Thursday, July 27, 2017

Rambling -- Nothing About The Bakken -- July 28, 2017

The TCM Page

Psycho ... North by Northwest ... Vertigo ...

I'm really hooked on TCM. A couple of nights ago, TCM had a Hitchcock extravaganza -- the three movies noted.

The host Ben Mankiewicz shared the introduction with Hitchcock "expert," Alexandre Philippe. I have seen all three movies but, except for Psycho, really do not remember much about them. And my hunch is that I don't remember Psycho all that well either.

I watched the first two (Vertigo and North by Northwest) but simply was unable to stay awake to watch all of Psycho. 

It is so much fun seeing these movies again late in life.

Alexandre Philippe considers Vertigo Hitchcock's best film; and, after watching it the other night I understand why. It was a psychological thriller and it clicked: Hitchcock loved human psychology.

But the "thing" that I realized when I saw these three movies the other night was that Hitchcock handed the baton off to the Coen Brothers. Like the Coen Brothers, Hitchcock loved to base his films in various locales:
  • Vertigo: beautiful San Francisco
  • North by Northwest: Rapid City, SD (and its environs) -- think the Coen Bros Fargo
  • Psycho: opens in Phoenix, AZ
North by Northwest, I would argue was as much a comedy as the Coen Bros dark comedies.

Speaking of Mankiewicz

The Barefoot Contessa: a review


I occasionally watch VEEP on DVD. We have the entire library, minus the current season, obviously, but I have not gotten past Season Four. I watch it so intermittently that I forget episodes and don't want to move to a new season if I can't recall the previous season. So, like Groundhog Day, I keep re-watching Season Four. Pretty funny.

Last night I was somewhat shocked at the amount of vulgarity in an episode in Season Four. I wondered if the writers had not gone a bit too far.

But today I read the actual "transcription" of President Trump's director of communications, Anthony Scaramucci, and realize that VEEP appears to be incredibly accurate.

Pretty sad.


Torsten Müller-Ötvös ("Pat, I would like to buy an umlaut"), CEO of Rolls-Royce, announces the first new Phantom in 13 years.

And just think, Rolls-Royce will be making EVs for Great Britain. LOL.

What Happened?

One decade, the '60s:
  • an incredibly expensive (blood and money) war half way around the world
  • in less than a decade from idea to execution: American to the moon and safely back
  • Civil Rights movement --> Civil Rights Act signed by a southern Democrat
  • Voting Rights Act
  • Free Speech Movement
  • some of the best music ever -- perhaps the decade of best music ever
  • creation of Medicare and Medicaid
  • birth control pill first approved for contraceptive use in the United States in 1960
  • several tax cuts during that decade 
  • by the end of the decade, median family income had risen from $8,540 in 1963 to $10,770 by 1969
  • first heart transplant
  • AstroTurf introduced (don't laugh --> NFL success) 
  • muscle cars; Mustang introduced in 1964
  • first working laser
Two lost decades, 2000 - 2020:
  • iPhone
  • Tesla

The Six Degrees of Kevin Bacon

Horizontal Madison Well Northeast Of Minot Has Been Updated -- July 27, 2017

Link here. Only the production data has been updated, through July, 2017. It's still quite a nice well.

Random Look At An "Old" Bakken Well: CLR's Gudmunson, #19548, Drilled In 2011 -- July 27, 2017

I track this well over at "wells of interest."

Re-posting here for wider dissemination.

If for no other reason, this is an important well (as are all wells of interest) because this data completely alters the EUR (estimate of ultimate recovery) of any given well in the Bakken.  We are starting to see more and more examples of abrupt changes in production/EURs in examples of wells posted by Mike Filloon.

July 27, 2017: this well had to have been re-fracked 11/16, but no sundry form and no data over at FracFocus. Wanna guess when #30970 was fracked? LOL. Here's the graphic:

According to FracFocus, #30970 was fracked: 10/3/16 - 11/10/16. One would assume if #19548 was re-fracked at the same time, FracFocus would have the data posted by now.  Also, why would CLR re-frack a well at the same time BR was re-fracking their new wells? I don't know.

The new well:
  • 30970, 1,283, BR, Gudmunson 4-1-26TFH, Elidah, 61 stages, 14 million lbs, 100 mesh and 40/70 (large) white sand, t12/16; cum 63K 5/17:
Production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The index well:
  • 19548, 508, CLR, Gudmunson 1-26H, Elidah, 24 stages, 2.4 million lbs; t10/11; cum 249K 5/17; 
Production profile: 
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Meager, Meager Daily Activity Report -- July 27, 2017

Active rigs:

Active Rigs603573193207

Seven permits renewed:
  • Petro-Hunt (6): six Maverick permits in McKenzie County
  • Denbury: one CHSU ML permit in Bowman County
COP 2Q17 Earnings Conference Call

Link here:

Asset sales program this year, update
  • closed the previously announced Canadian transaction
  • announced the sale of their San Juan Basin and Barnett shale assets
  • announced an agreement for the sale of our Panhandle assets
  • progressing on the sale of their Anadarko position
  • asset sales: $16 billion this year
Asset sales proceeds: to include (maintaining) shareholders distributions)

  • made money on $50 Brent
  • fourth consecutive quarter where operating cash flow more than covered our CAPEX and dividend
  • able to generate free cash flow at oil prices in the $45 - $50 / bbl range
Operations continued
  • plays mentioned in this order: Eagle Ford, Bakken, Permian, Barnett, Niobrara
  • 12 development rigs: Eagle Ford (5), Bakken (4), Permian (3)
  • recently added a sixth rig in the Eagle Ford

Q: great question: proceeding too quickly in unconventional?
A: COP agrees; COP is not moving into manufacturing mode until they understand the geology/completion strategies better, but that doesn't mean they are slowing down

Q: Permian or Eagle Ford
A: Eagle Ford infrastructure in place; not so, in the Permian; in the Permian, COP has to make additional significant commitments to infrastructure in order to expand there

Q; manufacturing mode, when?
A: 2019, most likely; possible as late as 2020

Q: flexibility if oil trends down again?
A: yes

Sophia In Southern California

Who Knew What And When Did They Know It ? This Is Not Rocket Science; Teavana Is Toast -- July 27, 2017

This is very, very interesting.

About 12:30 p.m. ET, the market plummeted and no one had any news, any explanation. Everything came back (the Dow 30 closed at a new record high) except tech. Tech plunged and the Nasdaq closed about 3% down on a day it was expected to set a new record.

Immediately after the close, Amazon reported an incredibly bad miss and fell 3% in after hours.

Amazon missing by such a wide mark would explain why the Nasdaq fell.

Only one problem: the Nasdaq fell four hours before Amazon reported and never came back. The Dow 30 came back immediately.

Call me a conspiracy theorist but it's pretty obvious. I'm sure President Trump can figure this out; I wonder if we see a tweet? LOL.

[Note: after hours, CNBC says a well-respected analyst released a bearish note during the day. Okay, no conspiracy. The Nasdaq had a flash crash for a reason. LOL.]

Other Reports

Starbucks misses earnings. Starbucks will close all 379 Teavana retail stores -- wow! Starbucks bought Teavana in 2012 for $620 million. The brand, apparently, is not going away -- just the retail stores. If so, another Amazoncoup.

Expedia misses earnings.

Mattel misses revenues and has a bigger loss than forecast. Girls not buying Barbie or American Doll -- they're buying iPhones. Mattel even "slashed" the dividend to save cash -- CNBC.

First Solar: huge, huge beat: 64 cents vs 4-cent estimate; also huge revenues beat, $623 vs $556 million. Trading stopped for 30 minutes. First Solar closed down a bit during the day; it will be interesting to see what the shares when trading begins again. After hours, FSLR up 13%!

Long Legs

The one on the right is a world-class soccer player (at least in my eyes). The one on the left is a budding competitive swimmer: she can swim 12 feet in 12 seconds: her goal: 10 seconds.

The Energy And Market Page, T+188 -- Earnings Calls -- Statoil, CalFrac -- July 27, 2017

HESM: Hess Midstream MPL -- I believe this is a new issue; 27.03 cents payable August 14, 2017; record date, August 4, 2017; ex-div, August 2, 2017. See disclaimer.

The usual disclaimer.

Fracking in the Bakken, from CalFrac's 2Q17 earnings conference call:
  • added two frack spreads in Colorado
  • larger jobs in the Marcellus and the Bakken
  • smaller jobs in Colorado
  • had to put on hold plans to frack in Texas
  • would like to have all frack teams reconstituted by end of year; not likely to happpen, partly due to workforce; 300,000 people left the industry in the downturn
Operating in the Bakken, from Statoil's 2Q17 earning conference call:
  • decreased CAPEX possible because --
  • efficiency gains
  • rigs drill 6% to 9% more meters / day
  • 4% to 2% less time on each well
  • 35% less cost per well
  • strict prioritization
  • added a second completion crew in July
  • production onshore is reduced y-o-y; but increased q-o-q, mainly Bakken
  • Kayak discovery, relatively small but could impact decision on Castberg later this year
  • improving cash margins toward the target of $12.50 per bbl in 2018
  • three most prolific basins in the US: Eagle Ford, Bakken, Marcellus (note which basin was not mentioned)
  • slightly higher activity level planned for 2H17 in the Utica and the Bakken
  • 900 wells with a breakeven of $50 and below; half of those 900 have a breakeven of $40 or below 
Curious. After setting record highs for quite some time now, how many individual issues are still touching new highs? On the NYSE:
  • new highs: 141 -- including Boeing, Coke
  • new lows: 21 -- including QEP, Snap, Sonoco Products
Maybe tax reform is not needed?

Another record: Dow 30, closing above 21,700 yesterday, closed just shy of 21,800 today. Wow!

Catalyst: A Feline Analyst?

Via twitter:

The Political Page, T+188 -- July 27, 2017

Fake news: need to confirm. Via Twitter, President Trump says that The New York Times has opined that Fox and Friends is the most powerful TV show in America. If accurate, amazing.

Daily WH press briefing: huge new stories breaking yesterday, but press focused on "trans in military." Ms Sanders finally said that if that's all they wanted to talk about, the press briefing was over. One more question came in -- on "trans in military" -- she repeated for the umpteenth time that she had answered the question -- and abruptly ended the briefing -- but did so very nicely, saying she had to go to a White House function celebrating children. Good for her. CNBC anchor was obviously dismayed by the lack of questions on other breaking issues.

  • up 10,000 to 244,000 expecting 240,000; last week revised upward from 233,000 to 234,000
  • durable goods orders up 6.5% almost double what forecast 
  • trade imbalance slightly less than expected
  • see previously posted graph; 240,000, takes us back to the low numbers we saw a year ago 
GDP now: latest forecast, July 19, 2017 -- 2.5%. Next GDPNow update will be later today.

Every Arab for himself: stand-off between Saudi Arabia and Qatar will last months, if not years. Saw this movie in 2014. The Wall Street Journal

Boogie Boarders

Wow, Bringing Coal To Newcastle -- Huge Story -- July 27, 2017


Later, 1:25 p.m. Central Time: see first comment --
But here's the rub: market prices don't bear out what the Peak Oilers claim.

Eagle Ford condensate sells at only a $1.00 per barrel discount to Eagle Ford crude, and Eagle Ford crude sells at no discount to West Texas Intermediate (WTI).

In Canada, Edmonton condensate sells at no discount to WTI, and sells at a premium to Canadian Light crude.
Original Post
UAE will import first crude oil cargo ever from the United States. Link here.
To repeat: The United Arab Emirates will import the country's first oil cargo from the US as the OPEC producer sought substitutes to replace Qatari condensate supplies after a diplomatic row.


Every Arab for himself.
Enbridge, 1 -- Chippewas, 0. Link here, data points:
  • Canadian Supreme Court rules in favor of Enbridge
  • Chippewas of the Thames First Nation in Ontario using same argument as their colleagues in Standing Rock
  • Enbridge's Line 9, running between Sarnia, Ontario, and Montreal, through "what the Chippewas regard as their traditional territory" 
US crude oil, gasoline stocks fall sharply: link here. Reposting from yesterday. WTI is down almost one percent in pre-market trading today. Still 38 weeks to re-balance at this rate of drawdown, and the US driving season will soon be ending. US gasoline demand has hit records
twice in the past three weeks, and barely missed a record that third week.

COP Beats By 16 Cents -- Did Analysts Underestimate The Trump Rally? -- July 27, 2017

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decision based on anything you read here or think you may have read here.

Trump rally: I'm sure I'm wrong, but scrolling through Yahoo!Finance In Play it seems I have never seen so many "beats" with regard to earnings. It seems it's a mixed bag, on the other hand, for revenues. But with so many "beats" it suggests to me the analysts misunderestimated the Trump rally.

Whoo-hoo! Shell was one of the few oil companies in which I bought shares this past year -- about a month or so ago. Disclaimer: this is not an investment site. Do not make any investment, financial, job, relationship, or travel decisions based on anything you read here or think you may have read here. I would never recommend anyone investing in the oil sector unless one is ready to lose everything. Yes, it can be that bad. Ask those who invested in any number of Bakken operators. But I digress. Shell profits triple. Link here. Revenue was $72.13 billion vs expected $67.78 billion. Net profit was $3.6 billion, up 245 percent. Up 245 percent? I don't think I've ever seen that in any mature regulated utility. So how is the market reacting? It looks like everyone knew: RDS-B was up half-a-percent yesterday, and is up a little over 1% in pre-market trading. Probably tempered by WTI coming down a bit today in pre-market trading. [Nope. Probably wrong; tempered by Shell's pessimistic view for the future -- "lower for longer."] Even with share price up today, RDS-B pays almost 7%.

COP: beats by 16 cents. Brief details here. Cuts CAPEX by $200 million. Waiting for the earnings call.

XLNX: in pre-market trading, up 3% today. See comments yesterday.

Back To The Bakken

Active rigs: I've lost the bubble on this but I think the general consensus was that we would see 50 rigs in the summer of 2017.

Active Rigs603573193207

RBN Energy: an update on natural gas pipelines into New York City.
It’s no secret that the political and regulatory environments for new pipeline development in New York and the New England states are notoriously challenging.
That reputation has been reaffirmed recently, as several natural gas pipeline projects targeting the region have been sidelined by permitting delays or denials.
As a result the region continues to experience gas transportation constraints and price spikes during peak demand periods.
But midstreamers have had some success penetrating the New York City metropolitan market (including the Lower Hudson Valley, Long Island and northern New Jersey), which may bode well for the handful of projects currently looking to serve the area. Today, we review recent and planned capacity additions into The Big Apple and its greater metro area.
Despite their proximity to the lowest-priced natural gas in the country — from the Marcellus/Utica shales — many of the East Coast’s heavily populated metro areas continue to experience gas-transportation constraints and, as a result, pay some of the highest prices in the country for their gas and electricity during peak demand periods.
The New England-New York region is becoming more dependent on gas-fired power, driven by a big push to reduce emissions. Nuclear, coal and older oil-fired power plants are aggressively being shuttered and replaced by new, more-efficient and cleaner-burning gas-fired units. Con Edison (one of the largest utilities in New York) reported that between 2012 and 2016, more than 5,000 large New York City buildings had been converted from oil to natural gas for heating. In addition, the Northeast Gas Association (NGA) in its 2017 Regional Market report said that the number of homes heating with natural gas in the Northeast has increased by more than one million since 2008.