Monday, November 21, 2016

Former White House Energy Advisor To President Obama Tweets On Future Of Oil; Shale Oil -- November 21, 2016

Via twitter, four (4) hours ago:
  • Prediction: (a) Trump guts enviro regs, (b) oil prices rebound. Shale output shoots up bc of (b). Trump claims credit for rising supply
That was tweeted by Jason Bordoff, Professor and Founding Director, Center on Global Energy Policy, Columbia University; former White House energy advisor to Pres Obama.

Full And Utter Repudiation Of ObamaNomics -- November 21, 2016


November 22, 2016: futures -- Dow 30 up another 50 points. WTI futures up 64 cents, now at $48.88. 

Original Post

Complete Repudiation Of The Obama Administration

Futures don't mean squat, but right now -- 9:19 p.m. Central Time, November 21, 2016, Dow 30 futures are up 65 70 points. The Dow 30 closed at another right today: 18,957. If the market were to open up 70 points higher in the morning, it would put the Dow 30 solidly over 19,000. 

There is probably not much else at this point in time that would be a greater indication of the market's full and utter repudiation of ObamaNomics.

The Political Page -- Or Is It The "Realpolitik" Page

Anyone paying attention is aware of the tension building in northeastern Europe, between NATO and Russia, over the future of Lithuania, Estonia, and Latvia.

Anyone paying attention knows what Trump said during the campaign regarding NATO.

I heard this snippet on NPR this evening, while driving our oldest granddaughter to water polo, something to this effect. A spokesman representing Lithuania was concerned "about any backroom deal between Putin and Trump that could be harmful to the three former USSR satellites."

Of course, that comes off immediately as utter craziness -- a "backroom deal" between Putin and Trump.

For a "backroom deal," the folks involved need to have a shared interest in something.

There is something at the very top of the list of issues facing Trump and something at the very top of the list of issues facing Putin.

For Putin, it's not his #1 problem but it's probably among his top ten. At one time it was probably among Russia's top two or three issues..

For the US, it may not be our #1 problem but it is probably the #1 issue that Americans deem the country's #1 security threat.

I'm not going to say anything more; I don't want to get out in front of my headlights, as they say, but that Lithuanian concern about a "backroom deal" is not as "crazy" as it first seemed.

Dallas (Yes, THAT Dallas) Is Facing Bankruptcy -- November 21, 2016

From The New York Times:
Dallas’s mayor, Michael S. Rawlings, testified this month to a state oversight board that his city appeared to be “walking into the fan blades” of municipal bankruptcy.
“It is horribly ironic,” he said.
Indeed. Dallas has the fastest economic growth of the nation’s 13 largest cities. Its streets hum with supersize cars and its skyline bristles with cranes. Its mayor is a former chief executive of Pizza Hut. Hundreds of multinational corporations have chosen Dallas for their headquarters, most recently Jacobs Engineering, which is moving to low-tax Texas from pricey Pasadena, California.
Data points:
  • city's pension fund for its police officers and firefighters is near collapse and seeking an immense bailout
  • over "recent" six weeks, panicked Dallas retirees have pulled $220 million out of the fund
  • the run begin in July when there was a recommendation that retirees no long be allowed to take out big blocks of money
  • trustees of the pension fund have asked for a one-time infusion of $1.1 billion, an amount equal to Dallas's entire general fund budget but not even close to what the pension fund needs to be fully funded
  • Moody's: Dallas is struggling with more pension debt, relative to its resources, than any major American city except Chicago
  • options:
    • raising property taxes (property taxes are already capped in Dallas)
    • borrowing money (city's borrowing capacity is limited)
    • delaying long-awaited public works
    • taking money back from retirees (retirees would surely litigate any clawback)
  • it all began in1993: incredible, inappropriate pension benefits were "sweetened beyond the wildest dreams of the typical Dallas resident (see linked article)
  • one of the sweeteners: guaranteed 8.5% interest, regardless of market returns
Much, much more at the link. Behind a pay-wall but easily accessed through Google.

Russia, Saudi Arabia On Shaky Common Ground -- Zeits -- November 21, 2016

From SeekingAlpha:
  • President Putin this morning re-iterated Russia’s position in the production control negotiations
  • While Russia’s “bid” falls far short of Saudi Arabia’s “ask,” Russia may win this negotiating round
  • However, to achieve a durable oil price response, OPEC and Russia need to achieve market re-balancing in substance, not just before the media
  • Saudi Arabia has significant negotiating power, as its sponsorship for the production pact is vital for Russia's and other producers' export revenues
NOAA "Re-Adjusts" Temperature Data (Again)

Link here

Bakken 2.0: Nine DUCs Completed; Most High-IP Wells; Twenty-Two Permits Renewed -- November 21, 2016

Active rigs:

Active Rigs3865191184181

One new permit:
  • Operator: Crescent Point Energy
  • Field: Blue Ridge (Williams)
Twenty-two (22) permits renewed:
  • Oasis (6): six Lars permits, all in Mountrail County
  • Hess (5): five BB-Federal permits, all in McKenzie County
  • Slawson (2): a Fox permit and a Shakafox permit, both in Mountrail County 
  • WPX (2): two Good Voice permits in McKenzie County
  • Statoil (2): two Mark permits in Williams County
  • Lime Rock Resources (2): a State permit and a Kary permit, both in Dunn County
  • CLR: a Stewart permit in Divide County
  • Whiting: a Smith Federal permit in Billings County
  • BR: a Ransom permit in McKenzie County
Seven permits canceled:
  • BR (7): seven Ransom permits canceled in McKenzie County
Nine producing wells (DUCs) reported at completed:
  • 29103, 780, EOG, Parshall 403-3534H, Parshall, t11/16 cum --
  • 29104, 1,221, EOG, Parshall 404-3534H, Parshall, t11/16 cum --
  • 29105, 953, EOG, Parshall 405-3534H, Parshall, t11/16 cum --
  • 29126, 955, EOG, Parshall 402-3534H, Parshall, t11/16 cum --
  • 29127, 1,584, EOG, Parshall 401-3534H, Parshall, t11/16 cum --
  • 30514, 3,020, MRO, Rufus USA 21-4TFH, Reunion Bay, t9/16; cum --
  • 30515, 2,279, MRO, Maggie USA 21-4H, Reunion Bay, t9/16; cum --
  • 30516, 1,536, MRO, Hannah USA 31-4TFH, Reunion Bay, t9/16; cum --
  • 31323, 1,758, EOG, Wayzetta 99-3-19H, Parshall, t11/16; cum --

Bakken Update -- Adding Oil To The Glut, Part 2; Eagle Ford Production Increased 46.5% Per Well In 2015 -- Filloon

At SeekingAlpha:
  • Mega-frack style completions are showing even bigger improvements in the Eagle Ford than the Bakken
  • Operators are increasing the number of stages, and volumes of frack sand and fluids with good results
  • Completion design is still in its infancy, and we believe better technologies and design are on the way
  • The Bakken and Eagle Ford improvements are nothing short of spectacular, and the reason breakevens continue to head lower
The Eagle Ford peaked in 2013. Horizontal oil and natural gas production was greater in 2013 than 2014. The number of locations were also greater. All data points provided a decline, which was not seen in the Bakken.

Sunoco Logistics To Acquire DAPL Operator (ETP) -- November 21, 2016

Link here.
  • all stock deal worth about $20 billion
  • ETP shareholders will receive 1.5 common units of Sunoco stock for each share of ETP they own
MDU Sells Its Share Of Natural Gas Processing Plant

Data points from press release:
  • MDU subsidiary WBI Energy Midstream (50%) and Whiting Oil & Gas Corp (50%)
  • Tesoro Logistics Rockies, LLC, will purchase plant for $200 million
  • MDU share: $100 million
  • MDU's subsidiary acquired Pronghorn natural gas processing plant in May, 2012, for $66 million

Don't Doubt Trump -- November 21, 2016


November 22, 2016: Vietnam cancels plans for two huge nuclear reactors. Comes on heal of UN climate scam in disarray, and two days after UN delays implement of new climate plan scam for one full year.  From an earlier post:
On another note, UN climate talks in Marrakesh, Morocco, at five minutes to midnight, reach a consensus, announce a breakthrough: implementing the "Paris Accord" will be delayed for one full year.
Later, 5:11 p.m. Central Time, sent to me by a reader, from FuelFix: coal expected to surpass natual gas as dominant winter fuel source. See original post: it looks like Trump is going to get a little bit of help from his friends. The winter gods.
The Energy Department predicted in its October energy outlook that average natural gas prices would steadily rise in the coming months — by February prices are expected to be 40 percent higher than the price of coal-fueled electricity. 
Original Post
Trump: has told US coal miners many, many times that he guarantees that he will "take care of years of horrible abuse." Most recent story: Charleston, SC; 12 minutes ago.

The mainstream media: says it will be very, very difficult for any president to help US coal miners.

MDW: don't underestimate Trump.

  • China, India, others use a huge amount of coal
  • US ports on west coast may not want to export coal, but the southeast coast is more than ready and willing
  • the Panama Canal has been widened
  • US incentives for the US coal industry could be part of a comprehensive Trump energy plan 
  • there is no reason why incentives for wind/solar energy could not be shifted to coal industry -- yes, that's a fact, or perhaps better said, "an inconvenient truth"

Random Photos Of Activity On A Bakken Pad -- November 21, 2016

One of the five wells:
  • 31607, 1,289, Oasis, Roflson N 5198 11-17 3T, Siverston, 36 stages, 3.9 million lbs, small and large proppant, t8/16; cum 199K 6/17; 
 Original Post

A trucker was nice enough to send some great photos of activity on a well pad in the Bakken. The wells, I believe, are still on the confidential list. There are six wells commingled into a single battery. Apparently, "runs" are averaging 225 bbls / hour (from the six wells). It will be interesting to see the IPs and frack data once that becomes available.

Although these wells are still on the confidential, some information was available before they went on the confidential list. That information will be placed below the photos. 

Apparently these wells have been at this rate for the past two months; all six similarly over-pressured. 

A couple things that caught my attention in the photos:
  • amazingly clean pads; not a sign of a single drop of spilled oil;
  • more than one truck in line to service these wells; 
  • how new the trucks and trailers look; and,
  • look how incredibly "clean" the Bakken oil looks; it could probably be used without refining in Willie Nelson's bus
Every time I've been on a Bakken pad, and I have been on many, I am struck by the "clean" condition they are in. That also goes for CBR terminals. In fact, it is quite unusual to find a regulated industrial site in the Bakken that is not in excellent condition.

Well #1, Three Forks:

DateOil RunsMCF Sold

Well #2, middle Bakken:

DateOil RunsMCF Sold

Well #3, Three Forks:

DateOil RunsMCF Sold

Well #4, middle Bakken:

DateOil RunsMCF Sold

Well #5, Three Forks, #31607:

DateOil RunsMCF Sold

Well #6, middle Bakken:

DateOil RunsMCF Sold

Area of interest:

Delaware (Permian) Acreage For $25,000/Acre; New England: An Energy Island -- November 21, 2016

Concho to acquire 16,400 net acres in the northern Delaware basin. Data points:
  • $430 million
  • Red Hills area 
  • undisclosed  seller
  • Concho now has 47,000 net acres in the Delaware
  • 69% oil (compare with 95% oil in the Bakken) 
  • will increase number of rigs to 8 in 2017
  • back-of-the-envelope: $430 million / 16,400 net acres = $25,000 / acre
New England could end up a bit like Hawaii, or California: an energy island. From recent energy conference in Boston:
The New England region needs more natural gas pipelines and power transmission lines, speakers at a conference on regional energy policies said last week.
The region has grown increasingly reliant upon natural gas for electricity generation, but pipeline development hasn’t kept pace, some said.
As things stand, New England’s reliance on coal or oil for power generation when natural gas isn’t available could mean high prices both financially and environmentally, executives said.
“In the winter days it’s tough — there’s just simply not enough gas,” said Marcy Reed, president of National Grid in Massachusetts, a gas and electricity company. The slated retirements of generators such as the Pilgrim Nuclear Power Station in Plymouth, Massachusetts, will only exacerbate the problem, she said.

The Broadway Theater Page

The father of the electoral college: Alexander Hamilton.

I can't make this stuff up.

Another EOG High-IP Well In The Bakken -- November 21, 2016

I track high-intensity fracks here

Note the amount of proppant:
  • 31247, 1,613, EOG, West Clark 103-0136H, Clarks Creek, 37 stages, 21.1 million lbs, s12/10/15; TD, 12/20/15; TVD, 10,552 feet; TD, 17,965 feet; again, only a 1.5 section lateral; 960-acre spacing; middle Bakken; t5/16; cum 114K 9/16;
 The Bubble 

Opening January 20, 2017; Apartments Starting At $1.9 Million

Saudi Needs $74-Oil To Balance Its Current Reserves -- November 21, 2016

Katie Ledecki smashes two more records.
Back to the Bakken

Active rigs:

Active Rigs3965191184181

RBN Energy: China's teapot refiners making ripples overseas.

Saudi Arabia: until it sees $74 oil, the kingdom is going to spend upwards of $5 billion/month out of its cash reserves to meet payroll -- Reuters, via Twitter.

Brent pipeline system -- to close tomorrow and remained closed for three weeks for maintenance -- Reuters, via Twitter. System carries 80,000 bopd. Big assist to OPEC.

Gasoline is down to $1.64 / gallon in north Texas. Not everywhere, but easily found. Generally, about $1.85 at major names along high-cost corridors.

The Market

Note: the election was on a Tuesday (9 - 11; 14 - 18; 21). I count nine business days since the election. I've lost track but the market has only closed down, maybe only, once in those nine days (if it closes higher again today).

At the close: records smashed. Dow 30 less than 50 points from 19,000. NASDAQ up an astounding 47 points to an all-time high of 5,369. WTI up over 4% to 48.33.

Wow! The market is off and running.

Dow 30 up another 50 points, less than 80 points from 19,000 just after the opening. NADAQ hits another record high.

Meanwhile, oil surging another 3%, up about $1.32, one cent over $47.00.