Thursday, March 10, 2016

Six More Reasons Why The Saudis Fear The US Shale Revolution; Six (6) More Permits -- March 10, 2016

Active rigs:

Active Rigs33113191187206

Six (6) wells coming off confidential list Friday:
  • 29324, 1,963, QEP, Jones 3-15-23TH, Grail, 50 stages, 10.3 million lbs, t9/15; cum 130K 1/16; only 8 days in 12/15; cum 482K 5/20;
  • 29325, 2,308, QEP, Jones 5-15-22TH, Grail, 4 sections, 50 stages, 13 million lbs, t9/15; cum 98K 1/16; only 8 days in 12/15; cum 391K 5/20;
  • 29326, 904, QEP, Jones 3-15-22BH, Grail, 2 stages on 9/9/15; 219K sand, t10/15; cum 54K 1/16; only five days total in 12/15 and 1/16; in a sundry form received October, 2015, QEP said they will come back and complete the frack at a later date; a follow-up form received in November, 2015, says QEP planned to re-complete the well; API 33-053-06235; FracFocus show the well was fracked beginning 9/8/15 and completed 2/15/15: 5.9 million lbs water; cum 286K 5/20;
  • 29327, IA/2,261, QEP, Jones 6-15-22TH, 50 stages, 9.5millin lbs; Grail, t9/15; cum 116K 1/16; only seven days in 12/15; cum 393K 7/19;
  • 29328, 2,312, QEP, Jones 4-15-22BH, Grail, 50 stages, 13.8 million lbs, t9/15; cum 128K 1/16; only 8 days in 12/15; cum 496K 5/20;
  • 29329, 2,291, QEP, Jones 15-22 16-21LL, 2 sections, Grail, 50 stages, 13.8 million lbs, t9/15; cum 140K 1/16; only 8 days in 12/15; cum 541K 5/20;
Six (6) permits approved:
  • Operator: HRC
  • Field: McGregory Buttes (Dunn)
  • Comments: the permits are for a 6-well pad (see graphics below)  

29329, see above, QEP, Jones 15-22 16-21LL, Grail:

DateOil RunsMCF Sold

 29328, see above, QEP, Jones 4-15-22BH, Grail:

DateOil RunsMCF Sold

 29327, see above, QEP, Jones 6-15-22TH, Grail:

DateOil RunsMCF Sold

29326, see above, QEP, Jones 3-15-22BH, Grail:

DateOil RunsMCF Sold

29325, see above, QEP, Jones 5-15-22TH, Grail:

DateOil RunsMCF Sold

29324, see above, QEP, Jones 3-15-23TH, Grail:

DateOil RunsMCF Sold

The general area where HRC's proposed 6-well pad will be sited.

Zoom in on area A:

Zoom in on area B:

First time wading. The moss is very slippery, that was my only concern.

Current Gasoline Demand; Update On Salt Water Disposal Wells In North Dakota -- March 10, 2016

North Dakota's Geological Survey major publication comes out twice a year: Geo News. At the link, simply scroll down and pick out the issue you want to visit, all the way back to 1974. It's all free; no password needed.

The January, 2016, issue has a nice article on salt water disposal wells in North Dakota.

US Gasoline Demand

The most recent data is for the first week in March, 2016: 9.411 million bopd. The graph below is for the first week in March of the twenty years prior to this year.

1st Week In March Of Year Indicated

The jump from the first week in March, 2015 (8.515 million bopd) to the first week in March, 2016 (9.411) represents a 10.52% jump in gasoline demand.

The US has never had a week in which gasoline demand averaged greater than 10 million bopd.

Last year's record for US gasoline demand was 9.749 million bopd set in the 3rd week, July, 2015. A 10.52% jump this July, 2016, would put us over the 10 million bopd (10.77 million bopd).

Current gasoline demand:

Japan Court Orders Nuclear Reactor To Shut Down; Keep 2nd Off-Line -- March 10, 2016

ABCNews from yesterday:
A court issued an unprecedented order Wednesday for a nuclear reactor near Kyoto to stop operating and ordered a second one to stay offline.
The Otsu District Court, which issued the injunction, said the emergency response plans and equipment designs at the two reactors have not been sufficiently upgraded after the 2011 Fukushima nuclear disaster.
The order requires Kansai Electric Power Co. to shut down the No. 3 reactor and keep the No. 4 unit offline at the Takahama plant in Fukui prefecture in western Japan, home to about a dozen reactors.
The two reactors restarted this year after a high court in December reversed an earlier injunction by another court. The No. 3 reactor, which uses a riskier plutonium-based MOX fuel, resumed operation in late January, while the No. 4 reactor had to be shut down late last month after operating for just three days because of a series of technical problems.
Kansai Electric said it would abide by the decision and start the shutdown procedures for the No. 3 reactor Thursday morning. The utility, meanwhile, said that the decision was "disappointing" and that it planned to appeal.
The decision reflects Japan's divisive views on nuclear safety and leaves only two of the country's 43 reactors in operation.
Market Sell-Off -- 300-Point Swing

The Dow was up 140 points before the jobs report this morning. Huge jobs report allows Fed to raise rates.

Then the extent of quantitative easing in Europe will lead to strong dollar will lead to currency fluctuations and US exports falling.

Profit taking after recent 5-day run in the bull market.

At least that's my take.

Jumping Jehoshaphat! Jobs Report -- Thursday, March 20, 2016

Iditarod update -- North Dakota musher jumps to seventh (this morning he shows up at #6). The Dickinson Press is reporting:
Back in seventh place Wednesday after overcoming sled breakages, North Dakota native Kelly Maixner will re-evaluate his team after passing through the McGrath and Ophir checkpoints — and may soon be opting to take his mandatory 24-hour rest in the 2016 Iditarod.
Maixner told a television crew his dogs were doing “awesome,” but that something on his sled seemed to break during every run.
Maixner, a pediatric dentist who grew up near Beach, has been plagued with equipment problems this week. He was listed in seventh place Wednesday morning, according to the official Iditarod website. Tuesday, he was in 26th place.Currently there are 81 mushers in the race; the race started with 85.
Heartwarming story of the day making the rounds in local talk radio: link here. Story and video at the link.

March 10, 2016: current polls show Rubio will be a Reuben sandwich in Florida; Kasich will krimp Trump's style in Ohio. Camille Paglia says she was wrong about Trump

Back To The Bakken

Active rigs:

Active Rigs33113191187206

RBN Energy: EIA’s March 2016 DPR Natural Gas Revisions Defy Previous Production Declines. We will come back to this -- this is quite startling.

Jobs data: pending. The forecast is for a drop of 6,000.
  • prior: 278,000
  • consensus for today's report: 272,000
  • consensus range: 270,000 to 278,000 
  • actual: 259,000 
Weekly energy data: pending.

Geopolitical article for the day: "End Times for the Caliphate?", Patrick Cockburn, London Review of Books, March 3, 2016. See below, some preliminary notes.

It's going to b a busy day.

Jobs Data

  • prior: 278,000
  • consensus for today's report: 272,000
  • consensus range: 270,000 to 278,000 
  • actual: 259,000 
The number of Americans filing for unemployment benefits fell more than expected last week, hitting its lowest level since October, pointing to sustained strength in the labor market that should further dispel fears of a recession.
Initial claims for state unemployment benefits declined 18,000 to a seasonally adjusted 259,000 for the week ended March 5, the lowest reading since mid-October, the Labor Department said on Thursday. The prior week's claims were revised to show 1,000 fewer applications received than previously reported.
Economists polled by Reuters had forecast claims slipping to 275,000 in the latest week. A Labor Department analyst said there were no special factors influencing last week's claims data and no states had been estimated.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,500 to 267,500 last week, the lowest level since late October.
How did the market react? Prior to the release of this data, the opening was forecast to be "higher." After the release of the jobs data, futures are now (7:56 a.m. Central Time): +140 points. And oil stable. [Maybe not: now that the market has had time to digest jobs report, futures up only 70 points and falling quickly. This gives the Fed an opportunity react. Janet must be asking, "If not now, when?"

A single swallow does not a spring make. 

End Times for the Caliphate 
Kurdistan, Rojava, and ISIS

The war in Syria and in Iraq have produced two new de facto states in the last five years and enabled a third quasi-state greatly to expand its territory and power.

The two new states are two separate Kurdish states, one to the west (Syria) and one to the east (Iraq). Neither are recognized internationally but they are stronger militarily and politically than most members of the UN.

Both states are very, very small in population.

17 million Kurds live in Turkey.

The three states:
  • the caliphate: ISIS -- eastern Syria / western Iraq
  • Rojava: Syrian Kurds (PYD) along Syrian / Turkish border (rojava means "west")
  • Kurdistan Regional Government (KRG): northern Iraq along Iraqi / Turkish border
For me, this is how I will keep track of them:
  • ISIS
  • Rojava (Syria) -- 2.2 million -- surrounded by much larger states
  • Kurdistan (Iraq) -- 6 million
The three states -- origin and geography:
  • ISIS: established itself in the summer of 2014 after capturing Mosul and defeating the Iraqi army
  • Rojava: the Syrian Kurds who filled the vacuum when the Syrian Army withdrew in 2012; west of the Tigris; across northern Syria between the Euphrates and the Tigris; along Syrian-Turkish border
  • KRG: Kurdish Regional Government; had been highly autonomous; took advantage of IS's destruction of Baghdad's authority in northern Iraq; expanded territory 40% -- south toward Baghdad to include the Kirkuk oilfields 
The question as discussed by Cockburn: will any of these "states" persist after the current conflict is over.

Cockburn gives short shrift to ISIS: "The Islamic State is likely to be destroyed eventually ... though its adherents will remain a force in Iraq, Syria, and the rest of the Islamic world.

So, it comes back to the age-old battle between the two Kurdish divisions AND the age-old battle between Kurdistan and Turkey AND Kurdistan and outside forces (US and Russia).

Urban Centers
Extent of Two Kurdish States: About 600 miles west to east

Along the Turkish border (Syria/Rojava)
  • Afrin, about 50 miles northwest of Aleppo; key transit city across Turkish border; current flashpoint between Turkey and the PKK/Rojava
  • Kobani, northeast of Aleppo; on the Euphrates river; key to Rojava/PYD/PKK -- see below)
  • Tal Abyad -- key to linking two of three enclaves (Kobani and Qamishi)
  • Hasak
  • Qamishi
Along the Turkish border (Iraq/Kurdistan)
  • Sinjar
  • Erbil (about 50 miles east of Mosul)
  • Kirkuk
  • Sulaymaniyah
  • Halabja (on Iranian border) 
Caliphate (ISIS may or may not hold these cities); all to the northeast of Damascus, or north of Baghdad
  • Aleppo: Syria
  • Raqqa: Syria (currently held by ISIS) (on the Euphrates River); capital cityof ISIS -- self-declared; about 80 miles due east (slightly southeast) of Aleppo)
  • Manbij: on road to Raqqa in Syria; "allies" re-take Manbij, August, 2016
  • Mosul: back and for between ISIS and Kurds; on the Tigris
  • Tikrit: midway between Mosul and Baghdad; on the Tigris
  • Ramadi: on the Euphrates, west of Baghdad, west of Falujah
  • Fallujah: on the Euphrates, between Ramadi and Baghdad
Rivers, Borders, and Boundaries
  • Neither major river separates Syria/Iraq; no natural boundary between northern Syria/northern Iraq
  • Euphrates cuts northern Syria in half
  • Tigris cuts northern Iraq in half
  • Syria reaches the Mediterranean Sea; small seacoast between Lebanon and Turkey

The West: Rojavo/PKK/PYD/SDF
  • Turkish response: belligerent in tone; ambivalent in practice
  • it appears that current conflict, starting with Kurdish uprising in 2011, resulted in resurgence of PKK (Kurdistan Workers' Party) which Turkey has been fighting since 1984
  • the ruling party in Rojava is PYD (Democratic Union Party)
  • so, PYD = PKK
  • IS finally defeated in Syrian city of Kobani: Rojava expanded territorially in every direction
  • by capturing Tal Abyad last June, Rojava/PKK/PYD linked up two of its three most important enclaves (Kobania nd Qamishli)
  • now working to link up Afrin on the far west
  • Turkey has drawn a line in the sand at the Euphrates but seems uneasy to act
  • Rojava's Arab proxy militia: Syrian Democratic Forces (SDF)
  • SDF crosses Euphrates and Turkey does not respond: US + Russia --> a/s on ISIS in that area
  • Key area of concern now: narrow corridor between Aleppo (once Syria's 2nd largest city) and Turkish border (Afrin) -- if opposition cut off -- the Sunni states of Turkey, Saudi Arabia, and Qatar -- will have failed to overthrow Bashar al-Assad.
  • if the "allies" fail, Rojavo/PKK/PYD/SD becomes that much stronger; 17 million Kurds
  • Turkey wants to intervene, but Turkey would be fighting: US, Russia, Iran, Syrian Army, PYD, and IS (LOL)
  • Turkey's only allies: Saudi Arabia and a few Gulf monarchies
  • this is the area where Turkey shot down a Russian bomber; carefully planned; Russia responded by setting up "permanent" bases in this area (Turkey: one meager step forward; result: stomped on by Russian)
  • US + Russia: begrudging/suspicious but supporting the Kurds, and not the Turks in this area
Kurdistan / KRG / Iraqi Kurdish state
  • once considered the "new Dubai" with its oil fields
  • now Kurdistan is a failed nation; a disaster; its rich folks trying to get to the west
  • Kurdistan: an economic disaster; low oil prices have led to the debacle; government taking to stealing bankers' money; has nothing but oil for revenue; nothing indigenous -- imports vegetables
  • Kurdistan: before ISIS, before the plummet in oil prices was becoming more independent; now Kurdistan looking to Baghdad for help
The Caliphate is similarly falling
  • loses Manjib, August, 2016
  • defeated at Kobani: IS now changing tactics -- not fighting to last man to save its territory but it may do so in Raqqa (Syria) and Mosul (Iraq)
  • conditions in the Caliphate unbearable (a holocaust by any other name)
  • people smuggled out of Mosul say IS is buckling; fled Mosul to safe refuge in Rojava -- this is where the migrants are coming from -- from rich Kurdistan oil regions to Rojava into Turkey and on to Greece
  • IS opponents have captured/re-captured: Sinjar, Ramadi, Tikrit (Iraq) and closing in on Raqqa (Syria)
  • Ramadi: still in contention
  • YPG, Syrian army, Iraqi armed forces, and Peshmerga: inadequate supplies against IS, but can call in Russian and US devastating air support
How the two Kurdish states see this playing out
  • the allies (YPG, Syrian army, Iraqi armed forces, Peshmerga, Russia, US) will ultimately prevail
  • once IS defeated once and for all, Kurds concerned Baghdad will again turn against Kurdistan; Damascus will turn against Rojava
Last comments (mine)
  • Iran, the 800-pound gorilla, not mentioned in the article
  • Assad (Syria) given new lease on life with US + Russia emphasis on taking out IS
  • Sunni allies Turkey and Saudi Arabia stymied in taking out Syria (Iranian proxy?)
  • when it's all over, who gets Kirkuk's oil fields? Kurdistan or Baghdad
  • when IS is taken out, how much longer do Russia + US stick around? 
  • one wonders if after IS, if Russia (pro-Iran) and US (anti-Iran) get back to where they were before IS
  • it looks like the current situation has "destroyed" any progress Kurdistan had made in previous 50 years
  • Turkey is becoming more and more repressive; is it feeling the stress; it looks like while Kurdistan might be failing, Turkey's real Kurdish nemesis, the PKK (Rojava) is gaining strength
Note: greater Kurdistan
  • west Kurdistan: Rojava, northern Syria
  • east Kurdistan: northwestern Iran 
  • northern Kurdistan: southern/southeastern Turkey
  • southern Kurdistan: northern Iraq (military forces - Peshmerga)