Fifteen Wells Should Be Coming Off Confidential List; The Whistler Pipeline Project -- August 6, 2018

If you get bored waiting for the market to open, you can always check out screeching tires and busting glass: defining the teen-tragedy song in 60 minute -- chock full of YouTube hits. I came across it while trying to figure out who did the cover for "Last Kiss" that is on the Starbucks playslist loop.

Sexist: if I had one piece of advice for working women -- carry two purses. Women seem to all carry a purse that appears to be about a cubic yard in volume -- makes them look like bag-ladies or homeless or insecure. Leave the cubic-yard purse in the car, at home, or in the workplace, and simply carry a clutch purse into Starbucks when picking up a cup of coffee. Something tells me Ivanka wouldn't show up to a meeting with a cubic-yard purse slung over her shoulder. [The secret service agent would be holding it. LOL.] On the other hand, a small brown, genuine leather, Gucci-quality- back-pack is incredibly sexy on a millenial -- but only on a contemporary millenial. 

A bit about Tim: I did not know that Tim has been around from almost the beginning. Steve and Tim must have really clicked. From MarketWatch:

Tim Cook is not a visionary CEO like his predecessor, Steve Jobs.

It was Cook’s skills in manufacturing and operations that interested Jobs, who hired him from Compaq a year after his triumphant return to Apple in 1997.

The Apple that Jobs returned to following his 1985 ouster was in a near death spiral, and Cook was a key partner in streamlining the company’s product lines, getting rid of hefty inventories, moving much of its manufacturing to contractors and forging long-term deals to buy components such as memory chips.

Since Jobs passed the torch, Cook has nearly quadrupled Apple’s share price by taking Jobs’s innovation and making it a permanent, perpetual and profitable ecosystem.

Apple’s revenue and market cap should have paused along with iPhone unit sales two years ago, but higher-priced phones, expensive accessories and more money coming in from software and services have kept the enormous Apple train running on time, and stuffed with cash.

Sales of wearables like the Apple Watch and AirPods headphones soared 37% to $3.7 billion. Watch progress has been seemingly slow and plodding and never fully disclosed by Apple. But executives told analysts last week that wearables had surpassed $10 billion in revenue in the past four quarters.

Putting $10 billion into perspective. In the pharmaceutical industry, a "billion-dollar-drug" is a home run. By the way, the "billion-dollar-drug" data point is something new investors would do well to remember. But I digress. If a "billion-dollar-drug" is a home run for the pharmaceutical business, Tim Cook hit ten home rooms in the past year. And that was just in wearables. Unprecedented? Probably. And that's from a sector (watches) that "everyone" said was doomed from the start. I remember reading all the negative commentary on social media when Apple introduced the AppleWatch. The AppleWatch is now ubiquitous.

Swag: speaking of wearables, my son-in-law recently attended a tech conference in Chicago. At the end of two days, those attending the TED-filled conference all received a pair of Apple ear buds.

Next Apple purchase: my next Apple purchase will either be a pair of ear buds, or a new iPad. Memo to wife: my birthday is coming up. Actually, in all seriousness, I don't want either: I'm teched out. I can't count the number of devices with USB charging that I have in the house. Most of them are front / rear lights for the bicycle and the back pack. This morning, coming into work before daybreak, I had four lights -- three rear-facing red lights on my bike/backpack and one forward white light on the bike.

Twitter wars: John Kemp tweets, "not impressed with jobs report." Meanwhile, from Ivanka:

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Oil Production: The Majors, Y/Y

Disclaimer: this is not an investment site, but in addition to the production column, note that first column, net income y/y. Wow. Dark blue except for ExxonMobil, but the colors don't show how bad things really are for XOM, or better said, their investors. Chevron's net income y/y up 132% and BP's net income up an astounding 312% but XOM? Up 18% yoy.

Whiting: changes course. Will stay in Colorado.

Whiting won’t sell it’s Colorado oil and gas properties after all, saying would-be buyers didn’t offer enough to give up the high-yield wells.

The Denver-based company signaled this spring that it wanted out of the Denver-Julesburg Basin, in part, because operating in Colorado had grown too hard. Whiting put its Denver-Julesburg wells and undeveloped assets on the market during the second quarter.

“The bids received did not achieve our expectations or reflect the cash-flow power of the asset,” said Brad Holly, CEO of the company during a Wednesday conference call with investment analysts. 

Oil and gas production from the Colorado wells, which Whiting refers to as its Redtail field, have netted $250 million after expenses for Whiting in 2018, and they should produce hundreds of millions of dollars more over the next couple years, the company said.

Unlike MDU which sold off all its oil holdings at just the wrong time some years ago; great case study for "buying high, selling low."

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Back to the Bakken

Wells coming off confidential list:
Monday, August 6, 2018:

• 33932, SI/NC, BR, Three Rivers 1B MBH, Charlson, no production data, 
• 33711, 403, Kraken Operating, Washburne 22-15 2TFH, Oliver, t3/18; cum 57K 6/18;
• 33710, 1,154, Kraken Operating, Washburne 22-15 3H, Oliver, t2/18; cum 90K 6/18;
• 33709, 733, Kraken Operating, Washburne 22-15 4TFH, Oliver, t2/18; cum 73K 6/18;
• 33708, 1,260, Kraken Operating, Washburne 22-15 5H, Oliver, t2/18; cum 93K 6/18;
• 33707, 953, Kraken Operating, Washburne 22-15 6TFH, Oliver, 9.8 million gallons of water; 78% water; 15.6% sand;  t2/18; cum 79K 6/18;
• 33706, 1,715, Kraken Operating, Washburne-Hodenfield LE 22-15 1H, Oliver, 9.8 million gallons of water; 78% water; 16% sand; t2/18; cum 118K 6/18;
• 30529, 1,485, CLR, Burr Federal 20-26H, 62 stages; 14.9 lbs proppant; 13.3 million gallons of water; 88% water, Sanish, t5/18; cum 65K 6/18;
• 30528, 935, CLR, Burr Federal 24-26H2, Sanish, 63 stages; 8.1 million lbs proppant, 9.9 million gallons of water, 90% water, t3/18; cum 72K 6/18;

Sunday, August 5, 2018:

• 33397, SI/NC, WPX, Hidatsa North 14-23HA, Reunion Bay, no production data,
• 33387, SI/NC, Crescent Point Energy, CPEUSC Paopao 3-35-26-158N-100W, Dublin, no production data,

Saturday, August 4, 2018: 

• 34056, SI/NC, BR, Kermit 7-8-32UTFH, Pershing, no production data,
• 34055, SI/NC, BR, Rink 7-1-5UTFH, Pershing, no production data,
• 33396, SI/NC WPX, Hidatsa North 14-23HW, Reunion Bay, no production data,
• 24235, SI/NC, Enerplus, Cheetah 149-93-30A-31H, Mandaree, no production data,

Active rigs:

$69.41↑↑	8/6/2018	08/06/2017	08/06/2016	08/06/2015	08/06/2014
Active Rigs	64	58	34	75	191

RBN Energy: Whistler Pipeline project goes the extra mile to link the Permian and Gulf Coast markets. Interesting -- we just blogged about the Whistler a couple of days ago -- a reader caught that and sent me the link. He noted the interesting partnership: Texas, Iowa, Florida partners. From the linked article:

Constructing greenfield pipelines is never easy — just ask any midstream developer you know — but building them across the breadth of Texas comes with its own unique challenges. There’s distance, for starters, and today’s massive associated gas growth in the Permian Basin is occurring more than 400 miles from the closest demand along the Gulf Coast. That makes the pipelines relatively expensive at somewhere near $2 billion a copy.

Integrating Permian supply with Gulf Coast demand also requires a big network of pipelines along the coast, as the demand is spread out from Louisiana to Mexico. Few midstream companies have such a network. Kinder Morgan does, one reason why, in our view, the Gulf Coast Express project was the first — and to-date the only — greenfield project from the Permian to proceed with a final investment decision. In the race to be the next Permian natural gas relief valve pipeline, the same hurdles will have to be overcome. On Friday, news came that a group of four companies is planning the Whistler Pipeline, and a closer look at the project reveals it may be capable of meeting the challenges needed to make it a serious player in the Permian pipeline race.

Today, we look at the details of the latest Permian natural gas pipeline project.

And then this, the recently announced Whistler Pipeline may prove to be one of the most interesting developments in the Permian gas story yet.

Some data points:

• natural gas
  450 miles, 42-inch diameter (huge diameter; think about that; more than a yard in diameter)
• from the WaHa hub in the Permian Basin to the NextEra Agua Dulce (sweet water) market hub in South Texas
• 2.0 billion cubic feet per day
• sourced from multiple upstream connections in both the Midland and the Delaware Basins, including direct connections to Targa plants
• from WaHa, turns south towards Mexico; parallels the southwest Texas-Mexico border before turning east to Agua Dulce, west of Corpus Christi
• from there, east into Corpus Christ, but also south to Brownsville, i.e., Mexico, and also southwest into Mexico via the NextEra NET Mexico Pipeline

RBN Energy has an interesting insight to "problems" with the natural gas pipelines in Texas. Wroth reading.