Saturday, March 3, 2018

Random Update Of An XTO Kaye Well Following A Neighboring Frack -- March 3, 2018

August 28, 2017: check #19960, #18189 at end of 2017. Neighboring wells just fracked (31199, 31200, 31201, 31202)
  • 31199, 1,838, XTO, Kaye Federal 13X-3H, Lost Bridge, t5/61 (sic, probably 6/17); cum 56K 9/17; (#19960, #18189); update here, #19960 with huge jump in production; #18189 still off-line; #19960 with huge jump -- see update here; yet to see what #18189 will do; most recent update, 12/17;
So, now, let's check:
  • 19960, 1,666, XTO, Kaye 43X-4, Lost Bridge, t12/11; cum 514K 1/18; API - 33-025-01222, FracFocus has no data that this well was re-fracked; nor is there a sundry form suggesting a re-frack; recent production data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

 18189 is still off-line.

US Natural Gas Production, A Random Update -- March 3, 2018


NOTE: from million tonnes LNG per year (MTPA) to Bcf/d = multiply the former by 0.131584156

March 4, 2018: China became second largest importer of LNG (after Japan) in 2017; Japan 11 Bcf/d; China, 5 Bcf/d; but Japan's and Korean imports have remained steady for years; China's is growing significantly; see EIA data;

March 4, 2018: the world needs a lot more LNG -- Royal Dutch Shell --
  • global trade volumes of LNG have doubled since 2005, and will continue to rise
  • the US will boast almost 10 billion cfpd of LNG export capacity by the end of 2019
  • US will be the third-largest LNG exporter, right behind Australia and Qater
  • that alone is amazing, but then consider this: two years ago (2016), the US had less than 1 Bcf/d of export capacity
  • Shell says the global supply of LNG won't meet demand
  • Shell expects the supply crunch to occur i the early 2020s mostly due to the way buyers/sellers interact
  • buyers want smaller, more flexible, shorter (in duration) contracts
  • sellers want the opposite to lock in prices / volumes to cover very expensive terminals ($4 billion for Cove Point)
  • sellers have responded: smaller trains at Cove Point; floating terminals
March 4, 2018: with regard to the Cove Point comment below, see this Reuters story --
  • first vessel carry LNG from newly constructed Cove Point LNG export terminal in Maryland has departed as of Friday (remember all the protesting again Cove Point? with revelations of Russia's meddling in US politics, the dots are starting to connect; I always thought it was Saudi Arabia sponsoring protests against shale, pipelines, natural gas -- nope, it was the Russians; if they dupe people into anti-Hillary demonstrations supporting Bernie Sanders, certainly they could do much more in the energy arena)
  • the facility is still undergoing final commissioning
  • Cove Point is the second big LNG export terminal in the Lower 48; after Cheniere Energy's Sabine Pass terminal in Louisiana which exported its first cargo in February, 2016
  • US became an exporter of LNG in 2017 for the first time in 60 years
  • the US will become the third largest LNG exporter this year (2018)
Later, 10:32 p.m. CT: see comments --
Regarding LNG and its export ...
Two developments will greatly assist US companies to bypass existing LNG producers, namely modularization and ship-based LNG plants.

Modularization: Tellurian cost to produce 27 mtpa (almost double Yamal [ Russia, Arctic]) is about $16 billion (about half Yamal) using the modularization approach.

Floating LNG: Delfin plans on using FLNGs -- ships -- to greatly lower the price to liquify gas.
Later, 9:59 p.m. CT: see first comment --
The Cove Point MD LNG just shipped its first test cargo of LNG the other day. [Think of all the jobs this "operation" has produced.]
At 750 MMcfd capacity, it will increase US exports a bit.

One year from now, pipelines will be online carrying 10 Bcfd gas out of the Appalachian Basin. This will increase AB (Appalachian Basin) production from 25 to 35 Bcfd ... simply a staggering amount.  [Again, to put that in perspective -- Bloomberg Gadfly points out that the additional 7 billion cfd growth this year is staggering -- imagine multiplying that 7 billion by four or five times -- and that's just one year from now.]
More increases will continue.
People are gonna be shocked at how much gas the US will be producing 5 years from now.
Original Post 

Natural gas, US production, EIA, the graphic:

Bloomberg, the Gadfly, January, 2018:

Again, to repeat, the US will add the equivalent of the entire output of Turkmenistan -- one of the world's largest gas exporters -- in the space of just one year.

According to a google search:
During 2009, Qatar exported over 2.4 trillion cubic feet of natural gas.
From SeekingAlpha, March 2, 2018:
The big fundamental news this week was that Lower 48 production averaged an all-time high of ~78.4 Bcf/d, and LNG exports reached ~4 Bcf/d.
80 billion x 30 days = 2,400 billion cf/month -- compare to  2,427 billion in the EIA graph at the top.

Disclaimer: I often make simple arithmetic errors, especially dealing with large numbers.

Just Dropped In ...

... To See What Condition My Condition Was In, Kenny Rodgers and The First Edition

Aluminum-Wrapped Life-Savers Could Get More Expensive Due To Tariffs -- Time Magazine -- March 3, 2018

Time headline: Trump's trade tariffs could make your beer and MacBooks more expensive.

Wow, of all the things to worry about, add this to the list.

Earlier it was reported that an aluminum can would cost an additional 0.6 cent, slightly more than half a penny per can, if President Trump follows through on his steel and aluminum tariffs.

A case of beer (four six packs) would cost an additional (24 x 0.6 cent =) 15 cents.

It should be noted that 8% sales tax on a case of beer runs about $3.20.

And so we get this headline story in Time that a tariff on aluminum is going to increase the price of beer. LOL.

But it's not just beer. 

From the article:
If the tariff includes finished goods, Apple’s Mac and iPhone costs could go up by as much as 0.2 percent, assuming the tax is a percentage of the metal components of Macs and iPhones, Munster said. Apple declined to comment.
For a MacBook: $4 more for a $2,000 laptop. Tax on a $2,000 laptop would add $160.

For a $1,000 iPhone X, an additional $2.00. The tax would be $80.

But what really has people frightened is how much more Life Savers might cost. Apparently it's such a concern that, according to Time:
Hershey Co. and Mars Inc., which makes aluminum-wrapped Life Savers, didn’t immediately respond to requests for comment.
I assume the Trump tariff would also be the kiss of death for aluminum-wrapped Hershey Kisses.

I can think of a gazillion reasons pro and con regarding tariffs on aluminum and steel: the cost added to a can of beer or to a roll of Life Savers is not one of them (either a pro or a con).

However, I am going to stock up on Life Savers if the Republicans can't talk President Trump out of these tariffs. My hunch: President Trump will exempt aluminum used to wrap Life Savers. Once President Trump signs the executive order, we probably have six months to buy Hershey Kisses and Life Savers before the price goes up.

A huge "thank you" for Don for spotting this article. I would have missed it.

Tesla Production Well Below 1,000 Units/Week -- Bloomberg Estimator -- March 3, 2018

I'm tracking 1Q18 Tesla data here, and I would normally post this graph a that post, but it is quite amazing on several levels:

This page won't be updated. I will continue to update 1Q18 Tesla data at the link above.

They Must Be Reading The Blog -- March 3, 2018

Forbes article sent by a reader: time to concede the Bakken bear call? The article begins:
With the fall in commodity prices in late-2014, and the subsequent drop in rig count and production levels, it was a natural call to write-off Williston Basin (most notably known for the Bakken formation) as yet another casualty of energy market forces. 
But are the Bakken bears hanging on too long? Sure, concerns over lack economic drilling locations over the very long-term could be warranted, but it may too soon to start planning the funeral. When you break down some of the data, the Bakken has a good trajectory
Yes, rig counts and oil prices are down from their 2014 peak, but initial production rates have ramped and differentials have fallen. As a result, production is on the verge of setting new highs and the recently expanded oil pipeline infrastructure leaving the area is on track to fill within 18 months.
But in the second paragraph, already falling into that same bear trap, following an outdated metric: the number of rigs drilling unconventional tight oil formations:
The drilling dynamics in the Williston have certainly changed.  At the peak when oil prices were above $100 per barrel, rig counts hit 198.  However, with the subsequent fall in oil prices in late 2014 and again in early 2016, rig counts fell to as low as 22.  Since then, oil prices have rebounded to above $60 per barrel.  In response, rig counts have also come up to above 50.  While this is a mere 25% of where they were, the rigs active today are much more productive than they were in the past.
Look at the history of the number of rigs in North Dakota. NDIC predicts that North Dakota will set new production records in just a few months:

Refreshingly, this:
The biggest driver is the fact that the 30-day average initial production (IP) rates for each well have dramatically improved.  In late 2014 those rates were around 500 barrels per day.  Following the drop in oil prices there was an immediate lift in IP rates as producers improved operationally and focused in on their most productive acreage. Since then, IP rates have continued to climb and as of late last year they were above 800 barrels per day. Top performers in the basin like Marathon Oil have seen IP rates above 3,000 barrels per day and overall average around 1,600 barrels per day.

Much more at the link.

But again, the big takeaway from this article: pipeline takeaway capacity in North Dakota could again peak out within 18 months. Wow.

"1031 Exchange" Information

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 think you may have read here.


July 12, 2018: a google search for "1031 exchange" puts this "hit" at or near the top suggesting a lot of folks with an interest in this subject have found the information at that site useful. 

July 12, 2018: another group with 1031 exchange experience, apparently, is The 1031 Team. I cannot vouch for or recommend any company I might mention on the blog, but I will say that this group has been very responsive with regard to e-mail correspondence.

Original Post

March 1, 2018.

A reader sent me this link. I am vaguely aware of Peregrine; occasionally it shows up in the news and on the "Bakken operators" page.

Peregrine 1031 Energy Partners, a company assisting 1031 investors in diversifying their exchange, has agreed to acquire producing and non-producing oil and gas royalties in Divide County, North Dakota from an undisclosed seller.

The acquisition features production from a number of currently producing wells in the prolific Bakken Shale oil basin. Josh Prier, Peregrine Managing Director, stated, “The Bakken Shale, in general, is a play we know well and is an area we’ve worked with clients in for many, many years. We’re excited about this latest acquisition as we continue to bring world class assets to our investor base from all over the United States.”

Over the past 12 months, Peregrine has been very active in the Bakken Shale region, deploying over $14 million to mineral owners looking for divestment options for part or all of their producing royalties.

Readers Catch Everything! -- March 3, 2018 -- February, 2018 - Atmospheric CO2 FWIW

Two days ago I posted a link to a Bloomberg article that said gasoline consumption declined 0.0006 percent, year-over-year, 2017-over-2016, the first time there had been any decline in consumption in the US in five years ... and then went on to blame President Trump winning the election. Wow.

But 0.0006% is the same as 0.000006 or six parts per million, about the same amount as atmospheric CO2 has changed in the past year.

Speaking of atmospheric CO2, the February 1, 2018, data is here.

The March 2, 2018, data:

What was the March, 2017, number? 407.05 ppm.

There appears to be some change in the reporting date, so keep that in mind when looking at the charts.

But using the reporting date, 408.67 - 407.05 = 1.62 parts per million.

So, that decline in US gasoline consumption kept the yearly jump in atmospheric CO2 to less than 2 parts per million.

2/1,000,000 = 0.0002% (or 0.000002).

2/407.05 = 0.5%.

The scariest things for the warmists: if atmospheric CO2 ever stays stable year-over-year, or heaven forbid, actually declines.

Has atmospheric CO2 ever been higher in the past two years? Glad you asked. In June, 2017, the number was 208.84.

But, atmospheric CO2 varies with the season.

Global Warming Smacks Europe, United Kingdom, New England, California -- And More -- March 3, 2018

"Weather" or not you're a warmist or a denier, or sitting on the proverbial fence, the biggest mistake one can make in these matters is hyperbole.

The photo-shopped image on the front cover of National Geographic some years ago of the Statue of Liberty sinking under a rising ocean did that publication irreparable harm. The Kennedy's assertion that their grandchildren would never see snow again was another bit of hyperbole that completely turned me off to global warming warnings. If the Kennedy grandchildren want to see snow they can go out to California where seven feet of snow in northern California has put a screeching halt to the state's drought -- today's headline at The Daily Caller. And, of course, now with the NOAA re-adjusting temperatures to fit their models ... well, what can I say?

I was reminded of all that when I realized there were no stories in the mainstream media last week on February 27, about the plight of polar bears.

February 27?

International Polar Bear Day. February 27th.

I do not recall any story in the mainstream press this year about International Polar Bear Day. A google search confirms my suspicions. The first six hits for "international polar bear day":
  • a story dated February 27, 2017 (last year)
  • wikipedia
  • "National Polar Day" website
  • Polar Bear Day / Days of the Year 
  • Happy International Polar Bear Day 2018! -- from The Sun
  • International Polar Bear Day: 13 Things You May Not Know About ... February 27, 2011
Apparently the polar bear story is no longer the cause célèbre it once was. Perhaps because the global polar bear population is larger than previously thought -- February 23, 2017 (and a reminder that humans legally kill millions of baby seals -- primary food for polar bears -- something that is never mentioned by warmists).

For those of you who may have missed it, the bellwether of climate change, the Adélie penguins are thriving, hitting all-time population records (link here).

A reader suggested to me that the reason for the population rise among Adélie penguins may be due to less shrinkage due to warmer waters. Badda-bing.