Wednesday, March 22, 2017

Some Excellent Late-Night Reading For Insomniacs -- Over At "Outrun Change" -- March 22, 2017

Trying to figure "it" out.

How US Shale Natural Gas Is Changing World Gas Trade -- Bloomberg -- March 22, 2017

Tanker's U-Turn Shows How Shale Is Changing World Gas Trade -- Bloomberg.


In Case You Missed It

John Kemp, over at Twitter:
US CRUDE OIL IMPORTS accelerated to 8.3 million b/d last week compared with 7.4 million b/d prior week.
Enbridge To Cut 1,000 Jobs

Comes on heels of its acquisition of Spectra Energy Corp -- Rigzone staff.

Saudi Isn't The Only One Squirming
Over at Bloomberg.
Exxon Mobil Corp.'s annual operations review, which dropped on Wednesday morning, could have been subtitled "Thank God for the Permian."
This, along with sanctions-related uncertainty around Exxon's plans in Russia, explains why Exxon has been gobbling up acquisitions in U.S. shale. The Permian has huge potential resources, which can be brought on relatively quickly and on relatively stable home turf.
Equally, it offers some explanation as to why Exxon's guidance on overall output through the end of the decade is flat -- even though it says it can roughly quintuple its Permian production by 2025 to more than 750,000 barrels of oil equivalent per day.
If Exxon is truly to thrive under potentially lower-for-longer energy prices, then success in shale is paramount.
Also archived. Growth at ExxonMobil may have to be downstream.

Just Checking The Math

From Rigzone:
Offshore energy companies ponied up more than $315 million in bids to lease 913,542 acres in the Gulf of Mexico off the coast of Louisiana, Mississippi and Alabama on Wednesday.
The lease sale is the final one in the GOM under the Obama Administration’s Five-Year Plan, which made available all offshore areas with the greatest resource potential from 2012 through 2017. The first 11 sales in the program netted more than $3 billion in bid revenue on almost 73 million acres for development, according to information from the Interior Department.
First eleven auctions under President Obama:
  • $3 billion / 73 million acres = $41 / acre
The last auction under President Trump:
  • $315 million / 913,542 acres =  $345 / acre
My math might be wrong. 

The Trump Daily Note

The Trump Presidency
The Third 30 days +10
The Second 30 Days 
The First 30 Days

Between Election And Inauguration
The Third 10 Days

April 30, 2017, T+100: slowest growth in three years. Obviously the culmination of eight years of Obama. One doesn't turn the US economy around in three months. This is Obama's final grade in economics: a failing grade -- slowest growth in three years. And if I recall correctly, Obama was the first American president in modern history to never have a year of 3% growth, or something to that effect. 

April 29, 2017, T+99: mainstream media says this is Trump's 100th day. I know the mainstream media included his inauguration day (January 20); I did not. I will keep my numbers.

April 28, 2017, T+98: Dow's rally from election to Trump's first 100 days is a postwar record. Trump speaks at NRA convention; first president since Ronald Reagan to address the NRA.

April 27, 2017, T+97: last cabinet nominee finally confirmed by the US Senate. Will be sworn in on T+97. Cognitive dissonance: people upset that rapists and murderers go free, but same people support sanctuary cities.

April 26, 2017, T+96: Trump rally continues; three days in a row. Although today, the third day, could go either way. Up as much as 60 points, near the close, up only 14 points or so. Trump releases his budget plan -- cuts taxes for everyone across the board and Chuck Schumer is upset.

April 25, 2017, T+95: O'Reilly? O'Reilly who? Tucker will easily beat him over time. [Update: how incredibly "funny": fired from Fox due to allegations of sexual impropriety. LOL.]

April 24, 2017, T+94: getting closer to budget release but who cares. Market up over 400 points in last two days, within 10 points of its all-time high.

April 23, 2017, T+93: US Surgeon General fired (NRA got him fired).

April 22, 2017, T+92: President Trump announces he won't be attending the White House Correspondents' Dinner. Instead he will host a "huge" rally in Philadelphia.

April 21, 2017, T+91: Senator Chuck Schumer's anti-Trump stance will put huge New York City infrastructure projects at risk. No wonder he has been so quiet lately, just as Trump is getting ready to release his budget.

April 20, 2017, T+90: quiet.

April 19, 2017, T+89: quiet.

April 18, 2017, T+88 (posted April 16, 2017): we still have a few weeks to go, but if nothing "important" happens in NOKO over the next few weeks, the most under-reported story since the Cold War, going back to the Cuban missile crisis, will be NOKO blinking, Trump "winning." Reading the mainstream media, one does not get the feeling that journalists are reporting how incredibly dangerous the past 72 hours has been. The events over the past week-end, or should we say the "non-events" over the past week-end could be a watershed moment in the relationship between China and the US, and the relationship between China and NOKO.

April 17, 2017, T+87: Trump's favorite -- Rex Tillerson for SecState. 

April 16, 2017, T+86: the press seems to be getting used to the president's tweets. 

April 15, 2017, T+85: FISA warrants = fishing warrants.

April 14, 2017, T+84: as long as the Democrats continue to argue that "Trump did not win," the situation for the Dems will grow even worse. It reminds me of Germany's decision to ban "Jewish science" in the late 1930s. Or Stalin banning Darwinian genetics.

April 13, 2017, T+83: now, beyond any doubt, the Obama administration "spied" on the Trump campaign using a FISA warrant to wire-tap phones.

April 12, 2017, T+82: Trump wins in Kansas.

April 11, 2017, T+81: Jared Kushner who has been put in charge of everything, apparently, by his father-in-law, is going to have his hands full overseeing two wars -- one in the Mideast and one on the Korean peninsula.

April 10, 2017, T+80: Supreme Court Gorsuch to be sworn in.

April 9, 2017, T+79: Donald Trump may be a braggart; may misuse words ("tapping phones" instead of "surveillance) (but using these words the way many Americans use these words); and, may use a  lot of hyperbole, but a) he keeps his word; and, b) does not lie, unlike Bill and Hillary; Donna Brazile, and Susan Rice -- who have been caught in outright lies -- and who lie and lie repeatedly. Trump: not one outright lie.

April 8, 2017, T+78: someday we will all know that Obama was a really, really bad dude. Connecting the dots -- Susan Rice, direct to Barack. On another note: Syria uses chemical weapons (nerve gas) on children and babies); the US knocks out the Syrian chemical weapons depot (at least the capability to access them); and, The Los Angeles Times leads with this photograph:

April 7, 2017, T+77: Donna Brazile, Susan Rice, Hillary Clinton ... there seems to be a pattern developing.

April 6, 2017, T+76: alt-left complaining that Trump's son-in-law working in administration, while defending JFK and RFK. Meanwhile, Trump launches 59 Tomahawk missiles into Syria after chemical attack on his own people. Something tells me Trump enjoys being president. It's very possible Trump will be seen by historians as the first neo-20th century president. Not Bush II; not Obama. Trump. Too many presidents in modern history have simply seemed no more than first among equals among those in Washington. Trump looks "presidential," a "real" branch of the US government, not part of the legislative branch of the US government. 

April 5, 2017, T+75: alt-left complaining that Trump's cabinet secretaries are doing yeoman work despite fact that deputies have not been confirmed. Well, duh!

April 4, 2017, T+74: The alt-left really can't have it both ways, can they? On the east coast they say Trump has not accomplished anything in his first 67 days, and yet on the west coast they say all the new policies set in place in the first 67 days have completely undone the Obama agenda. Likewise, under the Obama administration, the nation's debt for the alt-left was a non-issue; now, all a sudden the nation's debt is driving the alt-left nuts. 

April 3, 2017, T+73: is it just me, or does it appear the mainstream media is surprised that Ivanka and Jared are quite wealthy?

April 2, 2017, T+72: for now, anti-Trump folks seem to fall into three categories: cupcakes, fruitcakes, snowflakes. And then there are the Schumites, I suppose.

April 1, 2017, T+71: everyday I wake up happy knowing that Michell is not the First Lady. Although I wish I had my own garden.

March 31, 2017, T+70: Most Americans will never know, never realize how with regard to the US economy how incredibly dangerous the Obama administration had become, and how incredibly important it was that Hillary was not the third Obama term. As Bill Clinton always said, trust the American voter.

March 30, 2017, T+69: ObamaCare, Ryan-TrumpCare, MoCare, NoOneCares -- US consumer confidence exceeds expectations; jumps to 16-year high.

March 29, 2017, T+68: Is it just me or has anyone else noticed how quickly the story died when it was finally "proved" that, yes, indeed, the NSA "wiretapped" POETUS Trump and his family beginning the day after the election? Neither the mainstream media nor the politicians even care about this story any more.

March 28, 2017, T+67: President Trump needs to pull Mitch McConnell into the Oval Office and read him the riot act: if Gorsuch confirmation is not brought to the Senate floor by .......(you fill in the date) .... Trump will pull Gorsuch's nomination and nominate someone even Chuck Schumer will support.

March 27, 2017, T+66: maybe it's time for a) a few more executive orders; and, b) some changes in the GOP leadership (White House and Congress).

March 26, 2017, T+65: the mainstream media is mis-reading the meaning of the "defeat" of the Ryan-Trump Healthcare Bill. This was an extremely important "win" for Trump, though that might not be obvious yet.

March 25, 2017, T+64: Reid, Pelosi, Schumer have taken politics in the US to a new level. That's fine.

March 24, 2017, T+63: with the Gorsuch hearings yet to play out, the GOP still hasn't figured out it's being slow-rolled by the alt-left.

March 23, 2017, T+62: US House Intelligence Committee confirms what Trump has said all along -- Trump and his family were under surveillance following November's election. "The surveillance appears to have been legal, incidental collection and that it does not appear to have been related to concerns over collusion with Russia."

March 22, 2017, T+61: Maybe now the courts will understand why Trump wanted some time to more seriously vet folks coming from certain countries. Nope. Not gonna happen. Terror attack on British parliament reported.

Active Rigs Drop To 48 As Crude Oil Stocks Continue To Increase -- March 22, 2017

Active rigs:

Active Rigs4832107198187

No wells coming off confidential list Thursday.

Six new permits:
  • Operators: EOG (3), MRO (3)
  • Fields: Parshall (Mountrail); Bailey (Dunn)
  • Comments:
Six permits renewed:
  • Sinclair (6): six Lizzie Rae permits in McKenzie County
Two producing wells (DUCs) reported as completed:
  • 32458, 1,084, Hess, BB-Federal 151-95-1708H-9, Blue Buttes, t2/17; cum --
  • 32459, 990, Hess, BB-Federal 151-95-1708H-9, Blue Buttes, t2/17; cum -- 
One well recompleted:
  • 14876, 655, White Rock, Federal 16-28, Mondak, Red River pool, t2/24/2000, cum 605K 2/16; re-completed, 3/17; target - Stonewall; no production from Stonewall noted; file report: sundry form received January 20, 2017: "White Rock... plans to recomplete the subject well to the Stonewall/Duperow formations ... 160 acres (I believe); commingling of pools not approved at this time; previously an SM Energy well; section SESE 28-148-104; 
Note: the Duperow can produce some nice wells. There are two Duperow wells noted on "Monster Wells" post. 

Note: White Rock did something similar back in 2006, #14974, took a Duperow well and recompleted a short lateral targeting the Bakken. See graphic below:

Worth Reposting: "Holy Nightmare, Batman, What Do We Do Now?" -- March 22, 2017

From today:
Oil: drops to lowest price since November (2016) as US inventories swell. These are the only two numbers I need to know:
  • rebalancing: IEA sees 0.5 million bopd shortfall in oil production by end of 2017
  • US reserves: 500 million bbls (increased another 5 million bbls in latest report to 533 million bbls)
By the way, the most recent 5-million-bbl increase far outpaced the forecast of about half that amount -- 2.8 million bbls were forecast.

The 533 million bbls in US storage does not include the US SPR.
My hunch: the IEA will revise its figures before the end of the year, on the bearish side for the price of oil, i.e., the shortfall will be less than 0.5 million bopd, and could disappear altogether.

From an earlier post: This is the most recent graphic of Saudi Arabia's cash reserves:

Other Notes With Regard To Increasing Stocks Of Crude Oil

From UPI:
Producers in the United States are partially responsible for the current oversupply in oil. Global supply increased by 260,000 barrels per day in February, to 96.52 million barrels per day, and U.S. production is the highest it has been in a year, at 9.1 million barrels per day, roughly the amount Saudi Arabia produced in February.
Which reminds me -- whatever happened to Jane Nielson? From an earlier post:
This still remains one of my favorite posts. Jane Nielson says:
Frequent Internet users are getting emails about the Bakken Formation in North Dakota and Montana, supposedly a great oil bonanza just waiting to be tapped if only nasty enviros would let it happen. The emails and websites say that Bakken would solve all our petroleum “needs.” (What, me worry about  global warming?)
Don’t believe it. There’s some oil to be gotten out of Bakken, and it’s going to be exploited. But the “bonanza” is nothing but hype.
My favorite quote in ten years of blogging: "There's some oil to be gotten out of Bakken, and it's going to be exploited, But the 'bonanza' is nothing but hype."

The Market And Energy Page, T+61 -- March 22, 2017

Oil: drops to lowest price since November as US inventories swell. These are the only two numbers I need to know:
  • rebalancing: IEA sees 0.5 million bopd shortfall in oil production by end of 2017
  • US reserves: 500 million bbls (increased another 5 million bbls in latest report to 533 million bbls)
By the way, the 5-million-bbl increase far outpaced the forecast of about half that amount -- 2.8 million bbls were forecast.

The 533 million bbls in US storage does not include the US SPR. 

Earlier Notes
MarketWatch asks: what next after "market's sharp drop"?  What was it, 1.4% after a run from 18,000 to 21,000? Utilities did fine. Saudi Arabia counting on two things for a successful IPO:
  • strong US equity market
  • high oil prices
May not see either. But, hey, in life it's the journey, not the destination, that makes it interesting.

What do Sears and Saudi both have in common? Yup, an "S" at the beginning of their name. As in "sinking." Sears warns of "going concern" doubts.

Poll. Closing out the earlier poll in which we asked whether Dennis Gartman was wrong, or was he early, when he turned bullish on oil (when he predicted $55 would be the new floor) and oil immediately trended down to $47, where it languishes today. The results:
  • wrong: 39%
  • early: 61%
If by "early," Dennis may yet be correct -- by 2020.

Getting ready for her flight home yesterday:

Late Morning

Both AAPL and SRE are up nicely in a down market. 


Dow: Continues where it left off yesterday: opens down 40 points.

WTI: down a bit. At $47.86. Is $45 the new floor?

Five Kingdoms:
An Illustrated Guide to the Phyla of Life on Earth

Third Edition
Lynn Margulis and Karlene V. Schwartz
foreword by Stephen Jay Gould 
 c. 1988 (1982)
DDS: 570.12 MAR

My first note on this book was earlier this week.

This may be the best book on this subject. As far as I know, the third edition was the last edition. Obviously a lot has happened since 1988 but this is not a bad classification method.

Carl Woese's three-domain system is probably more acceptable these days than Margulis' five-kingdom classification system but once you get to the phylum level, it probably matters not.

If you have a child/grandchild interested in biology heading off to college in the next year or so, I would recommend this book. A mentor (parent/grandparent/teacher) could spend some time with this book, get a feel for it, and then in one or two 30-minute sessions "speed-read" the book with the college-bound student. After that, it becomes a great reference book. This book is not to be read cover-to-cover.

Meanwhile, the book is filled with cocktail party trivia.

Fungi are more closely related to animals than plants: the chitin that forms the fungal spores is the same/similar as the chitin exoskeleton of insects.

Fossils: oldest, of course, the bacteria, show up almost 4 billion years ago. But then, the real fun starts. The protists show up about 1.2 billion years ago; animals, about 600 million years ago; fungi, about 500 million years ago; and, finally, plants, about 430 million years ago. 

Of the bacteria, there are 14 phyla.

The really nasty bacteria -- as far as humans are concerned -- are the first two phyla, the "purple bacteria" and the spirochetes. The "purple bacteria" include the largest number of genera of any phylum -- by a large number (too great to count): Enterobacter (E. coli); Klebsiella; Neisseria; Pseudomonas; Rickettsia; Salmonella; Shigella; Vibrio; -- to name just a few. The spirochetes, of course, include Spirochaeta and Treponema.

Margulis' 13th phylum among the bacteria: Deinococci. Because they tolerate as much as 3,000,000 rads of ionizing radiation, they are easily isolated by bombardment with radiation, a procedure that kills everything else. (The human lethal dose is about 500 rads, and bacteria [other than Deinococci] are killed by 100 rads.)

Among the protists, 30 phyla. Those that affect humans: Trichomonas, Amoeba, Toxoplasma, Leishmania, Plasmodium (malaria).

Of the 37 phyla of Animalia, most interesting might be the 27th -- the tardigrades (water bears).

Fungi with 3 phyla.

Plants with 12 phyla are the most confusing, by far.

By the way, in the past week I've finally gotten the "picture" of the malaria life-cycle etched in my brain -- and will finally, perhaps, never forget it. I think if a professor that identified the "adult" phase and then the "embryo" phase of the malaria life-cycle for me I would have remembered it. Not that it matters.  (I've looked at several YouTube versions of the malaria life cycle; this may be one of the best such videos.)

I'm Movin' On [Hank Snow], Johnny Cash [and Waylon Jennings]

The Political Page, T+61 -- March 22, 2017

Double-down again. It looks like Trump can double-down again -- it is very, very clear that he was correct, that, in fact, he and his family were under surveillance after the election. Even Bloomberg is reporting it, though trying to downplay it as much as possible. But this story will have legs. We now know that the conversations of Trump and/or his family were picked up by (most likely) the NSA. 

Really? Maybe now the courts will understand why Trump wanted some time to more seriously vet folks coming from certain countries. Nope. Not gonna happen. Terror attack on British parliament reported.

Original Post 

Poll. New poll at the sidebar at the right. A big "thank you" to a reader for suggesting it.

NOKO: people are asking -- did NSA sabotage NOKO's missile on the launchpad?

Starting The Day At 50 Active Rigs -- March 22, 2017

Active rigs:

Active Rigs5032107198187

RBN Energy: SCCOP/STACK gas takeaway needs and the Midship announcement.

Shale revolution. Oil giants "upending" shale turf where wildcat drillers once ruled -- Bloomberg. From the article: (with snarky comments)
  • drilling 10,000 feet down (imagine that)
  • then drilling horizontally for a mile (imagine that; in the Bakken, 2-mile laterals for the past decade with a few 3-mile laterals)
  • blasting through rock to capture light crude oil (imagine that, blasting through rock)
  • they've turned shale drilling from art into science (imagine that; ND with the world's largest microseismic array)
  • shale wells for as little as $5 million each (that's a bit of a stretch)
  • Shell says they can make money in the Permian with oil at $40/bbl; new wells are profitable at $20/bbl (awesome)
Russian LNG. Rosneft signs deal to supply ten (10) LNG cargoes to Egypt in 2017  -- Reuters. Rosneft must have read the blog. At the link: Egypt: imported more LNG than India in 2015; second only to China in LNG imports. Also:
  • Jordan: a new entrant -- imported as much LNG as France in 2015 
  • Pakistan: a new entrant -- imported twice as much LNG as France in 2015  
  • Egypt: a new entrant -- imported more LNG than India in 2015