Sunday, September 30, 2018

Nothing New Under The Sun -- September 30, 2018

Trump: I've Got Canada In My Pocket! Dow Futures Surge -- Making America Great Again! -- September 30, 2018

Someone blinked ... and I doubt it was Trump.

I've Got Canada In My Pocket

NAFTA is "renewed."  Link here. Of course, Congress will now get involved. My hunch: someone will want the FBI to do a background check on Prime Minister Trudeau.

Quick! Dow futures? Up 184 points.

... I'm bound to movin' on ... still I wish you'd change your mind; if I asked one more time; but we've been though that a hundred times or more ...

Four Strong Winds, Ian and Sylvia

That Didn't Last Long -- Solar Energy Project In Saudi Arabia Comes To Screeching Halt -- WSJ -- September 30, 2018

Midnight at the oasis, send your camel to bed ...

Meet Me At The Oasis, Maria Muldaur

See this post. Updates at that post:
March 28, 2018: ready to roll. Will start with $5 billion this year; initial $1 bill from Saudi/SoftBank Vision Fund.

February 19, 2018: solar will not be enough. The $7-billion solar project will be eclipsed by an $80-billion nuclear energy project. 

30-second elevator speech: instead of $109 billion, Saudi Arabia will now build a solar energy project costing upwards of $7 billion; paid for by the developer.

Renewable implications for the rest of the world? None. Saudi and solar energy is a one-off; possibly the only country where solar energy might make sense. But if truth be told nuclear energy would be a better bet.
It is now being reported that Saudi Arabia has scrapped SoftBank's $200 billion solar energy plan. Wow! Link here.
Saudi Arabia has put on hold a $200 billion plan with SoftBank Group Corp. to build the world’s biggest solar-power-generation project, Saudi government officials said, in a complication for another eye-catching transformation project in the kingdom.
The stalled project marks a setback for a partnership between Saudi Arabia and SoftBank that has pursued ambitious ideas. Together, they have created a $100 billion fund for technology company investments that has resulted in a rush of new money flooding into startups.
The project would have turned the world’s most important oil producer into a giant in solar power, ultimately generating about 200 gigawatts of energy—more than three times what the country needs every day.
Former Olympians, Future Olympian

Our oldest granddaughter, today, attended a one-day training camp with three former water polo Olympian swimmers. 

Is it just me, or does it appear you have to be really attractive to be an Olympic champion?

Sunday Night Ramblings -- September 30, 2018

LOL. This is one article I'm not even going to read. This is the guy that said the Bakken was dead back in 2016 or thereabouts.

Metonyms: by the way, I agree with the headline above. "Literally," I don't think WTI will hit $100 within the next 18 months but figuratively, and as a metonym, I'm not so sure we won't see "$100-oil" in the next year and a half. For many people $75-WTI is as good (or as bad) as $100 oil. For the US investor heavily invested in energy, $75-WTI might be a whole lot better than $100-WTI (recession, demand destruction); on the other hand, for the $12-an-hour In N' Out employee (advertised starting wage  here in Grapevine, TX), there may not be a whole lot of difference between $75-WTI and $100-WTI (can't afford gasoline at any price).

Futures: holy mackerel! It will be a lot different by tomorrow morning -- it always is -- but right now, Dow (irrelevant) futures are up 120 points and WTI is up another quarter percent. TSLA will surge. Trust me. TSLA is going to surge. Elon Musk "beat" the SEC. And Tesla emerges in a much stronger position. This is huge. If I had a farm, I would "bet the farm." But I don't have a farm. I don't even own a house. [During the past two hours, Dow futures have been melting up; at 8:14 p.m. CDT, Dow futures are at 136, up from 120 when I first looked.] [October 1, 2018: overall market is surging, the Dow is up 230 points; TSLA up $45; up 17%.]

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

Trade wars: China's economy is losing steam as tariffs start to sink in. -- WSJ. China is trying to run out the clock. They have at least two more years.

Unrest: Iran struggles with unrest in pivotal oil hub. -- WSJ. John Kerry, no doubt, telling the Iranians to hang in there. It will be better in two years. 

Ryder Cup: Wow, the US team was shellacked. This is beyond embarrassing. I believe I saw that together, Mickelson and Tiger Woods went 0-6-0. That's zero wins, six losses, and zero ties. I don't golf but I could have done that -- zero wins, six losses, and zero ties. Rickie Fowler didn't do much better: I believe Rickie Foweler's card for the tournament was 1-3-0. Jordan Spieth: 0-6 career singles record in Ryder Cup. Phil Mickelson: 22nd career match lost (most in Ryder Cup history). Dustin Johnson: 1-4-0; worst record in Ryder Cup by sitting world No. 1 player. If you can handle the blood, see this link.

State rights:
  • Iowa: can a farmer with four-acres of land force the closure of a multi-billion pipeline that benefits millions?
  • North Dakota: can a state take land from "rightful" owners by drawing new maps?
  • for me, these are fascinating questions.
Irony: my wife is fascinated by Ruth Bader Ginsburg. My wife tells me her husband -- RBG's husband -- was a very, very successful tax attorney. Tongue-in-cheek, trying to get her strongly Democratic goat, I asked my wife what a "very, very successful tax attorney" did. She did not take the bait; she said, "I don't know." And then went back to reading the article.

The Bible Page

I was completely unaware that there was a controversy about the "existence of King David." It is, I understand, a fact -- as much as anything can be factual -- that there existed a historical Moses, Abraham, Jesus, and Solomon. They may not have done everything attributed to them in the Bible, but it's my understanding there's little controversy they really existed.

I assumed that David was of the same group. But apparently not. Apparently there is a huge argument whether he existed. I stumbled across that in the current issue of The London Review of Books in an essay, "Nobody's Perfect," by Diarmaid MacCulloch, page 21:
If King David is mythical, what does that do to modern Jewish claims to a place in the land of Israel, achieved by feats of arms to equal his own?
"If King David is mythical?" I never knew.

So, quickly, an internet search:
Until very recently, there was no evidence outside the Bible for the existence of King David. There are no references to him in Egyptian, Syrian or Assyrian documents of the time, and the many archaeological digs in the City of David failed to turn up so much as a mention of his name. Then, on July 21, 1993, a team of archaeologists led by Prof. Avraham Biran, excavating Tel Dan in the northern Galilee, found a triangular piece of basalt rock, measuring 23 x 36 cm. inscribed in Aramaic. It was subsequently identified as part of a victory pillar erected by the king of Syria and later smashed by an Israelite ruler. The inscription, which dates to the ninth century BCE, that is to say, about a century after David was thought to have ruled Israel, includes the words Beit David ("House" or "Dynasty" of David"). It is the first near-contemporaneous reference to David ever found. It is not conclusive; but it does strongly indicate that a king called David established a dynasty in Israel during the relevant period.  
So, there you have it. There is doubt among scholars whether King David ever existed.

It turns out that an archaeological dig twenty miles south of Jerusalem, Khirbet Qeiyafa, may have evidence that supports the view that David was a real historical figure. If you can't get to the London Review of Books, there is wiki, and, the Khirbet Qeiyafa site itself. 

Of all the things that one might question about the Old Testament, it seems questioning the "reality" of a historical David is beyond the pale. But then, that's just me.

Story Lines As We Approach The End Of The Year: Natural Gas Fill Rate Not Keeping Up; Running Out Of The "Right" Kind Of Oil -- September 30, 2018

Natural gas: becoming the big story of the year. Now this from Platts via oilprice:
Europe’s natural gas and electricity markets are heading into the winter heating season with prices at record highs amid various supply outages in already tight markets and uncertainty over how much flexibility in gas and power generation there will be.
Forward prices for natural gas are factoring in a winter risk premium in the currently tight market, highlighting the concern that another supply outage could strain the market further and send prices even higher.
Yet, the key factor determining Europe’s gas and power demand this winter will be something that no market can control—weather. Forecasts suggest that the start to the winter in Europe would be mild.
Last winter’s start was also mild, before the Beast from the East swept through Europe at the end of the season, causing one of the coldest winters this decade, squeezing natural gas supplies across Western Europe, and sending prices soaring.
Refiners struggle to adapt to the shale boom -- from Forbes via oilprice -- we've talked about this often -- it's not a shortage of oil, it's a shortage of the "right" kind of oil --
U.S. shale production is at record highs and the momentum is still not over. A lot has been said about the energy self-sufficiency implications of this trend, but there’s something that has not garnered a lot of attention: U.S. shale is light crude, great for making gasoline and other light fuels, but not so great for products such as middle distillates. Why this is important? Because gasoline demand is stagnating while demand for middle distillates is set for a serious boost ahead of the new IMO regulations on maritime vessel emissions.
In a recent article for Forbes, Wood Mackenzie’s VP for Chemicals and Oil Markets, Alan Gelder, warned that U.S. refiners may very soon find themselves struggling with excess production of gasoline that exceeds demand for the fuel.
At the same time, to make matters worse, the production slump in Venezuela is reducing the availability of heavy crude needed for middle distillates, not to mention that not all U.S. refiners have upgraded their facilities to produce more low-sulfur bunkering fuel products.
The problem concerns Asia as well, Gelder notes. Most refineries there need heavy sour crude to function, and there could be a shortage of this particular type of crude on the horizon because of the situation in Venezuela.
This Week's Book

Atom Land: A Guided Tour Through The Strange (And Impossible Small) World of Particle Physics, Jon Butterworth, author of Most Wanted Particle, c. 2017, 2018.

Jon Butterworth is a professor  of physics and astronomy at University College London of the ATLAS collaboration at CERN's Large Hadron Collider.

The discipline: the study of the very smallest things goes by many different names; none of them is perfect:
  • particle physics: most commonly used
  • elementary particle physics
  • high-energy physics
The Standard Model
  • more of a theory than a model
  • compares with "the Curry Mile," in Manchester, England, where the author grew up. Indian and Pakistani restaurants on "the Curry Mile" called themselves "Standard," but they were anything but Standard: they set the bar for "Indian food" and the bar was very, very high.
  • likewise, the the "Standard Model" that summarizes the current state of our knowledge of the fundamental forces and constituents of matter is a very, very excellent model
  • the theory (or "Standard Model") was further validated with the discovery of the Higgs boson in 2012
Eight expeditions:
  • this book will take the reader on eight expeditions deep into the heart of material universe
  • the exhibitions will examine the smallest constituents of matter and the forces that bind and break them
First expedition
  • glass
  • silicon dioxide: for every atom of silicon, two atoms for oxygen -- 14 electrons
  • it's interesting: the writer says the nucleus has a positive electric charge of fourteen time that of the electron (that is why fourteen electrons are attracted to it -- but the author has not yet used the word protons or neutrons
  • science of particles
  • science of waves: light, sound, radio, X-rays, and more esoteric waves
  • the physics of waves is in many waves more interesting and more complex than the physics of particles
And we will stop here; rest of notes, if any, elsewhere.

Waves vs particles: think about this: while bullets fired from different directions may collide, there is no way that firing more shots could reduce the number of bullets. But making more waves might indeed make part of an ocean bay calmer. -- p. 12.

The Dinosaur Exhibit

A Radermecher Shows A Jump In Production -- September 30, 2018

This page will not be updated

This well was not re-fracked:
  • 17718, 575, CLR, Radermecher 1-15H, Camel Butte, t8/09; cum 190K 8/18;
The Radermecher wells are tracked here, but have not been update.

Production, recent, August extrapolates to 7,400 bbls in a 30-day month, a jump from less than a 1,000 bbls prior to the three-month shut-in:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

For Art Berman: Note the production data after just 18 months for two of the three new Radermecher wells:
  • 28990, 1,572, CLR, Radermecher 3-22H, Camel Butte, t2/17; cum 71K 8/18;
  • 28991, 2,120, CLR, Radermecher 1-22H1, Camel Butte, t2/17; 349K 8/18;
  • 28998, 1,880, CLR, Radermecher 4-22H2, Camel Butte, t2/17; cum 322K 8/18;
The Bible Page

The "Bible Page" will have to wait. Sophia and I are on our way to the Jurassic dinosaur exhibit!

Saturday, September 29, 2018

Natural Gas Could Well Be The Energy Story Of 2018-2019 -- September 29, 2018

Re-posting from earlier today, since "natural gas could well be the energy story of the year."

US natural gas:
Natural gas: this might be the story of the year -- lots of buzz, lots of talk -- from SeekingAlpha yesterday --
  • a severe cold spell could raise Henry Hub natural gas prices to a range of $12-$16/MMBtu, “similar to where marginal generation costs of fuel oil and diesel would be,” says Citi’s Anthony Yuen
  • and if bitter cold weather hits both the U.S. and “either Europe or Asia at the same time... spot LNG [liquefied natural gas] prices could surge to $20/MMBtu at the extreme," Yuen writes; Nymex U.S. natural gas currently trades at ~$3.00/MMBtu
  • Yuen thinks a spike in gas prices this winter could lift shares of gas-oriented companies such as Range Resources, Southwestern Energy, and Cabot Oil & Gas
  • shares of many gas companies, while up from winter lows, are still lower YTD, reflecting concerns that there is too much new gas supply to sustain a rally in the gas market
It is being re-posted because a reader has sent me the following story:
Domestic natural gas production of about 82 billion cubic feet a day isn't nearly enough to provide for peak winter demand, which is why up to about 4 trillion cubic feet of gas is stored underground and nearly 3 trillion drawn upon during some heating seasons.
This year, though, the U.S. Energy Information Administration expects the starting amount at the end of next month to be around 3.3 trillion cubic feet--the lowest since 2005, when natural gas prices hit their all-time high.
A projected ending storage level much below 1 trillion cubic feet often spooks traders. A 2005-style hurricane-fueled squeeze is out of the question, but a big price spike isn't.
It was just four winters ago that a cold winter caused a 75% surge in futures prices to above $6 a million British thermal units. So far there is little sign of anxiety among traders, with both front-month and February futures below $3. Thursday's weekly inventory report and forecasts for continued builds in coming weeks were encouraging, yet storage is now 20% below year-ago levels and 18% below the five-year average. Possible tough sledding ahead.
This is not from The National Inquirer, or from some nut contributing to SeekingAlpha.

The natural gas concern is from The Wall Street Journal. 

Link here.  Or here if you have a subscription to the Journal

Note: natural gas out of the Permian is going for as little as 50 cents, it was reported not too long ago.


Re-posting: LSD. Story here. Silicon Valley (?) getting ready to do "formal"testing. We talked about this earlier this year.

Three-page essay in the current issue of The London Review of Books, by Mike Jay, in his review of two new books:
  • How to Change Your Mind: The New Science of Psychedelics, Michael Pollan, May, 2018
  • The Science and the Story of the Drugs That Changed Our Minds, Lauren Slater, February, 2018
My hunch: marijuana is soooo old news.

 Notes To The Granddaughters

I have journaled all my life. I have kept calendars. I make and keep lists. I am obsessive-compulsive about these sorts of things.

I wish I had done even more. I can think of many more things I wish I had done along this line.

But it looks like I paled in comparison to Kavanaugh's journals and calendars. Wow.

I think about that often. I thought of it again when reading the "Diary" essay -- a regular feature -- in The London Review of Books

Will I destroy my journals before I die? I was brutally honest in them. Often I wrote when I was most depressed.

Wow, it was so much easier back then.

Somebody to Love, Jefferson Airplane

Slawson Recap: Week 39 -- September 29, 2018

Note: this was done quickly. There may be typographical and factual errors. 

This past week I noted many great wells being reported and/or a lot of activity by some players that had been relatively quiet over the past couple of years. I caught many of them under "Bakken 2.5" at the top stories for the week. Two operators seemed to pop up more often than the others: Slawson and Bruin.

For the note regarding Bruin E&P, see this link

I only noted one Slawson well at this week's "top stories" (link above). There were just too many Slawson posts to link. Slawson deserved  a stand-alone post. Here is the list of posts that featured Slawson this past week:
The Travel Page

Boulder, Utah: hopefully I see this most interesting destination sooner than later. Stay tuned.

Khirbet Qeiyafa, Canaan: no, I won't be seeing this site any time soon.

Boulder, Utah: "Why Two Chefs in Small-Town Utah Are Battling President Trump," Kathryn Schulz, The New Yorker, current issue. I don't subscribe to The New Yorker any more. The editors continue to suffer from Trump Derangement Syndrome. I haven't read this article yet, but my hunch is that a) it would have been a great article even without the Trump tie-in (I won't know until I finish reading it); and, b) the editors would not have published it had there not been a Trump tie-in. LOL.

Even without a subscription, The New Yorker allows a few free e-articles each month, so if you haven't visited The New Yorker recently you should be able to access the article.
It begins:
In south-central Utah, where the topography is spectacular, desolate, and extreme, the pessimistic tradition in place-names runs strong. Head south from Poverty Flat and you’ll end up in Death Hollow.
Head east from Dead Mare Wash and you’ll end up on Deadman Ridge, looking out toward Last Chance Creek and down into Carcass Canyon. During the Great Depression, when the whole state turned into a kind of Poverty Flat, the Civilian Conservation Corps sent a group of men to the region to carve a byway out of a virtually impassable landscape of cliffs and chasms.
The men nicknamed the project Poison Road: so steep that a single drop would kill them. Midway up, the ridge they were following gaped open and plunged fifteen hundred feet to the canyon floor. They laid a span across it, and called it Hell’s Backbone Bridge.
Today, the entire route built by those men is known as Hell’s Backbone Road. Still largely unpaved, still treacherous in bad weather, it connects the town of Escalante to the tiny hamlet of Boulder, long reputed to be one of the most remote settlements in the continental United States.
As late as 1940, the mail there was delivered via an eight-hour trek by mule team; the first lights did not flicker on until Christmas Eve, 1947. Until the nineteen-seventies, locals had to spend up to forty-eight hours in transit to obtain any number of essential goods and services: a new pair of socks, medical care, anything beyond an eighth-grade education.
Eventually, the county paved a different road into town, the two-lane Highway 12; as a result, assuming that you are already in Utah, getting to Boulder is no longer particularly difficult. Yet by contemporary standards the town remains strikingly out of the way.
Its population hovers around two hundred and fifty people, many of whom bear the same last names as the earliest Westerners to settle the area: to the extent that Boulder is full at all, it is full of Kings and Roundys, Lymans and Ormonds and LeFevres.
Most of those families came to Utah because they were Mormon and came to Boulder to pasture their cattle, and the twin influences of the Latter-day Saints and ranching still dominate today. Boulder is the kind of place where those who aren’t related by blood are related by marriage, and those who aren’t related by either are effectively kin by proximity—the kind of place, in short, where everyone knows everyone else’s children, parents, politics, struggles, scandals, and cattle brands. 
But this is what the story is all about and why I hope to visit sooner than later: Hell's Backgone Grill & Farm.

From the article:
And down at the end of town, just before the road starts climbing steeply back into the wilderness, there is a hotel called the Boulder Mountain Lodge, and, on its grounds, a restaurant called Hell’s Backbone Grill.
Actually, the restaurant is the second Hell’s Backbone Grill. The first one opened in 1996, closed in 1999, and sat empty until it was acquired, for three thousand borrowed dollars, by two women who had never attended culinary school or started a restaurant or lived in Utah.
Nonetheless, in 2000 they moved to Boulder, reopened Hell’s Backbone Grill, and, in short order, changed everything about it except the name. In the years since then, it has gained a reputation as one of the best restaurants in the Southwest, and also the most improbable. It is an all-organic, sourcing-obsessed, vegetarian-friendly venture in the middle of a traditional ranching community; a part-hippie, part-hipster, Buddhist-influenced culinary retreat in conservative Mormon country; a farm-to-table operation in a landscape not exactly known for its agricultural bounty; and a high-end, foodie-magnet restaurant that is four hours on a good day from the nearest major metropolitan area.
Khirbet Aeiyafa? That will have to wait until the next post.

Some Incredible Bruin Wells Ready To Come Off The Confidential List -- September 29, 2018

Note: this was done quickly. There may be typographical and factual errors. 

By the way, when these new wells come off the confidential list, look at these neighboring, older wells:
  • 20328, off line for six to seven months; came back on line for 16 days in 8/18; t3/12; cum 535K 8/18;
  • 22708, off line for four to five months; came back on line for 12 days in 7/18; then off line again; t4/14; cum 297K 7/18;
  • 22707, off line for six months; still off line as of 8/18; t4/14; cum 494K 2/18;
This past week I noted a lot of great wells being reported and/or a lot of activity by some players that had been relatively quiet over the past couple of years. I caught many of them under "Bakken 2.5" at the top stories for the week. Two operators seemed to pop up more often than the others: Slawson and Bruin. More on Slawson later. Bruin E&P seems to be on a roll with some great "Fort Berthold" wells. It appears they had one well that produced 96,182 bbls of crude oil in one month. We will know more when that well comes off the confidential list. In fact, I just checked. The reader was correct.
  • 31774, conf, Bruin E&P, Fort Berthold 151-94-27A-34-16H, 33-053-07183, t--; cum --; fracked 6/26/18 - 6/28/18:
DateOil RunsMCF Sold

Frack data from FracFocus says it was fracked with 281,231 gallons of water; with only 13.6 water by mass; sand was 83.5% by mass. That is so far from what one normally sees, ... well, before I say any more ... time to check some others. See below.
  • 31775, 33-053-07184, fracked 6/24/18 - 6/25/18, 12 million gallons of water; 87% water by mass:
DateOil RunsMCF Sold
  • 32431, 33-053-07466, fracked 6/24/18 - 6/26/18, 10.8 million gallons of water, 85.8% water by mass;
DateOil RunsMCF Sold
  • 31776, 33-053-07185, fracked 6/2/18 - 6/3/18, 11.8 million gallons of water; 86.6% water by mass;
DateOil RunsMCF Sold

  • 31777, 33-053-07186, fracked 5/31/18 - 6/3/18, 12.3 million gallons of water; 87.2% water by mass;
DateOil RunsMCF Sold
  • 31778, 33-053-07187, fracked 5/16/18 - 7/6/18; 10.8 million gallons of water; 88% water by mass:
DateOil RunsMCF Sold

The graphic (the six wells above are indicated by the arrow pointing to the"six well Bruin E&P Fort Berthold pad in the northwest corner of section 26:

For newbies: there are some wells that don't produce 60,000 bbls of crude oil in one calendar year!

Screenshots of the frack referenced above:

Ordinary High Water Mark Study Accepted By The NDIC -- September 29, 2018

Disclaimer: there are opinions interspersed with facts in this post. It may be hard to separate fact from opinion. Do not make any financial or investment decisions based on what you read here. This is a layman's perspective based on newspaper articles. If this information is important to you, go to the source and get professional advice.

NDIC accepts "ordinary high water mark study" results: the state owns 9,500 more acres than originally shown by the US Army Corps of Engineers; mineral owners along the river between New and Williston may find they don't have as many acres as they once thought they did.
The study, directed by the Legislature, aimed to resolve disputes over oil and gas ownership by investigating the accuracy of the 1950s river survey conducted by the U.S. Army Corps of Engineers.
The Industrial Commission’s action determines the ordinary high water mark of the Missouri River. The final report concludes that North Dakota owns about 9,500 more acres than the corps survey of the river showed. The consultant did reduce the state’s ownership by about 900 acres based on “clear and convincing evidence” received during a public comment period last spring.
Josh Swanson, an attorney who represents several mineral owners, said Thursday he’s disappointed by the Industrial Commission’s decision, which he called sanctioning “a blatant taking of thousands of acres of mineral acres of private landowners.”
My understanding is that the study, at the NDIC website, which has been previously linked, is the study that the NDIC accepted. The links are at this post.
Two additional comments:
  • it appears that some of the best oil locations in the Bakken are along the river between New Town and Williston
  • 9,500 acres / 640 acres = 14 sections
How big is 14 sections? One of the very best fields in the Bakken is the Helis Grail; it is 30 sections in size (at the time of the original post).

Individuals who originally homesteaded may have had 160 acres, and over time, some successful farmers may have put together a section of land, or 640 acres (some may have done much, much better; I don't know). But if one's entire 160 acres were within the state's OHWM land, this would be an incredible blow.

If one bought mineral rights years ago in this contested area, and one has clear title to those mineral rights, I have no idea how that title-transfer process works. I guess that's why one buys "title insurance" when buying "real estate." Am I getting too far ahead of my headlights? See disclaimer above.

The original study was done in 1950? For almost 70 years that study was accepted by the state? I must be missing something.

British Week At Central Market, Southlake, TX

Third DAPL Defendant Sentenced To "Three Years In Federal Prison" -- September 29, 2018

Link here.
  • 1st of seven: three years federal prison
  • 2nd of seven: 57 months federal prison
  • third of seven (link above): "three years federal prison"
Three down; four to go.

North Dakota: Oil, Nuclear Missiles, Honey, Winter Wheat; Ducks Unlimited; Now ... Straw -- September 29, 2018


Later, 2:37 p.m.: from a reader --

There happens to be a smaller coal fire power plant in Spiritwood. My guess is it would be burned in that plant.
Original Post
The only question I have: how do readers find these "bizarre" stories?

From biofuelsdigest and from MarketWatch: North Dakota straw to fuel California cars -- data points:
  • NewEnergyBlue, based in Massachusetts
  • six months away from groundbreaking: a cellulosic ethanol refinery
  • will be sited in Spiritwood Energy Park near Jamestown, North Dakota
  • $170 million financing to be finalized (no mention of Elon Musk)
  • 280,000 tons of North Dakota wheat straw/year --> 16 million gallons of fuel/year
  • this will be the only cellulosic ethanol capable of exceeding California's rigorous air-quality standards
  • will also produce clean lignin
  • will not require any fresh water in the proprietary process
  • 20,000 miles / year / 40 mpg = one car = 500 gallons of fuel per car
  • 16,000,000 / 500 gallons = 32,000 cars (0.2% of cars registered in CA)
  • number of cars in California: 15 million 
  • one small step for North Dakota straw; one giant step for Governor Moonbeam
Global commercial production of lignin is a consequence of papermaking.
In 1988, more than 220 million tons of paper were produced worldwide. Much of this paper was delignified;
Lignin comprises about 1/3 of the mass of lignocellulose, the precursor to paper. It can thus be seen that lignin is handled on a very large scale.
Lignin is an impediment to papermaking as it is colored, it yellows in air, and its presence weakens the paper. Once separated from the cellulose, it is burned as fuel. Only a fraction is used in a wide range of low volume applications where the form but not the quality is important.
Sounds like there is already an over-abundance of lignin, but a bit more on the market probably won't hurt.
Because lignin reduces stack emissions in coal-fired power plants, it's a cleaner replacement than wood chips. Lignin is also a lightweight binder for composites that replace metal parts in automobiles and other products.   
After its Spiritwood refinery is up and running on Dakota straws, NewEnergyBlue says it expects to double capacity of future biomass refineries and also process corn stalks.
Corle envisions a series of refineries throughout the grain belts of the U.S. and Canada, each producing 32 million cellulosic gallons a year and attracting escalating support from capital markets keen on catching the next wave of renewable energy. "California alone could easily absorb production from 70 of our refineries to reach their goal. Other states and Canada are following California's successful low-carbon model."

New England Natural Gas Could Very Well Be The Story Of The Year -- Week 39: September 23, 2018 -- September 29, 2018

Vern Whitten quarterly package of photos; northwestern North Dakota here.

If you have time for only one post/story this weekend, read the September, 2018, Rystad Energy production newsletter at this link.

Peak oil? What peak oil? US hitting crude oil production records. So much for Hubbert.

US gasoline demand dropped precipitously.

Some of this has been previously posted.

US natural gas:
Natural gas: this might be the story of the year -- lots of buzz, lots of talk -- from SeekingAlpha yesterday --
  • a severe cold spell could raise Henry Hub natural gas prices to a range of $12-$16/MMBtu, “similar to where marginal generation costs of fuel oil and diesel would be,” says Citi’s Anthony Yuen
  • and if bitter cold weather hits both the U.S. and “either Europe or Asia at the same time... spot LNG [liquefied natural gas] prices could surge to $20/MMBtu at the extreme," Yuen writes; Nymex U.S. natural gas currently trades at ~$3.00/MMBtu
  • Yuen thinks a spike in gas prices this winter could lift shares of gas-oriented companies such as Range Resources, Southwestern Energy, and Cabot Oil & Gas
  • shares of many gas companies, while up from winter lows, are still lower YTD, reflecting concerns that there is too much new gas supply to sustain a rally in the gas market
WTI: closes solidly above $73. Data points:
  • "relentlessly climbs"
  • Iranian sanctions: would remove 1.5 million bopd from global market
  • Saudi Arabia will boost production by 0.5 million bopd in 4Q18
Saudi boost: Saudi Aramco to boost oil capacity by over one-half million bopd in 4Q18 -- link at Reuters

Iran: reported earlier that by November or so, South Korea would no longer be importing Iranian oil. Now it is being reported that China's top refiner will halve Iranian oil imports.

US crude oil production: staggering -- Rystad Energy. Link here.

US crude oil production, July, 2018: just short of 11 million bopd

Chevron: growing volume will support a growing dividend. -- SeekingAlpha.

US natural gas:
  • fill rate well below 5-year average and the gap is not closing
  • New England could face natural gas shortage over next month or so
  • natural gas being diverted from New England to Florida
  • Florida: #1 electricity producer in US; #2, Texas
  • Florida: converting from coal to natural gas

Back to the Bakken
Week 39

From Geoff's top North Dakota energy stories:

Back of the envelope:
  • some folks suggest North Dakota production will level off at 1.5 million bbls / day
  • unfettered, the Bakken should be able to produce 2.2 million bopd (early, early estimate)
  • 2.2 million x 365 = 800 million bbls/year
  • 40 billion bbls / 800 million bbls = 50 years of production
  • 500-billion-bbl reservoir x 12% primary recovery = 60 billion bbls
  • unfortunately many of us won't be around fifty years from now
Land grab:
NDIC accepts "ordinary high water mark study" results: the state owns 9,500 more acres than originally shown by the US Army Corps of Engineers; mineral owners along the river between New and Williston may find they don't have as many acres as they once thought they did

SHD's Golden well pegs the company's natural gas pressure gauge
Bruin: almost 100,000 bbls of crude oil from one well in one month

Bakken 2.5
Slawson' sweet spot north of the river
XTO wants to unitize a large area of the Bakken -- good luck with that
MRO wells in Bailey oil field hitting 300,000+ bbls crude oil in one year
XTO's huge Sand Creek well;
CLR's Antelope wells -- Christmas in  July
Hess EN-Jeffrey wells; CLR Florida / Alpha wells
CLR's Kennedy-Miles wells
BR's Jerome wells
BR's CCU Corral Creek well
BR's Dodge well 
CLR's Hendrickson wells
Bruin E&P on a roll
Newfield Wisness well
QEP Tipi with 110,000 bbls in two months
Equinor picking up the pace: here; and, here; and, here; and, here;
PetroShale anticipates eleven (11) more wells on an existing 640-acre drilling unit
Completion strategy for MRO wells in Reunion Bay

East Coast refinery back in the news; taking advantage of the WTI - Brent spread 

Natural gas
ONEOK to build yet another natural gas processing plant, Demicks Lake II
ONEOK to increase natural gas processing in the Williston Basin

Bakken economy
Williston, Dickinson lead increase in August enplanements (boarding at airports) 

Awaiting results of the "ordinary high water mark" study
Legacy Fund deposits hit recent record

Other formations
Southwestern to target the Tyler

MRO Wells In Bailey Oil Field Hitting 300,000+ Bbls Crude Oil In One Year -- September 29, 2018

Some time ago I posted this well with production data at the link:
  • 16180, 128, MRO, Marlin 24-12H, Chimney Butte, t8/06; cum 345K 2/19; re-fracked 4/17 -- 14 stages, 2.8 million lbs (200,000 lbs/stage - standard)
For some reason I didn't think of looking at the other Marlin wells.

The graphic:

The wells of interest:
  • 16908, 248, MRO, Marlin 14-12H, Chimney Butte, t3/08; cum 153K 2/19; it was taken off line when Hondo/Mittelstadt were fracked, there was not jump in production;
  • 16180, see above,
  • 33248, 2,774, MRO, Hondo 34-12TFH, Chimney Butte, see note for #33247; t6/17; cum 232K 2/19;
  • 33247, 2,774, MRO, Mittelstadt 34-12H, Chimney Butte, at one year of production this well had produced 329,238 bbls of crude oil; t6/17; cum 361K 2/19; note how its frack correlates with jump in production of #20233;
  • 20233, 947, MRO, Marlin 44-12H, Chimney Butte, not re-fracked; t6/11; cum 232K 2/19; note jump in production starting in late 2017 and then a much bigger jump in early 2018:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Friday, September 28, 2018

This Would Have Been The Perfect "Oil Story" Except It Didn't Mention: The Bakken; Killed Pipeline Projects; Iowa, Nebraska; Obama; Tom Steyer; Or Ford Pick-Up Trucks -- September 28, 2018

Article at The Hill here.
Brent oil, the world standard, relentlessly climbed from a low of $30 per barrel early in 2016 to above $80 per barrel today. A year ago, when Brent was around $55 barrel, some pundits foresaw a return to the 2016 lows; others saw the price languishing in the $50-$60 per barrel range.
Bearish forecasts reflected a tepid outlook for the world economy and expectations of fracking on an ever-larger scale coupled with new finds from deep-water drilling. Few observers reckoned that Brent might again exceed $100 per barrel, as it did between 2011 and 2014, or even reach $80.
Several factors combined to upset these bearish forecasts. On the demand side, massive tax cuts, taking effect in 2018, sparked the U.S. economy with global spillovers. Meanwhile, easy monetary policy in all advanced countries further promoted global growth.
On the supply side, the fracking rig count dropped dramatically when oil prices plunged in 2015 and has recovered only slowly since then. Fracking makes a much larger contribution to natural gas than to oil supply.
U.S. oil production continues to grow, but at a modest pace. Meanwhile, the major oil producers have been cautious about betting $3 billion or more on deep-water drilling off the coast of Brazil or Africa.
President Trump’s renewed sanctions may reduce Iranian oil exports by as much as 1 million barrels a day as European buyers reluctantly cut their purchases. This shock gives Russia and Saudi Arabia even stronger control of world oil supply.
The writer could have saved a lot of time had he just written, "it's all Trump's fault."

Production Update For XTO's Huge Sand Creek Well -- September 28, 2018

See original post and graphic here. It just went off line in the middle of 6/18 and is still off line (7/18).

The well:
  • 19889, 1,678, XTO, Sand Creek 21-10SH, Sand Creek, 12 stages; 2.3 million lbs, t5/11; cum 574K 7/18; not re-fracked;
Recent production:

Initial production: