Wednesday, January 4, 2017

Big Box Demise -- January 4, 2017

Rigzone blog: what was the biggest oil and/or gas industry surprise of 2016? This is pretty cool. Rigzone's top surprise, or top story, was the very same one I had. These were the stories listed.
  • without question, the election of Donald Trump as president was the #1 energy story for the oil and gas sector in 2016
  • disintegration of the highly anticipated HAL-BHI deal was unexpected by some analysts
  • the somewhat surprising BHI deal with GE as the response to the failed HAL-BHI
  • one analyst surprised that major oil companies did not take advantage of low oil prices to make big acreage buys (the majors were lucky to survive; buying more acreage was hardly an option)
Will The Parade Be The Next To Go?

Over at "the Big Stories," I have a section called "the Doomsday Chronicles." And there I track "the demise of the Big Box store" which just coincidentally began with the Obama presidency. I say all that to note this article over at MarketWatch:
Macy's and Kohl's [shares] plunge after weak holiday sales. Macy's said it will slash more than 10,000 jobs -- ten thousand -- and detailed plans to close dozens of stores after another holiday season of weak sales, providing more evidence (as if more evidence was needed) that department stores have lost their once-central place in American retailing.
The story is also over at The New York Times.
The announcement on Wednesday continued a trend for Macy’s, which announced last January that it was eliminating about 4,500 jobs in a major restructuring. Then, too, it said slumping holiday season sales had hurt its bottom line.
The company, which now has 730 stores, announced in August that it would close 100 of them. On Wednesday, it identified 68 stores to be closed.
The 158,000-square-foot store in the Douglaston neighborhood of Queens, which opened in 1981, will close. Stores at the Marketplace Mall in Rochester; at the Oakdale Mall in Johnson City, N.Y., near Binghamton; and at the Preakness Shopping Center in Wayne, N.J., will close.
Of the 68, three were closed by the middle of 2016, 63 will close in the spring and two will be closed by the middle of 2017. Three other locations were sold or are to be sold. The company said it planned to close about 30 other stores over the next few years.
Cramer has something he calls FANG (Facebook, Amazon, Netflix, and Google). FANGS (adding Starbucks) would also work.  FANGS might be better; FANG could be confused with the ticker symbol for Diamondback Energy.

Total US Crude Oil Imports -- Historical Data -- January 4, 2017

I wonder if the increase in US crude oil imports, for the most part, was along the northeast coast. RBN Energy noted that when Saudi Arabia changed course in 2014, Bakken CBR to the northeast practically came to a standstill. [See first comment: I had forgotten about contango and storage; a lot of oil imported this past month could have gone into storage anticipating better prices in six months.]

I don't know. I'm sure the data is out there but that would be beyond the scope of this blog.


I've been posting a number of links to stories regarding Mexico; one can start here. Mexico could be facing a "perfect storm" and it isn't beyond the pale to think that Mexico could face more dire economic straits than what folks are talking about. After the election I returned to watching MSNBC and CNBC  (I won't watch Fox News except in passing). But after two weeks of "Morning Joe," I grew tired of MSNBC and switched completely to CNBC, but that, too, has become tiresome and trivial. I am amazed that "they" can talk for twelve hours and have so little to say about what is going on in Mexico and what is going on in Canada.

What made me think of that was this story over at the AP today: "scuttled Ford plant has Mexico fearing more under Trump."

When/if Mexico implodes, there will be a lot of finger pointing, and I won't be surprised if Mexico's problems are blamed on a change in American policy. Good, bad, or indifferent, there will be some in America who will say that it was Mexico's own failure to help stem the tide of illegal immigration that got Donald Trump elected. Actions have consequences.

As I write that, my mind begins to wander, but those thoughts will have to wait. Our older granddaughter has finished water polo practice and is ready to head home.

Straw Man

By the way, here's another "straw man." CNBC talking heads all day talk about how few cars made by US manufacturers in Mexico are really sold back here in the states. In fact, they tell you, 90% of US cars made in Mexico are sold around the world. So the obvious question is why aren't US companies building those cars in the US to sell around the world. And that is a great example of a "straw man" argument.

When I heard that Ford's profit margin or cost savings or however "they" measure it, amounted to a measly "10% savings." That is incredible. Ford would building a factory in Mexico just to save 10%. I assume there's enough inefficiency in US plants that could easily be tightened, knocking off that 10% waste, and doing just as well here in the states. And for the country (the US) all those folks working, paying taxes, supporting their communities, their churches, their schools. When I heard that we're talking a measly 10%, I understood even better why Trump and US workers are so enraged about sending jobs overseas, or across the border to Mexico. Now with relatively inexpensive energy here in the states compared to counties that need to import fossil fuel, something tells me the US may be competitive enough to offset the difference in labor costs.

And, oh, by the way, saying that an American worker costs several times more than a worker across the border is another straw man argument. The issue is not the "cost" of an individual worker but the productivity of the manufacturing plant as a whole.


Yesterday, the cupcakes over at The Los Angeles Times were grousing that the snow pack this year was 70% of normal compared to 105% at this time last year.

Twenty-four hours later the forecast is for up to 20 feet of snow to be dumped on parts of California in the next few days. I can hardly wait.

This tells me two things:

There is a God.

And God has a huge sense of humor.

Go, God!

By the way, snow pack can be tracked here:

And you can change the "date" by simply changing the year/month in the URL. Seriously. I will try ot remember to check snow pack two months from now.

The photo below was taken by "Lois and Clyde" near New Salem, ND.

Grousing Redux

Full disclosure: I have a Costco card, basic membership, $55 / year.

I "never" shop at Costco. I've been to our local Costco once in the past year and did not buy anything. No, I guess I've been there twice. The other time was with my wife. She bought a chicken. (Not a live chicken but ... you know what I mean....)

There is talk that Costco may raise the price of basic membership from $55 to $60. I would still renew. I would renew up to $75/year. I would probably even renew at $100/year, and I would probably shop there just as often.

The one time two times I went to Costco this past year I noted that many of the customers looked no richer nor no poorer than I (looked). In fact, it was getting to look a lot like our local Wal-Mart. Based on that observation, I think Costco would be smart to raise the basic membership to $75/year. Maybe more.

Didn't Mark Twain Groucho Marx say something to the effect that he didn't "believe" in clubs: he wouldn't want to be part of any club that would accept him as a member? Costco is starting to get that "feel." (An eagle-eyed reader caught my "Mark Twain" mistake.)

Quick: what's the average family income for a Costo shopper? for a Sam's Club shopper? Answer here.

By Popular Request, The Science Page

All living things on Earth fall into one of three main categories, or domains: Eukaryota (us), Bacteria (not us), and Archaea (not us, either).

The defining characteristic of eukaryotic cells is the presence of a nucleus.

I knew all that. The following is new to me.

In eukaryotic cells and in archaea, the DNA is wrapped every so often along its length around blobs of a protein called histones.

Only eukaryotic cells have cytoskeletons. And only eukaryotic cells have kinesin and dynein. The latter are two remarkable motor proteins that drag other molecules or entire organelles around inside the cell, literally walking along tubular tracks.

That's from The Cell: A Visual Tour of the Building Block of Life, by Jack Challoner, c. 2015. This information might be important if you have a cocktail party to attend this weekend. Or not.

Whiting, CLR Report Nice Wells In The Bakken -- January 4, 2017

Active rigs:

Active Rigs4059171184179

Two wells coming off confidential list Thursday (according to the NDIC site, these two wells were due to come off the confidential list Thursday, 1/5/17, but that did not happen):
  • 32680, 1,205, Hess, HA-Link-152-95-3526H-6, Hawkeye, 50 stages, 3.5 million lbs;  t11/16; cum 16K over 12 days;
  • 32712, drl, Statoil, Heinz 18-19 5H, Patent Gate, no production data,
Two new permits:
  • Operator: Marathon Oil Company (2)
  • Field: Chimney Butte (Dunn)
  • Comments:
Three permits renewed:
  • BR (3): three CCU Red River permits, all in Dunn County (one might recognize these as three permits that "EXP" yesterday
Three permits canceled:
  • Emerald Oil (3): three Coleman wells in McKenzie County
Three producing wells (DUCs) completed:
  • 32074, 2,025, Whiting, Koala 14-32-2H, Poe, t12/16; cum --
  • 32075, 2,388, Whiting, Loala 14-32HU, Poe, 4 sections, t12/16; cum --
  • 32294, 2,320, CLR, Holstein Federal, Elm Tree, t11/16; cum 13K in 8 days
32680, see above, Hess, HA-Link-152-95-3526H-6, Hawkeye:

DateOil RunsMCF Sold

The Williston Herald's Top Ten Stories For 2016 -- January 4, 2017

Link here.
1. Crew camps nearly gone, but not without a fight.
2. Dakota Access fight will continue in 2017
3. Williston closes downtown strip clubs
4. Williston High School moves into its new home
5. Downturn in oil and gas produces leaner, more efficient companies
6. Babe Ruth returns to Williston
7. Double shooting leads to arrest months later
8. Airport work begins
9. Fentanyl causes overdoses, leads to arrests
10. Downturn in agricultural commodities likely to shape 2018 farm bill
Honorable mentions:
  • Katie Ledecky
  • construction begins on jail, second expansion project in ten years
  • Mon-Dak Thunder 6-man football fell just short of state championship
  • Williston hires city administrator
  • WHS basketball coach resigns after sexual misconduct allegations
The blog's top stories for 2016 at this link.

Oasis Reports Another Great Bakken Well; Add In The Natural Gas And It's Quite A Well -- January 4, 2017

This is mostly being posted for newbies. This well is not unremarkable among the wells now being reported in the Bakken.

This well came off the confidential list over the long weekend.

Note that this well produced more than 100,000 bbls of oil in less than six months (actually, less than five months).

It should also be noted that not a particularly large amount of proppant was used. This is the amount of proppant that Statoil (BEXP)  has used for years in the Bakken, unlike some operators who have ramped up to 10 million lbs (and even more).

The number of stages for fracking in the Bakken appears to be about 36 as the "norm"; we still see a fair number of wells fracked with 24 stages but the number of wells below 36 stages seems to be decreasing. On the other hand, we are starting to see more wells fracked with 50+ stages.

Also, note the incredible amount of natural gas produced. Unfortunately, it is not yet all being captured/processed/sold, but 60,000 MCF translates to 10,000 boe which could be added to the 20,000 bbls of crude oil produced in the early months.
  • 31333, 247, Oasis, Johnsrud 5198 12-18 10T, Three Forks Bench 1, Siverston, in McKenzie County, 36 stages, 4.1 million lbs, t7/6; cum 103K 11/16;
NDIC File No: 31333     API No: 33-053-06981-00-00  
Well Type: OG     Well Status: A     Status Date: 7/3/2016     Wellbore type: Horizontal
Location: NENW 18-151-98    Latitude: 47.905130     Longitude: -103.274861
Current Well Name: JOHNSRUD 5198 12-18 10T
Elevation(s): 2159 KB   2134 GR   2141 GL     Total Depth: 20867     Field: SIVERSTON
Spud Date(s):  8/28/2015
Completion Data
   Pool: BAKKEN     Perfs: 11504-20862     Comp: 7/3/2016     Status: GL     Date: 10/7/2016     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 103451     Cum MCF Gas: 215887     Cum Water: 160041
Production Test Data
   IP Test Date: 7/8/2016     Pool: BAKKEN     IP Oil: 247     IP MCF: 424     IP Water: 3882
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Twenty-nine (29) Wells/Permits Came Off Confidential List Over Long Weekend; Oasis WIth A Huge Well -- January 4, 2017

In yesterday's daily activity reports, the following wells were noted to have been released from the confidential list:

SM Energy, four wells/permits in Ambrose oil field,Divide County:
  • 30380, EXP, Marlyn
  • 30381, EXP, Laura
  • 30382, EXP, Bob
  • 30383, EXP, Maria
BR, nine wells/permits, all in Corral Creek oil field, Dunn County:
  • 32332, conf, CCU Red River
  • 32333, conf, CCU Red River
  • 32334, conf, CCU Red River
  • 32346, EXP, CCU Mainstreeter
  • 32347, EXP, CCU Mainstreeter
  • 32348, EXP, CCU Mainstreeter
  • 32420, EXP, CCU Audubon
  • 32421, EXP, CCU Boxcar
  • 32422, EXP, CCU Boxcar
BR, four Cleetwood wells/permits in Elidah oil field, McKenzie County 
  • 32425, EXP, Cleetwood, Elidah oil field
  • 32426, EXP, Cleetwood, Elidah oil field
  • 32427, EXP, Cleetwood, Elidah oil field
  • 32428, EXP, Cleetwood, Elidah oil field
CLR, four Polk Federal permits/wells in Banks oil field, McKenzie County
  • 32412, EXP, Polk Federal, Banks oil field
  • 31413, EXP, Polk Federal, Banks oil field
  • 32414, EXP, Polk Federal, Banks oil field
  • 32415, EXP, Polk Federal, Banks oil field
Newfield, two Orvis State permits/wells, both EXP, (#30283, #30284), South Tobacco Garden, in McKenzie County

  • 32470, 328, Crescent Point Energy, CPEUSC Suitor 2-13-24-158N-101W, Little Muddy, 35 stages, 5.1 million lbs; in Williams County, t11/16; cum 11K 11/16;
  • 32682, 1,143, Hess, HA-Link-152-95-3526H-8, Hawekey, in McKenzie County, 50 stages, 3.5 million lbs, t12/16; cum 10K in 8 days;
  • 31333, 247, Oasis, Johnsrud 5198 12-18 10T, Three Forks Bench 1, Siverston, in McKenzie County, 36 stages, 4.1 million lbs, t7/6; cum 103K 11/16;
  • 30357, EXP, Enduro, MRPSU, Mouse River Park, a Madison well, in Renville County
  • 30204, EXP, Samson Oil and Gas, Rainbow, in Rainbow oil field, in Williams County
  • 32391, Liberty Resources, Anderson, in Williams

The Science Is Settled -- Global Warming Adds Tons Of Ice To Greenland -- Predicted By Warmists -- January 4, 2017

From The Daily Caller:
Greenland’s ice sheet kicked off 2017 gaining about eight gigatons of snow and ice, which is well above what’s usually added to the ice sheet January 1 for the last 24 years, according to Danish meteorologists.

In fact, Greenland’s ice sheet has been gaining ice and snow at a rate not seen in years based on Danish Meteorological Institute (DMI) data. DMI reports the Greenland ice sheet’s “mass surface budget” has been growing significantly since October, 2016.

Greenland’s “surface mass budget” for winter 2016-2017 is already more than two standard deviations higher than the northern ice sheet’s mean snow and ice accumulation over the last 24 years. DMI data shows the ice sheet added 8 gigatons of ice and snow January 1, 2017, well above the standard deviation for that day. 
If the GOP is smart, and I'm having my doubts, they need to start reading this "stuff" into the Federal Register.  I know David Muir, over at ABC News, won't be reading it. Maybe Trump will tweet it.

The Physics Page

This is actually quite funny -- I've been mentioning "quantum theory" off and on for the past few weeks. Not for any reason; I just get into different phases that run awhile and then I move on to something else.

Coincidentally, I've also noted that quantum theory is being referenced in any number of other media outlets. Today was the latest example: in the current issue of The New York Review of Books: "The Trouble with Quantum Mechanics" by Steven Weinberg. I've not read it yet. I'm restraining myself until I am really ready to enjoy it.

For folks who feel comfortable with the subject, they may enjoy Louisa Gilder's The Age of Entanglement: When Quantum Physics Was Reborn, c. 2008. It remains my favorite "pop" reference on quantum.

Auto Sales -- Another Trump Rally? SM Energy Looking To Boost Presence In The Permian; Drop Back In Eagle Ford -- January 4, 2017

Saudi oil imports: this is interesting. It's never happened to me before. At 12:10 p.m. Central Time, this date, I was unable to access EIA site for Saudi oil imports to US, "Server Too Busy." Several attempts later, able to access:

Drudge Report DDOS: last night I blogged that I was unable to access Drudge and suspected DDOS; today that was confirmed

Auto sales, the Trump rally continues: auto sales for December come in much higher than expected; once full numbers are reported it's possible December sales -- the Trump effect -- will push annual sales for 2016 at record pace.

Moves, from Albany (NY) Times Union, data points, for 2016:
  • people from from New York state outnumber arrivals by two-to-one
  • 59% of moves within the eastern US were outbound  
  • states where people are moving: mostly western states and the Carolinas, one exception, Vermont
  • South Dakota: #1 in inbound moves -- 68% of moves in South Dakota are inbound
  • #1 and #2 for outbound moves: New Jersey and Illinois
  • #3 for outbound moves: New York state
  • the top ten: inbound and outbound moves by state
SM Energy to sell some Eagle Ford Assets, at Reuters, data points:
  • $800 million 
  • buyer: KKR's Venado Oil and Gas LLC
  • assets operated by a third party
  • 37,500 net acres, related pipeline, infrastructure
  • SM Energy looking for cash to boost present in the Permian Basin
  • plans to buy 35,700 net acres in Texas's Howard and Martin counties: $1.6 billion 
  • $21,000 /  acres vs $43,000 / acre
Back To The Bakken

Active rigs:

Active Rigs4059171184179

RBN Energy: prepping crude for pipeline and a min-crisis in the Permian.

The Market

Mid-morning: up about 45 points. NYSE:
  • new highs, 135: CNP (a big whoop); Royal Dutch Shell;
  • new lows, 4:
The opening: continues to melt up; about 26 points to the upside.

Obama Makes A Rare Visit To Congress To Try To Save ObamaCare

Mainstream media is calling it a "rare visit." Other than state-of-the-union addresses has the president every visited Congress? 

Which takes us to #4 of the 20 songs to be played in the transition countdown.

Hit the Road, Jack, Ray Charles