Tuesday, October 11, 2016

US Shale Oil Seen Surging If Crude Reaches $60 -- Bloomberg -- October 11, 2016

Does any more need to be said? Data links: nope, nothing of interest.  A "dog bites man" story.

The biggest story not being reported: all the Canadian oil sands oil that will be coming on line 2016 - 2019.  A fairly long lead time is required to develop oil sands oil fields. When crude oil prices were high, the Canadians began a lot of oil sands projects in Alberta. They will start coming on line between now and 2017. Once at full capacity, Alberta oil sands could be adding another million bopd to the global glut.

And, no, OPEC won't cut production. 

Apple Has Board Seat On China's "Uber" -- Didi -- October 11, 2016

This is really cool. Uber was trying to make inroads in China. But then they ran into Apple.

Didi Chuxing, or "Didi" for short, is the "Uber of China," the most popular ride sharing service in China.

Tim Cook / Apple made a $1 billion investment in Didi this part June (2016) and now Apple has a seat on the board of directors at Didi.

Apple's Adrian Perica represents Apple on the Didi board. Perica was a former Goldman Sachs investment banker and handled key acquisitions like Beats.

This was a first for the company and gives Apple access to data and expertise on both electric and autonomous car technology.

Uber had hoped that Didi would fail at raising more capital to expand. Apple's investment in Didi in May, 2016, was instrumental in helping Didi Chuxing acquire Uber's Chinese operations in a $35 billion deal at the end of July.

Much, much more at Macrumors. Really, really cool. Most important takeaway has nothing to do with Uber vs Didi. The most important takeaway from this story is the fact that Tim Cook is in the good graces of the Chinese government. Priceless. Especially if one is selling smart phones there.

Uber CEO Travis Kalanick most likely has this on his playlist:

Cryin' Time Again, Leann Rimes

One New Permit; Six Permits Canceled; Four DUCs Reported As Completed -- October 11, 2016

Active rigs:

Active Rigs3368190185190

Wells  coming off confidential list Wednesday:
  • 31312, SI/NC, Hess, AN-Brenna, no production data, 
One new permit:
  • Operator: BR
  • Field: Little Knife (Dunn)
  • Comments:
Six permits canceled:
  • Hess (6): six CA-Anderson Smith permits in Williams County
Four producing wells (DUCs) reported as completed:
  • 30282, 2,806, BR, Jerome 21-15MBH, North Fork, t9/16; cum --
  • 30943, 2,517, Statoil, Richard 8-5 6TFH, Banks, , t9/16; cum --
  • 31390, 896, XTO, Sara 41X013DXA, Grinnell, t8/16; cum 1K after 1 day;
  • 32323, 938, Hess, EN-Freda-154-94-2635H-11, Alkali Creek, t916; cum -- 

Sophia Painting 
First Time She Ever Held a Paint Brush in Her Hand
Look at that smile, that technique.

Why Canada Needs More Diluent -- And Where They Will Get It -- RBN Energy -- October 11, 2016

In today's RBN Energy post, RBN provides some great information on NGL processing and fractionation by updating Alberta, Canada's activities.

According to RBN Energy, some data points:
  • wet gas contains significant volumes of NGLs
  • wet gas needs to be run through a natural gas processing plant to extract NGLs and remove impurities
  • the resulting mixed NGLs need to be run through a fractionation plant to separate out natural gasoline and other "purity" NGLs
  • natural gasoline (C5) is the in-demand diluent
  • Much of the article focuses on Pembina Pipeline Corp
  • PPC's new fractionator at its Redwater, Alberta, site can separate out ethane
  • this new fractionator is a "twin" of an existing unit at the same location
  • the fractionator can separate out  ethane (C2), propane (C3), normal butane (C4), and natural gasoline (C5) 
  • PPC has also built C3+ fractionators
  • C3+ fractionators can separate out propane (C3) and heavier NGLs (normal butane [C4] and natural gasoline ]C5) but not ethane (C2)
In addition to what PPC has already brought on line and will complete this year (2016), these are PPC's plans for 2017:
  • a 100-MMcf/d Duvernay 1 gas processing plant near the company's Fox Creek Terminal (west-central Alberta); backed by a long-term take-or-pay contract
  • developing plans for a twin plant, Duvernay II
  • will finish and begin commercial operation of RFS III, a C3+ fractionator at Redwater facility
In addition, it should be noted that more crude oil production will come on-line in western Canada:
  • Canadian oil sands will add about 850,000 bopd of production capacity in the 2015 - 2019 period 
  • these were projects started years ago when price of oil was much higher; projects finally being completed
  • these projects are driving the need for more diluent 
  • diluent either in the form of natural gasoline (C5, a natural gas liquid) or field condensate (superlight crude oil (think Bakken oil condensates)
  • Canadian oil sands will also spur development of oil and diluent pipelines, and oil and diluent storage capacity
  • in-province demand fro diluent will increase 200,000 bopd (from the current 550,000 to 750,000 bopd by 2021 as the oil sands expansion projects come on line and ramp up to full production
  • Alberta's current diluent needs are being met to a significant degree by out-of-province sources -- almost all from the US 
Diluent pipelines of note:
  • Enbridge Southern Lights diluent pipeline from Manhattan, IL (near Chicago) to Alberta; 180,000 bopd
  • Kinder Morgan Cochin Pipeline from Kankakee, IL (south of Chicago) to Fort to Alberta; 95,000 bop
  • But now:
  • Alberta focusing on in-province diluent from "wet" gas and field condensate production in Alberta's Montney and Duvernay plays
So much more at the RBN post linked above.

City of New Orleans, Arlo Guthrie

EIA Changes Reporting Process As Of Thursday (Two Days From Now) -- October 11, 2016

From the EIA today:
Starting with the Weekly Petroleum Status Report (WPSR) published on Thursday, October 13, the U.S. Energy Information Administration will no longer include crude oil lease stocks in U.S. total commercial crude oil inventory data.
Crude oil lease stocks refer to oil (currently about 31 million barrels) that is stored in tanks at sites across the United States where producers are drilling on leased land. Lease stocks are not yet available for commercial use, and in many cases, operators do not count them as production until the oil is transferred off the lease. -- EIA

Update On Natural Gas Processing And Fractionation Additions In Alberta -- RBN Energy -- October 11, 2016

IEA: OPEC output hits record in September. Higher production from Libya, Nigeria, and Iraq challenges Saudi and Russian goals  to cut production.

Active rigs:

Active Rigs3268190185190

RBN Energy: update on natural gas processing and fractionation additions in Alberta.
Oil-sands expansion projects coming online and the resulting need for more diluent are among the drivers behind a number of midstream infrastructure projects in the province of Alberta, including natural gas processing plants and fractionators; oil and diluent pipelines; and oil/NGL storage facilities. The total volume of work is surprising, considering the fact that oil-sands production economics are iffy right now, if not downright upside down. Today, we continue our look at midstream projects under development within Canada’s Energy Province, this time focusing on gas processing and fractionation facilities.
Warren Buffett
Building A Mountain Of Cash

  • more than $73 billion by mid-summer -- almost 20x the amount in North Dakota's Legacy Fund
  • without new spending, the cash will grow by $1.5 billion / month
  • BNSF was big, but his biggest acquisition was aviation parts maker Precision Castparts, $32.36 billion
  • $20 billion in cash off-limits; Buffett keeps that on hand in case one of his insurance companies faces a big claim (think global-warming induced hurricanes) 
  • the article mentions his recent sale of $2.1 billion in preferred stock (for which I suggested he sold for about $3 billion)
The Market

Apple shares hit a 52-week high yesterday, and in pre-market trading today APPL is up almost 2%.

Alcoa earnings disappoint.

  • new highs -- 64 -- HAL (hit a new high yesterday also); Pioneer Natural Resources; RSP Permian; SM Energy; US Silica Holdings
  • new lows --  32
Late afternoon: Dow 30 down 235 points.

Mid-day trading: Dow 30 down 140 points. Wells Fargo warns of tough times. Ford is closing its Mustang factory in Michigan for one week after US sales for the vehicle plunged 32% in September. Ford reported earlier this year it will invest $1.6 billion to open new plant for small vehicles in Mexico. New Ford plant will create 2,800 new jobs. Minimum wage, union strikes, and ObamaCare come to mind.

Futures: Dow (mini) down 42 points; WTI giving up gains, back under $51, now that early enthusiasm meets reality. 

LM Wind Power

Has presence in Grand Forks:
  • 1580 South 48th Street
  • Grand Forks, ND 58201
  • 701-780-9910
Over at SeekingAlpha: GE to buy rotor blades make LM Wind Power for $1.65 billion. LM Wind Power is based in Denmark.

When I was up in the Bakken, I was told that components for the new wind farms near Hebron and Tioga were coming from Denmark, Denver, and China.

DAPL -- October 11, 2016

I'm following the DAPL story, but I won't be blogging about it until the situation is resolved one way or the other, unless something really piques my interest. But the DAPL issue sort of represents everything I can think of that "turns me off." I've moved on. And I'm going to bed.

You Don't Own Me, Lesley Gore

The movie with the following line was released earlier this year in a Blu-Ray edition: "I was born when she kissed me. I died when she left me. I lived a few weeks while she loved me."

If Barnes and Noble did not exist, Amazon.com would have to invent it. 

North American English Dialects -- Nothing About The Bakken -- October 10, 2016

For those interested in this subject, this is a pretty interesting blog, all done in one page, with lots of links to other pages. Be sure to check out the dialect of the author.

It should be noted that the Miles City, MT, area has its own dialect.

Warning: it will take you about a month of Sundays to completely "absorb" the linked post. Good luck. Have fun.