Sunday, March 11, 2018

Here We Go Again -- The Sky Is Falling, The Sky Is Falling -- AAA -- March 11, 2018; Tesla Shut Down Production For One Wekk In Late February -- That's Good News -- Bloomberg

According to the AAA:
  • the price of gasoline is going to keep rising
  • the price of gasoline is already 25 cents/gallon more than it was last year
  • American drivers could reach a "tipping point" on the price of gasoline this summer
So, let's take a look:
  • 16,000 miles / year
  • 20 miles per gallon 
  • 800 gallons of gasoline / year
  • x 25 cents / gallon = $200
  • / 52 weeks = $3.85 / week more in gasoline
  • a single Big Mac costs about $4.00
Get a grip, AAA.

  • minimum wage, $15/hour
  • $4/$15 =  27% = 16 minutes (per week)
Confirmed: Tesla Suspended Production Of Its Model 3 For One Week
That's Good News -- Bloomberg

Reported by Bloomberg:
Tesla Inc. temporarily suspended production of the Model 3 electric sedan at its lone auto plant for a week in late February, a planned breather that ultimately may help increase output of the closely watched vehicle.
Model 3 production was idled from Feb. 20 to Feb. 24 before resuming at the company’s assembly plant in Fremont, California, Tesla confirmed Sunday. The automaker currently makes the Model S sedan, Model X sport utility vehicle and Model 3 at that site, and batteries at a plant known as the Gigafactory east of Reno, Nevada.
“Our Model 3 production plan includes periods of planned downtime in both Fremont and Gigafactory 1,” a Tesla spokesman said in an emailed statement. “These periods are used to improve automation and systematically address bottlenecks in order to increase production rates. This is not unusual and is in fact common in production ramps like this.” 
I assume shares of Tesla will surge on this news tomorrow.

Here It Is -- It's Official (?) -- SaudiAramco IPO Delayed Until 2019 -- March 11, 2018

Financial Times reporting: SaudiAramco IPO delayed until 2019.
The kingdom had targeted a late 2018 listing, with shares to be sold on Saudi Arabia’s Tadawul exchange. But preparedness for the offering and willingness for a simultaneous or sequential flotation on a foreign exchange has been questioned
Delays on IPO decision-making come as advisers have struggled to achieve the $2tn valuation that Prince Mohammed wants. 
Saudi Aramco’s finances and internal operations have been shrouded in secrecy for decades and its close relationship with the state has raised financial, legal and regulatory challenges. 
Not in the headline but in the story:
... any foreign flotation was likely to happen in 2019 at the earliest.
Or ever.
Bjorn Lomborg Now Linked In

Bjorn Lomborg is now linked at the sidebar at the right. I considered removing Mark Perry and replacing Mark Perry with Bjorn Lomborg, but elected to keep them both for now. 

The Remaining Oakdale / Ryden Wells In Jim Creek Have Been Fracked; Very Nice Wells -- March 11, 2018

The wells are tracked here. The wells are still on the SI/NC (confidential) list but production data suggests they have all been fracked.

A "OnePointSeven" Million Bbl Well Taken Off-Line, #16059, A Very Old Petro-Hunt USA Well -- March 11, 2018

A very, very good well has just come off-line. The well:
  • 16059, 729, Petro-Hunt, USA 2D-3-1H, Charlson field, t10/06; cum 1.66 million bbls 1/18; still producing 5,000 bbls/month; this is a very, very short lateral; only 13,689' total depth
There are no wells in the immediate area. No sundry note to explain why this well was taken off-line. Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Random Update Of An Old WPX Bear Den Well, #20359 -- March 11, 2018

I'm not sure what resulted in the jump in production. According to FracFocus this well has been fracked only once, back in 2011. Note the production jump in late 2015, note, it was never taken off-line during that period (in bold red). The legal name of the well suggests a second bench TF, but in fact it's a middle Bakken well. No neighboring wells were fracked during the period of increased production.The well:
  • 20359, 96 (no typo), WPX, Bear Den 24-13H2, middle Bakken, 12 stages; 2.7 million lbs; t 10/11; cum 465K 1/18;

Interestingly enough, there is a sundry form received in October, 2015, that said that there was an overflow of produced water due to a mechanical problem with the pump. It makes me think the well was being re-worked about that time but nothing was found in the file report. Not only was there a jump in production back  in late 2015, that increase in production held on for quite some time.

Random Update Of Mathistad Wells -- March 11, 2018

These Mathistad wells have been updated:

Shell Changes Mind On Convent Refinery -- Louisiana -- Part To The Motiva - Saudi Aramco Story -- March 11, 2018

You may remember this story, reported some time ago:
Shell became the sole owner of the Convent refinery in May 2017 after it completed the transaction for the separation of assets, liabilities, and businesses of Motiva Enterprises LLC with Saudi Aramco. Under that deal, Aramco got the biggest refinery in the U.S., Port Arthur in Texas, while Shell received the Norco and Convent refineries in Louisiana.
Shell had planned to permanently decommission the Convent refinery:
Initial plans were to permanently decommission the gasoline unit as part of a project to integrate the Convent plant with the 225,800-bpd refinery in Norco, Louisiana, through a network of pipelines.
Shell has now changed its mind. The refinery will undergo a major overhaul this summer; gasoline production will halt for an unspecified period of time.
Shell decided not to permanently close the gasoline unit in early 2018, opting instead to overhaul it to extend its production life for at least another four to five years, Shell spokesman Ray Fisher told Reuters at that time.
Oil major Royal Dutch Shell halted gasoline production at its Convent, Louisiana, refinery between Thursday and Friday.
As of Friday morning, it was not immediately clear how long the gasoline producing unit with processing capacity of 92,000 bpd would remain offline.
The gasoline-producing unit of the 227,586-bpd Convent refinery was scheduled to undergo a major overhaul this summer, after Shell dropped its plans to decommission it.
Shell plans to shut for a planned overhaul the gasoline producing unit at Convent for some six weeks starting in June.
I don't see a cost figure but a major overhaul for extending a refinery only four to five years suggest that Shell sees quite an opportunity for selling gasoline overseas.

Wells Coming Off Confidential List This Next Week -- March 11, 2018

Note: over the past few weeks it is clear that a lot more wells are starting to come off the confidential list; still a lot of DUCs, but a lot of very, very good wells. Starting to see more and more results of pad drilling. 

Friday, March 16, 2018:
32157, 1,758, Bruin, Fort Berthold 152-94-13B-24-11H, Antelope, a nice well; t9/17; cum 80K 1/18;

Thursday, March 15, 2018:
33631, SI/NC, Hess, BB-State-151-96-3625H-8, Blue Buttes, , no production data, 

Wednesday, March 14, 2018:
33632, SI/NC, Hess, BB-State-151-96-3625H-7, Blue Buttes, no production data, 
29975, 1,038, QEP, MHA 5-06-01H-149-92, Heart Butte, 51 stages; 10.3 million lbs, mesh/large, a very nice well; t9/17; cum 110K 1/18;

Tuesday, March 13, 2018:
31085, 299, Bruin, Fort Berthold 148-94-35C-26-6H, Three Forks, 52 stages; 10.4 million lbs, producing, but not noteworthy; early numbers disappointing; t9/17; cum 17K 1/18;

Monday, March 12, 2018:
33633, SI/NC, Hess, BB-State-151-96-3625H-6, Blue Buttes, no production data,
32840, SI/NC, BR, CCU Badger 1C-TFH, Corral Creek, no production data,
28242, 569, Lime Rock, Rebsom 3-14-23H-143-95, Murphy Creek, 40 stages; 6 million lbs, producing, an okay well; t9/17; cum 49K 1/18;

Sunday, March 11, 2018:
33495, 2,437, Hess, BB-Ole Anderson-151-95-3130H-9, Blue Buttes, 60 stages; 4.2 million lbs, large/medium, producing, a nice well, t12/17; cum 49K 1/18;
32841, SI/NC, BR, CCU Badger 1D-MBH, Corral Creek, no production data,
32839, SI/NC, BR, CCU Badger 1B-MBH, Corral Creek, no production data,
32732, 987, Whiting, Keeling 31-13-2H, Truax, 4 sections, 44 stages; 10.5 million lbs, a very nice well;  t9/17; cum 98K 1/18;
31396, SI/NC, BR, Glacierson 1-4 UTFH-ULW, Clear Creek, no production data, 

Saturday, March 10, 2018:
33741, 342, Foundation Energy, Fugere 3-31, Camel Hump, a Red River well; t12/17; cum 14K 1/18; a nice well for a Red River well;
31757, SI/NC, BR, Glacier 2-4 MBH, Clear Creek, no production data,
29518, 333, Oasis, Twobins 5501 41-20 8T, Missouri Ridge; 50 stages; 4.1 million lbs; mesh/large/medium, a nice well; t9/17; cum 57K 1/18;
28243, 683, Lime Rock Resources, Rebsom 4-14-23H-143-95, Murphy Creek, 40 stages; 6 million bls, producing, a pretty good well; t9/17; cum 47K 1/18;
28241, 415, Lime Rock Resources, Rebsom 5-14-23H-143-95, Murphy Creek, 40 stages; 6 million lbs, producing, t9/17; cum 37K 1/18;

Idle Chatter About Mark Papa's Concerns About Shale Oil -- March 11, 2018

This is an old story but it's getting a lot of press because Mark Papa spoke about it again at the recent oil conference. One can find the story everywhere; here's one link. I think he first spoke about this about a year ago. I may have even blogged about it then.

Simply stated: Mark Papa warns that US shale oil forecasts are too optimistic. He may be right. Look at this graph from this link:

Note how "narrow" the band is for "tight oil" (the Permian, Eagle Ford, and the Bakken) compared to that large, large band labeled "other." I assume that's what Papa (former EOG/CEO) is looking at.

In the military when we had "information" or "intelligence" a big issue was whether the "information" or "intelligence" was "actionable." We have a lot of information but so what?

I'm not sure that Mark Papa's "concern" is actionable. After you read the articles about what he is saying, how will that affect what you do, with regard to anything? I honestly don't know.

One source said that Mark Papa said that the Bakken and the Eagle Ford were "long in the tooth." A reader sent me that link. I replied, not ready for prime time (and my reply does indeed miss what Mark Papa seems to be saying, but I will post it anyway):
He may be correct. It all has to do with perspective.

Oil companies are in the "E & P" business -- "exploration and production."

From an "exploration" point of view, I think he's right on track. There's not much more "exploration" needed in North Dakota. Exploration would suggest some dry wells while operators are looking for new plays; there are "no" dry wells in the Bakken. In other words, the Bakken was probably long in the tooth by 2014.

For me, the emphasis is now on the "production" half of the equation.

And production is going to depend on many factors:
  • price of oil
  • advances in technology
  • skill of geologists
  • completion strategies (fracking: number of stages; amount of proppant)
  • infrastructure (takeaway capacity)
  • state and federal regulations
  • extraction and production taxes
To put all this in perspective, the Permian was a legacy play that was considered "dead" some years ago.

The Bakken is now in the "manufacturing" stage which was predicted some years ago.

I'm not sure what "actionable" information Mark Papa provides by saying the Bakken is long in the tooth without more specifics. I would be more interested in what his thoughts are about the Bakken with regard to max production in a "perfect oil" world.  Bentek provided that "analysis years ago: 2.2 million bopd. Right now, the Bakken is stuck at 1.1 million bopd but analysts expect the Bakken to set more production records as soon as this summer.

Idle Chatter -- Nothing About The Bakken -- March 11, 2018

I think this is the third or fourth time I've blogged about the jobs report this past week. Absolutely amazing, those reports. The WSJ has another interesting story.  At 4.1%, unemployment rate held at 17-year low. I've read a fair number of articles about this surge in employment and it's clear that the press is unable to credit Trump's policies. It's really quite amazing how much they are affected by TDS. Two comments.

By the way, look at that third story: truckers boosted hiring at fastest pace since 2015.

First comment: snowball effect. More jobs will result in more jobs. As more folks go back to work, the need for "support" services will increase. Example: McDonald's will open 1,000 new restaurants in 2018 (that's a Fox Business link so it might be blocked by the blogger app). [Later: this link to USA Today is not blocked.]

Second comment: why are folks coming back to the workplace? Three reasons: they are making more money; they need jobs to get employee-provided health insurance; and, they need cash to pay for their smart phones and data plans (I'm not kidding on the third reason):
  • eighteen states have raise their minimum wage
  • due to the Trump tax cuts, less is being taken out of hourly wages
  • companies are using tax breaks to build their businesses
  • health-care costs continue to sky-rocket; ObamaCare is dying; folks need jobs for access to health-care 
  • likely amount that the average 19-year-old is paying for her smart phone, data plan, music streaming, apps, etc: $150/month
Companies realize they have a four-year window in which to take advantage of these tax breaks. When the Dems win the US presidency, the US House and the US Senate in 2020, corporate America knows their taxes are going back up.

McDonald's Has Raised The Bar -- By A Lot

For various reasons, I have had the opportunity to visit three fast food restaurants in the past week: McDonald's; What-A-Burger; and, Chick-fil-A.

McDonald's: their new restaurants have raised the bar. Really, really incredible. Do a google search of McDonalds new stores renovation kiosks and then read some of the articles. I'll come back to this later.

Chick-fil-A: because they are closed on Sundays, and because they are so well liked, and because there are so few Chick-fil-A restaurants, you will have a long line if you visit when they are busy. But pick a "slow" time and their service is incredible. Their sandwiches travel better than McDonald's or What-A-Burger if taking your meal home to eat.

What-A-Burger: nothing new. The hamburgers are outstanding. The service is great but wow, they can be slow, slow, slow -- at least compared to the McDonald's and Chick-fil-A. I visited all three when things were very slow and Chick-fil-A was by far the fastest, then McDonald's and What-A-Burger was a distant third.

What slows down service when ordering inside the restaurant? The drive-through. Obviously the restaurants have to prioritize their drive-through customers or the lines would go on forever. In addition, it appears that more and more folks are using drive-through than coming inside to eat. I talked to the Chick-fil-A folks about that and they said the same thing. Inside can be fairly slow but the drive-through is busy, busy, busy.

Now, back to McDonald's. Three things.

1. If one doesn't like standing around waiting for one's order, McDonald's is the place to go. You go in, place your order on the self-ordering kiosk, and then you go sit down and start working on your computer or read a book or newspaper. No wasted time. A few minutes later, your food is brogught to you. It's quite incredible. Absolutely no time wasted standing around.

2. McDonald's says they do not plan to cut staffing even with the kiosks. We'll see. Right now, iwth no cut in staffing, there were two McDonald's employees standing around with little to do. But they were helping folks using the self-ordering kiosks (one can still order at the counter if one wants). But this gives the McDonald's employees more time to get out and clean the tables, refill napkins and straws and ketchup. I think McDonald's will be able to cut one of six employees once kiosk-ordering takes off.

3. Interestingly enough, McDonald's says kiosk-ordering will cut down on errors. I thought that was a bunch of malarkey. I can't imagine there are that many ordering mistakes made. But I am wrong. When I went up to talk to the MeDonald's employee today, I could not understand her, her Spanish accent was way too strong. I finally figured out she was telling me that the lunch menu would not be available for eight minutes (I had arrived just before 11:00 a.m. when breakfast was still being served -- which, of course, brings up another question, for another day). I told her I would wait. I blogged. When I did order, I went to the kiosk. So, McDonald's can now worry less about what language their employees speak. The kiosks by the way, appear to be pretty much in English (maybe there's a Spanish option that I missed); that doesn't matter -- it's pretty much all in pictures.

Quality of food: that's a completely different issue. I'm only talking about the ordering process and timeliness. However, having said that, the Big Mac is still hard to beat. No one beats McDonald's on French fries (even with their changed recipe [years ago]). Which reminds me, one no longer needs to stand in line to get a cup for soft drinks. All the cups at the renovated McDonald's are freely available. They must be counting on the "honor system." This is not going to work in some areas, such as East St Louis.

Bottom line: for my needs, McDonald's is the only place of the three that I will visit with occasional exceptions. This was the first time I had been in a What-A-Burger in over a year, maybe two years.. No wi-fi at What-A-Burger and the service was incredibly slow. Hamburger choices are much wider but the Big Mac is hard to beat for overall umami-ness. There must be a gazillion fast food restaurants to choose from but for me, bang for the buck, it's still McDonald's. And, yes, in the local area, we have everything: Five Guys, In 'N Out, Wendy's, Burger King, Jack-in-the-Box, Sonic, Dairy Queen, and on and on and on.