Monday, July 31, 2017

Total OPEC Imports UP; Saudi Imports DOWN -- July 31, 2017

The most recent import; just posted. May, 2017, data.

Saudi Arabia crude oil imports into the US are down slightly:

But, overall OPEC crude oil imports into the US are up:

Machts nicht.

See if you can spot the problem?

As long as we're doing graphs, let's look at one more. US crude oil exports:

Fracking The Heck Out Of CLR's Candee 11-9H, #16509, Chimney Butte -- July 31, 2017

Link here.

Venezuela Imploding -- July 31, 2017

There are going to be a lot of articles in the mainstream media with regard to what might happen if the flow of Venezuelan oil is cut off. I've talked about this so much over the past several years in an indirect way, I have no interest in opining on what might happen with regard to Venezuela and oil. For now, I won't blog on that; I've simply grown too tired / bored with the subject. Perhaps for the archives, I might link headlines but that's about it. It will be a fascinating story to watch. I will blog about it eventually, I assume, but not for awhile.

Futures Mean Squat

Having said that, holy mackerel ... have you see equity futures this evening! The Dow 30 has been climbing all night; right now, Dow 30 futures are up 82 points; the Nasdaq up 21 points; and the S&P 500 is up 6 points (again, futures at 9:21 p.m. Eastern Time). [At 10:05 Eastern Time, Dow 30 futures are up 94 points. I've seen this movie before. By tomorrow morning, the market will open down. LOL.]

I can  hardly wait for the early morning presidential tweets. LOL.

North Korea Keeps Launching ICMB Missiles .. and No One Seems To Care...

... and no one is commenting on that, that no one seems to care. Not only does no one seem to care, but the stock market continues to surge despite the fact that North Korea is launching ICBM missiles on a daily basis, it seems. The most recent ones are able to reach the US, and the US military now suggests that within a year, North Korea will be able to launch these missiles with a nuclear weapon on top, like a cherry on a sundae.

This begs the question: would the market be hitting new records under these circumstances if a Jimmy Carter were president? if a Barack Obama were president? If a Gerald Ford were president?

I don't know. But for all the crap the mainstream media gives President Trump each day and for all the crap the opposition party gives President Trump each day, one gets the feeling that not only is everyone sleeping well at night because he IS president, but they are so comfortable with him as president at this particular time, they have no problem driving the market higher.

It doesn't hurt that he is surrounding himself with retired general officers who have served in South Korea and who have studied North Korea for decades.

The Apple Page

This past quarter (2Q17) is a "dead quarter" for Apple. No one cares what Apple reports this week; everyone is interested in the third quarter (3Q17) with the new iPhone release, and, of course, the fourth quarter -- the holiday quarter -- the big quarter for Apple.

But this was the great insight I heard on CNBC today regarding Apple. People shorting Apple are spreading the story/rumor that Apple might miss its launch date for the new Apple phone. Here's a little secret: no one cares. People are so used to delays in getting their new Apple products (for whatever reason) that a launch delay is  ... well, yawn.

Helping put this in perspective, of course, Tesla "always" misses its deadlines and no one cares, least of all Musk Melon.

There will be a lot of talk about Apple missing its iPhone launch date over the next few weeks.

And, no one will care. Next subject.


I really, really enjoyed the hour-long special on TCM tonight, a repeat showing of the 2017 recipient of the AFI Life Achievement Award, but how in the world did Diane Keaton ever win this award?

They're Reading The Blog -- July 31, 2017

From Investor's Business Daily:
Energy: Last week Royal Dutch Shell (RDSA) told investors that it expects oil prices to be "lower forever." We're still waiting for all those people who were only recently complaining about higher-forever oil prices to admit their mistake. It wasn't that long ago that President Obama was mocking Republicans for their "three-point plan for $2 gas: Step one is drill, step two is drill, and step three is keeping drilling."

He went on to say that "the American people aren't stupid. They know that's not a plan." Renewable energy, he said, was the only way to solve the "problem" of high oil prices.

And he kept pushing for new taxes on "old" energy to support federal subsidies for the energy supplies "of the future."

Of course, Obama wasn't the only one. There was endless talk about how Big Oil was making obscene profits while gas prices skyrocketed. There were calls for investigations into collusion among oil companies. Some wanted to bring back the Jimmy Carter-era "windfall profits tax."

Turns out drill, baby, drill was exactly what was needed.

Domestic oil production was skyrocketing even as Obama made those remarks — thanks to advanced drilling technologies that have opened up vast new domestic supplies to production.

The Energy Information Administration projects that, next year, U.S. oil production will average almost 10 billion barrels a day, which would beat the previous record of 9.6 billion in 1970. What's more, a quarter of this production is coming from one oil field: the Permian Basin in West Texas.
One might also ask where all those speculators are that are always being blamed for driving up prices of crude oil and gasoline. Many onshore oil companies have declared bankruptcy in the past year, and shares of XOM are trading at 52-week lows. Why aren't the speculators doing more to help these companies? Inquiring minds want to know. 

What a doofus

Eight New Permits; Five DUCS Reported As Completed -- July 31, 2017

Active rigs:

Active Rigs613574193180

Eight new permits:
  • Operators: Hess (5); Oasis (3)
  • Fields: Beaver Lodge (Williams); Banks (McKenzie)
  • Comments: Hess with permits for an E Burdick 5-well pad in SESE 19-155-95; Oasis with permits for a Berquist 3-well pad in NWNE 27-152-98
Interesting note:
  • Armstrong Operating has two wells plugged or producing, one Renville County (a Hanson well) and one in Stark County (a Frenzel well)
Five producing wells (DUCs) reported as completed:
  • 27419, 2,013, CLR, Garfield Federal 6-5H, Banks, t6/17; cum --
  • 27421, 2,032, CLR, Garfield 4-5H, Banks, t6/17; cum --
  • 30871, 284, BR, Curtis 21-16 TFH-3NH, North Fork, t6/17; cum --
  • 30872, 526, BR, Saddle Butt 21-16 MBH-3SH, North Fork, t6/17; cum --
  • 33148, 142,  STRI, 22-15 163-90B, Stony Run, t7/17; cum --

In cockpits, there is a fold-up seat between and behind the pilot/co-pilot seats: it's called the jump seat. You may have seen it in the movie, Catch Me If You Can.

Apparently Sophia was able to have her seat assignment upgraded.

Perhaps The Biggest Energy News Story Of The Week -- Nuclear Energy In The US Is Dead -- July 31, 2017


August 6, 2017: nuclear energy is dead -- NPR --
A decade ago, utility executives and policymakers dreamed of a clean energy future powered by a new generation of cheap, safe nuclear reactors. Projects to expand existing nuclear plants in South Carolina and Georgia were supposed to be the start of the "nuclear renaissance."
But following the decision last week by two utilities to scrap the expansion at the Virgil C. Summer Nuclear Generating Station in South Carolina, that vision is in tatters. There's now just one nuclear expansion project left in the country, its future is also uncertain. That remaining project is an expansion at the Vogtle Electric Generating Plant in eastern Georgia.
As recently as five years ago, then-Energy Secretary Steven Chu visited Plant Vogtle and declared the project the start of "the resurgence of America's nuclear industry" and a critical part of President Obama's energy strategy.
The two new reactors at Plant Vogtle were the first next-generation reactors in the country, and some of the first new reactors to be built in the U.S. in three decades. After the partial meltdown at Pennsylvania's Three Mile Island in 1979, the U.S. nuclear industry went into hibernation for more than two decades.
Then there were setbacks. First came the global financial crisis, which flattened the demand for electricity. Then fracking flooded the market with cheap natural gas. Renewable energy — especially wind power — also got more competitive.  
Later, 3:26 p.m. Central Time: see first comment. Apparently, other nuclear reactors on the east coast are also under scrutiny --
Potentially significant, related story playing out with the Millstone nuclear plants in Connecticut.
The two units provide over 2,000 MW capacity and the owner is saying they may shut down soon unless subsidies similar to those in Ohio and New York are forthcoming.
Original Post 

I've said many times on the blog that nuclear energy is dead. I never got any push back.

Today, the final nails in that coffin: The Washington Post reports that building of nuclear reactors in South Carolina has come to an abrupt halt. I'm not sure if this was a news story or an op-ed by The Post:
The long quest to revive America’s nuclear power industry suffered a crippling setback on Monday when two South Carolina utilities halted construction on a pair of reactors that were once expected to showcase a modern design for a new age of nuclear power.
The project has been plagued by billions of dollars of cost overuns (sic), stagnant demand for electricity, competition from cheap natural gas plants, and the bankruptcy of Westinghouse Electric, the lead contractor and the designer of the AP1000 reactor that was supposed to be the foundation of a smarter, cheaper generation of nuclear power plants.
Instead, the South Carolina reactors, along with two others under construction in Georgia, have demonstrated that the main obstacle to new nuclear power projects is an economic one.
The plants would be more viable if the federal government were to impose a tax on carbon as part of climate change policy, but that seems unlikely.
Killing these projects would not have been done if analyses did not show that natural gas was going to be available and affordable for at least the next 30 years.

With regard to a carbon tax, it certainly is not wind or solar killing nuclear energy -- anyone suggesting that has no clue how much wind/solar it would take to replace one nuclear plant -- there simply is not enough land for wind/solar to do that.

The reason story that is coming out of this story is this: GE and others are developing really, really good peaker generators to back up what little wind/solar energy offers.

Perfect Juxtaposition -- The Political Page, T+192 -- July 31, 2017

I cannot make this up. I'm watching CNBC: this advertisement is cut short by about 10 seconds ...

.... for this breaking news: Anthony Scaramucci OUT as White Communications Director, right after President Trump tweets ...

White House. Not. In. Chaos.

Yes, I cannot make this up.

And, again, one must ask why Anthony Scaramucci even lasted one day after that interview? The scuttlebutt is that Jared and Ivanka recommended Scaramucci to the president.

Scaramucci was out of the job less than six hours after the new chief of staff was sworn in.

Progressive soap opera.

Last man standing: Bannon. [Ten minutes after posting the "last man standing: Bannon" I see this article was posted three hours ago by Axios: Bannon working to destroy Scaramucci. Wow. Time to re-watch the Progressive Insurance commercial above.]

The Americal Division

During all the above chaos, President Trump was on television, live, awarding a military medal to a Vietnam veteran. The citation mentioned the "Americal Division." That was so neat to hear, for me; it's been awhile since I've heard that mentioned.

I wrote about the Americal Division before.  My father-in-law served in that division. His father arrived illegally in the US and was returned to Mexico; my father-in-law, born in the US, was allowed to stay and was raised by his aunt. He served at the very end of WWII; in the Korean War; and served two tours in Vietnam. His Japanese wife, my mother-in-law finally had enough of all the moves and settled in southern California until he finished his last tour in Vietnam. They enjoyed southern California for many years after retiring after 30+ years in the US Army. 

Time To Re-Look At A CLR Chimney Butte Eco-Pad -- July 31, 2017

First, review this post.

The well: now look at the recent production profile of this well on the same pad:
  • 16509, 484, CLR, Candee 11-9H, Chimney Butte, t6/07; cum 170K 5/17; FracFocus (33-025-00613) with no frack data as of July 31, 2017;
Recent production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Random Look At CLR's Brandvik Well, #16460 -- July 31, 2017

The well:
  •  16460, 538, CLR, Brandvik 14-24H, Corral Creek, t3/07; cum 225K 5/17;
Coming back on-line: this well has been off-line since September, 2015. It recently came back on-line. Recent production:

Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Graphics Have Been Added To The Update On An EOG Mandaree Well -- July 31, 2017

Link here.

European Refinery Shut Down Due To Explosion/Fire


August 1, 2017: this is Europe's largest refinery; earliest re-start, late August, 2017; Shell has also declared force majeure on supplies of solvents from Pernis, several of the company's customers said Tuesday.

Original Post 

Data points from Oil & Gas Journal:
  • a Shell refinery in the Netherlands (Rotterdam)
  • 400,00 bopd capacity
  • power outage over the weekend --> explosion --> fire --> decision to shut down entire operation
  • power failure occurred in a high-voltage power station


August 16, 2017: nope, I was right the first time. I guess I wasn't so dense. President Trump is upset that consumers don't pay taxes when ordering from Amazon. That's a bit of a lie. Third-party sellers do not collect taxes on their sales in (some/most/all) cases. But Amazon itself does charge state sales tax; collects that tax; and, reimburses the states on items that Amazon sells. Like many things, Trump is making a mountain out of a mole hill. South Carolina is suing Amazon for $12 million in back taxes for the first three months in 2016. Trump tweeted this early in the morning on August 16, 2017:

Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt - many jobs being lost!
Trump's fascination with this issue is becoming tiresome.
Original Post
I finally get it. Wow, am I dense. I completely misunderstood President Trump when he said Amazon did not pay any taxes. I thought he was talking about charging taxes on products they sold. I'm not the only one. Brick-and-mortar retailers complain that Amazon has an advantage by not paying taxes, obfuscating the issue by suggesting that retailers have to charge sales tax at point of sale in most states whereas alleging that Amazon does not.

The whole thing is an apple-and-oranges issue.

Amazon collects state sales tax at point of sale on the products they sell (that is not always true for third party sellers selling through the Amazon site -- that's yet another issue).

The issue Trump has problem with: Bezos is the richest or second richest man in the world, and yet his main company, Amazon, as a whole, "generally" does not pay federal corporate income taxes because it "always" shows a loss.

I probably don't articulate it as well as I wish I could but I think it can be understood what I'm trying to say. The "light went on" when listening to an analyst talking about Amazon and the FANG stocks and Apple on CNBC this morning.

The Market And Energy Page, T+192 -- The Trump Rally Continues -- Dow Hits Record On Opening -- Just After Hand-Wringing Last Week; US Companies Post Profit Growth Not Seen In Six Years -- July 31, 2017


Closing: it looks like the Dow will hit a new all-time record at the close. WTI is solidly above $50; may close above $50.

10-year bonds: below 3%. 

Original Post 

Dow hits record high.... and barely noted on CNBC. Mentioned in passing, but the crawler is staying there: "record high for Dow." Wow. [Later: after a nice opening, the Dow 30 just keeps rising throughout the day; now -- 12:56 p.m. Central Time -- the Dow 30 is up one point shy of 100 points.]

NYSE, early trading:
  • new highs, 77 -- Boeing, Deere, Exelon, Sunoco,
  • new lows, 13 --  
Trump rally:
  • US companies post profit growth not seen in six years -- The Wall Street Journal
  • 73% of the S&P 500 companies that had reported as of Friday had topped on both the top and bottom lines -- repeating: 73% of companies reporting so far, topped on both the top and bottom lines
The Old-Fashioned Way Of Streaming Photos

Sophia loves looking at albums the old-fashioned way while visiting "the homestead" in California.

Tesla Sending Our Cancellation Refunds In "Batches"; The Political Page, T+192 -- July 31, 2017


August 1, 2017: They must be reading the blog. from Green Car Reports, Tesla won't discuss net Model 3 reservations number; why? The writer didn't say a thing, except to confirm two things:
Tesla won't provide updated reservation/cancellation figures; and,
this little gem:
A rare example of pushback came after it released second-quarter Model S and Model X delivery numbers last month but omitted the number of cars in transit, a statistic included in previous quarterly reports.
Relatively widespread complaints by analysts prompted the company to update its release a few days later: the number of cars in transit had declined from that of the previous quarter.
The revelation didn't necessarily help perceptions of the company's deliveries or ongoing demand for the aging Model S hatchback sedan and specialized Model X crossover utility vehicle.
Original Post

From Tesla: they are receiving a lot of cancellations from folks who reserved a Model 3 for $1,000. The company is, apparently, admitting that ... as an explanation why refunds are so slow. They can't keep up with all the cancellations. From Wired:
Chitti cancelled his reservation on May 17, 2017. He says he was tired of waiting and frustrated by Tesla's lack of transparency.
Yet more than two months later, he hasn't received his refund. "
Every time I reach out I get the same explanation: They have a lot of cancellations to process, they'll prioritize my request, and that my refund should go out in the next batch," he says.
His experience is not unique. Many deposit holders have taken to Twitter to complain to Musk directly about their late refunds.
In a poll posted to the popular Tesla Motors Forum, a majority of respondents reported waiting more than a month to receive their reimbursement. On other message boards, claims of 5-, 6-, and 7-week waits are common, and many say they’ve held out even longer.
“It has been three months,” wrote /r/teslamotors user UnDosTresPescao on Reddit on July 3. “I have called/emailed them several times over the last month and a half asking about status.
Every time they ask for my address and say that a check will be promptly on its way. The check never comes.”This seems as good a place as any to disclose that I, too, was once a Model 3 reservation holder. I cancelled my deposit in April, when an honest evaluation of my transportation needs forced me to concede that the last thing I need in life is a new car. Tesla took just shy of three months to refund my deposit, which I received soon after the company caught wind of me reporting this piece.
I saw a clip of the Tesla event delivering the 30 new cars (to its employees) -- someone once said the Saturn automobile was the ugliest vehicle ever produced -- I did not agree -- but the Tesla Model 3 looked almost identical to the Saturn from 100 yards away.

Tesla's earnings call is this week. If analysts don't ask the question and if Tesla is not forthcoming with actual numbers, I will be quite disappointed.

If refunds are going out in "batches," one wonders how many refund checks are in each batch?

More: I never really thought about that -- situations change over time with regard to car buying. Putting down $1,000 for a car for delivery sometime in the future....I think in hindsight this is going to turn out to be one of the biggest (and audacious) marketing schemes by any auto salesperson: getting folks to reserve a $40,000 car with a thousand-dollar deposit three years in advance. Can you imagine if Ford was able to pull off this advertising campaign: send us $1,000 now to reserve your new $75,000 F-150 five years from now?

A lot of folks put down $1,000, I suppose, just for a conversation stopper, "Yes, I've reserved a Tesla." From someone who was living from one pay check to the next.

But ordering a car one won't see for two years suggests the buyer really didn't need a new car anyway.

And, if her situation changes, that she really does need a new car sooner, she will ask for her $1,000 Tesla deposit back to use on another car.

Millennials want same day delivery. Tesla is unable to guarantee 36-month delivery. A lot happens in three years.

Bolt? I may be wrong. I've suggested the real Tesla story is the effect it will have on the Chevrolet Bolt. This morning, CNBC's auto reporter said very clearly that the Tesla is not to be compared to the Chevrolet Bolt. Two completely different cars; two completely different audiences. Phil LeBeau says the Tesla Model 3 is targeting the "3-series" (BWM) and the "C-class" (Mercedes). That should be an easy bar to jump. Mercedes sold zero Mercedes C350e's in June (discontinued? no it's still there). BWM sold about 500 330e's in each of the last few months. This will be fascinating to watch. All three sell for about $44,000.

Hyperbole. Huffington Post suggests these 30 Teslas could represent the end of the internal combustion era. "This might be the way horse stable owners felt when they first saw a Ford Model T." Incredibly bad -- but easy -- analogy. Electric cars have been around 1884. Electricity has powered rail since 1879. The delivery of tirty Teslas may represent something but I don't think it represents the end of the internal combustion era. 

The Market And Energy Page, T+192 -- July 31, 2017

WTI briefly goes above $50; then drops back. I guess we can close the poll in which we asked whether we would see $50-WTI before August 5, 2017 --
  • yes: 78%
  • no: 22%
Futures: wow! I wasn't paying attention. Last night Dow 30 futures started negative but improved early in the evening. Now I see Dow 30 futures up almost 70 points; Nasdaq futures up 16 points; and, even the S&P 500 is up nicely. Wow. 

US energy suppliers: North Dakota ranks fifth behind Wyoming, Texas, Pennsylvania, and West Virginia. North Dakota could very easily surpass both Pennsylvania and West Virginia to become #3. But, of course, that's where it will stop.

They Must Be Reading The Blog; CVX -- Higher Production For Less Dollars -- July 31, 2017

Enbridge. Link here. They must be reading the blog; I don't know how many times I've written: Canadian oil = Venezuelan oil. And, this is what the Keystone XL was all about. The oil men (to include George W. Bush) knew what they were doing. Obama had no clue. We're lucky shale came alone the same time Obama did and Obama was too slow to shut down fracking.

Back To The Bakken

Active rigs:

Active Rigs613574193180

RBN Energy: why US LNG won't face Australia's natural gas supply problem.
The U.S. and Australia have been ramping up their LNG exports — Australia already is the world’s second-largest LNG exporter after Qatar and the U.S. will soon rank third.
Two recent events highlight the difference between the two countries and their natural gas markets.
First, in June the Australian prime minister acted to curtail LNG exports next year because of gas-supply shortages affecting domestic consumers.
Second, on July 19, the Potential Gas Committee released its biennial analysis of recoverable gas resources in the U.S.; its findings support the view that U.S. LNG exports can continue growing without causing domestic supply constraints.
Today we review the PGC report and the Australian LNG/supply situation, then compare the two markets.
There are real similarities — and noteworthy differences — between the U.S. and Australia. They’re similar in size (Australia’s land mass is slightly smaller than the Lower 48). Both were British colonies before establishing stable, long-lasting democratic governments. Both call their currency the dollar, and both are blessed with extraordinary scenery and natural resources. Big differences stand out, though. Australia’s population is only 24 million, an astounding 300 million fewer than the U.S. — heck, Texas alone has four million more people than The Land Down Under. And, as we will discuss today, there appears to be a big gap between the U.S. and Australia in the respective capacity of their natural gas sectors to accommodate a big ramp-up in LNG exports.
Chevron: swung to a 2Q17 profit even as refining returns fell short. From Bloomberg. Data points that stand out:
  • Chevron's production was the most in more than seven years
  • adjusted, the company earned 91 cents, beating estimates of 87 cents; unadjusted, they missed by 10 cents
  • cost cuts erased $50 billion from Chevron's market capitalization
  • more production for less money
  • cuts in CAPEX to continue
  • in passing, despite the headline: "the company also reported shrinking returns from its refining unit.
  • meanwhile, analysts expected XOM production to climb 1.5%, bu tin fact dropped almost 1%, and in a low-price environment, a double whammy

Sunday, July 30, 2017

Results In The Eagle Ford Core May Place A Ceiling On Oil Prices, But USO Could Still Head Higher -- Filloon

Link at SeekingAlpha.

  • new well completions produce more oil, especially in the core, and continues to pressure the US Oil ETF (USO)
  • production improvements offset increased costs
  • better stimulation and increased proppant use per foot improve economics, and this data shows a significant improvement
  • This was part of a presentation given at the Bakken Conference and Expo
I'm not sure who writes these headlines, but something tells me the "Eagle Ford" won't put a ceiling on global oil prices. LOL. Maybe I'm misreading / misunderstanding something.


Yellow River, The Tremeloes

Are We Looking At Eleven More DUCs This Week? Coming Off Confidential List This Week -- July 30, 2017

Friday, August 4, 2017
  • 29631, SI/NC, MRO, Delia USA 14-9TFH, Bailey, no production data,
  • 32543, SI/NC, BR, Lassen 1-1-26UTFH, Blue Buttes, no production data,
Thursday, August 3, 2017
  • 32445, SI/NC, BR, Lassen 2-1-26MBH, Blue Buttes, no production data,
Wednesday, August 2, 2017
  • 25885, SI/NC, Slawson, Pike Federal 7-3-2TFH, Big Bend, no production data,
  • 29630, SI/NC, MRO, Clarice USA 14-9H, Bailey, no production data,
  • 31437, SI/NC, Slawson, Pike Federal 6-3-2TFH, Big Bend, no production data,
Tuesday, August 1, 2017
  • 32544, SI/NC, BR, Lassen 3-1-26UTFH, Blue Buttes, no production data,
Monday, July 31, 2017
  • 33043, SI/NC, BR, Veeder 4B TFH, Blue Buttes, no production data,
  • 33247, SI/NC, MRO, Mittelstadt 34-12H, Chimney Butte, producing, 4K in 5/17;
Sunday, July 30, 2017
  • 33044, SI/NC, BR, Veeder 4C MBH, Bailey, no production data,
  • 33248, SI/NC, MRO, Hondo 34-12TFH, Chimney Butte, no production data,
Saturday, July 29, 2017
  • 33045, SI/NC, BR, Veeder 4D MTFH, Blue Buttes, no production data,

Re-Fracking Works -- USA News -- July 30, 2017

I don't recall if I've previously posted this. From US News: applying new fracking techniques to older wells in the Bakken works. Data points:
  • North Dakota Pipeline Authority made the analysis
  • targeting wells originally drilled between 2008 and 2010
  • most of the 140 wells in the Bakken that have been refractured saw an increase in oil production from 200,000 to 250,000 barrels
  • companies will typically want to see at least an additional 200,000 barrels of oil to justify the investment 
The link to The Bismarck Tribune article is here.

The Site Needs A Bit Of Music

Sea of Love, Emily West

Even with YouTube, not many live versions with Patsy Cline:

I Fall To Pieces, Patsy Cline

Annual US Residential Electricity Dropping; The EIA Suggests It Was Partly Due To The Bakken Bust -- July 30, 2017


Later, 8:32 p.m. Central Time: see first comment. Click on these links to see some striking graphics which might explain the decrease in electricity usage during the Obama presidency. The most striking is the "median income" graph:

Later, 5:58 p.m. Central Time: I posted this graph earlier, but when I went back and re-looked at it, something jumped out at me.

This had nothing to do with the EIA explanation: a) weather; b) LED lights and energy-saving devices; and, c) the Bakken.

It is a well-known fact that the recovery from the Great Recession was the worse recovery on record. The flattening (and actual decrease) of residential electricity sales corresponds exactly to the years Barack Obama was president.

Something else was going on. That line labeled "Pre-Obama" is absolutely incredible when you think about it. There aren't many economic data curves that climb that fast, and then look how fast the "curve" changed. It didn't just slow down; it came to a complete stop, reversed direction (from upward to downward), went down a bit more and then flattened out/descended throughout the rest of his presidency. Darndest thing I've ever seen.

Original Post
It will be interesting to see the analysis, explaining the drop in electricity consumption / capita. One wonders if (I'm writing this before going to the source):
  • all those "energy-saving" devices that have been sold over the years
  • LEDs replacing conventional tungsten lightbulbs

This decline all came during the Obama administration; prior to that, we did not see this in the Bush administration. It will be interesting to see whether things change or stay the same during the Trump "era."

EIA provides this analysis:
  • weather
  • energy saving devices
  • LED lighting
I found it interesting that one state was highlighted in this report:
Other factors, such as income growth, have affected retail electricity sales, especially in states such as North Dakota. North Dakota experienced significant economic growth as crude oil production from the Bakken region increased from 2008 to 2015.
Annual new housing permits in North Dakota increased from fewer than 4,000 units in 2010 to more than 12,000 units in 2014. As the size of new houses increased and residents who experienced rapid income growth likely increased their home use of electricity, per capita residential electricity sales in North Dakota grew by 12% from 2008 to 2014, the most rapid growth in the nation during this time.

With the decline in oil prices starting in mid-2014, per capita real gross domestic product in North Dakota fell by 12% from 2014 to 2016, with new housing permits falling to less than 4,000 units in 2016. During this period, North Dakota’s per capita electricity consumption declined from a peak of 7,241 kWh in 2014 to 6,149 kWh in 2016.
If there is "truth" in the North Dakota piece, it speaks volumes about how huge the Bakken really was. And note: they are hiring electricians in North Dakota again

Why I Love To Blog -- It's An Existential Issue -- July 30, 2017

Has Saudi Arabia stopped the bleeding?

Source: Trading Economics.

Posted by John Kemp, via Twitter, early Monday morning, July 31, 2017:

Lies, Damned Lies, And Statistics

John Kemp's headline over at Twitter: SAUDI CRUDE OIL EXPORTS have been running well below 2016 level since start of year and kingdom has pledged < 6.6 million b/d in August. 

What is not said in that headline is that Saudi had record production in 2016. From late 2014 to late 2016 Saudi tried to break US shale by opening the spigots; their production actually never dropped until early 2017. So, saying their exports were well below 2016 may not be saying a whole lot. Then, in the graph, they compare current exports to the 10-year average, which, of course, is greatly affected by the surge in production/exports from 2014 to 2016. If one eliminated 2014 - 2016 data, the 10-year line would be (much?) lower and Saudi exports would still be greater than the 10-year average. Lies, damned lies, and statistics. 

The real problem, however, is not Saudi. In the big scheme of things they probably are trying to right the ship. The problem is the other OPEC countries, notably Iraq and Iran.

Now Bloomberg Is Calling It An Existential Issue
As long ago as November 11, 2015, I said that low oil prices were an existential issue for Saudi Arabia and I've said it since on numerous occasions.

I see that others are reading the blog. LOL.

From Bloomberg today: OPEC's existential sucker punch.
You wait decades for an existential crisis, then two come along at once. At least that's how it must feel for OPEC's beleaguered ministers. In the short term the market for their oil is being eroded by rising production outside their control. Looking further ahead, oil demand itself is under threat from the electrification of road transport. OPEC may not yet be dead, but its days are surely numbered.
The most obvious short-term threat to the group comes from the rapid rise in U.S. shale oil, but the risks have expanded to include other areas like Brazil's prolific sub-salt discoveries and more recent finds further north along the east coast of South America.
The writer says "OPEC's days are numbered." For me, OPEC = Saudi Arabia. In math, if A=B and B=C, then A=C. Just saying.

Some data points from the article:
  • Asia turning to US crude oil to offset OPEC cutbacks
  • China was the biggest foreign buyer of US crude in April (most recent EIA data) -- overtaking Canada for the second time this year (does this say more about Canada or China?)
  • Indian refiners are finding an appetite for US grades that compete directly with OPEC
  • Saudi was hoping that Asia would stay true to OPEC
  • little letup in US oil production
  • lower 48 crude oil production hit 9 million bopd for the first time in nearly two years
  • big oil is learning to live with "lower for longer"
  • last quarter, Shell generated almost as much cash from its operations at $50/bbl as it when oil was above $100/bbl
  • big oil is getting "fit"; OPEC is not: they have not made the cuts they need to survive if prices persist at these levels
Then a lot of political correctness talk about EVs. Trivial. 

Random Look At An EOG Mandaree Well Drilled Back In 2011 -- July 30, 2017

Link here.

Something Lost In Translation? Mideast Rhetoric Rises -- July 30, 2017

Over at "The Big Stories" I follow the "Mideast on the Brink." I have moved that link back to the sidebar at the right, under "The Top Five." Apparently Saudi Arabia says there has been "a declaration of war in the Mideast."

From Reuters: Saudi Arabia says calls for internationalization of holy sites is a "declaration of war." The rhetoric between Saudi Arabia and Qatar increases.
Saudi Arabia's foreign minister called Qatar's demands for an internationalization of the Muslim hajj pilgrimage a declaration of war against the kingdom, Saudi-owned Al Arabiya television said on Sunday, although it was unclear whether Qatar had actually made any such demand.
"Qatar's demands to internationalize the holy sites is aggressive and a declaration of war against the kingdom," Adel al-Jubeir was quoted saying on Al Arabiya's website.
"We reserve the right to respond to anyone who is working on the internationalization of the holy sites," he said.
However, it was unclear whether Qatar made the demand. It did accuse the Saudis of politicizing Hajj and addressed the United Nations Special Rapporteur on freedom of religion on Saturday, expressing concern about obstacles facing Qataris who want to attend hajj this year. 
Sounds like something lost in translation.

Is That All He Said? Yes, With Intensity

Lost In Translation

Update Of Whiting Chameleon Wells -- July 30, 2017

Some time ago (last February), I said I might eventually get back to #22621. I returned to it in April but that was before the NDIC map showed the horizontals; those horizontals are now shown on the NDIC map. An update regarding the Whiting Chameleon well is posted here, a classic pincer movement, or a fracking squeeze.

Random Update Of A CLR Rochester Well In North Tobacco Garden, #21600 -- July 30, 2017

The well:
  • 21600, 838, CLR, Rochester 1-24H, North Tobacco Garden, t1/12; cum 249K 5/17; frustratingly, since early 2017, this well has had a steep decline in production.
The production profile for #21600 can be found at this post with additional information.

The graphic:

EIA's Forecast For 2018 Crude Oil Production; Coal, Japan, and Korea (A Movie) -- July 30, 2017

For the archives: this really doesn't tell us anything new, I don't think ... I could be wrong. But it was posted just the other day by the EIA so for the archives: US crude oil production forecast expected to reach record high in 2018.

In 2017, this year, total US crude oil production is forecast to average 9.3 million bopd, up one-half-million bopd from 2016. If the EIA is correct, if US production hits an average of 9.9 million bopd in 2018, that will surpass the all-time record of 9.8 million bbls of oil produced per day in 1970.

9.9 is an average, meaning that by the end of 2018, the US could be producing well above 10 million bopd (which the graph at the link suggests.

Coal, Japan, And Korea -- A Movie

After my recent notes on coal and Europe, a reader introduced me to something I had never heard of before: undersea coal mines during the industrialization of Japan in the 19th century. There is a 2017 South Korean action movie, Battleship Island, soon to be released; based on the trailer it will be way too intense for me to watch, so I won't see the movie.

Whether you watch the YouTube trailer or not, I can't recommend. However, if you watch it first, you will have a better "visual" of the wiki entry on Hashima Island. For folks who wondered where some of the scenes in the James Bond thriller Skyfall came from, now you know.

For me, unable to watch a movie like Battleship Island, I will re-watch Tampopo, which now has a new trailer with "4K restoration."

Nature's Most Anticipated Movie

This is still almost a month away and Wyoming officials are already preparing. 

I can hardly wait to see the photographs of the park during the eclipse. It will also be interesting to see US gasoline consumption numbers that week.

A reader sent this from a post over at Facebook:
The Wyoming Patrol would like to inform you of the following information as the 2017 Solar Eclipse event quickly approaches. 
The eclipse will take place on Monday, August 21st.

It will start traveling through Wyoming at Grand Teton National Park around 11:35 a.m. MST and follow the path on the map shown below.

No oversize/overweight loads will be permitted in/through WY Sunday, August 20th through Tuesday, August 22nd, 2017. Oversized loads cannot travel during that time period even with a permit in hand.
  • be prepared for distracted drivers 
  • traffic volumes are expected to create travel congestion particularly along I-25 
  • food and fuel are likely to be limited
Plan accordingly before traveling through the eclipse route.
Cell phone coverage may also be limited and no parking is permitted along the highways.
We encourage you to arrive early and stay late to avoid potential traffic congestion.

Hiring In The Bakken -- July 30, 2017

Electricians needed:From Facebook, sent by a reader:
L&K Electric, a member of the Expanse Energy Solutions Family of Companies, is hiring Licensed and Unlicensed Journeyman Electricians with oilfield or industrial experience to work in North Dakota and Montana. 
Individuals for these positions must possess a high degree of initiative, creativity, communication skills, self-supervision, and respect for safety requirements.
L&K Electric offers a very attractive compensation package that includes a competitive salary and enrollment into a full benefits package.
Active rigs:

Active Rigs613573191181

Saturday, July 29, 2017

Mandaree Wells (EOG, WPX, Enerplus)

Mandaree wells:
21332, 1,189, EOG, Squaw Creek, NWNW 20-149-94, 320 acres; t9/12; cum 97K 5/17;
18908, 1,565, EOG, Squaw Creek, NWNW 20-149-94, 320 acres, t9/10; cum 173K 5/17;

22232, PNC, EOG, Squaw Creek, NWNW 9-149-94,
22233, PNC, EOG, Squaw Creek, NWNW 9-149-94,
18927, 815, EOG, Squaw Creek, NWNW 9-149-94, 640 acres t8/10; cum 171K 5/17;

18464, 1,424, EOG, Squaw Creek, NWNW 10-149-94, 640 acres, t9/10; cum 186K 5/17;

18411, 977, EOG, Squaw Creek, Lot 4 5-149-94, 640 acres, t10/10; cum 194K 5/17;
21003, 580, EOG, Squaw Creek, Lot 4 5-149-94, 640 acres, t10/11; cum 131K 5/17;
26769, 526, EOG, Squaw Creek, Lot 4 5-149-94, 640 acres, t10/14; cum 93K 5/17;
26768, 2,054, EOG, Squaw Creek, Lot 4 5-149-94, 640 acres, t10/14; cum 190K 5/17;

23934, PNC, EOG, Squaw Creek, NENW 17-149-94,
18594, 105, EOG, Squaw Creek, NWNW 17-149-94, 640 acres, t9/10; cum 169K 5/17;

26778, IA/704, EOG, Squaw Creek, Lot 3 5-149-94, 640 acres, t9/14; cum 156K 10/18; went inactive 10/18; remains off line 5/19;

26777, 940, EOG, Squaw Creek, Lot 3 5-149-94, 640 acres, t10/14; cum 155K 5/19;
26779, 1,014, EOG, Squaw Creek, Lot 3 5-149-94, 640 acres, t10/14; cum 174K 5/19;

19004, 1,440, EOG, Squaw Creek, SESE 7-149-94, 640 acres, t11/10; cum 196K 5/19;
32514, 1,355, EOG, Squaw Creek, SESE 7-149-94, 1280 acres, t12/16; cum 271K 5/17; see this post;

32512, 1,505, EOG, Squaw Creek, SESE 7-149-94, 1280 acres, t2/16; cum 173K 5/17;
32513, 1,910, EOG, Squaw Creek, SESE 7-149-94, 1280 acres, t12/16; cum 252K 5/17;

18697, 927, EOG, Squaw Creek, SESE 15-149-94, 640 acres, t8/10; cum 243K 5/17;

18774, 526, EOG, Squaw Creek, NWNW 16-149-94, 640 acres, t10/10; cum 161K 5/17;

20601, 1,059, EOG, Squaw Creek, SESE 4-149-94, 320 acres, t5/12; cum 132K 5/17;
19426, 1,207, EOG, Squaw Creek, SESE 4-149-94, 320 acres, t3/11; cum 156K 5/17;

28209, PNC, EOG, Squaw Creek, SWSE 5-149-94, monitoring

28982, 823, WPX, Spotted Horn, Lot 1 30-150-93, 1280 acres, t9/15; cum 203K 5/17;
28983, 2,222, WPX, Spotted Horn, Lt 1 30-150-93, 1280 acres, 45 stages, 10.1 million lbs, t9/15; cum 553K 5/17;
19604, PNC, WPX, Spotted Horn, Lot 1 30-150-93,
28984, 1,849, WPX, Spotted Horn, Lot 1 30-150-93, 1280 acres, t9/15; cum 233K 5/17;
28981, 1,642, WPX, Spotted Horn, Lot 1 30-150-93, 1280 acres, t9/15; cum 238K 5/17;
19603, 332, WPX, Reunion Bay, Lot 1 30-150-93, 1280 acres, t5/11; cum 499K 5/17;

33320, 2,903, WPX, Spotted Horn, Lot 5 30-150-93, t10/17; cum 16K first 11 days;
33321, 2,615, WPX, Spotted Horn, Lot 5 30-150-93, t11/17; cum 7K over first 8 days;
33323, 2,724, WPX, Spotted Horn, Lot 5 30-150-93, t11/17; cum --
33822, 1,569, WPX, Spotted Horn, Lot 5 30-150-93, t5/18; cum 203K 5/19;
33823, 1,778, WPX, Spotted Horn, Lot 5 30-150-93, t5/18; cum 268K 5/19;
33824, 2,434, WPX, Spotted Horn, Lot 5 30-150-93, t5/18; cum 307K 5/19;
33825, 2,486, WPX, Spotted Horn, Lot 5 30-150-93, t5/18; cum 260K 5/19;
33826, 2,264, WPX, Spotted Horn, Lot 5 30-150-93, t5/18; cum 225K 5/19;

28875, 1,138, WPX, Reunion Bay, NWNW 30-150-93, 1280 acres, t11/14; cum 279K 5/17;
28874, 367, WPX, Reunion Bay, NWNW 30-150-93, 1280 acres, t1/15; cum 139K 5/17;

20320, 375, WPX, Squaw Creek, SESW 14-149-94, 1280 acres, t5/12; cum 305K 5/17;

33135, 1,591, Enerplus, Spotted Horn, SESW 32-150-94, Mandaree 150-94-32C-29H TF, t2/18; cum 228K 5/19;


Some, not all. These are mostly WPX Mandaree wells. EOG Mandaree wells are to the west, in Squaw Creek (off the graphic):

Why I Love To Blog -- July 29, 2017

Remember all the outrage when President Trump pulled out of the "Paris climate accords." LOL

Does anyone remember this, from 2013? The Brits effectively pulled out four years earlier. The (London) Guardian reported in 2013: UK's climate change adaptation team cut from 38 officials to just six.
The number of people employed by the government to work on the UK's response to the effects of climate change has been cut from 38 officials to just six, triggering accusations that David Cameron's promise to be the greenest government has been abandoned.
I can't make this stuff up.

And with all the effort required for Brexit, it's unlikely these six folks are doing much more than a) answering telephone calls; b) writing press releases; and, c) talking to mum.

Favorite Story of The Day

Steve Wynn's $10 million loss on baccarat.

This article will provide a bit more color, a bit more breadth and depth to the short Fortune article.

I've never played baccarat; I wonder if this is something Sophia and I might enjoy? LOL. 

The Dots Are Starting To Connect Faster Than Expected -- July 29, 2017


August 6, 2017: A reader sent me a fascinating New York Times article: "Under Trump, coal mining gets new life on US lands."

I thought I had already posted a similar story at an earlier post. I will update that post and bring it here -- it's that fascinating to me. There are some important "things" converging:
  • first, the switch to global EVs cannot occur without coal; at the end of the day, EVs are coal-powered cars. Period. Dot
  • second, a third Obama term (aka the Hillary debacle) would have stopped the coal resurgence in its tracks
  • third, Trump has been in office ... T+196 days
  • fourth, the press is fascinate with presidential tweets -- the really big stories are happening in his departments -- like the Department of Interior; Department of Energy; Department of Homeland Security
From The New York Times' article:
The Obama administration, he said, had become intent on killing the coal industry, and had used federal lands as a cudgel to restrict exports. The only avenues of growth currently, given the shutdown of so many coal-burning power plants in the United States, are markets overseas.

“Their goal, in collusion with the environmentalists, was to drive us out of the export business,” Mr. Reavey said.

Even with the moves so far, the prospect of coal companies operating in a big way on federal land — and for any major job growth — is dim, in part because environmentalists have blocked construction of a coal export terminal, and there is limited capacity at the port the companies use in Vancouver.

Competition from other global suppliers offering coal to Asian power plants is also intense.

But at least for now, coal production and exports are rising in the Powder River Basin after a major decline last year.
There's plenty of coal in non-federal land for now. 

Original Post
When you  -- or rather, if you -- read the previous two posts on coal, just think how much has changed.

First, the links to the previous two posts (over time, things will get lost):
Now, back to the original thought -- just think how much has changed.

First, President Trump sees the hypocrisy of the "Paris accords" and does the right thing by letting the world know that the US will no longer participate in such nonsense.

Second, the Obama war on coal has been reversed, in less than six months. I find that absolutely incredible. And it's just getting started.

Third, it is becoming clear that European reliance on coal (or natural gas) is going to increase rather than decrease as forecast ... and it appears it's going to happen much faster than we expected.

Fourth, and this is really interesting ... does anyone remember this post:
  • France plans to close a significant number of nuclear plants, saying it doesn't want to become overly dependent on nuclear energy (German and US engineers hold that card) and, apparently, would rather become overly dependent on Qatar natural gas instead
" ... France plans to close a significant number of nuclear plants, saying it doesn't want to become overly dependent on nuclear energy..."

That was buried in a very long note. I honestly did not understand that. It made no sense. "Overly dependent on nuclear energy"? What was that all about? Nuclear energy was France's "only hope." If they shut down nuclear plants, they have only two choices: CO2-emitting natural gas or huge CO2-emitting coal. Wow.

Now, it becomes clear. In that first linked article, this little gem on which Reuters did not elaborate:
France had suffered a series of nuclear power plant outages that required it and regional neighbors to rely more heavily on coal
Yes, that was in the Reuters article.

Of course, it begs the question: what caused the series of nuclear power plant outages in France? Russian hacking? Homer Simpsons (plural)? Aging plants and no money (or political will) to modernize? 

And note that the nuclear power plant outages didn't affect only France but also the neighboring countries that rely on that energy.

So, when France cuts back on nuclear energy, they also cut back on the surplus electricity being sold to other countries, and .... well, it doesn't take a nuclear scientist to connect the next dots.

Six months into the Trump presidency.

We've only just begun.

Don't forget this: EVs run on coal. Period. Dot. Or maybe natural gas where natural gas is in abundance, but in most of the world (and in most of the US) EVs run on coal. Connect these dots:
  • England is a net energy importer (or very nearly; some winters England has come within 48 hours of running out of coal; January 13, 2017: Europe close to running out of coal, natural gas, energy due to cold snap caused by global warming)
  • France had to increase coal imports because of a series of nuclear power plant outages
  • neither England nor Europe has plans for any expected change in home-grown energy production (France bans fracking; I can't foresee a fracking revolution in Yorkshire)
  • EVs run on coal (not crude oil)
  • France and Britain have both said they will ban gasoline cars by 2040
  • if they don't have enough coal to power their countries now, imagine what happens when they go to coal-powered cars
Even forgetting about the electrical grid and charging infrastructure that will be required, it appears that no one has really thought any of this through.

And finally, just so we don't forget, the UK plans to phase out all coal by 2025. From the Torvald Klaveness post:
The biggest looser (sic) this year in terms of negative growth in coal imports is without doubt the UK.
Total coal imports in first half-2016 of 4.9Mt is down a massive 71% from the 16.9Mt imported in the same period last year. The U.K.’s taxation system is disfavoring coal compared to gas and the UK government has committed themselves to phase out coal by 2025. We therefore expect the UK volumes to continue to be very low going forward. There are seven remaining coal-fired power plants in the UK today.
That was written less than a year ago (the writer only had data through first half of 2016). What happened since then:
United Kingdom (aka Great Britain, includes England): 175% increase in US coal shipments  
Torvald finished his October 29, 2016, post with this:
However, the positive news from a seaborne trade perspective is that the majority of import cuts are already behind us. The current low base means that any further fall in import will only have a marginal negative impact on global trade.
Wow, not only "kinda wrong" but really, really wrong. 

I track "Europe at a tipping point" as one of "The Big Stories."