canadian oil and gas infrastructure projects.
Canadian energy production and the pipelines, rail facilities and other infrastructure needed to move oil and natural gas to market have been frequent topics in the RBN blogosphere. In an earlier post, we considered the challenges faced by oil sands producers in Alberta, namely that 1) their hydrocarbon-extraction process is more complicated and costly than their shale-play counterparts; 2) the oil sands are farther away from most major refinery centers than most U.S. shale plays; 3) oil sands producers need to either add diluent to their bitumen to allow it to flow through pipelines, or transport low-viscosity bitumen in special “coil” rail cars that can be heated before unloading; and 4) existing pipelines out of the oil sands to the U.S. Midwest and Gulf Coast—and the existing Trans Mountain Pipeline to British Columbia (BC)—had been bumping up against capacity limits, resulting in significant, margin-erasing price discounts versus West Texas Intermediate (WTI), at least until incremental pipeline capacity started coming online in early 2015.  
We also noted that—for these and other reasons—RBN’s forecast for Alberta production in 2021 is far less upbeat than the recent 4-MMb/d estimate of Canada’s National Energy Board (NEB); we see the province’s production (now about 3.1 MMb/d) rising to only 3.4 MMb/d over the next five years under our Growth Scenario (with $65/bbl in 2021) and staying flat at best under our Contraction Scenario.
How the Exxon case unraveled. WSJ op-ed.

Tuesday, August 30, 2016

Number Of Active Rigs In North Dakota Increase A Bit -- August 30, 2016

Active rigs:

Active Rigs3376194185191

Wells coming off confidential list Wednesday (and Thursday and Friday and ... ): None.

One new permit:
  • Operator: BR
  • Field: Dimmick Lake (McKenzie)
  • Comments:
Ten producing wells (DUCs) completed:
  • 27652, 1,243, Petro-Hunt, Klatt 145-97-19C-18-5H, Little Knife, t8/16; cum --
  • 30387, 308, SM Energy, Shawn 1B-15HS, West Ambrose, t8/16; cum --
  • 30388, 278, SM Energy, Heather 1B-15HN, West Ambrose, t8/16; cum --
  • 30405, 215, SM Energy, Alvin 1B-15HS, West Ambrose, t81/6; cum --
  • 30406, 404, SM Energy, RM Federal 4-15HNB, West Ambrose, t8/16; cum --
  • 30407, 439, SM Energy, RJ Federal 4B-15HN,West Ambrose, t8/16; cum --
  • 30408, 459, SM Energy, DK Federal 4-15HNA, West Ambrose, t8/16; cum --
  • 30409, 369, SM Energy, Gladys 4-15HS, West Ambrose, t8/16; cum --
  • 30424, 926, Hess, HA-Sanford-152-96-1819H-9, Westberg, t8/16; cum --
  • 31949, 463, Petro-Hunt, Glovatsky 145-98-24D-13-1HS, Little Knife, t7/16; cum --
Two more EOG West Clark wells renamed to reflect change in"SWD" status:
  • 31247, see below, EOG, West Clark 103-0136H, was West Clark 201-01SWD, Clarks Creek, see yesterday's post;
  • 31249, see below, EOG, West Clark 201-01SWD, was West Clark 105-0136H, Clarks Creek,
The EOG Wells Noted Above With SWD Notations

31249, see below, EOG, West Clark 201-01SWD, was West Clark 105-0136H, Clarks Creek:

PoolOil RunsMCF Sold

31247, see above, EOG, West Clark 103-0136H, was West Clark 201-01SWD, Clarks Creek:

DateOil RunsMCF Sold

Social Security Administration Stepping Back From Text-Sent Password To Access One's Social Security Account -- August 30, 2016

Why I love to blog: some weeks ago I mentioned that the Social Security Administration was going to require a text-sent password to access one's social security account. Because I don't get text messages on my old-fashioned clam shell phone, I was out of luck. I would not be able to access my social security account on-line.

Well, today, I see the SSA has had a change of heart. From an e-mail received just moments ago:
On July 30, 2016, we began requiring you to sign into your my Social Security account using a one-time code sent via text message. We implemented this new layer of security, known as “multifactor authentication,” in compliance with a Presidential executive order to improve the security of consumer financial transactions.  SSA implemented the improvements aggressively because we have a fundamental responsibility to protect the public’s personal information.
However, multifactor authentication inconvenienced or restricted access to some of our account holders. We’re listening to your concerns and are responding by temporarily rolling back this mandate.
As before July 30, you can now access your secure account using only your username and password. We highly recommend the extra security text message option, but it is not required. We’re developing an alternative authentication option, besides text messaging, that we’ll begin implementing within the next six months.
Obviously SSA employees, working inside the beltway with high wages and state-of-the-art mobile devices are entirely out of touch with the average American. They must have gotten an earful from taxpayers, senators, and representatives. 

Update On Shell In The Permian -- August 30, 2016

I haven't followed Shell very closely for two reasons:
Earlier today Don sent me a link to a short but very interesting article regarding Shell. Shell sold its position in the Gulf of Mexico:
In a deal that included $425 million in cash, Royal Dutch Shell said it sold off its entire stake in assets held in the U.S. waters of the Gulf of Mexico.
The article then goes on to say that Shell is going to concentrate where prospects are better.

I think there are several story lines here.

The first one I have is the most controversial and it's likely no one will agree with me, except for members of the alt-right conspiracy. It's not mentioned in the story, but I think the CEO gave some thought to liability risk in the GoM. He saw what the US government did to BP and that story is still not over. Trying to take all your money is one thing but drawing the "case" out Dickens-style is probably worse. At least when you've lost all your money, you can quit and move on. There was a hint of that concern in the linked article:
Shell this year closed down production briefly after observing sheen in the region. More than 2,000 barrels of oil were released into the U.S. waters of the Gulf of Mexico about 97 miles from the southern tip of Louisiana from operations the company's Glider oil field.
In the New Oxford English Dictionary, sheen is defined as a thin-layer of oil, that when found in US waters, will precede a multi-billion dollar settlement in favor of the government.
Adding a bit of support to that argument, note the first paragraph again:
In a deal that included $425 million in cash, Royal Dutch Shell said it sold off its entire stake in assets held in the U.S. waters of the Gulf of Mexico.
At the end of the article, this paragraph:
Shell said it maintained a strong portfolio of assets in the Gulf of Mexico and plans are to increase output from established reservoirs. The Brutus/Glider assets combine for about 25,000 barrels of oil equivalent in production per day, or less than 5 percent of its total output.
So, there you have it. Shell departs the US GOM and remains in the GOM, but outside of US jurisdiction.  [Note: to keep comments to a minimum, I focused on an actual spill, risk, sheen -- I did not comment on all the US regulatory headwinds operators face in the Gulf.

A second story line:
This year, the company said it was leaving oil and gas operations in as many as 10 countries, while focusing more heavily on gas-rich Australia and shale opportunities in the United States.
Throughout the blog, I've posted a number of links to articles highlighting plays were Shell is leaving, including the Arctic. 

The third story, also in that paragraph: to focus on shale opportunities in the United States. Shale plays in the US were not identified by name. In the very first article linked at this post, it was noted that Shell was not one of the top five operators in the Permian. Right now, of the three top shale plays in the US (Bakken, Eagle Ford, and the Permian), the Permian is, by far, getting most of the attention. One can add Oklahoma's STACK/SCOOP, I suppose.

There's a fourth story line, but that came as a result of the article linked below. The fourth story line: the majors were slow to catch on to onshore fracking.

When searching my own blog, I don't see (m)any references to Shell and the Permian. But through google, I found this story, from Rigzone, June 21, 2016 -- just a couple of months ago, with these data points:
  • Shell acquired its Permian acreage from Chesapeake Energy in 2012
  • the company believes it position in the Delaware is the best of any operator there, in terms of size and rock quality
  • Shell holds 300,000 net acres in the Delaware through a joint venture with Anadarko Petroleum
  • 5,000 future wells identified
  • estimates: 2 billion boe
  • three plays in the Wolfcamp: 
    • the well-developed Bone Spring III
    • the Avalon
    • the Bone Spring II
  • sees multiple benches in the Bone Spring III
  • focus: longer laterals and more wells / pad
  • EURs: increased by 130% over past two years; estimates EURs will increase another 20% this year
  • breakeven price: $35 - $50 / bbl
  • improved performance due to:
    • fracking long laterals: to date, Shell has drilled two 10,000-foot lateral
    • sweet spot selection
    • eliminating (selling) non-core acreage drilling
  • the company wants to drill laterals as long as possible without adding significant cost (the drilling is not the long cash-pole in the teepee; it's the fracking)
  • asset swapping is how operators are maximizing operations now: companies swapping Permian acreage -- Shell, Anadarko, EOG

Summer, 2016 -- As Seen By Vern Whitten

Western North Dakota, my favorites:
  • the new Williston High School
  • the new Watford City High School
  • new track crossing in Dickinson
  • the new Middle School in Dickinson 
  • look how fast those cement walls go up (Watford City High School)
  • how beautiful the landscape is around the pads (slide 20); decades from now, these wells will be shut in, taken out of production; and the land reclaimed; and much of North Dakota will return to what it was 500 years ago; archaeologists from some planet near PSR J1302-6350 may look for signs of these pads in the year 8510 (with apologies to Zager and Evans).
Central North Dakota to west-central Minnesota, my favorites:
  • the lakes and forests in Minnesota
  • most sad: Devils Lake area
West Fargo, Fargo, and Moorhead, my favorites:
  • flood wall, under construction
  • Bluestem Center for the Arts
  • handicapped accessible launching ramp for kayaks, canoes (wow)
  • Microsoft, south Fargo
  • Dakota Boys Ranch, south Fargo
  • classic car show, Walmart, south Fargo
Okay, okay -- I love all the Fargo-area pictures, because I so seldom get to see that part of the state.

This is just a small, small microcosm of the whole Great Plains -- Mr Whitten gives new meaning to "the fly over states."

These pictures are incredible and continue to remind me how great this country is.

I am sure Mr Whitten would love to hear from you, especially if interested in any prints.

His business card:

Vern Whitten Photography
(701) 261-7658

Idle Chatter, Observations Regarding The US Economy -- Consumer Spending; The NYSE -- August 30, 2016


Later, 4:46 p.m. Central Time: consumer spending links? See first comment.
Original Post
With regard to the "market" and investing, there are two interesting stories right now (and by noon, the stories will be history and we will have moved on to something else, perhaps a new Trump/Hillary poll, or another story about Barbara Streisand threatening to move to Ireland if The Donald wins). By the way, it was interesting to note that the Clinton camp was able to persuade the very camera-shy and reclusive Ms Streisand to appear on late night television.  It is also interesting that Trump's lead in the LA Times/USC poll jumped significantly after that appearance. But I digress.

Now what was I talking about? Oh, yes, with regard to the "market" and investing, there are two interesting stories right now.

This is the first:
This is the second story, from The Wall Street Journal:  U.S. consumer spending rose in July. Domestic consumption could continue to drive economic growth over the second half.
Personal consumption, which measures how much Americans spent on everything from hotel stays to hamburgers, rose a seasonally adjusted 0.3% in July from a month earlier. Incomes rose 0.4%, a pickup from growth in the prior two months.
I assume the folks who derive these figures use very complicated formulas but at the end of the day, it's my understanding that they simply measure "dollars spent."

Some random data points or observations that might lead to further discussion at a Williston coffee shop, or not:
  • seasonally adjusted, Americans drive about the same amount of miles day in / day out. Sure, the amount of driving is affected by a gazillion factors, but at the end of the day, the law of "large numbers" tends to win out. If one accepts that assumption, then US spending on gasoline will be considerably less over the course of one month if the average price is $2.00/gallon vs $4.00 gallon
  • cheap gasoline does not only affect cost of driving, but everything that involves transportation, including food
  • without question, the sector that shows the most increase in prices is health care, particularly ObamaCare premiums; that cannot be disputed; so, if Americans are spending more on health care (and getting about the same amount) or spending more on ObamaCare premiums (and still paying out-of-pocket until the annual $6,000 deductible is met), US consumer spending will increase.
Maybe "they" don't count insurance premiums as part of consumer spending. Maybe they don't count money spent on health care as "consumer spending." Shoot, just the 500% increase in EpiPens will increase the amount US consumers spend, all things being equal. I don't know. Maybe there's a big spreadsheet somewhere that shows us what is included in "consumer spending."

The Music Page

For reasons I won't go into, I happened to catch two "specials" on our local PBS station last night -- when the "specials" are this good, one knows that PBS is having one of its monthly two-week fundraising events. At least these events seem to come once a month, and when they do, they seem to last two weeks. And another truism: one can be guaranteed an opportunity to binge on the British comedies during those two weeks. But again I digress.

The two specials last night: a 90-minute documentary on The Mamas and the Papas, and a similar documentary on the Beach Boys or California surf music -- I don't know how long it lasted; I fell asleep sometime during the show.

But they were both incredible.

Only one or two comments. The Mamas and Papas were around for only 2.5 years. It is incredible how much they packed into those two years. In addition, it is unlikely -- except for Cass Elliot -- that any of them had any significant voice lessons prior to (or maybe even during) their 2.5 years of incredible hits. And despite that, their voices and their singing was ... for lack of a better word, incredible. Let's see -- I've used "incredible" at least four times in the past few sentences to describe The Mamas and The Papas.

The other comment: Michelle Phillips may have been the most physically abused individual -- and perhaps emotionally abused as a result of the physical abuse -- of the group, and here she is, still alive, having outlived the other three, and at least for the documentary, as beautiful as ever, and as positive as ever about her life with the group.

Okay, enough of that.

Crocodiles And Alligators
A Note For The Granddaughter Who Wants To Become A Marine Biologist

From Crocodiles and Alligators, consulting editor, Charles A. Ross. No copyright date or publishing date provided. DDS: 597.98 CRO.

Archosauria: ruling reptiles; dominated animal communities on the continents during the Mesozoic Age (245- 65 million years ago); included:
  • dinosaurs
  • pterosaurs (flying reptiles, not dinosaurs)
  • crocodilians
  • thecodontians (included a variety of primitive archosaurs, some of which may have been the precursors of later groups such as crocodilians
Archosaurs: one of the most successful groups of land-dwelling vertebrates ever known; living crocodiles are the only living representatives of this group

Crocodiles more closely related to birds than to lizards (despite the largely superficial resemblance).

The next closest relatives of crocodilians among living vertebrates: lepidosaurs, or scaly lizards
  • tuatara of New Zealand
  • lizards
  • snakes
Archosaurs: two temporal fenestrae behind each eye socket: delimited by horizontal bony arches; one opening is high upon the skull roof; the other is down on the side of the cheek.

Two theories for these two temporal fenestrae:
  • an area where jaw muscles could "reside" during jaw closure
  • flying buttress analogy: lighter and stronger
These two fenestrae -- or openings -- behind each eye socket: distinguishing feature of the diapsid or "two-arched" reptiles.
  • lizards: the lower bony arch is always incomplete
  • snakes: both the lower and upper arches are absent, leaving the entire cheek open
  • crocodilians: retain the typical diapsid configuration
  • birds: the large eye and the considerably expanded braincase have encroached on the cheek region and consequently the bony bars between the eye socket and the two openings have largely disappeared
By comparison: mammals, including hamans
  • only one opening for the jaw muscles behind the eye socket (synapsid condition)
By comparison: turtles
  • a solid roofed cheek; no openings (anapsid condition)
Classification systems
  • phenetic: based on structural similarity
  • cladistic: based exclusively on how long ago two organisms shared a common ancestry
  • eclectic: draws selectively on information from both cladistic and phenetic approaches
Using the eclectic system: crocodilians aligned with the lizards; and that is the classification used by these scientists contributing to this book

Nile Crocodile
  • Kingdom: Animalia
  • Phylum: Chordata
  • Subphylum: Vertebrata
  • Class: Reptilia
  • Order: Crocodylia
  • Suborder: Eusuchia (modern crocodilians)
  • Family: Crocodylidae (alligators, crocodiles, and relatives)
  • Subfamily: Crocodylinae (crocodylines)
  • Genus: Crocodylus (true crocodile)
  • Species: Crocodylus niloticus (Nile Crocodile)
Geological Time
  • Phanerozoic eon: appearance of most multicellular life forms 
  • phanerozoic: means visible life
  • three eras
    • Paleozoic (old life) - 590 245 mya -- Age of Reptiles or Age of Dinosaurs; first appearance of crocodilians in the fossil record
    • Mesozoic - first appearance of of the majority of groups that populate existing environments: birds, mammals, advanced bony fishes, most living insects, angiosperms (flowering plants); also marks the arrival and reign of dinosaurs and the rise to dominance of both major lineages of diapsid reptiles and is therefore aptly referred to as "The Age of Reptiles" 
    • three periods 
      • Triassic
      • Jurassic
      • Cretaceous 
    • Cenozoic -- new life -- from 65 mya; mammals, birds, insects, and flowering plants  quickly rise to dominance
Crocodiles that could be assigned to present crocodiles and alligators: first definitely known from the Campanian stage of the Upper Cretaceous, some 80 million years ago. 

Evolutionary notes: too much to record but some things that caught my eye.
  • Crocodilians may have descended from some group of thecodontians, the stem group of all archosaurian reptiles and birds -- based on peculiar ankle joint, described in 1963 -- affects their walking.
  • Crocodilians are unusual among vertebrates in that they employ two completely different main methods of moving on land: sprawling gait, dragging belly on land; and, the "high walk." The sprawling gait for short distances; the "high walk" similar to mammalian pattern of limb motion.
  • Several groups of crocodilian relatives. One group, with the crocodilian type of ankle joint, the rauisuchians, were the dominant carnivores on land during much of the Triassic period until they were replaced by the dinosaurs.
  • In order to express the evolutionary connection between the crocodilians and the various thecodontians with the crocodilian type of ankle joint, the discoverer of the ankle joint, Barnard Krebs (Swiss, 1963) assigned both, in 1974, to a new group called Suchia.
  • Suchia and -suchus: a frequent ending of scientific names for various living and extinct crocodilians; derived from the Greed word souchos, which in turn is an adaptation of the Egyptian name of a crocodile-headed god who was worshipped in some regions of ancient Egypt.
  • Another group of thecodontians had a different type of ankle which superficially resembled the crocodilian ankle. That group may have been part of the lineage leading to dinosaurs and perhaps also to the pterosaurs. This variation would have allowed them to run on their two back legs.
Crocodilian distribution:
  • Crocodiles cannot survive in cold weather; their distribution is limited to warm climates; must be at least 50 - 59 degrees F)
  • Alligators not as restricted (as lost as 39 degrees F); optimal temperature for the American Alligator: 90 - 95 degrees F); but below that optimum, alligators can sustain activity at temperatures as low as 53 degrees.
The big question: why were crocodilians unaffected by whatever wiped out the dinosaurs and the flying reptiles at the end of the Cretaceous period, 65 million years ago. That event(s) resulted in a global mass extinction on land and in the sea.
  • Crocodiles no longer found in Europe.
  • Evolution spanned 200 million years: it began in the Late Triassic, when dinosaurs were beginning to dominate continental ecosystems and the first mammals were diversifying.
Crocodilians and continental drift:
  • crocodilians appeared at the end of the Triassic
  • Pangaea: end of the Triassic
  • subsequent evolution affected by breakup of Pangaea
  • breakup of Pangaea began in the Jurassic
  • Cretaceous crocodilians of Africa and South America: well documented to be very similar, but then diverged
  • Tethys Sea: during Pangaea, 200 mya -- separates Gondwana (southern Pangaea: North America, South America, Africa, Australia) from northern and eastern Pangaea (Lauraia -- norther North America, eastern Europe, Asia)
  • Tethys Sea: 100 mya, after the breakup of Pangaea -- the Tethys Sea was essentially the Indian Ocean separating Africa's Arabian peninsula from southeast Asia; subcontinent of India not well defined at this time.
World distribution of crocodilians
  • Crocodiles and caiman: western hemisphere
  • Crocodiles and mugger: Africa
  • Crocodiles, mugger, gharial: Asia and Australia
  • Alligators: only southeast North America; and very, very small area in China
  • Nile Crocodile: all of Africa south and east of the Sahara; all the way to South Africa
  • American Crocodile: not in the US; only in Central American and northern South America
  • Caiman throughout Brazil, but no crocodiles in Brazil

  • Unlike other living reptiles, the crocodilian has four chambers in the heart as mammals. A septum completely divides the ventricle into right and left; likewise the atrium.
  • The crocodile seems to have two major arteries coming from the left ventricle, unlike the single aorta in mammals. One of the two major arteries supplies head and front legs; both of the two major arteries feed the rest of the body, although different parts in and below the abdomen
  • The atria appear to be huge; larger than the ventricles (based on the drawings in this book).
Cladistics -- Phylogenetic Relationships
Reptiles and Amphibians
General Editor: Chris Mattison
c. 2008
DDS: 597.903 FIR 

Amphibians: frogs, salamanders, caecilians

At one time, the differences between frogs and salamanders were considered so great that it was believed that each had descended from different orders of Paleozoic tetrapods. The possibility that all of the common features (glands; skin as a respiratory organ; the structure of the eye; unusual pedicellate tooth structure) could have evolved independently is so unlikely, it has been argued, that it is more reasonable to assume a monophyletic origin. Therefore, most biologists place the three living groups in one subclass: Lissamphibia. 

Phylum: Chordata
Subphylum: Vertebrata

Vertebrata: the first bifurcation was when jawed fish broke off from jawless fish.
Jawless fish were a dead end.
Gnathostomata continued.

Gnathostomata separated into cartilaginous and bony.
Cartilaginous were a dead end.
Bony fish continued.

Osteichthyes (bony fish) developed into ray-finned fish (actinopterygii) and lobe-finned (sarcopterygii).

The sacropterygii made a huge leap: lobe-fish; flesh fins/limbs; made the "leap" to land though they were predominantly water animals.
The sarcopterygii broke into two groups: the lung fish (and coelacanths) and the tetrapods
The lung fish survive, but are a dead end; the coelacanth (a living fossil) survives but critically endangered

The tetrapods were the huge new important group.

The tetrapods broke into two groups: the Lissamphibia (Amphibia) and the Amniota
Lissamphibia (Amphibia) -- 15 minutes of fame; incredibly important as a bridge from water to land, but ultimately a dead end
Amniota -- cracked the "dry land" problem in two different ways

Amniota went two different routes: mammals and reptilia

Mammals will be discussed later.

Reptilia went two different routes: turtle and Sauria.
Turtles are still around, but another dead-end.

Sauria broke into two groups, both of which are still around: the archosauria and the lepidosauria

The Archosauria broke into two groups: the Crocodylia and the Aves
Both are still around, but the crocodylia pretty much quit evolving
Aves continued to evolve.

The Lepidosauria broke into two groups: the tuatara and the Squamata.
The tuatara are another dead end, but the Squamata continued to evolve.

The squamata broke into two groups: the iguania and the snakes and other lizards
The iguania are a dead end, although they are still around.
The snakes and lizards continue to evolve and remain with us today.

The T-Shirt

The cladogram at this site is pretty good. 

FAQ: How Much Sand/Ceramic Is Used To Frack A Typical Well In The Bakken?

Over at FAQs, this was the posting as of August 30, 2016, and obviously needs to be updated:
[Update: October 21, 2014].  Click here for update posted in early 2011. [October, 2011: I am starting to track fracking specifics: it turns out some companies, like Hess, are using less than 1 million pounds of sand to frack, whereas some companies like BEXP are using up to 4 million pounds of proppant (sand plus ceramics); and sometimes the amount of ceramics used is more than the sand.] [Update: June 9, 2015. When I first started blogging, one million lbs of sand was common and then, as noted, BEXP pushed it to 4 million lbs. Maybe two years or three later EOG, with its own sand mines in Wisconsin pushed it to 10 million lbs for a long lateral. Now, EOG has used almost 20 million lbs in a long lateral.]

August 20, 2016: Mike Filloon talks about mega-fracks --
  • Mega-fracs continue to use large volumes of sand per well, with some operators now using up to 3,000 lbs/ft
  • The combination of increased locations completed in the STACK, Delaware and Midland basins with enhanced completions using up to 30,000,000 lbs per well could aid in increasing sand pricing
  • Frac sand producer stock prices have improved, significantly from earlier this year but with demand growing at its current pace there could be extended gains into year end 
In the Bakken in North Dakota there is very little fracking being done in 2016 due to depressed commodity prices. However, of the wells that have been fracked in the past twelve months, it appears that for a long lateral:
  • number of stages: 35 - 45 stages seems typical; there are few exceptions on the low side; more exceptions on the high side
  • sand/ceramic: 4 million lbs to  8 million pounds seems typical; again, there are few exceptions on the low side; more exceptions on the high side.

Statoil's Huge North Sea Field Profitable At $25 Oil; Big Shift In Energy Fundamentals -- RBN Energy -- August 30, 2016

Samson Resources signs new Chapter 11 exit plan -- WSJ
Tulsa, Okla.-based Samson is battling junior creditors in bankruptcy court and must either defeat them or win them over in order to make the restructuring proposal a reality.
The agreement signed Friday pledges investors holding 39% of Samson’s second-lien loan claims to support a new chapter 11 plan that should be filed within days.
When it filed for bankruptcy protection in September 2015, Samson was weighted down with about $4.9 billion worth of debt. It had a deal in hand, but falling energy prices continued to chop into the value of Samson’s assets and the pact fell apart.
Although is it increasingly difficult for a one-man band to keep this data updated, I track Bakken operators at this post

Statoil slashes CAPEX but will still see a 40% increase in initial daily production capacity from that field.
Norway’s Statoil AS A has slashed billions of dollars off planned spending on the giant Johan Sverdrup field in the North Sea, ensuring it should remain profitable even if oil prices fall to around half current levels.
The state-controlled oil producer also forecast as much as a 40% increase in initial daily production capacity from the field.
Again, note: Statoil's Johan Sverdrup field in the North Sea should remain profitable at $25 oil.

The WSJ sees the other side of the coin:
The recalibration of one of Norway’s biggest-ever oil projects—a rare example of a major investment that has gone ahead since the collapse in oil prices in the past two years—shows the pressure oil producers including Statoil are still under with oil prices hovering below $50 a barrel.
I guess it depends how you want to see / tell the story.

For the WSJ, the emphasis is on Statoil slashing CAPEX.

For Saudi Arabia: Statoil's giant oil field should still be profitable if oil prices fall to $25 oil. Twenty-five-dollar oil is an existential issue for Prince Salman.  

See the RBN Energy story below (and the Richard Zeits' article yesterday): $50 oil is the new $80.

ATT Just Got Better (Or Bigger)

Telecom and pay-TV behemoth, AT&T Inc. has inked a deal with HBO that will enable it to deliver Time Warner Inc. TWX-owned HBO’s content across multiple platforms through satellite, online streaming and cable-based U-verse. Notably, AT&T is launching its online streaming service Over The Top (OTT) DIRECTV Now by the end of this year owing to the gaining popularity of the business model across the millennial population.

The online streaming service is gaining momentum as is evident from the growing success of companies like Netflix Inc. NFLX, which is a leading player in this segment. This has resulted in massive subscriber losses for the pay-TV operators.
To counteract the churn rate, many pay-TV operators are implementing this model and AT&T is no exception. We believe that the addition of HBO’s content, which features immensely popular TV series like Game of Thrones, will help the company gain subscribers in its new platform. However, AT&T is a late entrant in this industry and it remains to be seen whether it can compete against the already established players in this segment.
And while we are on the subject of ATT, here's another Obama administration ruling that was overturned by the court:
A federal appeals court threw out a government lawsuit against AT&T Inc. that alleged the company misled wireless subscribers by selling them unlimited data plans and then quietly slowing down service if they consumed high amounts of data.
Monday’s ruling, from the San Francisco-based Ninth U.S. Circuit Court of Appeals, is a blow to the Federal Trade Commission, which filed the suit in 2014 seeking potential refunds for consumers. 
Although the FTC has broad authority to police unfair and deceptive commercial practices, it doesn’t have authority over “common carrier” phone services such as the landline services traditionally offered by AT&T. The commission had said it could pursue the company, however, because it involved data services, but the appeals court rejected that argument.
The ruling further solidifies the FTC’s diminishing authority in the telecommunications space. The consumer protection agency already was facing reduced enforcement powers thanks to open-Internet rules the FCC put in place last year. Those rules imposed common-carrier obligations on broadband services, including wireless.
Back To The Bakken

Active rigs:

Active Rigs3176194185191

RBN Energy: Big shift in energy fundamentals. RBN Energy seems to agree with Richard Zeits. $50 oil is the new $80 oil.
U.S. crude oil prices languish below $50/bbl, but the oil-directed rig count is up by 90, an increase of almost 30% over the past 12 weeks.   Natural gas production is down less than 1% from the all-time high hit back in February even though the price of natural gas remains below $3/MMbtu.  The price spread between U.S. propane and international markets is far below a level that should justify exports, but LPG exports to overseas markets continue at astronomical levels –– approaching 700 Mb/d, most of which is propane. What’s wrong with this picture?  Why does it seem that relationships between energy production, demand and prices have broken down, or at least have undergone some fundamental shift?  That is what our upcoming School of Energy Fall 2016 is all about.   
At first glance, a number of energy market relationships may seem to have shifted, but the reality is that we are just looking at the market from a different perspective than ever before – the recovery from a Shale Revolution crude oil price crash.   Two years ago U.S. hydrocarbon markets entered Shale 2.0.  (Sorry about using such a tired old metaphor, but it works.)
Back in 2007-09 before the Shale Revolution started to impact markets (labeled Pre-shale), gas, NGLs and crude tended to move in tandem.  Moving in almost perfect correlation, all three of these markets blew out in the commodity run-up of 2008 and all crashed with the Great Recession.   
But by then shale had come to natural gas, and pricing for gas, NGLs and crude diverged (the Shale Gas era).  Natural gas oversupply kept prices low while crude and NGLs recovered along with the global economy.   That motivated producers to move to wet gas – containing lots of NGLs, because NGL prices were still strong.  U.S. hydrocarbon markets entered the Wet Gas era.
Update On California's Bullet Train 
First Leg Ends In Almond Orchard In Middle Of Nowhere

From The Los Angeles Times:
The state’s plan to build an initial stretch of high-speed rail line, from San Jose to a map point in the midst of Central Valley farmland, came under renewed attack at an oversight hearing Monday. 
The apparent absurdity of the abbreviated route was not lost on supporters. 
“It seems odd,” acknowledged Dan Richard, chairman of the rail authority, “to be stopping in the middle of an almond orchard.”
The words of the rail authority chairman: "It seems odd to be stopping in the middle of an almond orchard."

I can't make this stuff up.

More Good News For US Natural Gas Industry
Australian State Of Victoria Bans Fracking

The state of Victoria plans to ban shale and coal seam gas fracking in what would be Australia's first permanent ban on unconventional gas drilling, citing the concerns of farmers and potential health and environment risks.

However the government left the door open to allowing onshore conventional gas drilling after 2020.

The decision was made despite the fact that most of eastern Australia's gas supply is produced from coal seam gas and comes as a blow to manufacturers who have been clamouring for more gas supply to help keep prices down.

Gas supply has become an issue following the opening of three liquefied natural gas (LNG) export plants in the state of Queensland, which together are set to triple gas demand in eastern Australia by 2018 from 2014.
The Market

Closing: uneventful day; the market (Dow 30) closed 49 points down; oil dropped below $47. NYSE --
  • new highs: 153; BRK-B traded at a new all-time high, now over $150; the banks are reporting record (?) profits and Warren Buffett loves banks
  • new lows: 5; add Noble Energy to ITT
Early morning: for a market that is looking for a reason to go down ("correct") and for all the talk about a "bubble" in the stock market, it is interesting to note that on a day when the market is down, there are 124 issues on the NYSE that hit a new high (many on opening; and, are now pulling back a bit); and only one issue that is trading at new lows -- ITT -- and that's due to force majeure.

Opening:  opens slightly up, essentially flat. AAPL drops 40 cents, down to about $106 after the huge EU tax story. It sounds like Ireland has the problem, not Apple. Apple was in compliance with Ireland's tax law and Ireland agrees. The EU says Ireland is at fault and wants Ireland to collect $14 million (plus interest) in back taxes from Apple. Isn't going to happen. [I may be wrong, but it seems the Drudge Report headline is in error. Drudge says the EU orders Apple to pay $15 billion in back taxes. I believe the EU told Ireland to collect that money -- whatever the final amount is -- from Apple. To the best of my knowledge, the EU did not send a tax bill to Apple. If anything, the EU sent a tax bill to Ireland. But I could be wrong.] NYSE:
  • new highs: 124 - BRK-B (a big whoop); Loews; OXY (a huge whoop -- for the record, I don't own any OXY; I don't think I've ever owned OXY and have no plans to ever buy OXY);
  • new lows: 1 -- ITT (Obama brought 'em down)

Monday, August 29, 2016

Richard Zeits On The Bakken -- Optimistic -- SeekingAlpha -- August 29, 2016

Mike Filloon has had four articles on the Bakken recently and now we have an article from Richard Zeits. This all suggests to me, along with other stories coming out of the Bakken, that things are "happening."

The newest contribution from Richard Zeits: shale oil -- the "upcycle" is already underway.

  • For U.S. shale oil, $50 per barrel is the “new $80” - a result of the industry's evolution since the beginning of the downturn in oil.
  • Capital spending and capital availability will continue to be forward-looking: operators and investors will anticipate improvements in drilling economics.
  • Using the current strip curve, activity acceleration is sustainable and should become particularly visible in 2017.
The article will disappear over time.

The comments are incredibly good. I particularly liked the comment about shareholders: agree 100%. I think a lot of folks forget that.

Cool -- 
Marijuana State Hasn't Lost All Sense
Hunter S Thompson Would Be Proud

Colorado anti-oil initiatives fall short of qualifying for ballot.
Two proposed initiatives that would have increased restrictions on oil and gas activity in Colorado failed to make the November 8, 2016, ballot because they did not collect enough valid signatures.

Officials of the Colorado Oil & Gas Association (COGA) and the Colorado Petroleum Council (CPC) separately welcomed the news.
Backers submitted the signatures in early August. Initiative No. 75 would have let local governments to prohibit, control, or impose moratoriums on oil and gas development; enact local laws that are more restrictive than state laws; and bar the state from preempting such law.

Initiative No. 78 would have changed Colorado’s setback requirements for any new oil and gas development to at least 2,500 ft from the nearest occupied structure or other specified or locally designated area, and authorize the state or a local government to require that any such new development be more than 2,500 ft away from such structures.