Thursday, September 28, 2017

Who Wudda Guessed? I Thought Everyone Was Driving EVs -- September 28, 2017

US petroleum demand highest for any August since 2007 -- that would be, like ten years ago. 

From Oil&Gas Journal, data points:
  • August, 2017: total US petroleum deliveries up 1.3% from a year ago
  • August, 2017: total petroleum demand averaged 20.5 million b/d
  • August, 2017: highest August deliveries in 10 years
  • compared with July, 2017: decreased 0.6%, month-over-month
  • year-to-date: US deliveries moved up 1.3% compared with same period last year
  • gasoline demand down 1.5% from August, 2016, at 9.5 million b/d but still the fourth-highest deliveries to date
Much more at the link.

A Good Neighbor -- Great Story -- September 28, 2017

This speaks volumes about Dakota Access LLC and the small-mindedness of some politicians. First the note that was posted earlier:
DAPL-gate: comes to an end. At The Bismarck Tribune, data points:
  • no fine
  • DAPL does not admit guilt
  • DAPL will plant three trees for every alleged tree removed (industry standard is to plant two trees for every alleged tree)
  • DAPL developer to provide manual on how to communicate better
Now, this story:
The Governor's office announced they will accept a $15 million donation from Dakota Access LLC. 
The money will go to the North Dakota Department of Emergency Services (DES) to help deal with debt brought on as a result of the Dakota Access Pipeline protests. 
The donation was wired this afternoon to the state-owned Bank of North Dakota and it will be used to pay off loans taken out by DES.
According to a press release sent by the Governor's officer, a bill passed by the state legislature in 2017 included language saying the Governor and DES could "accept reimbursement in the form of land, cash, or other assets from from nonstate sources for state cost incurred relating to unlawful activity associated with the construction” of the Dakota Access Pipeline. 
Another bill passed in 2017, HB 1024, required that any reimbursements received must be used to repay the Bank of North Dakota loans. 
Currently the state has borrowed $43 million from the Bank of North Dakota. $40 million for DES and $3 million for Morton County. 
During a budget interim committee meeting at the State Capitol Thursday, they voted to accept a $10 million grant from the U.S. Department of Justice to reimburse the state for law enforcement support costs. 
More at the link.

Four DUCs Completed; Five New Permits -- September 28, 2017

Active rigs:

Active Rigs583270190184

Five new permits:
  • Operators: Hess (3): Petro-Hunt (2)
  • Fields: Antelope (McKenzie); Charlson (McKenzie)
  • Comments: a lot of action in the Charlson recently
Two permits renewed:
  • EOG: two Clearwater permits in Mountrail County
Four producing wells (DUCs) reported as completed:
  • 26922, 2,173, Hess, AN-Gudbranson-153-94-2215H-5, Elm Tree, t9/17; cum -- ; (21312, 19538)
  • 26923, 2,145, Hess, AN-Gudbranson-153-94-2215-6, Elm Tree, t9/17; cum --; (21312, 19538)
  • 26924, 2,121, Hess, AN-Gudbranson-153-94-2215H-7, Elm Tree, t9/17; cum --; (21312, 19538)
  • 33046, 433, Veeder 4E MBH-ULW, Blue Butte, t7/17; cum --; (16357)

BBC Remains Conflicted -- The Political Page, Part 2 -- T+251 -- September 28, 2017; China Blinks

The personal attacks on President Trump continue but he's the first president who is finally getting around to doing things that should have been done a long time ago. And he's getting results.

Past presidents were co-conspirators in North Korea's move to ICBM-nuclear weapons. President Trump still has a number of arrows in his quiver before he even has to consider the military option, and already we see significant results.

The BBC is reporting:
China to shut down North Korean companies.

China has told North Korean companies operating in its territory to close down as it implements United Nations sanctions against the reclusive state.

The companies will be shut by early January. Joint Chinese and North Korean ventures will also be forced to close.

China, Pyongyang's only major ally, has already banned textile trade and limited oil exports.

The move is part of an international response to North Korea's sixth and most powerful nuclear test.
We might see little rocket man launch a flurry of ICBMs tomorrow and he may test an H-bomb over the Pacific Ocean this weekend, but the tea leaves certainly suggest little rocket man finds himself in a box. Reagan, Bush I, Clinton, Bush II, Obama -- never did a thing to stop North Korea. Amazing what a little tough talk can do.

In that short BBC article linked above, the writer did not have enough space to put the word "Trump" into the story, simply calling it an "international response."

Obviously the BBC is very conflicted over all of this. It doesn't fit the narrative.

If North Korea launches a nuclear-tipped ICBM targeting Guam, would one rather have Dirty Harry in charge, or Barney Fife?

NFL Blinks

The tea leaves suggest that the NFL is going to stand during the National Anthem. The controversy will continue but there's no question the NFL knows their fans really are patriots.

Later: I assume the game is over. I don't recall who is playing; I don't even care who won. I'm most interested in who stood / who didn't. That's what the NFL is doing to its fans: more interested in the pre-game show and no longer caring about the game itself.

Sanctuary Cities

And this is why I always thought sanctuary cities made so much sense, like shooting fish in a barrel, as they say.
U.S. Immigration and Customs Enforcement arrested 101 people for immigration violations in Los Angeles as part of a broader operation targeting sanctuary cities, netting nearly 500 arrests across the U.S.

According to ICE, "Operation Safe City" focused on cities and regions where "ICE deportation officers are denied access to jails and prisons to interview suspected immigration violators or jurisdictions where ICE detainers are not honored."

A total of 498 people from 42 counties and multiple cities were arrested as part of the operation, an ICE press release stated. The operation came to a conclusion on Wednesday.

Of these individuals, 101 were from Los Angles; 28 were from Baltimore; 30 were from Cook County, Illinois; 63 were from Denver; 45 were from New York; 107 were from Philadelphia; 33 were from Portland, Oregon; 27 were from Santa Clara County, California; 14 were from Washington, D.C.; and 50 were from Massachusetts.
Look how much money the federal government saves not having to plan sweeps across the country. They can simply target sanctuary cities. Reminds me of the answer Willie Sutton gave when he was asked why he robbed banks -- "because that's where the money is."

The Energy And Market Page, Part 2 -- September 28, 2017 -- The Trump Rally Broadens; ObamaCare, Bye, Bye? Nope, Buy, Buy; Health Insurer Pulls Out Of North Dakota -- Cites Uncertainty Of Government Bailout

Hitting new records:
  • Russell 2000 (small cap) -- this is huge -- up until today, this was the one major indice that had not set new records
  • S&P 500 -- barely, but it closed at a new high today
  • Dow Transportations -- also set a new high; Dow Theory comes to mind
  • Dow 30: not a new high, but a good day
  • NASDAQ: not a new high, but a good day
  • "Yields" are up.
WTI: solid move down today -- helps refiners.

Bye, Bye? Nope, Buy, Buy

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

I've said this repeatedly, so instead of writing de novo, I will simply cut and paste from an earlier post:
Longest running reality show/soap opera continues. These summer re-runs are getting a bit boring. No real need to post / link the most recent update. I will simply copy/paste what I wrote September 19, 2017.
Bye-bye? Nope, buy-buy. CNBC contributor had it exactly right today -- whether GOP repeals ObamaCare or whether it doesn't, investing in US health care companies is a no-brainer. Bottom line for the contributor regarding health care investments: buy-buy. Buy if ObamaCare is "repealed" (wink, wink); buy if ObamaCare survives a GOP vote to repeal. I've said the same thing for months.
For investors: thank Paul Rand and John McCain for scuttling ObamaCare Lite. Rand and McCain insure that the big insurance companies will be the big winners, and for investors, that's good news.
So, what's new?

Senator Schumer says the Senate is very, very close to bailing out the major, publicly held insurance companies. The story is here.  ObamaCare, bye, bye? Nope, buy, buy.

By the way, from CNBC:
  • regional insurer Medica is pulling out of the North Dakota's health exchange for 2018 at the last minute
  • state regulators denied the health insurer's request for a rate increase to account for uncertainty over funding for Obamacare cost-reduction subsidies
  • Wednesday was the deadline for insurers to commit to offering plans on the exchanges for 2018
  • senators Lamar Alexander and Patty Murray say they will try to revive their bipartisan effort to approve funding for CSRs and stabilize the health insurance exchanges for the next two years

The Political Page, T+251 --- September 28, 2017 -- DAPL Protestor, Tribal Chief Voted Out Of Office

Good riddance!

Voted out of office, and not even close.

From sayantyingblog:
Standing Rock chairman who helped instigate #NoDAPL protests gets thumped in re-election campaign.
The often violent and often unlawful #NoDAPL protests against the Dakota Access Pipeline made David Archambault, chairman of the Standing Rock Sioux Tribe, something of a national and even international celebrity. He appeared on national television shows. He’s been on something of a lecture tour of college campuses and other venues. He even visited a United Nations event in Geneva.
But last night his fellow tribal members voted him out of office, and it wasn’t even close.
His opponent/the new chairman: “We kind of neglected our own” by taking the lead on the pipeline protest, he said. “We did what we had to do, but we didn’t realize we were going to hurt our economy that much.”
"Hurt our economy so much"? ---- Only way to interpret that is casino gambling revenues are way down.

I used to send contributions to a native American charity in South Dakota on a quarterly basis but with the DAPL protests, I sent a note to that charity informing them that my contributions would cease. They got the message; I no longer receive "solicitations" from them. A simple note from them saying they did not support the DAPL protests and I gladly would have continued the contributions. 

So, was Archambault voted out of office because he lost the battle with DAPL or because his protest was wrong for the tribe in the first place? For me, it does not matter. Good riddance!

A Marathon Oil Re-Frack -- Larry Repp #17-49 -- September 28, 2017

Again, another cool well:
  • 17049, 513, MRO, Larry Repp 31-16H, Lake Ilo, t10/08; cum 189K 7/17;
Note: this well is in central, far east Dunn County, not a particularly good area; a little too far east.

 Recent Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Compare production after the re-frac (above in bold/red); with the initial production after first frack:

Another Cool Example Of The "Bakken Phenomenon" -- Newfield Jorgenson #17045 -- September 28, 2017

Again, this is so cool.

The well:
  • 17045, 786, Newfield, Jorgenson 1-10H, Lost Bridge, t8/08; cum 183K 7/17; note production jump in 7/16;
Recent production (note, 4,000 bbls over 16 days extrapolates to 8,000 bbls over one month):
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The graphic:

Neighboring wells:
  • 31635, SI/NC, Newfield, Jorgenson Federal 148-96-10-15-19H, t/--; cum 91K after less than three months; see below;
  • 31136, SI/NC, Newfield, Jorgenson Federal 148-96-10-15-10H, t/--; cum 46K after less than two months; see below;
  • 31137, SI/NC, Newfield, Jorgenson Federal 148-96-10-15-1H, t/--; cum 75K after two months; see below;
 31137, SI/NC, Newfield, Jorgenson Federal 148-96-10-15-1H:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

31136, SI/NC, Newfield, Jorgenson Federal 148-96-10-15-1H:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

31635, SI/NC, Newfield, Jorgenson Federal 148-96-10-15-19H:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The Energy And Market Page, T+251 -- September 28, 2017, T+251

Market: in early trading, market is flat. On the NYSE there are 46 issues reporting 52-week highs, including BRK-A; Navistar International; Norfolk Southern; Oasis Midstream Partners; Phillips 66; Royal Dutch Shell; UNP; Valero Energy.

Equifax: to allow lock/unlock feature free of charge.

GDP: 2Q17 -- revised upward to 3.1%. Link here

Inflation: the whole argument that the employment / unemployment rate is linked to the inflation rate turns out to be a wrong model. What was missing; why was the model wrong? Technology. Period. Dot.

Inflation: argument on CNBC this morning -- what drives inflation? I thought the science was settled.

OPEC: does the Saudi Aramco IPO affect the future of OPEC? Some thing so

How Renewables Are Displacing Natural Gas from the West Coast -- RBN Energy -- September 28, 2017


September 29, 2017: yesterday, below, I posted a snarky comment about the credibility of GOP congressional leaders. Today in The Hill: distrust of US Senate grows, which led with a picture of Susan Collins and John McCain. No more needs to be said, except, the president's tax plan has no chance of passing. The good news: it's not "tax reform" and it's not needed. The bad news: if GOP can't pass this bill, the GOP is pretty much done for the rest of this term.

Original Post

Active rigs:

Active Rigs583270190184

RBN Energy: how renewables are displacing natural gas from the West Coast -- part 2 of a continuing series.

Tesla: has burned through $10 billion in cash over its public lifetime and the ramp up in production has just begun.

Hugh Hefner dead at 91 years of age.

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

Jobs: link here --
  • new claims, prior: 259K
  • forecast for new claims: 275K -- an increase of 17K after a huge drop last week (a drop of 23K last week); range: 260K to 300K
  • actual: 272 -- 3,000 less than what consensus was; so up 12,000 from previous week;
  • actual, 4-week average, rose 9,000 to 277,750, the highest level since February, 2016 (think hurricanes) 
  • when the Fed (aka Janet Yellen) raises rates in December, folks in Texas, Florida, and Puerto Rico will still be struggling with after-effects of three huge hurricanes
Tax reform: my 2-cents worth. Why the Trump bill will not pass --
  • political leadership is not there (Trump, McConnell, Ryan)
    • after the healthcare debacle, is anyone even paying attention to McConnell or Ryan any more? I know I switch stations when Ryan shows up for an interview (or at least hit the "mute" button -- all hat, no cattle)
  • "never Trumpers" and Dems will never pass "tax reform" initiated by President Trump -- that's simply a fact; some GOP senators have already said clearly they will not vote for this
  • 42% of Americans do not want to see tax cuts (previously posted)
  • any middle income investor paying attention knows that raising the marginal rate from 10% to 12% means taxes on investment gains will increase (as I understand it; could be wrong) -- that may be offset by doubling the standard deduction
  • there is no urgency to get this done
    • equity markets at all-time highs
    • US economy plugging along at an "okay" rate; no headlines that US in dire straits
    • the big pole in the tent dragging down US economy: cost of healthcare and that issue has not only NOT been addressed, but is actually getting worse
    • cost of housing might be the second issue but trails healthcare costs as an issue for the middle class
    • college education may be the third issue but that affects a segment of the population that is hard to define and seems to be a niche issue
    • corporations (where most of the impetus lies for tax reform) have learned to deal with the tax code and seem to be doing just fine, thank you, regardless of what some say
  • no urgency, and we've run out of time this year anyway
  • perception that, with some exceptions, tax reform not needed; there is a perception that under current political environment, greater chance of "shenanigans" than "real" tax reform