August 16, 2018

The NDIC Director's Cut is scheduled to be released this afternoon, 3:00 p.m. 

Fast and Furious

Hope springs eternal: either "these guys" have the crystal ball all of us want and don't have, or their timing was incredibly off .. the Rigzone staff: oil price rise to drive up drilling globally. The lede begins:

• the rise in oil prices is feeding through into higher spending in the oil and gas sector.
• Say what? Did anyone see the slump in oil prices yesterday? Certainly correction territory. If not correction territory for "price of WTI," it was correction territory for publicly traded companies in the US oil sector
• From the article: globally, rotary rig counts have averaged 183 rigs higher in 2018 to date compared to same period, 2017
• majority of additions: US shale
• rig count has been trending lower in North Dakota
• oil companies make few bids in US offshore lease auction -- previously reported, Reuters

Diamondback's Energen acquisition will create synergies in the Permian: the original story previously posted. This Rigzone story provides a bit of background. From the Rigzone staff. 

• this is exactly what we saw in the Bakken boom at about the same point in the timeline
• "it signals a shift in the US shale industry towards consolidation" -- that should have read, "a shift in the Permian." The Bakken already experienced that shift: six years ago
• the synergies mentioned are pretty petty in the big scheme of things  
• this was not a bolt-on acquisition: new acreage is not adjacent to existing Diamondback acreage
• the biggest synergy? access to capital

The China trade war:

• a reader's reply to my note yesterday; the reply is too long for this blog but too good to be lost, so it has been posted elsewhere; 
• my post from yesterday
• Chinese oil importers shun US crude despite tariff reversal
• US-China trade talks to resume
• China, US to hold next round of trade talks
• Walmart reports best sales growth in a decade. 
• trade war? what trade war?
• Amazon, a monopoly? What monopoly? 
• The Dow just registered its longest stint in correction territory in nearly 60 years -- and few notices
• comment: on CNBC, with regard to the trade wars, there is this constant hand wringing that US companies and US farmers will lose markets and business relationships that have taken decades to build; this works both ways, folks; the Chinese importers dependent on US products will go broke if they refuse to "buy America"; a disruption for six months will not destroy those relationships -- the rolodex full of names and numbers will remain the same; but if the Chinese-central-government-mandated embargo on US goods lasts a year, a lot of those relationships will start to be lost; people will lose their jobs; take their rolodex database with them (and lost forever); both sides have a lot to lose -- it's not just Americans that are worried about these decade-long relationships; the difference, most agree, America is bargaining from a position of strength; the Chinese Achille's heel: keeping millions of young men (and women, it appears) gainfully employed

Nobody noticed:

• Trump revokes security clearance for political hack, CNN spokesperson, and former CIA director
• it should be noted that Brennan was never fired; Comey was; IG issued scathing report on Comey 
• Omarosa who?

Disclaimer: this is not an investment site.

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Back to the Bakken

Wells coming off confidential list today --

• 33291, 1,395, Enerplus, Ft Berthold 150-94-32C-29H, Spotted Horn, a very nice well; t2/18; cum 104K; over 100K in exactly four months; only 40 stages; only 7.99 million lbs of small sand; but it works out to 200,000 lbs/stage -- at the upper end for the Bakken;
• 33135, 1,591, Enerplus, Mandaree 150-94-32C-29H TF, Spotted Horn, a very nice well, another 100K+ well in less than six months; t2/18; cum 108K 6/18; 108K in just over four months; only 41 stages; only 8.2 million lbs sand (all small sand); but it works out to 200,000 lbs/stage -- at the upper end for the Bakken; CLR often uses about 167,000 lbs/stage;

Active rigs: note -- essential where we were one year ago -- 55 - 57 active rigs in North Dakota

$65.13→	8/16/2018	08/16/2017	08/16/2016	08/16/2015	08/16/2014
Active Rigs	57	55	32	74	194

RBN Energy: Trafigura's plan for a crude oil export terminal off the coast of Corpus Christi.

Since mid-July — only a few weeks ago — four proposals have been unveiled to build offshore crude export terminals along the Gulf Coast that would be capable of fully loading Very Large Crude Carriers. That’s an extraordinary burst of interest in new infrastructure development, and a signal that (1) more export growth is on the horizon and (2) VLCCs will play a much bigger role in transporting that crude. A leading contender in the race to construct new offshore terminals is Trafigura, the Swiss-based logistics and physical-trading giant, which in recent years has become a major player in U.S. energy markets. Today, we continue our review of made-for-VLCCs offshore terminals with a look at Trafi’s plan.

Every year, when Nobel Prizes are awarded for physics, chemistry, economics and other arts and sciences, it’s become relatively common for each prize to be shared by two or three very smart people who on their own — and almost at the same time — came up with the very same idea. This phenomena, known as either “multiple discovery” or “simultaneous invention” — appears to have a corollary in the more mundane world of crude oil exports. As we said in our intro, in the space of only three weeks, four companies (Enterprise Products Partners, Oiltanking, Tallgrass Energy and Trafigura) announced specific (or at least relatively specific) plans to develop offshore crude oil export terminals. At least two others (MPLX and Magellan) noted during their second-quarter earnings calls in this same period that they were interested in crude-export opportunities that (we surmise) could involve offshore terminals, and a Texas-based start-up (JupiterMLP) announced in May (2018) that it had begun engineering for a planned VLCC-loading terminal off the coast of Brownsville.