Thursday, February 22, 2018

Interesting Slide From Recent Denbury Presentation -- February 22, 2018

Link here.

The Cedar Creek Anticline (CCA) is located in Montana, just across the state line from the very southwest corner of North Dakota. (It extends a bit into southwestern North Dakota.)

According to slide 10 of 23 of the company's presentation, Denbury has 600,000 acres in several plays across the United States, including in North Dakota, Montana, Wyoming, Mississippi. Among those plays, their Mission Canyon-Pennel play in the CCA (southeast Montana) is the most promising (highest probability of success among its many plays; high productivity potential).

Slide 11 of 23 is most interesting. In the CCA, Denbury reports a successful Mission Canyon, de-risking a multi-well follow-on program.

Their successful well was a short lateral (4,800 feet) that required no fracking (typical for Mission Canyon wells in North Dakota, but usually vertical wells). The well had a 30-day IP rate of 1,050 bopd; a preliminary EUR of 400,000 bbls oil but will be updated when sufficient production history is established. The graph:

The follow on wells appear to be in Montana but some folks in southwestern North Dakota might be able to see the rigs and/or from their back porches.

The Art Page

Mom, dad, Sophia and her two sisters (Sophia is in the middle):

Wow, WTI Jumps -- Up Almost 2% -- Flirting With $63 -- Also Exxon On The Move -- February 22, 2018

Note: initially unable to access NOG press release reporting guidance, but it looks like it may be good news. Shares up 8% before the close; down 2% after hours.  Here's the press release (link here):
  • Northern raises 2018 annual production guidance and now expects a 16 - 20% increase over 2017
  • year-end 2017 proved reserve volumes increased 40% year over year from 54.1 million barrels of oil equivalent (“boe”) in 2016 to 75.8 million Boe
  • the SEC PV-10 value of year-end proved reserves increased 100% year over year
  • fourth quarter production increased 22% year over year and 9.3% sequentially to 1,540,237 boe. Production averaged 16,742 boe per day in the fourth quarter
  • fourth quarter oil differential was $3.51 per barrel, an improvement of $2.71 per barrel compared to the third quarter
  • Northern added 16.9 net wells to production during 2017 and ended the year with an additional 18.3 net wells in process
  • adjusted EBITDA for the fourth quarter was $48.5 million. Northern’s adjusted net income for the fourth quarter was $6.6 million, or $0.10 per diluted share. GAAP net loss for the quarter was $23.8 million, or a loss of $0.37 per diluted share, primarily due to a non-cash mark-to-market loss on its hedge portfolio. [I don't know, yet, what analysts forcast NOG's earnings to be for 4Q17.]

First, Exxon: could make Beaumont the largest refinery in the US -- being reported by Data points:
  • Beaumont Refinery currently processes 365,00 bpd; produces 2.8 billion gallons of gasoline annually
  • Exxon could expand the capacity for the Beaumont Refinery to between 700,000 bpd and 850,000 bpd
  • this capacity would be higher than the current largest refinery in the US, Motiva's Port Arthur refinery, at 600,000 bpd; North America's biggest refinery
Much more at the link.

Now, back to WTI: $62.73 near the close of the normal trading day in the US. Tomorrow, for those turning into CNBC you could hear the phrase, "63-handle for WTI."

Back To The Bakken

Active rigs:

Active Rigs564339127187

Two new permits
  • Operator: WPX
  • Field: Squaw Creek (McKenzie)
  • Comments:
One permit canceled:
  • WPX: one Hackberry permit in McKenzie County
No permits renewed.

No producing wells (DUCs) reported as completed.

Wow, This Happened Quickly -- EQT To Spin Off Midstream Business -- February 22, 2018


Later, 7:05 p.m. CT: speaking of "Rover" -- this just in -- moments ago from ArgusMedia -- 
Energy Transfer Partners (ETP) said its Rover natural gas pipeline will not reach completion until the second quarter, up to three months later than its earlier estimate. Delay due to a regulatory issue which has since been resolved.
Later, 6:44 p.m. CT: see first comment --
Regarding EQT ...
The acquisition of Rice will not only enable much longer laterals (there are NO geometric, pre-set drilling units in Eastern states. Contiguous acreage is invaluable for efficiency), Rice's recognized drill skills will be a huge boost for the new company.
The article mentioned the 1.9 Bcfd Mountain Valley pipe coming online this year - one of 2 opening up the south.mid Atlantic to vast gas supplies (the other being the Atlantic Coast pipeline).

Another massive pipe - Mountaineer Xpress - is under construction and - at 2.7 Bcfd - is almost as big as the well recognized Rover.

This time next year, Appalachian Basin output will soar.
Original Post 

Story at ArgusMedia, EQT:
  • largest natural gas producer in the US when it acquired Rice Energy last year
  • acquisition resulted in proven reserves of 21.4 Tcf of natural gas equivalent
  • sold 3.2 Bcfe/d by end of 4Q17
  • the acquisition hastened the spin-off
  • EQT Midstream Partners will merge with Rice Midstream Partners
  • result: will become the third largest gathering footprint in the US
See link for more numbers.

Another investing opportunity while waiting for the Saudi Aramco IPO.

Disclaimer: this is not an investment site. Do not make investment or financial decisions based on what you read here or think you may have read here. If this is important to you, go to the source.

@Tesla Charts

These charts are coming out of nowhere, several every few hours; not sure how one can do so many of these charts so fast. Oh, that's right. This is Tesla.

Trump's Coal: It's What France And Italy (And Germany) Want; What's In Your Barge? -- February 21, 2018

By the way, while you read this article, note that the "Big Chill" will hit Europe starting early next week, maybe as early as this weekend. It could be epochal, as they say.  

Over at the sidebar at the right, I link the "big stories." From there, you can navigate to "Europe at a tipping point." There one can track how the energy picture in the EU is getting messier and messier; more and more hypocrisy as France, Germany, and Italy are importing record amounts of coal from the US. See below.

From that linked "Europe at a tipping point":
July 29, 2017: a trifecta --
Now, today, a coal update for 2017:

From The Washington Times:
As France, Germany and Italy chastised President Trump for rejecting the Paris climate accord in June and mocked the U.S. for turning its back on the environment, their nations were busy importing record amounts of American coal.
The U.S. last year produced 773 million short tons of coal, 45 million more than 2016. That was the largest year-to-year increase in nearly two decades.
But that didn’t equal increased use at home, with more coal than ever heading overseas.

Indeed, the U.S. consumed 719 million short tons of coal last year, a drop of 12 million from 2016.
Total exports in 2017, however, shot up to 95 million short tons, a 58 percent increase over the previous year.
About 31 million short tons of that went to Asia, nearly double the amount from 2016. China alone imported 2.8 million short tons through September 2017 — a wild increase over the previous year’s 205,000.
Total exports to Europe reached 40 million short tons — 13 million more than in 2016.
Some of the most fertile markets in Europe are nations with leaders that have been the most outspoken in bashing Mr. Trump for pulling out of the global Paris climate pact, an Obama-era agreement that the current administration says unfairly punished the U.S. while letting major polluters such as China off the hook.
Chief among the critics has been French President Emmanuel Macron. Among other instances, Mr. Macron in December mocked Mr. Trump by launching the “Make Our Planet Great Again Awards,” a spin on the president’s famous campaign slogan. He gave grants to U.S. scientists to continue their research in France and said his country was leading the way in clean energy and carbon emissions reductions.
Through September 2017, France imported 1.5 million short tons of American coal — double the amount in 2016.
Through September, Germany imported 3.4 million short tons, compared with 2.5 million in 2016.
Italy brought in 2.2 million tons of U.S. coal during the same period; in 2016, it imported just 1.3 million.
Thy hypocrisy is getting tedious. 

Random Look At MRO's 4Q17 Presentation -- February 22, 2018

The other day we mentioned a 30-day IP record in the Bakken, taken from the 4Q17 MRO earnings call.

From that same presentation here are two more Bakken-specific slides from the MRO presentation.

Capital budget for North Dakota (26% x $2.4 billion = $600 million):

MRO's core areas in the BakkeN: Mymidon, Elk Creek, Hector, and Ajax: 

Weekly Petroleum Report -- February 22, 2018; Re-Balancing Remains Unchanged; Gasoline Demand Remains Strong; Regular Gasoline In North Texas For $2.08 Easily Found

Weekly petroleum report data points:
  • US commercial crude oil inventories decreased by 1.6 million bbls; at 420.5 million bbls, inventories in the lower half of the average range for this time of the year
  • refineries operated at 88% of their operable capacity last week; wow -- way below potential
  • despite that refinery capacity report, gasoline production actually increased last week, slightly more than 10 million bbls/day
  • distillate fuel production decreased last week, averaging about 4.5 million bbls/day
  • products delivered: up significantly year-over-year

Re-balancing (again, lines 1 - 23 hidden; otherwise chart would be getting too long to post):

Weeks to RB
Week 0
Apr 26, 2017

Week 24
October 12, 2017
Week 25
October 18, 2017
Week 26
October 25, 2017
Week 27
November 1, 2017
Week 28
November 8, 2017
Week 29
November 15, 2017
Week 30
November 22, 2017
Week 31
November 29, 2017
Week 32
December 6, 2017
Week 33
December 13, 2017
Week 34
December 20, 2017
Week 35
December 28, 2017
Week 36
January 4, 2018
Week 37
January 10, 2018
Week 38
January 18, 2018
Week 39
January 24, 2018
Week 40
January 31, 2018
Week 41
February 7, 2018
Week 42
February 14, 2018
Week 43
February 21, 2018

Gasoline demand:

Cleaning Out The In-Box -- February 22, 2018

Some days my in-box is just too full to get to everything. Today is one of those days. So, I'm going to clean out the in-box and simply run through the list.
Venezuelan Woes Continue
Maybe Crypto-Petro-Currency Will Help

From ArgusMedia, some data points:
  • Venezuela's state-owned US refining subsidiary CITGO has shelved plans to re-start / operate Aruba's 235,000 b/d refinery
  • why? CITGO running short of cash to finance the $695 million plan to revamp the refinery; shortfall due to US sanctions
  • CITGO had already built a construction worker's camp and is looking for a way to move forward
From the article:
The Aruba project was aimed at bulking up PdV's nearshore logistics on the eve of the December 2019 expiry of its lease on the accident-prone Isla refinery in Curacao. Deteriorated infrastructure in Venezuela itself, and a Dutch threat in December to close Bopec unless PdV makes critical repairs add to Aruba's relevance for PdV. The Venezuelan company is also using its Dutch Caribbean assets to supply crude to the Cienfuegos refinery in Cuba, a close political ally of Caracas.
But the route from Venezuela through the Dutch Caribbean and onward to the US Gulf coast and other destinations, namely China and India, is fraught with risk for PdV because of frequent debt-related detentions of its cargoes or vessels. The Panamanian-flagged Proteo tanker has been detained in Bullen Bay since early January as a result of a preliminary embargo on its cargo of Venezuelan Boscan crude and the ship's bunkers. Another vessel, the Greek-flagged Promitheas carrying Russian Urals, is also on hold but has yet to berth in Curacao.
The detentions, which numbered as many as 15 in Curacao alone last year, might have been a trigger for Venezuela's early January decision to close its borders with the ABC islands — Aruba, Bonaire and Curacao — which Caracas initially attributed to rampant smuggling of Venezuelan goods and resources such as gold, and later blamed on EU sanctions. The borders remain closed, but the Venezuelan oil logistics are carrying on with no noticeable effect.
Big Wind Story Of The Day

From the Albuquerque Journal: wind farm developer can't make "it" work if not given huge financial breaks.
Xcel Energy’s plans to build two massive wind farms in New Mexico and West Texas have hit a potential project-killing road block at the Public Regulation Commission.
PRC hearing examiner Elizabeth Hurst wants commissioners to reject a proposal that would allow the utility to recover lost earnings that accumulate during the time that lags between when the wind farms actually come online and when the commission eventually approves new rates for cost recovery and profits on its project.
That lag could take up to two years, during which time Xcel subsidiary Southwestern Public Service Co. would have to write off any earnings because new rates would not yet be approved, even though customers would be benefitting from the electricity generated by the facilities.
But Hurst said it would violate legal principles that prohibit “retroactive rate making,” since it establishes an “interim rate” for the wind farms before the commission has actually approved new rates.

The interim rate design, however, is a key part of a settlement agreement SPS negotiated with other parties in the case, without which the utility might abandon its $1.6 billion project, said David Hudson, Xcel president for New Mexico and Texas.

“It will be extremely difficult to proceed because of financial uncertainty,” Hudson told the Journal. “We wouldn’t know when we would start earning a return, and the longer new rates are delayed, the bigger the financial damage is to the company.”

Best new link of the day: @TeslaCharts at Twitter. Thanks, Don.

Best Chart Of The Day

Although they don't call it that, WalletHub's newest survey ranks the "most boring states" in the US.

#1: Vermont. 

When you get to the link, one needs to turn the chart "upside down" -- bottom to top, top to bottom -- to see how the "most boring states" survey turned out.

In addition to the fixed chart, the interactive map is very, very nice.

Also, note where North Dakota ranks on the survey. 

It appears to be one of the most accurate surveys I've ever seen based on where Vermont and North Dakota rank.

Best Renewable Energy Chart Of The Decade (So Far)

Link here.

Huge Jump In Legacy Fund Deposits -- February 22, 2018

February deposits for the Legacy Fund has been posted (see below). How did I do projecting the February deposit. On February 16, 2018, I posted:
Legacy Fund: deposits are reported here. The data is posted monthly; the most recent deposit was reported for January, 2018. Just for the fun of it, I'm trying out an algorithm to predict the next deposit. Having just run the algorithm, here are my estimates for the February, 2018, Legacy Fund deposit:

  • high end: $49,392,838
  • low end: $41,245,734
  • average (most likely): $47,121,013.55
Price of Bakken
Legacy Fund Deposit Projected
Legacy Fund Deposit Projected
Legacy Fund Deposit Projected
Price WTI
Projection February 2018
High end
as of February 16

Another, much simpler formula, suggests the February deposit will be closer to $51,407,066

Last month I was off by 5% (on the low side). In January, 2018, the deposit was $46,242,885.80. 
It looks like my simpler formula was the better predictor. Legacy Fund deposits for February, 2018: $50,310,643.40.

And look at the curve, wow:

Updating Prince Salman's Plan -- Two Items -- February 22, 2018

I link the Prince Salman plan at the sideboard at the right.

I would not have posted this as a stand-alone post, but the figures put side-by-side are interesting. Prince Salman plans to invest almost as much in his country's entertainment industry as his country's nuclear program. And it looks like he's going to "do" the entertainment spending more quickly than the nuclear spending. Previously posted:
In one case, $64 billion over one decade; in the other case, $80 billion over three decades.

Huge thanks for a reader for sending me the link. I always enjoy updating Prince Salman's plan.

Connecting The Tuvalu Dots -- February 22, 2018

Tuvalu, Tuvalu, Tuvala -- oh, Tuvalu -- now we know.

Tuvalu is the greenies' poster child for AGW - Rising Seas! hyperbole.

How did Tuvalu manage this? I always tell our granddaughters when they don't understand something, google it or follow the money. In this case, it's follow the money.

By claiming to be at risk of going underwater due to anthropogenic global warming, Tuvalu goes to the front of the UN AGW money line. This "nation" is the fourth smallest nation in the world and yet it has more leverage than most countries when it comes to global warming; and, along with the Clintons, may be among the best grifters in the world.

This nation is rich. And it has no land, to speak of, for its 9,000 inhabitants. Their main occupations: fishing and agriculture to feed themselves. The government of Tuvalu depends on a handful of external sources for its operational budget. How do they do it?  Let's go down the list:
  • the Tuvalu Trust Fund: funded by Australia and New Zealand
  • the Falekaupule Trust Fund: funded by the Asian Development Bank
  • UN financial support
  • US government: The US government is also a major revenue source for Tuvalu. In 1999 the payment from the South Pacific Tuna Treaty (SPTT) was about $9 million, with the value increasing in the following years (wiki)
  • funding from the Multilateral Fisheries Treaty and related agreements (US flagged purse seine vessels to fish 8,300 days in the region in return for a payment of $90 million made up by tuna fishing industry and US-Government contributions) (wiki)
  • commemorative and bullion coins (minted in Australia)
  • internet royalties (this is incredible -- the agency that administers domain names just happened to give Tuvalu its own domain: ".tv." I can't make this up. Tuvalu earns over $2 million by leasing the rights to its designated higher-level internet domain name: “.tv”. To media companies in the U.S. and elsewhere, the appeal of having websites with the “.tv” suffix for your television properties is obvious. The domain is managed by Verizon subsidiary dotTV, of which Tuvalu owns 20%
  • stamps: the Tuvalu Philatelic Bureau issues stamps and first day covers for stamp collectors around the world; the Bureau issued its first stamps in 1976, the same year Tuvalu gained its independence and the first year the country minted bullion coins (the coins are minted in Australia; Tuval simply collects the royalties) 
I have some "unique" Tuvalu coins. I knew the Australian-minted Star Trek one-ounce silver coins would be in high demand, and they are. I bought mine at an average price of $27. They are now no longer available from "primary sources." One can find them at significantly higher prices at "second sources" like eBay and Amazon. Although if you wait awhile, they will trend back toward $27. I have found that, generally, these "unique" coins actually lose value as interest wanes (there are exceptions).

Because these are minted in Australian (and marketed as "Australian coins") they sell; my hunch is that if they were marketed as "Tuvalu" coins they would not sell. I assume serious collectors avoid these; speculators buy them and flip them. I could be wrong. Just an opinion.

Anyway, at least for me, the dots between the UN, the greenies, and Tuvalu have now been connected.

Primary suppliers: out of stock --

Secondary sources have them in large amounts:

From a post just a few days ago:

Island Rising!


February 10, 2018: from JoanneNova --

Original Post 

The poster-child island for "anthropogenic global warming sea rising" or AGWSR for short -- is growing. I can't make this stuff up. From
The Pacific nation of Tuvalu—long seen as a prime candidate to disappear as climate change forces up sea levels—is actually growing in size, new research shows.
Has the UN sent Tuvalu that $50 billion -- mostly from US taxpayers -- to save themselves from rising seas yet?

Back To Basics -- February 22, 2018

Wow, I talked about this years ago and this is the first time I've seen someone else mention it.

From Mike Filloon today over at SeekingAlpha:
I personally like the use of short laterals because geology is precious and should be treated as such. Operators are getting better at stimulating the toe on two-mile laterals, but there is still a decrease in production the further completions are from the kick off point. 
More at the link, of course.

Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on what you read here or what you think you might have read here. 

Jobless Claims: 45-Year-Low; Drops 7,000 From Previous Week; 222K Versus 230K Expected -- MAGA -- February 22, 2018

My, oh, my -- jobs: US weekly jobless claims total 222 vs 230,000 expected. At 45-week low

Back To The Bakken

Active rigs:

Active Rigs554339127187

RBN Energy: refined-product delivery and storage infrastructure in Mexico, part 4.