Thursday, August 17, 2017

Active Rigs Continue To Slide -- Down To 53 -- August 17, 2017

Active rigs:

Active Rigs533274194183

Seven new permits:
  • Operators: Slawson (4); Kraken Operating (3)
  • Fields: Big Bend (Mountrail); Winner (Williams)
  • Comments: Kraken has permits for a 3-well pad in 22-158-100; Slawson has permits for a 4-well pad in 29-151-92
Ten permits renewed:
  • CLR (6): three Mittlestadt and three Jensen permits, all in Dunn County
  • Whiting (3): three Koala permits in McKenzie County
  • HRC: a Christine Joe permit in Williams County

Market Down 1% -- One Day After US CEOs Say "Good-bye" To Trump -- August 17, 2017

I Never Promised You A Rose Garden, Lynn Anderson
California Gas-Fired Power Plant Files For Bankruptcy

I thought I had posted this story; maybe not.
The La Paloma natural gas plant in California filed for bankruptcy last December because it was not getting enough operating time to cover its costs due to solar and other renewable energy receiving preference.
The plant, which serves as back-up to the state’s renewable generating technologies, was also denied a reliability charge by the state that would have allowed it to continue to operate.
The owners project an annual loss of $39 million without a reliability contract or other support. In its bankruptcy filing, the plant owners listed assets of between $100 million and $500 million and liabilities of $500 million to $1 billion.[i] La Paloma is a 1200-megawatt merchant plant located 110 miles northwest of Los Angeles and is able to serve both the San Francisco and Los Angeles markets.
Trump Scraps Plans For An Infrastructure Council

Link here. Most likely, prospective panel members said, "no."

New Poll -- August 17, 2017

Closing out the poll in which we asked: quick, without looking, what percent of GDP does US spend on defense (2016 data)? Answer: a paltry 3.3% (many sources; here's one). Respondents:
  • 1.3%: 7%
  • 3.3%: 27%
  • 5.3%: 21%
  • 8.3%: 14%
  • 10.35: 31%
Now for a new poll. For background to this story, see this link. Will Warren Buffett prevail? Yes or no. See poll at sidebar at the right.

Not Necessarily Surprising For Anyone Following Shale

From Platts: UK shale geology not likely to support fracking natural gas.

Too bad. Lots of natural gas "they" can't reach with current technology:
An estimate by the British Geological Survey found in 2013 that Central Britain, which includes the prospective Bowland basin, could hold between 822 and 2,281 Tcf (23.3-64.6 Tcm) of gas-in-place, the lower figure representing P90 reserves -- a 90% probability -- and the higher figure P10 reserves -- a 10% probability. Although these figures are huge in comparison with the UK's proved conventional gas reserves, which at end-2016 were just 7.3 Tcf, they do not represent recoverable gas.

Making America Great Again -- August 17, 2017; Laptop Buying

Consumer confidence: almost double that of last year. Link: See first comment.

Confidence in Kids

$15/hr minimum wage will kill summer jobs? From The WSJ today -- youth jobless rate falls to level of 1969.

The unemployment rate among young Americans fell this summer to match the lowest level in nearly a half-century.

Wow, 1969:
  • the year I graduated from high school; that summer, the first of many great summer jobs
  • the best year ever for music, bar none
From another blog:
The top 100 songs of 1969.

There was an 18-month-period, from late 1968 through mid-1970 that clearly had some of the best music ever. 
This was the year of Woodstock.
The Beatles were still going strong, but touring less, and would soon stop completely. 
Led Zeppelin's first two albums, Zeppelin I and Zeppelin II, were released in 1969.
The era of "free love" and the uncertainties of the Vietnam War probably contributed to some of this really incredible music. Speaking of the Vietnam war, I turned 18 in 1969. My lottery draft was July 1, 1970; my lottery number was 103. The highest lottery number called for this group was 125; all men assigned that lottery number or any lower number, and who were classified as available for military service, were called to report for possible induction. I would have been deferred by virtue of being enrolled in college. I was worried that I would be called up before I graduated from college. I was convinced, but wrong, that the war would still be going on when I graduated from college.
Laptop Shopping

Page B1 of today's Wall Street Journal: how to ease the pain of laptop shopping.

Cut to the chase: what's one laptop the writer would be happy with right now? the 13-inch HP Spectre x360 -- starts at $940.
  • no port drama: 
    • it has a standard USB-A for accessories you already own
    • two USB-C ports for charging and future add-ons
  • 2.89 pounds; weighs less than the MacBook Air (2.96 pounds)
Microsoft Surface: survey suggests 25% of Microsoft products were having problems by the of their second year -- much higher than for other brands

MacBook Air?
  • 7-year-old model, but keeps getting updated
  • $1,000
  • great battery life: over 10 hours in writer's test
  • but don't buy it
    • the Air's screen isn't HD-quality
    • writer predicts it will go away once Apple can get its super-slim 12-inch MacBook down to $1,000
Which Mac laptop is worth buying? many reasons to buy a Mac, but ...
  • the problem: Apple's latest line, the ultralight MacBook and MacBook Pros, jacked up prices and put sleek looks ahead of functionality
  • they only come with the smaller USB-C ports
  • Apple charges $25 for a cable to plug in an iPhone

Feds OK $20 Million Grant For Airport; Total Grant Funding Now Stands At $73 Million -- Williston Herald -- August 17, 2017

Link here.

Previous grants came from the FAA; the most recent grant came from US DOT.

Total project: $112 million.

Apparently moving ahead rapidly.

Note to self: send memo to CNBC talking head who noted there has been no new airport built in the US in 23 years; and, seemed more concerned about pot holes in NYC. 

Note to self: send memo to Art Berman, author of "the beginning of the end for the Bakken."

Another great example of public-private partnership. 

The Market And Energy Page, Part 2, T+209 -- August 17, 2017 -- Gasoline Demand: Close But No Cigar!

Close but no cigar (source): gasoline demand came close to beating last year's record demand, but didn't quite do it. It will be interesting to see how gasoline demand is affected by the "great migration" on/about August 21, 2017. They say this will be the greatest one-week migration in the history of the US.

Fracking In Illinois

First well to be fracked in Illinois -- getting close.

Link here. Data points:
  • White County, just north of Enfield
  • Woodrow No. 1H-310408-193: vertically, 5,280 feet (exactly one mile vertically); horizontally: 4,780 feet
  • permit application last June (2016) but put on hold while details worked out
  • if permit issued, it would be the first for Illinois
  • former governor signed legislation in 2013 to allow fracking in Illinois
Also here

Firing In Nebraska

UNP to lay-off 750 employees, mostly in Omaha, NE.

The Market And Energy Page, T+209 -- August 17, 2017

More smoke and mirrors coming out of the Mideast: from ArgusMedia --  "Iraq output drop likely reflects methodology shift."
Iraqi field-level production data appears to show it has deepened crude output cuts, but methodology changes are the more likely explanation. And data from international oil firms show output from the semiautonomous Kurdistan region to be much higher than the federal government's estimate.
Baghdad is facing pressure to improve its compliance with the production deal struck between Opec and several non-Opec countries. Argus estimates Iraqi output has been 4.45mn b/d so far this year, making it just over 50pc compliant, compared with Opec's overall 101pc compliance rate. Iraq agreed to cut output by 210,000 b/d from an October 2016 baseline figure determined by secondary sources, including Argus, to 4.35mn b/d until March next year. Production data from the federal government in Baghdad put output at 4.54mn b/d this year.
Iraq's low compliance led to an appearance before a joint ministerial monitoring committee meeting earlier this month to discuss its future production plans. Saudi Arabia's oil minister Khalid al-Falih made comments after a meeting with his Iraqi counterpart Jabbar al-Luaibi on 8 August that could be interpreted as a public hint that Iraq needs to improve its compliance.
Iraq's production published two days later in Opec's latest Monthly Oil Market Report (MOMR) showed output at 4.4mn b/d in July, down by 150,000 b/d from June. A regional breakdown for July, provided by the oil ministry, shows a decline of 374,000 b/d when compared with the previously-published breakdown for September 2016, before the Opec agreement. The biggest fall comes from state-owned North Oil, (NOC) followed by the Kurdistan region (see table).
An explanation for the large drop from NOC could be a methodology change. The ministry's September figure for NOC included production from Bai Hassan and Avanah Dome, in Kirkuk, even though these fields were taken over by the KRG in 2014 to prevent them falling to Islamist group Isis. Production from the two fields totalled 275,000 b/d in September last year.
Data from the Kurdistan Regional Government (KRG) placed the region's output at just over 560,000 b/d for the same month in 2016, similar to the federal government's estimate but including production from Bai Hassan and Avanah Dome.
Wisconsin refinery: small Calumet Specialty refinery to be bought by Husky Energy for $435 million. 
Husky produces primarily heavy oil from oil sands and conventional operations in western Canada and the deal will help it manage exposure to depressed global crude prices, which are hovering below $50 a barrel on concerns about a persistent supply glut CLc1. 
Husky said it would retain about 180 workers at the refinery, which can process Canadian heavy crude and light and medium barrels from Canada and the Bakken region, and also boosts the company's asphalt production capacity.
Alibaba. Huge beat.

Wal-Mart: slight beat. Market down 2%. $1.08 vs $1.07 forecast. 

The Political Page, T+209 -- August 17, 2017 -- Huge Drop In First Time Unemployment Claims -- Making America Great Again

Disbanding the president's "strategy" and "economic" councils. Catching a bit of CNBC this morning suggests that disbanding the councils may have been the smartest thing Trump ever did. LOL. A lot of mainstream America saw 20 "fat cats" sitting around the table talking to the president about cutting their taxes. Most of the CEOs seemed to have nothing in common with Trump except making money: they seemed to disagree with him on immigration, climate change, healthcare, trade with China, etc. This now leaves Trump listening to his "own" people and not getting advice from social liberals, like Tim Cook, et al. Big winner? Bannon? I don't know, but the question is being raised.

Cheap money. Speaking of Tim Cook -- Apple just set a record borrowing cheap money -- link here.  Data points:
  • joins Tesla and Amazon in borrowing cheap money this week
  • called a "maple bond" deal; its first foray into the Canadian market
  • $1.9 billion (US dollar); C$2.5 billion; 7-year; 2.513%; 80 basis points above Canadian govt's 7-year bond
  • proceeds will be used mainly to fund the company's shareholder return program (dividends and stock buybacks)
Jobs: the jobs data posted yesterday was in error. Weekly jobs data will be posted today. A comment to that post would be lost so I've re-posted that but it will show coming from me: it did not. It came from a reader. Jobs report:
  • last week's number unrevised, at 244,000
  • this week, a huge drop: down 12,000 to 232,000
Deplorables: word on the street -- "if deplorables no longer shop at Wal-Mart, it won't matter." This follows reports that the Wal-Mart CEO is really, really angry with President Trump. Wal-Mart shares down over 2% in pre-market trading and pulling the overall market down. 

WTI Down To $46.60; To Test $45 Again? End Of Driving Season Looms -- August 17, 2107

Active rigs:

Active Rigs543274194183

RBN Energy: are the Capline Pipeline and LOOP about to enter a new era? A must-read.
The stars may finally be aligning for two related crude oil infrastructure projects that, if undertaken, would provide an important new pathway to overseas markets for Bakken, western Canadian and other North American crude. The first would involve reversing the Capline Pipeline, which was built to transport crude north from the U.S. Gulf Coast to Midwest refiners.
The second would make modest physical changes to the Louisiana Offshore Oil Port — better known as LOOP — to allow the crude import facility off the Bayou State coast to load crude onto ships, including Very Large Crude Carriers (VLCCs). Today we look at the new infrastructure and market forces that may finally spur Capline’s reversal and lead imports-focused LOOP to enable exports.