Monday, August 22, 2016

Two New Permits, Not Much Else -- August 22, 2016

Active rigs:

Active Rigs3276193184191

Wells coming off confidential list Tuesday:
  • 31363, SI/NC, Statoil, Topaz 20-17 6H, Banks, no production data,
  • 31609, SI/NC, XTO, Johnson 31X-6G, Siverston, no production data,
Two new permits:
  • Operator: BR
  • Field: Dimmick Lake (McKenzie)
  • Comments:
No producing wells completed.

The Miami Vice Page

I could easily become a cult fan of Saundra Santiago. Okay, got that out of the way. Her 30 seconds on Episode 1, Season 2, "Prodigal Son" were incredible.

In that episode Gene Simmons (Kiss) and Penn Jillette, of Penn & Teller. Penn has a most interesting biography. I gained great respect for Penn Jillette after watching Tim's Vermeer.

What A Great Country! -- Nothing About The Bakken; Greenhouse Gas Emissions From Natural Gas Now Exceed Those From Coal In The US -- August 22, 2016

Babe Ruth World Series -- Williston, ND

The Babe Ruth World Series in Williston has come to an end. Torrance, CA, took first, followed by Atlantic Shore, NJ, and Eau Claire, WI, and Tallahassee, FL (tie for 3rd).

Zack Carson, of Williston, ND, was one of ten to make the "Gold Glove All-Defensive Team." The "Sportsmanship Team Award" went to Williston, ND (wow!). 

Pretty cool! What a great country!


From a June 8, 2016, posting:
Walmart sells more than Apple, Amazon, and Microsoft combined.
Then, today in The Wall Street Journal:
Five years ago, Apple Inc. ’s iconic and visionary co-founder Steve Jobs passed the torch to his handpicked successor, Tim Cook. The official transition took place six weeks before Mr. Jobs passed away.
Now Apple is the world’s largest company by market value and remains one of the most influential. Its $53 billion in net income last year was greater than the combined earnings of technology behemoths Facebook Inc., Google’s parent Alphabet Inc., Inc. and Microsoft Corp.
Apple recently sold its billionth iPhone.
Starbucks In Our Apartment Complex

I went down this afternoon to pick up a package that had been dropped off at the manager's office for us. The manager's office -- a stand-alone building with a business center and a fitness room facing the outdoor pool -- is being renovated.

Today, they tell me that a Starbucks will be going inside the new manager's office. I'll let you know what it's like when it is completed.

Who would ever have thought Starbucks -- or any coffee shop -- would have become this ubiquitous?

Poster Child For Stupidity

Link here: SecState John Kerry still out there, trying to kill the air conditioner.

By the way, a new milestone: August, 2016 -- greenhouse gas emissions, which by the way, are resulting in no global increase in temperature, but have resulted in "significantly enhanced global greening" -- in the US, greenhouse gas emissions from natural gas now exceed those from coal. The data was posted in a tweet by John Kemp today, so I assume the milestone occurred some months ago.

US Highway 2 Bridge Over Little Muddy River North Of Williston -- August 22, 2016


Later, 2:09 p.m. Central Time: see first comment. The story will be updated at the "Dakota Access Pipeline" post.
Original Post
Dynamic link. Today, the satellite view shows clearly work on the bridge. This is about 30 miles north of Williston, just on the south side of ND state highway 50.

In and of itself, this note may not mean a lot, but taken in conjunction with the EIA analysis just posted, this speaks volumes. The state of North Dakota has taken advantage of the relative lull in oil activity in the Bakken to continue improving the infrastructure in western North Dakota. I'm impressed.

From NDDOT (this link will break once things "are back to normal"):
Beginning Wednesday, August 3, 2016, northbound and southbound traffic on US 85 north of Williston will be moved onto new temporary roadways for Little Muddy Creek bridge construction work.
Traffic has been moved to temporary roadways at two locations between US 2 and ND 50 on US 85. Construction is taking place on US 85 approximately 7 miles north of US 2 near mile marker 208 and approximately 1 mile south of ND 50 near mile marker 216, while crews construct new bridges and demolish the current bridges over Little Muddy Creek.

Tight Oil Plays In The US -- EIA -- Annual Energy Outlook 2016 -- August 22, 2016

First the screenshot:

See poll at the sidebar at the right, asking readers what they think is most remarkable about this graphic? Update, August 24, 2016, results of the poll:
  • that the Bakken is the dominant US tight oil play: 58%
  • that the Eagle Ford dwindles relatively quickly, compared to the Bakken: 16%
  • after peaking in 2030, Bakken production barely declines through 2040: 13%
  • that Oklahoma's STACK/SCOOP plays are relegated to "other plays": 6%
  • that the Bakken is forecast to "last" this long: 6%
From this link.

I don't know about you, but for me, this graph is incredibly compelling. It takes me back to the original estimates by Harold Hamm and Bentek.

Note which "play" is absent from the graphic. It is part of "other," no doubt.

Right now, in late 2016, the Permian is getting a lot of interest, but at the end of the day, it's hard to beat a play with oil comprising 93% (or more of the output).

By the way, it appears that the "area under the curve" for the Bakken is about 14 billion bbls of oil (fro 2015 - 2040). Conservative estimates: the Bakken will produce at least 50 billion bbls of oil, assuming we don't go back to coal to power all the EVs in the US by 2050. 

The Music Page
Lou Reed

Warning: sexually explicit lyrics. 

Initial critical review was mixed. Rolling Stone seemed to have "panned it" when it was released. It stood the test of time. From wiki:
In 1997, Transformer was named the 44th greatest album of all time in a 'Music of the Millennium poll conducted in the United Kingdom by HMV Group, Channel 4, The Guardian and Classic FM.
Transformer is also ranked number 55 on NME 's list of "Greatest Albums of All Time." In 2003, the album was ranked number 194 on Rolling Stone magazine's list of the 500 greatest albums of all time.[12] It is also on Q Magazine's list of "100 Greatest Albums Ever".

Deloitte's Analysis of CAPEX For Oil And Gas Sector -- August 22, 2016

A reader sends a link to a Deloitte presentation on the capital (CAPEX) needs for the oil and gas sector going forward. Well worth taking a look. I'll have to go back and compare their findings with my musings of a few days ago. I think "we" are all on the same page with regard to the "big picture." It's now just a matter of tweaking, a) the time frame; and, b) the pricing.

The Market

The market is a bit schizoid today; can't seem to make up its mind. Too much Janet Yellen talk? Maybe. At worse, it's "one and done" but the market is certainly obsessed by the Fed.

Closing. It looks like the market may close slightly in the red. Waiting the announcement from the Oracle at the Fed. NYSE:
  • new highs: 120; add Domino's Pizza (and it's not even NFL season yet); XLNX (not on the NYSE, a big whoop);
  • new lows: 11
Mid-day trading.  The market is back on the positive side, but barely; up 5 points. NYSE:
  • new highs: 102, including Deere; Edwards Lifesciences (a huge whoop); Baxter may not be trading at a new high, but it sure is close (a huge whoop)
  • new lows: 10

Some Shale Drillers Return To The Oil Patch -- WSJ -- August 22, 2016


Later, 12:59 p.m. Central Time: the nuclear mishap reported below reminds me of another government toxic debacle. From wiki:
The 2015 Gold King Mine waste water spill is a 2015 environmental disaster at the Gold King Mine near Silverton, Colorado.
On August 5, 2015, EPA personnel along with workers for Environmental Restoration LLC caused the release of toxic wastewater when attempting to add a tap to the tailing pond for the mine.
Workers accidentally destroyed the plug holding water trapped inside the mine, overflowing the pond, spilling three million US gallons of mine waste water and tailings, including heavy metals such as cadmium and lead, and other toxic elements, such as arsenic, beryllium, zinc, iron and copper into Cement Creek, a tributary of the Animas River in Colorado.
The EPA was criticized for not warning Colorado and New Mexico until the day after the waste water spilled, despite the fact the EPA employee "in charge of Gold King Mine knew of blowout risk."
Later, 10:01 a.m. Central Time: wow, a sharp-eyed reader (with an elephantine memory) caught something I missed; something I had forgotten. In the original post below I mentioned that I was unaware of the nuclear mishap in New Mexico. The reader recalled that I had indeed posted the report of the mishap. In fact, it was made easy to understand how it happened by another reader who explained the difference between inorganic kitty litter (clay pellets) and organic kitty litter (think Trader Joe's or Whole Foods). Here were the earlier links:
A huge thank you to the reader who caught this. I'm pretty embarrassed. Not only did I not remember posting this but the "kitty litter" analogy should have stuck with me forever. Now I have to go back and see if the Los Angeles Times even explained how this mishap occurred. If the Times did not, we have yet another story line. Again, a great story. Thank you. See first comment below.

Original Post
GDP Now - Latest forecast: 3.6 percent for 3Q16 — August 16, 2016
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2016 is 3.6 percent on August 16, up from 3.5 percent on August 12.
After this morning's new residential construction release from the U.S. Census Bureau, the forecast for third-quarter real residential investment growth increased from 0.4 percent to 2.4 percent.
Active rigs:

Active Rigs3276193184191

RBN Energy: pipelines from hubs to refineries -- part 2, the series continues.
There is a story behind every new crude oil pipeline built to supply a decades-old refinery. After all, the refinery surely had a well-established crude-delivery system in place –– why change horses now, especially with refinery margins under so much pressure? Typically, the answer is that, well, times have changed. Or, more specifically, the Shale Revolution has up-ended traditional crude sourcing, forced refinery owners to rethink their crude slates, and opened up opportunities to access new, lower-cost oil. Today, we continue our look at these new pipeline connections, their rationales, and their effects on other pipelines, barge deliveries and crude-by-rail.
In an earlier post, we noted that new pipelines to increase crude oil takeaway capacity from major producing areas to oil storage and distribution hubs like Houston, TX and Cushing, OK seem to garner most of the media’s attention. Just outside the spotlight’s glare, though, midstream companies are building several “demand-pull” pipelines to move crude to refineries more efficiently, and to give refineries easier, cheaper access to new, desirable supplies. We noted that U.S. refineries –– and most of the crude oil delivery infrastructure that supplies them –– were built many decades before the Shale Revolution enabled vast quantities of oil (and natural gas and natural gas liquids) to be freed from the shale and/or tight sands of the Permian, the Eagle Ford, the Bakken and other big-name plays. Rapid production growth from these new plays forced a major rethinking –– and re-plumbing –– of the nation’s crude-delivery infrastructure; slashed oil imports (especially lighter crudes); and led a number of U.S. refiners to revamp their oil-processing facilities to allow the use of more domestically sourced crude.
Jumping the gun? Some shale drillers are returning to the oil patch -- The Wall Street Journal. 
Devon Energy Corp. , Pioneer Natural Resources Co. and other prolific shale producers are telling investors that this fall they will pour more money into drilling new wells. The burst of activity shows the resilience of American energy companies that managed to survive oil’s plunge from over $100 a barrel in June 2014 to less than $30 earlier this year. But the burgeoning ramp-up threatens to cut the recent rally to $50 off at its knees.
Investors are scared there is little room in the market for all the new crude that is about to be unleashed by companies restarting their operations in Texas and Oklahoma. Federal data shows companies are already pumping more from each well, getting an additional 15 percent to 30 percent from new wells in some of the biggest shale fields.
“I do worry,” said Daniel Katzenberg, an energy analyst with Robert W. Baird & Co. “This higher activity level may be premature, in my view, and probably keeps a cap on how high oil prices can go.”
Venezuela "soaks up" US light crude oil -- Platts:
Venezuela’s thirst for light crude imports could play an interesting role in crimping as much as 300,000 b/d of its own crude exports. That would amount to a whopping 14% of Venezuela’s 2.12 million b/d production as of July.
The two are tied because of Venezuela’s rising dependence on imported light crudes and condensates for blending with its increasingly heavy domestic oila result of the government’s bet on heavy oil production and sharp declines in conventional output.
Venezuela’s net crude exports could drop by 200,000-300,000 b/d if credit concerns prevent state-owned PDVSA from keeping those light crude imports flowing.
Malaysia: Profit falls 96% at Malaysia's state oil company, Petronas, after prices slump - Bloomberg.

Saudi crude oil stocks, from John Kemp:

Another government cover-up? Completely off my radar scope: Nuclear mishap two years ago in New Mexcio among most expensive in US history.
When a drum containing radioactive waste blew up in an underground nuclear dump in New Mexico two years ago, the Energy Department rushed to quell concerns in the Carlsbad desert community and quickly reported progress on resuming operations.
The early federal statements gave no hint that the blast had caused massive long-term damage to the dump, a facility crucial to the nuclear weapons cleanup program that spans the nation, or that it would jeopardize the Energy Department’s credibility in dealing with the tricky problem of radioactive waste.
But the explosion ranks among the costliest nuclear accidents in U.S. history.
The long-term cost of the mishap could top $2 billion, an amount roughly in the range of the cleanup after the 1979 partial meltdown at the Three Mile Island nuclear power plant in Pennsylvania.
The February 14, 2014, accident is also complicating cleanup programs at about a dozen current and former nuclear weapons sites across the U.S. Thousands of tons of radioactive waste that were headed for the dump are backed up in Idaho, Washington, New Mexico and elsewhere, state officials said in interviews.