Friday, January 6, 2017

Data Of The North Dakota Oil And Gas Permits Issued in 2016

818 total oil and gas permits issued by NDIC in 2016; all of them were for the Bakken/Three Forks with one (1) exception (does not include permits for salt water disposal wells)

As of today (and the status of the permits/wells change on a daily basis):
  • 414: wells/permits on confidential status (CONF)
  • 237: wells/permits -- location only (LOC)
  • 66: DUCs (SI/NC)
  • 42: wells on DRL status (DRL)
  • 18: producing; still on confidential status (CONF)
  • 18: completed, with IPs reported (A)
  • 14: PNC (permit cancelled) (PNC)
  • 6: EXP
  • 1: actively producing, but no IP (A)
  • 1: dry (DRY)
  • 1: a non-Bakken permit, a Madison permit
Disclaimer: my data comes from spreadsheets based on NDIC's daily activity reports. The data may not agree with that of the NDIC. Do not quote me on any of this. It is simply a snapshot of the data on Friday, January 6, 2017. If this information is important to you, go to the source.

Quiet Daily Report; Eight Permits Renewed; One New Permit -- January 6, 2017

Active rigs:

Active Rigs3957169186179

One new permit:
  • Operator: Hess
  • Field: Elm Tree (McKenzie)
  • Comments:
Eight permits renewed:
  • CLR (3): two Thronson permits and one Sorenson permit, all in Mountrail County
  • Petro Harvester (2): two Ligi permits Burke County
  • HRC: one Fort Berthold permit in McKenzie County
  • MRO: one Stillwell permit in Dunn County
  • BR: one Ole permit in McKenzie County

The Market Must Have Loved The Dismal Jobs Report Today -- January 6, 2017

The Trump rally surges. All three indices hit all-time records: Dow 30, S&P, and the NASDAQ. Broad-based. Not one sector is leading this. Every sector involved. "Hope" sectors taking the lead (according to CNBC).

The Dow 30 is less than 10 points away from 20,000.

WTI is at $54.96.

Oh, oh, oh --- now less than four points away.

Almost: January 6, 2017 -- 11: 43 a.m. Central Time -- 19,999.63 (from CNBC crawler). My data suggests that if the major oil companies jump in this rally (today) we will easily go over 20,000 but right now CVX, XOM, and COP are all marginally down. As is T (down almost 2%). ENB is down, KMI is up slightly. BRK is up marginally, essentially flat.

My hunch: if we do go through 20,000, it will occur during a commercial break.

One comment: I generally don't watch much CNBC but it was a bit exciting today. After listening off and on for about six hours, and watching various segments, this is the big takeaway for me with regard to the market today: Pocahontas will be a voice in the wilderness. She will get a lot of air time because the mainstream media has very few of their own to interview, but within the halls of Congress, she will pretty much walk alone. 

The market, Dow 30:
  • new highs, 69: CNP, Deere, HAL, WMB (another big whoop)
  • new lows: 8
A Man Of Constant Sorrow Is Moving On

One recurring theme on CNBC: are investors expecting too much? Are investors expecting that Trump's "make America great again" policies will be in place by the end of his first week? Are investors going to be discouraged when Trump's policies are not put in place by February 15th? I think folks asking those questions are missing a point that has not yet been made. The bottom line for me: come January 21, 2017, I no longer have to worry about new regulations that are anti-growth. There will be no more speeches about how capitalism is bad. There will be no more "apology" tours

Publicly traded companies will feel more confident about making investments; publicly traded companies will feel more confident about expanding. Publicly traded companies who held off on increasing CAPEX because of the uncertainty of a Hillary presidency have a more optimistic outlook. Even if nothing changes in the tax code (and, of course, that's not accurate), under Hillary there certainly would have been more of "if it moves, tax it."

For many of us, the man of constant sorrow is moving on. Yes, #6 in the countdown:

A Man of Constant Sorrow, Soggy Bottom Boys

Chalk And Limestone

The other day a reader sent me a link to an article over at Seeking Alpha on EOG's Austin Chalk wells. I did not post it then because I was not particularly interested in Austin Chalk. But now, today, while reading The Cell: A Visual Tour of the Building Block of Life, by Jack Challoner, c. 2015, some dots connected that caught my interest.

First, I had completely forgotten all about Austin Chalk. I do have a link to Austin Chalk at the sidebar but that's about the extent of my interest.

At the linked Seeking Alpha article, the contributor notes, comparing the Austin Chalk to the more prolific Permian, two plays in which EOG is involved:

The comparison of production decline curves yields the following insights:
  • Austin Chalk wells are less prolific, yielding 630 MBoe in estimated ultimate recovery (EUR) compared to 780 MBoe in the Permian (and now up to 1.5 million boe in the Bakken's best locations)
  • The crucial source of Austin Chalk's advantage is brought about by a dramatically higher oil content. It is worth noting that the company's acreage in Karnes County falls within the crude oil window of the Eagle Ford. Despite having a lower EUR, these wells have a higher oil recovery, at 465 MBoe compared to 380 MBoe for Permian wells
  • The percentage of oil in the output stream starts as high as 85% in Austin Chalk with the eventual decline to about 67% at the four-year mark. In the Permian, about 76% of initial production is oil, declining to below 40% by the end of the fourth year, and as low as 35% at the five-year mark
  • The higher oil content in Austin Chalk is the first hint that those wells are going to pay off sooner than an average Permian well
So, what caught my interest. Warning: at this point, this is very, very esoteric and anyone who reads further, proceeds at one's own risk. From Challoner's book on the cell.

Protists are one-celled eukaryoctyes.

Protists that live in water often develop hard cases. Examples:
  • loricae: 
    • basket-shaped composed of various biological materials
    • used by some ciliates and flagellates
    • continuously produced inside the cell and held inside tiny granles
  • frustules:
    • made by diatoms
    • made by dissolving silicate materials
    • settle at bottom of oceans and lakes
    • called diatomaceous earth
    • prized as an insecticide by gardeners
    • nitroglycerin, highly sensitive to vibration (unstable, explosive); to transport, place in diatomaceous earth where the nitroglycerin is absorbed and made more stable = dynamite
  • coccolithophores:
    • protists that make coccoliths (spherical stones)
    • made by plantlike flagellates
    • coccoliths made of calcium carbonate
    • "CHALK" 
    • White Cliffs of Dover
  • foraminifera:
    • ameboid (animal-like) protists
    • also calcium carbonate cases: these hard cases are called "tests"
So, now the connecting dots.

I am way beyond my comfort zone here, but I believe the middle Bakken is dolomite limiestone. Limestone is calcium carbonate; dolomite is calcium carbonate with magnesium.

So, "chalk" in Eagle Ford, "limestone" in the Bakken. I'm going to stop there. For now.  

Job Watch

Page 7
This is Page 6

Trump vs Obama: pending.

Reagan vs Obama: job recovering following a recession. Reuters and Bloomberg keep telling us job growth is strong, but never seem to really back up that assertion.

The Magic Numbers (change with Trump administration -- see earlier pages for previous "magic numbers")
First time claims, unemployment benefits: 275,000 (> 250,000: economic stagnation)
New jobs: 150,000 (< 150,000 new jobs: economic stagnation)
Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters
For "first time claims," the mainstream media was consistently happy with first time claims ~ 275,000 under President Obama. In hindsight, the previous number of 400,000 seemed incredibly high.

For "new jobs," 125,000 will be the new "base." The final number under the Obama administration, was 156,000. Even though 156,000 was described as "tepid" by The New York Times, it was associated with economic growth. Now, June 2, 2017, Steve Liesman (and others) suggest that 121,000 is a fine number.

With both these numbers, the Fed under Janet Yellen felt comfortable raising "rates" for the first time in quite some time.

After about the first two years of posting these updates, it had become clear/obvious that the figures were often suspect, if not outright falsified. On November 18, 2013, it was reported that, indeed, unemployment figures have been falsified.
In the home stretch of the 2012 presidential campaign, from August to September, the unemployment rate fell sharply — raising eyebrows from Wall Street to Washington.
The decline — from 8.1 percent in August to 7.8 percent in September — might not have been all it seemed. The numbers, according to a reliable source, were manipulated.
And the Census Bureau, which does the unemployment survey, knew it.
Take the numbers for what they are worth, I guess. Not much. Rick Santelli, CNBC, January 6, 2017, also suggested the numbers were suspect when the December jobs report, at 156,000, was incredibly bad, and yet unemployment number (4.7%) did not change.


September 15, 2017: down to 284,000. Better than expected.

September 7, 2017: surges 62,000 post-Harvey. Up to 298,000, a five-year high. 

August 31, 2017: up 1,000 vs forecast an increase of 3,000. At 235,000.

August 30, 2017: ADP employment report to be reported later. Forecast: US added 185,000 jobs in August. Actual: holy cow! 237,000 jobs added in August. Steve Liesman, CNBC seems awestruck, blown away.

August 24, 2017: held onto much of the sizable decline last week; rose only 2,000, to 234,000. The 4-week average is down for the 4th time in 5 weeks, 2,750 lower to 237,750 which is the lowest reading since May.

August 17, 2017: dropped 12,000 to 232,000. Huge.

August 10, 2017: 244,000 today, up 3,000 from last week's 241,000 (revised upward by 1,000).

August 3, 2017: down 5,000 to 240,000 (last week revised up 1,000 to 245,000). Nothing mentioned about layoffs at auto manufacturers yet due to huge inventory buildup.

July 27, 2017: up 10,000 to 244,000 expecting 240,000; last week revised upward from 233,000 to 234,000

July 20, 2017: what just happened?
  • first time claims: down 15,000 to 233,000
  • not even mentioned on mainstream media
  • forecast: 245,000

July 13, 2017: 247,000. Down 3,000 from last week but last's 248,000 was revised up to 250,000.

July 7, 2017: US nonfarm payrolls total 222,000 in June; forecast, only 179,000.

July 6, 2017: first time in a long time, first time claims rose to 248,000; forecast for a dip to 243,000. Not a good report. News jobs report also "bad." Forecast for 185,000 jobs; actual, only 158,000. 

June 22, 2017: first time claims rise 3,000. Unremarkable.

June 15, 2017: first time claims fall more than expected; drop 8,000 to 237,000.

June 8, 2017: numbers here. Down 10,000 to 245,000. Still not a very good  number.

June 2, 2017: this might be the big story of the day, regarding jobs. Look at the "magic numbers." The number of jobs needed to maintain economic activity continues to come down according to pundits. Transitioning from the Obama to the Trump administration, the tea leaves suggested 150,000 new jobs each month was the "magic number."  But many economists (see above) suggested 125,000 was the "magic number." Now, today, Steve Liesman over at CNBC (and many concur), 121,000 is just fine. So, it looks like the new number is truly 125,000. I have updated the "magic number" above.

June 2, 2017: May's employment number disappoints; unemployment rate drops to 4.3%; but only 138,000 new jobs. Note magic number: 150,000.

June 1, 2017: huge miss; forecast 239K, an increase of only 2,000; in fact, a jump in first time unemployment claims, 248K; now, it turns out, revised upward to 255K 

May 25, 2017: slightly better than expected; 234,000 vs 237,000 forecast;

May 19, 2017: unemployment by state, April, 2017, numbers. 

May 11, 2017: new claims down 2,000 vs forecast of an increase of 3,000; initial claims at 236,000;

May 4, 2017: first time claims plunge; down 19,000. To 238,000.

May 3, 2017: 177,000 vs 175,000 -- weekly ADP report

April 20, 2017: increased more than expected; up 10,000, at 244,000.

April 13, 2017: declined 1,000; consensus: 243K; actual, 234K. 

April 7, 7, 2017: a really, really back employment report for March; only 98,000 jobs created; 150,000 "new" jobs are needed to avoid economic stagnation; this is a bad, bad report

April 6, 2017: biggest drop in nearly two years; better than expected; previous week revised up 1,000; most recent numbers: 234,000; four-week moving average: fell 5,000 to 250,000

April 5, 2017: jobs -- boom! ADP March numbers -- up 263,000. Forecast, 185,000.

March 30, 2017: last week's number revised upward to 261,000. This week's number, 258,000. That is a decrease of 3,000 but expectations were for a decrease of around 15,000 (which seems to be the new narrative under the Trump administration). The four-week moving average rose to 254,250, much higher than the previous report.

March 23, 2017: prior of 241,000 was revised to 243,000. Most recent numbers was 25,000, a horrendous increase of 15,000: this marks the first time above 250,000 in eight weeks. Four-week moving average is 240,000.

March 16, 2017: down 2,000 to 241,000. Unremarkable report. 

March 9, 2017 Jumps 20,000 to 243,000. Forecast for 238,000 from the prior week's reading of 223,000, the lowest count since March, 1973. Four-week moving average came in at 236,500, an uptick of 2,250.

March 8, 2017: ADP jobs report: much better than expected; 298,000 jobs added; much, much better than the 190,000 forecast. Market reacts; goes from red to green. Trump enthusiasm, Trump rally.

March 2, 2017: expectations were for claims to jump a bit; in fact, huge plunge; declined to 223,000; a drop of 19,000; 4-week average 234,250. 

February 23, 2017: last week revised to 238,000; new number, 244K; exactly as forecast; up 6,000; four-week average, 241,000. Revised to 242,000 (from 244,000).

February 16, 2017: 239,000 vs forecast of 245,000; four-week average, 245,250; also note this:
  • fewer than 240,000 for five out of last seven weeks (post-Trump election)
  • significant: claims had not gone below 240,000 even once from December, 1972, to December, 2016
February 9, 2017: unexpected plunge; drops 12,000; to multi-decade low; now down to 234,000 after expectations of 250,000; 4-week average down to 244,250; the Trump enthusiasm continues;

February 3, 2017: jobs report for January, 2017, blows away the estimates. Estimate was for 175,000 jobs added in January, 2017. Came in at 225,000 added jobs. Unemployment rate ticks up to 4.8% from 4.7% due to increased labor participation.

February 1, 2017: ADP: up 246,000! Forecast: private sector to add 160,000 jobs.

January 26, 2017: forecast way off; high end was an increase to 250,000; in fact surged well past that; up 22,000 to 259,000. CNBC talking head already getting ready to blame that dismal number on Trump. LOL. Four-week average at 245,500. 

January 19, 2017: first time claims plunged 15,000 to 234,000, just shy of the 233,000 level in mid-November (2016), the lowest since November, 1973. Four-week average also dropped 10,250 to 246,750.

January 12, 2017: first time claims surged by 10,000; economists forecast much worse; now at 255,000; four-week average fell 1,750 to 256,500. 

January 6, 2017: the December numbers are at page 5. New data on this page will begin next week.  

Incredibly Poor Jobs Report; Market Turns Green; Update On Natural Gas Production In STACK, SCOOP -- January 6, 2017


January 6, 2017: this is how the Obama presidency ends -- on a "tepid note" as The New York Times calls the jobs report. And that's after a trillion-dollar stimulus and keystoning three pipelines.  This is the first president who presided over an economy that never had one year of 3% growth or better -- eight years of another lost decade. By the way, "tepid" is being generous. The magic number: 200,000 new jobs needed for economic growth; forecast was for 183,000 new jobs, and that was well below November's 204,000 added jobs; and, the number comes in at 156,000, one of the lowest in recent memory. Had this been under Trump, one can almost imagine The NYT headline.

Original Post

WTI: starts the day, slightly over $54. 

Jobs: wow, wow, wow -- WSJ headline -- jobs added forecast to be 183,000; came in at 156,000, misses forecast and way below November's 204,000.
Amazing. Earlier post: media anticipates a good jobs number today, and will "crow" if 180,000+ jobs added. But note the magic numbers. Anything less than 200,000 jobs added was the magic number under Bush II. Below that number: economic stagnation. Soon after the Obama administration, the number was lowered to 150,000. It will be interesting to see if the number changes under the Trump administration. Probably not. Anyway, WSJ headline: economists expect December payrolls grew by 183,000; an unemployment rate of 4.7% for December, 2016, to close out the year and the Obama years. [Update: number comes in at 156,000. Unemployment as predict, 4.7%. Interesting that even Rick Santelli questions these numbers. CNBC notes that the 156,000 added jobs is significantly less than the 204,000 in November. In addition, private sector added 144,000 jobs in December vs 198,000 jobs in November. NASDAQ remains slightly up; Dow futures improve from negative to almost flat.]
Trade deficit: 9-month high. 

Disclaimer: this is not an investment site. It is not a music site, and it is definitely not a dance site.

Crown jewel of US shale: the Transco pipeline from the Gulf Coast of Texas to New York City. Williams knows it has a "gold mine" with that pipeline. Transco has now been re-engineered to flow south as well as north. Opposition to other energy projects makes the Transco pipeline that much more valuable. Transco route: Corpus Christi, TX, Atlanta, GA; Charlotte, NC; and then NYC. Other WMB news:
  • if it sells Transco, won't buy other assets
  • already has plenty of other irons  in the fire
  • Atlantic Sunrise: a $3 billion and 185-mile expansion of Transco in eastern Pennsylvania that Williams expects to place in service this year
  • will concentrate on capitalizing on gas export terminals along the Gulf Coast and gas-fired power plants in the east
  • much more at the link
Iraq: being reducing oil output in keeping with OPEC decision.

Active rigs:

Active Rigs3957169186179

RBN Energy: natural gas production trends in the SCOOP and STACK, part 2.

For The Elites, Or
Why I Love Texas

Express tolls during rush hour in Washington, DC, area, a whopping $30:

The Market

Apple cuts Tim Cook's pay based on performance.
  • MacBook Pro was a huge miss, and a huge disappointment
  • iPhone 7 not showing much traction; even Rush was giving them away for free
  • Siri falling well behind Alexa (Amazon)
  • relying on App Store 
  • product clutter: Steve Jobs emphasized minimum number of variations in products offered
The market turned higher after the poor jobs report today.