- February 17, 2017: #17089 off-line; are they getting ready to frack neighboring well (#31847)?
#31847 is still showing up as SI/NC, but FracFocus shows that #31847 was fracked 4/2/17 - 4/24/17.
I track the CLR Bridger wells here.
Tuesday, August 8, 2017
CLR's Bridger 9-14H1 Has Been Fracked -- August 8, 2017
Posted earlier:
#31847 is still showing up as SI/NC, but FracFocus shows that #31847 was fracked 4/2/17 - 4/24/17.
I track the CLR Bridger wells here.
#31847 is still showing up as SI/NC, but FracFocus shows that #31847 was fracked 4/2/17 - 4/24/17.
I track the CLR Bridger wells here.
Inconvenient Truths About EVs -- August 8, 2017
Sent to by a reader.
I'm posting this for the archives, but it's like preaching to the choir. Subject: Electric Vehicles ~ What We're Not Being Told??
INTERESTING - ONE OTHER QUESTION. IF ELECTRIC CARS DO NOT USE GASOLINE, THEY WILL NOT PARTICIPATE IN PAYING A GASOLINE TAX ON EVERY GALLON THAT IS SOLD FOR AUTOMOBILES, WHICH WAS ENACTED SOME YEARS AGO TO HELP TO MAINTAIN OUR ROADS AND BRIDGES. THEY WILL USE THE ROADS, BUT WILL NOT PAY FOR THEIR MAINTENANCE!!!
In case you were thinking of buying hybrid or an electric car:
Ever since the advent of electric cars, the REAL cost per mile of those things has never been discussed. All you ever heard was the mpg in terms of gasoline, with nary a mention of the cost of electricity to run it. This is the first article I've ever seen and tells the story pretty much as I expected it to.
Electricity has to be one of the least efficient ways to power things yet they're being shoved down our throats. Glad somebody finally put engineering and math to paper.
At a neighborhood BBQ I was talking to a neighbor, a BC Hydro executive. I asked him how that renewable thing was doing. He laughed, then got serious. If you really intend to adopt electric vehicles, he pointed out, you had to face certain realities. For example, a home charging system for a Tesla requires 75 amp service. The average house is equipped with 100 amp service. On our small street (approximately 25 homes), the electrical infrastructure would be unable to carry more than three houses with a single Tesla, each. For even half the homes to have electric vehicles, the system would be wildly over-loaded.
This is the elephant in the room with electric vehicles. Our residential infrastructure cannot bear the load. So as our genius elected officials promote this nonsense, not only are we being urged to buy these things and replace our reliable, cheap generating systems with expensive, new windmills and solar cells, but we will also have to renovate our entire delivery system! This latter "investment" will not be revealed until we're so far down this dead end road that it will be presented with an 'OOPS...!' and a shrug.
If you want to argue with a green person over cars that are eco-friendly, just read the following. Note: If you ARE a green person, read it anyway. It's enlightening.
Eric test drove the Chevy Volt at the invitation of General Motors and he writes, "For four days in a row, the fully charged battery lasted only 25 miles before the Volt switched to the reserve gasoline engine." Eric calculated the car got 30 mpg including the 25 miles it ran on the battery. So, the range including the 9-gallon gas tank and the 16 kwh battery is approximately 270 miles.
It will take you 4.5 hours to drive 270 miles at 60 mph. Then add 10 hours to charge the battery and you have a total trip time of 14.5 hours. In a typical road trip your average speed (including charging time) would be 20 mph.
According to General Motors, the Volt battery holds 16 kwh of electricity. It takes a full 10 hours to charge a drained battery. The cost for the electricity to charge the Volt is never mentioned, so I looked up what I pay for electricity. I pay approximately (it varies with amount used and the seasons) $1.16 per kwh. 16 kwh x $1.16 per kwh = $18.56 to charge the battery. $18.56 per charge divided by 25 miles = $0.74 per mile to operate the Volt using the battery. Compare this to a similar size car with a gasoline engine that gets only 32 mpg. $3.19 per gallon divided by 32 mpg = $0.10 per mile.
The gasoline powered car costs about $20,000 while the Volt costs $46,000-plus. So the American Government wants loyal Americans not to do the math, but simply pay three times as much for a car, that costs more than seven times as much to run, and takes three times longer to drive across the country.
I'm posting this for the archives, but it's like preaching to the choir. Subject: Electric Vehicles ~ What We're Not Being Told??
INTERESTING - ONE OTHER QUESTION. IF ELECTRIC CARS DO NOT USE GASOLINE, THEY WILL NOT PARTICIPATE IN PAYING A GASOLINE TAX ON EVERY GALLON THAT IS SOLD FOR AUTOMOBILES, WHICH WAS ENACTED SOME YEARS AGO TO HELP TO MAINTAIN OUR ROADS AND BRIDGES. THEY WILL USE THE ROADS, BUT WILL NOT PAY FOR THEIR MAINTENANCE!!!
In case you were thinking of buying hybrid or an electric car:
Ever since the advent of electric cars, the REAL cost per mile of those things has never been discussed. All you ever heard was the mpg in terms of gasoline, with nary a mention of the cost of electricity to run it. This is the first article I've ever seen and tells the story pretty much as I expected it to.
Electricity has to be one of the least efficient ways to power things yet they're being shoved down our throats. Glad somebody finally put engineering and math to paper.
At a neighborhood BBQ I was talking to a neighbor, a BC Hydro executive. I asked him how that renewable thing was doing. He laughed, then got serious. If you really intend to adopt electric vehicles, he pointed out, you had to face certain realities. For example, a home charging system for a Tesla requires 75 amp service. The average house is equipped with 100 amp service. On our small street (approximately 25 homes), the electrical infrastructure would be unable to carry more than three houses with a single Tesla, each. For even half the homes to have electric vehicles, the system would be wildly over-loaded.
This is the elephant in the room with electric vehicles. Our residential infrastructure cannot bear the load. So as our genius elected officials promote this nonsense, not only are we being urged to buy these things and replace our reliable, cheap generating systems with expensive, new windmills and solar cells, but we will also have to renovate our entire delivery system! This latter "investment" will not be revealed until we're so far down this dead end road that it will be presented with an 'OOPS...!' and a shrug.
If you want to argue with a green person over cars that are eco-friendly, just read the following. Note: If you ARE a green person, read it anyway. It's enlightening.
Eric test drove the Chevy Volt at the invitation of General Motors and he writes, "For four days in a row, the fully charged battery lasted only 25 miles before the Volt switched to the reserve gasoline engine." Eric calculated the car got 30 mpg including the 25 miles it ran on the battery. So, the range including the 9-gallon gas tank and the 16 kwh battery is approximately 270 miles.
It will take you 4.5 hours to drive 270 miles at 60 mph. Then add 10 hours to charge the battery and you have a total trip time of 14.5 hours. In a typical road trip your average speed (including charging time) would be 20 mph.
According to General Motors, the Volt battery holds 16 kwh of electricity. It takes a full 10 hours to charge a drained battery. The cost for the electricity to charge the Volt is never mentioned, so I looked up what I pay for electricity. I pay approximately (it varies with amount used and the seasons) $1.16 per kwh. 16 kwh x $1.16 per kwh = $18.56 to charge the battery. $18.56 per charge divided by 25 miles = $0.74 per mile to operate the Volt using the battery. Compare this to a similar size car with a gasoline engine that gets only 32 mpg. $3.19 per gallon divided by 32 mpg = $0.10 per mile.
The gasoline powered car costs about $20,000 while the Volt costs $46,000-plus. So the American Government wants loyal Americans not to do the math, but simply pay three times as much for a car, that costs more than seven times as much to run, and takes three times longer to drive across the country.
Seventeen Permits Renewed -- August 8, 2017
Update: production has been updated for this well --
Six new permits:
- 31044, 797/PNA, XTO, Homer 14X-32AXD, Grinnell, 4 sections, stimulated 12/19/15; 40 stages, 7 million lbs, t1/16; cum 183K 7/17;
- 21235, natural gas, BTA, Sharon #1, North Taylor, Winnepegosis formation, t2/12; cum 5.9 million MCF natural gas; $/MCF at this link;
| $49.09↓ | 8/8/2017 | 08/08/2016 | 08/08/2015 | 08/08/2014 | 08/08/2013 |
|---|---|---|---|---|---|
| Active Rigs | 56 | 34 | 73 | 193 | 182 |
Six new permits:
- Operators: Hess (3); Statoil (2), BTA Oil
- Fields: Beaver Lodge (Williams); Banks (McKenzie); Beaver Creek (Golden Valley)
- Comments:
- BR (7): six Ivan permits; one Sanyvan permit, McKenzie County
- HRC (5): five Fort Berthold permits in McKenzie County
- Statoil (3): three Martin permits in Williams County
- Petro-Hunt (2): two Noonan Federal permits in McKenzie County
Highlights From CLR's Investor Update, August, 2017 -- Will Curtail Some Growth/Lucatrive Opportunities To Rein In Debt
Updates
August 12, 2017: from the Reuters link below --
Continental Resources Inc, one of the largest U.S. shale oil producers, will fund future wells from cash flow and not take on any new debt, Chief Executive Harold Hamm said on Wednesday.
The vow from one of the shale industry's leaders and strongest advocates comes as prices mostly below $50 a barrel this year pressure oil companies to live within their means after overspending for years.
Heavy debt loads nearly decimated U.S. shale producers when oil prices started to tumble in 2014. The number of bankruptcies in the U.S. shale patch from 2014 through 2016 eclipsed the depths of the telecom bust of 2002 and 2003, a previous high-water mark.
Continental, which operates in North Dakota and Oklahoma, famously stopped hedging in late 2014, expecting oil prices to rebound. They didn't, and the company's debt load has jumped 15 percent to $6.54 billion.
But that appears to be at an end.August 12, 2017: more from the conference call sent in by a reader -
One interesting discussion from the conference call was the discount that Bakken crude sells to WTI, and the discount WTI sells to Brent.August 11, 2017: a reader provided this from CLR's conference call, 2Q17 earnings:
First, WTI discount to Brent. Here’s the transcript of Hamm’s conference call:
"[T]he market is in the process of correcting as is the disparity between WTI and Brent. The new light oil refining capacity comes online and increased export shipment of light crude take place, this differential will be eradicated to return to dort norms of WTI dominance over Brent."
https://seekingalpha.com/article/4097204-continental-resources-clr-ceo-harold-hamm-q2-2017-results-earnings-call-transcript
Here's how Reuters explained it:
"Hamm also said he sees the U.S. West Texas Intermediate (WTI) crude oil contract regaining price 'dominance' over Brent, the global benchmark. He cited rising U.S. crude exports and refiners’ increasing ability to process the type of crude produced from shale.
WTI has traded at a slight discount to Brent for years, but if that dynamic were to flip, it would be a boon for Continental and its peers."
http://www.rigzone.com/news/article.asp?a_id=151354
Don't know if you listened to Continental's conference call Wednesday, but if one wants to look at proven demonstrated performance, as opposed to Berman's fact-free nonsense and goofball predictions, this is it:
"Consequently, we have elevated our 2017 production growth guidance raising the expected range for exit rate to 24% to 31% above fourth quarter 2016 production. And even more significant we expect to accomplish this within the same capital expenditure budget or less ....
Continental has reset it's priorities and recalibrated its growth strategy to pluck the new era of U.S. energy technology. Having ownership of Tier-1 quality rock assets and multi-decades of highest quality drilling inventory, we're now capable of growing production at the industry leading and much lower level of capital investment compared with any time in our 50-year history ....
In the face of low oil prices we have recently released three grown rigs and four completion crews. This is a 20% reduction in rigs and cruise while increasing our production outlook ....
The second key factors are optimized completions which are improving performance in all of our assets.
In the Bakken, our optimized completions are bringing on company record wells over a broad cross-section of a play. Rates of return for typical Bakken wells have been doubled to 82% generating over $2 million of added revenue during the first six months.
We also increased the EUR type curves for Bakken wells by 12% to 1.1 million boe for 9,800 foot lateral well....
It's a challenge to estimate what those EURs are going forward. But again, when we’re talking about an extra $2 million per well in revenue in the first six months, so that's big. You’re tackling, accomplishing, increasing the economics up front in these wells and so the economics will actually prove quicker than EUR in time....
And so, I mean we're talking about getting this outcome over a broad area and it's … and we're not done. I mean we're continuing to push the extent of where this is for replying optimized completions. So, there's a lot of questions about the inventory and how much of the 1.1 million boe will ride now. The footprint continues to grow and we couldn’t be more pleased with what we’re seeing here. I mean here we’ve been in this play really we started out in 2003 and I remember having some conference calls with you just to talk about the Bakken way back when we first got into it....
It's amazing and so this is where technology has taken us....
[A]nd as far as the infill wells again this this particular this type curve is based on all wells. HPP, wells as well as those wells that we develop out from grass roots and that's 90% of what we have left to develop. There are not very many units we have out there at this point that still need development with pure infill wells."
Original Post
2017 guidance "improved":- full-year production: up 10% yoy
- CAPEX revised: range of $1.75 billion to $1.95 billion
- cash neutral at annual average of $45 to $51 WTI
- non-core STACK leasehold, $72.5 millilon for 6,590 acres ($11,000 / acre)
- non-core Arkoma Woodford leasehold, $68 million for 26,000 acres ($2,600 / acre)
- apparently nothing in the Bakken sold
- EUR per operated well (does not break out Bakken vs non-Bakken)
- EUR per operated well up over 200% since 2012
- from 470K EUR (2012) to 1.4 million bbls EUR (2016)
- Bakken: 806,000 net reservoir acres
- Bakken: 80% oil; estimated total % liquids -- 90%
- compare with 70% (STACK Meramec oil) and 55% (SCOOP Woodford condensate)
- from 980K EUR to 1.1 million EUR base on first six months production
- doubled ROR to 82% compared to 980K boe type curve
- average 24-hour IP rate of 1,606 boepd (82% oil)
- Holstein Federal 8-25H
- Akron Federal 7-27H
- Garfield Federal 4-5H
- Radermecher 2-22H1
- Brangus North 1-2H2
- Holstein Federal 4-25H
- Garfield Federal 6-5H
- Holstein Federal 13-25H
- Holstein Federal 6-25H
- Radermecher 4-22H2
- 7 in middle Bakken
- 1 Three Forks, 1st bench
- 2 in Three Forks, 2nd bench
CLR -- Breaks Even -- August 8, 2017
From a press release:
Company raises 2017 production guidance and lowers costs while targeting cash neutrality for the year:
Company agrees to sell non-strategic leasehold and property for $147.5 million, with proceeds targeted to reduce debt
Financial notes:
Glenn Campbell dead at age 81.
President Trump responded verbally to North Korea's threats today. Those remarks finally got, perhaps, a bit of reaction out of the market.
From my perspective:
Company raises 2017 production guidance and lowers costs while targeting cash neutrality for the year:
- exit rate raised to 260,000 to 275,000 barrels of oil equivalent per day, up 24% to 31% over 4Q 2016
- annual production raised to 230,000 to 240,000 boe per day
- oil differential improved by $1.00 per barrel and operating costs lowered
- capital expenditures adjusted to a range of $1.75 billion to $1.95 billion, targeting cash neutrality at $45 to $51 WTI
- production averaged 226,213 boe per day, up 6% from 1Q 2017
- oil differential dropped 11% to $6.31 per barrel from $7.09 per barrel in 1Q 2017
- total G&A declined to $1.89 per boe, compared with $2.45 per boe in 1Q 2017
- Bakken ROR uplifted to 82%, based on new 1,100 MBoe type curve EUR
- STACK Condensate type curve announced at 80% ROR, based on 2,400 MBoe EUR
- SCOOP Springer Cash 1-26H well yields over 100% ROR, 25% higher EUR
Company agrees to sell non-strategic leasehold and property for $147.5 million, with proceeds targeted to reduce debt
Financial notes:
- reports a net loss of $63.6 million , or $0.17 per diluted share, for the quarter ended June 30, 2017
- adjusted, a net loss for the second quarter was $1.8 million , or $0.00 per diluted share
**************************
Glenn Campbell dead at age 81.
**************************
NOKO
President Trump responded verbally to North Korea's threats today. Those remarks finally got, perhaps, a bit of reaction out of the market.
From my perspective:
- his remarks were not meant for NOKO, but rather for China and Russia, but mostly China
- if "something" does happen, no one can suggest that President Trump did not telegraph his patience was running out
- President Trump will work with regional allies; his UN ambassador will work with the UN, but Trump won't go to the UN for approval for any action
- Trump will look for any "excuse" to make good on his remarks
- NOKO cannot afford one misstep; if one of his missiles goes ballistic and hit Japan's mainland, reaction will be swift
- US military may know NOKO's capabilities better than Kim Jong-un
- regardless how it plays out, NOKO's not getting any more money or breaks from the US as it did come the last several administrations
The Market And Energy Page, Part 2, T+199; TCM? No, DCM -- August 8, 2017
Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on anything you read here or think you may have read here. In addition, I often post quickly which may result in factual and typographical errors. If this information is important to you, go to the source.
Truck manufacturing: huge. Cramer says he's never seen it this strong. That corroborates what my son-in-law in Portland, OR, is seeing. He works at a truck manufacturing plant there. Where the demand is coming from: heavy fleet business (housing, construction, shipping [Amazon], oil and gas, etc).
Fossil Group: shares plunge after hours; shares drop 20%. Reported a loss of $345 million after reporting a profit same quarter a year ago. CNBC said loss much worse than expected; Zacks seems to disagree. Only comment: is this a surprise?
Hertz: earnings much worse than expected, a loss of 63 cents vs 20 cents forecast. Meets revenue forecasts of $2.22 billion.
NOG reports. From a press release --
The other day I posted a list ranking the states based on "fiscal health." North Dakota was second from the top. I mentioned that Alaska had fallen to #17 in the most recent polling (2017) after being #1 in 2014.
Today I see COP is considering taking advantage of Alaska's offer to let the E&P company expand its footprint along the North Slope:
After hours, Disney: missed on revenues, $14.24 billion vs $14.42 billion; beats on earnings, $1.58 vs $1.55; the bigger news is that Disney will pull its movies from Netflex, and will initiate a new streaming service that will take on Netflix. The new streaming service sounds a lot like TCM. Call it DCM -- Disney Classic Movies.
And then get this: Disney to take a majority interest in Bamtech. This is huge. The Motley Fool predicted this back in April, 2017.
Biggest beneficiary? Our youngest granddaughter, Sophia, who is hooked on all-things Disney. Especially Frozen.
Disney to Netflix, just let it go.
Let It Go, Idina Menzel
Truck manufacturing: huge. Cramer says he's never seen it this strong. That corroborates what my son-in-law in Portland, OR, is seeing. He works at a truck manufacturing plant there. Where the demand is coming from: heavy fleet business (housing, construction, shipping [Amazon], oil and gas, etc).
Fossil Group: shares plunge after hours; shares drop 20%. Reported a loss of $345 million after reporting a profit same quarter a year ago. CNBC said loss much worse than expected; Zacks seems to disagree. Only comment: is this a surprise?
Hertz: earnings much worse than expected, a loss of 63 cents vs 20 cents forecast. Meets revenue forecasts of $2.22 billion.
NOG reports. From a press release --
- daily production increased 4% sequentially to average 13,794 barrels of oil equivalent per day in the second quarter, for a total of 1,255,280 boe
- Northern added 4.3 net wells to production during the second quarter of 2017
- the 6.2 net wells that Northern elected to participate in during the first half of 2017 have an estimated internal rate of return of approximately 30% at a $50 /bbl flat pricing assumption
- at June 30, 2017, Northern maintained a strong list of wells in process totaling 16.1 net wells that have an estimated internal rate of return of approximately 30% at a $50 /Bbl flat pricing assumption
- Northern's GAAP net income for the second quarter of 2017 was $13.8 million. Adjusted net income for the quarter was a loss of $0.2 million. Adjusted EBITDA for the quarter was $30.7 million.
***************************
Nominee For 2017 Geico Rock Award
Nominee For 2017 Geico Rock Award
Mark Egan: over at CNN Money -- "millions can't feel the stock market boom." Mark obviously doesn't understand macroeconomics, the economy, how the market works, etc. In fact very few Americans are not feeling the stock market boom:
- economy growing at almost 4% GDP;
- unemployment rate at 4.3%; full unemployment;
- number of folks on food stamps dropping;
- record number of Americans working;
- many employed have 401(k)s; pension plans -- all dependent on the market; and,
- it goes on and on.
COP And Alaska's Fiscal Health
The other day I posted a list ranking the states based on "fiscal health." North Dakota was second from the top. I mentioned that Alaska had fallen to #17 in the most recent polling (2017) after being #1 in 2014.
Today I see COP is considering taking advantage of Alaska's offer to let the E&P company expand its footprint along the North Slope:
ConocoPhillips (COP +1.2%) is evaluating a proposal from Alaska's Department of Natural Resources that would allow it to expand an existing North Slope oil field into an area near big discoveries if it agrees to development steps that include drilling a well by next June and possibly paying the state ~$7M.Wow, business writers may need to offer their services to Hollywood studios for screenwriting. Earlier we saw the word "terrifying" in relation to natural gas production; and, now, "desperately" with regard to Alaska's budget.
The offer to COP to add acreage its to its Colville River unit follows months of discussions between the company and the state over drilling rights on the Tofkat area
The prospect might attract significant interest if Alaska offered it to bidding companies in a lease sale, but doing so also could restart the clock on development, leading to delays in a state that desperately wants more oil production to help close a $2.5B deficit.
**********************************
TCM? No, DCM
After hours, Disney: missed on revenues, $14.24 billion vs $14.42 billion; beats on earnings, $1.58 vs $1.55; the bigger news is that Disney will pull its movies from Netflex, and will initiate a new streaming service that will take on Netflix. The new streaming service sounds a lot like TCM. Call it DCM -- Disney Classic Movies.
And then get this: Disney to take a majority interest in Bamtech. This is huge. The Motley Fool predicted this back in April, 2017.
Biggest beneficiary? Our youngest granddaughter, Sophia, who is hooked on all-things Disney. Especially Frozen.
Disney to Netflix, just let it go.
Pet Peeve, The Political Page, T+200 -- August 8, 2017
One of my pet peeves is when folks ask why the US cannot have a national health care system like that in Canada (assuming that's what one really wants, anyway).
This graphic -- produced during the Obama administration -- helps explain why (see if you can spot "Canada" in this graphic):
Other links (from reader, see first comment):
So, it doesn't get cluttered, we will close out the poll in which we asked whether President Trump should re-appoint Yellen to be the Fed chairman or replace her with Gary Cohn?
This graphic -- produced during the Obama administration -- helps explain why (see if you can spot "Canada" in this graphic):
Other links (from reader, see first comment):
Two other ways of comparing military expenditures. Canada and Germany are getting a benefit from the USA's largess..If really interested in this, see this link which will provide links to spreadsheets and PDFs. See poll at the sidebar in which we ask what percent of GDP the US spends on defense.
https://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures
https://en.wikipedia.org/wiki/List_of_countries_by_military_expenditure_per_capita (Germany & Canada are approx. $400 per capita)
So, it doesn't get cluttered, we will close out the poll in which we asked whether President Trump should re-appoint Yellen to be the Fed chairman or replace her with Gary Cohn?
- Yellen: 30%
- Cohn: 70%
EIA Short Term Energy Outlook: Renewables Trivial; Coal Resurging; Natural Gas Production Will Actually Accelerate -- August 8, 2017
Updates
Later, 12:18 p.m. Central Time: see first comment --
Recent round of conference calls from Appalachian Basin operators validate the ongoing advances in processes that indicate enormous continuing efficiencies.
Rice described how they drilled and completed 19 wells simultaneously on 4 adjacent pads with 4 rigs, just like Encana is doing in the Permian.
Rice said it was the future model for Marcellus production.
Original Post
Re-posting.
The current EIA short-term energy outlook is so interesting, it needed to be re-posted. I am only posting portions of the summary; the full summary is here.
***********************************
Key Points
EIA Short-Term Energy Outlook
Oil Markets:
- The forecast calls for U.S. oil production rising over the next two years, with oil output heading for an all-time high of just over 9.9 million barrels per day in 2018, surpassing the old record set in 1970.
- U.S. consumers are buying record amounts of gasoline this summer, even though pump prices are higher than last year.
- A growing economy and more people working are major contributors to higher gasoline consumption this summer.
- U.S. natural gas production growth is expected to accelerate over the next two years with growth rates over 2% in 2017 and over 5.5% in 2018.
- Coal-fired power plants are expected to be the leading source of U.S. electricity for the next two years, as the cost of coal is expected to rise by less than the cost of natural gas and renewable generation continues to grow.
- U.S. coal production is getting a boost in 2017 from higher coal exports and more coal-fired electricity generation. (Coal certainly is getting a boost.)
- U.S. wind power, which provided 6% of total U.S. electricity in 2016, is expected to have a 9% generating capacity increase this year and another 16% in 2018. (1.09 x 6 = 6.54%)
- Solar power, which provided 1% of total U.S. electric generation in 2016, is expected to see the largest rate of growth in utility-scale electricity generating capacity of any energy source, increasing 36% this year and more than 10% in 2018. (1.36 x 1 = 1.36%; 1.36 x 1.1 = 1.5% in 2018)
**************************************
"Terrifying"
Look at the EIA outlook regarding US natural gas production (from above):
- U.S. natural gas production growth is expected to accelerate over the next two years with growth rates over 2% in 2017 and over 5.5% in 2018.
The average gas initial production or IP rate of wells is up 34% year-over-year compared to a 7% compound annual growth rate in the 2012-to-2015 period, noted Alliance Bernstein analyst Jean Ann Salisbury. Gas well efficiency improvements are "terrifying," she said, in a report published this morning. Expecting that rate to continue would be unrealistic. Salisbury is adjusting her estimates downward to account for high grading, declining IP rates, and lower improvement rates from the shift from oil to gas in the Utica.I don't think I've ever heard/seen the word "terrifying" used to describe what is currently going on in the oil and gas sector.
This validates the postings of a reader who regularly reminds me how prolific the Utica/Marcellus is turning out to be.
The analyst wrote:
In our updated base case, we forecast rig counts in associated basins slightly below current levels over the next 3 years to remain roughly within cash flow.
We grow Marcellus/Utica rigs by ~25 rigs to fill the coming pipelines by 2020.
With overall improvements in the 5-10% range, this gives us more than enough gas to meet demand to 2020 (+17 bcfd from 2016).
Thus, we think something has to give between associated gas ramp, Marcellus/Utica spending to fill the pipes, and Haynesville rigs staying flat …. it's probably the Haynesville first, but will do a deeper exploration into this.
In general, this update is even more bearish for our view of gas price, mixed but mostly negative for gassy E&Ps (more production but worse price), and bullish for gassy and NGL-y midstream.Saudi Arabia and OPEC can probably relate.
The Market And Energy Page, T+199 -- August 8, 2017; Coal-Fired Plants To Be Leading Source Of Electricity For Next Two Years -- EIA
Wow. I wasn't paying attention. Futures were down earlier this morning so I wasn't paying attention to the market. For whatever reason I checked in and to my surprise, all indices are green, and actually doing quite well. Dow 30 and S&P 500 both hit new all-time highs. Now, 87 new highs on the NYSE. Among the new highs: Deere; RDS (Shell); Diageo (whoo-hoo);
Jolt: job openings at a record high. Apparently 6.2 million job openings. June JOLTS job openings 6.163 billion vs 5.7 billion expected.
Apple just hit another all-time high, now trading above $160; market cap $828 billion with a quarter of a trillion dollars in cash. Shares outstanding: 5.17 billion.
Plug Power missed estimates; shares fall 7%.
Credit card debt: Americans now have the highest credit-card debt in U.S. history. This is an incredibly interesting story. Cheap money. A digression. Apple has a quarter-trillion dollars in cash, and yet it raises more money selling bonds. Why. Because money is cheap. Other examples abound. Same for the individual. Banks are offering individuals the opportunity to borrow thousands of dollars against their credit card with zero percent interest if the loan is paid off in twelve months (only charge, a transaction fee). Retailers, especially those selling big ticket items like furniture, are doing the same thing: one, two, even three years of no interest as long as the debt is paid off within the time period. Ads on television suggest similar low-interest loans on automobiles.
I took advantage of one of those bank offerings -- 0% interest as long as the loan is paid back within the year. I will pay it back well before the due date, and will have that much more in my equity portfolio. So, I am one of those Americans that "contributes" to the highest credit-card debt in US history. I assume I am not the only one, and I assume I "borrowed" a relatively small amount.
The good news: I will pay back my interest-free loan in half the time required. The even better news: the offers keep coming. But I won't do it again until current loan paid off.
Oil Markets:
Jolt: job openings at a record high. Apparently 6.2 million job openings. June JOLTS job openings 6.163 billion vs 5.7 billion expected.
Apple just hit another all-time high, now trading above $160; market cap $828 billion with a quarter of a trillion dollars in cash. Shares outstanding: 5.17 billion.
Plug Power missed estimates; shares fall 7%.
Credit card debt: Americans now have the highest credit-card debt in U.S. history. This is an incredibly interesting story. Cheap money. A digression. Apple has a quarter-trillion dollars in cash, and yet it raises more money selling bonds. Why. Because money is cheap. Other examples abound. Same for the individual. Banks are offering individuals the opportunity to borrow thousands of dollars against their credit card with zero percent interest if the loan is paid off in twelve months (only charge, a transaction fee). Retailers, especially those selling big ticket items like furniture, are doing the same thing: one, two, even three years of no interest as long as the debt is paid off within the time period. Ads on television suggest similar low-interest loans on automobiles.
I took advantage of one of those bank offerings -- 0% interest as long as the loan is paid back within the year. I will pay it back well before the due date, and will have that much more in my equity portfolio. So, I am one of those Americans that "contributes" to the highest credit-card debt in US history. I assume I am not the only one, and I assume I "borrowed" a relatively small amount.
The good news: I will pay back my interest-free loan in half the time required. The even better news: the offers keep coming. But I won't do it again until current loan paid off.
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EIA Short-Term Energy Outlook
Oil Markets:
- The forecast calls for U.S. oil production rising over the next two years, with oil output heading for an all-time high of just over 9.9 million barrels per day in 2018, surpassing the old record set in 1970.
- U.S. oil production growth could slow as some U.S. energy companies plan less investment spending for the rest of this year and the number of drilling rigs has recently increased at a slower clip.
- The monthly increase in U.S. onshore oil production during the second half of 2017 is expected to slow from the pace seen during the first six months of this year.
- U.S. consumers are buying record amounts of gasoline this summer, even though pump prices are higher than last year.
- A growing economy and more people working are major contributors to higher gasoline consumption this summer.
- U.S. natural gas production growth is expected to accelerate over the next two years with growth rates over 2% in 2017 and over 5.5% in 2018.
- Forecast record natural gas production in 2018 coincides with an expected rise in electricity generation from natural-gas fired power plants and a 23% increase in U.S. natural gas exports.
- Looking ahead to the start of the upcoming winter heating season, U.S. natural gas inventories are forecast to total just over 3.9 trillion cubic feet at the end of October, about 2.9% less than last year’s record level.
- U.S. electricity generation is expected to decline in 2017 for the third year in row, as forecast milder temperatures in the third quarter compared to the same period a year earlier reduces electric cooling demand.
- Coal-fired power plants are expected to be the leading source of U.S. electricity for the next two years, as the cost of coal is expected to rise by less than the cost of natural gas and renewable generation continues to grow.
- U.S. coal production is getting a boost in 2017 from higher coal exports and more coal-fired electricity generation. (Coal certainly is getting a boost.)
- U.S. wind power, which provided 6% of total U.S. electricity in 2016, is expected to have a 9% generating capacity increase this year and another 16% in 2018. (1.09 x 6 = 6.54%)
- Solar power, which provided 1% of total U.S. electric generation in 2016, is expected to see the largest rate of growth in utility-scale electricity generating capacity of any energy source, increasing 36% this year and more than 10% in 2018. (1.36 x 1 = 1.36%; 1.36 x 1.1 = 1.5% in 2018)
A Night Out -- Introduction To Roller-Skating -- August 8, 2017 -- Nothing About The Bakken
Photos from last night. Sophia learning to skate. In the first picture, note Sophia's hat; she looked very chic.
I was the only one over the age of 65 on the floor; Sophia was the only one younger than four years of age.
I was the only one over the age of 65 on the floor; Sophia was the only one younger than four years of age.
Back To 59 Active Rigs In North Dakota -- August 8, 2017
Making America great again: GALLUP: U.S. Small-Business Owners' Optimism Highest in 10 Years ---http://www.gallup.com/poll/215048/small-business-owners-optimism-highest-years.aspx?g_source=ECONOMY&g_medium=topic&g_campaign=tiles
Active rigs:
RBN Energy: changes afoot in sourcing of crude for Asian refiners.
Gusher: a gusher of cash at Suncor. Oil sandsproducer has lost its luster to hot shale drillers but its ability to generate cash is the envy of them all. Link at Wall Street Journal.
An inconvenient truth, and I think we've found the problem: the major of NYC says the "subway system" needs more money. Helloooo....
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Back to the Bakken
Active rigs:
| $49.43↑ | 8/8/2017 | 08/08/2016 | 08/08/2015 | 08/08/2014 | 08/08/2013 |
|---|---|---|---|---|---|
| Active Rigs | 59 | 34 | 73 | 193 | 182 |
RBN Energy: changes afoot in sourcing of crude for Asian refiners.
Gusher: a gusher of cash at Suncor. Oil sandsproducer has lost its luster to hot shale drillers but its ability to generate cash is the envy of them all. Link at Wall Street Journal.
Canada’s oil sands are dirty, costly and the opposite of fast-money shale drilling, but the companies that mine them generate gushers of cash and are some of the biggest bargains in the stock market right now.Sage grouse. Zinke Directs Agencies to Follow New Plan on Sage Grouse Protections. U.S. interior secretary’s order follows task force recommendations that potentially loosen conservation measures around mineral leasing areas. Link at The Wall Street Journal:
Canada’s Suncor Energy SU 0.06% is among the world’s higher-cost producers of oil. By all rights it should have scaled back its ambitions during the last few difficult years. Instead, it did the opposite, buying out partners on the cheap and plowing ahead with projects that could pay off for decades.
This came at a time when the shale producers, which sport flashy growth rates but devour cash, attracted plenty of investment. Now Suncor’s shares look undervalued at current oil price assumptions. If prices rise then Suncor is especially alluring.
Interior Secretary Ryan Zinke has ordered his agencies to begin implementing a revised management plan to protect the greater sage grouse, a move that could undo some protections created under the Obama administration.
Among other things, the recommendations compiled by an Interior task force at Mr. Zinke’s request call for potential loosening of sage grouse protections around mineral leasing areas, using states’ conservation plans that provided more flexibility to potential economic development and using potentially increased cattle grazing in some sage grouse areas as a tool to protect the birds’ habitat against wildfire and invasive grasses.Nuclear energy: South Carolina Seeks Ways to Salvage Nuclear Project. Governor looks to get at least one reactor completed after Scana Corp. abandoned the project. Link at The Wall Street Journal:
An energy company’s decision to abandon work on a nuclear project in South Carolina has left the state reeling and the governor seeking one of several solutions to save at least one of the two reactors.Banks: Banks Poised to Boost Buybacks and Dividends. Financial stocks have been strongly correlated to the yield on 10-year Treasurys. The link at The Wall Street Journal:
Last week, Scana Corp. said it would walk away from its project to build two nuclear reactors in tiny Jenkinsville—after nine years and $10.4 billion spent—stunning local leaders and the 600 nuclear employees and 5,000 construction workers at its V.C. Summer Nuclear Station. The move left Jenkinsville, population 71, with an unfinished worksite the size of 1,000 football fields, while electric customers continue to pay 18% of their bill for a nuclear-power plant that may never generate a single kilowatt.
“I just hope that people who bought new houses, new cars, didn’t create a situation where they lose everything they worked so hard to get,” said Jenkinsville Mayor Gregrey Ginyard.
Financial stocks this year are more closely tethered to government bond yields than ever."Global Warming" is dead. US Dept of Agriculture will no longer use "climate change" in its correspondence. New phrase: "weather extremes." Link at The Guardian.
The tight relationship is an indication that traders are playing big-picture macroeconomic trends over stock-specific fundamentals. That focus could provide an opportunity for investors willing to look past the expected trajectory of interest rates as banks increase the capital they return to shareholders.
Higher rates tend to boost lenders’ profitability, so financial stocks often beat the S&P 500 when government bond yields rise and lag when they fall. This year the degree to which that is happening is unprecedented. This is evident in the six-month correlation between the performance of financial stocks versus the S&P 500 and the yield on benchmark 10-year Treasury notes.
An inconvenient truth, and I think we've found the problem: the major of NYC says the "subway system" needs more money. Helloooo....
.... the MTA has cobbled together an $800 million plan to fix the subways — and wants half of that from Gothamites.
No matter that the MTA’s own budget has increased by $3.4 billion since the governor has been in a charge, from $12.3 billion to $15.7 billion.
No matter, either, that much of that increase is due to the governor’s union deals. Payroll at NYC Transit, which runs the subways, has grown from $3.5 billion annually to $4.4 billion — a 26 percent increase, although inflation is up only 11 percent.
Making America Great Again -- 2016 Automobile Sales Hit Record
I don't remember if I posted this or not. I would assume I had but for some reason it escapes me. I was reminded of it when re-reading the "Daily Note" from the second thirty days after the 2016 presidential election. At that linked post, this item:
January 4, 2017, T+55: Trump rally extends to auto sales. December auto sales much stronger than expected; could push annual sales to new record.So, I was curious. Did the US set a new record in 2016 for automobile sales. Yes. From The Los Angeles Times, the headline: 2016 U.S. auto sales set a new record high, led by SUVs --
US consumers bought a record number of new cars and trucks in 2016. A repeat performance in 2017 could be a tall order.
Low gas prices, rising employment and low interest rates kept buyers coming to car dealerships last year. There was also the allure of new technology — such as backup cameras, automatic emergency braking and Apple CarPlay — and new vehicles such as the Chrysler Pacifica minivan, the Honda Civic and the all-electric Chevrolet Bolt.
U.S. vehicle sales totaled 17.55 million, beating 2015's record of 17.47 million. It was the seventh consecutive year of year-over-year sales gains, an unprecedented string.
That string could be in jeopardy, however. The National Automobile Dealers Assn. expects U.S. sales to drop to 17.1 million vehicles in 2017 as interest rates and vehicle prices rise. Large numbers of cars coming off leases will hit the used-car market next year, putting pressure on new-car sales. And more buyers are opting for longer loans, so they won't be returning to dealerships anytime soon.
The Daily Note
The Trump Presidency (301 - 400)
The Third 100 Days
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) -- this page
The Trump Presidency (201 - 300)
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 (101 - 200)
The First 100 Days
The Third 30 days + 10
The Second 30 Days (Days 231 - 260)
The First 30 Days (Days 201 - 230) -- this page
The Trump Presidency (201 - 300)
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 (101 - 200)
The First 100 Days
The Third 30 days + 10
September 7, 2017, T+230: RINOs saying they are upset with President Trump cutting deals with the Dems is laughable. To the best of my knowledge, Congress (in the hands of the GOP) has done little to move Trump's agenda; they are still way behind in confirming nominations. I have no idea what GOP will campaign on in 2018.
September 6, 2017, T+229: cognitive dissonance. Americans filled seasonal jobs at higher pay due to Trump's visa squeeze upsets Politico. Can't make this stuff up. Politico showing their true colors: anti-American.
September 5, 2017, T+228: Thomas Friedman on CNBC this morning highly supportive of Trump's policy on North Korea and highly supportive of Trump's "wall." Iraq is a completely different country: US and Iraq on the same page; huge success. On Afghanistan, he was very clear: the US can lose late, lose early; lose big, lose small. Five-thousand more troops won't make any difference.
September 4, 2017, T+227: Hillary's book is out:
September 3, 2017, T+226: what a bunch of hypocrites. Dems and RINOs criticize Trump for ending DACA (the "Dreamers' Act"). In fact, he is postponing his executive order for 6 months which will give Congress more than enough time to pass a law to put DACA into effect. Congress simply has to pass a veto-proof law protecting "Dreamers." This is not rocket science. But Rachel Maddow will have trouble understanding the nuances of Trump's thinking.
September 2, 2017, T+225: President Trump makes a second visit in three days to Texas flood.
September 1, 2017, T+224: Trump is simply awesome. Compare Katrina, Sandy, Harvey. Bush did a flyover; Obama made a speech then back to campaigning. Trump: two visits in three days.
August 31, 2017, T+223: chance of "tax reform" this year? Less than 10%. Not gonna happen. Chance of "tax cut" this year? Not gonna happen.
August 30, 2017, T+222: Holy cow! Making American great. Jobs report today. ADP employment report to be reported later. Forecast: US added 185,000 jobs in August. Actual: holy cow! 237,000 jobs added in August. Steve Liesman, CNBC seems awestruck, blown away. Doesn't understand where jobs are coming from. Talking head: "can't last forever." In addition, the July number was revised higher, up 23,000 to 201,000. And now they are saying the initial August figures tend to be on the light side and are generally revised upward. Wow. And in a very long CNBC segment, Trump administration not mentioned. In fact, Steve Liesman specifically said he did not want to talk politics.
August 29, 2017, T+221: raising the debt limit just got easier. On another note, it looks like Denmark is giving up on the Paris (Climate) Accord also; will scrap the 200% tax on automobiles for something more reasonable, like 100%. LOL.
August 28, 2017, T+220: 24/7 - Houston / Hurricane Harvey.
August 27, 2017, T+219: so, how will this play out in 2020 when Trump's "Hillary" opponent campaigns on need to take down statues and memorials of George Washington, Thomas Jefferson, and, Christopher Columbus?
August 26, 2017, T+218: best Trump can do with regard to the huge Texas hurricane (Hurricane Harvey) -- is break even. He will get no credit if emergency response goes well; he will get all the blame if emergency response goes badly.
August 25, 2017, T+217: Janet Yellen gives what-sounds-like-her swan song speech at global economists meeting in Jackson Hole, WY. She criticized Trump for his policies; her term expires in February, 2018; Trump will likely pick either Yellen (re-appoint) or Gary Cohn for Fed Reserve chair.
August 24, 2017, T+216: relatively quiet; still talking about Gary Cohn's interview.
August 23, 2017, T+215: Gary Cohn has "balanced" interview with Financial Times; mainstream press blows it out of proportion (as usual); sounds like he wants to be Fed Reserve chairperson.
August 22, 2017, T+214: Everyone survived the total eclipse yesterday.
August 21, 2017, T
August 20, 2017, T+212: Trump and family doing the right thing. Skipping the tuxedo-fat cats ball honoring the Hollywood elite (Kennedy Center Honors). The Trumps will not attend this year's Kennedy Center honors. It will be interesting to see how many women show up in high heels; Melania will be home in comfortable shoes.
August 19, 2017, T+211: With Steve Bannon out of the White House, it is likely Gary Cohn will stick with Trump. If Cohn does not leave the White House, he will be appointed Fed Chairman. The big question: will the Senate confirm Cohn? This is not a slam dunk.
August 18, 2017, T+210: someone suggested that with all the leaks in Washington, and the fact that this has gone on for months without a leak suggesting anything has been found, the likelihood that Robert Mueller has found a/the smoking gun is zilch. Nada. Nil.
August 17, 2017, T+209: political fallout of disbanding the "economic" and "strategy" councils by Trump: zilch. Nada. Nil. Now CNBC suggesting that disbanding these councils was the right thing to do. LOL
August 16, 2017, T+208: Trump follows Obama's example of moral equivalence -- WSJ. Link here. Time to rename the Jefferson Memorial and the Washington Monument, "Monument #1" and "Monument #2" immediately, while putting together plans to tear them down. Meanwhile, Mount Rushmore National Park needs to be closed immediately. Cities and states with names like Washington, DC. and Jefferson City, MO; and Washington state need to change their names. Perhaps "City #1" and "City #2" until city leaders can come up with acceptable names. Washington State, of course, would become "State #42." When I look at Trump's (former) manufacturing council, it was composed of all white males, generally in their 50s and early 60s; one woman. No African-American? The strategy forum might have had two African-American CEOs. How can this be in this day and age? All white males heading American corporations. It's also noteworthy that 90% of anchors on CNBC are white males. The only non-white males are "info-babes" as one known radio personality calls them.
August 15, 2017, T+207: talking head on CNBC -- Charlottesville? That was not free speech; that cross the line, that was not free speech, that was hate speech. Advocating killing police? Hey, it's a crazy world.
August 14, 2017, T+206: I would take the criticism of Trump regarding his response to weekend violence in North Carolina a bit more seriously if that same level of criticism had been voiced following the dozens of police killed directly related to Black Lives Matter. Maybe.
August 13, 2017, T+205: is right-wing Bannon on his way out?
August 12, 2017, T+204: the Democratic National Committee's position on Trump -- NOKO Kim Jong-Un more responsible than President Trump. That should go over well among patriots.
August 11, 2017, T+203: North Korea says it will launch four ICBMs to land 30 miles off-shore America's largest military base in Asia, on Guam. Russia tells the US to chill. Russia goes "ballistic" when US simply announces talks with Russia's neighbors regarding missile defense. Whatever.
August 10, 2017, T+202: VP Pence's "real" power move -- replacing his own chief of staff with talented political operative, Nick Ayers. Pence could not do that until Reince Priebus was out of the White House. Priebus would not allow Ayers to assume a White House staff job -- because, although they were "friends," Ayers was not a member of the RNC. Wow, sounds like the old Soviet Union politburo.
August 9, 2017, T+201: see first comment -- in the key 2018 battlegrounds, Trump's support is as high as ever. Americans opt out of ObamaCare: 6.5 million Americans pay "fine" rather than sign up for ObamaCare. I think it can be safely said that the worst tax plan ever foisted on the American public was ObamaCare, bar none.
http://www.reuters.com/article/us-mazda-strategy-idUSKBN1AO0E7?il=0.