Saturday, August 5, 2017

Fiscal State Rankings, 2017 Edition -- North Dakota Ranks 2nd Behind Florida

Worth spending some time on.

Interactive map ink here (dynamic link).

Narrative here (same link; if the map shows up again, scroll down to get to the narrative).

Top five:
  • Florida
  • North Dakota -- #2
  • South Dakota
  • Utah 
  • Wyoming
In 2014, Alaska was ranked #1; in 2017, Alaska had dropped to #17.

The bottom five in 2017:
  • Maryland -- #46
  • Kentucky -- #47
  • Massachusetts  -- #48
  • Illinois -- #49
  • New Jersey -- dead last, #50
Surprisingly, maybe, maybe not:
  • California: #43
  • New York: #39
  • Texas: #23

An EOG Fertile Well Is Back On-Line After Being Off-Line For Almost Two Years -- August 5, 2017

An EOG Fertile well is back online after being off-line for  almost 2 years. Two new horizontals (#31578, #30958) parallel the entire length of this well. The well:
  • 17870, 796, EOG, Fertile 7-06H, Parshall, t8/09; cum 279K 6/17;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Production prior to going off-line back in late 2015:

Production following first frack:

Now, the production data for the recently fracked wells that run parallel to the older well, for the entire length of the older well:

oolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The graphic:

Later, from a reader, see first comment: just to the west one can see another horizontal that parallels #31578. This well had a even bigger bump:
  • 21406, 1,355, EOG, Liberty 25-0107H, Parshall, t4/13; cum 379K 6/17; note recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Baggage Claim Hall Of Fame

Link here.

The Bakken Was A Hard Nut To Crack -- August 5, 2017

Back on October 23, 2010, I posted a list of the operators in the Bakken with a few comments about most of them. About MDU (Fidelity), I wrote at the time:
Of all the operators, [MDU /Fidelity] is the most disappointing; HQ in Bismarck, ND; seemed to have missed the Bakken right in their backyard; "discovered" Cottonwood oil field; sold it to Oasis after some disappointing wells; Oasis became "overnight" success with this purchase; MDU re-entering the Bakken in 2011; doing better; MDU (utility) focused on natural gas; waited a bit too long to shift to oil
Earlier this week, a reader talked about how well Oasis had done because of the Bakken.

Here is my reply, not ready for prime-time, with a few additional notes, in no particular order:
It has become incredibly clear to me that the Bakken was an incredibly difficult nut to crack. There have been very few long-term survivors. Yes, MDU had its challenges in the Bakken but it was not the only one.
1. Hess has survived because it's been in North Dakota forever; and the natural gas story has been bigger than anyone expected; the reader noted that Hess had really deep pockets and knew that technology would eventually win; it always does; winning in the oil business seems to require time and money;
2. EOG: I don't know how much was luck and how much was really, really good work. But they had deep pockets to begin with and moved quickly with huge fracks which was one of the secrets to cracking the Bakken; the reader noted that EOG got into the east side of the field where they had huge wells (huge at the time); that area also had the highest field pressure, perhaps because nothing had yet been tapped

3. CLR: survived because Harold Hamm had bought so many acres over the decades at cheap prices prior to the boom; was incredibly brilliant across upstream and midstream; a survivor but certainly not in a real strong position today if oil stays below $50 another year; the reader noted that CLR focused along the Nesson Anticline figuring that the natural lifting and fracturing of the rock would help them;

4. Whiting: wanted to sell out; get out of the Bakken several years ago; no buyer found; stayed in; probably did much better than expected; again, because of simply getting better and better at figuring out the Bakken. The reader reminded me that Whiting wrote off the entire value of KOG after buying its assets at the top of the boom

5. Statoil: great initial IPs; but really doesn't seem to be particularly remarkable in the big scheme of things; again, deep Norwegian pockets. The reader agreed, suggesting that BEXP and "Bud" goaded all the operators with his 24-hour IPs (which is now the norm in the Bakken); it may not have been the best strategy, going after max IPs based on ultimate EURs, it appears;
6. Oasis: looks like the real survivor -- bought SM Energy's assets; doing very, very well

7. Others all gone -- sold out (KOG, SM Energy, BEXP) or renamed after coming out of bankruptcy (Triangle, others).
8. OXY was never able to figure out the Bakken; they were the poster child for incredibly bad Bakken wells when small independents were drilling incredibly good wells; the location of their play in the Bakken may not have been the best, but certainly not the worst;
9. Chesapeake: another huge company that never figured out the Bakken;
10. Anschutz was in very early; and out, very early;
11. MRO and XTO, both with deep pockets; MRO seemed to take the lead on re-fracks;
12. SM Energy, once said they would never leave the Bakken, recently exited the Bakken to focus on the Permian;
13. Slawson. See comments. I did not include Slawson in the original post but a reader reminded me. Slawson was noted for having incredibly good wells in the early days; a private company, it would not have had deep pockets, so it made every dollar count ... and they got incredibly good wells; Slawson is not only a survivor, but apparently, a successful survivor;
At the end of the day, every operator added something to the Bakken. Some showed "us" how not to do it; others more successful for a variety of reasons.

In Bakken 2.0, some new operators and a few survivors.

The point: the Bakken was a hard nut to crack and operators are still learning. 

Legacy Fund Data Through July, 2017 -- $4 Billion Milestone To Be Hit In August, 2017

Source here.
  • most recent deposit, July 21, 2017: $35 million (down from $37 million in June)
  • total deposits since inception: $3.976 billion
  • less than $25 million required to reach $4 billion in total deposits; that milestone will be hit next month, August, 2017
  • net assets in the fund, as of January, 2017: $4.3 billion 
  • height of the boom: $90 million / month being deposited
  • currently: about $30 million / month being deposited 
Get ready to spend:
  • principal and earnings of the Legacy Fund may not be expended until after June 30, 2017 -- that date met
  • expenditure requires a vote of at least 2/3rds in each house of the legislative assembly
  • not more than 15% of the legacy fund may be expended during a biennium

Resurgence Of Coal -- How Wyoming Got Its Mojo Back -- August 5, 2017

Anyone who has traveled through Wyoming during the winter knows how violent the wind and the cold gets. Perfect spot for wind energy. LOL.

War on coal devastated Wyoming under the previous administration.

Aha, Wyoming has it figured out. Start putting up wind farms knowing the slicers and dicers will need to be backed up 24/7 with coal-burning power plants. I can't make this stuff up. Over at CBS News.

Wind farms? Sage grouse? What sage grouse? We now know why the previous administration did not add sage grouse to the list of endangered species. Just a hunch.

Tesla Model X Goes On Sale -- August 5, 2017

From a reader: has anyone noticed that since President Obama left office there have been no instances of the 5:00 p.m. Friday night news dump? That was something the previous administration perfected. Not one instance of a Friday evening news dump since January 20, 2017.

However, having said that, this is priceless.

Tesla announces that it has put its Model X on sale. Great, great news. One would have expected a great marketer like Musk Melon to make that announcement on a Monday morning. But the story supposedly was posted late Friday afternoon, though it appears no one saw it until now. It was not mentioned on CNBC.

The news: Tesla lowers the price of of its Model X, saying margins have improved. LOL. Over at Reuters.

Just when Tesla needs more cash for the ramp-up in Model 3 production, they cut the price of Model X. Just the other day, Musk Melon implored Tesla buyers "to keep buying the Model X and the Model S to help pay for the model 3."

Here's the lede:
Tesla Inc on Friday lowered the base price of its Model X SUV to $79,500 and said improving margins were behind the move, which came as the automaker is ramping up production of its new lower-priced Model 3.
Some analysts have been concerned that the launch of the Model 3, whose base price is $35,000, would steer some potential buyers away from the Model X SUV to that lower-priced sedan.
But Chief Executive Elon Musk said earlier this week that demand had not waned for the luxury electric sport-utility vehicle.
"When we launched Model X 75D, it had a low gross margin. As we've achieved efficiencies, we are able to lower the price and pass along more value to our customers," Tesla in a statement on Friday announcing it had lowered the previous $82,500 starting price of the vehicle by $3,000.
I tried to see the difference between the Model X and the Model S -- almost no difference. Likewise, it's hard to see the difference between these two high-end models and the Model 3. Except for the price: $100,000 vs $45,000.  Except now the luxury SUV is $3,000 cheaper. LOL.

By the way, according to The Motley Fool:
Nevertheless, Tesla found another way to outdo GM. A second version of the Model 3 will have a generous 310 miles of range: even more than most of Tesla's pricier vehicles.
The extra 90 miles of range represents a big boost in utility, so most potential buyers would be likely to prefer this option. The catch: it costs $9,000 for this upgrade, which is the only Model 3 version that Tesla will build until at least November.
Other options packages will also add significantly to the Model 3's price. A $5,000 package upgrades the interior to something more in keeping with luxury car standards.
It costs another $1,500 if you want 19" wheels instead of the standard 18" wheels, $1,000 for a color other than black, and $5,000 to activate Autopilot.
An extra $3,000 will unlock "full self-driving" capabilities -- once regulators give the green light.
Thus, a fully loaded Model 3 would cost nearly $60,000 today. This doesn't even include future upgrades like a dual-motor configuration and "Ludicrous" mode, which will undoubtedly cost even more.

So many stories on so many levels, but I need to move on.

Except one: as for Musk Melon's assertion that demand had not waned for the luxury electric SUV, check out the numbers for yourself: the Model X has had a precipitous fall in deliveries month-over-month.  Last year, Model X had two months of 3,000+ deliveries; so far this year, none. In fact, this year (2017) Tesla Model X did not even crack 1,000 deliveries in three of the first four months. And unlike most car sales, Tesla sales are not "seasonal" or "promotional." These cars are ordered "ahead of time" and there are no end-of-month incentives, or end-of-year incentives.

The Humor Page -- August 5, 2017

This was sent to me by a reader. I think I heard every one of these when growing up in Williston, ND,  except the one on "time travel."

Most of our generation of 50+ were ‘HOME SCHOOLED’ in many ways.

1. My mother taught me TO APPRECIATE A JOB WELL DONE.
"If you're going to kill each other, do it outside. I just finished cleaning."

2. My mother taught me RELIGION.
"You better pray that will come out of the carpet."

3. My father taught me about TIME TRAVEL.
"If you don't straighten up, I'm going to knock you into the middle of next week!"

4. My father taught me LOGIC.
" Because I said so, that's why."

5. My mother taught me MORE LOGIC .
"If you fall out of that swing and break your neck, you're not going to the store with me."

6. My mother taught me FORESIGHT.
"Make sure you wear clean underwear, in case you're in an accident."

7. My father taught me IRONY.
"Keep crying, and I'll give you something to cry about."

8. My mother taught me about the science of OSMOSIS.
"Shut your mouth and eat your supper."

9. My mother taught me about CONTORTIONISM.
"Just you look at that dirt on the back of your neck!"

10. My mother taught me about STAMINA.
"You'll sit there until all that spinach is gone."

11. My mother taught me about WEATHER.
"This room of yours looks as if a tornado went through it."

12. My mother taught me about HYPOCRISY.
"If I told you once, I've told you a million times, don't exaggerate!"

13. My father taught me the CIRCLE OF LIFE.
"I brought you into this world, and I can take you out..."

14. My mother taught me about BEHAVIOR MODIFICATION .
"Stop acting like your father!"

15. My mother taught me about ENVY.
"There are millions of less fortunate children in this world who don't have wonderful parents like you do."

16. My mother taught me about ANTICIPATION.
"Just wait until we get home."

17. My mother taught me about RECEIVING.
"You are going to get it from your father when you get home!"

18. My mother taught me MEDICAL SCIENCE.
"If you don't stop crossing your eyes, they are going to get stuck that way."

19. My mother taught me ESP.
"Put your sweater on; don't you think I know when you are cold?"

20. My father taught me HUMOR.
"When that lawn mower cuts off your toes, don't come running to me."

21. My mother taught me HOW TO BECOME AN ADULT.
"If you don't eat your vegetables, you'll never grow up."

22. My mother taught me GENETICS.
"You're just like your father."

23. My mother taught me about my ROOTS.
"Shut that door behind you. Do you think you were born in a barn?"

24. My mother taught me WISDOM.
"When you get to be my age, you'll understand.

25. My father taught me about JUSTICE .
"One day you'll have kids, and I hope they turn out just like you"

US Economy Hitting On All Cylinders -- The Political Page, T+197 -- August 5, 2017

From Yahoo!Finance:

Note: in the graphic above, this is not the numbers the president began with; this is the change in employment numbers from the day he took office to six months later. It's hard to believe that President Obama let things get so out of hand. The beer summit was probably not the best way to start.

Top story in The Wall Street Journal this morning:
Jobs Growth Contributes to Uncommonly Strong U.S. Economic Picture. Employers add 209,000 jobs as jobless rate drops to 4.3%, a 16-year low.
It's too bad the story is behind a paywall; perhaps googling will get you to it. The lede:
The U.S. economy is hitting a sweet spot seldom seen in past expansions, posting in July a record 82nd straight month of job creation and an unemployment rate at a 16-year low, despite slow growth in output.
Economic growth has been stuck stubbornly near a 2% annual rate, the weakest expansion in output since World War II.
But by a range of measures the economy is pushing into new territory, including record stock-price highs, improving consumer confidence and rising corporate profits. Even wages, though rising slowly, are advancing at a healthy pace when adjusted for exceptionally low inflation.The latest evidence was a Labor Department report Friday that showed U.S. employers added 209,000 jobs to payrolls in July and the unemployment rate fell to 4.3%.
With the July increase in hiring, the record stretch of monthly hiring is equivalent to six years and 10 months, almost three years longer than the second-best streak, from 1986 to 1990. Expansions tend to get tripped up by boiling excesses, like a housing bubble in the 2000s, a tech bubble in the 1990s and inflation in the early 1980s. But this economy appears to have some more room to run as it enters its ninth year. 
And then this.
That points to an economy set to outperform the long but sluggish expansion’s 2.1% average annual growth rate through June.
“This is not a 2% economy,” said Ellen Zentner, chief U.S. economist at Morgan Stanley. “If you look at the domestic economy, it’s much stronger.”
  • one has to ask, why is it happening now? Why didn't this happen in 2000? Or 2008? Or 2012? Or 2016? My thoughts at this post
  • due to peculiar circumstances, I was home almost all day yesterday; I watched a lot of business news yesterday (almost all CNBC; very little FBN). Despite listening to several hours, I suppose of business news, not once did I hear that the unemployment rate is at a 16-year-low -- I knew it ticked down to 4.3% -- but I did not know it was at a 16-year low
  • 16-year low: two lost decades -- the Bush administration was bad enough (hardly all his fault -- Hurricane Katrina and 9/11) -- but the following eight years was abominable, starting off with a beer summit and ending with BLM
  • love him, hate him: perhaps the best single "commentator" on the stock market is Jim Cramer; almost never gets political; great insight; his comments a week ago when tech stumbled were incredibly prescient
  • the previous administration will get some undeserved credit for the economy based on the fact that the Trump rally began when Obama was still president; Obama will get the benefit of the incredible jump in any number of economic factors that began to occur immediately after November 8, 2016, including "consumer confidence"
  • particularly noteworthy, and not stressed enough: none of this can be attributed to any new legislation -- Congress did not "repeal and replace" ObamaCare; Congress did not legislate even one tax cut. Incredible. I'm happy that whatever is going on is not due to these changes; let the US economy run "as is"
  • ObamaCare: every insurance company is walking away. And every insurance company who left early is hitting new highs (except for ones like Molina). I think Senate was correct on this one; not the time to vote for a "skinny repeal" 
  • regarding the ads on television for tax cuts; completely misleading. I'm beginning to think this is not the right time for any change in taxes. Not easily explained. Dems and those GOP folks worried about deficit will probably make it difficult to pass any significant tax cut 
  • it's going to be hard for politicians to explain to non-investors why tax cuts are needed when the economy seems to be expanding (2.6% GDP), unemployment at a 16-year-low; and, stock market hitting new highs, day after day
  • what could mess this up? a) a black swan; and/or, b) Congress, by not raising the debt limit in a timely matter, causes the US to technically be in default; some say the US will pay Chinese US bondholders before he pays US servicemen, veterans, social security, or at least that's my takeaway; I doubt it; in fact, if push comes to shove, tie US interest payments to China with action on North Korea
  • best political insight all day: the mainstream Dems and the GOP are not all that far apart; it's the alt-left and socialists teaming up with the mainstream media to pull the mainstream Dems farther left