Wednesday, May 31, 2017

Some Big Things Happening In The US Energy Sector -- May 31, 2017

There are some big things happening in the US energy sector

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here or think you may have read here. 

Link here:

SRE today in a "down" market:

Statoil With Eight New Permits On A Single Pad -- May 31, 2017

Active rigs:

Active Rigs482880189187

Nine (9) new permits:
  • Operators:  Statoil (8), WPX
  • Fields: Banks (McKenzie), Reunion Bay (Mountrail)
  • Comments: all eight Statoil permits in NWNE 30-153-97; Garmann 19-18F: SH 30-153-97, BH Lot 1 section 18-153-97; Broderson 30-31F 5H: SH 30-153-97, BH SESE 31-153-97; see graphic below
Two permits renewed:
  • Statoil (2): one Jennifer permit and one Allison permit, both in Williams County
Four producing wells completed:
  • 30968, 1,237, EOG, Van Hook 48 -3626H, Parshall, t5/17; cum --
  • 31488, 396, XTO, Cheryl Federal 24X -12AXB, Grinnell, t4/17; cum --
  • 32483, 1,221, Hess, BB-Chapin A- 151- 95- 0403H-3, Blue Buttes, t41/7; cum 5K over 2 days;
  • 32527, 343, Enerplus, Robin 148 -92- 23B -24H, Heart Butte, t5/17; cum --
Area For Statoil's Proposed Eight Wells

See above.


31910, SI/NC, Statoil, Sax 25-36F XE 1H, no production data,
31908, SI/NC, Statoil, Sax 25-36F 2TFH, no production data,

24372, 2,995, Statoil, Broderson 30-31 2H, Banks, t6/14; cum 158K 3/17; off-line much of the time since 11/16;
20531, 3,088, Statoil, Broderson 30-31 1TFH, Banks, t12/11; cum 166K 3/17; off-line much of the time since 11/16;

24411, 3,380, Statoil, Broderson 30-31 3H, t2/14; cum 157K 3/17; off-line much of the time since 11/16;
24413, 2,513, Statoil, Broderson 30-31 4TFH, t2/14; cum 118K 3/17; off-line much of the time since 11/16;

Mainstream Media Continues To Struggle -- May 31, 2017

May 31, 2017: NYT offers buyout offers to its newsroom editors. Something tells me the folks at The Washington Post are thrilled with their multi-billionaire owner.

I track the demise of the mainstream media at this post.

Banana Pancakes

One week later Sophia is still talking about making pancakes with her mother. She does not mention the umpteen times we have made waffles together. LOL.

Speaking of bananas. The Norwegians have become so wealthy because of their crude oil (think Statoil), they no longer peel their own bananas. It is true that for a popular Norwegian [banana] sandwich spread, the process of peeling the bananas has been outsourced to the Swedes. Source: Michael Booth's The Amost Nearly Perfect People, c. 2014, p. 183.]

It is interesting to note that even in their #2 industry -- fishing -- the Norwegians outsource most of the work. From page 194 of Michael Booth's book:
...but take the fish factories on the north coast -- it's well paid but hard, cold work, fish-filleting. Most is now outsourced to China -- the fish is flown to China, filleted, packed in Findus boxes, and sent back -- but the rest is done by Tamils (Sri Lanka/Indians) and Russians, not Norwegians. No one wants to work in a factory, or be an engineer ... 
Findus: Swedish frozen food brand; think "Bird Eye").

By the way, minimum wage in Norway is $47 / hour -- at the time Michael Booth was writing his book, and still factories had difficulty finding local folks willing to take jobs.

The Daily Note

The Second 100 Days
Second 30 Days (Days 131 - 160)
 The First 30 Days (Days 101 - 130)

The Trump Presidency
The Third 30 days +10
The Second 30 Days 
The First 30 Days

Between Election And Inauguration
The Third 10 Days

June 29, 2017, T+160: even by his own standards, President Trump's tweets about "Morning Joe" today were a bit more callous than usual. Some might say he has gone "off his rocker" but it is what it is.

June 28, 2017, T+159: Bernie Sanders finds it "pathetic" that family members are targets of presidential candidates. Welcome to the real world Bernie. Whiner. On another note, the Trump rally just won't quit: despite no tax reform bill; despite no new health care bill; despite a gazillion investigations; the Trump rally continues. Dow 30 is up another 160 points and the big positive news (bank stress test results) are due out this afternoon.

June 27, 2017, T+158: From the WSJ today, via Twitter -- Comey’s deserved dismissal: The FBI chief forfeited his credibility with his 2016 interventions.

June 26, 2017, T+157: black unemployment is now below 8%. Black unemployment is at its lowest level in seventeen years. Black unemployment is at its lowest since 2000. The black unemployment rate has been dropping since T+30, February, 2017. It begs the question: what was the Obama administration doing for eight years?

 June 25, 2017, T+156: even the Dems are getting of the Russia stuff. Burr under my saddle: one-on-one private conversation, and James Comey refused to respect something so sacred as that. And for what? Not much. Comey looks more and more like a loser.

June 24, 2017, T+155: the mainstream press is now re-visiting two plants that Trump visited shortly after becoming president -- his goal to keep jobs at home. Now, those two plants are facing cutbacks, and the mainstream press is now "suggesting" it might be Trump's fault. It should be noted, that all Trump can do is set the agenda; Congress has to legislate .... and so far: no legislation on healthcare and no legislation on tax reform.

June 23, 2017, T+154: I have no dog in this fight -- at least not directly. How GOP's national healthcare plan works out will be very, very interesting to watch. It is clear that ObamaCare will die if there is no action -- and Dems will not support the GOP plan which would keep ObamaCare alive  (will cut off their nose to spite their face). Meanwhile, the ideological right of the GOP won't sign off on a bill that "looks like ObamaCare Lite." Apparently four GOP senators holdouts; GOP can lose two GOP senators. A fifth, Susan Collins, has not said she will vote "no" but she has big concerns about the GOP bill. Bottom line: Dems could save ObamaCare but won't vote for any GOP bill; key GOP senators can't vote for ObamaCare Lite.

June 22, 2017, T+153: ObamaCare is still the "law" of the land. Nothing has changed. Except health insurers are fleeing. On another note, Nancy Pelosi, the gift that keeps on giving. Like him or hate him, Trump's instincts are first rate. From his tweet today : Mexico was just ranked the second deadliest country in the world, after only Syria. Drug trade is largely the cause. 

June 21, 2017, T+152: it's now being reported that Senator John McCain more deeply involved with the Russians during his 2008 presidential campaign than anything remotely seen in the 2016 campaign. And folks tend to forget he was among the Keating Five.

June 20, 2017, T+151: the US bull market it is into its ninth (9th) year; it moved briskly higher when Trump was elected president and continues to climb the wall of worry. Despite President Obama's admonishments to the contrary, yes, the US can drill itself to lower oil prices. LOL. On another note, all day long, CNBC suggested that the Dems would win one or both of the special elections in South Carolina and Georgia. The GOP won both. The Georgia election set a record for most money spent on a "local" election.

June 19, 2017, T+150: Dow surges 110 points; S&P up 16 points; Nasdaq up an astounding 70 points. Trump rally continues.

June 18, 2017, T+149: "Obama alums" struggle to deal with Trump. LOL. Some refer to Trump's actions as a "dagger into their hearts." The Obama alumni network has become a diaspora of the disappointed as Trump tries to make good on his promises to upend much of what they had worked to accomplish. Wow, this is almost eight months after Trump was elected president and they are still depressed.

June 17, 2017, T+148: quiet.

June 16, 2017, T+147: Trump approval rating hits 50%. Obama's approval rating at this point in his presidency: 43%. Congressional Democrats more interested in playing politics; vengeful vendettas; character assassination; rather than actually helping the middle class.

June 15, 2017, T+146: just give them a bit more room. Baltimore officers put on 12-hour shifts as violence esclates.

June 14, 2017, T+145: After sustained lobbying from the packaged food and beverage industry, the Food and Drug Administration announced Tuesday an indefinite delay in the launch of Nutrition Fact labels that were intended to help Americans eat more healthfully. This was Michelle's pet project (along with vegetable gardens).

June 13, 2017, T+144: Attorney General Sessions: avuncular.

June 12, 2017, T+143: it looks like Congress won't get a thing done this year. Russia has shut down the US government. LOL.

June 11, 2017, T+142: Dow hit an all-time high on Friday; NASDAQ had its worse day in a long time, plunging nearly 5% before recovering, but still with a 3% loss for the day.

June 10, 2017, T+141: James Comey wrote his "memo" on a government/FBI/classified computer. "Leaking" that information from a classified/FBI/government computer is completely illegal -- it would have required a FOIA request, and, of course, the FBI would have denied it. I suppose one could argue that he could write a "new" memo on his personal computer or his own stationary and then give that to the press, but if the memo was a "cut and paste" and released to his friend, that was clearly illegal. Lawyers are starting to note that.

June 9, 2017, T+140: James Comey's testimony -- there was no there there. To coin a phrase. By the way, Tina Fey would say that her "gadar" was pinging during Comey's testimony: expressing his feelings: felt nauseous; felt discomfort; might have done things differently had he been "stronger". Didn't sound like a Washington lawyer; sounded like a man trying to come to terms with his feminine side. To quote Willie Nelson, "cowboys are frequently, secretly fond of each other."

June 8, 2017, T+139: James Comey stands alone now that entire intelligence leadership refuses to answer questions from Congress.

June 7, 2017, T+138: Presidential tracking poll shows Trump's approval rating exceeds Bill Clinton's at same point in presidency. Trump names new FBI director. Today in Congress: Senior U.S. officials decline to answer questions on whether Donald Trump pressed them on Russia inquiries. On live TV, they looked pathetic. 

June 6, 2017, T+137: it's interesting that a private conversation between the president and the FBI director is not protected by executive privilege. But I agree; let Mr Comey testify. His credibility is ...

June 5, 2017, T+136: still trying to understand how she lost the election, Hillary is now talking to God ... daily. I can't make this stuff up.

June 4, 2017, T+135: sitting US Senator most likely to be top contender for Democratic nominee for president in 2020: Al Franken. Reaganesque in quips. One of few Democrats in Congress/Senate less then 90 years of age. Political baton passed from Hubert Humphrey to George McGovern to Al Franken. Great Britain arrests 12 within hours of another terrorist attack in London; amazing how fast they can round up the usual suspects.

June 3, 2017, T+134: wow, talk about snowflakes, cupcakes, and fruitcakes -- where to pigeon-hole Hillary; Kathy Griffin; Cher; Barbra?

June 2, 2017, T+133: it will be interesting to see if the following countries exit Paris climate accord: Australia, Saudi Arabia, Israel. Any US taxpayer who does not agree the Paris climate accord was stacked against the US didn't hear the speech or check out the facts.

June 1, 2017, T+132:  Hillary continues to suck all of the oxygen out of the room. The gift that keeps on giving. Flashback: Hillary's Facebook followers: most came from Baghdad. She is truly delusional. [June 4, from The Hill: "Dems want Hillary Clinton to leave spotlight."] From Trump today: The big story is the "unmasking and surveillance" of people that took place during the Obama Administration. Trump announces US will exit Paris climate accord.

May 31, 2017, T+131: CNN fires Kathy Griffin over freedom of speech issue. Admitted she was going after Barron. By the way, Breitbart is the website the alt-left would like the FCC to take down. 

WTI Down Again -- May 31, 2017

Second trillion-dollar mistake: see graph below. Oil traders are not impressed. Pushing WTI below $48. OPEC doesn't understand the market. If you only meet "what is already baked into the price" when the announcement is made, the commodity will sink in price. In this case, the market was "hoping" for further cuts, not simply continuation of the same (which hasn't worked); in addition, it's hard to call it a "cut" when production still exceeds what it was before the surge. See graph below. 

Oil down again, today. Down over 2%. Around $48.65. [Later: now, down almost 4% and well below $48. I guess Prince Salman was not kidding: he doesn't care if oil goes to zero. Posted, 10:53 a.m. Central Time.]

Active rigs:

Active Rigs502880189187
RBN Energy: continuing the series -- new infrastructure to help Corpus Christi keep pace with Permian growth.

Market opening: NASDAQ scores another record high. WTI continues to fall; at $48.26.

Global glut: there's a meme out there that "OPEC and Russia will do whatever it takes to 'stabilize' the market." LOL. They can start by looking at this graph:

Note how much higher OPEC production is today -- after the production cuts -- than it was in 2014, prior to the production cuts. I guess it's how one defines "production cuts."

TV Crawler: Trump To Withdraw From Climate Accords -- May 31, 2017


May 31, 2017; MuskMelon says he will have no choice but to leave two White House advisory councils if President Trump pulls out of the Paris climate accords. Cher says she will move to Bulgaria.
Original Post 

See this earlier post on same subject.

It will be interesting to see whether India, China double down with Merkel.

Tea leaves suggest it will be a "waffling statement." Anything less than a clear withdrawal will be a huge disappointment, considering he made it clear he would disengage the first day he was president. Whatever. It could be worse. Hillary would be pushing for more stringent milestones. 

Tuesday, May 30, 2017

It Just Never Quits -- May 30, 2017 -- Gas Production From The Permian Basin Is Likely To Triple By 2020

From The Wall Street Journal: The oil play that could flood the natural-gas market.

Gas output from the Permian basin is likely to surge by 2020, rivaling production from Appalachian Marcellus.
The oil-rich Permian Basin is emerging as a major source of new natural gas, a development that could deepen an existing glut and pressure gas prices for years.

The West Texas region has become the most prolific spot for horizontal oil drilling and fracking. The new oil wells also produce natural gas, making it a nearly free byproduct that energy companies can then sell on top of the more-sought-after crude.

Gas production in the Permian Basin is likely to triple by 2020 from its 2010 levels, analysts say. The region is poised to rival new gas output from the Appalachian Marcellus Shale, the U.S.’s biggest gas-producing region.
The numbers:
Gas production in the Permian is expected to increase by 5.5 billion cubic feet a day from the end of last year to reach 12.5 billion cubic feet by the end of 2020, according to energy investment bank Tudor Pickering Holt & Co. in Houston.

The Marcellus, which has long been the fastest-expanding gas field, is likely to add 6.1 billion cubic feet during the same period, not much more than the Permian, though its total production will be two times that of Permian by 2020.
Two thoughts come to mind as I ponder the story and the graph:
  • the demise of solar/wind as a viable economic alternative
  • US exports
From wiki:
According to the International Energy Agency, the top 10 natural gas producers in 2013 produce two thirds of the total world production of 3,479 billion cubic meters.
In billion cubic meters (percent of global production):
  • US: 689 (19.8%)
  • Russia: 671 (19.3%)
  • Iran: 255 (5.9%)
  • Qatar: 161 (4.6%)
  • Canada: 155 (4.5%)
  • China: 115 (3.3%)
  • Norway: 109 (3.1%)
  • Netherlands: 86 (2.5%) -- see 2015 production numbers below
  • Saudi Arabia: 84 (2.4%)
  • Algeria: 80 (2.3%)
That was back in 2013 -- which seems like a lifetime ago, and things have changed greatly since then. 

Compare this with a pretty sophisticated analyst's view back in 2013 (which has now been archived). I linked it at this post, "Exhibit A." The comments, as usual, are priceless.

BP's natural gas production statistics for 2015 are here.
North America (+3.9%) recorded the largest growth increment, driven by continued strong increases in US output, while production in Europe & Eurasia declined by 0.7%, with large declines in the Netherlands and Russia. The Netherlands (-22.8%) recording the world’s largest decline. Large volumetric declines were also seen in Russia (-1.5%) and Yemen (-71.5%).
EIA's 2016 assessment here.

PeakOil's top eight, May 24, 2016. Comments are priceless.

They Come In Threes -- May 30, 2017

Scott Pelley out at CBS Evening News. May 30, 2017.
Kathy Griffin fired from just about everything. June 2, 2017.
Theresa May down at Downing Street, but not out. June 8, 2017.

Hess With Ten New Permits -- May 30, 2017

Active rigs:

Active Rigs502980188186

Ten new permits:
  • Operator: Hess
  • Fieldw: Truax (Williams); Antelope (McKenzie)
  • Comments: eight in SESW 8-154-98 (Truax); two in Lot 4 12-152-95 (Antelope)
6 Million Hits On Norwegian Television

From Michael Booth's The Almost Nearly Perfect People, c. 2014, page 200:
In fact, Danish -- in particular what the Swedes and Norwegians claim is its declining intelligibility, with the Danes apparently slurring and swallowing even more of their words, and employing even more glottal stops as time passes -- in increasingly the butt of jokes throughout Scandinavia. As improbable as this may sound, one of the funniest TV comedy sketches I have ever seen featured two Norwegian comedians from the show Uti var Hage pretending to be Danes trying to communicate with each other.

It's good the first time; great, the second time; and, perhaps the best thing I've seen in years after watching it a third time. A little Finlandia while watching it will make it even funnier.

EOG, The Apple Of Unconventional Oil -- Filloon -- Part 2 -- May 30, 2017

Link here.

  • EOG's technological advances have made it the best operator in the United States
  • looking at what may be EOG's best asset, we are comparing other operator results to its most recent huge wells
  • Chevron underperformed the average of all wells in the area by a significant margin
Part I was posted May 28, 2017.

The Energy And Market Page -- May 30, 2017

On May 26, 2017, I wrote:
Mexican natural gas demand: No links but scrolling through Twitter suggests Mexico's demand for natural gas is going to significantly outpace domestic supply. Imports won't fill all the demands. That's why I'm following SRE.
Previously I've written that in a down market, it's always important to note what bucks the trend. SRE? SRE is up 1.48% today, about $1.69. A 52-week high.

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here or what you think you may have read here. 

RBN Energy: continuing the series on pipelines to the Gulf Coast from the Marcellus/Utica. Archived.

Active rigs:

Active Rigs502980188186

Canada's Diesel Glut -- May 30, 2017

From Bloomberg via Twitter:
It seemed like a good idea at the time. When Canada’s government decided to fund the nation’s first new refinery in three decades in 2012, a diesel shortage had just caused some truckers to be turned away from filling stations, and demand was climbing. Oil-sands producers were ramping up output and crude prices topped $100 a barrel.

Fast forward to 2017, and North West Refining’s Sturgeon plant in Alberta is poised to add 40,000 barrels a day of diesel to an already-glutted market. Crude is hovering around $50 amid surging North American output, oil-sands producers have shelved expansions and Alberta has just emerged from a two-year recession. Diesel demand is lower than it was two years ago, and truck-fuel prices relative to crude oil are half their level from three years ago.

“Diesel demand is dropping in Alberta,” John Auers, executive vice president at energy consultant Turner Mason & Co., said by phone. “Any time you are adding more supply, you are going to impact the price negatively.”

The Sturgeon plant, Canada’s first new refinery since 1984, will begin turning oil-sands bitumen into diesel by the end of the year, according to Ian MacGregor, chairman of Northwest Redwater Partnership, which owns half the project in partnership with Canadian Natural Resource Ltd. Bitumen is a molasses-like substance extracted from oil sand that is so thick, it has to be blended with condensate or upgraded into synthetic oil to be processed.
Much more at the link. 

The Road To Germany -- An Update -- Electricty Now Considered A "Luxury" In Germany -- May 30, 2017


August 8, 2018: power worth less than zero spreads as green energy floods the grid. Wind and solar farms are glutting networks more frequently, prompting a market signal for coal plants to shut off. From Bloomberg.
Original Post 

Angela Merkel has recently turned incredibly vitriolic in her comments about the US. It appears she is running scared. All things being equal, the US will have a huge energy advantage compared to Germany (and the entire EU) for decades, maybe centuries. But all things are not equal. Germany bought into hook, line, and sinker on global warming, and worse, rashly and inexplicably she killed their nuclear industry after the Japanese tsunami debacle (not much risk of a tsunami in Berlin).

Electricity is now considered a "luxury" in Germany (see below). Merkel desperately needed to close the energy-cost-advantage/gap with the US, and the only way to do this was to convince Trump to saddle Americans with higher electricity prices by buying into solar and wind energy.

The first to feel Merkel's policies will be all the blue-collar workers not hired by new plants in Germany. Those losses will be invisible. The second to feel her policies will be all the blue-collar workers laid off by the closing of manufacturing plants that require huge amounts of electricity.

From The Wall Street Journal today: electricity for Germans is now a luxury.
Mrs. Merkel seemed especially miffed about Mr. Trump’s decision not to embrace the Paris climate accord that Mr. Obama signed in his final year as President. “The whole discussion about climate has been difficult, or rather very unsatisfactory,” Mrs. Merkel told reporters. “Here we have the situation that six members, or even seven if you want to add the [European Union], stand against one.’

But wait. Since when is a difference of opinion on climate policy a signal of U.S. retreat from Europe? And why is Mr. Trump’s reluctance to sign on to Paris—he says he’ll decide whether to leave the accord this week—a failure of leadership? Mrs. Merkel’s comments suggest that she is most upset because Mr. Trump declined to follow her lead on climate.

Mr. Trump should decline if he wants to fulfill his campaign promises to lift the U.S. economy. Mrs. Merkel’s embrace of green-energy dogmas has done enormous harm to the German economy. She reacted to the Fukushima meltdown by phasing out nuclear power, and her government has force-fed hundreds of billions of dollars into solar and wind power that have raised energy costs. As Der Spiegel once put it, electricity is now a “luxury good” in Germany.

It’s not surprising that Mrs. Merkel and the Europeans should want to shackle the U.S. with similarly high energy costs, and Mr. Obama was happy to oblige. But Mr. Trump was elected on a promise to raise middle-class incomes, and domestic energy production is essential to that effort. Mrs. Merkel doesn’t care if Mr. Obama committed the U.S. to Paris without any Congressional approval, but Mr. Trump has to take that into account.

The U.S. natural-gas fracking revolution also has the benefit of reducing fossil-fuel emissions by reducing reliance on coal. To the extent that U.S. energy production can supplant Russian natural-gas supplies to Europe and keep the price of oil low, it also undermines Vladimir Putin’s influence at home and abroad.

Previously Posted

Everything below this line was previously posted a little over a year ago, March 30, 2016:

Germany’s switch to renewable energy sources is a success story. [Yes, that's the first line -- Germany's switch to renewable energy sources is a success story. Now the article goes on to say how this appears to be a "trainwreck." If this is how Handelsblatt defines a "success story," I sure hope Germany does not have something they would call a failure. Oh, that's right; they do: open borders.]
Ever since the country dedicated itself to a transformation of its energy supply following Japan’s Fukushima nuclear disaster five years ago, renewables have been booming. Last year, they accounted for a third of the energy consumed in Germany.
But while this success goes far in protecting the climate and environment, it has an economic downside. The electricity market has come apart at the seams.
While wind and solar electricity are being fed into the grid at set prices on a priority basis, natural gas- and coal-fired power plants, and soon nuclear power plants, are being forced off the market.
The price of electricity on the wholesale market has been in freefall for five years, plunging from €60 ($67.37) per megawatt-hour to the current €20.
The situation poses an existential threat for German operators of conventional plants like E.ON and RWE.
According to Trendresearch, a marketing research institute commissioned by Handelsblatt, the use of conventional power plants will continue to decrease. The gas- and coal-fired power plants and the nuclear power plants that remain on the grid will produce around 435,000 gigawatt hours of electricity this year.
Although that’s about two-thirds of the total German electricity production, the power plants were designed for 521,000 gigawatt hours. This means the utilization of their capacity is lagging around 17 percent below what they were designed for. By 2020, the gap between capacity and production is likely to increase to 23 percent.
The plunge in price is putting the heads of E.ON and RWE, Johannes Teyssen and Peter Terium respectively, in a predicament. With prices of €20, restructuring is in danger. When Mr. Teyssen decided to spin off the ailing power plants in 2014, the megawatt-hour of electricity was still at €33.
At the moment, the two executives are watching as their business is virtually imploding. First gas-fired power plants were forced off the market, then the black coal plants, and now low-priced lignite and even nuclear energy is struggling against being shut down.
While consumers are being forced to pay rising prices for electricity because of constantly higher taxes, fees and levies, the quoted rates on the wholesale market for electricity from coal, gas and nuclear power plants have been heading in the other direction for years. In recent weeks, they reached a dramatic low point that no manager would have thought possible.
At times, the price of electricity broke below the €20 per megawatt-hour mark on the futures market. Five years ago, before Germany’s energy transition was stepped up, the price was sometimes over €60. Since then, the market has been flooded with expensive wind and solar electricity.
Much more at the linked article.

The question I have: how does this play out? It appears that Germany runs the risk of conventional power plants being taken off line past the point that intermittent energy (wind, solar) can make up the difference.

What we have is this:
  • German consumers are paying more and more for home electricity
  • their conventional power plants may have to be taken off-line; some conventional providers may go broke
  • at some point, too many conventional plants not on-line, but intermittent energy neither adequate/nor dependable --> brownouts or worse
I honestly don't know how this plays out.

This was the ORIGINAL POST
Flashback: this was posted September 21, 2014:
Bloomberg is reporting:
When Germany kicked off its journey toward a system harnessing energy from wind and sun back in 2000, the goal was to protect the environment and build out climate-friendly power generation.
More than a decade later, Europe’s biggest economy is on course to miss its 2020 climate targets and greenhouse-gas emissions from power plants are virtually unchanged.
Germany used coal, the dirtiest fuel, to generate 45 percent of its power last year, the highest level since 2007, as Chancellor Angela Merkel is phasing out nuclear in the wake of the Fukushima atomic accident in Japan three years ago.
The transition, dubbed the Energiewende, has so far added more than 100 billion euros ($134 billion) to the power bills of households, shop owners and small factories as renewable energy met a record 25 percent of demand last year.
RWE AG, the nation’s biggest power producer, last year reported its first loss since 1949 as utility margins are getting squeezed because laws give green power priority to the grids.
“Despite the massive expansion of renewable energies, achieving key targets for the energy transition and climate protection by 2020 is no longer realistic,” said Thomas Vahlenkamp, a director at McKinsey & Co. in Dusseldorf, Germany, and an adviser to the industry for 21 years. “The government needs to improve the Energiewende so that the current disappointment doesn’t lead to permanent failure.”
While new supplies sent wholesale power prices to their lowest level in nine years, consumer rates are soaring to fund the new plants. Germany’s 40 million households now pay more for electricity than any other country in Europe except Denmark, according to Eurostat in Brussels. A decade ago, Belgium, the Netherlands and Italy all had higher bills than Germany.
“Politicians are often trying to kid us,” Claudia Fabinger, a 65-year-old self-employed marketing manager, said in between shopping for groceries on Leipziger Strasse in Frankfurt. “Our power bills keep rising and rising to fund clean energies; on the other hand, we are still polluting the air with old coal plants.” 
The entire article is a must-read. Go to the link to read the full article. As you read the article, remember: Germany accounts for 2.4% of all the CO2 emitted into the atmosphere. A lot of pain for making absolutely no difference. And now it seems, they don't even feel good about it.

The story above ... well, what can I say? It can't be much worse. But, actually it is. Just a few weeks ago, the Germans said this sacrifice was their gift to the world (at the linked post, scroll down to "tilting at windmills") (I can't make this stuff up):
I'm posting this for the archives. I assume no one will read the entirety of the linked article over at The New York Times. The article is on Germany's transition to renewable energy. It is costing the average German a lot of money, and there are questions whether the transition will even succeed. The article concludes:
“Indeed, the German people are paying significant money,” said Markus Steigenberger, an analyst at Agora, the think tank. “But in Germany, we can afford this — we are a rich country. It’s a gift to the world.”
I wonder if the average German is aware how little their efforts will result in anything meaningful. I wonder if the average German has looked at the graphic at the bottom of this article. Because it's always possible that the graphic will disappear some day, here are the data points.
Unrelated, but the thousands of folks who attended today's global warming march in NYC arrived in 500 diesel-burning buses. Not natural gas buses, or propane buses, or electric buses. But diesel buses.

Random Update On Whiting Program Northwest Of Belfield -- May 30, 2017


August 1, 2018: reader asked question about drilling unit for #32301, see comments. Screenshot of permit application:

July 31, 2018: production data updated below.  Graphic as this area appears today:

June 23, 2018see update here

Original Post

This was done quickly. There are likely to be errors, typographical and factual. I will come back to this later and correct errors if anyone spots errors or if other corrections need to be made. In addition, if anyone has additional information on this area, I'm sure there will be readers that will be interested. I have no mineral rights and have no specific interest in this area more than any other area in the Bakken.

Whiting has proposed three new pads in this area northwest of Belfield:

In addition, I will update the various wells that are already producing. "Open circles" on the NDIC map indicate that at this point permits have been let, but the wells are not yet on confidential list nor has any drilling begun.

From a Whiting presentation (I should have included a marker on Belfield; Belfield is located just below the "date box" in the screenshot below; about 4 miles SSE of Smith 34-12TFH):

NDIC map screenshot today:

The nearest rig in the area is to the east, in Bell oil field, and according to NDIC, it is "undetermined" where this rig will go next.

The Wells In The Graphic Above
Note: see first comment below -- #32288 (Smith Federal 34-12-2PH, SESE 12-140-100) is being drilled (June 7, 2017) that was not added to the GIS map in section 12. Just like 41-15PHU and 44-10PHU are not on the map, but will be drilled. I wonder how that happens? How some are left off the map? And as I had hoped, they went from Bell to Park. Also, I hope someday they do refrack, would be interesting to see what happens.

24159, 1,195, Whiting, Pronghorn Federal 14-10PH, Park, t2/15; cum 132K 5/18; typical decline rate;
24158, 954, Whiting, Pronghorn Federal 11-15PH, Park, t2/15; cum 121K 5/18; typical decline rate;
24157, 1,179, Whiting, Pronghorn Federal 21-15PH, Park, t2/15; cum 132K 5/18; typical decline rate;

24160, 863, Whiting, Pronghorn Federal 34-10PH, Park, t7/13; cum 83K 5/18; not a particularly good well; will be interesting what neighboring fracks do; if re-fracked;
24161, 716, Whiting, Pronghorn Federal 41-15PH, Park, t7/13; cum 84K 5/18; not a particularly good well; will be interesting what neighboring fracks do; if re-fracked;
24162, 1,327, Whiting, Pronghorn Federal 44-10PH, Park, t7/13; cum 82K 5/18; not a particularly good well; will be interesting what neighboring fracks do; if re-fracked;

24821, 1,236, Whiting, Pronghorn Federal 14-11PH, Park, t7/14; cum 114K 5/18; a "so-so well'; will be interesting what neighboring fracks do; if re-fracked;
24541, 1,113, Whiting, Pronghorn Federal 24-14 Cl PH, Park, t7/14; cum 108K 5/18; a "so-so well'; will be interesting what neighboring fracks do; if re-fracked;
24542, 1,176, Whiting, Pronghorn Federal 11-14PH, Park, t7/14; cum 109K 5/18; a "so-so well'; will be interesting what neighboring fracks do; if re-fracked;
20404, 1,606, Whiting, Pronghorn Federal 21-14TFH, Park, t10/11;  cum 164K 5/18; will be interesting what neighboring fracks do; if re-fracked;

20131, 1,343, Whiting, Pronghorn Federal 34-11TFH, Park, t10/11; cum 170K 5/18; typical decline rate
24830, 2,542, Whiting, Pronghorn Federal 44-11PH, Park, t7/14; cum 241K 5/18; typical decline rate; but expect a better well than this;

32300, loc, Whiting, Pronghorn Federal 44-11PHU, Park,
32301, drl, Whiting, Pronghorn Federal 44-14PHU, Park, noted to be on drl status 5/18;

27691, 2,683, Whiting, Pronghorn Federal 34-11TFH, Park, t11/14; cum 317K 5/18; a nice well; typical decline rate; 
27692, 2,873, Whiting, Pronghorn Federal 14-12H, Park, t11/14; cum 374K 5/18; a nice well; typical decline rate; 
20504, 2,696, Whiting, Pronghorn Federal 21-13TFH, Park, t12/11; cum 284K 5/18; a nice well; typical decline rate; 

31779, SI/NC, Whiting, Pronghorn Federal 21-13-2PH, Park,
31780, SI/NC, Whiting, Pronghorn Federal 31-13PH, Park,
31781, SI/NC, Whiting, Pronghorn Federal 24-12PH, Park,

20526, 2.446, Whiting, Smith 34-12TFH, Park, t9/11; cum 378K 5/18; a nice well; typical decline rate; 

Monday, May 29, 2017

VLCC At Corpus Christi -- Successfully Tested -- OXY -- May 29, 2017


September 25, 2017: update on the OXY Corpus Christi terminal. To be complete by end of 2018.

Later, 11:35 p.m. Central Time: see comments from a reader.
Propane - propylene here:

Ethane - ethylene here:
Original Post

This is pretty incredible. Earlier a reader sent me a link to a story reporting that this historic event had been delayed 24 hours due to a local thunderstorm.

Apparently, things are back on schedule. New link to a new story. Data points:
  • supertankers tested at Port Corpus Christi, TX
  • mammoth tanker docking Friday at Port Corpus Christi, historic and successful
  • 1,093-foot-long EuroNav tanker: Anne
  • docked at Oxy's crude oil export facility
  • classified as a Very Large Crude Carrier (VLCC) 
  • Belgian-owned ship: largest crude oil tanker to call on a Gulf of Mexico port
  • will boost crude oil exports from Texas
  • when fully loaded: the bottom of the hull -- 66 feet down
  • unfortunately, Corpus Christi Ship Channel is only 45 feet deep
  • so, they partially load the tanker dockside and then finish the loading in deeper waters using using a smaller ship and ship-to-ship transfer
  • will fill up to 60% capacity dockside
  • tanker at 100% capacity will hold 2.2 million bbls of crude oil for European and Asian markets
  • Port of Corpus Christi plans to deepen its channel; build a higher harbor bridge to accommodate larger vessels
Think about that:
  • ten years ago we were talking about Peak Oil
  • President Carter: "start wearing cardigan sweaters"
  • President Obama: "we can't drill out way to cheaper oil"
  • now, VLCCs are docking off Texas
  • Texas will dredge a channel to make it twenty feet deeper (20/45 = 44%)
  • will build a new bridge over the channel
  • all to export oil from the Permian -- an old basin thought to be dead ... until the Bakken revolution
  • not in a generation; not in a lifetime; in less than ten years

GDPNow 2Q17 -- Forecast 3.7% -- May 29, 2017

GDPNow: Latest forecast: 3.7 percent — May 26, 2017.
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 3.7 percent on May 26, down from 4.1 percent on May 16
The forecast for second-quarter real residential investment growth fell from 8.3 percent to 3.1 percent after Tuesday's housing related releases from the U.S. Census Bureau and Wednesday's existing-home sales release from the National Association of Realtors.
Wow. And the scuttlebutt is that Americans want to buy real estate, but not enough new, affordable houses are being built to keep up with demand.

Next forecast: Tuesday, May 30, 2017.

Quick: What Ethnic Group / Nationality Makes Up The Largest Immigrant Population In North Dakota? -- May 29, 2017

Link here and here for answer.

From the first link:

Third Verse, Same As The First -- Rigzone -- May 29, 2017


July 20, 2017: three years into cheap oil, OPEC is still hoping for a rebound.
The six members of the Gulf Cooperation Council have curtailed subsidies and introduced new taxes to bolster non-oil revenue and reduce ballooning budget deficits.
Much of the savings, however, have been due to spending cuts and the pace of reforms has slowed across the region, said Monica Malik, chief economist at Abu Dhabi Commercial Bank. Overall progress in economic diversification has been limited, she said.
Absent a rebound in oil prices, analysts say it’s unlikely that these nations can repair their finances without deeper spending cuts that could further hurt growth. The standoff between a Saudi-led bloc and Qatar is also undermining investor confidence at a time when the GCC is seeking foreign funds.

Original Post  

Refresh your memory with this post. And this post, it's just a matter of time before it's every Arab for himself.

Now for the third verse, same as the first, from the Rigzone staff:
Although crude exports figure heavily in its namesake, the Organization of Petroleum Exporting Countries may be oblivious to their relevance now that the United States is back in the market.

After a 40-year absence, the United States began shipping its crude around the world in January 2016, but the importance of the occasion is something OPEC hasn’t quite grappled with, experts say. Rather, OPEC’s focus remains on revenue, if not market share, to keep the world’s crude supply and demand in balance.

And once the nine-month extension of production cuts expires next March – and if global oil benchmarks still haven’t busted through to remain above $50 for a significant period of time – the club may see that it was simply not enough.

More than 1 million barrels of oil are leaving U.S. ports each day, noted Jamie Webster, senior director at the BCG Center for Energy Impact. Petroleum product exports are north of 3 million barrels of oil per day.

“Right now, it’s not something they want to bring into their general discussions, even if it is the reality,” he said. “One thing about OPEC you have to always understand is that they are a low consensus organization – they are just like the U.S. Congress in that – and they are reactive versus proactive. They don’t generally start making moves seeing that something is going to be changing X or Y; they make a move after something pushes them.”
And more:
And for its own exports, OPEC loads only started to slow in May, said Antoine Halff, senior research scholar at the Center of Global Energy Policy at Columbia University, in his commentary, ‘OPEC’s Catch 22?’

April loadings were at a peak, and overall shipments since January have failed to indicate any significant drop compared to October levels,” he noted, reflecting on figures from ClipperData. 
Happy Memorial Day to one and all from Sophia and from me (it might be hard to see, but Sophia has a little Texas cowboy hat on also):

Quickies -- May 29, 2017

I'm alive and well but not much to blog about.

NASCAR: I was pretty much disappointed in the Coca Cola 600 -- I assume it was just me -- I missed the first stage and then when I got home I saw the hour and a half rain delay; the second stage was fairly boring, or maybe it was already into stage three. Regardless, it still seemed boring.
By stage 4, I no longer cared and turned in before the race ended. I see that it ended on a pretty sad note; the one who "nearly won" (as Hillary would say), ran out of gas. It's hard for me to say that Austin Dillon "won" the Coca-Cola 600. He won one of four stages, each stage 100 laps. Whoopee.
I may or may not have stayed with it to the end had it been a full 400-lap race but I think it would have been a better race. This would be like the NBA playing four quarters with each quarter counting as a game but the "winner" of the "full" game belongs to whichever team scored the most points in the 4th quarter.
NASCAR: "picking his nose" was probably the "high point." Like Hillary, he should be happy, he "nearly won."

"Purt near": this Hillary thing, I can see, is becoming a meme, "I didn't lose, I nearly won." But it did not start with her. (By the way, British Airways has a new commercial: "we nearly had a good weekend.") But as I was saying, the "nearly won" meme did not start with Hillary. Again, it was a rancher who started it all:

Refinery: I have no dog in this fight and I have no opinions one way or the other, but perhaps things would go a bit more smoothly if the proposed refinery would be sited southeast of Belfield. Having said that, I wonder what leaves a larger carbon footprint: the proposed refinery or 760,000 tourists visiting the park every year, most in their gas-guzzling SUVs towing a trailer coming from as far away as ... the land of a 1,000 malls -- Minnesota. Just saying.  Someone else can do the math but assuming there are four people in the SUV, 760,000 tourists works out to 190,000 vehicles each year. If the large percentage of visitors are seniors (those over 65 years of age) with a $10 lifetime pass that would be as many as 380,000 vehicles. It seems if folks really wanted to cut down on the carbon footprint in the park, the government would ban automobiles and pick-up trucks. As for me, I'm beginning to think that national parks need to be closed to vehicles of any sort (even EVs run on coal). Per square foot, my hunch is that Yellowstone Park has more carbon emissions during the summer than downtown NYC -- a statistic for those who are concerned about carbon emissions; I'm not.

Sami: quick -- who are the Sami? They are those nomadic Nordic reindeer-loving people. It turns out -- and I did not know this until a few minutes ago -- that the National Geographic was incredibly insensitive all these years, calling the Sami "Lapps." It turns out that "Lapps" is a racist term. The Sami are effectively the sixth Nordic people, Europe's only nomads (if you don't count the Romanican gypsies who follow tourists rather than reindeer), whose territory spans the borders of northern Norway, Sweden, licorice-loving Finland, and parts of northwest Russia, depending on where their reindeer roam. From Michael Booth's The Almost Nearly Perfect People, c. 2014, page 175.

Sámi artist Berit Margrethe Oskal (no relation to the webmaster of the MillionDollar Way) from Guovdageaidnu, singing/yoiking "Eamifámut" (English: "Ancient Forces"):

Sunday, May 28, 2017

OPEC Still Doesn't Understand Free Market Capitalism -- May 28, 2017

From Reuters, note the last paragraph:
"If we get to a point where we feel frustrated by a deliberate action of shale producers to just sabotage the market, OPEC will sit down again and look at what process it is we need to do," said Nigerian Oil Minister Emmanuel Kachikwu. 
By the way, for those who have forgotten (I had), Mark Papa is CEO of Permian oil producer Centennial Resource Development Inc:
Some OPEC members seem keen to show they have shed any prior naivete about shale, making it a key topic during Thursday's meeting after barely mentioning it before. Shale's limitations, including rising service costs, also were discussed.

"We had a discussion on (shale) and how much that has an impact," said Ecuador Oil Minister Carlos Pérez. "But we have no control over what the U.S. does and it's up to them to decide to continue or not."

Mark Papa, chief executive of Permian oil producer Centennial Resource Development Inc, was asked by OPEC delegates to give a presentation on shale's potential last week. He appeared to have played his cards close to his chest.

"In terms of the threat, we still don't know how much (U.S. shale) will be producing in the near future," Nelson Martinez, Venezuela's oil minister said after the talk.
US Shale Killing OPEC

From an Investor's Business Daily op-ed:
Despite cuts in oil output and threats of even more, the OPEC cartel can only watch in disappointment as prices for crude defy their efforts to raise them. Credit fracking for the cartel's loss of power over the world market.

These are desperate times for OPEC. On Thursday, oil prices plunged nearly 5% when it became apparent OPEC wouldn't cut output further, which would have put a serious dent in members' finances. Instead, the cartel will extend current cuts for nine more months.

In essence, they're declaring victory and going home.

Just three and a half years ago, the price for a barrel of West Texas Intermediate crude peaked at $110.62 a barrel. At the time, President Obama was pushing Americans to conserve and warning, "we can't drill our way out of the problem."

Turns out, we could. Today, oil prices are struggling to rise above $50 a barrel, thanks in large part to vast new supplies of crude on the market from American frackers. They've used technology to dramatically slash costs, so OPEC can no longer control the global market price.
Will They Or Won't They -- Only Putin Knows For Sure

From The New York Times:
Global oil prices were in a deep slump. And because oil profits lubricate the Russian economy, the Kremlin was casting about for a solution. So Russia’s leaders set politics aside and cut a deal with Saudi Arabia: Russia agreed to join the Organization of the Petroleum Exporting Countries on a production cut, with the intent of lifting global oil prices.

On the face of things, the agreement worked: Prices picked up, and along with them the cost of gasoline and consumer goods in developed countries.

There was just one catch: Russia, in fact, did nothing.

“There was a beautiful public relations effect,” said Aleksey I. Turbin, at the time a senior official at the Ministry of Energy who helped negotiate the deal with the Saudis.

That was 16 years ago, but once again, an oil-dependent Kremlin is, if not exactly desperate, at least eager to prop up prices, and again questions abound on whether it is serious about cutting output or just assembling another public relations effort.
Closing The Poll

I guess I forgot about this poll. Whatever. The poll: good, bad, or indifferent, your thoughts on "special counsel" to investigate the "Russian thing":
  • good: 30%
  • bad: 34%
  • indifferent: 36%
Interesting: most "evenly divided" poll I've seen in a long time.

Random Update Of Global Warming -- May 28, 2107


June 1, 2017: Trump announces the US will run, not walk, away from the Paris climate accords.

May 31, 2017: TV crawler -- Trump will walk away from the Paris climate accords.

Original Post

Hillary: we'll support the coal miners. How? Talk.
Trump: we'll support the coal miners. How? Walk.

Rumors are that Trump will walk away from Paris / Kyoto.

Tea Leaves On Global Warming
80% -- Won't Stay Engaged With Paris
20% -- Will Stay Engaged With Paris

In my mind, I still think there's a 80-20 chance that Trump will stay engaged with Paris / Kyoto on global warming, but these are the tea leaves suggesting he has made up his mind:
  • it's now being leaked he has made up his mind; Trump will walk
  • Merkel comes out with an incredibly "defiant" speech suggesting she knew Trump's leanings at the G-7 conference
  • no love lost between Macron and Trump
  • I can't imagine Trump wanting to be part of the Merkel-Macron camp on anything
  • why would be announce his support of AGW back in Washington when he could have announced it in Europe and gotten a few moments of adoration?
  • he himself says he "hit a home run" on his first overseas trip; I doubt he wanted to spoil it by taking a highly controversial position at the very end; I doubt he wanted the AGW announcement to be the only thing the mainstream media would talk about when he returned
  • drives home the point that he wants other countries to pay their fair share in NATO (not directly connected, but "it's all political" and it's all part of "making America great again")
  • his first visit was to Saudi Arabia where many, many business deals were signed; not exactly AGW-oriented 
  • more than ever he needs to start keeping his campaign promises
  • he needs to separate himself from Hillary -- if he is seen as supporting Paris/Kyoto, he's going to be seen as not that much different than Hillary on this issue
A couple of data points that still give me pause:
  • Ivanka has taken the opposite view based on other reports
  • ex-CEO of ExxonMobil, Tillerson has taken the opposite view based on other reports, and Tillerson may be Trump's "strongest" member of his cabinet 
As far as I can tell, Trump came back from Europe with exactly "no" wins. From Saudi Arabia and Israel, he came back with a wheelbarrow full of wins.

By the way, looking back the at the stories, the photos, the results, something tells me Trump enjoyed the first part of the trip a whole lot more than the second part of trip.

Worse, it wasn't even alphabetical.

Global Warming Update

Data points from US National Weather Service:
  • never since the U.S. Drought Monitor was established in 1999 has there been so little drought across the contiguous U.S. 
  • only 4.52% is in some degree of drought (D1-D4, where D1 is moderate drought and D4 is exceptional drought). 
  • 85.73% isn't even abnormally dry (D0). 
  • contrast that with the most widespread drought since 1999 in late September 2012 when 65.45% was at least D1. Only 23.41% wasn't considered at least abnormally dry.
US drought monitor.

Memo to self: e-mail link to Algore.

New Millenial Narrative For Losing: "I Nearly Won."

Wells Coming Off Confidential List This Next Week -- May 28, 2017

Saturday, May 27, 2017
  • None.
Sunday, May 28, 2017
  • 33107, SI/NC, Kraken Operating, Coveleski 26-35 4H, Lone Tree Lake, no production data,
Monday, May 29, 2017
  • 32100, SI/NC, Abraxas Petroleum, Stenehjem 9H, North Fork, no production data,
  • 33012, 824, Oasis, Teal 5692 13-22H, Alger, 23 stages, 8.5 million lbs t12/16; cum 55K 3/17;
  • 33106, SI/NC, Kraken Operating, Coveleski 26-35 3H, Lone Tree Lake, no production data,
Tuesday, May 30, 2017
  • None.
Wednesday, May 31, 2017
  • None.
Thursday, June 1, 2017
  • 32099, SI/NC, Abraxas Petroleum, Stenehjem 9H, North Fork, no production data,
  • 33105, SI/NC, Kraken Operating, Coveleski 26-35 3H, Lone Tree Lake, no production data,
Friday, June 2, 2017
  • 28434, 1,308, EOG, Fertile 102-0333H, Parshall, 46 stages, 11.91 million lbs, t12/16; cum 92K 4/17;
28434, see above, EOG, Fertile 102-0333H, Parshall:

DateOil RunsMCF Sold

 33012, see above, Oasis, Teal 5692 13-22H, Alger:

DateOil RunsMCF Sold

USGS Topographic Maps For Free -- Via National Geographic -- May 28, 2017

Don alerted me to a very, very interesting feature National Geographic now provides for free: printable USGS pdf topo in the contiguous United States.

This is the link:

From the link:
National Geographic has built an easy to use web interface that allows anyone to quickly find any 7.5 minute topo in the contiguous U.S.A. for downloading and printing. Each topo has been pre-processed to print on a standard home, letter size printer. These are the same topos that were printed by USGS for decades on giant bus-sized presses but are now available in multi-page PDFs that can be printed just about anywhere. They are pre-packaged using the standard 7.5 minute, 1:24,000 base but with some twists:
Page 1 is an overview map showing the topo in context 
Pages 2 through 5 are the standard USGS topo cut in quarters to fit on standard printers 
Hillshading has been added to each page of the PDF to help visualize the topography
It's incredibly easy to use. Once you get to the site, click on the map of the United States and keep zooming in on the area you are interested in. You have to zoom in several times to get to the "red" pointers. Click on the "red pointer" and begin exploring. 

And, yes, the link has been added to my "Data Links" page. 

EOG May Be The Apple Of Unconventional Production -- Part 1 -- Filloon -- May 28, 2017

Part 2 at this post

  • IBD has stated EOG may be the Apple of oil and we test this theory in what may be the its best acreage
  • Delaware Basin core well results have outpaced the rest of the country, and EOG's most recent results point to much better results for competitors in the future
  • We took a sample of 135 horizontal locations in the same general area where EOG has produced huge initial production to provide an idea of average economics
  • Results continue to outpace the rest of the country and point to lower breakeven prices going forward
Is EOG Resources the Apple of oil? IBD seems to think so and with good reason. Oil recovery has become a science with the advancement of shale. This is the reason for the large discrepancy in initial production rates by operator. Conventional vertical production did require proficiency. This proficiency may have been more about geology than technology. US operators continue to pester OPEC with better economics.
Although decreased costs are touted, improved recoveries will drive the industry.

EOG is even using Apple technology, including the iSteer smartphone app. It is using precision targeting as well. EOG has real time data streaming from every asset. It applies proprietary algorithms with in-house software. It also uses over 65 in-house desktop and mobile software applications. EOG also applies data science to optimize completion design to specific geology. These are just a few of the ways that EOG continues to outperform. More importantly, we would expect other operators to match this performance in the future.

The Delaware Basin may be better than Midland. We have continued to be bullish this play as production per foot has consistently outperformed. This has been seen with a lower inventory of wells turned to sales. The bullish narrative gets better when we look at EOG results. Focusing on northern Loving County, Texas and southern Lea County, New Mexico provides a visual to why there is so much activity in the area. From March of 2016, 135 horizontal locations have been completed. 74 of those wells are owned by EOG.
Much, much more at the link. 

Saturday, May 27, 2017

Back To United Van Lines -- May 27, 2017

For background to this story, see this post from February 8, 2017.

That was a few months ago. Now this story from Fox News yesterday
Connecticut's population is falling: Its net domestic out-migration was nearly 30,000 from 2015 to 2016. In 2016, it lost slightly more than 8,000 people, leaving its population at 3.6 million.
Indeed, recent national moving company surveys underscore the trend, showing more people leaving Connecticut than moving in. In 2016, the state also saw a population decline for the third consecutive year.

One of the companies, United Van Lines, reported that of all their Connecticut customers, 60 percent were leaving compared to 40 percent who were moving there. Only three other states had higher rates of people moving out – New York, New Jersey and Illinois. One out of five of those leaving said they were retiring.
But solutions are in the works:
Some state legislators suggest legalizing marijuana as a new tax source, as well as new tolls and a new casino. Other legislators and economic analysts say one remedy is to start taxing services, such as dog grooming.

Back To Obesity -- May 27, 2017

Denmark and Bacon. From Michael Booth's The Almost Nearly Perfect People: Behind the Myth of the Scandinavian Utopia, c. 2014, p. 26:
The Danes are the world's leading pork butcher, slaughtering more than 28 million pigs a year. The Danish pork industry accounts for around a fifth of all the world's pork exports, half of domestic agricultural exports, and more than 5 percent of the country's total exports. Yet the weird thing is, you can travel the length and breadth of the country and never see a single sow because they are all kept hidden form view in intensive rearing sheds.
From page 67:
The Danes also appear to be addicted to sugar, consuming more candy per capita than anyone else in the world (15 pounds per year). They are also, perhaps less surprising, the largest consumers of processed pork products in the world ... the Danes eat 143 pounds each of pork per year.
That naturally led me back to this post on CNBC's segment on America's concern with obesity and gluten and linking it to pasta.

With all that sugar consumption and all that pork consumption, where do the Danes stand (or sit) with regard to obesity and national rankings. This would be a good post for NY's governor Andrew Cuomo and NY's former mayor Mike Bloomberg and current mayor Bill deBlasio to read. To recap:

If you look at 192 countries around the world, pasta-eating countries are nowhere near the top:
1. Cook Islands -- in fact the South Pacific islands -- the ones that are sinking due to rising sea levels -- or maybe due to something else -- comprise the top five or six spots
2. the Middle Eastern countries of Kuwait, UAE, Bahrain, and Saudi Arabia pretty much round out the top 20, and all of those have obesity rates higher than the US
3. finally, we get to the US, at #19 on the list, followed by the Caribbean, UK and former colonies, Mexico, Chile, more south Pacific islands, and so forth
4. Finally, after going through most of the "recognizable" names in the rest of the world, Europe, South America, and Asia, we finally get to Italy -- the pasta-eating capital of the world ; coming in at #90
5. second from the bottom, the country where little pasta (or any real food for that matter) is eaten, North Korea, or known more prosaically as the Democrate People's Republic of Korea, #191 in a list of 192 countries.
One would imagine that Denmark -- with all that candy consumption, all that pork consumption -- would rank among the top ten, along with the US, Canada, and the UK. Nope. Denmark is not among the top ten OECD countries.

In the top 20 of all global nations? Nope.

Top 50? Nope.

In the top 100? Nope.

Denmark is #107 (the list is only 192 countries long) and is nestled between Namibia and Switzerland, the home of chocolate. 30%+ of the US population is obese; most of the rest of the OECD countries report 24% of their population as obese.

Denmark 19%.

So, it looks like candy, bacon, and pasta are not the problem when it comes to obesity. Must be something else. Global warming?

About That Cut In OPEC Production --- May 27, 2017


June 4, 2017: Saudis just blowing smoke -- Bloomberg. Nice update of the three Motiva refineries: Port Arthur in Texas (Saudi Aramcco); Norco, Convent in Louisiana (Shell). The Shell refineries take very little Saudi Arabian oil; Port Arthur takes 238,000 bopd from Saudi Arabia (21% of all Saudi crude sales to the US. To the other two refineries, only 33,000 bopd sourced from Saudi Arabia.
Crude loading during June in Saudi Arabia will arrive off the U.S. coast between mid-July and mid-August. By then, refinery runs will already be at their seasonal peak and attention will be starting to turn towards the fall slowdown, which typically gets under way around the end of July. This may allow the Saudis to claim a seasonal downturn as evidence of cuts.
Bloomberg tanker tracking data shows Saudi crude exports to the U.S. in May at around 840,000 barrels a day. That is a drop of 160,000 barrels from April. Significant? Perhaps, but it only takes them back to where they were in January, the first month of the output deal.
May 28, 2017: perhaps the graph below explains why the Vienna meeting was a bust for OPEC. LOL.  
Original Post
Note how much higher OPEC production is today -- after the production cuts -- than it was in 2014, prior to the production cuts. I guess it's how one defines "production cuts."

Thought experiment: overlay this chart with US shale production during same period of time.