Saturday, August 6, 2016

Olympics: American Sniper. Wow, This Doesn't Fit The Washington, DC, Story Line -- August 6, 2016

First Olympic gold medal.

Goes to the US.

Goes to a woman.

Goes to a teen-ager.


Gold medal.

Link here.

Beats out the top two Chinese shooters and the top Russian shooter in a field of eight. Questionable whether she would even medal.

Remember that name. It's an easy one to remember: Virginia Thrasher.

American Sniper.

The comments at the story are quite interesting.

The interesting story line not talked about: just to get to the final eight, she had to beat a lot of Olympic competitors. Just to make the US team, she had to beat a gazillion US competitors.

The Weber Page

The Weber Mobile Grill arrives at Sturgis.

It's A Wonderful Life

Some days, or perhaps more precisely, some moments can never be more perfect. For me, most of those perfect moments occurred in Yorkshire, along the Scottish border, some years ago. 

I am having one of those perfect moments now. I sat down to my usual Saturday lunch: four pieces of pickled herring in wine sauce, and 3/4 ounce of a great Scotch. The particular Scotch hardly matters; I can enjoy them all, although it may take me a few minutes to renew my acquaintance with Laphroaig.

I sat down at our incredibly nice new dinner table (another story for another time), took a bite (or a bit) of herring and a sip of Scotch.

I then went back to the "Review" section of today's Wall Street Journal. Nirvana. Page C5: a book review of Landmarks, Robert Macfarlane, c. 2016, 434 pages, $18. The review was about a third of the entire page, and was all about "landforms" and words and descriptions of the Scottish highlands. There was a picture of the immensity of Scotland, and it easily could have been me several years ago, although my hiking attire would have been different.

The words I love to hear were repeated in the review: heather, moor, bog, hag, crag, loch, and lochan. And that was just in the first few paragraphs.

But there is more. Here is the link.  Note the writer of the review: Tom Shippey. I missed that the first time. I don't know when I noticed the name, but when I did, I said, "wow, that name looks familiar." No wonder. Tom Shippey is the author of one of my favorite books: J.R. R. Tolkien: Author of the Century.

Scotch, pickled herring in white wine sauce, and memories of Scotland -- some moments can never be more perfect.

Salmon Dinner

Bakken Economy: Updates On Two Hospitals -- Watford City, Minot; Other Projects In The Bakken Area-- August 6, 2016

From The Williston Wire.

Minot:  a new $250 million medical park for Trinity Health.
Crews in Minot are continuing site work for the $250 million medical park for Trinity Health, taking advantage of dry weather to ensure the campus is built on a solid foundation. Dave Kohlman, vice president of facilities, said in a statement that contractors have been busy conducting soil tests that will assist engineers in planning the new construction. Initial groundwork should begin in the Fall, with serious digging and concrete work beginning in mid-2017. The 76-acre site southwest of the Minot Family YMCA will be home to the new medical park, which will fulfill a strategic goal of Trinity Health to design a more modernized regional care system.
Watford City: a new $75 million health care facility.
Construction on the long-awaited new health care facility in Watford City is getting underway. According to Dan Kelly, McKenzie County Healthcare Systems, Inc. CEO, the ground breaking for the $75.4 million complex was given the green light when they received approval from the  United States Department of Agriculture (USDA) for a $58 million loan for the project.
Other projects in the area.

Minot: $30 million ag processing expansion.
AGT Food and Ingredients celebrated its ribbon-cutting ceremony in Minot Friday. The agricultural processing company, which has grown to become one of the world's largest suppliers of value-added pulses, celebrated a recent expansion at its facility in Minot's ag park. AGT and Minot Area Chamber of Commerce Ambassadors cut the ribbon on a $30 million expansion. The 33,000-square-foot addition gives AGT the capability to increase from three processing lines to six lines, creating as many as 20 additional jobs and bringing total employment to 100.
Crosby: a $1.1 million daycare facility.
The new Crosby Kids Daycare facility is starting to take shape. The daycare committee purchased a pre-cast $1.1 million, 72,000 square foot steel building to serve 90 children, as opposed to the current site's 30-40.  

Week 31: July 31, 2016 -- August 6, 2016

Without question, the big story of the week: the Bakken 2.0 will be built on sand. There were numerous posts regarding this story (see below).

Another big story: the tea leaves suggest Enbridge Sandpiper pipeline has been keystoned. As in "X'd" out -- it was a combination of regulatory and court delays and lack of need for this pipeline. We also have a new system name: the Bakken Pipeline System, which I think is pretty cool. Of course, it's not done until the fat lady sings, as they say, and eco-terrorists are still trying to shut it down in Iowa.

CLR may have set a world record drilling the longest horizontal using one bit.

The international story of the week was the fall in oil prices below $40 after there had been a bit of a bullish trend toward $45. This put huge stress on everyone, but disproportionately on OPEC, one would think. Today, there's a WSJ article suggesting that consideration for an OPEC production freeze may be back on the table at the September 26, 2016, meeting. My hunch is that OPEC will come to some agreement, although it may be nothing more than to agree to meet again on the issue sooner than later. The plummet in oil prices is so bad, just the fact that we "might" see $50 oil next year is a headline story.

The other big international story was the increasing amount of US LNG being exported from the US to the Mideast. Right now, it's being considered a temporary measure to bridge the Mideast until their nuclear reactors come on line in the 2020s but that's a few years from now. Nuclear won't replace oil and by the end of 2030 some suggest that Saudi Arabia will be a net importer of crude oil.

CLR may have set a world record drilling the longest horizontal using one bit
EOG will increase production, increase fracking and will do this by NO increase in CAPEX
On the docket: Hess to drill 20 new wells in a 2560-acre spacing unit
On the docket: Liberty Resources to put as many as 12 wells on a 640-acre drilling unit
An update on a spectacular CLR Holstein Federal well in Elm Tree oil field 
Location, location, location: latest ND state lease auction sale

Surges in Canada? (due to the Keystone XL being keystoned)

Mega-fracks in the Bakken -- Mike Filloon; also related, another Filloon update here
Bakken 2.0 will be built on sand
Even the frackers themselves are surprised 

Sandpiper pipeline may be dead; and, here; and, here;

A Rystad Energy update on DUCs 
CLR has an interesting way of costing out DUCs (same link)

Bakken economy
July, 2016, Legacy Fund deposits (total account in July less than the June balance?)

Mark Perry posted some staggering graphs regarding Bakken 1.0
Some are questioning whether Chesapeake Energy will survive
A hiccup in exporting ethane from Eterprise Morgan's Point facility?; RBN Energy had a long blog on first ethane exports from Texas
John Kemp weighs in on why it is taking so long to re-balance
The STACK is becoming quite extraordinary
Many Bakken operators reported 2Q16 earnings this week, including CLR
California gasoline / diesel sales surge in past few months
Hurricane "drought" sets new record -- Scientific American
NY governor, who banned fracking, has bailed out the state's nuclear plants
Saudi Arabia's foreign exchange reserves took a huge hit in June, 2016
The first estimate for 2Q16 was pitiful, and before the ink was dry, there were forecasts that it would be revised downward; this is now, officially, the worse recovery in modern US history
Canadian GDP plummets: combination of record low price for oil; and the wildfires shutting down oil sands temporarily

Mega-Fracks In The Bakken -- Mike Filloon -- August 6, 2016

What a treat! Two Filloon articles in two consecutive days. This one looks good. It will be interesting to see if any of the 200 mega-fracks have been posted on this blog (unfortunately, only a map is show; individual wells are not identified by file number).

It is interesting that I use certain terms on the blog that I came up with myself, not taking them from other sources. Others now use some of those same terms, but it's unlikely they came from this blog; they simply made sense.

  • well costs continue to decrease while well designs improve.
  • as operators get better at creating induced fractures, more proppant is required.
  • mega-fracs have shown a significant improvement in recoveries and this is why we are seeing operators complete more wells like this
  • from 2004 to 2013 operators increased proppant usage by 636% in ND
  • in 2011 only one mega-frac was completed, but this increased to 78 in 2014
First, the definition of a mega-frack. Filloon's 200 hundred biggest fracks by proppant volume in the Bakken/Three Forks:
  • proppant: a range of 8 million to 28 million lbs
  • fluids: a range of 50,000 to 460,000 bbls
  • average amt of proppant: 11 million lbs; weighted toward sand
  • average amt of frack fluids: 166,000 bbls
The best well design in the Bakken may be: hybrid fracks (large volumes of proppant in concert with slickwater).

Slickwater operators include:
  • Emerald
  • EOG
  • QEP
Tesla: Here It Comes

MuskMelon says Tesla needs a huge cash infusion to keep operating.
Tesla Motors Inc on Friday disclosed $1.1 billion in third quarter cash requirements in payments and planned expenditures, about a third of the cash on hand mid-year, in a new sign of pressure on the electric vehicle maker.
The company is finishing construction of a massive battery factory in Nevada, the Gigafactory, and ramping up for production next year of a mass market sedan, the Model 3. That has raised questions about whether the company will need to raise new cash to reach its goals.
It said in the filing that it had $3.25 billion in principal sources of liquidity as of June 30, 2016, including $1.7 billion from a public offering in May and a $678 million credit line.
The filing also said that in July it had repaid that $678 million credit line and that it intended to repay principle on $411 million of 2018 convertible notes in the third quarter and could spend more on the securities.
It was just two days earlier, we raised the question, rhetorically, how long it would take for MuskMelon to confirm Tesla needed to raise more money. 

Back of the envelope calculations:
  • Tesla has 148 million shares outstanding.
  • An additional share offering of 10 million shares at $220 = $2.2 billion
  • An additional share offering of 5 million shares at $220 = $1.1 billion
  • 10/148 = 7%
  • 5/148 = 3%
Based on my "experience" with the Bakken, a 10% dilution when offering additional shares seems to be fairly standard. 

OPEC Production Freeze "Back On The Table"? -- Wall Street Journal -- August 6, 2016

From The Wall Street Journal:
Several OPEC members want to revive the idea of setting new limits on oil production this fall as Iran regains much of the energy-industry might it lost during the years of Western sanctions, according to people familiar with the matter.
The nations—which include Venezuela, Ecuador and Kuwait—want to take another stab at cooperation between the 14-nation oil cartel, the Organization of the Petroleum Exporting Countries, and nonmembers like Russia.
A similar initiative died back in April during talks in Doha, Qatar, when Saudi Arabia backed out over Iran’s refusal to join in a so-called production freeze until it had reached pre-sanctions levels of oil production. Under the freeze, countries would have agreed to limit their production to certain levels in a bid to raise oil prices by constricting the amount of crude on the market.
Now, Iran’s production has crept back up to 3.6 million barrels a day, about 180,000 barrels a day above its levels in April and almost 600,000 barrels a day higher since world powers lifted economic restrictions on the country over its nuclear program in January. That brings it within reach of the 4 million to 4.2 million barrels a day that Iranian officials said they would require before agreeing to a freeze.
The next meeting where some type of freeze could be announced: September 26, 2016. By then, Iran will be even closer to 4 million bopd.