The Million Dollar Way (The Bakken Oil Blog): 06/26/17

Monday, June 26, 2017

Wow, The CLR Florida Wells Are Being Reported -- June 26, 2017

The Florida / Alpha wells are tracked here.

The well:

28800, 1,386, CLR, Florida Federal 4-11H1, Camp, 45 stages, 22 million lbs, t3/17; cum 63K 4/17;

Production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2017	30	41973	41925	49038	54798	53586	760
BAKKEN	3-2017	23	21298	20622	30566	26099	7028	19071
BAKKEN	2-2017	1	0	0	1984	361	0	361

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Don't Forget To Remember Me, The Bee Gees Don't Forget To Remember Me, The Bee Gees

Another Pipeline Connection To The DAPL -- Watford City Area -- June 26, 2017

A "tip of the hat" to a reader for sending me this link to a press release: American Midstream Notice of Binding Open Season for Crude Oil Deliveries to Dakota Access Pipeline at Watford City. Data points:

open season
a newly constructed delivery point interconnecting into the DAPL in Watford City
capacity: to accept over 40,000 bbls/day
to commence service in August, 2017

Wow, Wow, Wow! After All These Months, Did Gadeco Finally Get This Well Producing Again? Gadeco, Golden, #20398 -- June 26, 2017

This was my previous note regarding this well:

December 9, 2014: just noticed that this one went inactive in August, 2014; track the well here.

20398, ~~1,313~~ 825 (corrected), Gadeco, Golden 25-36H, Epping, Bakken, t6/12; cum 147K 3/17; IA as of 8/14; back on status for one month, 12/14, but then off-line all of 1/15; now listed as A, 2/15. Off-line 11/15, and then back on-line 3/16 but only 3 - 6 days each month through 6/16. Two IPs provided; not explained why; t6/12; installed new ESP after it quit working 4/16; July 18, 2016; back on status, 2/15;A API 33-105-02135; FracFocus: no report that this well has been fracked. No stimulation reports in the file. On-line only 2 days 12/16; off-line since; last checked 3/17; remains off-line since 12/16 and before that off-line much of the time.

Look at the most recent production report:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2017	23	4370	4356	1230	5298	5188	109
BAKKEN	3-2017	0	0	0	0	0	0	0
BAKKEN	2-2017	0	0	0	0	0	0	0
BAKKEN	1-2017	0	0	0	0	0	0	0
BAKKEN	12-2016	2	976	979	360	736	734	1
BAKKEN	11-2016	18	2118	2163	2736	4406	4400	5
BAKKEN	10-2016	12	3596	3599	2080	4004	3982	20
BAKKEN	9-2016	18	2370	2931	2390	4826	4775	43
BAKKEN	8-2016	20	6256	6002	3615	8486	8417	10
BAKKEN	7-2016	16	4256	3831	2212	3638	3478	152
BAKKEN	6-2016	11	489	489	175	700	700	0
BAKKEN	5-2016	3	240	361	125	309	309	0
BAKKEN	4-2016	6	309	784	312	344	104	240
BAKKEN	3-2016	3	1072	506	286	522	0	522
BAKKEN	2-2016	0	0	0	0	0	0	0
BAKKEN	1-2016	0	0	0	0	0	0	0
BAKKEN	12-2015	1	0	0	0	11	11	0
BAKKEN	11-2015	6	53	414	872	233	232	1
BAKKEN	10-2015	24	2054	1821	4925	3234	3234	0
BAKKEN	9-2015	26	3131	3313	2566	9962	5032	4930
BAKKEN	8-2015	31	2471	2353	6511	1947	1947	0

The 4,356 bbls over 23 days extrapolates to almost 6,000 bbls over a 30-day month.

If this is accurate: a huge "congrats" to the roughnecks getting this well back on-line.

Meager Daily Activity Report -- Only Activity: Ten Permits Renewed -- June 26, 2017

Active rigs:

$43.49	6/26/2017	06/26/2016	06/26/2015	06/26/2014	06/26/2013
Active Rigs	59	30	75	192	187

No new permits.

Ten permits renewed:

Petro-Hunt (4): four USA permits, McKenzie County
Whiting (4): three Kessel permits, Billings County; and, one Strand permit, Mountrail County
Crescent Point Energy (2): two Makowsky permits, Williams County

Why I Love To Blog -- Reason #37 -- LNG Export Story Gets Bigger And Bigger -- June 26, 2017

Updates

June 29, 2017: from the US Department of Energy, a press release:

The U.S. Department of Energy announced today the approval of two long-term applications to export additional liquefied natural gas (LNG) from the Lake Charles LNG Liquefaction Project in Lake Charles, LA.

Additional exports in the amount of 0.33 billion cubic feet per day (Bcf/d) of natural gas are approved from Lake Charles’s proposed liquefaction facility.

The two non-additive authorizations for the Lake Charles LNG Liquefaction Project have been issued to Lake Charles Exports, LLC and Lake Charles LNG Export Company (the Lake Charles Companies) authorizing additional exports of domestically produced LNG from the Lake Charles LNG Liquefaction Project to any country in the world not prohibited by U. S. law or policy.

The Energy Department previously authorized the Lake Charles Companies to export LNG up to the equivalent of 2 Bcf/d of natural gas to any country in the world not prohibited by U.S. law or policy from the Lake Charles LNG Liquefaction Project.

Now, with further engineering of the planned project, additional design capacity has been realized and the Energy Department is authorizing an additional 0.33 Bcf/d of exports from the Lake Charles LNG Liquefaction Project.

According to the Lake Charles Companies, the construction of Lake Charles LNG Liquefaction Project will provide thousands of construction jobs and hundreds of permanent jobs as well.

Later, 10:30 p.m. Central Time: now it's South Korea! South Korea's KoGas in talks with Cheniere for more LNG supply. From Platts:

Korea Gas, the largest natural gas buyer in South Korea, is talking to Cheniere Energy about the possibility of acquiring additional capacity from the LNG exporter that would help it commercialize two liquefaction trains for which it has permits but has not yet made a final decision to build.

The comments during a small gathering at Cheniere's Sabine Pass terminal in Louisiana to mark the commencement of a 20-year sales and purchase agreement for KoGas to take LNG from the facility highlight the aggressive marketing the company is doing to reach new deals, just as it faces growing competition from other US developers along the Gulf, Atlantic and Pacific coasts.

With the SM Eagle tanker expected to arrive in South Korea on July 1 with the first shipment of LNG from Sabine Pass' train 3 under the SPA signed in 2012, executives from Cheniere and KoGas said they want to build on their commercial relationship.

Cheniere is seeking offtakers for train 6 at Sabine Pass and train 3 at its Corpus Christi, Texas, export terminal before deciding whether to move forward with those units.

Original Post

Just this morning we posted two huge stories:

US LNG exports will go over 11 Bcf/day by 2020 (currently around 2 Bcf/day)
Senator Heidi Heitkamp, D-ND, wants to see more US LNG export terminals

Now, this story from Bloomberg: Cheniere Gets Ready for ‘Next Round’ in Global Gas Export Market.

Sixteen months after sending the first cargo of U.S. shale gas overseas, Cheniere Energy Inc. is already preparing to be at the forefront of the next wave of export projects.

Cheniere is exploring new ways to finance additional terminals that chill gas to a liquid and ship it across the globe, including skipping the banks and going to other capital sources, Jack Fusco, chief executive officer.

The company has room to grow: It’s leased additional acres at the Sabine Pass terminal in Louisiana and has the option to purchase more land at Cheniere’s Corpus Christi site in Texas, where another export project is under construction.

Cargoes of liquefied natural gas from the U.S. to Australia are flooding the global market, adding to a supply glut and prompting investors to back new export facilities at the slowest pace since 1999. But a second round of projects is emerging on speculation that the slowdown will lead to a post-2020 construction boom that’ll benefit low-cost producers offering flexible contracts.

Latest Forecast: Unchanged -- 2Q17 GDP -- June 26, 2017

Black Lives Matter: black unemployment is now below 8%. Black unemployment is at its lowest level in seventeen years. Black unemployment is at its lowest since 2000. The black unemployment rate has been dropping since T+30, February, 2017. It begs the question: what was the Obama administration doing for eight years? This data point was posted three days ago. Was it reported anywhere in the mainstream media? If so, I missed it.

Link here.

Latest forecast: 2.9 percent — June 26, 2017.

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.9 percent on June 26, unchanged from June 16.

The forecasts of the contributions of real nonresidential equipment and inventory investment to second-quarter real GDP growth declined from 0.15 and 0.76 percentage points to 0.12 and 0.69 percentage points, respectively, after this morning's durable manufacturing report from the U.S. Census Bureau.

The forecast of second-quarter real residential investment growth increased from -0.3 percent to 2.5 percent after Friday's new-home sales release from the Census Bureau.

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Great Future As An Astrophysicist

True story.

Despite getting more ink on herself and her nice clothes than on her paper, Sophia loves to use my best ink pen to "draw pictures" when we watch her older sister at water polo.

Yesterday was a typical day. Sophia was a bit bored so I gave her an ink pen and the back of a program to write on.

She went into her own world, scribbling away; I was not watching or paying attention to what she was doing.

All of a sudden, Sophia jumped up, huge smile on her face, and practically yelled, "I did it! I did it. I made an 'S.'"

We've been working on printing her name for quite some time; she recognizes the letters "S" and "O" but certainly has not been able to print or draw either letter.

Until yesterday.

And there it was. She had a full page of wavelengths of various frequencies. But there it was, in all the "background noise," there it was, an "S." Sophia was thrilled to point it out to me.

For posterity, it can be "validated" that Sophia, not quite three years old, wrote her first S on June 25, 2017, and was able to find it (again) in a background of a universe of what-appear-to-be wavelengths of light.

Hyperdrive -- LNG Exports -- June 26, 2017

From an earlier post:

Platts:

record-setting US LNG exports in May, 2017
despite exceptionally low profit margins
17 LNG cargoes
58.3 Bcf
some confusion with destinations (see linked article)

Note: about 60 Bcf over a 31-day month.

So?

Today, EIA tweets: "After 2020, the United States will have the capacity to export more than 11 Bcf/d of LNG to global markets."

That's per day. More than 10 billion cubic feet per day only three years from now -- currently exporting about 2 billion cubic feet per day.

By the way, US Senator Heidi Heitkamp was a special guest on CNBC this morning: one of her main points -- she wants to see more LNG export terminals built in the US. She said she had just returned from Norway (I believe she said Norway) where she saw a new state-of-the-art LNG export terminal and wants to see more of the same here in the US.

If we didn't have so many dams downstream, we could built an LNG-export terminal at the Missouri River - Yellowstone River confluence. LOL.

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The Literary Page

Wow, right up my alley, as they say.

Light, A Radiant History: Creation to the Quantum Age, Bruce Watson, c. 2016. An imprint of Bloomsbury Publishing Plc.

Quickly paging through the book there is much about art history and that, of course, explains the Bloomsbury publisher.

I'm back in my quantum theory phase, reading The Strangest Man, a biography of P.A.M. Dirac. I still think Louisa Gilder's Age of Entanglement was a great help bringing me up to speed on the history of the theory of quantum.

EOG's Permian Rattlesnake Pad Produces $44 Million At $50 Oil In 12 Months -- Filloon -- June 26, 2017

Link here at SeekingAlpha.

Summary:

EOG continues to set new production records in the Permian
its Rattlesnake 4 well pad produces over 2.1 million barrels of crude on a 12-month model (500,000 bbls/well/first year)
the Rattlesnake provides insight into how much competitors in the area could improve current production rates
the Delaware core continues to show significant upside

From the linked article:

We have watched EOG revolutionize the industry, continuing to improve production per foot. EOG began its "Mega-Frac" design, focusing stimulation around the well bore in the Eagle Ford. It then showed its proficiency in the Bakken. It has seen its best results to date in the Delaware. EOG's Delaware acreage may have the best geology and is perfectly suited to this design. More importantly, other operators can do it as well. We just may not see those results for 6 to 12 months down the road.

Take a look at this graph of four wells on a single pad. Note the change in production of the first two wells (something not talked about):

And, This, Folks, Is The Problem -- June 26, 2017

From an earlier post:

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.

And this is the problem, folks, from John Kemp, just a few hours ago:

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Notes for the Granddaughters

It is interesting how things work out.

All golf tournaments are 4-day events. I was watching the Travelers tournament in Cromwell, CT, closely on Thursday-Friday, but missed almost all of it on Saturday because of water polo (oldest granddaughter playing in the two-day North Texas tournament).

Then yesterday, Sunday, I knew I would miss all of it, again because of water polo. I kept track of the scores on the internet. It was obvious it was an incredible tournament, and I knew I was missing it. I last checked in when the tournament was almost over; I was driving Arianna to her 5:00 p.m. "date" and knowing that when I got home (Sophia was also with us) I would find out who won. It looked like Spieth might lose after doing so well in the first three days.

I came into the apartment with Sophia, got her started on her projects, and then turned on the television. To my surprise, the tournament was tied at end of regulation play.

The two, Spieth and Berger, were just getting ready to tee off on the first tee (the 18th hole) for a sudden-death playoff.

Bergen was on the green in two strokes and clearly looked like he would win. Spieth's hit off the tee was awful; he hit a tree (that nobody else hit in the tournament) and the ball barely got down the fairway.

Spieth's second shot put him in a sand trap in front of the green. At that point, it was pretty clear he was going to lose to Bergen who was already on the green.

Incredibly, and I got to see it live, Spieth hits the ball out of the sand trap and incredibly, the ball rolls into the cup. Everyone goes nuts and he wins.

It's funny how things work out. I really wanted to see the tournament and I was able to see the most exciting conclusion, live. Had it not worked out, that would have been okay: in the big scheme of things, I much prefer going to water polo and much prefer being with any of the granddaughters to almost anything else.

As usual, Sophia was awesome. She is so much fun.

By the way, two pictures tell a complete story. This occurred under the watchful eye of her mother at Sophia's home, not at our apartment -- I was not taking care of Sophia at the time -- this is "not my fault":

The Political Page, T+157 -- June 26, 2017

Updates

Later, 2:24 p.m. Central Time: wow, the mainstream media is hardly reporting this. And when they do report it, they release bits and pieces in dribs and drabs. This morning the US Supreme Court handed President Trump a huge victory, putting in place an injunction against the lower court ruling that tried to thwart the president's travel bans. That was barely reported. And had it not been for a Presidential tweet one would not know that the ruling was unanimous, 9 - 0, by the Supreme Court. Wow.

Later, 9:13 a.m. Central Time: a huge "hat tip" to Don who sent me the link: "the genius of Trump's tweets."

Google, Twitter and Facebook control much of the news we see today, but Trump’s tweets get around their dominance.

Similar to the Drudge Report website, Trump’s tweets are so well-known that people view his tweets independently of the tech giants.

The Drudge Report receives comparable traffic to Google News and The New York Times — despite the fact Google News prominently promotes the Times in search results and on its homepage.

Drudge isn’t even carried in Google News, since the site merely aggregates links to articles.

Google is the most trafficked site in the U.S. as well as in the world.

Most of the time, Google News is full of articles by the left-leaning media critical of Trump and conservatism.

But Trump’s tweets changed all that. Reporters race to report on his tweets, filling up Google News with articles that are far more favorable to Trump, since there is so little room left for spin with his tweets. A quick perusal of Google News right now reveals this headline near the top, “Trump accuses Clinton of colluding with Democrats to defeat ‘Crazy Bernie Sanders.’” The Washington Post article acknowledges, “Trump took to Twitter Sunday morning…”

There really is very little way to write the headline to make Trump look bad. There wasn’t any extra information to glean something from outside of one short tweet.

Original Post

Huge presidential win: I almost missed this one. This is a huge win for the president but the way CNBC presented the story, I almost missed it. First, it should have been "breaking news" and it was not. Second, it came as part of a low-key segment from the milk-toast CNBC White House correspondent, who seemed to almost say in passing that the Supreme Court has issued an emergency injunction against lower court actions that tried to hamstring Trump's "travel bans."

Presidential tweets: I generally don't try to read too much into the president's tweets. For me, they are generally very straightforward and don't require a lot of analysis. However, one of the president's tweets this a.m. seems to have a very different message regarding ObamaCare -- a message very different than what he has had in the past.

Two issues:

first: during the campaign, it was "repeal and replace" -- no compromise on this; it would happen "day 1"
second: the legislative process has been very, very difficult; but the president continues to push the process along; as recently as last week, his tweets or public statements remained positive and he continued to make telephone calls to senators to get them to support the GOP plan

But, now today, it looks like he is coming around to what others in the GOP have said: just let ObamaCare run its natural course.

His tweet:

Republican Senators are working very hard to get there, with no help from the Democrats. Not easy! Perhaps just let ObamaCare crash & burn!

For me, I have no idea why the GOP would want to sign off any national health care bill. It is a lose-lose.

By the way, as noted earlier, President Trump can easily weigh in on ObamaCare using executive orders. In fact, I am somewhat perplexed he did not do more along that line while waiting for Congress to get its act together.

The Energy And Market Page, T+157 -- June 26, 2017

Making America great again. BMW's largest factory in the world -- Spartanburg, SC. Capacity:

450,000 vehicles/year. Last year, about 411,000 vehicles. Just announced:
$600 million new investment at Spartanburg between now and 2021
1,000 new hires
will help BMW reach its target of 450,000 vehicles/year at this one factory
CNBC was quick to point out that BWM planned this move even before Trump talked about BATs -- an unnecessary point in a business story, but an important point for a left-leaning network
the Spartanburg facility is BMW's worldwide source for SUVs -- the Spartanburg facility is a big, big deal for everyone involved or interested in the story

Making America great again. German-based company will bring a $12 million aviation-related plant to Auburn, Alabama.

Winkelmann Group is a fourth-generation German company that has three divisions including automotive, building and industry, and flowforming, which is a metal-forming technique.

The Auburn site will use the company's flowform technology that primarily builds high-precision, high-strength, thin wall roto-symmetrical parts from various metals.

"With the North America operation, my team will be able to better serve the aerospace and defense industry, as well as the commercial automotive and oil and gas industry in the U.S.," CEO Heinrich Winkelmann said in the release.

Supply problem, or demand problem. The consensus seems to be that with regard to WTI / Brent, it's a "demand" problem, not a "supply" problem. I've bought into that consensus -- that it's a "demand" problem. On CNBC this morning, Kevin Caron of Washington Crossing clearly said it's a "demand" problem. Many moving parts.

Understanding Permian Gas Takeaway Capacity at Waha Hub, Part 2 -- RBN Energy -- June 26, 2017