Friday, December 8, 2017

XTO WIth Six More Siverston Permits -- December 8, 2017

Active rigs:

Active Rigs534065191193

Six new permits:
  • Operator: XTO
  • Field: Siverston
  • Comments:
One permit renewed:
  • Resource Energy: one Mathilda permit in Divide County.
No permits cancelled.

No producing wells (DUCs) reported as completed.

And that was it. Have a great weekend.

China Sets Second-Highest Record For Crude Oil Imports; US Hits Record For Amount Of Oil Exported To China -- December 8, 2017

It might be my imagination but it certainly seems the fossil fuel energy story has moved faster in the past six months than expected.

Now we get this story -- big "thank you" to Don for alerting me to the story.

From CNBC:
  • China crude oil imports for November: second-highest on record
  • China crude oil imports from the US in November: highest amount on record
  • driving the record for US crude exports to China: WTI discount to Brent -- currently about $6/bbl
Rule of thumb: a $7 spread (advantage to WTI) almost guarantees WTI will outsell Brent to Asia, all else being equal. If the spread is less, depends on a number of factors how much US crude oil China will import. The greater the spread over $7 the more likely that data point will be the single data point necessary for China to buy US oil.

"Mr Berman, Meet Mr CVX. Mr CVX, Meet Mr Berman. -- December 8, 2017

From August 11, 2017:
This is Art Berman suggesting that data in December, 2016, suggested that we were seeing the "beginning of the end" for the Bakken. The article begins:
It’s the beginning of the end for the Bakken Shale play.

The decline in Bakken oil production that started in January 2015 is probably not reversible. New well performance has deteriorated, gas-oil ratios have increased and water cuts are rising. Much of the reservoir energy from gas expansion is depleted and decline rates should accelerate. More drilling may increase daily output for awhile but won’t resolve the underlying problem of poorer well performance and declining per-well reserves.

December 2016 production fell 92,000 barrels per day (b/d)–a whopping 9% single-month drop. Over the past two years, output has fallen 285,000 b/d (23%). This was despite an increase in the number of producing wells that reached an all-time high of 13,520 in November. That number fell by 183 wells in December.

Source: NDIC.

From November 30, 2017:
"Shale is not a revolution -- it's a retirement party. Shale plays were not some great new idea. They became important only as more attractive plays were exhausted." -- Art Berman.
Re-posting: where will ChevronTexaco deploy its CAPEX in 2018?
In particular, Chevron is concentrating on increasing its investment in shale as it strives to boost its U.S. shale production next year. For 2018, the company intends to spend $4.3 billion in shale – up 70% year over year – the lion's share (or $3.3 billion) going to the lucrative Permian Basin of Texas and New Mexico alone.
The remaining $1 billion has been set aside for other shale investments.

Goodnight Moon, Shivaree

The Political Page? T+321 -- For The Archives -- December 8, 2017

Mideast. ISIS fell faster than even the US military imagined once President Trump came into office and turned the "war" over to the military. Another story we won't see in mainstream media.

Jerusalem. Meanwhile, terrorist organizations across the Mideast tell us that President Trump's decision to recognize undivided Jerusalem as the capital of Israel will derail the Mideast peace initiative. LOL. How long has there been a peace initiative going on in the Mideast? How many presidents have simply kicked this can down the road? Maybe bold action by this president will convince the terrorist organizations they may want to negotiate or risk seeing more unilateral action. It should be noted that President Trump did not do this overnight. He signed the "usual waiver" the first time he was presented with the decision to make; he took more than a year to finally make the decision. That's not a knee-jerk reaction.

Guns. What's wrong with this picture? Under President Obama handgun sales surged. Under President Trump shares of Smith and Wesson have "plunged after massive gun sales decline." See American Outdoors Brand (AOBC).

Bitcoin: someone asked me the other day, "my thoughts on Bitcoin." I said I had no thoughts on Bitcoin. That was true then. But then Bitcoin raced from a few thousand dollars to $18,000 seemingly overnight, I took notice. There's really only one way for that to happen (with any commodity): someone is trying to "corner" the Bitcoin market. Someone is willing to pay whatever price is required to buy more Bitcoin. (This reminds me of the Hunt brothers and silver some decades ago.) Now, who in the world would have that kind of cash to corner the Bitcoin market, and who would also have a motive to do so? Maybe someone who can afford to buy a painting for half-a-billion dollars.

Prince Salman: buys a $450 million painting which may or may not be a Da Vinci to give as a gift to the U.A.E. (Abu Dhabi's new Louvre museum).

This Stuff Is So Easy To Miss -- Thank Goodness For Twitter -- December 8, 2017

From Argue Media today: the United States under Trump suspends federal flaring restrictions until 2019. Wow. So many story lines, but right now, the data points:
  • the rule would have required oil and gas producers on federal land to limit flaring and methane leaks starting a month from now (specifically, January 17, 2018)
  • the US BLM said it was delaying compliance -- stating the rule would create a particular burden to marginal wells and threaten their economic viability
This following is true. We saw this phenomenon during the Bakken boom:
US producers sometimes flare natural gas so they can maximize production of more valuable oil, particularly in booming shale areas where gathering pipelines either do not exist or at full capacity.
Producers also sometimes lose natural gas directly into the atmosphere if they lack leak detection programs or install high-emission equipment.
It seems that some states, like North Dakota, have a pretty good handle on this.

The BLM was not only concerned about the economic viability of marginal wells, but like so many Obama-era rules, it was thought by the BLM that this rule would not "stand up to judicial review."

After that, a lot of global warming nonsense, as if one can monetize CO2 emissions affect on global warming. Especially since there is no correlation.

The Market Page, T+321 -- December 8, 2017

Road to New England: spot price for electricity in New England is hitting $60 (dynamic link).

Whole Foods! Fast Money! Amazon is rallying on news the “Amazon Effect” is alive and well. United Natural Food, the food distributor whose largest customer is Amazon’s Whole Foods, said it is “continuing to see record sales and shipping unit volume” and incurred $25 million in additional out-of-stock costs as it races to keep up with demand.

ChevronTexaco: where will CVX deploy its CAPEX?
Of the American multinational's total 2018 capital expenditure, a little over 86% is planned to be incurred in its upstream operations.
In particular, Chevron is concentrating on increasing its investment in shale as it strives to boost its U.S. shale production next year. For 2018, the company intends to spend $4.3 billion in shale – up 70% year over year – the lion's share (or $3.3 billion) going to the lucrative Permian Basin of Texas and New Mexico alone.
The remaining $1 billion has been set aside for other shale investments.
Overall, the oil giant plans to shell out $6.6 billion for its domestic upstream operations. An additional $9.2 billion will target international upstream projects.
Over the last few years, majority of the capital expenditure in its 'Upstream' segment were dedicated to Australian LNG projects – Gorgon and Wheatstone – and the Tengiz field in Kazakhstan. But having completed both Gorgon and Wheatstone, Tengiz remains the only large capital project Chevron is committed to, for which the company has allocated $3.7 billion out of a total $5.5 billion for projects already underway. Meanwhile, Chevron has earmarked approximately $8.7 billion to sustain currently producing upstream assets.  
Disclaimer: this is not an investment site. Do not make any investment, financial, job, relationship, or travel decisions based on what you read here or what you think you may have read here.

The "Death Cross"

A couple of days ago I mentioned that I finally understood (at least to some extent) what is meant when guys like Rick Santelli talk about the Fed rate curve flattening or inverting. That's not as important as knowing who the "real" William Shakespeare was, but it's nice, after forty years of watching the market, to finally know what this means.

Likewise, now I finally understand (at least to some extent) what technicians mean when they talk about the "Death Cross."

Today, a contributor is using TSLA shares to demonstrate a "death cross." This is when the 50-day moving average crosses below the 200-day moving average, and TSLA is coming darn near close to that phenomenon.

November Jobs Report -- Making America Great Again -- One Has To Ask: What Was Obama Doing For Eight Years? -- December 8, 2017

Not being widely reported: unemployment rate among Hispanics is 4.7% -- lowest on record in the US, via Twitter.

Jobs report for November:
  • forecast: nonfarm payrolls grow by 200,000
  • actual: nonfarm payrolls grow by 280,000
  • unemployment rate holds steady at 4.1%
  • wage growth disappoints: forecast for 2.7% growth; actual, 2.5%
  • U6 (now being reported by the mainstream media; a data point not reported during the Obama administration: 8% (up 0.1%)
  • not in the labor force: edged higher by 35,000 to 95.4 million
Or more bluntly: jobs report crushes expectations!
  • the unemployment rate held at a 17-year low
  • manufacturing sector added 31,000 jobs; manufacturing unemployment rate fell to a record-low 2.6%
2.2 million new jobs since election: Gateway Pundit
  • President Trump's economy is simply "on fire"
  • after the same period under President Obama, 4.8 million jobs were lost, and unemployment skyrocketed to 9.9%
  • according to the Bureau of Labor Statistics: under President Trump more Americans are in the work force than ever before
  • over 160 million Americans are working for the first time in US history
  • ADP reported 40,000 new manufacturing jobs in November: this was the highest monthly amount of new manufacturing jobs in the history of their report
With regard to the "magic numbers":
For "new jobs," 125,000 will be the new "base." The final number under the Obama administration, was 156,000. Even though 156,000 was described as "tepid" by The New York Times, it was associated with economic growth.
Now, June 2, 2017 (the Trump administration), Steve Liesman (and others) suggest that 121,000 is a fine number
Again, one needs to ask: what was Obama doing for eight years.

We would not have seen these numbers under a Hillary administration.

The worst the mainstream media could find in this report? U6 ticked up 0.1%, a date point that was not reported by the mainstream media during the Obama administration.

Trump, during the campaign, said he would do this.

Former President Obama is being schooled.

EOG Reports Two Huge Wells -- 220K Bbls Crude Oil In Less Than Five Months -- December 8, 2017


Later, 10:45 a.m. Central Time: see first comments regarding produced water. Here's data from FracFocus.
  • 32796, API: 33-053-07663, fracked 4/8/17 - 5/13/17: 8,098,437 gallons of water; by weight, water, 85%; proppant, 15%; produced water to date: 175,497 bbls or 7.4 million gallons of produced water; 
  • 32795, API: 33-053-07662, fracked 4/18/17 - 5/15/17: 10,077,667 gallons of water; by weight, water, 85%; proppant 15%; produced water to date: 149,589 bbls or 6.3 million gallons of produced water 
Wow, what a great memory. In my reply to the reader (see comments below) I mentioned that it was my "recollection" that 10 million gallons of water is a typical amount of water I see used in the Bakken for fracking a well.

Very, very interesting. I had not looked at FracFocus data for a well for quite some time, several months at least. If I find the time, I might look at similar data for some of the earlier EOG Clarks Creek wells.

Original  Post 

Friday, December 8, 2017: 36 for the month; 146 for the quarter
  • 33414, SI/NC, MRO, Wilbur USA 31-2TFH, Antelope, no production data,
  • 33413, SI/NC, MRO, Chauncey USA 31-2H, Antelope, no production data,
  • 32796, 2,518, EOG, Clarks Creek 73-0719H, Clarks Creek, 4 sections, GL, 55 stages; 13.2 million lbs, t6/17; cum 220K 10/17; see below --; #20886, #20888; #20891;
  • 32795, 2,204, EOG, Clarks Creek 110-0719H, Clarks Creek, 4 sections, GL, 60 stages; 17.5 million lbs, t6/17; cum 204K 10/17; see below --

Look at these EOG Clarks Creek wells:
  • 32796, 2,518, EOG, Clarks Creek 73-0719H, Clarks Creek, 4 sections, GL, 55 stages; 13.2 million lbs, t6/17; cum 220K 10/17; with natural gas = 290,044 boe in less than five months
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 32795, 2,204, EOG, Clarks Creek 110-0719H, Clarks Creek, TD = 21,297 feet; 4 sections, GL, 60 stages; 17.5 million lbs t6/17; cum 204K 10/17; with natural gas = 266978 boe in less than five months
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Trucking Sector's Shift To CNG And LNG -- RBN Energy -- December 8, 2017

Making America great again: US government report says stocks, home values helped total household net worth rise. Total household net worth rose to almost $100 trillion in 3Q17, larger gain than prior quarter. Tax bill could lead to greater gains.

Active rigs:

Active Rigs534065191193

RBN Energy: can the trucking sector's shift to CNG and LNG survive low diesel prices?

From RBN Energy ....

... but CNG locater says there are CNG fueling locations in North Dakota: Williston, Dickinson, Minot, and Bismarck.

Don writes: with regard to the CNG fueling locations in North Dakota. These sites are all owned/operated by MDU. If one has an MDU account and a credit care you can use these fueling stations. That's probably true in other states, also. "So, available, but not really."

ICYMI: Basin Electric Power Cooperative recently started commercial operation of Phase III of its Pioneer Generation Station northwest of Williston. Units 1, 2, and 3 started commercial operation in 2014. Those three have a total generation capacity of 135 MW.  Phase III will feature first-of-its kind engines for Basin Electric: 12 natural gas-based reciprocating engines, each a generating capacity of 93 MW. Thus, a peaking generation station with total capacity of 247 MW which can provide fast-acting reactive power which will help stabilize the electric grid in the area, apparently necessary to offset the destabilizing effect of wind farms going up in the area.

Panama Canal: maybe The New York Times was correct about the Panama Canal: what if the Panama Canal does not work as advertised?