Calling It A Night -- Good Luck To All -- June 8, 2018

Clean Sweep

The Market, Energy, And Political Page, T+8 -- Apparently No One Can Count To Nine, June 8, 2018; The New Bogeyman

Updates

June 10, 2018:

June 10, 2018:

Original Post

Follow the money: Isn't this an interesting game the oil companies play -- this would be like Coca-Cola buying up all the soft-drink shelf space in your local grocery store, stocking only half the shelf-space, and letting the rest sit empty. From Bloomberg via Rigzone --

Enbridge Inc.’s decision to implement and then scrap new rules governing Canada’s biggest export pipeline system sent crude prices on a record roller coaster move this week, earning the pipeline operator both friends and enemies.

BP filed a complaint this week with Canada’s National Energy Board saying Enbridge used an “unreasonable exercise of discretion” when it announced and then, 11 days later, canceled new rules governing the amount of oil that shippers were allowed to send through its Mainline system.

Heavy Western Canadian Select crude prices surged by a record $12.20 a barrel relative to U.S. benchmark West Texas Intermediate futures Monday after Enbridge scrapped the rule, which was designed to stop shippers from claiming more space than they needed on the pipeline.

Space on the system, the largest link between Alberta’s oil sands and U.S. refineries, has been increasingly rationed, as crude production overwhelmed capacity.

Prices had sunk $8.75 a barrel relative to WTI in the days after the new rules were announced on May 24.

Suncor Energy Inc. and Canadian Natural Resources Ltd, two of Canada’s biggest oil sands producers, welcomed Enbridge’s reversal, saying the existing rules better ensure producers receive a fairer price for their oil.

Summits: The real question is this: is the G7 even relevant any more? If it is, how relevant is it? The goal, apparently, of the G7 has been to issue some kind of joint statement that a bunch of Euro-centric, mostly elderly males can agree upon. Not only boring, but pretty lame, .... it just struck me, when President Trump said the summit with KJU would not be a "photo-op," my hunch is that is exactly what he was thinking the G7 in Quebec is -- a photo-op. For his "allies."

It's a hoot that Trump scheduled the KJU summit so closely following the G7 conference which pre-ordained his need to leave early. Brilliant. Something tells me he never looked forward to this meeting in Quebec in the first place ... exactly what it its purpose? ... and thus, why not throw a little "red meat" to the journalists: suggest that Russia needs to be re-admitted (another Euro-centric elderly male would fit right in) and skip the global warming conference altogether.

But I digress.

The G7 is made up of "the seven largest economies" plus the European Union, so in effect, France, Germany, Italy, the UK (for a bit longer) get two votes, and the EU gets about six votes (the four heads of state, plus the President of the European Council and the President of the European Commission. Poor Abe -- one vote. Trump -- one vote. Merkel, Macron, Conte, May -- each three votes (each with his/her own vote and two votes from the EU). Maybe the EU doesn't get to vote, but they get two seats at the table.

Largest economies: see wiki re: the G7.

List of countries by GDP. France and Canada don't even make the list, and if you had a cut-off, of say USD$4 trillion, not one European country would be attending.

The new meme: any sector that dies was killed by Trump's tariffs. The new bogeyman.

Brilliant. How come the brightest president in modern history -- that would be Barack Obama, of course -- did not think of this. [Yes, there were no kneeling NFL players during the Obama administration but I'm sure there were some grievances.] Absolutely brilliant. Maybe one of the kneeling NFL football players will actually visit the Oval Office to argue his case.

 

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House of Cards

Update, June 10, 2018: amazing. The Chicago Tribune actually picked up this story. And "blogger" will link The Chicago Tribune even if it won't link Fox News. It will be interesting to see if either The New York Times or The Washington Post posts the story.

Original Post

I don't know if anyone is following this story or if anyone even cares, but this "factual" story being reported over at Fox News  was the very story line during the first season of House of Cards. Truly amazing. The google app "blogger" won't allow linking Fox News stories but one can get to the story by googling: "New York Times reporter Ali Watkins' past tweets are raising eyebrows after revelations she had a three-year romantic relationship with a Senate Intelligence Committee aide now accused by federal prosecutors of leaking sensitive information to journalists, including herself."

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More From G7

Three New Permits ... And That Was All Today -- June 8, 2018

Active rigs:

$65.74→	6/8/2018	06/08/2017	06/08/2016	06/08/2015	06/08/2014
Active Rigs	61	52	26	82	194

Three new permits:

• Operators: Petroshale (2); Petro-Hunt
• Fields: Mandaree (Dunn); Mondak (McKenzie)
• Comments:

And that was all. Wow. Pretty slim. 

Two Huge Stories From Geoff Simon For The Past Week In The Bakken -- June 8, 2018

Maybe more on these two stories later. First:

And then this one:

During the selection process for "Williston City Administration," I said the choice was a no-brainer.

Updating A CLR 2560-Acre Drilling Unit In Elm Tree; CLR's Bohmbach / Antelope Wells In Elm Field -- June 8, 2018

I am updating this post from 2016. Compare the graphic at that post with these graphics of the 2560-acre stand-up drilling unit, four miles long x 1 mile wide.

Note: I did not check the spacing for any of the wells listed on this page. 

Elm Tree oil field is tracked here but has not been updated in quite some time. 

This page may not include all of CLR's Bohmbach / Antelope wells in the Elm Tree oil field.  

The graphics.

First the entire drilling unit:

Zooming in on the pads in that drilling unit:

The second one:

The ten wells in that graphic:

• 32358, 144, CLR, Antelope Federal 5-23H, Elm Tree, 4 sections, t9/18; cum 138K 3/20; 5 days of production in 8/18; none since, 8/18; back on line 9/18; cum 181K 8/21; cum 197K 6/22;
  
• 32359, 1,335, CLR, Antelope Federal 6-23H1, Elm Tree, 4 sections, t1/19; cum 306K 3/20; producing as of 12/18; cum 445K 8/21; cum 496K 6/22; production update here.
  
• 32360, 1,912, CLR, Antelope Federal 7-23H, Elm Tree, 4 sections, t 9/18; cum 207K 3/20; 6 days of production in 5/18; none since, 8/18; on line of 9/18; monster well; off line for a month, 1/20; cum 260K 8/21; cum 278K 6/22;
  
• 32361,1,200, CLR, Antelope Federal  6-23H2, Elm Tree, 4 sections, t9/18; cum 273K 10/19; ditto; a monster well; off line 10/19; remains off line 3/20; back on line 9/20; cum 394K 8/21; cum 468K 6/22; production update here.
• 32152, dry, CLR, Bohmbach 5PA, Elm Tree, t --; cum --
• 32153, 1,391, CLR, Bohmbach 5A-26H2, Elm Tree, 4 sections, t9/18; cum 251K 3/20; ditto; another huge well;cum 314K 8/21; cum 336K 6/22;
  
• 32154, 2,506, CLR, Bohmbach 6A-26, Elm Tree, 4 sections, t9/18; cum 189K 3/20; ditto; another monster well; cum 232K 8/21; cum 264K 6/22;
  

  Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
  BAKKEN	12-2018	19	15406	15304	8346	29628	28509	962
  BAKKEN	11-2018	30	31957	31938	15437	58896	53450	5177
  BAKKEN	10-2018	31	33260	33426	17533	60145	31168	28678
  BAKKEN	9-2018	26	39892	39548	19669	63831	51570	11948
  BAKKEN	8-2018	0	0	0	0	0	0	0

• 32155, 1,883, CLR, Bohmbach 7-26H, Elm Tree, t9/18; cum 270K 12/19; ditto;

  Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
  BAKKEN	12-2018	25	22053	21825	13765	44974	43276	1460
  BAKKEN	11-2018	30	32659	32657	17544	63319	57464	5566
  BAKKEN	10-2018	31	37247	37374	22519	60965	31593	29069
  BAKKEN	9-2018	26	37758	37432	20018	59606	48156	11157
  BAKKEN	8-2018	0	0	0	0	0	0	0

• 32362, TASC, CLR, Bohmbach 8-26HS, Elm Tree, t --; cum --
• 33700, 1,392, CLR, Bohmbach 14A-26H2, Elm Tree, t9/18; cum 294K 1/20; ditto;

  Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
  BAKKEN	12-2018	10	6824	6876	7133	12138	11680	394
  BAKKEN	11-2018	30	30041	30016	26722	53418	48479	4695
  BAKKEN	10-2018	31	29812	29876	31584	52458	27184	25013
  BAKKEN	9-2018	23	26004	25780	27821	43115	34833	8070
  BAKKEN	8-2018	0	0	0	0	0	0	0

The third one:

The two wells to the north of the ten-well pad:

• 22820, 1,240, CLR, Antelope 1-23H2, Elm Tree, t12/14; cum 575K 3/20; off line as of 8/18; an excellent well from the very beginning; huge jump in production, 7/18; cum 625K 6/22;
  
• 22821, 1,299, CLR, Antelope 1-23H, Elm Tree, t12/14; cum 684K 3/20; off line as of 2/18; an excellent well from the very beginning; cum 780K 6/22;
  

And finally the last one for now:

The wells in this graphic:

• 21490, 736, CLR, Bohmbach 3-35H, Elm Tree, t7/12; cum 395K 11/19; huge jump 5/18; off line 11/19; remains off line 3/20; back on line; cum 411; 6/22;
  
• 21488, 1,357, CLR, Antelope 3-23H, Elm Tree, t8/12; cum 698K 11/19; huge jump 5/18; multiple jumps in production; was taken off line 11/19; but returned to production late 2/20; too early to say if any jump in production; cum 741K 6/22;
  
• 21491, 835, CLR, Bohmbach 4-35H, Elm Tree, t7/12; cum 204K 11/19; back on status, 5/18; off line 11/19; remains off line 3/20; back on line; cum 228K 6/22;
  
• 21489, 823, CLR, Antelope 4-23H, Elm Tree, t8/12; cum 475K 11/19; a small jump when back on line 5/18; off line 11/19; remains off line 3/20; back on line; cum 488K 6/22;
  

Very, Very Counterintuitive -- Apple -- June 8, 2018

Don sent me this link earlier this morning: Apple music subscribers reach 50 million. Then the light bulb went "on." It finally made sense.

I posted this article earlier this morning: Apple iPhone sales falling. That appeared just after the article noting that Apple was taking the unprecedented step of offering its most recent upgrade (iOS 12, yet to be delivered) to Apple iPhones going back to 2013 -- that's five year ago, and unprecedented. Google/Androids updates generally go back only a year or two years, maximum.

When I wrote that, it seemed crazy. Allowing those with iPhones as old as five or six years to upgrade. That extends those phones another five years, meaning some folks will be able to keep their current smart phones for ten years or more. It did not make sense.

Yes, one way to reward great customer loyalty, but what's the benefit to Apple?

Then it dawned on me, as soon as I saw the linked article above.

Churn.

When one's iPhone has reached the end of its life (batteries, operating system, etc), the iPhone user has two options: a) buy a new iPhone; b) buy an Android.

Advertisers would suggest (and they may be correct), an Android is every bit as good as the iPhone (assuming you don't need the Apple ecosystem and/or you don't need Group-FaceTime.

But for an iPhone user, just about the time your operating system seems to be getting a bit old -- wow, Apple has just provided a free upgrade, and it will be a major upgrade.

With chargers now ubiquitous (in the home, in the office, and in the car) batteries are becoming less and less an issue for even really, really iPhones.

Back to the linked article that started all this:

Apple Music subscribers have reached 50.0 million, up from 30.0 million in October 2017.

This includes paid members as well as users on membership trials. Apple Music expects to reach 60.0 million subscribers by the end of 2018. Apple Music subscribers have increased significantly from 13.0 million in April 2016 and ended 2016 with 20.0 million subscribers.

During Apple’s fiscal Q2 2018 earnings call, CEO Tim Cook stated, “The App Store set a new all-time revenue record in the March quarter and Apple Music reached a new record for both revenue and paid subscribers, which have now passed 40 million.”

Spotify is the global leader in the music streaming industry. Spotify has 75.0 million subscribers, and it recently announced revenues of ~$1.4 billion in the first quarter of 2018 for year-over-year growth of 26.0%.

Intermittent Blogging Today -- Water Polo Tournament In Houston, TX -- June 8, 2018

Pending: I'll probably miss the coverage of the G7 conference. Oh, well. Hopefully, I catch the NBA Finals tonight. I already said the only two important games (for spectators like me) in these NBA championship games is game #4 -- tonight -- and game #7 if it goes to 7 games.

• game #4: sweep / no sweep
• game #5: extend or GSWs win
• game #6: extend or GSWs win
• game #7: GSWs win 

Market: apparently all that angst --

• G6+Trump
• Trump wants G8 -- (wants Russia back in)
• Trump to skip G7 environmental conference to prepare for KJU Summit --

 -- apparently all that angst has dissipated -- I see the market is up about 60 points and even AAPL shares have recovered a bit. What a great country.

What else?

• WTI holding above $65
• oil prices could jump to $140 on US sanctions (Iran's production data / export data, here, IEA) (I haven't read the article yet; there is only one reason why Iranian sanctions might result in surge in oil prices) (I just read the article: the $140-oil quote comes from Iran OPEC governor -- obviously no credibility; in addition, the article contains absolutely no new information
• time to do some number crushing on the back of an envelope
• time to remind oneself of the difference between WTI, Brent, and Saudi oil
• produces: 140,000,000 tonnes a year of crude oil (1,000,000,000 bbls) (conversion site)
• exports 60,000,000 tonnes (410,000,000 bbls)
• / 365 days = 1.123 millioin bbls / day = exports
• country most depended on Iranaian oil: Turkey (50% of Turkish requirement for oil is met by Iranian exports
• the Bakken is producing 1 million bopd; will set a new all-time production when June, 2018, results are release in August, 2018; unfettered, the Bakken could produce 2.2 million bopd
• the Permian is producing in excess of 3 million bopd; unfettered will go to 5 million bopd

The Energy, Market, And Political Page, T+8 -- June 8, 2018

Tripling Down: wow, the press has to love this president. First this theme: "G6+Trump." Then, this theme, "Trump wants a G8; wants to invite Russia back."  Now, the next theme: global warming, what global warming? Trump is expected to skip the G7 conference on the environment. LOL. The press can't wait to cover this debacle. Folks have suggested he send Scott Pruitt, but then Scott would be accused of taking an unnecessary flight at taxpayer expense. Meanwhile, Trump can use that time to prepare for the Singapore summit with Kim Jong Un. The press is already reporting that the president is not spending enough enough preparing for the summit.

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Coal. What's In Your Back Yard?

Yesterday I posted this: Wow, did anyone see this coming? China slashes solar installations. There are only four reasons why China would do this (I will list three):

• policy decisions; knows global warming is a scam
• solar is incredibly expensive and won't meet the needs anyway
• regardless of what anyone says, the only way China can meet energy demands: with coal

So, that was the solar story yesterday.

Now, today, from Bloomberg, "coal rallies to a six-year high as heatwave fires up China demand. 

China’s power producers have been challenged by extreme weather in 2018, from a cold snap in January to a heatwave in May, draining stockpiles. The nation has boosted coal imports by 8.2 percent to 121 million tons in the first five months this year even as policy makers imposed restrictions on some shipments. Australian cargoes bound for China jumped to an all-time high in April.

Let's see? Didn't the global warmists / faux environmentalists telegraph us this was likely to happen?

Answer To Apple's Open Book Test -- June 8, 2018

Yesterday, I posted this: 

AAPL: This looks like an answer to a question in an open book test. An Apple (AAPL) analyst suggests that AAPL shares at $193 are "flying high" after rising quickly from $173. If I find the link again, I might post it. Probably not. The analyst says that if iPhone sales slow, it's very possible AAPL shares could tumble back to $173.

So, could iPhone sales slow? Sure. I assume everyone saw this article yesterday: Apple is not encouraging folks to upgrade to new iPhones. Apple encourages folks to keep their "old" phones.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on anything you read here or think you may have read here.
Today, this story from Bloomberg via Yahoo!Finance: Apple shares drop after report of cut in iPhone orders.

Apple Inc. shares and Europe-based suppliers declined after a report that the technology giant has warned its supply chain of a drop of around 20 percent in new iPhone component orders.

Apple fell 2.1 percent in U.S. pre-market trading, after its Frankfurt-listed shares also lost as much as 2.1 percent. Supplier AMS AG dropped as much as 6.7 percent. Other European semiconductor stocks including Dialog Semiconductor Plc, STMicroelectronics NV and Infineon Technologies AG all slipped after the Nikkei said that Apple told its supply chain to prepare about 20 percent fewer components for iPhones debuting in the latter half of this year, compared with 2017’s orders, citing people in the industry it didn’t identify.

North Dakota Active Rigs Hold At 61 -- June 8, 2018

Doubling down: the press has to love this president. Just when they thought they had the theme for the G7 meeting ("G6 + Trump), the president proposes a new theme: let Russia back in. LOL.

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Back to the Bakken

Active rigs:

	6/8/2018	06/08/2017	06/08/2016	06/08/2015	06/08/2014
Active Rigs	61	52	26	82	194

RBN Energy: Midland sourr crude -- all your weight, it brings Maya down.

The Permian Basin is awash in light, sweet crude oil that’s cheap to produce and easy to process. It’s so awash, in fact, that supplies are overwhelming takeaway pipeline capacity. The resulting bottleneck in West Texas has cratered prices in Midland, where West Texas Intermediate (WTI) — the region’s light, sweet benchmark — has blown out price-wise against the same grade in other locations, including Houston, with its crude-export docks.

Less well known, but influential beyond its geography, is Midland West Texas Sour, or WTS. WTS is suffering from the same wide differentials as WTI at Midland, and those yawning spreads are dragging down the price of Maya, Pemex’s flagship heavy, sour crude.

Today, we discuss some surprising ripple effects of takeaway constraints out of the Permian. As crude output in the wildly prolific Permian rocketed past 3 MMb/d — and beyond the region’s pipeline takeaway capacity — a day of reckoning came for the price of oil in West Texas. We talked about the precarious pricing for WTI at Midland which noted the relationship between pipeline constraints and the teetering value in West Texas. Midstream companies are racing to build the pipelines needed. We showed how increasingly desperate shippers are pondering the feasibility of long-haul trucking or revived crude-by-rail to mitigate the takeaway crisis. The market is like quicksand for price differentials now, as supply keeps growing and additional pipeline capacity — while under development — isn’t coming online soon enough.

Tier 3 Or Tier 4 Wells? -- June 7, 2018

It wasn't too long ago that East Coast pundits doubted any operator would drill anything other than "Tier 1" wells in the Bakken unless the price of oil moved significantly higher.

An eagle-eyed reader caught this: CLR is drilling in the northwestern corner of North Dakota, clearly out of the core Bakken around Watford City and New Town. The two wells:

Look how fast operators can move in North Dakota. CLR was issued the permits on April 9, 2018 ; and now, less than two months later, they have already started drilling. Wow, that's quick.

So, here are the wells, which the reader says are west of Noonan, Divide County, and south of Larson, Burke County, across the road from the Winkler well:

• 34766, drl, CLR, Steve 1-34H, Larson, t--; cum -- ; date for drl status: May 13, 2018
• 34767, drl, CLR, Teresa D 1-10H, Juno, t--; cum --; date for drl status: May 11, 2018

The Bakken never ceases to amaze me. A huge shout-out to the CLR team. Good luck!

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Meanwhile, Back To The Daily Activity Report

Active rigs:

$66.03↑	6/7/2018	06/07/2017	06/07/2016	06/07/2015	06/07/2014
Active Rigs	60	52	26	82	194

Three new permtis:

• Operator: Nine Point Energy (used to be Triangle)
• Field: Painted Woods (Williams)
• Comments: Nine Point Energy has permits for a 3-well Gibbins pad in SESW 11-154-103; 

Seven permits were canceled:

• all seven permits were Petro-Hunt Maverick permits in McKenzie County

Six permits were renewed:

• all six permits were CLR permits, two in McKenzie County (two Berlain permits); and four were in Williams County (two Olympia permits; and, two Charleston permits)

Hess reported three dry holes:

• 17014, dry, Hess, Edwards 1-33 BH, Mountrail County; drilled to depth (14,056 feet); horizontal lateral 94% of time in target middle Bakken; open-hole completion / open-hole frack; but apparently no production
• 17043, dry, Hess, St Andes-151-89 -2413H-1, Mountrail County; drilled successfully to19,258 feet, with 9,740 feet of open horizontal hole; apparently no production
• 17564, dry, Hess, St Nomeland-150-89-0235H01, McLean County; drilled successfully to19,440 feet, with 10,479 feet of open horizontal hole; apparently no production