Obviously Saudi Arabia is not going to go the way Venezuela went --- or, could it. Remember, a Saudi finance official says Saudi Arabia could go bankrupt in two years.
Maybe it's "tick-tick-tick-Saudi-Arabia."
From a John Kemp tweet yesterday: Brent and WTI timespreads have weakened significantly as traders become more pessimistic about oil market rebalancing in 2017.
************************** The Bakken Economy
Wow, this is really quite amazing. Look at the map at the linked article below. Hillary and Bernie talk about free college education. The Bakken is actually doing it (and not costing taxpayers a dime).
Williston State College
expanded its Regional County Scholarship to include Burke, Divide,
McKenzie and Mountrail in February 2016, but the WSC Foundation has an
ambitious plan for 2017 — adding five counties in northeastern Montana.
The
college announced Monday that high school graduates and those who earn
GEDs in Daniels, Richland, Roosevelt, Sheridan and Valley counties will
be eligible for the WSC scholarship that would provide free tuition and
fees for the first two years of their college experience. This inclusion
could bring in 600 more graduating seniors.
“An
expansion of the WSC Foundation Regional County scholarship program
into northeastern Montana is a natural extension of what has
traditionally been a fertile recruitment region for the college, drawing
on the close economic and cultural ties that have long existed between
northeastern Montana and northwestern North Dakota,” explained John
Miller, acting president of WSC.
I could not find anything in the file report to explain the recent (modest) bump in production. This well was drilled in 2010 and has produced more than 600,000 bbls of oil:
18496, 474, Armstrong Operating, Gruman 18-3, Patterson lake, t3/10; cum 630K 8/16;
But HHS said if that hypothetical consumer has a fairly modest income,
making $25,000 a year, the subsidies would cover $280 of the new premium,
and the consumer would pay $142. Caveat: if the consumer is making
$30,000 or $40,000, his or her subsidy would be significantly lower.
So, a moderate income in the US, as defined by HHS, is also "poverty."
Let them eat cake. A "fairly modest income" in the US is now defined as $25,000 / year.
Let's do the math. $25,000 / year. Divided by 52 weeks = $480/week. Divided by 40 hours = $12 / hours. Easy.
If $12/hour equates to a "fairly modest income," no wonder "they" want $15/hour -- they would feel like millionaires -- but no longer eligible for ObamaCare "help."
I used to give some folks the benefit of the doubt regarding ObamaCare. No more. If you still support ObamaCare you are either brain dead or not paying attention.
GOP needs to run, not walk, away from this in 2017. ObamaCare will die on the vine. Big Pharma and Big Health will sort it out. At $600/EpiPen.
The U.K. said it would deploy tanks and drones alongside 800 troops
in Eastern Europe, the first of several expected moves by the North
Atlantic Treaty Organization to help counter growing fears about Russia
in the region.
The U.K. troops will deploy next spring and be joined in Estonia by forces from France and Denmark, said Michael Fallon,
the British defense secretary said. The force, he said, will likely
include tactical drones, Challenger 2 main battle tanks and Warrior
armored infantry fighting vehicles.
Meanwhile, in the Mideast, the Russians will establish their first-ever permanent naval station, large enough to handle their entire Northern Fleet.
The Cold War is back. Ronald Reagan is rolling over; he can't watch.
Wow.
The Obama Legacy.
Last military salute for Barack: less than 87 days.
Many of France’s nuclear units are down for inspection. As a result,
coal and natural gas generation has more than doubled. Last month,
generation from fossil fuels was the highest in 32 years in France and
nuclear generation was the lowest since 1998.
As a result, French
month-ahead power prices escalated to near the highest levels since
2009.
Germany is replacing its nuclear units with renewable energy (wind
and solar) as part of its energy transition, the so-called Energiewende.
It is using mainly coal to back-up its intermittent renewable energy
and as a result, it has increased its coal-fired generation.
Due to the
higher cost of wind and solar units, residential electricity prices in Germany have
escalated and are 3 times that of the United States.
Later, 10:35 p.m. Central Time: it's over. Bottom of the 8th -- Cleveland, 6 - Chicago, 0.
Later, 9:37 p.m. Central Time: top of the 7th - Cubs with bases "loaded," no outs, and behind 3 - 0. Did not capitalize.
Later, 9:17 p.m. Central Time: Chicago needed to pull this pitcher about four innings ago.
Original Post
A reader noted that I had not posted a note about, perhaps the most important event this year, namely that the Chicago Cubs are once again in the World Series. This is their second consecutive century in which they have made it to the "big game." They did it in the 20th century, and here they are again, early in the 21st century. Halley's Comet comes to mind. Although, I guess even Halley's Comet comes around more often than the Cubs making it to the World Series.
The reader assumed I did not like baseball.
That would be correct.
Well, not entirely correct. It's not that I don't like baseball, it's just that on my list of things to follow each day, MLB is about #45, just below the garage bands in Portland, OR, and generally, on any given day, I don't get past #3 or #4 on my list of things that interest me.
It has not always been like that.
I have two fond memories.
#1. The Minnesota Twins.
In high school, I think it's safe to say that my favorite class was chemistry in my junior year, 11th grade, and my favorite teacher was Mr Ceglowski. The district superintendent and school principal had strict rules and regulations about students and homework and classwork and the World Series. Mr Ceglowski was the only teacher that I know in the entire Williston public school system who would bring a huge television set into his classroom and turn on the World Series. And to make sure he wasn't breaking any rule or regulation he put the volume on "mute" and continued to teach about atomic shells and subshells, and barbell-shaped orbits and the periodic table. No teacher could be more cool than that. And, yes, of course, it was the Minnesota Twins.
Let's see. 1967 - 1969, what were the Minnesota Twins doing? Here it is.
My closest friend, every bit a BFF, is a huge Minnesota Twins fan. He was also a great catcher in those days in Williston, playing for various Little League teams. I also played, but it was not a pleasant memory. It was not an unpleasant memory, either. I never understood batting averages but that's probably because mine was 0.000 and I didn't understand why you needed three digits after the decimal to record a batting average. No matter how you rounded 0.000 it was still 0%.
#2. Los Angeles Dodgers.
When I was in graduate school, my future in-laws lived in San Pedro, CA, south Los Angeles, and they loved the Dodgers. The high point of many summers was a ride in the open-air "jeep" to Dodger Stadium to watch the home team. Wow, I had never been to an MLB game before and this simply blew me away. The view from the outdoor stadium is spectacular; the weather was spectacular.
#3. Boston Red Sox. Okay, I said I only had two fond memories of MLB, but I guess I had several more. Years ago when "dating" a Boston woman -- the "love of my life" -- I went to my first (and only) Boston Red Sox game while she was at work. The Boston stadium is downtown and it's a "walk-up" stadium. I couldn't believe it. I walked from the Back Bay in Boston to the Red Sox stadium and I bet I paid not more than $5 for a seat. As far as I recall, the "love of my life" was not a fan of baseball. For her, the closest thing that came to "baseball" was ballroom dancing.
#4. Texas Rangers. This will be the last. Every summer, my son-in-law gets us tickets to the "all-you-can-eat" corner the Texas Rangers stadium here in Arlington, TX. The stadium is about 15 minutes down the road; the parking is neighborhood parking, practically. A short walk to the stadium, and then up to "all-you-can-eat" corner -- the price of admission includes unlimited food at that location: hot dogs, popcorn, nachos, everything. The only thing one pays for is the beverage. Although some beverages may be free. I forget.
I don't watch baseball during the regular season, but that's true for all sports, except NASCAR. But in the playoffs and the championship season, I tend to watch everything.
So, yes, I will be watching the Cubs and the Indians. Right now, 0 - 2, Cleveland ahead in the second inning.
The burrito chain on Tuesday reported same-store sales fell a
worse-than-expected 21.9% in the third quarter. Analysts were
anticipating a drop of 18.7%. Profit fell 95% in the quarter. Still, the
decline marks a recovery from prior months, including its steepest
sales decline in January, when same-store sales fell 36.4%.
The same scientists that told us we would be seeing more hurricanes -- they said that eleven years ago. We've now gone a record eleven years without a major hurricane hitting the US despite rising CO2.
Crying wolf one too many times.
**************************
There Has To Be A Statute Of Limitations
This happened ten years ago. Can you imagine all the IRS forms that would need to be re-completed. This is government run amok.
Mr. Carter didn’t spell out how officials would resolve the problem.
During the early 2000s, the California National Guard awarded thousands
of soldiers with bonuses to persuade them to re-enlist, as the conflicts
in Iraq and Afghanistan drove demand for military manpower and strained
U.S. military forces.
I had no doubts the SM Energy - Oasis deal was a big deal but it's always nice to see others write about it. I was quite surprised to see that a business magazine no less than Forbes wrote about that deal. A huge "thanks" to a reader for sending me that link.
“You may all go to hell and I will go to Texas.” – Davy Crockett,
after losing his bid to be elected to serve in congress from Tennessee
Over the last six months or so, it has sometimes seemed as if
everyone in the oil and gas industry has been in the same mood as Davy
Crockett was on one famous day early in 1836.
The rush by oil and gas
operators to either obtain new positions or enlarge existing stakes in
the West Texas/Southeast New Mexico Permian Basin has been the ongoing news of the summer and into the fall. Just last week, we saw Dallas-based RSP Permian and Denver-based SM Energy
complete acquisitions of thousands of leasehold acres in the Permian,
both at an announced cost of more than $40,000 per acre, which has
become the going rate in the Basin.
Last week, I found the SM Energy transaction especially interesting
since, to help raise funds for its entry into the Permian, the company
sold its position in North Dakota’s Bakken Shale. The buyer in that transaction was Oasis Petroleum, one of the most active drillers in the Bakken over the last several years.
I'll archive the article, in case it disappears, but won't post any more here; I will let you enjoy the article at Forbes.
By the way: this is CLR's second 10-well pad in two consecutive days. Supports my thesis that we're seeing the early days of Bakken 2.0.
Ten-well Bailey/Wiley pad permitted October 25, 2016. In a straight line west-to-east, each well vertically separated only 45 feet from its neighbor. This is the proposed location for these ten new wells (five Bailey wells and five Wiley wells):
The ten-well pad in the graphic above: each well will be 1,265 feet from the north line, and they will extend from 2,076 feet from the west line to 1,516 feet from the west line. Each well will be 45 feet vertically from its neighbor. The ten wells, west to east, these are huge wells, posting 40K to 55K in first full month of production:
33117, 1,962, CLR, Bailey 8-24H, Pershing, 66 stages; 16.1 million lbs, t6/18; cum 397K 12/20; offline 2/20; back on line 4/20;see this note; see this note; cum 468K 5/22;
33116, 1,733, CLR, Bailey 9-24H2, Pershing, t6/18; cum 319K 12/20; offline 2/20; remains off line 4/20; cum 330K 5/22;
33115, 1,950, CLR, Bailey 10-24H, Pershing, t6/18; cum 250K 12/20;remains off line 11/19; back on line 1/20; wow, talk about a nice well; cum 344K 5/22;
33114, 1.495, CLR, Bailey 11-24H2, Pershing, t6/18; cum 305K 12/20; remains off line 11/19; back on line 1/20; another nice well; cum 360K 5/22;
33113, A/IA/1,563, CLR, Bailey 12-24H, Pershing, t6/18; cum 117K 12/20; off line a lot; remains off line 11/19; back on line 1/20; it will be okay; cum 152K 5/22;
33112, 2,526, CLR, Wiley 8-25H, Pershing, t7/18; cum 307K 12/20; cum 327K 5/22;
33111, 1,881, CLR, Wiley 9-25H2, Pershing, t7/18; cum 258K 12/20; off line all of 10/18; back on line as of 12/18; cum 290K 5/22;
33110,1,720, CLR, Wiley 10-25H, Pershing, t7/18; cum 323K 12/20; cum 366K 5/22;
33109, 1,923, CLR, Wiley 11-25H2, Pershing, t6/18; cum 276K 12/20; cum 307K 5/22;
33108, 1,547, CLR, Wiley 12-25H, Pershing, t7/18; cum 266K 12/20; cum 303K 5/22;
Other wells sited in that same section, 25-150-97:
17742, 668, CLR, Wiley 1-25H, t6/09; cum 206K 12/20;huge jump in production in 7/18 after neighboring wells fracked; cum 213K 5/22;
19935, 309, CLR, Wiley 2-25H, a Three Forks well, 30 stages, 2.8 million lbs, t12/11; cum 257K 12/20; huge jump in production in 7/18 after neighboring wells fracked; cum 272K 5/22;
19933, 495, CLR, Bailey 2-24H, a Three Forks well, 24 stages, 2 million lbs, t1/12; cum 208K 12/20; huge jump in production in 7/18 after neighboring wells fracked; cum 214k 5/22;
19936, IA/724, CLR, Wiley 3-25H, 30 stages, 2.7 million lbs, t12/11; cum 200K 5/20; remains off line 5/22;
19934, 877, CLR, Bailey 3-24H, t12/11; cum 325K 12/20;huge jump in production in 5/18 after neighboring wells fracked; cum 349K 5/22;
28561, 759, CLR, Bailey 4-24H2, a Three Forks well, 40 stages, 8.2 million lbs, t9/15; cum 263K 12/20;huge jump in production in 5/18 after neighboring wells fracked; cum 281K 5/22;
28562, 1,474, CLR, Bailey 5-24H, 30 stages, 6.1 million lbs, t5/15; cum 280K 12/20;nice jump in production in 5/18 after neighboring wells fracked; cum 298K 5/22;
28563, 985, CLR, Bailey 6-24H1, a Three Forks well, 30 stages, 6.2 million lbs, t8/15; cum 208K 12/20; cum 226K 5/22;
28564, dry (casing would not hold; would be plugged, re-permitted), CLR, Bailey 7-24H, t10/14;
29808, 1,145, CLR, Bailey 7-24XH, t12/15; cum 325K 12/20; cum 354K 5/22;
28565, 1,212; CLR, Wiley 4-25H2, Pershing, t8/17; cum 242K 12/20;huge jump in production in 5/18 after neighboring wells fracked; cum 300K 5/22;
28566, 693, CLR, Wiley 5-25H, Pershing, t8/17; cum 306K 12/20; huge jump in production in 5/18 after neighboring wells fracked; cum 343K 5/22;
28567, PA/dry, CLR, Wiley 5-25H,t1/15; no production,
30578, 1,188, CLR, Wiley 6-25H1, Pershing, t8/17; cum 319K 12/20; offline 3/20; remains off line 4/20; back on line; cum 376K 5/22; jump in production / halo effect;
30577, n/d, CLR, Wiley 7-25H, Pershing, t8/17; cum 327K 12/20; off line 3/20; remains off line 4/20; a most unusual production profile; back on line 10/20; cum 352K 5/22;
17770, 406, CLR, Bailey 1-24H, a Three Forks well, 22 stages, 1.7 million lbs, t4/10; cum 233K 12/20; stripper well, June 17, 2016; off line 2/20; remains off line 4/20; back on line; cum 251K 5/22;
Apple Watch: after hours -- shares steady, slightly green.
3:05 p.m. CT -- gradually creeping up; earnings not announced yet
3:09 p.m. CT -- someone must know something; just turned red; after-market trades slightly down from the close; buy on the rumor; sell on the news; closed at $118.25; big question, will shares go below $115 in after-market trading?[See below -- id did.] Now, right at $118 at 4:11 p.m.
3:26 CT -- first significant movement since close of market -- and the direction? Up. But didn't last even a minute; back to red, just slightly. A lot of trades must be happening as we approach the 4:30 ET mark; yup, now it's green again at 4:27
3:28 p.m. CT -- definitely green;
3:30 p.m. CT -- there we go -- up over $120! But immediately drops back.
3:34 p.m. CT -- down over a dollar; someone must know; now under $117 (3:34)
3:35 p.m. CT -- down to $116; will it go below $115?
Over at Twitter the numbers are out: EPS at $1.67 beats $1.66 forecast; revenue of $46.9 billion in line; guidance of $76 - $78 billion, above expected guidance of $75 billion; shares immediately jumped 2.5% but then fell back; $115.88 at 4.39 p.m. ET.
5:19 p.m. CT -- this is probably the low for the night: $114.90.
Saudi Arabia: tough OPEC equation with mounting "exemptions." -- Bloomberg. This is Bloomberg's analysis of the Iraq "exemption." Saudi has three choices:
carry a greater burden within the group;
cede market share to other producers (I'm not sure how that differs from the previous bullet); or,
lose credibility by softening the terms of the deal.
In a worst-case scenario, Saudi Arabia will have to cut production by more than 1 million bbls/day, sending the kingdom's output to a two-year.
This is a disaster for Saudi Arabia. Even if they cut by more than 1 million bbls/day, there is no guarantee that the price of oil will rise enough to meet their budget needs. They could end up draining cash reserves even faster than they are now, which by the way, I cannot find the September numbers even though it is almost November. The most recent update, which included the August numbers, have been out there forever.
Big story everywhere: from NPR to The Wall Street Journal -- as premiums jump 25% and insurers flee, administration extends sigh-up for Affordable (LOL) Care Act. I think everyone pretty much agrees this is the beginning of the end. Next iteration: HillaryCare. At some point, ZombieCare -- it will never, ever die.
In an interview with the Washington Post, Fisher said Tesla had taken a
basic platform and “added so many overly complicated features”, such as
automated front doors, middle-row seats on power sliders etc. “All those
things add up in a way that can bring the platform down,” he said. “The
falcon-wing doors are kind of an accident waiting to happen,” Jake
Fisher, Consumer Reports’ Director of Automotive Testing, said.
********************************
Talk About A Market That Can't Get Any Traction
Apple is expected to announce 3Q16 earnings after the market closes. Apple had done well as of late after the Samsung implosion, or should we say, "Samsung explosion"? It is expected that Apple will announce first full-year revenue decline since 2001. The shares are still up despite that bit of negative news and on a day where the market is negative. It is barely up, about 35 cents on $118/share.
Late afternoon trading: Dow 30 down 43 points; WTI below $50 at $49.81
new highs - 62: BHI, BAX (a huge whoop), SandRidge Energy,
