Monday, February 1, 2016

CLR Lost Almost $700 Million On Bet Price Slump Wouldn't Last Long -- February 1, 2016

Here is the "Bing" poll that was taken before the actual numbers come out tonight, we'll see how good Microsoft search engine is as it pertains to predicting election results:
  • Hillary Clinton: 50.1%
  • Sanders: 46.8%
  • Trump: 39.8%
  • Ted Cruz: 30.5%
  • Marco Rubio: 12.9% 
Wow, it looks like Bing really blew it with regard to the GOP. The actual numbers:
  • Cruz: 28%
  • Trump: 24%
  • Rubio: 23%
Even on the Democrat side, Bing failed to show how close the Hillary / Sanders race really was: 50 / 50. O'Malley got the other 0%. And calls it quits.
Chinese Oil Demand Posts Fastest Growth Since 2011

China's apparent oil demand in 2015 grew 5.8% year on year to 11.11 million b/d, the fastest pace since 2011, despite the country's economy growing at the slowest rate since 1990, Platts calculations based on recently released official data showed.

Apparent demand in 2011 expanded at 7.1% on year to 9.62 million b/d.

The strong apparent demand in 2015 was driven by transportation fuels gasoline and jet/kerosene, as well as LPG and fuel oil.

But Platts China Oil Analytics expect the country's oil demand growth to slow to around 2.4% in 2016.

North Dakota Budget Update

North Dakota facing $1 billion shortfall; governor orders agencies to slash 4% from budgets; link at Dickinson Press.
The new forecast predicts general fund revenues will fall $1.074 billion short of the March forecast that state lawmakers relied upon when crafting a $6 billion general fund budget for the current two-year cycle that began July 1. Revenues were already $215 million below forecast from July through December.
To make up the shortfall, Dalrymple announced across-the-board cuts of nearly $245 million, or 4.05 percent, for state agencies that receive general fund dollars, which is most of the 73 agencies. That’s deeper than the 2.5 percent cut required by state law when an updated forecast predicts that revenues will be 97.5 percent or less of what was projected in the legislative forecast.
Dalrymple also will draw $497.6 million from the state’s Budget Stabilization Fund, leaving roughly $75 million in the rainy day fund for what he called the “unlikely event” that the July revenue forecast would be even worse.
CLR Update

From Forbes, Harold Hamm Expects $60 Oil, Says America Will Double Output Again --
“Some people didn’t pull back as fast as they should have,” says Hamm. “They are pulling back now.” Hamm’s move represents capitulation of a sort. In late 2014 he decided to sell off all of Continental’s oil price hedges for $400 million, betting that prices would soon recover. They didn’t, and Continental missed out on about $700 million in proceeds that those hedges would have generated. No surprise, he’s even more bullish now. Prices are “unsustainable,” he says. “People aren’t making any money.”

These bad days won’t last. America’s oil output has already turned down from 9.6 million barrels per day to 9.2 million bpd. Hamm, backed up by analysis from his resident team of data eggheads, expects the declines to accelerate as drillers capitulate. Each passing month will shave another 125,000 bpd off U.S. output — adding up to about 1.5 million bpd this year. As it happens, that’s almost precisely the same amount of oversupply currently sloshing around world markets, according to Energy Aspects, a consultancy.

XTO To Report Two Big Wells Tuesday; Whiting To Report One Big Bakken Well -- February 1, 2016

Active rigs:

Active Rigs45146192187203

Four (4) new permits --
  • Operator: HRC
  • Field: McGregory Buttes (Dunn)
  • Comments:
Statoil canceled two permits, both were Lougheed permits in Williams

Eight (8) permits renewed, including --
  • Petro-Hunt, 2, both Marinenko permits in Dunn County
  • Kaiser-Francis, 2, an Agnes permit and an Albert J permit, both in Stark County
  • Enduro, an NGMU permits in Renville County
  • Enerplus, a Fool Bear permit in McKenzie County
  • WPX, a Kale Bad Brave permit in McKenzie County
  • Hunt, a Patten permit in Mountrail County
Four (4) producing wells completed:
  • 29862, 2,035, XTO, Johnsrud Federal 34X-14AXB, Bear Den, t1/16; cum --
  • 30600, 1,247, Whiting, Charging Eagle 9-19-18-1H3, Twin Buttes, t1/16; cum --
  • 30756, 102 (no typo), XTO, Roen 24X-23BXC, Elk, t12/15; cum --
  • 30913, 2,453, XTO, Johnsrud Federal 34X-14F, Bear Den, t1/16; cum --
Wells coming off confidential list Tuesday:
  • 28296, 2,268, HRC, Fort Berthold 152-93-19D-18-10H, Four Bears, t8/15; cum 111K 12/15; on-line only 4 days in 12/15;
  • 29535, SI/NC, Hess, EN-Sorenson B-155-94-3526H-4, Alkali Creek, no production data,
  • 31572, SI/NC, Statoil, Samson 2-32 7H, Banks, no production data,
  • 31666, SI/NC, EOG, Austin 433-3402H, Parshall, no production data, 

  • ************************************

    28296, see above, HRC, Fort Berthold 152-93-19D-18-10H, Four Bears:
    DateOil RunsMCF Sold

Monday, February 1, 2016 -- Minimal Blogging This Morning; Off The Net For Now

New Venezuela US imports graph posted at an earlier link

Dominion Resources to buy Questar: link here.  Data points:
  • $4.4 billion in cash
  • 27,500 miles in gas distribution pipeline
  • 3,400 miles of gas transmission pipeline
  • 56 billion cubic feet of working gas storage
  • will operate an additional 15,500 miles of NG transmission, gathering, and storage pipelines
  • 24,300 MW of power generation
  • combined: 2.5 million electric utility customers, 2.3 million gas utility customers in 7 states
  • $25/share; a premium of nearly 23% to Questar's Friday close
  • other recent deal for comparison: Duke to buy Piedmont, $4.9 billion, announced last October
  • other recent deal for comparison: Southern Co to buy AGL resources, $8 billion, announced last August
Active rigs:

Active Rigs45146192187203

RBN Energy: LNG —A Market in Turmoil Moves to Right Itself.

Vertical wells in the Bakken over at Seeking Alpha.  This is an interesting story, perhaps, to tell us a bit about the Bakken, but I believe it's pretty much a non-story in the big scheme of things. If I don't forget I will come back to this story. At the story, some of the comments are completely off-base/wrong; other comments are very good.

Saudi oil. WSJ, Heard on the Street: "Oil-Price Poker: Why Saudi Won't Fold 'Em." Nice graphic at the link.
The Shiite powerhouse is ramping up production following the lifting of nuclear sanctions. And its export surge is occurring against the backdrop of ongoing proxy wars in Syria and Yemen. Those make it difficult for Sunni champion Saudi Arabia to take the lead with output cuts.
Russia, meanwhile, is pumping the most crude ever, hitting a post-Soviet Union peak. But it may have difficulty maintaining today’s pace given a lack of investment in its aging Siberian fields. The chief executive of Russian oil giant Lukoil predicted that Russian output would drop in 2016 for the first time in several years.
And then there is the additional wrinkle that Russia is actively on Iran’s side in Syria. For those reasons, not only have occasional statements from Russia about nonexistent agreements been something of a bluff, so too might be the country’s willingness to voluntarily curb its own output.
In other words, Russia is holding weak cards and the Saudis know it.
For now, politics, if not economics, suggests the Saudis will remain all-in. That alone could keep a lid on an immediate oil-price recovery.