Sunday, January 28, 2018

Australia, As Predicted, Experiencing Brownouts And Blackouts Because Consumers Are Using Too Much Electricity -- January 28, 2018

So, here it is, as predicted by a reader of the blog: brownouts and blackouts in Australia. From the article:
Mr Armstrong from Ausnet Services (another power company) blamed unreported air conditioners:
“There are a lot fuses blowing in the hot weather and a significant power pull with people having put in air-conditioners they didn’t tell us about,” Mr Armstrong said. 
Who knew you needed to tell your power company when you put in an air conditioner?
I assume Elon Musk is watching closely.

The Australian Grid

"ISO Australia": Spot prices for Victoria, South Australia, and Tasmania -- note the spot price for electricity earlier in the day, in excess of $3,000/MWh --

There is no question in any sentient American that we would have been headed down the same path had Hillary been elected president.

From A Reader 
(Electricity Consultant and Expert)

If power prices hadn't spiked I would accept the "official" explanation that it was a local distribution system problem... transformers/conductors too small resulting in overheating and open fuses. Doesn't sound right does it? My hunch is low voltage from lack of on line capacity caused current to increase and open fuses. Sure, once these fuses opened they had sufficient power on the grid (load shedding).
Bull feathers...the junk power coming from all those wind turbines would make any system "blow fuses". It must be nearly impossible to maintain a stable electrical grid with a major component of wind power.
It's not just the varying wind speed that makes the output power nasty...see below: IEEE lists seven (7) power "disturbances". All seven of these are more of an issue with a variable, intermittent, on again off again wind generator than a conventional coal or gas generator. Example: Compare 500 wind turbines at two MW each vs. a coal-fired 1000 MW generation station...7x500 potential "disturbances" for the wind mills vs 7x1 for the coal-fired unit!!!
The reader quotes this from the news article:
The variable nature of wind energy sources (in terms of the real power, reactive power, output voltage, and frequency) is a major challenging issue.
The conversion of an input AC power at a given frequency and voltage to an output power at different frequency and voltage can be obtained with static circuits called power converters, containing controllable power electronic devices.
Note 1: These power converters use diodes and filters to convert the AC from the generator attached to the turbine to DC. This is necessary to smooth the constantly changing generated current. Then the DC current must be inverted to AC to be compatible with the electrical grid.
Note 2: See below item 5 (for example). Waveform distortion...some of this DC from the converter/inverter will certainly leak into the AC output as the diodes age and fail...believe me I've seen diode leakage/failure problems for 30 plus years maintaining AC to DC rectifiers on pipeline cathodic protection systems.
IEEE: ... power quality disturbances... have been organized into seven categories based on wave shape: 1. Transients 2. Interruptions 3. Sag / Undervoltage 4. Swell / Overvoltage 5. Waveform distortion 6. Voltage fluctuations 7. Frequency variations
Wind? The gift that keeps on giving. 

Oldest Well In North Dakota Now "Inactive" -- January 28, 2018

From an earlier post:
I believe #35 is the oldest active well in North Dakota.
Two payzone well, total production, ~ 2.2 million bbls since 1951; still active
  • 35, 503/PNA, Hess, Beaver Lodge-Devonian Unit H-310, s8/51; t4/52; Madison, 216K; PNA 
  • 35, 263, Hess, Beaver Lodge-Devonian Unit H-310, t3/60; Devonian, 2.08 million bbls; still active; almost 1,500 bbls monthly, 8/14; around 1,000 bbls monthly in 2015; Went inactive 12/13; back on line as of 8/15; 
  • Note: #35 is the oldest well in North Dakota still producing; all but two or three wells earlier than #35 were dry.  Well #2 was completed in 1923; well #1 was completed in 1916, in Ward County; it tested positive for trace oil. The Clarence Iverson well that started it all was drilled in 1951 (#25).
According to the scout ticket it looks like #35 went inactive in July, 2017:

NDIC File No: 35     API No: 33-105-00007-00-00     CTB No: 400035
Well Type: OG     Well Status: IA     Status Date: 10/15/2017     Wellbore type: Vertical
Location: SWNE 31-156-95     Footages: 1980 FNL 1980 FEL     Latitude: 48.293098     Longitude: -102.944139
Elevation(s): 2329 KB     Total Depth: 13325     Field: BEAVER LODGE
Spud Date(s):  8/22/1951
Casing String(s):  9.625" 6014'   5.5" 10823'  
Completion Data
   Pool: DEVONIAN     Perfs: 10232-10450G     Comp: 3/5/1960     Status: AL     Date: 3/5/1960     Spacing: U
   Pool: MADISON     Perfs: 8555-8590     Comp: 4/25/1952     Status: PNA     Date: 2/19/1960     Spacing: U
   Pool: RED RIVER     Comp: 4/25/1952     Status: DRY     Date: 4/25/1952
Cumulative Production Data
   Pool: MADISON     Cum Oil: 216488     Cum MCF Gas: 113622     Cum Water: 4547
   Pool: DEVONIAN     Cum Oil: 2091755     Cum MCF Gas: 1061915     Cum Water: 1682237
Production Test Data
   IP Test Date: 4/25/1952     Pool: MADISON     IP Oil: 503     IP MCF: 57     IP Water: 7
   IP Test Date: 3/5/1960     Pool: DEVONIAN     IP Oil: 263     IP MCF: 240     IP Water: 25
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Chronologically by permit number, the next well that was recently still active was #443:
  • 443, IA/409, Hess, Beaver Lodge-Madison Unit S-27HR, Beaver Lodge, Madison, t8/54; cum 747 4/17 (last month of any production; it appears this well was re-entered in 2003 as a re-entry second leg horizontal; and re-named
Chronologically by permit number, the oldest well that is still active is #554:
  • 554, 408, Hess, Tioga-Madison Unit L-128HR, Beaver Lodge, Madison, t8/54; cum 273K 11/17; in the file report, there is a letter dated March 29, 2017, stripper well status; it appears that in 1999 that the well was re-entered; and re-named; producing since 1954, this well is still active, having produced for about 64 years;

The Energy And Market Page, T+7 -- January 28, 2018

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

Disclaimer. I did, for the first time in my life, buy some shares in RDS-B about six months ago. They will become a long-term holding and I will add to these shares over time but I have no plans to buy any more shares in the immediate future. I will wait for the 15% correction that CNBC seems to keep talking about. LOL. Their senior markets commentator keeps suggesting that the market may "overshoot" (whatever that means).

Shell, from The [London] Telegraph via Yahoo!Finance:
Royal Dutch Shell is set to unveil its highest earnings since the oil market collapse this week, just one year after the oil major’s lowest profits in more than a decade.
The Anglo-Dutch oil group’s efforts to overhaul its portfolio during the depths of the oil market rout are expected to be turbo-charged by the recovery in oil prices to over $65 a barrel last year, from under $30 a barrel at their lowest point in early 2016.
Analysts predict the group’s earnings on a “current cost of supply” basis will be more than $15.7bn (£11bn) for 2017 from just $3.5bn (£2.5bn) the year before. The final quarter of last year is expected to generate higher earnings than the whole of 2016 at $4.2bn (£3bn).
The startling turnaround from Shell’s disappointing 2016 results, which were even lower than in 2015, comes in the wake of a diligent focus on financial discipline following the mega-deal to take over BG Group, the gas giant, at the depths of the market rout.
Dow futures: futures mean squat, but Dow futures are green and have been improving since 6:00 p.m. EST earlier this evening.

AAPL: earnings to be reported after market close on February 1, 2018. Apple, Inc, predicted in November, 2017, this quarter (ending December, 2017) will be its biggest quarter ever.

AAPL: initial reviews of the HomePod suggest it's knocking the socks off those who have tried it. Exceeding expectations across the board. Disclaimer: I am an Apple fanboy; fanboy #3 to be exact.

North Dakota On Track For New Crude Oil Production Record In 2018 -- Zacks -- January 28, 2018

From Zacks.
As per North Dakota’s oil regulator, the state’s daily crude output rose 0.9% in November after climbing 6.9% in the previous month.

Reflecting a healthy increase, the newest numbers confirm the resurgence in volumes extracted from North Dakota, centered on the Bakken Shale formation. As daily output consolidated above 1 million barrels for the tenth month in a row, the state’s total number of producing wells numbered 14,324 at the end of November, a new all-time high.

Interestingly, natural gas output was up 1.4% in November to 2,095,342 thousand cubic feet per day – another record – as operators scrambled to the core areas of the Bakken where wells tend to produce more gas along with crude.

Some 54 drilling rigs were active in the state in November. The all-time low of 27 was set in May 2016, while a year ago, North Dakota had just 37 rigs operating. A closely watched yardstick of North Dakota oil industry's strength, the year-over-year improvement in the number of units searching for oil and gas in the region indicates essentially steady drilling activities and production. However, the rig count is still down considerably from the peak of May 2012 when North Dakota had 218 units drilling.

More rigs in operation and stable production not only confirms the positive developments for the state of North Dakota, but also points to the rising flood of U.S. shale-driven production.

Now at a financial equilibrium, the shale firms are putting more rigs and employees back to work. Throughout the downturn, producers (in North Dakota and particularly the Permian Basin in Texas) worked tirelessly to cut costs down to a bare minimum and look for innovative ways to churn out more oil from rock. And they managed to do just that by improving drilling techniques.

Indecision Delays IPO Launch -- January 28, 2018

From The Wall Street Journal: the Aramco IPO s stalled by indecision over where to list. Saudi Arabia’s state-owned oil producer continues to weigh risks of listing in New York, London, Hong Kong or locally.

Most likely it's due to all those "transparency" rules over at the NYSE.

The Road To New England


February 2, 2018: New Hampshire site evaluation committee votes unanimously to deny the "right-of-way."

Original Note
A reader sent me this note:
  • executive summary, in a couple of weeks, a crucial decision will be made by small, New Hampshire board (Site Election Committee)  on whether or not to allow Northern Pass transmission line to be built through state
  • the 1,000 Mw - to be sourced by Quebec Hydro - was chosen days ago by Massachusetts to be supplier to fulfill "renewable' mandates
  • problem? not yet built nor even approved. And the approval is far from certain as ALL the juice will be sent on power lines despoiling NH mountainsides for Mass' consumption
  • if the line is approved, court fights will immediately ensue
  • if the line is approved, it will be a near miracle to be in service late 2020, a full year AFTER Pilgrim nuke is retired
  • Bottom line is NE is entering 'interesting' times.
So, there are two problems here:
  • decision yet to be made; tea leaves not particularly helpful; in New England many decisions on energy seem capricious
  • at least a year, maybe more, for a huge energy gap
Map and story here, final vote delayed until March 30, 2018, so we'll see in a couple of months. 

Background, from UtilityDive:
  • Massachusetts chose the Northern Pass transmission project to supply 9,450,000 MWh of renewable energy annually to the state's utilities to meet goals established in the Global Warming Solutions Act passed two years ago.
  • Northern Pass, owned by Eversource Energy, is developing a 192-mile transmission line that would move power from Hydro-Quebec dams in Canada to a substation in Deerfield, N.H. Northern Pass will provide up to 9.4 TWh of hydropower annually, while also reducing  wholesale energy costs, project backers say.
  • The transmission line will begin at the Canadian border in Pittsburg, N.H., and will extend 192 miles to the point where it connects to the New England electric grid. Sections of the line will also be buried along roadways to reduce the impact of views around the White Mountain National Forest. Contract negotiations are expected to be completed by March 27 and sent to regulators by April 25 for review, according to the state's timeline.
The Road To California

The California PUC suggests the natural gas crisis is so acute that utilities should place a moratorium on new natural gas hook-ups for commercial and industrial customers. Wow, this will encourage new commercial and industrial customers to relocate and/or expand in California. By the way, look at the trend in the cost of energy in southern California.

WPX Reunion Bay Wells -- Random Note -- January 28, 2018

WPX in Fort Berthold Indian Reservation has quite an interesting history.

WPX is now reporting some incredible wells.

From my "FAQ" page with regard to record IPs:
  • 33398, 3,291, WPX, Hidatsa North 14-23HX, Reunion Bay, huge well; if this is not a typo, could be a new record: 85,032 bbls in the first full month, Three Forks, 51 stages; 8.6 million lbs; t9/17; cum 167K 11/17;
Now, this WPX well to be reported later this week:

This will be a fun well to watch this week, posted January 28, 2018:

  • 33381, conf, WPX, Mandan North 13-24HW, Reunion Bay, API 33-061-04011, a huge well; 75K in first full month; 65K in second full month; FracFocus shows this well was fracked 9/15 - 22/2018; 8.7 million gallons of water; proppant, 9.95%
  • 8.7 million gallons = 72 860 973.755 lbs
  • 89.6% of what = 72 860 973.755 lbs; 81,318,051 lbs
  • 9.95% x 81,318,051 lbs = 8,091,146 lbs
  • so, we'll see when the NDIC data is reported whether proppant was about 8 million lbs
Production data:
DateOil RunsMCF Sold

The WPX Mandan Wells In Reunion Bay

This will be a fun well to watch this week, posted January 28, 2018:
  • 33381, 3,433, WPX, Mandan North 13-24HW, Reunion Bay, API 33-061-04011, a huge well, t10/17; cum 366K 12/18;; 75K in first full month; 65K in second full month; FracFocus shows this well was fracked 9/15 - 22/2018; 8.7 million gallons of water; proppant, 9.95%
    • 8.7 million gallons = 72 860 973.755 lbs
    • 89.6% of what = 72 860 973.755 lbs; 81,318,051 lbs
    • 9.95% x 81,318,051 lbs = 8,091,146 lbs
    • so, we'll see when the NDIC data is reported whether proppant was about 8 million lbs
Production data:
DateOil RunsMCF Sold

It looks like the Mandan wells will be directional to the south and then the horizontals will swing west (left) and parallel, an earlier Mandan well:
  • 19896, PA/273, WPX, Mandan 13-14H, Reunion Bay, t10/11; cum 133K 11/17; has never been a good well; best month, following initial frack, was less than 10K/month; time will tell if neighboring fracks affected this well;

The graphic:

Wells Coming Off Confidential List This Next Week -- January 28, 2018

Friday, February 2,  2018:
30578, 1,188, CLR, Wiley 6-25H1, Pershing, 4 sections, Three Forks B1, 55 stages; 8.9 million lbs, t8/17; cum 120K 12/17;

Thursday, February 1, 2018:
33381, 3,433, WPX, Mandan North 13-24HW, Reunion Bay, Three Forks, 51 stages, 8.6 million lbs, a huge well; 75K in first full month; 65K in second full month; t10/17; cum 186K 11/17; 
32768, 1,065, Oasis, Oyloe 5199 42-23 2B, North Tobacco Garden, 50 stages; 1 million lbs (sic), mesh/large/ceramic, t8/17; cum 110K 11/17;
31415, SI/NC, Hess, EN-Kulczyk-154-94-2029H-7, Alkali Creek, no production data,
31083, 1,305, Bruin E&P, Fort Berthold 148-94-35C-26-9H, McGregory Buttes, t8/17; cum 67K 11/17;
29719, 382, Nine Point Energy, Anderson 148-100-7-6-3H, Buffalo Wallow, 31 stages, 4.3 million lbs; mesh/large/small, t9/17; cum 39K 11/17; 

Wednesday, January 31, 2018:
33541, SI/NC, BR, Outlaw Gap 14-23TH-A, Sand Creek, no production data,
32901, SI/NC, Crescent Point, CPEUSC Makowsky 6-31-30-158N-99W, Ellisville, no production
32577, 2,051, CLR, Tarentaise Federal 5-19H, Elm Tree, 47K first full month, 61 stages, 14.8 million lbs, mesh/large; t11/17; cum 84K 12/17;
31644, 1,126, Oasis, Lawlar N Federal 5199 44-23 11BX, North Tobacco Garden, 50 stages, 10.1 million lbs, mesh/large/ceramic, t8/17; cum 88K 11/17;
31414, SI/NC, Hess, EN-Kulczyk-154-94-2029H-8, Alkali Creek, no production data,

Tuesday, January 30, 2018:
33555, SI/NC, BR, Gladstone 1-1-25MBH A, Sand Creek, no production data,
33540, SI/NC, BR, outlaw Wagon 14-23MBH-ULW-A, Sand Creek, no production data,
32355, 1,217, CLR, Hereford Federal 6-20H1, Elm Tree, Three Forks 1, 61 stages; 15.5 million lbs, mesh, large, small; t8/17; cum 111K 11/17;
31413, SI/NC, Hess, EN-Kulczyk-154-94-2029H-9, Alkali Creek, no production data,

Monday, January 29, 2018: 71 wells for the quarter; 71 wells for the year
33554, SI/NC, BR, Gladstone 2-1-25TFH A, Sand Creek, no production data,
32769, 869, Oasis, Oyloe 5199 42-23 3T, North Tobacco Garden, Three Forks, 50 stages; 4 million lbs, mesh, large, small, t8/17; cum 72K 11/17;
32088, 787, Whiting, Fladeland 13-27H, Sanish, 42 stages; 9.7 million lbs; large and small-to-very small, t9/17; cum 39K 11/17;
31643, 960, Oasis, Lawlar N 5199 44-23 10T, North Tobacco Garden, Three Forks, 50 stages; 4.7 million lbs, mesh, large, and ceramic large, t8/17; cum 88K 11/17;
31472, SI/NC, Crescent Point Energy, CPEUSC Makowsky 3-31-30-158N-99W, Ellisville, no production data;

Sunday, January 28, 2018: 66 wells for the quarter; 66 wells for the year
31855, 735, Whiting, McNamara 42-26-3XH, Sanish, 45 stages; 10.5 million lbs, large, small, very small; t9/17; cum 59K 11/17;
31847, 1,515, CLR, Bridger 9-14H1, Rattlesnake Point, a very nice well; 33K in first month of full production, Three Forks 1, 40 stages; 15 million lbs; t8/17; cum 77K 11/17;
31412, SI/NC, Hess, EN-Kulczyk-154-94-2029H-10, Alkali Creek, no production data,

Saturday, January 27, 2018: 63 wells for the quarter; 63 wells for the year
33553, SI/NC, BR, Gladstone 3-1-25MBH A, Sand Creek, no production data,
32900, SI/NC, Crescent Point, CPEUSC Makowskky 7-31-30-158N-99W TFH, Ellisville, no production data;

Targa Resources In The Bakken

In light of the recent announcement regarding a joint venture with Hess, it's a good time to get acquainted with Targa, a name I am very familiar with but do not know much about.

Most recent presentation dated January 23, 2018. Most of the slide presentation is devoted to the Permian; 80% of Targa's activity is related to the Permian.

There is one slide touching on the Bakken.

Note the three NG processing plants, Little Missouri I, II, and III.

If I read the graphic correctly, the capacity of these three plants is 90 million cf/d; apparently the plants reported a gross plant inlet of 61 million cf/d in 3Q17.

If I am reading the graphic correctly, Little Missouri IV will drawf these smaller plants, projected to come in at 200 million cf/d. It will also be the third or fourth largest plant in North Dakota as projected out to 2020.

Back on April 16, 2015, it was announced that Targa had planned to expand its "Badlands" project to four plants, projecting the expansion to cost $140 million. One assumes this is that project but now a joint venture with Hess at $150 million. I see both "Badlands" and "Little Missouri I - IV" being used. It's possible the entire complex is referred to as the "Badlands" complex with each plant a Little Missouri plant. I could be wrong.

History of Little Missouri I - III at this link.

Little Missouri trains I and II are straight refrigeration plants and Little Missouri III is a cryo plant (source, footnote 4).

From a reader regarding the new plant:
It's not in the corporate interest for OneOK to pay for an ethane separtion system in the Bakken as they have ones further south with pipelines there.
Targa doesn't have the capability and needs one and has deeper pockets. Hess Midstream is needed as part of it because Hess holds a big card with an ethane pipeline right now to Alberta.
That pipeline will be converted to propane and an ethane cracker would have sufficient feed if Targa and Hess build an ethane separation unit. The location is almost smack dab in the middle, so pipelines interconnecting those nat gas plants would be minimal.
OneOK will still need its NGL pipelines carrying C4 and greater. Don't think Hess and Targa would be working together unless something bigger is in planning.