Closer Look At Section Where Petroshale Has Eleven Permits To Site New Wells -- September 14, 2016

Over the last two days, Petroshale was granted permits to site eleven (11) wells in this section, 17-152-94. It appears there are no horizontal wells in this section (which is quite unusual for the Bakken) but it does have a history of quite a bit of activity:

Six vertical wells in this section; five are permanently abandoned; one is still active. Note the Sanish well (#1779) that produced more than a million bbls of crude oil between 1958 and 1988 -- 30 years of production:

• 1254, 53, Amerada Hess, Antelope-Madison Unit N-509, Antelope field, Madison pool, t12/56; cum 68K 10/71;
• 1254, 65, Amerada Hess, Antelope-Madison Unit N-509, Antelope field, Sanish pool, t10/57; cum 28K 9/65;
• 1339, 361, Amerada Hess, Antelope-Madison Unit N-510, Antelope field, Madison pool, t2/57; cum 64K 5/63;
• 1398, 262, Hess, Antelope-Madison Unit M-511, Antelope field; Sanish pool, t2/58; cum 161K 12/70
• 1398, 73, Hess, Antelope-Madison Unit M-511, Antelope field; Madison pool, t2/57; cum 429K 3/98
• 1499, 110, Hess, Antelope-Madison Unit L-512, Antelope field, the Madison pool, t9/57; 254K 5/87;
• 1779, 301, P & P Producing; originally permitted by Pan American Petroleum Corporation, Harvey Hopkins A 3, Antelope field, Sanish pool, t5/58; cum 1,123,222 bbls 11/87
• 11686, 182, Ranch Oil Company; originally permitted by General Atlantic Energy Corporation, Pronghorn 1, t12/85; cum 165K 7/16;

Petroshale With Five More Permits In Same Section As Their Six Permits Yesterday -- September 14, 2016

Note: production data for the Hess EN-Jeffrey wells has been updated. 

Active rigs:

	9/14/2016	09/14/2015	09/14/2014	09/14/2013	09/14/2012
Active Rigs	34	68	199	178	193

One well coming off confidential list Thursday:

• 31133, 1,547, Oasis, Hysted 5200 11-30 7T, Camp, 36 stages, 4 million lbs, t3/16; cum 77K 7/16;

Six new permits:

• Operators: Petroshale (5), Oasis
• Fields: Antelope (McKenzie), Alger (Mountrail)
• Comments: Yesterday, Petroshale had six new permits in section 17-152-94; today they have five more permits for the same section; take a closer look at this section at this post;

Six permits renewed:

• XTO (3): three Bang Federal permits in Dunn County
• Petro-Hunt (2): two Klevmoen Trust permits in McKenzie County
• Kaiser-Francis: a Hushka permit in Stark County

No producing wells (DUCs) reported as completed.

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31133, see above, Oasis, Hysted 5200 11-30 7T, Camp:

Date	Oil Runs	MCF Sold
7-2016	12528	9407
6-2016	15802	11439
5-2016	10440	13055
4-2016	16147	20527
3-2016	22416	34048

Talk About Bad Timing; Prepare To Be Inspired -- September 14, 2016

Updates

September 19, 2016: MarketWatch just now noted this change.

Original Post 

From the EIA today:

Starting with the Weekly Petroleum Status Report published on October 13, 2016, the U.S. total commercial crude oil inventory weekly data series will no longer include lease stocks.

This change reflects our understanding that lease stocks are not yet available for commercial use and that in many cases operators do not count them as production until they are transferred off of the lease via pipeline, rail, or trucks to tank farms for storage. Crude oil lease stocks, currently about 31 million barrels, refer to oil that is stored in tanks at sites across the United States where producers are drilling on leased land.

Lease stocks have been relatively small and stable, ranging from just 30.6 million barrels (5.8%) to 33.1 million barrels (7.4%) from January 2014 through June 2016. Over that same period, total U.S. commercial crude oil stocks have increased from 367 million barrels to 529 million barrels, as rising U.S. crude oil production contributed to growing commercial crude oil inventories. As of the week ending September 9, the total U.S. commercial crude oil inventory was about 511 million barrels including about 31 million barrels of lease stocks. --- EIA

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BP: Permian Too Expensive; Argentina A Better Bet

From Bloomberg, some data points:

• BP thinks the Permian is too expensive
• BP more interested in Argentina's Vaca Muerta shale
• Vaca Muerta: one of nine "key activity" areas in the Western Hemisphere -- according to Exxon
• BP still reeling from the $60 billion fallout from the 2010 Gulf of Mexico oil spill
• BP has a joint venture through Pan American Energy LLC  (60 percent owned by BP; 40 percent by Bridas Corp -- a partnership between the billionaire Bulgheroni brothers and China's CNOOC
• BP: sees oil at $50/bbl for remainder of 2016
• BP: in the long term, BP will shift toward natural gas over oil

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The Apple Page

This is Wednesday. Friday, the iPhone 7 and 7 Plus will be available at Apple stores. People have started camping out at the stores. 

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The Health Issue

It looks like Women's Health  has a special issue this month.

As the reader who sent me this link said, "I can't make this stuff up."

This screenshot was taken on September 14, 2016, at around 1:00 p.m. Central Time. This "issue" of Women's Health was dated September 13, 2016, two days after the individual in the middle suffered a "medical event" that has perplexed the brightest minds in journalism, including Charlie Rose.

Whatever. I'm preparing to be inspired.

Table of contents:

• Seizures: how to "power" through them. A first hand account, by Hillary Clinton.
• When it comes to seizures, how many are too many? By Bill Clinton.
• Sexting, seizures, and support systems. The four "S's. By Anthony Weiner.
• Managing schedules when your boss has random "falling out" spells. By Huma Abedin.
• Suffering from dehydration? Carry bottled water. By Dr Oz.
• Setting up a "home" emergency room and ICU. By Chelsea.
• Pneumonia? Concussions? Hypothyroidism? Brain clots? How to manage multi-organ disease while running for public office. Special insert from the Mayo Clinic.
• Zeiss Blue Lens Glasses: the answer to photo-induces seizures. Advertising supplement.
• End-of-summer bikini shoot. Special 12-page photo extravaganza.

Number Of Active Rigs In North Dakota Dropping Again -- September 14, 2016

Katie Ledecky on the Ellen Degeneres show today -- if I have the dates correct.

From the USC - Los Angeles Times daily tracking poll:

The EN-Leo / EN-Freda wells have been updated. Link here. 

Active rigs:

	9/14/2016	09/14/2015	09/14/2014	09/14/2013	09/14/2012
Active Rigs	34	68	199	178	193

RBN Energy: sizing up the shale revolution footprint.

Let’s face it — for producers, the last couple of years have stung, with low-slung energy prices allowing little-to-no returns on drilling investments in most parts of the major shale basins. A side effect of the low price environment in the past two years has been the shrinking geographic footprint of the Shale Revolution. About 50% of all onshore rigs in the Lower 48 currently are clustered in the top 20 counties for drilling activity. In effect, this also means a lot of the new production growth will come primarily from these same 20 counties, with the potential for all sorts of implications for infrastructure and regional price relationships. In today’s blog, we take a closer look at rig counts by county to see how much the geographic focus of the Shale Revolution has narrowed.

Some of the data points:

• almost 70% of drilling rigs are clustered in 38 counties: oil and natural gas
• only two counties in North Dakota of significance now: McKenzie, Dunn
• the Permian is almost single handedly keeping the Shale Revolution alive in the oil patch
• five years ago: the Permian was thought to be dead
• outside of those 38 counties, there is a pretty good chance production is declining; if not accurate, it may be due to DUCs being completed
• a new term: dead DUCs: non-economic DUCs

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The Market

Mid-day trading: turned negative; down about 30 points. Hemorrhaging has been slowed to some residual slight oozing. NYSE

• new highs: 11 (including Las Vegas Sands -- related to the Fed "rate watch"?)
• new lows: 20 (including Noble again)

Opening: up a bit after several tough days.

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But If You Stay

Selloff takes some shine off energy shares: it's not that they're enamored with the current value proposition of energy. The elephant in the room is that people are hungry for yield.

Energy companies fell more than the broader stock market in a selloff that dragged down all 10 major sectors of the S&P 500, as well as crude-oil prices and government bonds. It was the third straight turbulent session, raising concerns that months of calm have given way to a period of volatility. Stocks and bonds fell sharply Friday as investors worried that central banks could dial back their easy-money policies. Markets stabilized Monday but declines picked up again Tuesday.

Energy stocks have risen roughly 12% in the S&P 500 so far this year as many investors bet that oil prices had bottomed and energy firms’ earnings were poised for a rebound. For three sessions through Monday, energy’s year-to-date gains were the biggest of any sector. 

But if you stay --

If You Go Away, Dusty Springfield

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Other Headlines 

Largest-ever US military aid package to go to Israel.

• $38 billion over 10 years; an increase from the $30 billion decade-long deal that expires in 2018

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Apple vs Samsung

Updates

September 19, 2016:

Few things motivate Samsung employees like the opportunity to take advantage of weakness at Apple Inc.

Earlier this year, managers at the South Korean company began hearing the next iPhone (iPhone 7) wouldn’t have any eye-popping innovations. The device would look just like the previous two models too. It sounded like a potential opening for Samsung to leap ahead.

So the top brass at Samsung Electronics Co., including phone chief D.J. Koh, decided to accelerate the launch of a new phone they were confident would dazzle consumers and capitalize on the opportunity, according to people familiar with the matter.

They pushed suppliers to meet tighter deadlines, despite loads of new features, another person with direct knowledge said. The Note 7 would have a high-resolution screen that wraps around the edges, iris-recognition security and a more powerful, faster-charging battery.

Apple’s taunts that Samsung was a copycat would be silenced for good.

Then it all backfired. Just days after Samsung introduced the Note 7 in August, reports surfaced online that the phone’s batteries were bursting into flame. By the end of the month, there were dozens of fires and Samsung was rushing to understand what went wrong. On September 2, 2016, Koh held a grim press conference in Seoul where he announced Samsung would replace all 2.5 million phones shipped so far. What was supposed to be triumph had turned into a fiasco. 

Original Post

 

Samsung rushes to contain fallout from Galaxy Note 7 recall. Just as the new Apple iPhone 7 and 7 Plus are released.

The company is also grappling with the issue of whether it will have enough supply of the new phones and components to replace millions of handsets that have reached consumers in such a short time frame.

Since Samsung announced the recall on September 2, 2016, more than $10 billion has been wiped off the company’s market value. Samsung also has delayed launches in other crucial markets such as India, and suffered dwindling consumer confidence as airlines and the U.S. Consumer Product Safety Commission have warned against people using or charging the phone on planes.

Samsung’s decision to recall the phones from consumers in different countries through different exchange programs has proved to be a bigger-than-expected challenge, and harder than a simultaneous global recall, people familiar with the matter said.

Tesla:

• operating cash flow (Yahoo!Finance): - $332 million 
• total cash (Yahoo!Finance): $3.25 billion
• total debt (Yahoo!Finance): $3.66 billion
• burning through $1 billion every quarter -- Chanos, Fortune

The Maah Daah Hey Trail -- NY Times -- September 14, 2016

In the September 13, 2016, edition of The New York Times: a feature article on one of the nation's most famous bike trails -- the Maah Daah Hey Trail that connects the south unit an the north unit of the Theodore Roosevelt National Park in North Dakota, perhaps one of the most unique parks in the world. It probably remains one of the remotest, wildest national parks but still incredibly accessible in the United States.

Some quotes from the article:

• it had been my idea to cycle the Maah Daah Hey Trail, the longest and arguably most grueling single-track mountain biking route in the United States
• the trail — a doorstep to the lush, vertiginous, sunstruck vastness of the North Dakota Badlands, which Theodore Roosevelt called “a place of grim beauty”
• Something I didn’t know about mountain biking, at least on a trail this challenging: You cannot look up. Even for a second. To do so is to court ruin. Forget about the scenery, all that peripheral beauty gone by in a flash, the profound silence, the bliss of seclusion. Was that a bull elk up ahead or merely a juniper? Oh, how the rings of morning light smolder over that ridgeline ... Wake up! Dial it in, man! Head down! Eyes locked on the trail! Let your mind drift and you are toast
• Bridging the north and south sections of Theodore Roosevelt National Park, the Maah Daah Hey is 144.7 miles all told
• From the very start, it was all up, up, up. With an elevation gain of 8,600 (sic) (see note below) sidewinding feet, it began to feel Dantean. Everywhere were wonderful reminders of our mortality: sheer 300-foot drops into saw-toothed river bottoms; eroding hillside ledges that slid away in our wake; Yugo-size cows with a knack for materializing around blind turns; and at road crossings, careening oil trucks
• The Maah Daah Hey was a long time in coming. Originally conceived as a horseback trail, it took the Forest Service a decade to stitch together the inaugural 96 miles in 1999 — a patchwork of federal, state and private lands — and in 2014 they finished a second section, called the Deuce, which tacked on 48.7 miles (there are more miles to come, pending federal financing)
• For mountain bikers, who caught wind of the trail early on and now make up the vast majority of its 15,000 annual users, the wait was worth it. The Maah Daah Hey ranks with the storied Slickrock Trail in Utah and the McKenzie River Trail in Oregon as among the country’s greatest single-tracks. It laps both by more than 100 miles

Note: the above were "cut and paste" from the article. A reader questioned the "elevation gain of 8,600 feet." See this link: http://www.experienceland.org/.

Grinding across 120 miles and over 8,000 feet of elevation gain on the fast, rugged gravel roads of the North Dakota Badlands. If you like riding on Badlands singletrack, you will love grinding Badlands gravel! All of the same gorgeous North Dakota scenery you see on the Maah Daah Hey trail, but with the freedom of wide, open, red scoria gravel roads.

The "Badlands Gravel Race" is at this link: http://www.experienceland.org/badlands-gravel-battle/. 

Hello Maah Daah, hello Fadda --

Hello Muddah Hello Faddah, Allan Sherman

Whatever Happened to Mark Papa? September 14, 2016

What is Mike Papa doing since he stepped down as CEO of EOG? From a closer look at Mike Filloon's recent SeekingAlpha article we have the answer.

His most recent article seems to have been hastily written and is a bit difficult to follow. Mike seems to be highlighting Silver Run on the coattails of Apache and Alpine Run.

From Mike Filloon's article, in Alpine High:

EURs range from 1,100 MBOE to 2,700 MBOE. Apache estimates the play is worth $6,400 per undeveloped acre. This is a base-case scenario as that number could be much higher. In other parts of the play, we are seeing operators purchase acreage from $20,000 to $40,000/acre. Operators that have acquired Delaware acreage this year are EOG (NYSE:EOG), PDC Energy (NASDAQ:PDCE), Diamondback (NASDAQ:FANG), Parsley (NYSE:PE), Concho (NYSE:CXO), WPX Energy (NYSE:WPX), and Silver Run Acquisition (NASDAQ:SRAQU) (NASDAQ:SRAQ).

SRAQU is run by former EOG chief executive and renowned shale driller Mark Papa. He bought 38,000 acres from Centennial Resource Development for $1.38 billion, or $29,000 an acre. Some thought this was a hefty price to pay, but SRAQU could benefit from the Alpine High discovery. Not only could it benefit, but also it is the only levered acreage holder.

I generally don't include ticker symbols in my posts (with some notable exceptions; this is not an investment site) but in this case I have for various reasons).

Silver Run sells under three different ticker symbols. This includes SRAQU, SRAQ and SRAQW. It started as a blank check company for the purpose of bargain hunting for oil and gas assets. An oil glut can be hard on the industry, but it provides an opportunity for those with cash. Assets get cheaper as operators become distressed.

In its IPO, Silver Run Acquisition Corp. raised $450 million in an upsized offering at $10 a share in February of this year. It is sponsored by energy-focused private equity firm Riverstone Holdings LLC. Being a blank check company, SRAQU had no acreage initially. In June of this year, Centennial Resource Development, Inc., an operator in the Permian Basin's Delaware sub-basin, planned to launch an initial public offering (IPO) to raise up to $100 million.

Close readers of the blog might recognize Riverstone Holdings. It's been mentioned on the blog a few times.

The breakeven prices, per the linked article:

And finally, back to Mark Papa:

In summary, Silver Run may be the only way an investor will benefit from the Apache Alpine High find.

Apache has already experienced a significant jump in market cap while Silver Run is still fairly discounted. Silver Run has approximately 12,000 acres in Big Chief and Kimsey.

If the Barnett/Woodford is prospective to its acreage, the uplift could be substantial. Steve Keenan is Apache's Senior VP of North American Unconventional Resources, whose team is credited with the Alpine High discovery. He worked with Mark Papa at EOG for around 15 years before coming to Apache.

Mark Papa is the founder, past chairman and CEO of EOG Resources. He is still on EOG's Board of Directors. Mark Papa is now a partner at Riverstone and the current CEO of Silver Run. It can be interesting how two great careers can meet up again in Alpine High.

Whatever Happened to Randolph Scott? Statler Bros