Thursday, April 13, 2017

Surprise, Surprise! -- April 13, 2017

Once we look at the original oil fields in the Bakken, I think we will see what a huge surprise this was.

Note: from the Director's Cut, all the data suggested the number should come in lower:
  • the number of inactive wells is huge and barely moved
  • the number of DUCs barely moved
  • the number of completed wells is in the mid-50's; down from 200 a month during the boom and when even 150 completed wells early in the boom did not produce 750,000 bopd 
  • one also needs to remember all the wells taken off-line when a DUC is being completed; because of pad drilling and infill wells, it is not uncommon to see up to four wells coming off line for two to four months while a DUC or a new well is being fracked
  • anyone not surprised by this 1 million bopd production in the middle of a North Dakota winter is simply not paying attention (yes, I was surprised [very surprised], and I'm paying attention -- LOL)

Trump's First 100 Days -- April 13, 2017

After eight years of drought, desolation, and dashed dreams under President Obama, The Los Angeles Times is now reporting that a wet winter has set a precipitation record in northern California, and for the most part, the entire state is drought-free. For the record, this was all accomplished well within President Trump's first 100 days.

Along with the Syrian airbase strike, the tactical strike on ISIS in Afghanistan, an incredible stock market rally, the announcements of any number of new manufacturing plants to be built in the US, the confirmation of a Supreme Court justice, and now the end of the California drought, one has to admit President Trump has accomplished quite a bit in his first 85 days. And there are still 15 days to go. I think we're all waiting for North Korea's "response" to President Trump's first 100 days. We should know by Monday.

Data points for The Los Angeles Times story:
  • it's in the history books
  • wettest winter for California's northern Sierra Nevada in nearly a century of record-keeping
  • as of Thursday, "an astonishing 89.7 inches of precipitation" had been recorded; that eclipses the previous record of 88.5 inches back in 1982- 83
  • Sierra Nevada provides large amounts of water to the rest of the state
  • although the latter part of the year receives little precipitation, we're only into the first six month of the "water year"
  • the San Joaquin index could also set a record this year
Much more at the link.

A Must-Read

From Victor Davis Hanson's private papers: Barack Obama is America's version of Stanley Baldwin. This is an extremely well-written article. It provides a bit of history I doubt very many folks know. I certainly did not. It begins:
Both leaders put their successors in a dangerous geopolitical position.
Last year, President Obama assured the world that “we are living in the most peaceful, prosperous, and progressive era in human history,” and that “the world has never been less violent.”
Translated, those statements meant that active foreign-policy volcanoes in China, Iran, North Korea, Russia, and the Middle East would probably not blow up on what little was left of Obama’s watch.
Obama is the U.S. version of Stanley Baldwin, the suave, three-time British prime minister of the 1920s and 1930s.
Baldwin’s last tenure (1935–1937) coincided with the rapid rise of aggressive German, Italian, and Japanese Fascism.
Baldwin was a passionate spokesman for disarmament. He helped organize peace conferences. He tirelessly lectured on the need for pacifism. He basked in the praise of his good intentions.
Baldwin assured Fascists that he was not rearming Britain. Instead, he preached that the deadly new weapons of the 20th century made war so unthinkable that it would be almost impossible for it to break out.
Baldwin left office when the world was still relatively quiet. But his appeasement and pacifism had sown the seeds for a global conflagration soon to come.
That last line bears repeating:
Baldwin left office when the world was still relatively quiet. But his appeasement and pacifism had sown the seeds for a global conflagration soon to come.
This perhaps explains why it is so critically important President Trump gets out in front of all this. 

Baldwin’s last tenure was 1935–1937.

FDR was president of the US from 1933 to 1945 and pretty much had to deal with the legacy that Baldwin left humanity. Exactly 80 years later (from 1937), Trump was sworn in as president.

World war threats? China is not going to go to war defending North Korea. Putin is not going to go to war defending Assad in Syria. Israel, Iraq, and Saudi Arabia will provide flank support to keep Iran in a box. [Update, April 15, 2017: Drudge has a banner headline suggesting that "war" almost broke out due to a misleading headline. The link takes us to a Zero Hedge story suggesting the same thing but hyping it to suggest "World War III." China is not going to go to an all-out war with the US over North Korea. But having said, it is possible, Russia would take advantage of the situation in the Mideast, the Crimean, Ukraine, and/or the Baltic region. So, I suppose in that sense one could call it WW III. Note: North Korea did not detonate a nuclear weapon as expected.]

Daily Activity Report With Very Little Activity: Four Permits Renewed; That's About It -- April 13, 2017

Active wells:

Active Rigs513091189186

Only one well coming off confidential list between now and Monday, April 17, 2017:
28945, conf, Petro-Hunt, Kostelnak 145-97-32D-29-3H, Little Knife, no production data,

No new permits today.

Four permits renewed:
  • EOG (3): three more Austin permits, all in Mountrail County
  • BR: one Cleetwood permit in McKenzic County
One producing well (DUC) reported as completed:
  • 29948, 1,585, CLR, Hendrickson 8-36H, Elm Tree, t3/17; cum --

Director's Cut; February, 2017, Data Posted; Daily Production Up Over 5% Month-Over-Month; Back Over 1 Million BOPD

Disclaimer: I do these summaries quickly. There are bound to be typographical and factual errors. If this information is important to you, go to the source.

Director's Cut, February, 2017, data has been published

  • February, 2017: 1,034,168 bopd (preliminary)
  • January, 2017: 981,380 bopd 
  • Delta: 52,788 bopd = a 5.4% increase in daily production (for newbies: this is quite amazing for any number of reasons)
Producing wells
  • February: 13,500
  • January, 13,341
  • February: 45 oil and gas permits
  • January: 81 oil and gas permits
ND sweet crude price
  • March: $38.13 / bbl
  • February: $42.74 / bbl
  • January: $40.51 / bbl
Rig count
  • March: 46
  • February: 39
  • January: 38
Wells waiting to be completed or inactive:
  • DUCs: 799, down 3
  • estimated number of inactive wells: 1,611, down 67  
Takeaway capacity: still dependent on rail, no comments about DAPL

Gas capture:
  • statewide: 89%
  • FBIR: 83%
  • goal: 85% (now) increasing to 91% by November 1, 2020

Wow! -- April 13, 2017

Link here.

How did the market react? The Dow 30 was down 98 points before the event; after the event the Dow 30 is down 71 points.

Another Win

Link here. A win for North Dakota farmers and small businesses.  Making America great again.

The Physics Page

"Dark matter" "captured"? Link here. The article is interesting, but the article doesn't really say what the "images" captured. Dark matter does not "interfere" or "react" with any tool physicists currently have in their toolkit.

Yeah, His Phone Lines Were Tapped And He Knew It

Link here.
The European countries that passed on electronic intelligence – known as sigint – included Germany, Estonia and Poland. Australia, a member of the “Five Eyes” spying alliance that also includes the US, UK, Canada and New Zealand, also relayed material, one source said.
Another source suggested the Dutch and the French spy agency, the General Directorate for External Security or DGSE, were contributors.
It is understood that GCHQ was at no point carrying out a targeted operation against Trump or his team or proactively seeking information. The alleged conversations were picked up by chance as part of routine surveillance of Russian intelligence assets. Over several months, different agencies targeting the same people began to see a pattern of connections that were flagged to intelligence officials in the US.
Again, everything must have been squeaky clean or Obama/Hillary/Bill/Loretta/Jim would have all "leaked' it to The New York Times

North Star Caviar To Halt Fish Cleaning Operations For First Time In 25 Years -- April 13, 2017

The 2017 Paddlefish Snagging Season is set to run May 1-31 in North Dakota. Update here

From The Williston Herald:
After dismal paddlefish roe sales, North Star Caviar announced Wednesday that its fish cleaning plant will halt operation this year — a first in its 25-year operation. 
“We’re super disappointed that we can't continue to offer this,” Williston Area Chamber of Commerce President Janna Lutz said on Wednesday. “We’re sad this resource cannot be sold to give back to the community.” 
A late delivery in January 2016 left international market buyers sitting on product that missed their crucial holiday sales. Disappointing 2016 summer roe sales left North Star Caviar with 1,200 pounds of caviar on hand. 
North Star Caviar attributes the loss to a saturated market from Chinese farm-raised products. Regardless of what’s driving the caviar market, the nonprofit was forced to make difficult decisions this year.
The small nonprofit has contributed $2 million in community grants throughout its two decades of operation, though it announced in January it wouldn’t have the funds to support grant funding until it found a caviar buyer. 
The company is now going to cut expenses even further by ceasing its operation of its fish cleaning plant located at the confluence of the Yellowstone and Missouri River — a $70,000 yearly expense.
Much more at the link.

Perhaps A New Nominee For The 2017 Geico Rock Award

From "The Talk of the Town: Comment, A State Away" in the March 13, 2017, issue of The New Yorker, page 27, by Jelani Cobb:
Amid the stunning Presidential-election results last November, a smaller, though perhaps equally consequential, development went relatively unnoticed: the Republican Party now controls thirty-three state legislatures. On its face, this development demonstrates the discrepancies between the Democratic and Republican farm teams. Not only does the GOP control the US Senate and the House of Representatives; (sic) it has created a pipeline of candidates to fill those offices for the foreseeable future. 

From "The Financial Page, Mar-A-Lago Rules," Sheelah Kolhatkar, the March 20, 2017, issue of The New Yorker, page 34:

  • H-1: full-time, permanent, long-term
  • H-2: part-time, seasonal, short-term
  • H-1A visas: expired; enacted during US nursing shortage; replaced by H-1C visas; also expired
  • H-1B visas: technical and skilled employees, full-time
  • H-2A visas: agricultural workers
  • H-2B visas: seasonal workers
Google, et al: H-1B
Mar-A-Lago, et al: H-2B

Whiting: 50-stage, 15.3-Million-Lb-Sand Frack; High-IP -- April 13, 2017

Notes From The Library

Wow, wow, wow -- I've hit the mother lode: five back issues of The New Yorker, going back to March 13, 2017. One issue is missing, the April 10, 2017, issue. It's been that long since I've been to the Southlake library. I've been going to the Grapevine library for the past several weeks where I read books and not magazines.

I canceled my subscription to The New Yorker about a year ago when it was clear that the magazine had become a Hillary mouthpiece.

I won't re-subscribe, but I am really enjoying the magazine now. Almost every article is anti-Trump, mostly overtly, but often times the anti-Trump message is very, very subtle. That's what makes it fun: trying to find the anti-Trump message in every article.

Actually, that's only part of the fun. The real fun is reading what the anti-Trump folks still believe. This is my favorite, from the April 3, 2017, issue, page 45:
President Trump was not democratically elected President of the United States. 
This is April 3, 2017, four months after the election and these folks still can't get over it.

I can only imagine all the glowing articles about Hillary and her globalism and her war on carbon and open borders had she been democratically elected President of the United States. As it was, she was trounced in the Electoral College where it counts. 

I'm not going to be able to get through all the issues today, but my favorite will probably be the March 20, 2017, issue. With a bright red "title," I can't wait to read this article, "Trolling the Press Corps: The Trump Administration disrupts the daily briefing."

From my college days I remember The New Yorker as a really, really good magazine with articles about many, many subjects. The article that I first recall reading was the one on Michael Murphy and Big Sur. It was published in the January 5, 1976, issue, but no longer accessible without a subscription. Maybe I will re-subscribe someday.

Notes From The Library

I won't get into the background but I've come across a most interesting observation. Oxygen is an incredibly toxic molecule and was a huge obstacle for the evolution of life one billion years ago, or whenever it was, plus or minus a few hundred-million years.

It is very likely that precursors to hemoglobin evolved to grab oxygen and dispose of it so it would not kill the anaerobic organisms. Likewise, it is very likely the respiratory chain found in all aerobic organisms today originally "evolved" to capture oxygen / slow / eliminate its toxicity to anaerobic organisms. This is not the only example of how proteins have changed to be used in ways not originally "intended." I apologize for not being more articulate to say it better, but you get the idea.

I find it incredibly interesting about hemoglobin and the respiratory chain -- it explains much.

I got this from Krauss' Oxygen, previously posted.

On another note, Gino Segre, in Ordinary Geniuses, explains why the it was so difficult for physicists to figure out why hydrogen and helium did not lead directly to certain heavier atoms/molecules. I get a kick out of the fact that the period table jumps from a one-nucleon atom (hydrogen) to a four-nucleon atom (helium) with no intermediaries. It was with discussions with our 13-year-old granddaughter (she was eleven at the time) that we understood why. Those discussions helped me understand/remember that U-238 is stable, U-235 is not, and that 99%+ of natural uranium is 238. Uranium-235 is the only naturally occurring fissile isotope.

Mindless meandering. 

Jobs, Making America Great Again; Huge Consensus Miss, T+82 -- April 13, 2017

First time....from Kiplinger:
  • the number of newly unemployed continued to drop: 234,000
  • a decrease of 1,000 from the previous week's revised level
  • the previous week was revised up by 1,000 from 234,000 to 235,000
  • 4-week moving average: 247,250 -- a decrease of 3,000
  • weekly initial jobless claims are tracking at levels last seen in 1973
Huge consensus miss, Econoday:
  • consensus: 243,000
  • actual: 234,000
Jobs claims: post-recession low. Trump making America great again. Trump approval jumps to 48%.

I'm continue to think the March jobs report was an anomaly; a huge error of some sort that may never be explained.

The Jane Austen Page

This summer: the bicentenary of Jane Austen's death.

From "Last Laugh: Jane Austen's final, surprising, unfinished novel," Anthony Lane, in the March 13, 2017, issue of The New Yorker:
Austen was the seventh child of a country rector. The family was well connected but not wealthy. Of her six mature novels, four were published in her lifetime, and none bore her name on the title page. The one she left dangling (unfinished) is known as "Sandition," although she assigned no title. Nor did her beloved sister Cassandra, when she copied the manuscript, long after Jane's demise.

The Energy And Market Page, T+82 -- April 13, 2017

Four Pinocchios: IEA says global oil market nears balance even as stock rise -- Reuters. When you look at the following graph (posted yesterday, Bloomberg), note:
  • does one really believe the US was the only country stockpiling crude when the price plunged?
  • compare the nearly stable level of crude inventories between 2011 and 2014, and where we are now
  • OPEC/NOPEC cuts agreed upon: less than 2 million bopd
  • US crude oil production in 2012: 6.5 million bbls
  • US crude oil production in 2017: 9.0 million bbls
  • US crude oil production in 2018, forecast: 9.9 million bbls
  • unless the drawdown yesterday was the beginning of a trend, and the upcoming drawdowns are "huge," it will be fascinating to see US crude oil inventories get back to 2015 levels, and at 450 million bbls that's still 100 million bbls more than what it was in 2012
Meanwhile the price of gasoline continues to rise.

OPEC balancing: it's important to look at the x-axis in the graphic below. If you can see signs of re-balancing in the graph you are doing better than I:

COP: to sell San Juan Basin interests; $3 billion; buyer - Hilcorp Energy; COP on track to divest more than $16 billion of assets in 2017. I track the San Juan here. Bloomberg's feature story on Hilcorp Energy.

The Trump Presidency Begins, T+82 -- April 13, 2017

Daniel Henninger: the Trump presidency begins.

Keeping Score

From "Trolling The Press Corps," Andrew Marantz, in the March 20, 2017, issue of The New Yorker:
... One America News Network, which was founded in 2013 as a right-wing alternative to Fox News; LifeZette, a Web tabloid founded in 2015 by Laura Ingraham, the radio commentator and Trump ally; Townhall, a conservative blog started by the Heritage Foundation; the Daily Caller, co-founded in 2010 by Tucker Carlson, now a Fox News host; and the enormously popular and openly pro-Trump Breitbart News Network.
Free market capitalism will have a huge effect on mainstream media and non-mainstream media. The ad dollars will flow to where the viewers are.


Motivations: Gen Xers -- "the Sandwich Generation" -- what motivates the "Sandwich Generation?
born: 1965 - 1982
  • 2014: 32 - 49 years old; early-to-mid-age; mid-career; near peak-earning years; getting serious about life; getting serious about saving for retirement 
  • have just lived through the Bush and Obama years; worst US recession in modern history; no draft; military experience not the norm
  • sandwiched between older parents (baby boomers who will leave trillions of dollars to younger generation) and millennials (born 1977 - 1995: 19 to 37 years of age -- most of whom making noise are in college; Bernie Sanders supporters
  • baby boomers living longer than FDR expected; inheritance will pass to children (or grandchildren) of the "Sandwich Generation"
  • from my perspective: the baby boomers will watch the Gen Xers (the "Sandwich Generation") knock heads with the Bernie Sanders millennials; baby boomers now spectators except they vote in droves and make up the Trump administration; the Deep State; and, the alt-left
The experience of the Gen Xers (at the linked article):
Economic challenges often translated into upheavals on a personal level for Gen Xers, Yorges added. "This generation witnessed high unemployment, layoffs/downsizing and family relocations caused by economic instability as they were growing up," she explained. "As a result, Gen Xers tend to be independent and individualistic, placing more value on their own careers over loyalty to organizations. Gen Xers, many of whom grew up as 'latchkey' kids, are independent, resilient and adaptable."
Kelly added that Gen Xers often exhibit resourcefulness and self-sufficiency but may be reluctant to highlight those attributes. They "are less likely to say that they are unique, compared to Millennials and Baby Boomers," he said.

Active Rigs At 51 -- April 13, 2017

Active rigs:

Active Rigs513091189186

RBN Energy: the numbers behind US crude oil balances and inventories.

Scott Adams: the North Korea reframe.

Daniel Henninger: the Trump presidency begins.