Tuesday, June 7, 2016

Is There A Story Here? -- June 7, 2016

If I remember, I will come back to this graphic.

This link to the Oil & Gas Journal will  have the graph. I've not read the article yet.

Notes for the Granddaughters

The two older granddaughters are enrolled in a computer coding "camp" this entire week at the University of Texas -- Dallas, which is really located in Plano or Richardson, I guess. From where we live, it's a horrendous 33-mile drive each way, so after I get them there, I spend the day in Plano, before picking them up again at the end of the day.

The day goes very, very quickly.

The highlight of the day is lunch! After yesterday's sushi luncheon I have decided that my goal this week in Plano is to visit five different sushi restaurants for lunch.

Yesterday, it was Densetsu Japanese Restaurant on Spring Creek Parkway. Excellent. A full 10-piece sashimi lunch: $16.95; a small sake for $5.00. With tip, the whole check for an incredibly good sashimi dinner in a very, very nice restaurant for $28 and change.

Today, Sushi Hinoki, at Coit and Campbell. The buffet must have been about $10.95: I forgot to look at the bill, although I noted the sake was $2.50. The total with gratuity came to about $18. One can order from a menu but the highlight seems to be the buffet, which comes with soup, salad, and about a dozen different sushi rolls. They were incredible. They even had a small selection of vegetable tempura. And yes, there was no limit to how much one could eat. According to the reviews, if you leave any uneaten sushi on your plate, the manager adds a few dollars to the cost of the meal, which I think is pretty clever.

The problem I have now is I'm not sure I want to go looking for another Japanese restaurant. An honest-to-goodness sushi roll buffet and $2.50-sake cannot be beat. I can only imagine what "they" would get for this in San Francisco or NYC. And not a dime for parking.

So, I don't forget: http://www.yelp.com/search?find_desc=Restaurants+Near+Coit+And+Campbell&find_loc=Richardson%2C+TX.

The Traitor, Leonard Cohen, Martha Wainwright
"It was called the traitor .... it was about the feeling that we have of betraying some mission that we were mandated to fulfill and being unable to fulfill it and then coming to understand that the real mandate was not to fulfill it and that  the deeper courage was to stand guiltless in the predicament in which you found yourself."

Oasis To Report Eight (8) Nice Bakken Wells; Whiting To Report Another Nice Stockyard Creek Oil Well; EOG Reports A Producing Well On A 16-Well Pad -- June 7, 2016

EOG Reports A Producing Well On A Huge Pad  On Today's Daily Activity Report
From Daily Activity Report: Summary of That Report Posted Below

In a long note like this, there will be typographical and factual errors. There is a combination of planning data and completed data; I don't always identify which. I am doing this to help me understand the Bakken. If this information is important to you, go the source.

One producing well completed:
  • 31247, 1,613, EOG, West Clark 103-0136H, Clarks Creek, not a particularly long horizontal, about halfway into second of two sections, ICO spacing, permit application for 960 acre-spacing unit, permit application estimated total depth of 17,889 feet; actual TD = 17,965; I don't think the frack data has been posted yet (API: 33-053006954-00-00); t5/16; cum -- 
I've probably posted more then once about this well, but this is a pretty comprehensive post: http://themilliondollarway.blogspot.com/2016/05/eog-eor-in-clarks-creek-may-18-2016.html

This is just one of 16 wells that will be on this pad, called the West Clark 1 SWSW 1 Well Pad. The wells that are or will be on this pad:
It looks like there will 45 oil storage tanks on the pad (+ three water tanks) from the schematic below:

Maybe once all the pumpers are on the pad, and all the tanks are in place, we can get Vern Whitten to get us an aerial photo. Time Magazine or National Geographic might like to make it a cover photo for their respective magazine. Maybe TimeLife could provide a glossy special edition of the Bakken as it enters its "manufacturing stage."

A schematic of the processing plant map:

 Gas capture plan:

Economic overview of this pad, for newbies: it is estimated that a Bakken well costs between $6 million and $10 million to complete. The older wells cost more than the newer wells, all things being equal. Costs are coming down in the Bakken. If we suggest that it cost about $7.5 million on average to complete each of these 16 wells, this pad .... 16 x 7.5 = $120 million.

In addition to whatever the wells cost, there were folks employed designing and building the pad; designing and building the road to the pad; designing/planning pad "refining"; pipelines to and from the pad; etc, etc. Once the pad is completed, it will require routine maintenance and attention. I doubt there are many mom-and-pop retail stores anywhere in North Dakota that rival the cost and activity involved in just this one pad.

As a reminder: both Bernie Sanders and Hillary Clinton want to ban fracking.

Back To The Daily Activity Report For June 7, 2016

No new permits.

Lime Rock renewed two permits, two Robert Sadowsky wells, both in Dunn County.

Samson Resources cancelled one permit, a Ranger permit in Divide County.
Active rigs:

Active Rigs2682194189214

Ten (10) wells coming off confidential list Wednesday:
  • 30771, SI/NC, XTO, FBIR Grinnell 34X-33B, Heart Butte, no production data,
  • 30852, 2,954, Whiting, Connie 21-4H, Stockyard Creek, total middle Bakken pay zone thickness estimated at 45 feet; a trip gas of 3,475 units with a 6 - 8 foot flare, 37 stages, 6.6 million lbs; t12/15; cum 137K 4/16;
  • 30892, 1,390, Oasis, Andersmadson 5201 43-24 7B, Camp, 36 stages, 4.1 million lbs, t2/16; cum 51K after 42 days;
  • 30893, 984, Oasis, Andersmadson 5201 43-24 8T, Camp, 36 stages, 4.1 million lbs, t2/16; cum 22K after 52 days;
  • 30894, 1,668, Oasis, Andersmadson 5201 43-24 9B, Camp, 36 stages, 4.1 million lsb, t2/16; cum 48K after 2 months;
  • 30895, 869, Oasis, Andersmadson 5201 43-24 10T, Camp, t3/16; cum 15K after 42 days;
  • 31053, 606, Oasis, Andersmadson 5201 42-24 3B, Camp, 36 stages, 4.1 million lbs, t1/16; cum 48K 4/16;
  • 31054, 1,341, Oasis, Andersmadson 5201 42-24 4T, Camp, t1/16; cum 38K 4/16 but only about 20 days/month;
  • 31055, 1,941, Oasis, Andersmadson 5201 42-24 5B, Camp, t1/16; cum 77K 4/16;
  • 31056, 1,259, Oasis, Andersmadson 5201 42-24 6T, Camp, t1/16; cum 45K 4/16;

 31056, see above, Oasis, Andersmadson 5201 42-24 6T, Camp:

DateOil RunsMCF Sold

 31055, see above, Oasis, Andersmadson 5201 42-24 5B, Camp:

DateOil RunsMCF Sold

31054, see above, Oasis, Andersmadson 5201 42-24 4T, Camp:

DateOil RunsMCF Sold

 31053, see above, Oasis, Andersmadson 5201 42-24 3B, Camp:

DateOil RunsMCF Sold

 30895, see above, Oasis, Andersmadson 5201 43-24 10T, Camp:

DateOil RunsMCF Sold

30894, see above, Oasis, Andersmadson 5201 43-24 9B, Camp:

DateOil RunsMCF Sold

 30893, see above, Oasis, Andersmadson 5201 43-24 8T, Camp:

DateOil RunsMCF Sold

 30892, see above, Oasis, Andersmadson 5201 43-24 7B, Camp:

DateOil RunsMCF Sold

30852, see above, Whiting, Connie 21-4H, Stockyard Creek:

DateOil RunsMCF Sold

EIA Forecasts Cooler Summer For US; So Much For Global Warming -- June 7, 2016

I thought it was taking longer this year for spring to arrive. We still haven't had good weather for swimming, although I've been in the pool three times so far this year. But I digress. I was just noting that it seemed cooler than usual, and it seems I was correct. From the EIA's short term forecast:

Gasoline/Refined Products:
  • Even with higher crude oil prices passed on to consumers at the pump, summer retail gasoline prices are still expected to be the lowest in 12 years. 
  • Despite the recent rise in gasoline prices, summer gasoline demand is forecast to reach a record 9.5 million barrels per day.
Crude Oil:
  • Low oil prices continue to cut into domestic oil production, with U.S. monthly oil output not expected to start steadily increasing until the end of 2017. 
  • The decline in U.S. May oil production is expected to be the largest drop in monthly output since Hurricane Ike knocked out a big chunk of offshore oil production in September 2008. 
  • Oil consumption in India is expected to increase by 350,000 barrels per day this year, the country’s largest annual volume growth ever, based on EIA data that goes back to 1980
  • Global oil inventories are expected to continue increasing through mid-2017, which could help moderate oil prices during that period.
Natural Gas:
  • U.S. natural gas production is forecast to remain mostly flat through the summer before output picks up at the end of this year and into 2017 in response to an expected rise in natural gas prices.
  • Expected cooler weather for most of the country this summer will contribute to a nearly 2% drop in total U.S. electricity sales to the residential sector this year.
  • U.S. coal inventories are higher because of less coal use as a generating fuel for electricity and warmer-than-normal temperatures this past winter. 
  • The decline in coal use by the electric power sector is expected to contribute to a nearly 8% drop in U.S. carbon dioxide emissions from coal during 2016.
  • The U.S. power sector’s reliance on hydropower, wind, solar, and other renewable energy sources for electricity generation is expected to increase in 2016.

Primer On Pipeline Siting: Federal And State Regulatory Authority -- June 7, 2016

This sort of gets into the weeds, but it may prove interesting to come back to this some day. This helps put the Iowa activity / Dakota Access Pipeline into perspective. From a reader:
Under the Natural Gas Act (NGA), siting of interstate natural gas pipelines and related facilities requires specific approval from the Federal Energy Regulatory Commission (FERC).
When the pipeline company receives a certificate of public convenience and necessity from FERC, state or local laws that conflict with FERC’s exercise of its jurisdiction under federal law or would pose an obstacle to construction of the pipeline (e.g., local zoning laws) are preempted unless FERC requires the company to comply with them as a condition of granting the certificate.
The NGA specifically preserves state authority over pipeline projects under the federal Clean Air Act (CAA), Clean Water Act (CWA), and Coastal Zone Management Act (CZMA).
However, state authority under these laws remains subject to federal administrative and judicial oversight and review. Federal law also provides several avenues for a state to provide input into FERC’s siting and environmental reviews of a proposed interstate natural gas pipeline.
In contrast to siting review of proposed interstate natural gas pipelines, interstate crude oil pipelines undergo a state-by-state siting approval process. No federal law broadly preempts state and local siting requirements for these pipelines.
The link is here: Pipeline Transportation of Natural Gas and Crude Oil: Federal and State Regulatory Authority, March 28, 2016. Twenty-eight (28) pages of delightful narrative, and for those who like footnotes, it's a barn burner.

It's hard to believe, but the Natural Gas Act of 1938 goes all the way back to the inter-war years and was the first occurrence of the US federal government regulating the natural gas industry. FDR was certainly a busy fellow. The passage of the Act gave the Federal Power Commission control over the regulation of interstate natural gas sales. Late on, FPC was dissolved and became the Federal Energy Regulatory Commission (FERC).

Rio Olympics

The dominoes are starting to fall. The first US athlete to say "no" was a bicyclist. Now Stephen Curry has added his name to the list which will likely grow quickly. The Drudge Report has a banner headline that NBC's Savannah Guthrie won't be going. For the media, this should not be a big deal. Cameras could be operated from the US, and sports announcers could report from the comfort of their NYC studios -- or even from home for that matter.

Except for opening and closing ceremonies, the IOC could "host" Olympic events worldwide.

German Company Outsells Tesla's Powerwall Units -- Just Barely -- June 7, 2016; Biggest Energy News Story Of The Week? India To Build Six Nuclear Reactors With Help Of US Firm


June 7, 2016: how big is the Indian energy story? Huge. The Wall Street Journal is reporting that a US company will be building six nuclear reactors in India.
The U.S. and India agreed to move forward with construction of six nuclear reactors in India by an American company, the first such move since the countries signed a landmark civil nuclear deal in 2008.
The breakthrough capped a wide-ranging White House meeting between U.S. President Barack Obama and Indian Prime Minister Narendra Modi, who are seeking closer cooperation and to boost New Delhi’s role in counterbalancing China.
Under the agreement, Nuclear Power Corporation of India and Westinghouse Electric Co., a U.S. unit of Toshiba Corp., will begin engineering and site-design work for the reactors, though the final contract won’t be completed until June 2017, White House officials said. The deal marked a significant step in resolving obstacles to the sale of nuclear reactors and fuel to India.
Original Post
Summer has certainly started off with a bang. The market is showing some life, "oil" starts the day right at $50, and ... well, let's begin.

Yesterday, a reader alerted me to movement on the Dakota Access Pipeline in Iowa. Here's the link today from the Des Moines Register.

I started beating the drum on India some years ago, but the drumming has become increasingly louder over the past few days, much of it because of Al Troner's articles. Now, a headline story over at The Wall Street Journal -- 24 million new vehicles in India give oil prices a lift. Over at "The Big Stories" I have a link to "India: The New China" - first posted in April, 2016. That's how fast this story is moving.
“The big news in demand is growth in India, which now rivals China,” said Daniel Yergin, vice chairman of consulting firm IHS. “India really is seen as the growth market for oil.”
India is fueling a rapid economic expansion, with consumption hitting a record 4.35 million barrels of refined fuels a day during the first three months of the year, according to the International Energy Agency. That is up more than 10% from a year earlier and a big pickup from 2015’s pace.
CVX is making news over at Yahoo!Finance In-Play: Chevron extends solid early run near the upper end of its May trading range at around $103. Later, XOM began to move; XOM edged just slightly above its May peak at 90.46 to set a new 52-week high of $90.50. Later, near the end of the market day, it was noted that there were 198 issues that hit 52-week highs, and only 8 issues that hit 52-week lows. Some of those making 52-week highs today: Allete (again, at least 3rd day in a row); Black Hills (again); CenterPoint Energy (again); XOM (wow); ONEOK (again); QEP (again); Raytheon (again); TransCanada; and, UnitedHealth Group.

Perhaps the biggest news of the day: atmospheric CO2 barely budged month-over-month. It was "407.57" in April. For May, it hardly moved:

I can never get my hands around big numbers, but "407.70" is "parts per million." So if I gave Sophia one million dollars and asked for $407 back, she might not give it to me, but she would hardly notice.  From April to May, at a time when fossil fuel use is surging, atmospheric CO2, using the same million-dollar analogy, rose .... drum roll ... 13 cents over a million-dollar denominator.

As the Democratic presumptive nominee would say: what does it matter?

Back to the Bakken

Active rigs:

Active Rigs2682194189214

RBN Energy: LNG glut challenging suppliers.

GE acquires Germany's Sonnen; solar power initiative, from SeekingAlpha --
  • General Electric agrees to acquire an unspecified minority stake in Germany’s Sonnen to improve its presence in the fast-growing market for battery systems built to store solar power.
  • GE Ventures is paying a “mid double-digit million-euro" amount for a stake in Sonnen, which started operations in 2010 and has become Europe’s largest maker of rechargeable energy storage units.
  • The German company so far has sold 11K lithium-ion battery packs powered by solar energy, including 2,600 units worldwide during Q1, just enough to outpace sales of Tesla’s wall-mounted Powerwall units.
Permian "springs to life" with $50 oil -- Oilprice at Yahoo!Finance -- 
Operators in the Permian added five rigs to their active count during the week, in the latest demonstration that the basin is perhaps the most viable across the shale patch, with its low production costs and abundant reserves.
The Permian is enjoying a lot of attention from the energy industry and from private equity alike. Those with a presence in the basin are upbeat about the future, and those without are trying to step into it in order to share in the riches.