Friday, June 23, 2017

SPAC -- June 23, 2017


SPAC: a unique investment vehicle known as a special purpose acquisition company.

See also this post

XTO WIth A Nice Re-Frack; Six DUCs Completed; Six New Permits -- June 23, 2017

Active rigs:

Active Rigs583077190189

Six new permits:
  • Operator: Kraken Operating
  • Field: Oliver (Williams)
  • Comments: permits for a 6-well pad; five Washburne wells and one Washburne-Hodenfield well; all in NWNE 27-157-98; only one well in this section now: #21626 (see below)
Six producing wells (DUCs) reported as completed:
  • 20376, 988, Enerplus, Fool Bear 23-34H, Antelope, Sanish pool, one section, t5/17; cum -- (#18905)
  • 29878, 1,597, WPX, Etstatis 32-29HS, Eagle Nest, t6/17; cum -- (#18419)
  • 29882, 1,886, WPX, Etstatis 32-29HW, Eagle Nest, t6/17; cum --
  • 31189, 1,308, WPX, Poplar 32-29HE, Eagle Nest, 4 sections, t5/17; cum --
  • 31627, 598, XTO, Ames Federal 31X-13F, Grinnell, t5/17; cum -- (#20582, API: 33-105-02163; March 14, 2016, sundry form suggests this well was re-fracked; see production profile below)
  • 31731, 1,154, Enerplus, Flyer 152-94-23DH TF, Antelope, Sanish pool, t5/17; cum -- (#18905)
A re-frack:
  • 20582, 1,645 (initial frack back in 2012), XTO, Ames 31X-13C, Grinnell, t11/12; cum 223K 4/17 
1) Monthly Production Data for most recent five months:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

2) This well was shut-in from 9/15; to 3/17, 18+ months.

3) Monthly production after initial frack back in 2012:

Producing Well Where Kraken Has Permits For A 6-Well Pad

See Kraken's new permits above:
  • 21626, 723, Kraken Operating/CLR, Hobart 1-27H, Oliver, 30 stages, 2.8 million lbs, t8/12; cum 203K 4/17;

Top 20 Retailers Likely To Succeed In Williston -- Consultant -- June 23, 2017

From the Williston Wire:

Would Williston shoppers like a Hobby Lobby, Buffalo Wings & Rings or 9 Round Kickboxing Gym in their town? The experts say yes. Buxton, a Dallas-based customer analytics company, has released its 2017 list of businesses most likely to succeed in Williston. The top 20 retail matches include popular fast food restaurants, coffee shops and grocery stores. "We see lots of opportunity with theses retailers," said Williston Economic Development executive director Shawn Wenko.

Williston Economic Development and the Williston Convention and Visitors Bureau have been working with Buxton for the past two years. The firm gathers all types of data to help WED and CVB further understand who visits Williston, how far they drive for particular goods and services, and what types of restaurants and retailers they visit.
The top 20:
  • A&W: we had an A&W drive-in when I was growing up in Williston; we often brought A&W home and made our own root beer floats
  • Buffalo Wings and Rings
  • City Brew
  • Dunn Bros Coffee
  • Grizzley's 
  • HuHot
  • Pita Pit
  • Sanford's Grub & Pub
  • Sonic
  • Steak 'n Shake
  • Tim Hortons
  • 9 Round Kickboxing Gym
  • Aldi (really?)
  • Bath & Body Works
  • CVS Pharmacy
  • Family Fair
  • Hobby Lobby
  • Market Place Foods
  • Reynolds Market 
  • Runnings

Look At The Completion Strategies For These Two CLR Maryland Wells -- June 23, 2017

The wells:
  • 31754, 762, CLR, Maryland 3-16H, Catwalk, 38 stages, 17.3 million lbs, t12/16; cum 74K 4/17;
  • 31755, 213, CLR, Maryland 4-16H1, Catwalk, Three Forks 1st bench, 38 stages, 11.4 million lbs, t12/16; cum 25K 4/17;
This page will not be updated; CLR's Maryland wells are tracked here

Dry Hole?

I'm being told by someone who checked in on the Armstrong Operating Frenzel 1-35 well (#33340) southeast of Dickinson that the well appears to be dry. This is the fourth wildcat in this section: 35-139-96. Two other dry holes targeted the Red River; the third wildcat targeted the Heath.  #33340 remains on the confidential list, all in that same section. Lodgepole? An earlier Armstrong well just outside of Dickinson (on the southwest side) was also dry (#29705, Dickinson City 1-16, targeted the Lodgepole).

Lots Of Green

Great photograph of the Missouri River / Yellowstone River confluence at this Williston Herald story.  Note the Missouri -Yellowstone Confluence Interpretive Center at the lower left in the photograph.

Foxconn's Decision To Move Manufacturing Plant To The US -- June 23, 2017

In response to an article posted about Braskem / La Porte, TX, a reader wrote:
While the focus has been on oil in this "shale revolution" saga, I think gas - both natural gas and the accompanying NGLs - will prove to be the bigger issue over time.
The fact that Foxconn is planning a multibillion dollar plant in the heart of US union country rather than expand in China is a huge story.
The combination of rock bottom prices for feedstock coupled with extraordinarily low power prices - derived from natgas fueled plants - augars well for US industry for decades to come. 
I agree completely.

There were two data points in that comment:
  • the future of natural gas in the US
  • the reason Foxconn is coming to the US
With regard to  Foxconn, a writer at Forbes had an interesting observation: it was all about transportation. There may be some truth to that, and right now that may be the overriding issue -- transportation costs -- moving heavy television sets and computer monitors from China to the US. With regard to transportation it may not only be costs, but also time involved and the risk of strikes at west coast ports (not a trivial concern).

But in the big scheme of things, I do think that inexpensive, accessible energy is the main driver for manufacturers coming to the US. 

Back to the linked article in case the link breaks:
News today that Foxconn, famous as the assembler of Apple's iPhone, is planning a $10 billion investment in a display production plant in the US. This is a decision driven mostly by transport costs, little else. The cost of capital doesn't vary much around the world these days, the costs of labour are converging, leaving transport costs as really the one big variable. Something small and valuable like an iPhone, transport costs are a minimal consideration. Something large like the current display systems those transport costs could indeed be the thing which swings the location decision.
Earlier in the year, Forbes had a similar article, but a slightly different take. In this, the writer argued more about "cost of time" to move things from China to the US.

Both articles were written by Tim Worstall. 

If folks have followed the stories about the strikes at the west coast ports, one wonders if that might not be the over-riding concern for an operator like Foxconn. 

Steady At 59 -- June 23, 2017 -- Gasoline Demand In Northeast US At 6-Year Low

Active rigs:

Active Rigs593077190189

RBN Energy: global refinery capacity additions and the effect on US refiners.

Wow, it never quits, hyperdrive in Texas. From Oil & Gas Journal, data points:
  • Delta production line at La Parte, TX
  • builder: Braskem America Inc, Philadelphia, a subsidiary of a Brazilian company, Braskem SA Sao Paulo
  • $675 million
  • will build North America's largest polypropylene (PP) production line
  • will build at Braskem's existing manufacturing site in La Porte, TX (about 26 miles from Houston)
  • will add another 450,000 tonnes/year: homopolymers, random copolymers, impact copolymers, and reactor thermoplastic pololefins (neither do I)
  • current production: 354,000 tonnes per year
  • goal to meet global demand by leveraging access to low-cost sources of feedstock from North Amerian shale production as well as existing support infrastructure already in place
  • should see mechanical completion of the PP unit during 1Q20
  • once completed: Braskem's total US PP production capacity jumps to 2.02 million tpy from a current output of 1.57 million tpy
  • announcement comes on heels of commissioning of another Braskem unit at La Porte, coming on line earlier than planned
Concerning, and unexplained, gasoline demand, from Reuters:
The operator of the biggest U.S. fuel pipeline system said demand to transport gasoline to the country's populous northeast is the weakest in six years, the latest symptom of a global oil market grappling with oversupply.
Summer is typically when gasoline demand peaks in the world's biggest oil consuming country as motorists hit the road for vacation, and keeping their gas tanks full strains the capacity of U.S. refiners and pipelines.
This year, so much fuel is stored in tanks in the Northeast that Colonial Pipeline Co said in a notice to customers that demand from refiners and fuel traders to bring gasoline through its pipeline to the region from refining hubs in the South was the worst in six years.
For the first time since 2011, demand for the pipeline was below capacity for a five-day period starting early next week, Colonial said on Thursday. The news pushed down gasoline prices in the Gulf region, where the pipeline begins.
Benchmark U.S. gasoline prices led the energy complex higher and were up about 2.1 percent shortly after midday, partly boosted by expectations that fewer barrels flowing into the East Coast would alleviate a glut.
Typically, demand exceeds the pipeline's space, forcing refiners and traders to supplement delivery with tanker shipments or imports.