Friday, April 28, 2017

Week 17: April 23, 2017 -- April 29, 2017

It's been a week of meager daily activity reports coming out of the Bakken: very few new permits; almost no reports of any DUCs being completed; most new wells going to DUC status. Meanwhile, WTI reversed direction, began trending down, and came close to trading under $48, finally settling at just over $49 for the week. Saudi Arabia is "talking their book" in preparation for its IPO arguing that the demand for oil will grow for decades. Whatever.

Top story of the month?
First shipment of Bakken oil heads for Asia

Operator considers expanding capacity on natural gas pipeline out of Tioga/Prairie Rose 
Tracing recent history of active rigs in North Dakota
Random update of a CLR Antelope well in Elm Tree oil field
Random update of an incredible SHD well in Deep Water Creek Bay
Random update of CLR's Anna wells
Report of seven producing wells (DUCs) completed
Filloon's update of Whiting in the Bakken

Bakken economy
Managers for new Williston airport selected
Watford City latest to join craft brewery business
North Dakota wheat being loaded unto Incheon Bay
Bank of North Dakota, human interest

Eleven New Permits; No Completed DUCs; Pretty Meager -- April 28, 2017

Active rigs:

Active Rigs492986185187

Three new permits:
  • Operators: Triangle (2), Hess
  • Fields: Squires (Williams); Ellsworth (McKenzie)
  • Comments:
Eleven (11) permits renewed:
  • Whiting (4): three Two Shields permits in Dunn County; one Kessel permit in Stark County
  • HRC (3): three Fort Berthold permits in Dunn County
  • WPX (2): two Grizzly permits in McKenzie County
  • Oasis: one Spratley permit in Mountrail County
  • Fram Operating: one Danny Funke permit in Renville County

Pretty Good, Huh! -- April 28, 2017 -- Can't Wait To See The Second 100 Days

Saudi Cutting Production? What A Bunch Of Crap -- April 28, 2017


May 29, 2017: see update here. Peak Saudi exports in April, 2017.

Original Post 

The most recent numbers have just been posted for Saudi Arabia US crude oil imports:

Look at the amount imported in February, 2017: 1.338 million bbls. That is the second highest amount since April, 2014. The only higher amount was last month by 6,000 bbls.

Most recent February: imports exceeded the average for February for the past 17 years: 1.282 million bbls.

Since production cuts were announced in Oct/Nov, 2016, Saudi Arabian crude oil has increased 33%, from 1,000,000 bbls in November to 1,338,000 bbls in February, 2017.

If you look across the chart in general, the amount imported in February, 2017, was at the high end of all the monthly import data .

And then folks wonder why WTI is trending below $50.

Managers For New Williston Airport Selected -- April 28, 2017

Link here.
City commissioners unanimously approved a recommendation by City Administrator David Tuan to work with Fargo-based Ulteig and AE2S, which is headquartered in Grand Forks, during the board’s regular meeting this week. 
The two companies, both of which have offices in Williston, submitted a joint proposal outlining a plan to take on the role of project manager, which will include oversight and cooperation with engineers, tribal representatives, contractors and utility companies, among others, Tuan said. 
A committee that included Tuan, newly-appointed airport director Anthony Dudas and other city officials received four proposals from companies around the country, including one from KLJ Engineering, which had previously been serving as project manager.
The Apple Page

Apple component manufacturer Foxconn and Apple say the manufacturer will be making a multibillion dollar investment in the US, as much as $7 billion. Great PR move. The manufacturer must like the lifestyle and cheap, dependable electricity. Tim Cook must have gotten tired of all that trans-Pacific flying.

It's Not How You Start The Race, It's How You Finish The Race, T+97 -- April 28, 2017

With all this focus on his first 100 days, one needs to compare:
  • how much President Trump has accomplished (whether you agree with him or not) in his first 98 days; and, 
  • how much President Obama accomplished in his eight years (only one I can think of and that one is dying on the vine)
With a stretch, one can think of a number of things President Obama accomplished in his eight years but most of those "things" have been undone in the first 100 days of the new administration, to wit President Trump's newest executive order "opening up the Arctic and offshore oceans" to scientific study and exploration.

The real questions today:
  • how much did previous administrations accomplish in four years (Carter) or eight years (Obama)?
  • how much did President Trump accomplish in 100 days?
  • what would President Hillary and VP Bill have accomplished in their first 100 days (I shudder to think)?
  • is President Trump keeping his campaign promises? 
  • is President Trump's focus on making America great or making other countries great at America's expense?
  • is America getting back on track or not?
Those are rhetorical questions; please don't respond. We all have our political differences.

Hillary Vs Tillerson When Cutting Department Staff

Tillerson says he will cut the State Department by 9%. I haven't read the stories. I assume it will mostly be by attrition through retirement which seems a lot more humane than the Hillary method: attrition through the Benghazi method. 

Sort Of Looks Like The Keystone XL Route, Doesn't It? -- April 28, 2017 -- President Obama -- What Were You Thinking?

By the way, I see that Time, Inc, shares this morning are down almost 20%. Wow.

But back to the graphic featuring Tioga and Prairie Rose, North Dakota:

For more on this pipeline, see this post from September 17, 2013. From that post:
Related headlines:
More takeaway capacity for North Dakota natural gas identified.

The Prairie Rose Pipeline, owned by Aux Sable, Calgary, with origins in Burke and Mountrail County, will feed natural gas from these two counties into the Alliance Pipeline, owned by Summit Midstream Partners; this pipeline is 2,300 miles long and runs from western Canada to the Chicago hub.

  • Current agreement: 17 million cubic feet/day
  • New agreement: 25 million cubic feet/day
 That's almost a 50% increase in one pipeline system.

Texas In Hyperdrive -- Focus On Corpus Christi -- April 28, 2017

A pdf will download:

Two More US-LNG-Export Stories -- April 28, 2017; Look At the Number Of Jobs One LNG Export Facility Will Generate -- President Obama, What Were You Thinking?

This past week has been an incredible week for LNG and the US and exports. Here are two more stories sent to me by a reader:

Cheniere ships LNG to Poland as Europe seeks less reliance on Russian gas. From FuelFix. Data points:
  • will be first shale gas to a member of the former Soviet bloc
  • Europe seeks to cut its dependence on fuel from Russia
  • this is the first such contract for Central and Eastern Europe
  • no LNG has been shipped to northern Europe since Sabine Pass started exports more than a year ago
  • Poland may offer a new outlet for Cheniere
For those with a long memory, Poland put too many obstacles in the way for E&P operators to explore for shale gas in their own country (I believe it was ExxonMobil that inally gave up trying; this was not that many years ago; within the lifetime of the blog).

By the way, where is Sabine Pass shipping US LNG? Glad you asked. From that link from Bloomberg:

Second story: Golden Pass LNG cleared to export, also at FuelFix. Data points:
  • DOE approved
  • up to 2.21 billion cubic feet of gas per day
  • located outside Sabine Pass, was originally built to import LNG from abroad in 2009
  • following the Bakken boom (memo to Jane Nielson), a joint venture between Qatar Petroleum, ExxonMobil and ConocoPhillips shifted gears
  • the number of export facilities continues to grow; now there are seven under construction; another four that have been approved but not yet begun
  • US SecEnergy Rick Perry gives the credit to President Trump
  • Golden Pass not yet completed
  • will provide 45,000 direct and indirect jobs over five years; another 3,800 direct and indirect jobs over the next 25 years  
Meanwhile, no new jobs under President Obama, but now he's giving speeches that fetch him $400,000. To date: one. Another one scheduled. Even Pocahontas expressed concern.

Idle Chatter -- April 28, 2017

It's funny the things that bug me. Yesterday a reader sent me this story which I posted: Saudi Aramco CEO says peak oil demand is a misleading theory. Bloomberg gave a lot of space to this story. The nut of the story: the IEA says oil demand will peak in 2030; the Saudi Aramco CEO says oil demand will continue to grow through 2050. Sometimes it seems I have to be hit over the head with a "2 x 4" to figure this out.

This is not rocket science.

Think about it. The Saudi Aramco CEO is getting ready to go public with his company. Would he launch his IPO telling potential investors that the company will stop growing by 2030 according to IEA as demand for our product goes away? LOL. He is simply "talking his book" when he tells us that demand for his product will continue to grow through 2050.

In hindsight, it's amazing Bloomberg posted such a long article on such a simple story. No one knows how long the demand for crude oil will last, but should it be surprising that Saudi Arabia says demand will continue to grow for decades?

By the way, I think Saudi Arabia is a voice in the wilderness, suggesting that oil demand will continue to grow for decades.

US Exports Of LNG and Crude Oil

This past week has been incredible: all the stories coming out about US exports of LNG and crude oil. If I get a chance, I will bring these posts together in one spot.

There are two huge stories that will be interesting to watch:
one, Asia, it appears, seems to prefer light oil; US still prefers heavy oil
second, US LNG exports to Europe has to be scaring Russia
This all takes me back to "The Big Story" -- linked at the sidebar at the right -- a post that was first posted about the time the Bakken boom began. At that link, several big stories:
  • US energy revolution
  • US energy centers of gravity
  • natural gas and coal in the post-nuclear world
  • Russia: losing dominance in Europe -- wow, that was first posted a year ago, February 26, 2016

The Marcellus / Utica -- Now, It's All About REX -- April 28, 2017

Active rigs:

Active Rigs482986185187

RBN Energy: is the northeast natural gas market no longer pipeline capacity constrained?
The difference this year is this:  while the regional balance is more bearish than last year, there also is more pipeline capacity available—such as REX’s incremental 0.8 Bcf/d added in December 2016—to send gas away, which has helped relieve constraint-driven pricing at some hubs.
Additionally, when REX’s 0.8 Bcf/d began service, it didn’t have the effect on production that previous expansions had. Instead of garnering new production, flow data indicated that it primarily “stole” existing production from other pipes, presumably leaving capacity open elsewhere.
This may signal the beginning of the next phase of the Northeast’s transformation into a U.S. supplier of gas—the unconstrained phase. There is more takeaway capacity due later this year and more capacity to serve regional demand as well, with Williams’s Dalton Expansion online and the Cove Point LNG export facility due to begin operations later this year. That said, rig counts are on the rise again as well after bottoming out last fall. Baker Hughes rig count data show the rig count in the Marcellus is 45 rigs, up from a low of 21 in mid-August 2016, while rigs in the Utica have more than doubled from 10 a year ago to 23 now.
While we have yet to see an uptick in Northeast production this year, it seems only a matter of time before production follows.
Scott Adams: how to know whether you are a real person or a simulation.

The Energy And Market Page, T+97 -- April 28, 2017

Disclaimer: this is not an investment site. This helps me put the Bakken into perspective.

Wow, wow, wow: GDP at 0.7%. Expectations as low as 0.5% so this is not as bad as it could have been. We're okay. Market with no reaction. Dow 30 futures suggest an opening of up about 15 points. Folks are already looking at 3% GDP for the second quarter. The "Street" doesn't care about the 1Q GDP -- it's always low.

OMG: Atheanhealth is down almost 20% in pre-market trading.

Boom. From FuelFix, shale investments in the US have surged $100 billion. No signs that things will slow down. Three plays in the US are getting the bulk of this $100 billion: the Permian; the Bakken (four counties in North Dakota); and, the Eagle Ford.

Boom. GM knocks it out of the park. Easily beats estimates. Shares up 1.5% in pre-market trading. EPS $1.70 vs $1.48 forecast. Also beat on revenues. Tops estimates for 8th straight quarter.

Surprise: ExxonMobil EPS 95 cents vs 86 cents forecast; missed on revenues and took loss on upstream. But the bean counters managed to surprise analysts at the end of the day: earnings per share. The guys working in the back room deserve a huge raise in pay. Good for them.

No repeat of the DAPL (link at FuelFix): Trans-Pecos Pipeline ready; protest camp to close. See more of this story at this post

Apple wins: Qualcomm says it will no longer get any royalty payments from Apple for iPhone technology. Complicated story. But Qualcomm's announcement seems pretty straightforward.

Headlines from Rigzone today:
  • OPEC wants further drop in oil stocks; is working for consensus
  • OPEC ministers to meet Russia amid push to extend cuts
  • France's Total approves first major project since 2014 as profits surge
  • OPEC wants US to join production cut deal; dream on, OPEC -- the US will never act like a cartel
  • France's Total will invest $500  million to produce shale gas in Argentina
  • world's two biggest shipbuilders signal more orders as earnings improve

PJM And Wind

Link here at Bloomberg: story developing. We will know more next month after PJM's capacity auction.

When the story comes out next week, the story will be 23 paragraphs long with a huge headline that "wind wins again."

One will have to get to the 21st paragraph to read the following:
Payments from capacity auctions are sought after by owners of nuclear and natural-gas fired plants and other resources in an era of lower power prices. Bidders have to ensure they can supply energy at any time of the year or risk paying hefty penalties under a rule designed to head off a repeat of the 2014 polar vortex, when a cold snap led to fuel shortages, forcing some plants to shut.  
In last year’s auction, the amount of wind resources selected rose to 969 megawatts from 857 megawatts, according to PJM. That represents just 13 percent of the total wind capacity available on the grid, and 0.6 percent of the total purchased at the auction.
While its role in the capacity market has been limited, wind has been playing a bigger one in the spot market. Its capacity on the grid jumped to 7,655 megawatts last year and has more than doubled in the past seven years, data from the Valley Forge, Pennsylvania-based grid operator show.
0.6 percent the total energy purchased at the auction. Wow.

And the writer fails to say how much that trivial amount is costing its customers.

Let's see if Bloomberg provides the percent that wind energy adds to overall energy purchased at next month's auction. My hunch: we won't see it.

The Politcal Page, T+97 -- April 29, 2017

What goes around, comes around: Bernie Sanders in cross hairs of FBI. Reason? Failed college. Sounds like the Trump story.

Texas pipeline protest leader (link at FuelFix):
Gutierrez, 56, has a long criminal history, according to the California Department of Corrections. In 1984, he was sentenced to nine years for forcible rape, seven years for forcible oral sex and three years for possession of a controlled substance with an intent to sell, the California Department of Corrections said. He served the sentences concurrently and got out of prison about six years later, released on parole.
Between 1990 and 1997, he was reimprisoned at least five times for parole violations, according to corrections records, and in 1998, was convicted of having sex with a minor under 18. He went back to jail, but gained parole again in April of 2002. The California Department of Corrections never heard from him again.
The Texas Rangers got him:

The Kennedy Klan is probably on its way out to Gillette, WY: 9 inches of snow over night.