SandRidge And Midstates Petroleum Company To Merge -- Mississippi Lime Shale Formation -- February 7, 2018

Link here.

SandRidge Energy, Inc. recently landed a merger deal with its rival Midstates Petroleum Company in an all-stock deal. The move is likely to create one of the largest oil players in the Mississippian Lime shale formation.

Both Tulsa-based Midstates Petroleum and Oklahoma-based SandRidge have prominent presence in Mississippian Lime and the merger is likely to unlock substantial synergies for both companies.

More:

The proposal also supports the prolonged efforts of Fir Tree Partners and Carl Icahn — two of the biggest shareholders in both SandRidge and Midstates Petroleum — who have long criticized SandRidge’s managerial decisions and wanted a change in the company’s leadership position.

The new entity will own more than 450,000 net acres in the core of the Mississippian Lime play with the production capacity of over 53,000 barrels of oil equivalent per day. In addition, the combined company will also hold 75,000 net acres in the Northwest STACK play.

Both companies have emerged from Chapter 11 bankruptcy after successfully completing their debt restructuring.SandRidge recovered from bankruptcy in October 2016 after reorganizing $4.1 billion in debt, while MIdstates Petroleum came out of the same in December 2016 after writing off $2-billion debt.

The combined company is thus does not have any debt and will display strong liquidity metrics with a forecasted free cash flow of up to $480 million in the next five years. The acquisition will help the combined entity to yield superior risk-adjusted returns in the coming years.

The Sky Is Falling! The Sky Is Falling! Not Really -- February 7, 2018

I know it's only been a couple of months, but has anyone noticed any bad news with regard to this Washington Post story published December 29, 2017? The headline: to round out a year of rollbacks, the Trump administration just repealed key regulations on fracking.

The only data point related to the headline after the story was written was that the US set a crude oil production record last week: 10 million bopd -- not seen since 1970. Wow. Less than two months after President Trump "repeals" Obama's fracking regulations -- not passed by Congress -- the US sets a crude oil production record.

The comments, in hindsight, look pretty ridiculous. The interesting thing is that this story had a shelf life of exactly 24 minutes. Not one story since this one was posted that suggested any problems with the rollback on fracking regulations.

**********************************

20-20 Hindsight

The crews from Montana would have had this problem solved by now but the guys in Washington, DC, and the gal in Puerto Rico, had a better solution: lawyer up.

By the way, if this is the typical terrain in Puerto Rico (see below), it now makes sense why the crews from Montana were called in. This is right up their alley, as they say.

Current estimate when electricity will be restored across the country: May. 2018.

Elon Musk's "powerwalls" have been in Puerto Rico since October 16, 2017. and this is how far "we" have come.

*********************************

For The Archives: Arctic Ice Is Too Thick 

First, this sad story: Canadian sealers come up short. Unable to reach defenseless seals to beat them to death. Why? The ice was too thick for the sealers to reach the seals.

Second, this less sad story: the reason there may have been a decline in polar bears in some loccal areas was because their prime food source had moved. Why? The ice was too thick for the seal pups to get to air holes in the ice to breath. The seals and the bears simply moved to better breathing/hunting grounds. The BBC film crews didn't bother looking for them. The film crews already had their story, and, besides, it was too cold to stay any longer.

Quiet, Quiet Day -- Only Four New Permits -- February 7, 2018

Active rigs:

$61.73↓↓↓	2/7/2018	02/07/2017	02/07/2016	02/07/2015	02/07/2014
Active Rigs	58	40	42	136	192

Four new permits:

• Operator: Abraxas
• Field: North Fork (McKenzie)
• Comments: Abraxas has permits for a 4-well Ravin pad in NENW 26-150-97

Three permits renewed:

• BTA: three Beaver Creek permits, all in Billings County

And that was all.

Double Whammy! Crude Oil Falls 2.5%; Now Below $62 -- February 7, 2018 -- If You Have But One Metric To Gauge The Health Of The US Economy, That Metric Is Gasoline Demand -- Winston Churchill

No, I don't think Winston Churchill ever said that, but he might have. I don't know. I never met him.

We'll get to that (gasoline demand) later.

But now, the double whammy on price of crude oil. First, the Forties Pipeline will re-open overnight.

But wait, there's a report that there's a problem: Crude oil prices pop higher on reports that he critical Forties pipeline in the North Sea has shut down following an unexpected closure of a feed control valve -- that was this morning at 10:20 ET. But five hours ago, via Twitter, operators said they plan to open the pipeline overnight. It's all in flux. Last Twitter comment: the "unexpected closure of a feed control valve doesn't sound too bad." Probably Homer Simpson came on at shift change. Futures right now show WTI at $61.51.

Second, and this is even worse news: US crude oil inventories increase for the second consecutive week. So much for re-balancing this year.

Gasoline demand.

***************************************

Weekly Petroleum: Selected Data Points

Data from the weekly petroleum report, linked above:

• US crude oil inventories increased by 1.9 million bbls -- almost 2 million bbls, and the second time in two weeks to see an increase; now at 420.3 million bbls
• refineries back up to 92.5% operable capacity; much better than last week, but certainly not remarkable
• gasoline production increased and averaged above 10 million bbls per day; same with distillate fuel production -- it rose; averaging 5.1 million bbls per day: for newbies, remember the numbers "10" (for gasoline) and "5" (for distillate fuel)
• total products supplied are up an incredible 4.8% -- almost 5% -- from this time last year -- can anyone say "boom"?
• likewise, motor gasoline product supplied was up 6.5% -- almost 7% -- from this time last year -- can anyone say "boom"?
• and, let's hear an "amen": distillate fuel product supplied was up 8.9% -- almost 9%, which is almost 10% -- can anyone say "boom"?

Amen.

********************************** 

Re-Balancing

Two weeks ago -- 20 weeks. Then 24 weeks. Now 26 weeks. Hey, we're going in the wrong direction!

20 weeks: about five months.

26 weeks: over six months and we're already into February.

Week	Date	Drawdown	Storage	Weeks to RB
Week 0	Apr 26, 2017		529.0	180
Week 1	May 3, 2017	0.9	528.0	198
Week 2	May 10, 2017	6	522.0	50
Week 3	May 17, 2017	1.8	520.2	59
Week 4	May 24, 2017	4.4	515.8	51
Week 5	May 31, 2017	6.4	509.9	41
Week 6	June 7, 2017	-3.3	513.2	60
Week 7	June 14, 2017	1.7	511.5	57
Week 8	June 21, 2017	2.5	509.0	62
Week 9	June 28, 2017	-0.2	509.2	71
Week 10	July 6, 2017	6.3	502.9	58
Week 11	July 12, 2017	7.6	495.3	47
Week 12	July 19, 2017	4.7	490.6	43
Week 13	July 26, 2017	7.2	483.4	38
Week 14	August 2, 2017	1.5	481.9	48
Week 15	August 9, 2017	6.5	475.4	35
Week 16	August 16, 2017	8.9	466.5	30
Week 17	August 23, 2017	3.3	463.2	29
Week 18	August 30, 2017	5.4	457.8	27
Week 19	September 7, 2017	-4.6	462.4	32
Week 20	September 13, 2017	-5.9	468.2	39
Week 21	September 20, 2017	-4.6	472.8	46
Week 22	September 27, 2017	1.8	471.0	46
Week 23	October 4, 2017	6.0	465.0	41
Week 24	October 12, 2017	2.8	462.2	40
Week 25	October 18, 2017	5.7	456.5	37
Week 26	October 25, 2017	-0.9	457.3	39
Week 27	November 1, 2017	2.4	454.9	38
Week 28	November 8, 2017	-2.2	457.1	42
Week 29	November 15, 2017	1.9	459.0	43
Week 30	November 22, 2017	1.9	457.1	42
Week 31	November 29, 2017	3.4	453.7	41
Week 32	December 6, 2017	5.6	448.1	37
Week 33	December 13, 2017	5.1	443.0	36
Week 34	December 20, 2017	6.5	436.5	30
Week 35	December 28, 2017	4.6	431.9	28
Week 36	January 4, 2018	7.4	424.5	25
Week 37	January 10, 2018	4.9	419.5	23
Week 38	January 18, 2018	6.9	412.7	20
Week 39	January 24, 2018	1.1	411.6	20
Week 40	January 31, 2018	-6.8	418.4	24
Week 41	February 7, 2018	-1.9	420.3	26

****************************************

Your Enemy Is My Enemy

These two nations have been fighting each other as long as ...  I don't know for how long ... but it's been awhile.

But now that it looks like the government might keep its word on at least one thing when dealing with Native Americans, the two nations unite to plead their case.

From Twitter:

The PennEnergy link is here. Technically, the government is not shutting the plant down -- at least not directly. The linked article has more of the story.