155-96-17, CLR, Brooklyn, Rolf / Springfield Wells -- March 15, 2018

Proposed 9-well CLR pad; Springfield wells will run north; Rolf wells will run south:

The 9-well pad:

• 34690, 1,058, CLR, Springfield 6-8H1, Three Forks, not in section 17; t4/19; cum 140K 11/20; cum 154K 6/21; off line 7/21;
  
• 34691, 940, CLR, Springfield 5-8H1, Three Forks, not in section 17; t4/19; cum 148K 11/20; cum 160K 7/21;
  
• 34692, drl --> 1,553; CLR, Springfield 4-8H, middle Bakken, not in section 17; t3/19; cum 170K 11/20; cum 179K 7/21;
  
• 34693, drl --> 1,757; CLR, Springfield 3-8H1, Three Forks, not in section 17; t10/18; cum 144K 11/20; cum 152K 7/21;
  
• 34694, drl --> 2,006; CLR, Springfield 2-8HSL, not in section 17; t2/19; cum 176K 11/20; cum 192K 7/21;
  
• 34695, drl --> 1,601; CLR, Rolf 6-17H1, Three Forks, t4/19; cum 231K 11/20; cum 242K 7/21;
  
• 34696, drl --> 1,324; CLR, Rolf 5-17H1, Three Forks, t4/19; cum 186K 11/20; cum 162K 7/21;
  
• 34697, drl --> 1,760; CLR, Rolf 4-17H, middle Bakken, t4/19; cum 213K 11/20; cum 230K 7/21;
  
• 34698, drl --> 1,872; CLR, Rolf 3-17H1, Three Forks, t4/19; cum 172K 11/20; cum 191K 7/21;
  

Existing well, running north from the south

• 20183, 282, CLR, Rolf 1-20H, t6/11; cum 415K 11/20; huge jump 1/19; see production profile here; cum 432K 7/21;
  

CLR With Permits For A 9-Well Pad; Three Producing Wells Completed -- March 15, 2018

Active rigs:

$61.23→	3/15/2018	03/15/2017	03/15/2016	03/15/2015	03/15/2014
Active Rigs	57	46	30	112	190

Nine new permits:

• Operator: CLR
• Field: Brooklyn (Williams County)
• Comments: CLR has permits for a 9-well (or two pads close together) Springfield/Rolf pad, in NWNW/NENW 17-155-98;

Three producing wells (DUCs) reported as completed:

• 31154, 741, Bruin E&P, Fort Berthold 148-95-13A-24-6H, Eagle Nest, t11/17; cum 39K 1/18;
• 31412, 2,553, Hess, EN-Kulczyk-154-94-2029H-10, Alkali Creek, t3/18; cum --
• 33656, 1,100, Hess, GO-Vinger-156-98-2116H-2,  Wheelock, 4 sections, t3/18; cum --

Parting Shot -- Off The Net For Awhile -- Biking -- March 15, 2018

Link here:

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

Tolkien

Only one book today.

Understanding The Lord of the Rings: The Best of Tolkien Criticism, editors Rose A. Zimbardo and Neil D. Isaacs, c. 2004.

Essays by:

• CS Lewis
• WH Auden
• Tom Shippey
• many others

WH Auden: "The Quest Hero"

The editors:

At the very moment that such champions of modernism as Philip Toynbee and Edmund Wilson were mocking and maligning The Lord of the Rings as "dull, ill written, whimsical, and childish," coarse fodder for those readers who have "a life-long appetite for juvenile trash," Auden, among the great modernist poets, wrote this admiring and penetrating analysis of Tolkien's great epic.

Auden considered The Lord of the Rings to be the kind of work that shapes an enduring, universal mythic and psychological pattern in human culture and consciousness. It is, he says, a "literary mimesis of the subjective experience of becoming." Dismissing the left-wing paper warriors who  attached Tolkien as a fascist and a racist, Auden calls attention to the political and social ideals the novel upholds: a "benevolent monarchy," within which the Shire exists as "a kind of small-town democracy." It is Sauron's kingdom, which all the free peoples of Middle-earth abhor, that is "a totalitarian and slave-owning dictatorship."

The Quest.

Some variants:

The Detective Story: the goal is not an object or a person but the answer to a question -- who committed the murder?

The Adventure Story: here the journey and the goal are identical.

Moby Dick: here the Precious Object and the Malevolent Guardian are combined and the object of the Quest is not possession but destruction. Another example of a Quest which should not have been undertaken, but it is tragic rather than evil. Captain Ahab belongs in the company of Othello, not of Iago.

The Kafka Novels: in these the hero fails to achieve his goal, in The Trial either to prove himself innocent or learn of what he is guilt, in The Castle to obtain official recognition as a land surveyor; and he fails, not because he is unworthy, but because success is humanly impossible. The Guardians are too strong and, though Kafka avoids saying so I think one can add, too malevolent. What makes K a hero is that, despite the evidence that Evil is more powerful than Good in the world, he never gives up the struggle to worship the Prince of this world. By all rules he ought to despair; yet he does not.

My first thought after reading that paragraph by WH Auden on the Kafka novels? Trump.

More from WH Auden (don't you wish you could have taken Brit Lit from WH Auden?):

To indicate the magnitude of the task Tolkien set himself, let me give a few figures. The area of his world measures some thirteen hundred miles from east (the Gulf of Lune) to the west (the Iron Hills) and twelve hundred miles from north (the Bay of Forochel) to south (the mouth of the River Anduin).

In our world there is only one species, man, who is capable of speech and has a real history; in Tolkien's there are at least seven.

The actual events of the story cover the last twenty years of the Third Historical Epoch of this world. The First Age is treated as legendary so that its duration is unknown, and its history is only vaguely recalled, but for the 3,441 years of the Second Age and the 3,021 years of the Third he has to provide a continuous and credible history.

My first thought after reading those paragraphs: George Lucas and Star Wars.

Tom Shippey: Tolkien's official biography, reviews Peter Jackson's movie trilogy. And says Jackson did an incredible job. One of Shippey's most interesting observations:

One has to say that there is, probably inevitably a certain degree of bowing to popular taste in Jackson. Tolkien's perceived lack of strong female characters leads to the insertion of Arwen as Frodo's rescuer in the first movie, but the heroic role she is given rings a little hollow ... But it perhaps offers a moment for female viewers to place themselves in the story.

If you've seen the movies (and who hasn't?), Tom Shippey's essay is a must-read.

I did not care for CS Lewis' essay -- CS Lewis was Tolkien's closest friend -- but the essay appeared to have been dashed off in one afternoon.

If one has time to read just two selections from this anthology, I recommend WH Auden's and Tom Shippey's.

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

Word For The Day: Mimesis

I've seen this word three times today in two sources.

Mimesis: imitation, in particular --

• representation or imitation of the real world in art and literature
• the deliberate imitation of the behavior of one group of people by another as a factor in social change

The Market And Energy Page, T+15 --- March 15, 2018; How Did Bloomberg's Gadfly Miss This One?

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 what you think you may have read here.

Wow. EOG has 40% upside -- Fitzsimmons over at SeekingAlpha.

• like many Canadian energy stocks these days - Enbridge has suffered a massive sell-off: down 14% YTD and down 20% since the merger with Spectra was completed
• but ENB's liquids pipelines in Canada are running at full capacity. And its storage assets benefit from the back-up in Canadian supply
• dividend growth prospects are excellent and management has committed to growing the dividend at a 10% CAGR through 2020
• an analysis of EV/EBITDA at a 14x midstream multiple (using 2018 estimated EBITDA) indicate shares are deeply discounted
• the shares could easily trade up 40%, or to $46, from the current $33. Add in the current 6.3% dividend and the total return would be 45%+ 
• the dividend story is incredible
• mentions Line-3 in passing; a big concern 

Texas holdem: cold snap could trigger gas supply emergency in UK if Putin orders Russian gas giants turn off taps due to spy scandal (won't happen; ships already in port, or very close)

• the cards:
• Putin's hole cards: two aces
• Theresa May's hole cards: an ace and an 8
• the flop: an ace, another 8
• the turn: yet to come
• the river: yet to come
• we've been talking about this since the winter of 2013-2014, maybe 2011-2012
• now we have the winter of 2017-2018
• Putin's in control, but a full house beats three of a kind

Beating a dead horse named Ipo. Now Bloomberg --

A couple of years on, the IPO hasn't yet happened, and there are now signs it could be pushed into 2019. The figure looks like it resulted from a highly scientific process of multiplying Saudi Arabia's roughly quarter-trillion barrels of proved oil reserves by a multiple of $8. But the fact that Aramco is being privatized in the first place undercuts such simple valuation by reserves, because the IPO acts as a hedge against weaker long-term oil demand. It makes little sense to apply such blanket valuations against 60 years' worth of production (companies usually carry about 10 - 15 years of proved reserves on the books).

Rule number one with an IPO: Don't announce a target value years ahead of the actual sale -- especially if one is tempted to use the word "trillion."

That rule was broken way back with Saudi Arabian Oil Co., or Saudi Aramco. In early 2016, when Prince Mohammed bin Salman first unveiled plans to list shares in the oil behemoth, he boasted about a price tag of $2 trillion. A couple of years on, the IPO hasn't yet happened, and there are now signs it could be pushed into 2019.

The problem: cash flow. Saudi Arabia can't get there from here.

Cash flow:

How Saudi gets there (hint: it won't, unless there's a huge geopolitical event):

One big problem: when it comes to some offerings, cash flow does not matter at all. It's all about the mojo. If cash flow mattered, Tesla would have gone away a long, long time ago.

How could Bloomberg's gadfly miss that?

"Everyone" will want a piece of the Saudi Aramco pie. Or not. But cash flow is not the driver.

Other comments:

• look at that: to get to Shell's 7% cash flow at $65, the Saudi Arabia IPO is worth about half ($1.1 trillion) vs what Prince Salman wants ($2 trillion)
• another trope dashed: Saudi's net profit per bbl on $65 oil is ... drum roll ... $18/bbl

******************************* 

If I Had My Druthers ...

... I wouldn't post links to oilprice.com, but sometimes it's almost impossible not to link some articles. We've talked about this for quite some time. This is why I suggested the other day that the biggest oil story of the year might be ExxonMobil's decision to move to light oil at its Gulf Coast refineries. RBN Energy has talked about this more than once. From oilprice.com:

"2020 is going to usher in a mammoth sea change for the global petroleum market. On January 1, 2020, the International Maritime Organization - the agency that regulates the global shipping market - will enforce a global sulfur cap of 0.5 percent on marine fuels.

While this is this going to have the biggest impact on fuel oil and middle distillates, it is also going to influence the crude flows of heavy sweet barrels. In fact, it already is.

Heavy sweet crude is going to be increasingly in demand in 2020, as refiners look to pivot towards producing low sulfur fuel oil.

Lest we forget, lighter crude yields less fuel oil, while sour crude raises the sulfur content.

The challenge for the global market is going to be getting its hands on heavy sweet crude. According to our ClipperData, heavy sweet crude exports make up just over 1 percent (!) of total waterborne exports, and have been on the wane in recent years. Of these exports, nearly two-thirds come from West Africa.

Paragraph 6: Angolan Dalia is the leading grade, but there are also exports of Lokele from Cameroon, Baobab from the Ivory Coast, Yombo from Congo and Ebok from Nigeria. Doba, which is produced in landlocked Chad, is the second-largest export, and hits the global market via loadings from Cameroon.

In terms of the destination of these grades, three countries account for a half of all barrels: the U.S., India and China. An interesting trend is emerging, as illustrated in the chart below. China has surpassed the U.S. in just the last year to become the largest recipient.

For newbies: there are two huge things I've learned from the blog over the years regarding heavy oil vs light oil

• US refiners along the Gulf Coast optimized their operations for heavy oil at great cost about ten years ago; killing the Keystone XL changed everything
• heavy oil: distillates, like fuel oil; light oil: gasoline (see graphic)

The coolest thing about the story above: while reading paragraph six (6) above, a 2 x 4 hit me on the head, and a light bulb went off: quick -- name the one country in the world that is investing heavily in African heavy oil.

Yup: China.

As I said to my son-in-law last night, things are moving very, very fast. My only regret: I won't live long enough to see many of these "sea-changes" -- pun intended.

The Political Page, T+15 -- The Ides of March

Not enough arrows in her quiver?

Warren: 1, Pocahontas: 0.

The US Senate overwhelmingly, 67 - 31, passed a partial roll-back of Dodd-Frank. Huge bipartisan support; even Dems hate Dodd-Frank.

Pocahontas: "I don't see how any senator can vote for Wall Street deregualation.

Re-posting:

Under the radar/connecting the dots:

• roll-back of Dodd-Frank; big win for big banks
• Buffett buys Bnnk of New York Mellon
• Buffett's largest holding: AAPL
• Apple, Inc, hires Bank of New York Mellon to protect its cash assets in Ireland
• Buffett buys BK back in September, 2017; Congress starts rolling back Dodd-Frank in early 2018
• Buffett really, really smart? was this the reason he Wells Fargo -- knowing that Dodd-Frank was going to be rolled back
• Buffett's hand in lobbying Congress on this one?
• Buffett just lucky?

********************************* 

Passion On The Potomac 

Season two has barely begun. In the first episode, Rex Tillerson was fired.

Now, looking to episodes 2, 3, 4, and 5. From CBS this morning. The never-Trumpers see this as chaos. The Trumpers see this as moving best folks into right positions, cutting losses, keeping folks on their toes. In the bottom photo, I agree: three of the four, and perhaps all four, need to go, sooner than later. There's one face in the crowd that unfortunately does not show up in either photo below:

If nothing else, this will keep the US Senate busy with confirmation hearings.

Is Buffett This Smart Or Just Lucky? -- March 15, 2018; A Norwegian Wins The Iditarod

Arnold Palmer Invitational: Tiger Woods will be playing. Starts today.

March Madness: "First Four" completed, and now to the tournament. Huge day today as the first round begins. Sixteen (16) games today. The game to watch: Alabama vs Virginia Tech.

Iditarod: after conquering the Winter Olympics, a Norwegian wins the Iditarod.

Statoil name change: to Equinor. Removes "oil" from name. Embraces renewable energy. My hunch: under duress they made the decision -- a political necessity. 

Another casualty due to Apple, Inc: iHeartRadio files for bankruptcy

• victim of "streaming"
• two players in this sector: Apple, Inc and Spotify
• Apple Music now has 36 million paying subscribers; only 30 million one last September (2017)
• Apple Music could eclipse Spotify this year (2018)

Texture:

• Apple buys Texture
• turns out Amazon considered buying Texture; backed off; already had Kindle Cloud Reader

Under the radar/connecting the dots:

• roll-back of Dodd-Frank; big win for big banks
• Buffett buys Bnnk of New York Mellon
• Buffett's largest holding: AAPL
• Apple, Inc, hires Bank of New York Mellon to protect its cash assets in Ireland
• Buffett buys BK back in September, 2017; Congress starts rolling back Dodd-Frank in early 2018
• Buffett really, really smart? was this the reason he Wells Fargo -- knowing that Dodd-Frank was going to be rolled back
• Buffett's hand in lobbying Congress on this one?
• Buffett just lucky?

Jobs report: econoday -- first time unemployment claims -- unremarkable

• forecast: 229K
• actual: 226K
• prior (revised): 230K
  

Chart of the day: look at the decline of US - Saudi oil imports year-over-year, via Twitter:

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

Active rigs:

$61.35↑	3/15/2018	03/15/2017	03/15/2016	03/15/2015	03/15/2014
Active Rigs	57	46	30	112	190

RBN Energy: the power generation drivers of East Coast gas demand growth.

The worst of this winter’s cold has passed, but the impact of structural changes in U.S. power generation will be felt in natural gas markets for years to come. The generation mix has been changing rapidly in recent years, and the switch from coal to gas is happening at an even faster pace on the East Coast than in the country overall.

This switch reflects both coal-plant retirements and ongoing competition between remaining coal plants and gas plants. But low-cost gas supplies in the Marcellus and Utica plays don’t always have ready access to the biggest consuming markets, and this winter, we saw how the increasing call on gas for Eastern power generation can stress the gas pipeline grid and cause price blowouts. Today, we continue a series on Eastern power generation and prices by untangling the sources and drivers of gas-fired generation growth in the region.