Friday, April 15, 2016

Week 15: April 10, 2016 -- April 16, 2016

Today's monthly production report was a pretty big story and North Dakota mineral acres still going for $10,000/acre is a pretty big story, but the report that the first ever shipment of North Dakota light crude oil (Bakken) was shipped overseas is a pretty big story (Hess), too. 

Operations
Hess: exports North Dakota light sweet crude overseas; a first for North Dakota light sweet oil
Month-over-month production: unchanged
Bakken: decline over past year: minimal
Random look at the top 18 oil fields in the Bakken
North Dakota mineral acres still going for $10,000/acre
EOG doing some big things in Clarks Creek
Unfracked wells: Lime Rock Resources with two new locations
CLR wants to drill 25 wells on an existing 2560-acre unit in Elm Tree
Huge day in the Bakken: WPX reported six high-IP wells; BR reports two nice wells, Hess and Statoil each report a nice well
EIA's monthly drilling report: the Bakken continues to shine
Median days for DUC status continues to increase
Average wells per pad continues to increase -- same link 

Bakken economy
Jamestown ethanol plant still on track?
New dry pea processing plant in Harrold, SD

Miscellaneous
XOM ships its first cargo crude oil from the US after ban lifted 
Trinity Containers in West Fargo to close; completed long term order for wind turbine towers
Fitch sees Saudi's oil price averaging $35/bbl in current calendar year
Venezuela - tick, tick, tick
Iraq coming apart at the seams 
UND Fighting Sioux Hawks take national hockey championship

Hess Exports Bakken Crude To Europe; First Reported Overseas Shipment Of Bakken Crude; No New Permits; No Producing Wells Completed -- April 15, 2016

Updates

April 25, 2016: follow-up to the original post here; the oil was from near Tioga; ended up in the Netherlands where XOM has a refinery. 
 
Original Post

Reuters/Rigzone reports:
Hess Corp on Friday confirmed it sold Bakken crude for export out of the U.S. Gulf Coast to Europe, the first reported shipment of the light North Dakota oil since Congress lifted the ban on exporting crude last December.
Hess sold 175,000 barrels of Bakken crude, which loaded at St. James, Louisiana, in early April and is being transported to a European refinery, spokesman John Roper said in an emailed statement.
Active rigs:


4/15/201604/15/201504/15/201404/15/201304/15/2012
Active Rigs2991183186206

In front of Willhoite's, checking out all the motorcycles -- 10:00 p.m. Friday night, Grapevine, TX, Main Street.

Happy, 50th Anniversary -- North Dakota C A 3 In McGregor Oil Field, A Devonian Well -- April 15, 2016

I missed this one earlier this year; celebrating its 50th anniversary:
  • 3983, 234, Enduro Operating, North Dakota C A 3, a Devonian well, vertical, 320-acre spacing, t1/66, cum 1.37 million bbls; 2/16; celebrating its 50th anniversary next January, 2016
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
DEVONIAN2-20162963370610532331600
DEVONIAN1-201631885103812602491710
DEVONIAN12-201526102279011333082430
DEVONIAN11-20152885895916643552850
DEVONIAN10-20152348645987668100
DEVONIAN9-2015309221132140293180
DEVONIAN8-201525937613129089260
DEVONIAN7-20150000000
DEVONIAN6-20150000000
DEVONIAN5-2015261822005286500
DEVONIAN4-2015283343945697000
DEVONIAN3-20153163863011227800
DEVONIAN2-20152867967212007550
DEVONIAN1-20153165192714138020

ObamaCare Insurers Lost Money In 41 States; Profitable In 9 -- McKinsey & Company -- April 15, 2016

Updates

April 17, 2016: UnitedHealth will exit Michigan
UnitedHealth Group Inc. plans to exit a third state Obamacare market as the insurer works to stem losses from its struggling Affordable Care Act business.
The insurer won’t sell policies through Michigan’s ACA exchange for next year, according to Andrea Miller, a spokeswoman for the state’s Department of Insurance and Financial Services. Georgia and Arkansas said last week that UnitedHealth will quit their exchanges for 2017.
UnitedHealth, the largest U.S. health insurer, began warning in November that it was losing money on its Obamacare policies and might exit some markets. The ACA relies on private health-insurance companies to offer policies that individuals can buy in government-run markets. Though it was selling plans in many states, UnitedHealth is a smaller player in ACA markets than rivals like Aetna Inc. and Anthem Inc. 
Original Post

The Hill is reporting that ObamaCare losses are unsustainable.
Health insurance companies are amplifying their warnings about the financial sustainability of the ObamaCare marketplaces as they seek approval for premium increases next year.
Insurers say they are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether. [United Health, the nation's largest healthcare insurer, has announced it will drop out.]
“Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.”
While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.” 
In the short term, there is a growing likelihood that insurers will push for substantial premium increases, creating a political problem for Democrats in an election year.
Insurers have been pounding the drum about problems with ObamaCare pricing.
The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage from employers.
And a report from McKinsey & Company found that in the individual market, which includes the ObamaCare marketplaces, insurers lost money in 41 states in 2014, and were only profitable in 9 states. 
“We continue to have serious concerns about the sustainability of the public exchanges,” Mark Bertolini, the CEO of Aetna, said in February.
The Aetna CEO noted concerns about the “risk pool,” which refers to the balance of healthy and sick enrollees in a plan. The makeup of the ObamaCare risk pools has been sicker and costlier than insurers hoped. 
The clearest remedy for the losses is for insurers to raise premiums, perhaps by large amounts — something Republicans have long warned would happen under the healthcare law, known as the Affordable Care Act (ACA).
“The industry is clearly setting the stage for bigger premium increases in 2017,” said Levitt of the Kaiser Family Foundation. 
Insurers will begin filing their proposed premium increases for 2017 soon. State regulators will review those proposals and then can either accept or reject them.
Michael Taggart, a consultant with S&P Dow Jones Indices, pointed to data from his firm showing per capita costs for insurers are spiking in the ObamaCare marketplaces.  
“We made a significant change in the rules with the ACA, and we're still working through the process to see how that market stabilizes,” Taggart said at a panel on Wednesday. “Is [a death spiral] a possibility? Sure it's a possibility. I wouldn't attempt to put a probability on it, because I think there are a lot of things going on.” 
One factor helping to prevent a death spiral is ObamaCare's tax credits, which cushion the impact of premium increases on consumers. 
“What we're likely to see is more of a market correction than any kind of death spiral,” Levitt said. “There are enough people enrolled at this point that the market is sustainable. The premiums were just too low.”  
As I've said before: by any measure ObamaCare is a debacle. Anyone still supporting ObamaCare is a) not paying attention; b) is a bit dull-witted; c) is making money off the scam; d) is a political demagogue; and/or e) is gaming the system.

One can suggest that the health care insurers are exaggerating the situation, but United Health, the nation's largest insurer has already dropped out of ObamaCare; others will follow.

But the fact that the largest or second largest (competes with Boston Consulting) consultant company and the most prestigious consultant company, McKinsey & Company, found that in the individual market, which includes the ObamaCare marketplaces, insurers lost money in 41 states in 2014, and were only profitable in 9 states.

Unsustainable.

*******************************
The Exodus Is Beginning

Speaking of unsustainable: Los Angeles and a $15-minimum wage: the exodus has begun. The Los Angeles Times is reporting:
Los Angeles was once the epicenter of apparel manufacturing, attracting buyers from across the world to its clothing factories, sample rooms and design studios.
But over the years, cheap overseas labor lured many apparel makers to outsource to foreign competitors in far-flung places such as China and Vietnam.
Now, Los Angeles firms are facing another big hurdle — California's minimum wage hitting $15 an hour by 2022 — which could spur more garment makers to exit the state.
Last week American Apparel, the biggest clothing maker in Los Angeles, said it might outsource the making of some garments to another manufacturer in the U.S., and wiped out about 500 local jobs. The company still employs about 4,000 workers in Southern California.
"The exodus has begun," said Sung Won Sohn, an economist at Cal State Channel Islands and a former director at Forever 21. "The garment industry is gradually shrinking and that trend will likely continue."
In the last decade, local apparel manufacturing has already thinned significantly. Last year, Los Angeles County was home to 2,128 garment makers, down 33% from 2005, according to Bureau of Labor Statistics data. During that period, employment also plunged by a third, to 40,500 workers. Wages, meanwhile, jumped 17% adjusting for inflation, to $698 per week — although that can include pay for top executives, as well as bonuses, tips and paid vacation time.
Many apparel companies say Los Angeles is a difficult place to do business. Commercial real estate is expensive and limited, the cost of raw materials continues to rise and it can be difficult to find skilled workers who can afford to live in the city. They expect things will become even more challenging after the minimum-wage hike further raises their expenses.
Close reading of the story suggests that the $15-minimum-wage is simply the last straw. The apparel industry was already on its way out. It's all for "the better." Those that have jobs will be paid more. The state will take care of the others. Bernie will see to it that no one is left behind.

***************************************
Bill Nye, The Science Guy, May Miss His Connecting Flight

Weather channel is now reporting:
  • 458 flights now cancelled at Denver International Airport due to coming snowstorm -- this is mid-April.
******************************
Barack and Michelle: 19% 

Headline: the couple pay $81K on $436K in income. 19%.

Not to be outdone:  Democratic presidential candidate Bernie Sanders' tax return shows he gave 4% of income to charity, effective federal tax rate is 13.4%.

Eighteen (18) Top OIl Fields In North Dakota; Monthly Production Change; Monthly Production Per Well -- February, 2016 Data

Please disregard this post. I have updated the information and re-posted the data here: http://themilliondollarway.blogspot.com/2016/04/twenty-20-top-oil-fields-in-north.html.

The following was done quickly and there are likely to be factual and typographical errors. I will triple-check this spreadsheet later and make corrections.

The first column in each group of four columns (if that makes sense) is the total production of the Bakken pool for that month, with the exception of the Antelope field; for the Antelope field, it is the Sanish pool.

The spreadsheet is ordered on the basis of monthly production for the month of February. The last column in each 4-column series refers to total monthly production from the particular field, not the production average from each well in that field.

Field
Dec 2015
Dec Wells
Dec Oil/Well/Month
Percent Change Nov-to-Dec
January 2016
Jan Wells
Jan Oil/Well/Month
Percent Change Dec-to-Jan
February 2016
Feb Wells
Feb Oil/Well/Month
Percent Change Jan-to-Feb
Sanish
1,558,779
594
2,624
-4.65%
1,610,948
596
2,703
3.35%
1,489,171
600
2,482
-7.56%
Parshall
1,189,523
417
2,853
-2.18%
1,122,403
421
2,666
-5.64%
999,597
422
2,369
-10.94%
Grail
760,765
159
4,785
-14.59%
840,089
159
5,284
10.43%
954,428
168
5,681
13.61%
Antelope 
942,611
157
6,004
4.77%
942,578
157
6,004
-0.00%
939,734
162
5,801
-0.30%
Corral Creek
722,677
140
5,162
10.31%
701,919
141
4,978
-2.87%
814,870
148
5,506
16.09%
Alger 
836,717
305
2,743
3.21%
768,741
308
2,496
-8.12%
723,330
308
2,348
-5.91%
Blue Buttes
790,622
133
5,945
-4.40%
783,914
135
5,807
-0.85%
674,886
137
4,926
-13.91%
Alkali Creek
663,364
134
4,950
3.10%
651,321
138
4,720
-1.82%
674,787
140
4,820
3.60%
Siverston
730,950
213
3,432
8.03%
711,959
214
3,327
-2.60%
667,148
218
3,060
-6.29%
Reunion Bay 
703,872
149
4,724
0.85%
691,065
146
4,733
-1.82%
633,995
146
4,342
-8.26%
Banks
680,867
166
4,102
6.19%
613,342
165
3,717
-9.92%
581,181
166
3,501
-5.24%
Truax
567,821
163
3,484
6.98%
572,302
165
3,468
0.79%
568,820
171
3,326
-0.61%
Heart Butte
617,786
170
3,634
-8.65%
628,965
170
3,700
1.81%
561,081
173
3,243
-10.79%
Van Hook
697,982
181
3,856
10.74%
599,489
178
3,368
-14.11%
489,871
178
2,752
-18.29%
Spotted Horn
354,969
66
5,378
-7.60%
408,309
66
6,187
15.03%
397,868
70
5,684
-2.56%
Pershing
264,899
39
6,792
45.33%
320,227
39
8,211
20.89%
254,260
39
6,519
-20.60%
Camel Butte
348,454
34
10,249
17.92%
346,584
34
10,194
-0.54%
254,196
34
7,476
-26.66%
Long Creek
224,394
27
8,311
6.81%
242,123
27
8,968
7.90%
170,498
27
6,315
-29.58%

This spreadsheet is ordered on the basis of the production / well / for the month of February. The last column in each 4-column series refers to total monthly production from the particular field, not the production average from each well in that field.

Field
Dec 2015
Dec Wells
Dec Oil/Well/Month
Percent Change Nov-to-Dec
January 2016
Jan Wells
Jan Oil/Well/Month
Percent Change Dec-to-Jan
February 2016
Feb Wells
Feb Oil/Well/Month
Percent Change Jan-to-Feb
Camel Butte
348,454
34
10,249
17.92%
346,584
34
10,194
-0.54%
254,196
34
7,476
-26.66%
Pershing
264,899
39
6,792
45.33%
320,227
39
8,211
20.89%
254,260
39
6,519
-20.60%
Long Creek
224,394
27
8,311
6.81%
242,123
27
8,968
7.90%
170,498
27
6,315
-29.58%
Antelope 
942,611
157
6,004
4.77%
942,578
157
6,004
-0.00%
939,734
162
5,801
-0.30%
Spotted Horn
354,969
66
5,378
-7.60%
408,309
66
6,187
15.03%
397,868
70
5,684
-2.56%
Grail
760,765
159
4,785
-14.59%
840,089
159
5,284
10.43%
954,428
168
5,681
13.61%
Corral Creek
722,677
140
5,162
10.31%
701,919
141
4,978
-2.87%
814,870
148
5,506
16.09%
Blue Buttes
790,622
133
5,945
-4.40%
783,914
135
5,807
-0.85%
674,886
137
4,926
-13.91%
Alkali Creek
663,364
134
4,950
3.10%
651,321
138
4,720
-1.82%
674,787
140
4,820
3.60%
Reunion Bay 
703,872
149
4,724
0.85%
691,065
146
4,733
-1.82%
633,995
146
4,342
-8.26%
Banks
680,867
166
4,102
6.19%
613,342
165
3,717
-9.92%
581,181
166
3,501
-5.24%
Truax
567,821
163
3,484
6.98%
572,302
165
3,468
0.79%
568,820
171
3,326
-0.61%
Heart Butte
617,786
170
3,634
-8.65%
628,965
170
3,700
1.81%
561,081
173
3,243
-10.79%
Siverston
730,950
213
3,432
8.03%
711,959
214
3,327
-2.60%
667,148
218
3,060
-6.29%
Van Hook
697,982
181
3,856
10.74%
599,489
178
3,368
-14.11%
489,871
178
2,752
-18.29%
Sanish
1,558,779
594
2,624
-4.65%
1,610,948
596
2,703
3.35%
1,489,171
600
2,482
-7.56%
Parshall
1,189,523
417
2,853
-2.18%
1,122,403
421
2,666
-5.64%
999,597
422
2,369
-10.94%
Alger 
836,717
305
2,743
3.21%
768,741
308
2,496
-8.12%
723,330
308
2,348
-5.91%