Tuesday, January 17, 2017

Saudi's Plans For Early End Of OPEC Production Cut May Leave "Job Undone" -- Bloomberg

Updates

January 18, 2017: my thoughts on ending the production cut this summer, as scheduled at this post.  
 
Original Post
My thoughts exactly:


Bloomberg link here.

I might come back to this later. There are at least three possible explanations for Saudi's statement that they feel they can open the spigots this summer. 

I think Saudi is in desperate straits.

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US Crude Oil Production February, 2017, Over January, 2017

+71,000 bopd more in February, 2017, than in January, 2017.  Source: EIA. See "game's on."

Active Rigs Up By Two (2) -- January 17, 2017

Active rigs:


1/17/201701/17/201601/17/201501/17/201401/17/2013
Active Rigs3849157187185

One well coming off confidential list Wednesday:
  • 28998, SI/NC, CLR, Radermecher 4-22H2, Camel Butte, 
Eight (8) new permits:
  • Operator: Whiting (7), Armstrong Operating
  • Fields: Bell (Stark), Truax (Williams);
  • Comments: for Whiting -- three Talkington permits in Bell oil field; four Johnson permits in Truax oil field
Six permits renewed:
  • BR (3): one Jerome permit and two Merton permits, all in McKenzie County
  • Slawson (2): two Pike Federal permits in Mountrail County
  • Sinclair: a Crosby Creek permit in Dunn County
Three producing wells (DUCs) completed:
  • 30325, 1,683, BR, Sun Notch 41-32TFH, Sand Creek, t12/16; cum --
  • 30970, 1,283, BR, Gudmunson 4-1-26TFH, Elidah, t12/16; cum --
  • 30972, 1,964, BR, Gudmunson 1-1-26MBH, Elidah, t12/16; cum --

Bakken Boom Over? Nope. Bakken 2.0: $20 Million Expansion Project Back On Track -- January 17, 2017

From The Williston Herald:
  • public works building: expand and renovate
  • $20 million
  • incorporated into the city's 2010 master plan put on back burner while other necessary infrastructure projects were completed
  • location: 809 Fifth Street East
  • architect: Kodet Architectural Group -- $1.3 million
  • project team: AE2S Civil Engineers; Cain Thomas Mechanical Engineers
**********************
EIA Monthly Petroleum Report

Drilling Productivity Report for January (dynamic link).

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Game's On

From twitter:



*****************************
Game's On 

NYT looking for path forward. As reported by .... The New York Times
  • more changes (euphemism for layoffs) needed if the newspaper is to survive
  • expanded training recommended
Perhaps less fake news on front page would help. 

Remember their story on natural? The Panama Canal expansion?

Just Idle Chatter -- January 17, 2017

One of the most interesting things for me with regard to the blog has been following the big stories over the past decade. It is quite striking.

In addition to ObamaCare, the two stories that dominated the media for most of the early years of the Obama presidency were:
  • the doomsday chronicles
    • cities declaring bankruptcy (a fairly recent phenomenon)
    • states in severe financial difficulty
    • the demise of the big box stores
    • the demise of mainstream media
    • the demise of unions
    • the demise of the US auto industry 
    • Chinese hacking federal government; millions of personnel files "stolen"
    • not mentioned, because it sort of sneaked up on us, the demise of the president's party
  • the Solyndra scandal
Now, before the new president is even sworn into office, in addition to all the attention to his tweets, the two stories dominating the news waves:
  • all the companies rushing to Trump Tower to tell PEOTUS they plan to increase investment in the US; and, 
  • the surging stock market
Just idle chatter.

**************************
Understatement

A "talking body" (as opposed to a "talking head") over at CNBC said (1:45 p.m. Central Time, January 17, 2017) investment in the Permian is a trend that needs to be watched. Oh, really? A nominee for the 2017 Geico Rock Award. She made that observation after the following Permian deals made:
  • ExxonMobil: $6 billion acquisition in the Permian; the biggest investment in US oil since 2004
  • Noble: $2.7 billion; acquires Clayton Williams in the Permian
  • WPX: $775 million for a few acres
In addition to the Permian, the same day the WPX deal was announced:
  • Sanchez, Blackstone: $2.3 billion to buy Eagle Ford acreage from Anadarko
And, in September, 2016, Apache announced an "elephant" in the Permian:

I wouldn't mention that simply for the Geico Rock Award. There's a much, much bigger story here. This speaks volumes that this kind of money at this stage of the game is being invested in US shale by companies like ExxonMobil. As everyone knows, COP is already (through BR) heavily invested in US shale. 

Peak Oil? Yup. In Asia -- January 17, 2017

Quick: what do Malaysia and China have in common? It's been posted on the blog several times.

From CNBC:
Oil production in Asia-Pacific is declining at a rate not seen elsewhere in the world, with around half of losses coming from China alone, Wood Mackenzie has warned.
China, Indonesia, Malaysia and Thailand are among the biggest producers in Asia but the near having of crude oil prices since 2014 has hit the industry and resulted in an annual average base decline rate of around 7 percent within existing oil fields, Rodger pointed out.
"Lower oil prices and the severe cuts to upstream capex (capital expenditure) to mature assets has increased decline rates," he explained in a new video published on Wood Mackenzie's site.
**************************
Chicago Homicides

This could become a regular feature, sort of like the monthly atmospheric CO2 numbers.

Previously posted:
Downtown is getting safer! Chicago homicides already dropping significantly after Trump election. The 24 homicides over the year's first 15 days (a dynamic link) extrapolates to 584 Chicago homicides in 2017, compared with 797 in 2016. If that holds, that represents a decrease of 27% homicides in the Windy City, one year after the shocking Trump election. 
Today, January 17, 2017: Over the MLK weekend, ten homicides. Now, 26 homicides over 16 days extrapolates to 593 for the year.

Job Announcements -- Idle Chatter -- January 17, 2017

One has to ask the question: what's driving all the new jobs coming back to American; all the new jobs that have been announced since November 8, 2016?

I don't think it's as much about Trump as folks think. The "velocity" of these announcements would have never happened under a Hillary presidency, of course, but something suggests that there is more going on than simply a Trump presidency. Many of these deals had been in the work long before Trump was elected, and prior to the election, it was generally accepted that Obama would have a third term (Hillary).

So, I think other things are going on.

These are the "things" I think driving the renewed interest in manufacturing / bringing jobs back to the United States.

Top tier:

1. Without question, it is now acknowledged that the US will have inexpensive, predictable, and dependable energy for decades. In addition, many US corporations have learned how to take advantage of tax credits by investing in renewable energy.

2. The US advantage in energy would have been enough for much of this to happen, but the frosting on the cake: the expansion of the Panama Canal. This moves LNG to Asia, but more importantly, it opens up the US East Coast ports if the US West Coast ports go on strike which they seem to do. Even if they don't go on strike, we now have a bit competition between East Coast and West Coast.

3. Robots: will offset the costs associated with moves back to the US. That "border-tax" driving up costs on clothes? Fantasy. Robots now able to sew clothes.

4. Brexit: this is a tough one. I'm not sure it's even a player, and if it is, even less sure it's in the "top tier." But -- London has always been the global financial capital; NYC, #2. With the threat of Brexit, one wonders if that changes. Whether it does or not, access to capital is not a bad thing.

Middle tier:

1. Intellectual property: patent protection.

2. American workers: well trained, educated; even high school graduates are often over-qualified for some of these jobs; flexible; eager to work in many cases.

3. Locality: transportation costs come way down. The recent international ruling on fuel oil used by cargo ships was a huge change, and will add significant costs of global shipping.

4. Locality: iPhones can be flown in from China; Buicks cannot. Americans are getting used to two-hour delivery times. Manufacturers being closer to their consumers is not all bad.

Bottom tier:

1. Incredible pressure from the White House if US corporations don't invest in the US. It's all about social media.

2. The Trump initiatives. Prior to November 8, 2016, none of these initiatives were even considered a possibility. It is unlikely they are making a huge difference "all of a sudden." But as the Trump initiatives are added, they will move up to the second tier, and if corporate taxes are lowered / corporate tax policy is changed significantly, this will definitely move up to first tier.

3. Heathcare: US corporations have finally adjusted to most costly health care program they have seen. Even if it doesn't change, they at least have seen the worst. It cannot get much worse. But, with Trump in office, it's very possible their healthcare costs will come down.

High IP Wells In The Williston Basin

This is page 12 of "High IP Wells."

New data was added starting January 17, 2017.

Starting mid-2017, I pretty much lost interest in adding wells to this list. Maybe I'll add a few.


Permits 34432 -- : Permits issued in calendar year 2018
Permits 33243 -- 34431: Permits issued in calendar year 2017 (1,188)
Permits 32425 --  33242: Permits issued in calendar year 2016 (817) (Saudi Surge)
Permits 30370 -- 32424: Permits issued in calendar year 2015  (2,054) (Saudi Surge)
Permits 27360 -- 30369: Permits issued in calendar year 2014 (3,009)
Permits 24693 -- 27359: Permits issued in calendar year 2013 (2,666)
Permits 22160 -- 24692 : Permits issued in calendar year 2012 (2,532)
Permits 20247 -- 22159: Permits issued in calendar year 2011 (1,912)
Permits 18571 -- 20246 : Permits issued in calendar year 2010 (1,675)
Permits 17946 -- 18570: permits issued in calendar year 2009 (624)
Pretty much in the order they were reported
Definition of "high IP" is arbitrary and does not refer to only the 24-hour IP

Page 1

33535, 6,204, MRO, Arkin 44-12TFH, hard to believe it's not a typo, but this is what the sundry form shows; Arkin 44-12TFH, Bailey, 4 sections; Three Forks B1, 45 stages; 6 million lbs; t1/18; cum 344K 7/19;
33400, 3,017, MRO, Ernst 14-7TFH, Bailey, t2/18; cum 302K 7/19;
33401, 3,161, MRO, Kenneth 24-7TFH, Bailey, t1/18; cum 264K 7/19;
33402, 3,040, MRO, Bethol 34-7H, Bailey, t2/18; cum 278K 7/19;
33403, 3,484, MRO, Stroup 34-7TFH, Bailey, t2/18; cum 318K 7/19;
33534, 5,113, MRO, Bronett 14-7H, Bailey 4 sections, t1/18; cum 295K 7/19;
33398, 3,291, WPX, Hidatsa North 14-23HX, Reunion Bay, 2 sections; Three Forks B1, 51 stages; 8.6 million lbs; sections 14/23-150-93; TD = 21,419; t9/17; cum 564K 7/19; note: 85,033 bbls in the month 10/17;
33381, 3,433, WPX, Mandan North 13-24HW, Reunion Bay, API 33-061-04011, a huge well; 75K in first full month; 65K in second full month; FracFocus shows this well was fracked 9/15 - 22/2018; 8.7 million gallons of water; proppant, 9.95%; t10/17; cum 462K 7/19;
33325, 5,072, MRO, Chapman 31-15H, Bailey, t10/17; cum 332K 7/19; (#16964, #20321)
33121, CLR, Mountain Gap, see this post;
33120, CLR, Mountain Gap, see this post;
32889, 3,707, MRO, Lockwood USA 44-22TFH, Antelope, Sanish pool, t12/17; cum 367K 7/19; (see also #32888 at this link, which may be a record Bakken well;
32888, 6,278, MRO, Forsman USA 44-22H, Antelope, Sanish, 45 stages; 15 million lbs, t12/17; cum 477K 7/19;
30253, 3,225, CLR, Monroe 6-2H, Banks, a huge well; first two full months, 50K+; 150K in first three months; 78 stages; 11 million lbs; large; TD = 24,847 feet; t10/17; cum 391K 7/19;
30134, 3,503, MRO, Rough Coulee USA, 24-22TFH, Sanish, t1/18; cum277K 7/19;
32891, 4,093, MRO, Begola USA 34-22H, Antelope, Sanish pool. t12/17; cum 301K 7/19;
30133, 4,855, MRO, Veronica USA 14-22TFH, Sanish, t12/17; cum 301K 7/19;
30488, 4,144, MRO, TAT USA 14-22H, Sanish, t12/17; cum 310K 7/19;
23469, 3,146, XTO, Lawlar 41-15SEH, North Tobacco Garden, t4/13; cum 331K 7/19; off line as of 7/19;
32890, 4,524, MRO, Murphy USA 34-22TFH-2B, Antelope, Sanish pool, t12/17; cum 310K 7/19; 
33290, 4,204, MRO, Lena USA 14-22H, Antelope, Sanish pool, t12/17; cum 329K 7/19; 
26456, 3,072, XTO, Broderson 31X-27H, t6/14; cum 218K 7/19;

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I'll probably forget to keep this list current. To keep it more manageable, the IP needs to be at least 3,000 or the 30-day IP of at least 40,000 bbls.

Long break in adding wells to the list
************* 
33281, 3,026, MRO, Iron Woman USA 14-9H,  Antelope, 30 stages, 15.3 million lbs, t7/17; cum 388K 7/19; (#20602; #19790)

32952, 2,071, Hess, BB-Lars Rothie-151-95-2932H-2, Blue Buttes, Three Forks, 50 stages, 7 million lbs, t7/17; cum 314K 7/19;
32953, 2,219, Hess, BB-Lars Rothie-151-95-2932H-3, Blue Buttes, 50 stages, 7 million lbs, small/large, t7/17; cum 294K 7/19;
32954, 2,042, Hess, BB-Lars Rothie-151-95-2932H-4, Blue Buttes, Three Forks, 50 stages, 7 million lbs, small/large, t7/17; cum 282K 7/19;
19780, 2,252, Whiting, Skunk Creek 4-10-11-8H3, South Fork, Three Forks first bench, spud Feb; t7/17; cum 211K 7/19;

32239, 1,640, Oasis, Rolfson S 5198 41-33 14BX, Siverston, 50 stages, 4 million lbs, t2/17; cum 141K 6/17;
29127, 1,584, EOG, Parshall 401-3534H, Parshall, 2 sections, 18 stages, 5.2 million lbs, t11/16; cum 40K 3/17; for more on this area, see "well of interest" 30241, 2,614, HRC, Fort Berthold 152-93-7C-6-13H, Antelope, 35 stages; 5.3 million lbs, t12/16; cum 112K 3/17; see "well of interest"
32506, 1,588, HRC, Fort Berthold 148-94-36D-25-10H, McGregory Buttes, 33 stages, 5 million lbs, t12/16; cum 98K 3/17;
30245, 1,588, HRC, Fort Berthold 152-93-7C-6-13H, Four Bears, 36 stages, 5.4 million lbs, t11/16; cum 64K 3/17;
 
28470, 1,374, Lime Rock Resources, Matthew Schmidt 4-2-35H-143-97, Cabernet, 35 stages, 4.5 million lbs, (22918, 18427); t11/16; cum 54K 2/17; went off-line all of 3/17;
30242, 2,324, HRC, Fort Berthold 152-93-7C-6-12H, Antelope, 35 stages, 5.3 million lbs, t12/16; cum 78K 3/17;
30246, 2,480, HRC, Fort Berthold 152-93-7C-6-8H, Four Bears, t11/16; cum 125K 3/17;
31991, 1,311, Oasis, Rolfson S 5198 12-29 7B, Siverston, 36 stages, 4.1 million lbs, t11/16; cum 156K 3/17;

30243, 2,634, HRC, Fort Berthold 152-93-7C-6-11H, Four Bears, 36 stages, 5.5 million lbs; , t12/16; cum 90K 3/17;
31990, 1,216, Oasis, Rolfson S 5198 12-29 6T, Siverston, Three Forks First Bench, 36 stages, 4.1 million lbs, t11/16; cum 121K 3/17;

32401, 1,260, QEP, Tipi V 3-13-12BH, Spotted Horn, t11/16; cum 114K 2/17;
32402, 1,140, QEP, Tipi V 2-13-12TH, Spotted Horn, Three Forks, 54 stages, 9.7 million lbs, t11/16; cum 55K 2/17;
32403, 1,988, QEP, Tipi V 4-13-12BH, Spotted Horn, t12/16; cum 135K 2/17;
32404, 1,189, QEP, Tipi V 3-13-12T2H, Spotted Horn, Three Forks second bench, 51 stages, 9.6 stages, t11/16; cum 54K 2/17;
32405, 707, QEP, Tipi V 5-13-12BH, Spotted Horn, middle Bakken, 51 stages, 10 million lbs, t11/16; cum 61K 2/17;
32406, see below, QEP, Tipi V 5-13-12TF, Spotted Horn, producing,

32833, 3,058, Whiting, Wold 16-7TFH, Banks, 4 sections, 35 stagges, 7.25 million lbs, t10/16; cum 108K 2/17; , (19468: link here),

31112, 2,401, Whiting, Chameleon State 31-16-1H, Banks, t10/16; cum 101K 2/17; (19859, 22621); see also this link; and this link;

32559, 1,416, Whiting, Flatland 43-9HU, Banks, 4 sections, 35 stages, 9.6 million lbs, t10/16; cum 97K 2/17;

32562, 1,385, Whiting, Flatland 43-9H-1XH, Banks, 35 stages; 9.8 million lbs, t10/16; cum 133K 2/17;  

32764, 2,043, Whiting, Chameleon State 31-16HU, Banks, 4 sections, t10/16; cum 77K 2/17;
32560, 1,385, Whiting, Flatland 43-9-2H, Banks, 35 stages, 7.5 million lbs, t10/16; cum 100K 2/17;
32561, 2,370, Whiting, Flatland 43-9-1H, Banks, t10/16; cum 78K 2/17;

31705, 2,079, Whiting, Rolla Federal 31-3-2TFH, Twin Valley, Three Forks, 35 stages, 7 million lbs, t10/16; cum 125K 1/17; 

32328, 2,053, Whiting, Rolla Federal 11-3-2TFH, Twin Valley, 35 stages 7.1 million lbs, t10/16; cum 112K 1/17; 

31706, 3,771, Whiting, Rolla Federal 31-3-2TFH, Twin Valley, Three Forks, 35 stages; 6.7 million lbs; s8/16; cum 129K 1/17 after four months)
31715, 3,465, Whiting, Rolla Federal 21-3-3TFH, Twin Valley, Three Forks, 35 stages, 7.13 million lbs, t10/16; cum 127K 1/17;
31711, 3,810, Whiting, Rolla Federal 21-3-2TFH, Twin Valley, t10/16; cum 150K 1/17;

QEP's KDM wells reported in early 2017

31707, 2,546, Whiting, Rolla Federal 31-3-4TFH, Twin Valley, Three Forks, 35 stages, 7.2 million lbs, t9/16; cum 115K 1/17;
31710, 2,426, Whiting, Rolla Federal 21-3-1TFH, Twin Valley, Three Forks, 35 stages, 7.1 million lbs, t10/16; cum 139K 1/17;
32329, 2,861 (NDIC has a typo), Whiting, Rolla Federal 11-3-1TFHU, Twin Valley, Three Forks, 35 stages, 10 million lbs, t10/16; cum 156K 1/17;

32326, 2,420, Whiting, Rolla Federal 11-3-1H, Twin Valley, 35 stages, 7.1 million lbs, t10/16; cum 116K after 4 months;

31150, 2,802, Whiting, Loomer 44-33TFHU, Banks, t2/17; cum -- 
32264, 2,024, Whiting, Koala 44-31TFH, Poe, 35 stages, 7.3 million lbs, t2/17; cum --

31708, 3,101, Whiting, Rolla Federal 31-31H, Twin Valley, 35 stages, 6. 9 million lbs, t9/16; cum 116K 1/17;

31704, 3,271, Whiting, Rolla Federal 31-3-1TFH, Twin Valley, 35 stages, 7 million lbs, t9/16; cum 120K in four months;

31712, 2,274, Whiting, Rolla Federal 21-3-1H, Twin Valley, t9/16; cum 135K 1/17;
31948, 1,103, Whiting, Frank 44-7PHU, Bell, t9/16; cum 68K 1/17;
32327, 3,149, Whiting, Rolla Federal 11-3-1TFH, Twin Valley, t9/16; cum 121K 1/17;
31161, 1,560, HRC, Fort Berthold 148-94-22A-27-11H, McGregory Buttes, t9/16; cum 115K 1/17;
32874, 1,511, Newfield, Helsingborg Federal 153-96-27-22-13H, Sand Creek, t12/16; cum 1/17;31697, 1,326, HRC, Fort Berthold 148-94-22A-27-12H, McGregory Buttes, t9/16; cum 85K 1/17;
32876, 2,813, Newfield, Helsingborg Federal 153-96-27-22-4H, Sand Creek, t12/16; cum 55K 1/17;

32605, 1,995, CLR, Charolais North Federal 1-3H1, first bench of Three Forks , Elm Tree; 46 stages, 10 million lbs; bottom hole location 204' FSL & 1320' FEL, SWSE 10-153-94; 1280-acres; sections 3/10-153-94; t9/15/16; as of 12/16: cum 101K oil and 122 MCF natural gas = 121,474 boe as of 12/16; oil / natural gas split: 83% / 17%.

32606, 2,305, CLR, Brangus North 1-2H2, Elm Tree, second bench of the Three Forks, 46 stages, 10 million lbs; 19 days of total drilling; within the target zone 94% of the total 9,852' of lateral section; this well is easily exceeding a 900,000 EUR type curve; link here; additional information here; and here; cattle names here; bottom hole location 236' FSL & 2014' FWL, SESW 11-153-94; March, 2016, a name change from Brangus Federal 1-2H1 to Brangus North 1-2H2; 1280-acre unit, sections 2/11-153-94; t9/2/16; as of 12/16: cum 152K oil and 192 MCF natural gas = 184,550 boe; oil/natural gas split: 83% / 17%.


31607, 1,289, Oasis, Rolfson N 5198 11-17 3T, Siverston, 36 stages, 3.9 million lbs, t8/16; cum 124K 12/16;
31608, 1,799, Oasis, Rolfson N 5198 11-17 4B, Siverston, 36 stages, 3.9 million lbs, t9/16; cum 114K 12/16;
31670, 2,063, CLR, Rath Federal 5-22H, Sanish, 62 stages, 14 million lbs, t8/16; cum 120K 12/16;
31606, 1,722, Oasis, Rolfson N 5198 11-17 2B, Siverston, 36 stages, 4 million lbs, t8/16; cum 145K 12/17; 

29635, 5,224, EOG, Parshall 164-3332H, Parshall, s12/19/16; TD, 12/27/16; TD = 16,184 feet (short lateral); 1280-acre spacing; "Bakken, NOS"; middle Bakken; t12/16, cum 3K 12/16;32767, 2,759 , Petroshale (US), Petroshale US 8H, Antelope, t1/17; cum 3K after 3 days; MOST LIKELY A TYPO FOR THE IP.

31687, 2,002, Whiting, P Bibler 154-99-3-5-29-3H,  Epping, t8/16; cum 96K 11/16; spud, April 30, 2016; TD, May 10, 2016;

31686, 1,957, Whiting, P Bibler 154-99-3-5-8-14H, Stockyard Creek, 40 stages, 10.6 million lbs, Whiting's P Bibler wells are tracked here, t8/16; cum 99K 11/16;
  
31688, 1,418, Whiting, P Bibler 154-99-3-5-29-3H3, Epping Three Forks first bench permit, 33 stages, 7.2 million lbs, t8/16; cum 85K 11/16; spud, May 12, 2016; TD, May 23, 2016;
31685, 1,714, Whiting, P Bibler 154-99-3-5-8-14H3, Stockyard Creek, Three Forks first bench permit, t8/16; cum 81K 11/16; spud, April 17, 2017; TD, 27, 2017;

30973, 2,325, BR, Gudmuri 1-1-26TFH-ULW, Elidah, t12/16; cum --

32042, 1,212, Whiting, Gullikson 14-35H, Glass Bluff, t7/16; cum 40K 11/16;
32043, 1,286, Whiting, Gullikson 44-34HU, Glass Bluff, 35 stages, 9.9 million lbs, t7/16; cum 50K 11/16; 

26364, 1,645, QEP, MHA 2-28-29H-148-92, Heart Butte, t7/16; cum 54K 11/16;
31334, 895, Oasis, Johnsrud 5198 14-18 15TX, Siverston, 4 sections, 36 stages, 4.1 million lbs, t7/16; cum 114K 11/16; neighboring #22202 showed modest bump in production;

Noble Increases Footprint In The Permian; Cheap Crude And Captive Market Boost Pacific Northwest Refineries -- RBN Energy -- January 17, 2017

Trump jobs: add Bayer to the ever-lengthening list.
German-based Bayer AG has committed to President-elect Donald Trump that it will invest $8 billion in American research and development as part of its deal to acquire Monsanto, Trump's transition team said Tuesday. 
Incoming White House press secretary Sean Spicer told reporters that Bayer will also protect all of Monsanto's 9,000 American jobs while creating an additional 3,000 high-tech positions in the country. That agreement, he added, came after Trump met with CEOs from both companies last week.
Trump jobs: just announced (10:06 a.m. Central Time): Hyundai will invest $3.1 billion in US. On CNBC. At the WSJ.


Trump jobs:



Meets, exceeds federal minimum wage; great career path for those with demonstrated skills.
Investment not noted in the screenshot: the investment will also add up to 24,000 new (temporary) construction jobs. But aren't most construction jobs (except Kemper CCS) temporary?

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Click Bait

Five states where taxes are going up in 2017. Can you name at least one of the five? If you did not name California, you are not paying attention. These are the five states listed by Kiplinger:
Maine, California, New Jersey, Pennsylvania, and, Louisiana.
  • PA: higher taxes on cigarettes, by a $1/pack; now $2.60/pack; another most-regressive tax
  • LA: higher sales taxes; 5%, up from 4%; the average state and local sales tax is now 9.9%, the highest in the US;
  • Maine: higher income tax on top earners
  • CA: higher taxes on smokers; from 87 cents/pack to $2.87/pack; will also apply to e-cigarettes
  • NJ: higher gasoline taxes
This was mostly click bait: either previously announced and well-known (higher gasoline tax in NJ) or inconsequential to most of us (higher cigarette taxes)

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Exxon Mobil To Increase Footprint In The Permian

  • Exxon Mobil Corporation said today it will more than double its Permian Basin resource to 6B barrels of oil equivalent through the acquisition of companies owned by the Bass family of Fort Worth, Texas, with an estimated resource of 3.4B barrels of oil equivalent in New Mexico’s Delaware Basin, a highly prolific, oil-prone section of the Permian Basin
  • ExxonMobil will make an upfront payment of $5.6B in ExxonMobil shares, and a series of additional contingent cash payments totaling up to $1B, to be paid beginning in 2020 and ending no later than 2032 commensurate with the development of the resource
  • The acquired companies, which include the operating entity BOPCO, hold about 275,000 acres of leasehold, and production of more than 18,000 net oil equivalent barrels per day, about 70% of which is liquids. This includes about 250,000 acres of leasehold in the Permian Basin, the bulk of that in contiguous, held-by-production units in the New Mexico Delaware Basin, with more than 60B barrels of oil equivalent estimated in place. The companies also hold producing acreage in other areas in the United States
  • ExxonMobil is producing approximately 140,000 net oil-equivalent barrels per day across its Permian Basin leasehold
  • “The highly-contiguous position will provide significant cost advantages in developing 3.4B barrels of resource, of which 75% is liquids. By utilizing ExxonMobil’s technological strength coupled with its unconventional development capabilities we can drill the longest lateral wells in the Permian Basin, reducing development costs and increasing reserve capture.” 
$6.6 billion / 275,000 leasehold acres =  $24, 000 / acre.
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Noble Increases Footprint In The Permian

Biggest M&A to date in 2017: Noble buys Clayton Williams, southern Delaware Basin, $2.7 billion.
  • Noble will have second-largest position in southern Delaware Basin
  • deal provides 4,200 drilling locations on about 120,000 acre
  • many of the locations economical with oil at $40/bbl
  • 55 million shares and $665 million to shareholders of Clayton Williams
  • acres acquired in this deal not mentioned at Bloomberg
At WorldOil:
  • 71,000 net acres
  • back-of-the-envelope: $2.7 billion / 71,000 net acres = $38,000 / acre
  • Southern Delaware Basin, Reeves and Ward counties
  • directly adjacent to Noble Energy's existing 47,200 net acres
  • Noble has an additional 100,000 net acres in other areas of the Permian
  • CNBC Jim Cramer says this was new acreage was not the best of the best in the Permian (I guess that's why acreage went for only $38,000 / acre)
  • EURs in Wolfcamp A wells: 1 million boe for a 7,500-ft lateral
Does the 120,000 acres sound familiar? See earlier story (just a couple of days ago) on WPX with 120,000 acres in the Permian.
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Back to the Bakken

Active rigs:


1/17/201701/17/201601/17/201501/17/201401/17/2013
Active Rigs3649157187185

RBN Energy: cheap crude and captive market boost Pacific Northwest refineries.
The five refineries in the U.S. Pacific Northwest (PNW) performed better in 2016 than rivals on the East Coast for two main reasons. First, the changing pattern of North American crude supply has worked to their advantage. Faced with the threat of dwindling mainstay crude supplies from Alaska, refiners in Washington State replaced 22% of their slate with North Dakota Bakken crude moved in by rail. They have also enjoyed advantaged access to discounted crude supplies from Western Canada. Second, PNW refiners face less competition for refined product customers than rivals on the East and Gulf coasts, meaning they have a captive market that often translates to higher margins. Today we review performance and prospects for PNW refineries.
The refineries:
  • BP, Ferndal, WA: 227,000 bopd
  • Shell, Anacores, WA: 145,000
  • Tesoro, Anacrotes, WA: 120,000
  • Phillips 66, Ferndale, WA: 101,000
  • US Oil & Refining, Tacoma, WA: 41,000
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It's Crying Time Again

#17 in the 20-song countdown. Finding another crying time song? Awesome. Finding one with Barbra Streisand? Priceless:

Crying Time Again, Ray Charles, Barbra Streisand

At the end of the day, the 2017 presidential election was all about NYC, the Trumpers vs the Never-Trumpers. 

At least that's how New Yorkers see it, based on coverage in The New Yorker