Sunday, June 3, 2018

Still Bullish On Cryptocurrency -- June 3, 2018

Disclaimer: yes, you know the drill. This is not an investment site. I'm not even sure it's an entertainment and/or education site. All I know is I've not been kicked off the internet yet. Certainly the internet gurus know my political leanings. If the internet censors are reading this, for the record I am a huge Obama supporter; will vote for Bernie Sanders if he runs again; can't understand how Hillary lost -- the election must have been hacked. And I love an unfettered net -- an internet without regulation, a free-for-all. But I digress. 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.

Cryptocurrency: some time ago -- a couple of weeks or a couple of months, I forget, I mentioned that having initially been wary of cryptocurrency, I am now bullish. Having mentioned that a reader sent me this:
I am in the "tech"  industry so I have exposure to blockchain.  Here is the first link. This one of the most understandable explanations of the process I have encountered:
If you like that here is the follow up on how Microsoft (sorry it is not Apple) is implementing it. 
An interesting aspect of the second video is how he addresses the "energy use" aspects of the process. If I remember correctly when I first saw this it was during the bitcoin boom and warmists were worried about the CO2 impact.
Yes, warmists should be very, very concerned about blockchain. The cryptocurrency miners use huge amounts of electricity. At the rate "miners" are using electricity, some countries that signed the Paris Protocol To Control The Earth's Climate will have to start burning coal, again, to make electricity needed by the miners.

From what I can tell, the reader did not say he was bullish, neutral, or bearish with regard to cryptocurrency.

For the record, simply because I am bullish on cryptocurrency does not mean I have any money invested in the sector. I am bullish for Tesla to succeed but I am not financially invested in the company. I think it's a cool car and if I had all the money in the world, I would buy one or two or three.
  • cryptocurrency
    • distributed currency
    • keep track of who has what
    • the view has to be consistent across the platform
    • digital coin is not physical
    • if the transfer is valid, the exchange is over; the buyer "disappers"
    • public - anonymous 
    • must be scalable
  • foundation: cryptography
  • hashing: taking a block of data and creating a digest of that data -- a small representation
    • a ton of data can be converted to a small bit of data
    • each block of data will have its own digest
  • signing: take the digest and then use cryptographic key to create a signature for that digest; 
    • public - private key
  • the white board begins at 5:20
    • transaction: Mark gives Seth five bitcoins
    • Seth now has the five coins -- wants to give George five coins
    • sign the hash of the previous transaction -- the public key of George sees that transaction
    • proves that Seth has those five coins 
    • Seth signs the Seth-George transaction with Seth's private key, but once signed everyone using the public key can trace back / validate the five coins
    • George "has" the five coins but to do anything with them, he has to do another transaction
    • George to Veronica
  • how are all these folks in consensus that all those transactions took place
    • generation of blocks and generation of transactions
    • take all the transactions that might have occurred during some point in time; put them in a block
    • the hash of that whole block refers back to the previous block/hash
    • distributed consensus algorithm was the problem that needed to be solved
  • mining
  • distributed consensus algorithm was the problem that needed to be solved
    • solved with "mining"
    • mining: distributed consensus algorithm
  • power needed to mine -- sidebar
  • anyone can try to mine a block
    • to mine a block, must solve a cp that is computationally intense
    • generate a hash; 
    • a field in the block called a nonce
    • the block: the hash; the transactions (the digests); and the nonce -- assign a value
    • that value must be less than a certain value (only so many leading zeroes)
    • it will take about ten minutes to solve a problem
    • it becomes a race
    • trying to solve the puzzle -- everyone racing to be first
    • some miner solves the problem; shows everyone the solution; once everyone sees the solution, that becomes the next block in the chain
  • what's the value for the miner
    • computationally expensive and getting more computationally expensive every day
    • for solving the problem, one gets a "bit" of bitcoin as payment
    • economic incentive to make sure they are right
    • also there are fees that one can get if the economic incentive gets too small
    • miners will have to "ante" bitcoin to replenish the pool of bitcoin for economic incentives
  • to be continued -- begin at 18 minutes

Making America Great Again -- The Market, Energy, Political, And Sunday Comics Page, T+3 -- June 3, 2018

Costco. Set to raise wages for 130,000 employees. And this fall those 130,000 employees can vote to put politicians back in office who want to raise tax rates. It's an open-book test.
  • the starting wage for Costco employees would go up $1 to $14 or $14.50 per hour, while other warehouse employees would see hourly raises of $.25 to $.50
  • the raises are expected to cost the wholesale retail company $110 to $120 million before taxes. 
  • Costoc credited the raises to last year’s tax bill, which lowered the corporate tax rate and provided a windfall for large corporations
  • comment: isn't Bernie Sanders pushing for $15/hour minimum; the Costco $14.50 is for starting wages; within six months those new hires will see their hourly rate going up again; and, they can buy lunch for $1.59 at Costco -- what a great country
Wal-Mart: the linked article continues --
  • Costco is not the only company to give out raises or bonuses that they attributed to the tax bill
  • two of Costco’s competitors have as well. In January 
  • Walmart raised its starting hourly wage to $11
  • Target said it would raise its wages to $12 per hour by the spring and $15 hourly by 2020 (isn't this what Bernie wanted?)
  • (Yet other reports show that fewer than 45 of Standard & Poor’s 500 companies gave out bonuses in the four months after the bill went into effect -- from the report.)
  • comment: the "race" is not over -- maybe only 45 of the 500 companies so far, but the number will keep increasing -- the journalist writing this story -- no doubt -- sour grapes -- didn't get a raise
Scheaffer, Bic, journals, et al: incredibly good news. EPA chief is re-writing so many of Obama's rules and regulations that he is running out of pens and legal pads. But he's making American pens great again. What a great story. EPA head Scott Pruitt apparently re-wrote so many regulations, making American great again, he needed to spend $3,230 on pens and journals. I can't make this stuff up. As a huge fan of both journals and pens, I applaud Scott Pruitt. Keep it up. Except for one journalist, I don't think anyone's complaining. Tag: jumping the shark.

Lunch: meanwhile, the price of a private lunch with Warren Buffett is $3.3 million. Tag: jumping the shark.

For Newbies: How Neighboring Fracks Might "Extend" High Production For Older Wells -- June 3, 2018

This well has "seen" several neighboring wells fracked over the past year. This page won't be updated. The well:
  • 28717, 3,638, Whiting, P Johnson 153-98-1-6-7-16HA, Truax, t8/15; cum 393K 4/18;
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Idle Chatter: Bakken Operators Executing Their Strategy; Saudi Preparing For 2019 IPO -- June 3, 2018

Wells coming off the confidential list this next week have been posted. It appears the wells being released over the weekend will be some huge wells but then next week there are going to be a lot of DUCs.

I have talked before about the large number of DUCs and inactive wells despite the fact that the price of oil is in a nice range for Bakken operators. My hunch is that operators are "managing" their assets based on their strategic plans, and that's why we continue to see so many DUCs despite the nice oil price environment.

So, what is talking about today? They call this "breaking news" but in fact it was reported last week. I think they are just keeping the same headline: "Saudis may hike July oil prices to Asia to more than 4-year high."

Remember, for newbies:
  • Brent is set by the market, directly; affected by Saudi Arabia, indirectly.
  • WTI is set by the market, directly: affected by Saudi Arabia, indirectly.
  • Saudi's OSP ("official selling price") is set by Saudi Arabia, but influenced by the global market.

Americans are watching two different movies when it comes to trade. The "mainstream media" calls it a "trade war." Trump supporters would see this as a historic turn regarding trade negotiations: previously, America, a single county would negotiate trade deals with multiple countries which had formed a "bloc" (like the WTO, the EU, NAFTA, etc). Now, Trump wants bilateral negotiations: one-on-one with Mexico. One-on-one with Canada. One-on-one with the EU. One-on-one with China. In a fight would you prefer to take on a gang of seven by yourself, or would you prefer to take on each individual, one at a time? This is not rocket science. [Yes, I know the EU is a bloc of nations, and one might say my argument falls apart. That's fine. On the other hand, certain tariffs might hurt Germany more than France. But my argument may not hold water. That's fine.]

Later: just after posting the above note, I went over to CNBC to see what was being posted (see screenshot below), and right on cue, validating exactly what I just posted, the market is watching the same "trade" movie that I'm watching. In fact, the market likes the idea of the US negotiating:
  • mano a mano
  • from a position of strength; and,
  • without bowing
One-on-one, there is not one country that wants to go tit-for-tat with the US on raising tariffs. They will all negotiate. Which is good. Yahoo!Finance validates Trump's argument:

The Mideast

Jordan: I've been wondering when Jordan would start imploding.


Last night ABC Evening News reported that the contents of some letter from Trump's legal team had leaked. I don't recall the specifics. I believe the letter was from last January, 2018. That story was either the third story or the fourth story to lead ABC Evening News last night. The first two stories had to do with trivial events, one-offs, which I have already forgotten. The ABC report on the leaked contents of the letter:
  • lasted less then 60 seconds
  • showed a taped comment from Rudy Giuliani, "Trump's lawyer"
  • had no discussion with Mueller's team or with any "never-Trumper"
  • no additional discussion of any sort
What did that tell me? This is what the one-minute segment told me: ABC News knows that Americans are tired of the Mueller witch hunt. When that story comes on network news and lasts long enough for Americans to find their remote control and switch stations, folks will do just that: switch stations. I was amazed how short this segment was. I asked my wife what that was all about. Apparently Rudy Giuliani was going to be on the Sunday morning "news" shows; if so, this was simply a subliminal tease/advertisement for ABC News on Sunday morning.

The Sports Page

Horse racing: don't forget. Triple Crown. Belmont. This weekend, June 9. Saturday. 6:36 p.m. EDT. I'll be traveling. I'll miss it.

Swimming: Katie Ledecky on cover of Swimming World's June 2018 cover.

NBA championship: for folks like me, the only two games worth watching: a) game 4 if there's a possibility of a sweep (we'll know later tonight); or, b) game 7 if it goes that far.

Wells Coming Off The Confidential List This Next Week -- June 3, 2018

Friday, June 8, 2018:33608, SI/NC, Hess, SC-Gene-154-98-0805H-5, Truax, no production data,
33525, 786, Oasis, Spratley 5494 44-13 4T, Alkali Creek, t1/18; cum 138K 4/18; 
33524, 930, Oasis, Spratley Federal 5494 44-13 3BX, Alkali Creek, t1/18; cum 151K 4/18;

Thursday, June 7, 2018:
33853, 758, Lime Rock, Hansen B 18-19-1H, Stanely, an old well previously off confidential, now confidential again and producing a nice well; 50 stages; 10 million lbs; t12/17; cum 81K 4/18;
33609, SI/NC, Hess, SC-Gene-154-98-0805H-4, Truax, no production data,
30556, 1,498, Bruin, Fort Berthold 148-95-13B-24-10H, Eagle Nest, t12/17; cum 117K 4/18;

Wednesday, June 6, 2018:
33610, SI/NC, Hess, SC-Gene-154-98-0805H-3, Truax, no production data,
30168, 2,107, CLR, Syracuse 7-23H, Banks, another huge Banks well for CLR; 140K in first four months, 4 sections; TD = 21,542 feet; 45 stages; 8.1 million lbs, 100-mesh; large/medium sand, plug & perf; t1/18; cum 144K 4/18;

Tuesday, June 5, 2018:
33769, 1,073, Kraken Operating, Redfield West 23-14 6H, Lone Tree Lake, t1/18; cum 56K 4/18;
33768, conf, Kraken Operating, Redfield West 23-14 5H, Lone Tree Lake, producing, 
33767, 1,415, Kraken Operating, Redfield Weest 23-14 4H, Lone Tree Lake, t12/17; cum 91K 4/18; 
33766, 868, Kraken Operating, Redfield West 23-14 3H, Lone Tree Lake, t12/17; cum 69K 4/18;
31478, SI/NC, Slawson, Serpent Federal 4 SLTFH, Big Bend, no production data,

Monday, June 4, 2018:
34126, SI/NC, Slawson, Serpent Federal 8-36-32H, Big Bend, no production data,
33913, SI/NC, Hess, BB-Sigrid Loomer-LW-150-95-0817H-1, Blue Buttes, no production data,
33455, 2,454, Whiting, King 11-8H, Truax, t12/17; cum 102K 4/18;
33297, 1,591, Whiting, Scanlan 11-5H, Truax, t12/17; cum 111K 4/18;

Sunday, June 3, 2018:
33671, 740, Lime Rock Resources, Hansen 18-19-2H, Stanley, t12/17; cum 77K 4/18;
33456, 2,252, Whiting, King 11-8-2H,  Truax, t12/17; cum 98K 4/18;
33078, 1,475, Oasis, Patsy 5198 12-17 6B, Siverston, t12/17; cum 127K 4/18;
29798, 1,916, CLR, Chicago 7-26H, Banks, t1/18; cum 147K 4/18;

Saturday, June 2, 2018:
33912, SI/NC, Hess, BB-Sigrid Loomer-150-95-0817H-9, Blue Buttes, no production data,
33385, 2,564, WPX Energy, Mandan North 13-24HC, Reunion Bay, t4/1; bcum --
33052, 33, Crescent Point Energy, Little Muddy, t2/18; cum 16K 4/18;
30555, 2,437, Bruin E&P, Eagle Nest, t12/17; cum 120K 4/18;

For Newbies: A Reminder Regarding Wells Of Interest -- June 3, 2018

For newbies: occasionally I will post "wells of interest" -- for the most part, these are wells that have had a jump in production years after they were originally drilled/completed/fracked.

For any number of reasons, Bakken wells may show a jump in production years after they have been drilled/completed/fracked. We have discussed that before in posts that discuss the "life history of a typical horizontal Bakken well."

Here is another example, at this link.

This is an index of "wells of interest" I have posted so far.

Summary Of North Dakota Wells That Came Off The Confidential List Two Years Ago; DUCs Have A Two-Year Deadline To Be Completed -- June 3, 2018

Second Nobel prize for Obama? Maureen Dowd certainly thinks so. Others will simply use this for the bottom of their bird cages.

Trans Mountain Pipeline Expansion Pipeline protests: now that the Federal government "owns" the pipeline, it looks like the Canadian judges will be more sympathetic to the plaintiffs when ruling on protestors.

Back to the Bakken 

DUCs: generally speaking, operators have two years in which to complete/frack a well once it has been drilled to depth. Between the time the well is supposed to come off the confidential list and the time it is actually completed (if not completed at the time it comes off the confidential list) the well is considered a drilled, uncompleted well (DUC).

So, let's see how the operators have done.

Going back to the 1Q16, two years ago, all wells that came off the confidential list during that quarter (1Q16) should now be completed and an IP reported. Wells coming off the confidential list during 1Q16 are at this link. 

During that three-month period, 280 of the 281 wells in North Dakota came off the confidential list.

Of the 283 wells, 13 were non-Bakken wells; 270 were horizontal Bakken wells.

There were three "dry" horizontal Bakken wells reported in 1Q16. I find that absolutely amazing. Wells are considered "dry" if for any reason they are spudded and then do not produce any oil. So, that means, that even if the casing collapses or the horizontal fails for some reason, the well is considered "dry" even though there would have been oil there had the well been successfully drilled. A Bakken well drilled to depth will generally produce oil  so a failed frack will not result in a "dry" well. Of the 270 horizontal Bakken wells, there were only three "dry" wells. Of the 283 wells that came off the confidential list in 1Q16, three (1%) failed. I would say that's incredible -- a huge "shout out" to the roughnecks.

Disclaimer: The following data is taken from my data base. It will not match the data base of the NDIC. There will be factual and typographical errors, but it's probably pretty close. Feel free to fact-check me on the numbers and alert me to any errors. Of the 281 wells reported in 1Q16:

  • of the 270 horizontal Bakken wells, 162 (60%) were DUCs; most were completed; some went to TATD status (see below)
  • 31220, XTO, Heart Butte, had an IP of "0" but is currently active, and producing about 1,100 bbls/month; not atypical for Bakken wells of this age; it is not a dry well;
Dry wells:
  • 31207, dry, EOG, casing failed
  • 31590, dry, Statoil, 
  • 31356, dry, Hess, 
One remains on conf:
  • 29690, conf, Hess, why?
Non-Bakken wells, vertical, some may be directional:
  • 31582, a Spearfish/Madison well, Resonance, producing,
  • 31525, a Spearfish/Madison well, Resonance, producing,
  • 31719, a Madison well, Petro Harvester, a nice well,
  • 31222, a Madison well, I believe, Ballard Petroleum,
  • 31118, a Madison well, Ballard Petroleum,
  • 29622, a Madison well, Ballard Petroleum,
  • 31552, a South Red River well, Denbury, 
  • 31721, a Madison well, I believe, Petro Harvester,
  • 31719, a Madison well, Petro Harvester,
  • 31720, a Madison well, Petro Harvester,
  • 30616, a Madison well, Noah Energy,
  • 31304, a Red River B well, Luff Exploration,
  • 31389, a South Red River well, Denbury,
TATD, the following wells went from SI/NC status to TATD status. I assume that means these wells are still DUCs but have a waiver to remain uncompleted past the two-year deadline:
  • 31367, SM Energy, Ambrose,
  • 31366, SM Energy, Ambrose
  • 31407, SM Energy, Ambrose
  • 31550, SM Energy, Ambrose
  • 31551, SM Energy, Ambrose 
  • 31549, SM Energy, Colgan
  • 31466, Statoil, Banks,
  • 31573, Statoil, Banks,
  • 31465, Statoil, Banks,
  • 31572, Statoil, Banks,
One permit PNC:
  • 28044, PNC, Cornerstone, a non-Bakken site

There Should Be A Fair Amount Of Blogging Today -- But It Will Start Later This Morning

Forecast to hit 100 degrees yesterday; last I heard was a high of 98 degrees. Today a cold front moves through the Dallas-Ft Worth (Texas) area -- the high will only get to 92 degrees, but then it will warm back up by the middle of the week.

Yesterday, fun in the sun:

All three feel very, very comfortable in the water. Sophia, four years old later this summer, is already a "fish." She seems to have no fear. Her oldest sister taught her how to blow bubbles out of her nose under water so she can swim "upside" down, if that makes sense.