The Bakken Is LIke A Box Of Chocolates -- One Never Knows What One Will Find -- July 19, 2017

For now, these two posts are two dots that are connected:

• short-term jump in production in an older well
• a series of Liberty Resources wells recently fracked in same area

If I remember, I will post a graphic when the horizontals are placed on the NDIC map. 

Say It: The Trump Rally -- July 19, 2017

A tale of two presidents. One had eight years. One has just completed his first six months in office.

Source.

Hallmark Card On Main Street, Williston -- Closing -- July 19, 2017

Link here.

The background / history is very nice to see. Names are familiar.

Hallmark is something that the present-day owner of the store, Brian Bolinske, also grew up with in Williston. He was 3 years old when his father Earl opened Service Drug Store in October  1964.

“He opened the pharmacy on the corner where the Vanity store was across from JC Penney,” Bolinske recalled. “Then, in 1969, my dad bought the Montgomery Wards building located at 313 Main, the center of the Downtown Plaza now. He carried over the Hallmark card line when he expanded over there.”

In the ensuing 20 or so years, Hallmark migrated from basement to balcony to main floor, until Bolinske purchased the drug store from his father in 1993. He expanded the store into an adjacent building and opened a Hallmark Gold Crown store in 1999.

Bolinske said he is hoping to negotiate a deal with a prospective new owner, who would be offering cards and other items at the location, though not Hallmark.

DAPL Update -- July 19, 2017

From a reader; a huge "thank you."

The link is here. I'm on my way out the door for a family commitment, but wanted to get this posted.

[Later: the update here.]

Agent Orange? Cell Phones? -- July 19, 2017

Just the other day I wrote about Senator McCain:

First, the surgery itself may be "minimally invasive" for someone else, but for McCain it certainly wasn't "minimally invasive." At least if this happened to me, I wouldn't call anyone drilling a hole in my cranium minimally invasive; it would be a "big deal."

Second, and worse, no one has talked about the underlying reason for a "small" blood clot to have been found. I would assume there was some underlying condition that led to the clot. If so, the question arises, are their other blood clots waiting to reveal themselves; is the underlying condition life-threatening (cancer is one of the leading causes of hypercoagulability)?

Today we learn that Senator McCain has a malignant brain tumor.

We should soon start hearing stories about a) Agent Orange; or, b) cell phones.

What happens next?

Hawaii and Arizona require the governor to appoint a temporary Senator from the party that the Senator who left office was from. So, for example, if Senator Mazie Hirono were to get a new job, the governor of Hawaii would appoint a Democrat to fill her spot. If a Senator from Arizona flaked out, the governor of Arizona would appoint a Republican, as both Senators from Arizona are Republicans. So there would not be a change in representation by party in the US Senate. 

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This Surprised Me

This is an important look at Tesla. The "percentages" surprised me. 

This is how Motley Fool breaks out Tesla's revenues:

• automotive: 85%
• battery: 8%
• services: 7%

I still think Tesla is a battery company disguised as an automotive company.

Random Note: High-Intensity Fracks -- July 19, 2017

These wells will be tracked elsewhere, but note the number of stages and amount of proppant used in fracking. These wells were released from the confidential list on July 19, 2017:

• 27390, 918, EOG, Parshall 69-1820H, Parshall, 56 stages; 20.46 million lbs; 100 mesh, t1/17; cum 81K 5/17;
• 28401, 1,611, EOG, Parshall 153-1820H, Parshall, 49 stages; 14.5 million lbs; 100 mesh, t1/17; cum 57K 5/17;
• 29899, 1,045, Liberty Resources, ND State 158-95-16-9-5MBH, McGregor, 27 stages, 6.5 million lbs; large (40/70); t1/17; cum 66K 5/17;
• 29900, 1,070, Liberty Resources, ND State 158-95-16-9-5TFH, McGregor, frack data not available, t1/17; cum 63K 5/17;
• 29901, 1,257, Liberty Resources, ND State 158-95-16-9-6MBH, McGregor, 27 stages, 6.5 million lbs; large (40/70), t1/17; cum 86K 5/17;
• 29910, 1,038, Liberty Resources, ND State 158-95-21-28-6TFH, McGregor, frack data not available, t1/17; cum 86K 5/17;
• 32743, 1,723, Hess, HA-Grimestad-152-95-3031H-9, Hawkeye, 60 stages; 4.2 million lbs; large (40/70); small (30/50); t5/17; cum 11K after 8 days;
• 32094, 1,356, CLR, Kukla 7-16H, Chimney Butte, 4 sections, 56 stages; 25.9 million lbs, t5/17; cum 88K 7/17; 

See also this post.

Eight Wells Released From Confidential List; EOG With High-Intensity Fracks; Eight New Permits -- July 19, 2017

Active rigs:

$7.10	7/19/2017	07/19/2016	07/19/2015	07/19/2014	07/19/2012
Active Rigs	59	30	73	195	207

Eight (8) new permits:

• Operator: Crescent Point Energy
• Field: Lone Tree (Williams)
• Comments:  permits for an 8-well pad, all wells exactly 330 feet from the north line, and extending west/east in NENW 30-157-99

Eight wells released from the confidential list:

• 27390, 918, EOG, Parshall 69-1820H, Parshall, 56 stages; 20.46 million lbs; 100 mesh, t1/17; cum 81K 5/17;
• 28401, 1,611, EOG, Parshall 153-1820H, Parshall, 49 stages; 14.5 million lbs; 100 mesh, t1/17; cum 57K 5/17;
• 29899, 1,045, Liberty Resources, ND State 158-95-16-9-5MBH, McGregor, 27 stages, 6.5 million lbs; large (40/70); t1/17; cum 66K 5/17;
• 29900, 1,070, Liberty Resources, ND State 158-95-16-9-5TFH, McGregor, frack data not available, t1/17; cum 63K 5/17;
• 29901, 1,257, Liberty Resources, ND State 158-95-16-9-6MBH, McGregor, 27 stages, 6.5 million lbs; large (40/70), t1/17; cum 86K 5/17;
• 29910, 1,038, Liberty Resources, ND State 158-95-21-28-6TFH, McGregor, frack data not available, t1/17; cum 86K 5/17;
• 32743, 1,723, Hess, HA-Grimestad-152-95-3031H-9, Hawkeye, 60 stages; 4.2 million lbs; large (40/70); small (30/50); t5/17; cum 11K after 8 days;
• 32912, SI/NC,  BR, Lillibridge-Veeder 3E MBH-ULW, Blue Buttes, no production data,

Old Post Updated -- July 19, 2017

An old post from 2014 was updated.

The Political Page, T+180 -- July 19, 2017

Making America Great Again: all three major indices (Dow 30, S&P 500, Nasdaq) closed at all-time record highs. 

Immigration. Trump wins again. Breaking news, 13 minutes ago --- The Supreme Court is granting the Trump administration’s request to more strictly enforce its ban on refugees, at least until a federal appeals court weighs in. 12:21 p.m. central time. 

Northwest Passage: I think we were promised a "northwest passage" by this time several years ago, and here it is, almost the middle of summer and still no northwest passage. Whatever. Pretty much frozen over.

Forecast: cold, brutal winter.

The ozone hole. Whatever happened to the ozone hole over the Arctic? LOL. It never existed.

Cutting one's nose off to spite one's face: the ObamaCare repair bill that the US Senate killed would have done two things: a) bailed out the insurance companies; and, b) bailed out the blue states who greatly expanded Medicaid. Blue states that greatly expanded Medicaid are in deep doo-doo. Two or three blue-state senators could have gotten a two-fer: a) the debacle would now be owned by Trump; and, b) their blue states would have gotten a huge cash infusion.  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.

The three states most at risk due to expanding Medicaid: California, Illinois, and Connecticut. Source.

FWIW: I still maintain my Facebook account, but haven't posted anything in months. I no longer respond to Facebook's e-mail alerts, "have you seen so-and-so's comment...?"

The Energy And Market Page, T+180; Part II -- July 19, 2017

Updates

Later, 3:04 p.m. Central Time: all three indices (Dow 30, Nasdaq, S&P 500) set new all-time hights.

Original Post

Futures: wow, did the Dow 30 futures just turn green? If so, incredible. All other major indices also green.

Really? Strong gasoline demand lifts oil but high OPEC supplies temper gains.  So, you're telling me that the "demand" side did its part -- gasoline demand is strong. But the "supply" side -- specifically the OPEC cuts (wink, wink) -- let us down. I'm shocked. Shocked.

EIA: US crude inventories dropped 4.7 million bbls; now down to 490.6 million bbls (not including the SPR).

At this rate of drawdown of US crude oil supplies, we're back to 56 weeks before we re-balance (update: methodology was wrong in some parts of this table; it has been updated and corrected at this post):

Week	Date	Drawdown	Storage	Weeks to RB
Week 0	Apr 26, 2017		529.0	180
Week 1	May 3, 2017	0.9	528.0	178
Week 2	May 10, 2017	6	522.0	29
Week 3	May 17, 2017	1.8	520.2	95
Week 4	May 24, 2017	4.4	515.8	38
Week 5	May 31, 2017	6.4	509.9	41
Week 6	June 7, 2017	-3.3	513.2	60
Week 7	June 14, 2017	1.7	511.5	63
Week 8	June 21, 2017	2.5	509.0	62
Week 9	June 28, 2017	-0.2	509.2	71
Week 10	July 6, 2017	6.3	502.9	58
Week 11	July 12, 2017	7.6	495.3	47
Week 12	July 19, 2017	4.7	490.6	56

Saudi's new city: if it has a name, I missed it. It will be an industrial city between Dammam and Ahsa, at the heart of energy operations, apparently close to Abqaiq, which is in the middle of Dammam and Ahsa. "Pat, I'd like to buy a 'q'."

US weekly energy data to be released today. Forecast:

• US shale production is forecast to rise for the eighth consecutive month
• forecast to climb 112,000 bopd to 5.585 million bopd in August (previously blogged)
• Permian: to produce 2.535 million bopd, up 64,000 bopd
• Eagle Ford: to produce 1.387 million bopd, up 27,000 bopd and the most since February, 2016
• Bakken: to produce 1.043 million bopd, up 3,500 and the most since November, 2016
• US natural gas production is projected to increase to a record 52.9 billion cubic feet per day in August (wasn't it just a day or two ago when we were told US natural gas would not hit a record this year? Whatever)
• projected gas output would increase in all of the big shale basins in August, with the biggest increase from gas in the Marcellus formation

Housing: starts, permits rebound more than expected in June.

Abraxas: will buy 973 net acres in the Delaware Basin; will add 445 acres in Caprito leasehold, 172 acres in ward County, and 356 acres in Reeves, Pecos and Winkler counties. Abraxas will pay $4.3 million in cash and $2 million in shares for the acquisition. In a separate deal, Abraxas will offload acreage in Powder River Basin in Wyoming for $4.6 million. Back-of-the-envelope: $6.3 million / 973 net acres = $6,500/acre in the Permian -- if accurate, a steal of a bargain.

The Energy And Market Page, T+180; Poseidon; Crude Oil To Stay In $50-Trading Range For Next Two Years -- Analyst -- July 19, 2017

$50 oil ... like forever? This analyst was almost named a nominee for the Geico Rock Award for 2017 but if I included him/her, I would have to include a gazillion more analysts who completely missed this over the past couple of years. So many analysts suggested that US shale could not make up for all the projects delayed or cancelled due to low price of oil.

Over at CNBC: the analyst noted that global oil supply increased by 720,000 barrels a day in June as OPEC compliance with its production cuts seemed to stall. Oh, yes, the OPEC cut (wink, wink).

DUCs: US backlog hangs over oil market -- John Kemp. Well, duh. And I remember all the analysts suggesting US shale operators would not be able to "ramp up" DUCs fast enough to make a difference. In the seven major plays in the US, the number of DUCs has risen by more than 1,000 since December, 2016.

• 2,250 DUCs in the Permian; up from 1,200 a year ago
• 3,800 DUCs across all other plays combined

Poseidon: new entrant in the US-Mideast crude fight. From Bloomberg via Rigzone, data points:

• Mars and Poseidon: both produced in the Gulf of Mexico
• similar in quality to Middle East supply
• will lure refiners away from Middle East oil: sulfurous sour crude oil pumped by Saudi Arabia, Kuwait, others
• American oil is now cheap enough for Asian refiners to haul it all the way from the Gulf of Mexico to Asia
• the first 500,000 bbls of each Mars and Poseidon will be delivered by Royal Dutch Shell
• buyer: Asian refiner; Kochi refinery on India's southwest coast; processor's first purchase of US oil (this is different from the earlier story in which another Indian company -- Indian Oil -- bought its first US oil due for arrival in October
• a trial cargo; similar to the Middle Easter crude the refiner usually uses
• WTI is trading at $1.42/bbl below Dubai crude, after it flipped from a premium to discount in December for the first time in six months

Herding cats. More on Ecuador, previously blogged. Exactly what I said, "Every Arab for himself."

The pain of those low prices led one of the cats to call it quits on Tuesday. Ecuador, which is implementing an austerity plan and struggling to clear a $1.1 billion backlog of unpaid pensions, said it can't continue to forgo the revenue lost from cutting a nominal 26,000 barrels a day as part of the agreement. At current prices, that's worth about $465 million a year.

Now, as Ecuador's oil minister said when announcing this, “What Ecuador does or doesn’t do has no major impact on OPEC output.” That is true in strict mathematical terms.

But we're beyond strict math at this point. [It's every Arab for himself.]

Saudi Arabia's own oil minister, Khalid Al-Falih, has been relying more on the power of rhetoric, with a central banker-like promise to do "whatever it takes" to clear the glut of excess barrels weighing on prices.

The Political Page, T+180 -- July 19, 2017

Six months into President Trump's presidency.

In that time, I think I've seen President Barack Obama give one speech and Ms President-wanna-be Hillary two speeches.

Thank goodness.

If Trump does nothing else, it's been a pleasure that it is he, and not Hillary, that is now sucking all the oxygen out of the room. By the way, speaking of which, sucking oxygen out of the room, last night I saw "The Drowning Pool" for the first time ever. Great, great movie, of course.

Automobile Association And The Open -- What They Both Lack In Common -- July 19, 2017

British.

This is pretty funny. When we were stationed in England, one of the first things I noticed is that for the British, the rest of the really doesn't count. Or at least the institutions outside of Great Britain did not mind. When we went to buy automobile road insurance, I noted it was not the "British Automobile Association" like the "American Automobile Association" but rather the "Automobile Association."

As in THE Automobile Association. The only automobile association.

LOL.

It was only a matter of time before someone else noted that. In The Wall Street Journal today,  this headline: "Dear American twits: this golf event's proper name is "The Open." THE Open. As in the only golf open. LOL. I will read the article later. It should be a hoot.

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The Bakken

Active rigs:

$46.48	7/19/2017	07/19/2016	07/19/2015	07/19/2014	07/19/2012
Active Rigs	59	30	73	195	207

RBN Energy: Really? New US cracker demand, exports will strain ethane supply. Really? Remarkable. Absolutely remarkable.

The last couple of years have been a wild ride for the U.S. ethane market, but look out ahead.  It’s going to get crazy. The onslaught of new, ethane-only crackers is upon us at the same time overseas exports are expected to ramp up. At first glance, it might appear there is enough ethane to meet all that demand, coming from molecules that today are being rejected — that is, sold as natural gas rather than liquid ethane. But the big question — will it be enough? Because not all that rejected ethane has access to pipeline capacity needed to get it to market, at least not right now. In today's blog, we begin a new series on rising ethane demand, how the new demand will be met, and what it all means for ethane prices.

Ethane is a unique market — it’s the only energy commodity that can morph from being sold as natural gas to being sold to petrochemical plants as a liquid feedstock.

It is this chameleon-like attribute that contributes to ethane’s volatility, both in terms of production volume and pricing. Because of ethane’s unique niche (and our fondness for the product here in the RBN blogosphere), we’ve been posting lots of blogs on the topic for years, going back to the original Ethane Asylum that heralded the ramp-up in ethane rejection in the Shale Era. Then in Ethane: Boat on the Water!, we discussed the growing supply of ethane, falling prices and the challenges that had to be overcome for the first ship of U.S. ethane exports to set sail. That finally happened on March 9, 2016, when the first ethane cargo departed the Marcus Hook, PA terminal near Philadelphia.

We examined ethane’s relationship to the price of natural gas, ethane rejection economics, and ethane’s competitiveness as a petrochemical feedstock in It’s Complicated. More recently, in Ain't Wastin' Time No More, we detailed Shell’s plans for a Beaver County, PA steam cracker and the regional supply and infrastructure necessary to support the cracker’s supply chain. 

Last night I read an article that discussed this very issue -- natural gas as a fuel vs a manufacturing feedtstack. I posted the link to that article but did not highlight this issue because I thought it a bit nerdy. Now, I see it's mainstream with RBN Energy. Cool. From this linked article:

As the US increases its shale gas production in the next 5 years, there should be enough to supply US manufacturers and to export the rest to foreign customers, [the IEA] said. “Manufacturing is taking over from power generation as the main gas demand driver."