More Gages For DAPL At The Reservation -- That Was Easy -- February 1, 2017

You mean that's it? A couple of extra gages and everyone's happy? You have got to be kidding. Reminds me of Roseanne Rossannadanna ("never mid") on NBC's "Saturday Night Live" many, many years ago.

A screen shot of the on-line "front-page" of The Bismarck Tribune:

For such a quick conclusion, the casino must have been losing a lot of money, as well as some charities for Native Americans.

CORRECTION: Most Likely A TYPO: EOG Reports A Huge Well In The Parshall -- February 1, 2017

Updates

February 6, 2017: see first comment. This is most likely a typo. Again, instead of re-typing everything -- read the first comment.
 

IP: Most Likely A Typo

SEE FIRST COMMENT 

Original Post

When you look at the first screenshot below, look how far east this well is and the IP. I've noticed a couple of EOG wells reporting huge initial production at the eastern edge of the Bakken. I remember early on in the boom, folks were saying that it was unlikely to get great wells this far east. Probably true, but it is nice to see a well with this IP this far east. Also note that it is a short lateral, although being sited in the adjacent section, it's a bit longer than the typical EOG short lateral, which makes the IP of 5,224 for crude oil even more impressive. All things being equal, one wonders what the IP would have been had the horizontal been a long lateral.

The well:

• 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;
• need to follow up on this: water, 5 bbls water, initial production; IP MCF, 250; no natural gas flared; all sold
• API: 33-061-03346
• FracFocus: 10/25/16 - 11/26/16; 3.340 million gallons of water; 21.83% sand by mass
• one gallon of water weighs: 8.3454 lbs
• 3.340 million gallons of water, 21.83% by weight sand, per FracFocus:
• 78.7% of what =  27,871,224 pounds of water = 35,414,516 pounds total water + sand
• 21.83% = 7,730,989 lbs of sand
• a lot of sand for a relatively short lateral; equates to about 18 million lbs in a long lateral, I suppose

A neighboring well sited in the same section (need to follow-up in a few months):

• 17621, IA/1,117, EOG, Parshall 17-33H, open hole, 8 stages, 700K lbs proppant "Bakken SS", 640-acre spacing, t8/09; cum 222K 11/16;

EOG Reports A Huge Well In The Parshall (Likely To Be A Typo) -- February 1, 2017

MDU: beat by 5 cents; misses on revenue.

Active rigs:

	2/1/2017	02/01/2016	02/01/2015	02/01/2014	02/01/2013
Active Rigs	40	45	146	192	187

Three new permits:

• Operator: Marathon
• Field: Bailey (Dunn)
• Comments: 

One well coming off confidential list Thursday:

• 31514, 256, CLR, Topeka 10-12H, Brooklyn, 30 stages, 8.5 million lbs, t8/16; cum 33K 11/16;

Three producing wells completed:

• 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; see this post; LIKELY TO BE A TYPO; more likely the IP was 524 bbls of oil; [THIS WAS A TYPO -- see EOG's file report at this link -- February 24, 2017.]
• 30834, 326, XTO, TAT State Federal 14X-36D, Bear Creek, t12/16; cum --
• 32767, 2,759 , Petroshale (US), Petroshale US 8H, Antelope, t1/17; cum 3K after 3 days; 

 ***********************************

31514, see above, CLR, Topeka 10-12H, Brooklyn:

Dat	Oil Runs	MCF Sold
12-2016	5083	26891
11-2016	7105	22628
10-2016	10156	25911
9-2016	5076	9673

EV Sales For January Are Starting To Be Posted -- February 1, 2017

Link here.

The highlight: Chevrolet reported that the company sold four -- yes, four -- one, two , three, four -- Chevrolet Spark EVs. Truly amazing.

Cadillac? Three -- yes, three -- one, two, three -- Cadillac ELRs.

I think we've turned the corner. 

Off The Net For Awhile; Tongue-In-Cheek; Not To Be Taken Seriously -- At Least Not Yet -- February 1, 2017

I'm consistently amazed how inefficient Mother Nature is. Or perhaps, how efficient Bakken tight shale operators are in comparison to Mother Nature.

It has been said that any well taken off-line for any significant period of time will show an increase in production once it's brought back on status. ("Significant period of time" in the oil patch is defined as about 3 - 8 months for purpose of this discussion.)

Here's an example of Mother Nature's inefficiency.

Note the peak production of this well after being fracked in the month of May, 2009: 11,976 bbls, which works out to 14,279 barrels for the full 31 days of the month (in fact, it would have been slightly less due to the severe decline rate of the Bakken).

After being fracked in 2009, after Mother Nature "shut-in" this well for a gazillion years, it's production was about 14,000 bbls in that first month, after which its production plunged to 2,000 bbls/month only six or seven months later.

However, a few years later, this well was taken off-line (not for a gazillion years as Mother Nature had done earlier) but for only a few months -- about six months in fact. After being taken off-line for only six months, look at the production in May, 2013: 14,798 bbls (for a 31-day month that would extrapolate to 15,291 bbls of crude oil.

[Just for the fun of it, boe:
May, 2009: 2,365 + 14,279 = 16,644 boe
May, 2013: 5,002 + 15,291 = 20,293 boe]

After being fracked in early 2009, this well was down to about 2,000 bbl of crude oil/month by the seventh month.

Note, after this well was taken off-line for six months, it's production surged, and remained well above 2,000 bbls of crude oil/month for the next two years, in fact jumping to over 4,000 bbls in two consecutive months. 

For newbies: this is all done with tongue in cheek. Pay no attention to this. It was just something that caught my attention: how much production in a Bakken well can improve by just taking it off-line for a few months. Of course, it begs a question. In fact, it begs a lot of questions.

Monthly Production Data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2016	30	4132	3995	0	732	0	732
BAKKEN	10-2016	31	0	0	0	0	0	0
BAKKEN	9-2016	0	0	0	0	0	0	0
BAKKEN	8-2016	0	0	0	0	0	0	0
BAKKEN	7-2016	0	0	0	0	0	0	0
BAKKEN	6-2016	0	0	0	0	0	0	0
BAKKEN	5-2016	0	0	0	0	0	0	0
BAKKEN	4-2016	0	0	0	0	0	0	0
BAKKEN	3-2016	0	0	0	0	0	0	0
BAKKEN	2-2016	0	0	0	0	0	0	0
BAKKEN	1-2016	0	0	0	0	0	0	0
BAKKEN	12-2015	0	0	0	0	0	0	0
BAKKEN	11-2015	0	0	0	0	0	0	0
BAKKEN	10-2015	0	0	0	0	0	0	0
BAKKEN	9-2015	0	0	0	0	0	0	0
BAKKEN	8-2015	0	0	0	0	0	0	0
BAKKEN	7-2015	0	0	0	0	0	0	0
BAKKEN	6-2015	0	0	0	0	0	0	0
BAKKEN	5-2015	0	0	0	0	0	0	0
BAKKEN	4-2015	2	322	665	18	413	413	0
BAKKEN	3-2015	27	1951	1804	221	3065	3011	54
BAKKEN	2-2015	28	1917	1896	219	2869	2790	79
BAKKEN	1-2015	31	1895	1870	242	2684	2637	47
BAKKEN	12-2014	31	1631	1632	291	3537	3537	0
BAKKEN	11-2014	30	1687	1646	337	2419	2399	20
BAKKEN	10-2014	31	1994	2245	349	3822	3802	20
BAKKEN	9-2014	30	1586	1650	562	3764	3760	4
BAKKEN	8-2014	29	4188	4464	856	8337	8303	34
BAKKEN	7-2014	31	4491	3977	1011	9142	7115	2027
BAKKEN	6-2014	30	1821	2195	616	3793	3201	592
BAKKEN	5-2014	31	2208	1817	770	4881	4821	60
BAKKEN	4-2014	12	1105	1075	403	2200	1175	1025
BAKKEN	3-2014	0	0	0	0	0	0	0
BAKKEN	2-2014	13	1248	1518	427	3211	0	3211
BAKKEN	1-2014	11	1599	1164	590	1680	0	1680
BAKKEN	12-2013	31	5332	5546	1528	13733	13168	565
BAKKEN	11-2013	30	9035	9648	2028	22446	22446	0
BAKKEN	10-2013	31	6597	6537	1314	11571	11378	193
BAKKEN	9-2013	30	7868	8076	1573	14471	14471	0
BAKKEN	8-2013	31	9881	9578	1930	18210	18210	0
BAKKEN	7-2013	31	12162	12586	2512	21742	21742	0
BAKKEN	6-2013	27	8985	8819	2647	15599	14575	1024
BAKKEN	5-2013	30	14798	14953	8053	29045	17210	11835
BAKKEN	4-2013	4	2836	2032	2648	4477	2416	2061
BAKKEN	3-2013	0	0	0	0	0	0	0
BAKKEN	2-2013	0	0	0	0	0	0	0
BAKKEN	1-2013	1	3	0	0	0	0	0
BAKKEN	12-2012	2	62	254	0	0	0	0
BAKKEN	11-2012	26	980	660	740	1799	1799	0
BAKKEN	10-2012	31	1404	1906	717	2498	2498	0
BAKKEN	9-2012	21	1094	1165	233	1493	1493	0
BAKKEN	8-2012	16	728	524	542	1172	1172	0
BAKKEN	7-2012	6	184	245	18	199	199	0
BAKKEN	6-2012	30	951	1603	111	2461	2461	0
BAKKEN	5-2012	31	1324	1129	282	2713	2713	0
BAKKEN	4-2012	30	1364	1484	445	2252	2252	0
BAKKEN	3-2012	24	1310	501	547	1971	1971	0
BAKKEN	2-2012	9	199	916	20	0	0	0
BAKKEN	1-2012	31	1217	648	218	2232	2232	0
BAKKEN	12-2011	17	1065	1179	367	477	477	0
BAKKEN	11-2011	26	1264	1357	147	1983	1437	546
BAKKEN	10-2011	14	580	1031	148	866	131	735
BAKKEN	9-2011	30	1105	1436	922	2733	2402	331
BAKKEN	8-2011	31	1331	933	384	2761	2751	10
BAKKEN	7-2011	30	1982	1468	518	3539	3539	0
BAKKEN	6-2011	2	205	239	7	240	240	0
BAKKEN	5-2011	25	1301	1398	561	2288	2188	100
BAKKEN	4-2011	5	371	0	210	731	360	371
BAKKEN	3-2011	17	687	965	112	1406	1406	0
BAKKEN	2-2011	28	1267	1453	220	2505	2222	0
BAKKEN	1-2011	31	1430	894	259	2436	2116	320
BAKKEN	12-2010	31	1440	1958	215	3457	2429	387
BAKKEN	11-2010	30	1446	1433	264	5066	3259	0
BAKKEN	10-2010	30	1375	1377	242	2550	2398	40
BAKKEN	9-2010	30	1509	1348	251	3389	3365	0
BAKKEN	8-2010	31	1710	1821	391	2710	1053	1650
BAKKEN	7-2010	11	1636	2155	269	137	137	0
BAKKEN	6-2010	20	1795	1314	683	681	681	0
BAKKEN	5-2010	29	2425	2017	377	4273	4273	0
BAKKEN	4-2010	29	1612	2250	203	1839	1839	0
BAKKEN	3-2010	31	1691	1522	238	2399	2399	0
BAKKEN	2-2010	28	936	975	240	1777	1777	0
BAKKEN	1-2010	27	1541	1193	515	1948	1948	0
BAKKEN	12-2009	30	1620	1627	492	1806	1806	0
BAKKEN	11-2009	28	2582	3246	593	3763	3763	0
BAKKEN	10-2009	29	2482	2141	827	5408	5408	0
BAKKEN	9-2009	30	3343	3248	892	7096	7096	0
BAKKEN	8-2009	18	2799	2413	365	2989	1424	1565
BAKKEN	7-2009	23	3196	3198	570	2170	0	2170
BAKKEN	6-2009	26	4480	4667	790	5600	0	5600
BAKKEN	5-2009	26	11976	11313	1280	11900	0	11900

For future reference, the well:

• 17755, 543, Statoil, Roscoe 2H-8, Banks, t5/09; cum 186K 11/16; 

US Refinery Throughput -- A Snapshot In Time -- February 1, 2017

You will read that the US imported more crude oil last week than the previous week, to about the tuen of 500,000 bopd, now up to a little more than 8 million bopd.

There are two reasons the US imports oil:

• Saudi Arabia needs about a million bopd to source its refinery on the US gulf coast 
• US refineries were configured for heavy oil (Canadian, Venezuelan); US oil is mostly light oil; US refineries can manage with a blend of heavy-light oil

From John Kemp, via Twitter:

If I read the graph correctly, compared to last year, the US refinery throughput has increased about 350,000 bopd.

Compared to the 10-year average, US refinery throughput has increased about 1.5 million bopd. Where is all this gasoline (and other refined products) going? That's a rhetorical question; please don't reply.

************************************

A Note To The Granddaughters

I've always wondered why it was important to the ancient Babylonians that they understood the Pythagorean Theorem, you know:

a² + b² = c²

It had to with measuring wealth. A farmer's prosperity was seen as dependent on the amount of grain he was able to produce, which, in turn, depended on the area that was available to the farmer. Area was known to be length x width, and when those two were equal, the area was equal to a-squared, and in this sense, wealth was a "squared quantity."

Babylonians wanted to know when such squares of whole numbers could be partitioned into other squares of whole numbers. A farmer who owned 25 square units of land could swap it for two square parcels of land, one measuring 16 square units, and one measuring 9 square units.

I assume I'm the only person who did not intuitively see that when learning the Pythagorean Theorem but there you have it. 

This graphic will help:

From Fermat's Last Theorum: Unlocking the Secret of an Ancient Mathematical Problem, Amir D. Aczel, c. 1996; DDS 512.74 ACZ.

More Trump Enthusiasm As Former President / Michelle Vacate White House -- Mideast Mainstream Meda Headline? -- February 1, 2017

Updates

Later, 4:55 p.m. Central Time: "calm down" the NY Times tells us! The NY Times who warned us about the natural gas scam in the Marcellus and the likely failure of the Panama Canal expansion, now tells us the "bacon shortage" story is a "fake story." LOL. Glad to see The NY Times on top of this.

Later, 1:55 p.m. Central Time: Forbes yells -- the looming disaster -- yes, DISASTER -- of a US bacon shortage -- this has got to be a "first world problem" -- LOL -- I need to go out to the barn and bring in my comfort pony, and my motivational meerkat. And then folks wonder why I don't subscribe to Forbes any more. A "disaster." A US bacon shortage. LOL. Stock up now.
 

Original Post

Nation's bacon -- yes, bacon -- reserves hit 50-year low.

Over at USA Today.

• not yet being reported by CNBC
• is it a supply problem or a demand problem?
• demand is outpacing supply
• December, 2016: inventory totaled 17.8 million lbs; lowest level since 1957

Fast facts:

• consumption, per capita, by country: China, #1; EU, #2; US #8;
• China's pork imports to hit record highs -- July 6, 2016; 

This is actually kind of a funny story. If it weren't for the calories I would eat a lot more bacon. As it is, I've never really kept bacon in the refrigerator. Until last November. I now buy a packet of the best bacon available, regardless of price, bring it home, and divide it up into three strips in each little zip-lock bag, to freeze, keeping one little zip-lock bag in the refrigerator at all times, and generally having one strip of bacon with one little Mickey Mouse waffle once every week. The one Mickey Mouse waffle almost every day, but only one slice of bacon once a week.

Trump Excitement! January Payrolls Crush Estimates -- ADP -- February 1, 2017

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

***********************
Saudi Oil Imports

Previous posted data here.

For November, 2016:

Observations:

• second lowest November in history (November, 2009, global recession)
• almost 20% lower year-over-year
• cut in OPEC production not yet in place; to begin late December, 2016 -- official start January, 2017; to last six months
• compare November, 2016, Saudi imports with March, 2016 -- a 25% drop
• look at November in years 2008, 2009, and 2016

Today's Finance Headlines -- February 1, 2017

WTI: $53.19.

Gasoline demand: corner turned? We'll see the graph Thursday. Today John Kemp tweets:

US gasoline consumption averaged 9.243 million bopd in November, up 1.44% compared with prior year; equal to previous seasonal record set in 2006.

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

ONEOK: Oneok to buy the rest of Oneok Partners it doesn't own --

• $9.3 billion deal
• OKE: up almost 3%
• OKS: up almost 30%
• implied price for OKS: $54 vs $43 closing price
• Oneok expects to raise its quarterly dividend by 21% to 74.5 cents/share

MRO: moving sharply higher. Easily beats estimates; attributed to refining. Forecast, 26 cents; actual: 43 cents. 

The Apple, Inc, story continues:

• #1 camera maker in the world;
• services growing 18% year-over-year;
• app store growing 40% year-over-year; and,
• cash grows to $246 billion 
• AAPL will hit 52-week high today; still an "Abe Lincoln" short of an all-time high
• AAPL: pays about 2%

ADP: up 246,000! December payrolls revised downward, 2,000 to 151,000. Forecast: private sector to add 160,000 jobs. Remember the "magic numbers":

The Magic Numbers (change with Trump administration)

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.

Next big thing.  UPS is toast. Discussed yesterday. What the heck just happened? -- Barrons. Data points:

• EPS: forecast, $1.69; actual, $1.63
• revenue: forecast, $17 billion; actual $16.93 billion
• guidance: $5.80 too $6.10 for 2017; Street consensus for $6.15
• shares: dropped more than 6% on a down-day for the market; Amazon had dropped 1.2%
• comment: the most ubiquitous truck in our neighborhood (other than landscapers, waste management, and black-and-white police department SUVs) is the brown truck

Difficulty finding "guests"? MSNBC "Morning Joe" was on a roll, really, really good ... until .... they brought on the Reverend Al Sharpton. What were they thinking? I immediately switched stations; completely forgot about "Joe" -- when I remembered, I returned only to find NYC mayor De Blasio explaining why NYC is a sanctuary city. Back to CNBC.

Speaking Of Pinocchio -- February 1, 2017

Updates

Later, 9:19 a.m. Central Time: if the writer over at the Financial Times says there is no "swing  producer" for crude oil, Reuters' John Kemp begs to differ:

• Saudi Arabia has been forced to return to the role of swing producer in the oil market, despite the country's insistence for three decades it would never play that role again
• Saudi Arabia and its allies in the Gulf Cooperation Council account for the majority of production cuts made so far (the "Willie" Sutton analogy: why did he rob banks? because that was where the money was)
• by cutting their own output deeply, Saudi Arabia and its allies have masked the low level of compliance from the rest of the organization
• outside OPEC, Russia, so far, has delivered only about a third of its promised cut of 300,000 bopd
• as a swing provider, Saudi was formally given that role in March, 1983
• Saudi Arabia is the only producer that exports enough crude oil and has the centralized control to exercise some degree of market power in the oil market

One wonders if John Kemp (above) and the Financial Times (below) are looking at two sides of the same coin. Saudi is the only producer that can quickly cut production to support/raise global prices; the US shale operators can fairly quickly offset any cut in Saudi production, but really can't do much about "flooding" the market to bring the price down.

I guess it depends on the definition of "swing producer."

Original Post

 

Why I love to blog: I've always questioned the notion that US shale was the "swing producer." Now, from the Financial Times: for the first time in years, the global oil market has no swing producer.  The article is a nice overview of how we got where we are, and where we are headed; an article worthy to be archived (an op-ed by a consulting firm exec; a former senior director on the White House National Security Council, yada, yada, yada.

Some believe recent pledges by OPEC and Russia to restrain production mark the return of supply management.

Hardly. Since these producers began talking about restraint last February, they added around 1.4m barrels per day to the glut.

Their recent pledges to trim production from historically high levels resemble ad hoc, collective supply restraint agreements that sprang up occasionally since oil’s earliest days by producers spooked by price busts. They sometimes enjoyed temporary success but invariably fell apart due to supply growth outside and cheating within members’ ranks.

OPEC's own analysts, and those at the US Energy Information Administration, project these pledges will not dent the towering inventory glut.

***********************************

Pinocchio

From The Wall Street Journal: the Saudi oil minister praises Trump's energy policy, welcomes increased US production. Minister says Saudi Arabi could increase its US oil-industry investments.

Saudi Aramco needs strong US market for successful IPO.

From the article:

Mr. Falih dismissed any suggestion that OPEC was a “foe” of U.S. energy interests.

“We’re not the foes,” he said. “People are recognizing that OPEC is a force for good.”

Okay.  Pinocchio.

******************************

India Plans To Form A Big, Huge, Giant National Oil Company

From Ruters/Rigzone, data points:

• India imports 80% of the oil it needs
• wants to cut that number to 67% 
• India has about a doze state-run oil and gas companies: separately not big enough to take on a global role
• will look to combine some (all?) of them
• on another note, India will cut the import tax for LNG in half: from 5% to 2.5%

Active Rigs Steady At 40 -- February 1, 2017

Active rigs:

	2/1/2017	02/01/2016	02/01/2015	02/01/2014	02/01/2013
Active Rigs	40	45	146	192	187

RBN Energy: midstream is on the upswing, but hidden risks remain below the surface.

Scott Adams' blog: is President Trump doing management wrong?

Apple, Inc, execs; Trumpers: sultans of swing.

Sultans of Swing, Dire Straits, Drum Cover by Sina