Thursday, June 29, 2017

Trump Looks To Be Favoring Mexico, Despite The Rhetoric More Pipelines Approved -- June 29, 2017

Trump loves Mexico. The US says it has issued permits for three more US-Mexico pipelines -- but no (?) movement on the Keystone XL. From Reuters, data points:
  • NuStar Logistics hit the trifecta
  • three NuStar pipelines given permits to cross the US-Mexico border
  • New Burgos Pipeline: 180,000 bbsl/day of "refined petroleum products"; will cross near Penitas, TX
  • two other pipelines, also; one also near Penitas, TX; the other near Laredo, TX -- will authorize a broader range of petroleum products
Mexican natural gas pipeline expansion -- EIA:

FERC: do we have a quorum? President Trump will apparently nominate a third member to the FERC. Google "turmoil FERC" at the blog for more; if the link does not break, this would be one place to start

Keystone XL dead: Canadian suppliers no longer have any interest in Keystone XL. Will be posted / linked later -- a Wall Street Journal article.
The Devil Sent You To Laredo

The Devil Sent You To Laredo, Baccara

They Mis-Underestimated The Frackers -- June 29, 2017

I remember when the analysts said US shale operators could not act quickly in bringing new supply of crude oil to the market. A sentence in this Bloomberg article jumped out at me. From the article:
The chorus in the oil market calling for deeper production cuts gets louder almost every day. By resisting the clamor, OPEC is breaking with its own history.

As crude sank below $50 a barrel -- less than half the price of two years ago -- market-watchers from Goldman Sachs Group Inc. to former OPEC officials said supply curbs imposed this year need to be intensified. That would be consistent with past behavior, when production cuts or increases often arrived in stages a few months apart.

This time is different. The emergence of U.S. shale oil producers -- who can adjust supply more rapidly than OPEC’s previous rivals -- means the Organization of Petroleum Exporting Countries cannot act with the same freedom it once did. As economic pressure mounts for exporting countries, using the old playbook runs the risk that new American supplies would fill in any extra cutbacks.

“When OPEC was in control, it would often act in stages,” said Chakib Khelil, a former Algerian energy minister who was OPEC president in 2008. “The market is different than in 2008. Today, non-OPEC plays a larger role in supply. And the major issue is how long can they sustain this supply.”

Oil has given up almost all its gains since OPEC and Russia launched their initiative to clear a three-year surplus. Their supply cuts have failed to deplete the world’s bloated fuel stockpiles quickly enough and West Texas Intermediate futures have declined about 16 percent this year, trading at $45.06 a barrel at 10:04 a.m. in New York on Thursday. Previously, that would probably have prompted OPEC to revise its plans and agree on additional reductions.
In bold again for those missed it the first time around: the emergence of U.S. shale oil producers -- who can adjust supply more rapidly than OPEC’s previous rivals ...

Bloomberg reports this like it's a fact, and a fact that everyone has known from "day one." But I remember analysts only two years ago suggesting US shale operators would be unable to quickly add output, that it would take six months to a year to ramp up production.

I guess they underestimated the "frackers" -- Aubrey McLendon, Harold Hamm, George Mitchell, Tom Ward, Charif Souki, and Mark Papa, to name a few.

Wow, I love this stuff.

Notes to the Granddaughters

This past year, Olivia, the middle granddaughter and fifth grader, took it upon herself to re-establish her school's garden. I do not know if she was influenced by Michelle Obama but I know she really, really like Ms Obama. Be that as it may, Olivia's garden was a huge success. There were three plots, mostly tomatoes, gourds, cabbage, herbs, and marigolds.

We stopped by the yesterday to see how the garden looked. It was quite amazing, to say the least:

The Daily Note

The Trump Presidency
The Third 100 Days
The Third 30 Days + 10 (261 - 300)
The Second 30 Days (Days 231 - 260)
The First 30 Days (Days 201 - 230)

The Trump Presidency
The Second 100 Days
 The Third 30 Days + 10 (161 - 200)
The Second 30 Days (Days 131 - 160)
 The First 30 Days (Days 101 - 130)

The Trump Presidency
The First 100 Days
The Third 30 days + 10
The Second 30 Days 
The First 30 Days

Between Election And Inauguration
The Third 10 Days
The First 30 Days

August 8, 2017, T+200: Making America great again: GALLUP: U.S. Small-Business Owners' Optimism Highest in 10 Years ---

August 7, 2017, T+199: Trump gets a B+ based on economy performance. Considering this comes from the anti-Trump, liberal press, this is quite remarkable -- obviously an A+ from a fair and balanced analyst. Another record-setting day on the Dow and S&P 500.

August 6, 2017, T+198: Trump on vacation. In New Jersey. And New England is jealous. LOL.

August 5, 2017, T+197: UN votes $1 billion sanctions on North Korea; largest in history by UN on North Korea. I do not recall ever seeing BOTH Russia and China supporting the US on anything of this nature. And it was initiated by the Trump administration.

August 4, 2017, T+196: GOP is Trump's worse enemy. Writes bill to keep Senate in session during August recess (on a technicality) to keep Trump from making recess appointments.

August 3, 2017, T+195: GOP smells blood -- Trump's approval ratings at 38% -- all-time low; lower than lowest Obama approval rating while in office.

August 2, 2017, T+194: with Gen (ret) Kelly moved to WH Chief of Staff, there is a vacancy at Homeland Security. Reports: Rick Perry being considered. Good move. Perry is in over his head at Energy; he had no clue (nor did most Americans) that DOE was a nuclear energy department, not an "energy" department. I'm not even sure Perry knows how to spell "nuclear" but he would know something about the illegal border crossings along the Texas international border.

August 1, 2017, T+193: first day under new WH Chief of Staff -- no presidential tweets as of 6:36 a.m.

July 31, 2017, T+192: Trump works 24/7. One wonders what Trump will do now that Congress begins their August recess? Later: did I read that Mitch McConnell delayed the Senate recess for two weeks?

July 30, 2017, T+191: Russia kicks out 755 American "diplomats" working in Moscow. That leaves about 455 in place. Why in the world do we need 1,200 "diplomats" working in Moscow. [Update: FBN  noticed this also, and asked the question. It turns out that only a quarter of those 1,200 "diplomats" are actually American. The vast majority of folks working in the US Embassy in Moscow are Russians providing admin support for the most part. Thus, most of the 755 "diplomats" being expelled from the US Embassy are not American, but rather poor Russian workers just trying to earn a living.

July 29, 2017, T+190: South Korea's very dovish president has finally seen the light after North Korea launches two more ICBMs; Korean Peninsula arms race begins. Trump tweets that Obamacare reform might not be off the table; threatens unilateral action.

July 28, 2017, T+189: ObamaCare is pretty much off the table for the 2018 elections. Priebus fired. 

July 27, 2017, T+188: new White House communications director has, apparently, released new directives for the White House communications agency through The New Yorker.

July 26, 2017, T+187:  S&P 500 and Nasdaq closed at record highs today; Dow 30 at record highs today. The Trump rally continues. Foxconn selects Wisconsin; 13,000 jobs initially.

July 25, 2017, T+186: Dow 30 looks like it will have a huge day on Caterpillar's earnings; CAT up 5% in pre-market trading. Jared Kushner testified yesterday, yawn; Dems (Schumer, Pelosi) look to re-brand: new emphasis -- $15/hour minimum wage; more regulation; slam US corporations. Re-branding? New ideas? LOL.

July 24, 2017, T+185: 185 days of "Hillary lost because of the Russians" preceded by 100 days of Jill Stein.

July 23, 2017, T+184: US gasoline prices at a 12-year low.

July 22, 2017, T+183: the US is hitting on all cylinders; and, the press is talking about the sitting president of the US pardoning Donald Trump. 

July 21, 2017, T+182: Sean Spicer resigns.

July 20, 2017, T+181: this will be the talk of the town this weekend. US Senate: 52-46-2 just went to 51-46-2 with Senator McCain out of action. This pretty much puts everything on hold. McCain won't quickly give up his seat; if/when he does, Arizona governor still needs to appoint a replacement. Two words: Kelli Ward. Please, oh, please, oh, please, Maxine Waters for president, 2020! ROFL.

July 19, 2017, T+180: President Trump hits his 6-month anniversary. Time to rally. Unto Ohio. With regard to ObamaCare: the most disillusioned are probably the Democrats: they know ObamaCare will implode; they wanted Trump to own ObamaCare Lite when it, too, imploded. Schumer said the patient (ObamaCare) was dying and that Trump/GOP failed to save the patient. I think Schumer forgets: true Republicans/Libertarians don't want the patient (ObamaCare) to survive. The big losers if ObamaCare not repaired: all the blue states that expanded Medicaid. Sure, Medicaid is costing the federal government a lot of money, but it can always print more money. The states cannot print money to cover the increasing costs of Medicaid. President Trump unhappy having been misled by Attorney General Jeff Sessions. Stock market: all three major indices hit all-time record highs on President Trump's 6-month anniversary.

July 18, 2017, T+179: stock market opened lower mostly due to Goldman Sachs earnings but then plunged when VP Mike Pence started talking about ObamaCare repair again -- repeating a litany of "facts" -- with no announcement of any success --

July 17, 2017, T+178: lots of TV time given to President -- executive order -- "Made In USA Day/Week." Steve Forbes has it right: GOP better press ahead with huge tax cut (tax reform); forget about CBO deficit projections; forget about ObamaCare repair. Americans like ObamaCare ("no pre-existing conditions"); they don't care about the deficit; they like tax cuts. Paul Rand could be held singly responsible for loss of US House if he doesn't get on board. ObamaCare Repeal is dead. The Dems will make a big deal out of this but at the end of the day, good, bad, or indifferent, ObamaCare is owned by the Dems. It will die on the vine; a lot of states will drown in their Medicaid debt.

July 16, 2017, T+177: quiet.

July 15, 2017, T+176: Senator McCain has surgery to remove small clot above right eye. He's 80 years old. Will convalesce in Arizona for another full week. Delays vote on healthcare bill. Then Senate goes on vacation. Bottom line: GOP healthcare plan dead for this year. The "bad news": so is any chance of tax reform.

July 14, 2017, T+175: Melania more popular than Hillary when the latter was First Lady. Color me surprised. LOL.

July 13, 2017, T+174: we are being told Don Trump, Jr, met with someone out to destroy our country, and yet, who let that cockroach into our country in the first place? Well, no other than President Obama, and it took "special" permission. LOL. Speaks volumes about our previous president. And John McCain? Well, there's always John McCain...

July 12, 2017, T+173: this morning I heard the new "Russian stuff" reported by the anti-Trump talking head on CNBC. It was such a convoluted story, it will have no impact on American public unless press is able to condense it into 30-second sound bite. Robert Mueller will run with this however. Will go nowhere. Market agrees. Futures up significantly after Trump son goes on Hannity to answer questions. Most noteworthy: CNBC does not mention the "Hannity" name. LOL. Curiouser and curiouser:

July 11, 2017, T+172: more Russian stuff.

July 10, 2017, T+171: more Russian stuff.

July 9, 2017, T+170: James Comey, fired FBI director, as bad as Hillary when it came to classified material. What a dingbat.

July 8, 2017, T+169: by every objective measure the US is in better shape today than it ever was under the Obama administration. One can start with the jobs data or unemployment data. Records of improvement being reported every week.

July 7, 2017, T+168: G20. Attendees all wear the "G20 Disney pin." Except President Trump. Hoo-wah! Link here. Sort of reminds me of what Groucho Marx was said to have said about clubs. 

July 6, 2017, T+167: G20.

July 5, 2017, T+166: G20.

July 4, 2017, T+165: the price of gasoline is at its lowest in 12 years.

July 3, 2017, T+164: tea leaves suggest CNN could have its credentials pulled from the White House briefing room: Trump probably doesn't like heckling in his own house.

July 2, 2017, T+163: the former president is again showing his true colors, worried about Americans showing too much patriotism. Indonesian or Kenyan, but not American.

July 1, 2017,  T+162: I'm sure BLM is percolating somewhere in the background, but it's interesting that we've heard so little from BLM now that President Obama is out of office.

June 30, 2017, T+161: consumer sentiment index hits 10-year record after Trump elected president; consumer sentiment index hit relative lows during Obama's presidency. Trump rally: the market has its best first half since 2013.

Declining Saudi Crude Oil Imports Into The US Now Affecting Regional Spreads -- June 29, 2017

This is my simplistic view of the subject; I could be wrong; it wouldn't be the first time. 

US refineries along the Texas-Louisiana gulf coast are optimized for heavy oil.

Without heavy oil, US refineries are not going to need as much Bakken oil.

That's why the Keystone XL was so important for the Bakken -- not because it would have carried Bakken oil (although that was possible) but because US refineries needed a stable source of heavy oil. US refineries blend light oil (US glut) and foreign heavy oil (cartel) to make things work.

This was a difficult concept for President Barack Obama to understand.

So, there is a relative glut of light, sweet oil (Bakken oil, WTI) and a relative decline in heavy oil (Canadian oil sands -- operators fleeing; Venezuela -- imploding; and, Saudi Arabia -- in deep doo doo). One should be able to predict the way prices will move based on that data.

So, let's see.

From Platts, today:
Declining Saudi crude imports to USGC strengthen regional differentials.A drop in the volume of Saudi Arabian sour crude imports to the US Gulf Coast has served to boost medium and heavy sour crude differentials.
Amid an increasingly tight global sour crude market driven by OPEC cuts, Saudi Arabian crude imports to the Gulf Coast in June decreased month on month by 9.975 million barrels to a level of only 11.519 million barrels, according to US customs data.
In May, Saudi crude imports totaled 21.494 million barrels and in April these imports reached 19.801 million barrels.
As imports from Saudi Arabia have tightened, the differential for domestic medium sour grade Mars has increased 85 cents/b since reaching a three-month low of WTI cash minus $1.80/b on June 20. Mars was assessed at minus 95 cents/b on Thursday after five trades were heard during the day at that level. (Mars off-shore platform.)
And this one-off:
The tightened supply in the Gulf Coast proved the perfect market for five cargoes of Mexican heavy sour Maya crude, diverted to the region from the US West Coast. Mexican state oil company Pemex diverted the cargoes to the USGC due to pipeline damage following both a regional flood and later a fire at the Salina Cruz refinery, according to market sources.
By the way, speaking of the Keystone XL killed by President Barack Obama, note this CBR story posted earlier today. Apparently, some folks in Washington thought CBR was better for the environment than pipelines. LOL.

Eleven New Permits; Five Permits Renewed; Four DUCs Completed; And A Partridge In A Pear Tree -- June 29, 2017

Active rigs:

Active Rigs593077191189

Eleven new permits:
  • Operators: SHD (7); Newfield (4)
  • Fields: Van Hook (McLean); Keene (McKenzie); Westberg (McKenzie); Clear Creek (McKenzie)
  • Comments: the seven SHD permits are for a seven-well pad in NENW 18-150-91; the four Newfield permits are for a four-well pad in NENE 16-152-96;
Five permits were renewed:
  • Petro-Hunt (4): four USA permits in McKenzie County
  • Whiting: one Two Shields Butte permit in Dunn County
Four producing wells (DUCs) reported as completed:
  • 28921, 1,269, Sinclair, Highland 4-9H, API: 33-061-03219, fracked 5/10/17 - 5/20/17; 4.5 million gallons of water; 7% proppant; Sanish, one section, t51/7; cum -- , (21087 -- off-line, 18377 -- off-line)
  • 30081, 952, Sinclair, Highland 3-9TFH, API: 33-061-03420, fracked 5/10/17 - 5/19/17; 3.2 million gallons of water; 10% proppant; Sanish, one section, t51/7; cum -- , , (21087, 18377)
  • 30088, 1,305, Sinclair, Highland 5-9H, API: 33-061-03422, fracked 5/22/17 - 5/26/17; 4.8 million gallons of water; 8% proppant; Sanish, one section, t51/7; cum --  , (18377 -- off-line)
  • 31628, 375, XTO, Ames Federal 31X-13B, Grinnell, API: 33-105-04126,  fracked 12/22/16 - 1/10/17; 7.9 million gallons of water; 14% proppant; t5/17; cum --, (20582 -- 20582, Ames, XTO, Grinnell, re-frac; also here)
Partridge in a pear tree: I lied.

July, 2017, NDIC Hearing Dockets

The July, 2017, NDIC hearing dockets have been posted.

The highlights of these dockets have been posted below; the full summary will be completed later.

The hearing dockets are tracked here.

Disclaimer: as usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source.


Wednesday, July 26, 2017 (nine pages)

Mostly pooling and commingling cases.

Thursday, July 27, 2017 (eight pages)

25978, Liberty Resources, North  Tioga-Bakken; create four 1920-acre units; 8 wells on each of those units; 32 wells total; Burke County
25982, Windridge Operating, Portal-Madison; i) create an 800-acre unit; ii) create a 1280-acre unit; or alternatively, i) create a 400-are unit; ii) create a 640-acre unit; two wells on each of the drilling units, Burke County
25983, Samson Oil, Foreman Butte-Madison, create an overlapping 1280-acre unit; facilitate an EOR pilot operation, McKenzie County
25985, DW Slate LLC, Eagle Nest-Bakken; create a 320-acre unit, two wells; and, create an overlapping 640-acre unit, two wells; Dunn County
26004, EOG, Alger-Bakken; 9 wells on an existing 1280-acre unit; Mountrail County
26007, Enerplus, Spotted Horn-Bakken; 9 wells on each of two existing 640-acre units; 5 wells on an existing 640-acre unit; 11 wells on each of two existing 1280-acre units; and, 11 wells on an existing 1920-acre unit; 56 wells total; McKenzie, Mountrail County
26008, Enerplus, Antelope-Sanish, 7 wells on each of two existing 640-acre units; 13 wells on each of three existing 1280-acre unit; 53 wells total; McKenzie County
26009, Enerplus, Heart Butte-Bakken; 5 wells each of two existing 320-acre units; 11 wells on each of eight existing 1280-acre units; 98 wells total; Dunn County
26010, WPX, Squaw Creek-Bakken; four wells on an existing 320-acre unit; McKenzie

Supplement, Thursday, July 27, 2017
25901 (notice to dismiss rec'd); CLR, Oakdale-Bakken, 12 wells on an existing 1280-acre unit, Dunn County

Just Two Days After Heidi Heitkamp Says She Wants To See More US LNG Export Terminals -- The Trump Administration Says Yes! Let's Make America Great Again! -- June 29, 2017

Link to both stories here. Wow. That Heidi Heitkamp -- keeping her thumb on the pulse of the Trump economic machine.

The Seldom Used, Much Anticipated Q&A Page -- June 29, 2017

Q: from Goldmans Sachs commodity analysts -- "How did we get it so wrong?"

A: they weren't reading The Million Dollar Way Blog.

From the linked article: Goldman Sachs Group Inc. analysts might not be the only ones to have incorrectly called commodity prices this year, but they are at least trying to figure out how they misjudged the market.

The Political Page, T+160 -- June 29, 2017

Dismantler-In-Chief: Jeff Sessions is dismantling Obama's legal legacy (whatever that was) according to Bloomberg. One could also say he is getting back to enforcing the nation's laws as written by the US Congress and not promulgated by President Obama's executive orders. Whatever. I went through the article very quickly; nothing there seemed particularly noteworthy. The writer noted that Mr Sessions must have a lot of time on his hands simply because he recused himself from going down that Russian rabbit hole.

Dumping on Arizona, Nevada. I saw this article some time ago, or a different version of the same story, at a different site. Much could be written about it. It could go on the "market and energy" page but this particular slant suggests it should go on the "political page." Whatever. If I had more time, I would write more about it. The implications are endless.

The Big Lebowski: chills when it comes to President Trump. Good for him. A breath of fresh air.

Down and Out at MSNBC: Greta Van Susteren "out" at MSNBC. Wow, that happened fast. It was such a non-story, it was buried at the Drudge Report. When will Wolf Blitzer be fired?

Geico Rock Award Nominee for 2017: former Secretary of the Interior, Ken Salazar, on CNBC says we need more projects like Southern Company's Kemper project. Link to follow if I ever find the video link. I guess he knows his legacy is tied up with the never-ending story.

Governor Cuomo: fighting global warming, fighting fracking, fighting sugary soda, apparently left Governor Cuomo spread too thin -- he forgot all about some very basic needs of his fellow New Yorkers: a modern transit system. CBS Local is reporting that Governor Cuomo has declared a state of emergency for the MTA; that Governor Cuomo calls the transit system’s state Of decline ‘unacceptable’ (with a "capital U"). I assume Elon Musk has a solution; just give Musk 100 days and he will solve this problem also.

ICYMI: Connecticut, Illinois in dire economic straits. Fox News has the update. Top three states with the worse credit ratings: Illinois, New Jersey, Connecticut. Some interesting details:
  • fifteen states have not passed a budget; deadline is June 30 (tomorrow); includes Connecticut, Illinois
  • Connecticut's deficit: $5 billion
  • Connecticut:$240 million cash in its 'rainy day fund -- only five states with a smaller cushion
  • governor of Connecticut: Democrat
  • Connecticut state government: first time in decades -- not in Democratic hands; state senate tied at 18 - 18; Connecticut is historically a blue state
  • Aetna, GE have recently left; Xerox, Sikorsky, Vineyard Vines have promised to stay
  • Connecticut's unemployment recently rose from 4.5% to 4.9%

Three Big MDU Natural Gas Projects? I'm Starting To Lose Count -- June 29, 2017

Notes based on an MDU press release today:
  • Gwinner natural gas project: $14 million.
  • expansion of Line Section 27, northwestern North Dakota: $30 million project (press release)
  • Valley Expansion project near Fargo, ND: $60 million project (press release)
Line Section 27, northwestern ND:
  • $30 million
  • 13 miles, 24-inch diameter pipeline; associated facilities
  • capacity will jump to 600,000 dekatherms/day
  • in-service date, 3Q18 -- late next year 
  • note: I've always used $1 million / mile when estimating cost of a new pipeline -- looks like with the associated facilities, this is two to three times the usual $1 million / mile price tag
Valley Expansion, near Fargo, ND:
  • in-service date also late next year
From Kyle's converter:
A dekatherm is equal to 10 therms or 1,000,000 British thermal units (MMBtu). It is also approximately equal to one thousand cubic feet (Mcf) of natural gas or exactly one Mcf of natural gas with a heating value of 1000 Btu/cf. It appears 600,000 dekatherms equates to 600 million cubic of natural gas.
See comment from reader below:
  • awhile back, an analyst described natgas thusly ...
  • when produced, it is in units of volume, e.g.., cubic feet.
  • when sent by pipeline, units of heat content, e.g.., mmbtuw
  • when shipped in liquid state, in volumes or weight such as cubic meters or metric tons
  • the monetary value is always expressed in terms of heat content (mmbtu), which is almost identical to cubic feet for 100% methane (dry gas); and,
  • there you have it ... in a nutshell....
Note: I don't know if I posted this, but sometime earlier this month the "stock picker of 2017," Chris Ellinghaus, was interviewed on CNBC. He provided two of his picks for 2017: one of his picks was MDU. From an e-mail I sent a reader on June 19, 2017: By the way, on CNBC today, the "2017 Stock Picker of the Year" was interviewed. He gave two picks: Allete and MDU. The URL is: but unfortunately it looks like the video doesn't always load; it took me several tries to get it to load.

Note: Bloomberg announced its own stock picker of the year for 2016 back in late December.

The Energy And Market Page, T+160 -- June 29, 2017 -- Peak Oil? What Peak Oil?

COP sells Barnett Shale assets for $305 million. From SeekingAlpha:
  • ConocoPhillips  agrees to sell its interests in the Barnett Shale to an affiliate of Miller Thomson & Partners for $305M
  • COP sees an impact to FY 2017 production guidance of less than 5K boe/day depending on the timing of the closing, and does not expect any material impact to 2017 cash flow or other guidance items as a result of the deal
Argentina's YPF says technology lowering its shale costs. Data points from Reuters:
  • longer horizontals and technology improvement lowering costs
  • problem: lack of infrastructure in its most productive shale field: the remote Vaca Muerta play
  • break-even price: $43/bbl
  • development costs are $12.9/bbl and expected to fall to $10 next year
  • $10 is world-class compared with the Permian shale
  • YPF produces 40,000 bopd; Chevron produces another 20,000 bopd
  • only 2 of Vaca Muert's 19 concessions have moved from pilot to production
Dallas Fed: business activity for oilfield services highest it's been in five quarters. Data points from Rigzone:
  • labor market indexes overall (for oil and gas exploration and production firms and oilfield services firms) increased
  • improving indices include rising employment, employees hours, wages and benefits
  • employment growth was driven by oilfield services firms 
  • 67 percent of respondents expect the oil market to come into balance in 2018 or sooner
  • 55 percent of respondents believe OPEC will continue to limit its oil production beyond March 2018; 45 percent believe OPEC will not
  • on average, respondents expect OPEC will produce 32.3 million barrels of crude oil per day in 2H 2017
  • 87 out of 115 executives said they are looking to use their internal cash flow to finance increased activity 
Tea leaves suggesting OPEC cuts to Asia starting to be seen? From the EIA today:
The difference between high-sulfur residual fuel oil prices in Singapore and crude oil prices in Dubai/Oman has been narrowing since the spring. Low inventories of residual fuel oil in Singapore and lower residual fuel oil production from Russia are likely contributing to the narrowing price spread. --- EIA

Huge Newfield Three Forks Well Shut-In? June 29, 2017

If the "cum oil" of 24,859 is not a typo, this is a huge Three Forks well. That 25,000 bbls was apparently produced over only ten days, which of course extrapolates out to as much as 75,000 bbls over a full 30-day month. I've seen errors in IPs and I have seen one example of an error in a monthly production figure, so this is possible.

See first comment and reply: note the amount of natural gas vented/flared.

I did not see frack data at the NDIC site, but FracFocus shows this well was fracked with a relatively "average" frack with 5 million gallons of water and 16% proppant by mass.

NDIC File No: 31635     API No: 33-025-02973-00-00
Well Type: OG     Well Status: NC     Status Date: 2/23/2017     Wellbore type: Horizontal
Location: SWSW 3-148-96     Footages: 167 FSL 908 FWL     Latitude: 47.661543     Longitude: -102.904111
Current Well Name: JORGENSON FEDERAL 148-96-10-15-10H
Elevation(s): 2005 GL     Total Depth:       Field: LOST BRIDGE
Spud Date(s):  12/29/2016
Completion Data
   Pool: BAKKEN     Status: SI     Date: 2/23/2017
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 24859     Cum MCF Gas: 35840     Cum Water: 9574
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

CBR Back In The News -- Big Story Of The Month? -- June 29, 2017

Note: yesterday I noted that CNI, CP, and Greenbrier all hit new 52-week highs. Hold that thought. See below.

Active rigs:

Active Rigs593077191189

RBN Energy: Canadian Congestion Revives Cushing Rail Option.
New production expected online in December 2017 from the Suncor Fort Hills project in the oil sands region of northern Alberta could increase pipeline congestion from western Canada to the U.S. Gulf Coast market where the oil is in demand. That’s because existing capacity across the Canadian border is running close to full and the only possible capacity addition across before 2019 is Enbridge’s 300-Mb/d Alberta Clipper expansion at the border — assuming it gets a long-sought U.S. Presidential Permit later this year.
As a result of this continuing near-term pipeline squeeze, producers are again turning to rail transport to bypass pipeline congestion and ensure their crude gets to market. On June 2 (2017), USD Group announced a new route option for Canadian producers following its purchase of a rail terminal in Stroud, OK, that is connected by pipeline to the Midwest crude trading and storage hub at Cushing, OK; USD will offer direct rail service from its Hardisty, AB, terminal to Cushing. Today we review the economics of this rail transport route for oil sands producers.
Pipeline pinch. From Bloomberg via Rigzone -- Pipeline Pinch Adds to Oil-Sands Woes as Keystone Wait Drag.
Call it the pipeline pinch, or maybe the Keystone quagmire.

While plans by Canadian companies from Suncor Energy Inc. to Canadian Natural Resources Ltd. to boost oil output are racing to fruition, the construction of three pipelines needed to move that product to market, including the infamous Keystone XL, is lagging years behind.

The end result: Producers have little choice but to move those extra barrels by train, with costs two to three times higher than pipeline shipping. It’s an unwelcome added expense after oil plunged about 20 percent from this year’s peak. Futures prices have settled in below $45 a barrel, after many predicted it would rise to $60.

“We’re not going to see significant new pipeline capacity until late 2019 or 2020,” said Nick Schultz, vice president for pipelines and regulatory matters at the Canadian Association of Petroleum Producers. In the meantime, the extra expense for shipping “impacts royalties and other things that impact the public.”

During the Barack Obama administration, oil-sands producers feared a future when they would have to rely heavily on costly railway shipments if he didn’t approve Keystone XL. That may start this year.

Pipelines in Western Canada, which holds the world’s third-largest oil reserves, can carry about 3.3 million barrels of crude a day, according to CAPP. Meanwhile, the area is expected to produce 3.92 million barrels a day this year and 4.2 million next year as a number of large oil-sands projects come online.

The looming bottleneck adds a new urgency to the industry’s calls for more capacity and may lend credence to its argument that the lack of lines hurts the nation’s economy.
Much more at the link.