Thursday, June 14, 2018

New Apple Watch Update Will Have "Walkie-Talkie" Feature For Apple Watches -- Incredible -- June 14, 2018

Link here.

Graphic that just about explains it all:

I don't know if any folks remember, but decades (?) ago, Sprint had a "walkie-talkie" feature on their cell phones. I don't think that feature was ever "accepted" by the general public and it gradually faded away. Maybe it still exists; I don't know.

Based on the comments at the linked article, Applephiliacs would appreciate new laptops and/or desktops and less emphasis on mobile gadgets. Most important to me: the MacBook Air. And it's still available.

Random Example Of An Old CLR Well That Had A Nice Jump In Production -- June 24, 2018

There are so many incredible wells in the Bakken. Here's another example:
This is an older well, drilled back in the early days of the boom, back in 2012. When I see a well drilled in the early days but now approaching 500,000 bbls cumulative it deserves another look. Look at the jump in production back in 2015:


According to FracFocus this well was not re-fracked. In addition, there are no sundry forms suggesting this well was re-fracked.

I'm not going to go through the graphics or the likely explanation for the jump in production -- it gets tedious and takes a lot of time -- but suffice it to say that there are not less than four horizontal laterals that parallel this well and that were fracked well after this well was drilled.

Another MRO Well In Bailey OIl Field Has Just Come Off Line -- June 14, 2018

This nice well has just come off line. Note that it is an MRO well in Bailey oil field:
  • 22341, 1,520, MRO, Lorene Stohler 11-3H, Bailey, t10/12; cum 318K 4/18;

Random Example Of Jump In Production In Two Older Slawson Wells -- June 14, 2018

Disclaimer: I do these rather quickly and I may be misreading something or have some data incorrect, but I believe the information is correct. The wells are a bit difficult to sort out on the NDIC map, but I believe they are correct. I post this disclaimer because generally wells this close together have the same "alpha" names -- these vary quite a bit: Jeriyote, Jericho, Coyote -- although it appears the "Jeriyote" is a combination of Jericho and Coyote.

Anyway, pressing on. Another case study for newbies to help understand the potential of the Bakken.

This post concerns four wells: #21595, #21596, #24919, and #24921. I happened to run across them while randomly updating wells that came off the confidential list in 1Q13 and noted that #21595 was a particularly good well. 

Wells #21595 and #21596 were older wells, short laterals, on the same pad, one horizontal went south, one horizontal went north.

A couple of years later, two long lateral wells were drilled parallel to these older (#21595 and #21596) wells. The new wells, #24919 and #24921, were long laterals drilled from the south, going north, and because they were long laterals, paralleled the entire length of the older, short laterals.

Hopefully that makes sense.

Here are the graphics:

Look at the cumulative production of the older wells; these turned out to be very nice wells:
  • 21595, 1,351, Jericho 3-5H, Big Bend, t9/12; cum 318K 4/18;  
  • 21596, 703, Coyote 2-32H, big Bend, t1/13; cum 301K 4/18;
Look at their production profiles back in 2014; they both showed a similar jump in production.



Jumps in production like that should suggest the wells were re-fracked. They may have been but FracFocus does not have any data to suggest they were re-fracked and there are no sundry forms to suggest they were re-fracked (I only checked on well). In addition, they were both originally fracked in late 2012 and it's not likely they would be re-fracked as soon as 2014.

So, when I saw that jump in production, I immediately went to look at the NDIC maps to see if any neighboring wells were fracked in mid-2014. Yup. These two wells were fracked in mid-2014:
  • 24919, 660, Slawson, Jeriyote 7-5-32TFH, Big Bend, t7/14; cum 158K 4/18;
  • 24921, 88, Slawson, Jeriyote 6-5-32TFH, Big Bend, t6/14; cum 242K 4/18;
There's one more interesting thing to note that those familiar with the Bakken might notice, but I won't talk about that for now.

US Economy On Fire -- Fed Raises Rates -- Desperate Attempt To Slow Economy Before It Gets Out Of Control -- June 14, 2018

I'm beating a dead horse.

But I love it.

Okay, we all agree.

Asia, and specifically China, is on fire. Not literally. The economy is on fire. GDP growing at 5, or 6, or 7 or 8%. I don't know.

If I was allowed to use only one metric to "judge" the economy, it would be consumption of energy. In the US, it would be oil.

So, once again:

Population of China? A gazillion or more. The US? Not so much.

China's petroleum consumption growth year-over-year? 0.5.

The petroleum consumption growth year-over-year in theUS? 0.61.

Everything suggests that the Chinese economy is on fire.

But everything also suggests that the US economy is also on fire.

And now this. Validation.

From The Wall Street Journal: "strong spending data show US economy chugging ahead of Europe and Asia. Second-quarter growth on track to exceed a 4% pace -- the fastest of any quarter in almost four years. The gap between the US and the EU widens. Canada is not even part of the discussion.

Quotes from others when told of this news:
  • Chuck Schumer: "Obama put this all in place. Frankly, I'm surprised it's not better."
  • Nancy Pelosi: "Crumbs, it's all crumbs. Jobs don't matter. The economy doesn't matter."
  • Paul Ryan: "It's a start. We need to see 12% growth before we can really be sure Trump's policies are making a difference."
  • Maxine Waters: "All the Trump folks are getting rich. The rest of us are falling farther and farther behind."
  • Bernie Sanders: "Americans don't feel rich. They're not participating. It's all a scam."
C'est la Vie

The Market, Energy, Political Page, Part 2, T+14 -- June 14, 2018

McDonald's: will add to its "cold brew" menu. Some say this is to "take on" Starbucks. Some say the demographics are different; not entirely true. I go to both. With senior coffee at 50 cents vs $2.11 for simple, black coffee at Starbucks, it's getting harder and harder to justify Starbucks. By the way, if I want to stop at McDonald's but my wife doesn't because she prefers "cold brew" (which she does), she can now join me at McDonald's. Some time ago, I suggested that McDonald's needs to move away from "PlayPlace" mentality and start catering to millennials and adults. This might be a start. We'll see. In-store kiosk ordering is available at McDonald's and will drive increased sales; in-store kiosk ordering is not available at Starbucks -- though there is the app.

Bakken permits: five new permits today. WPX has four new permits in Squaw Creek oil field; and, Nine Point Energy (formerly Triangle) has one new permit in Painted Woods. WPX has permits for a 4-well Spotted Horn pad in NWNW 26-149-94.

WTI: closed at $67.00. It is interesting that oil did not spike higher -- it is being reported that Venezuela is now importing heavy oil to meed refinery demands. Amazing. Obviously, movers, shakers, speculators, all knew that this would eventually happen -- that, or the refineries would shut down altogether. This is as good a page as any to track "the road to Venezuela."

Petrochemicals: huge story. Saudi Arabia has inked a deal with "start-up" in California to manufacture petrochemicals.
The latest news is a deal between Aramco and a California startup that will allow the Saudi company to use the startup’s oxidative coupling of methane technology in its petrochemicals operations. This technology may sound impressive but it is in fact an alternative to the traditional way of converting gas into ethylene, the main raw material for plastics. This alternative, according to the California company, Siluria, can increase the portion of crude oil converted into chemical feedstocks to 40-80 percent per barrel from the current 15-25 percent, while the rest is made into fuel.
Aramco and Siluria announced their deal in a joint statement without going into financial details. However, the signal is loud and clear: Aramco is doubling down on its refining and plastics bet made amid the latest oil price crisis.
No oil shortage due to underinvestment. Remember all those concerns about lack of investment in the oil sector. Not a problem according to BP -- over at

The Market, Energy, And Political Page, T+14 -- June 14, 2018 -- Flag Day -- I Assume The NFL Players Are Putting Out Their Flags This Morning

The market. Wow, wow, wow -- earlier this week the S&P hit an all-time high, going over 2,700. Creeping up at 4 - 8 points per day, the S&P 500 keeps moving -- it's up almost 9 points today and currently trading at 2,784. If 2,700 was a huge benchmark, then I assume 2,800 will be a similar important benchmark.

WTI: down slightly, but holding above $66.

Libya: not even worth finding the link, but apparently "militants" closed a Libyan crude oil terminal. In the Bakken, we have road restrictions in the spring, in Libya they have militants year 'round.

Jobs (link here):
  • forecast: 225K
  • actual: 218K
  • down another 4,000 from previous week
Retail sales for May, 2018 (link here): -- huge
  • forecast: up 0.4% month-over-month
  • actual: up 0.8% -- double the forecast
  • actual less autos: up 0.9%
Fortunately the Fed is raising rates aggressively to keep the economy from getting out of control under Trump's watch. 

Disclaimer: this is not an investment site. Do not make any investment, travel, financial, job, or relationship decisions based on what you read here or think you may have read here.

The market: both Tesla and Netflix are on a tear this week. TSLA is up another $10/sh today; NFLX is up another $10/sh also.

A Note For The Granddaughters
The Crooked Eye

Sophia, our youngest granddaughter, is very aware of her parents' concern that she is watching too much "Netflix."

Last night, she asked her mom if she could watch the Octonauts again. She said she would quit watching if her eyes "got crooked."

She watched her program, went to bed, and we thought everything was okay.

Then this morning, from school, we received this photograph.

Yes, she has the dreaded "crooked eye" affliction.

Global Oil Supplies Down To 58 Days, Four Hours, And Forty-Eight Minutes -- IEA -- June 14, 2018

If folks are confused by all the statements coming out of Saudi Arabia, this may be the reason.  
Reuters wonders if OPEC is moving the goalpost for its oil market scoreline.
I have never really believed whatever OPEC says but lately the flip-flops have seemed even more outrageous. First, there's too much oil; then, there's not enough oil; then, there's enough oil now but there won't be enough oil next year; and now, not only is there not enough oil now, there won't be enough oil next year, and US shale oil won't be able to make up the difference.

Four months ago, there was this article from Reuters: surge in global oil supply may overtake demand in 2018 (IEA).

Today, crude oil demand in 2019 will grow another 1.4 million bopd after growing a similar 1.4 million bopd this year (2018).

So, we go back to the data.

First, it's nearly impossible to find OECD crude oil inventories. I think it's around 2 billion bbls. This was from, March, 2018:
At 2.865 billion barrels, OECD stocks were 206 million barrels lower than in January 2017, but 50 million barrels above the latest five-year average, OPEC said. 
But ycharts says the number is 4.4 billion bbls. Whatever.

Regardless, what it is, no one knows how much is really needed.

In the US, we have better data, but folks interpret it differently. At 435 million bbls in reserves, analysts suggest that's below the average median/mean/average for the past five years. And yet, it certainly appears that historically, the US has done just fine with 350 million bbls in reserves. [My benchmark remains: 350 million bbls in reserves.]

So, let's look at what I think is the best metric: the number of days of crude oil supply.

For the US, my benchmark is 21 days. Anything more than 21 days is a "glut." We haven't seen 21 days or less since 2014.

Recent data, from the EIA, US days of supply of crude oil excluding the SPR:

Now, OECD (global) data. From a Financial Times article:
The level of oil stocks in countries within the Organisation for Economic Co-operation and Development has been used as the benchmark of energy market tightness for years.
With an inventory level – measured as the number of days that stocks are able to meet demand – at about 55 days, the market has been seen as roughly balanced.
Anything below has indicated a tight market; anything above, a loose one. The International Energy Agency estimates OECD oil inventories at the end of January to be about 58.2 days of forward demand, suggesting that the oil market is comfortably well supplied. Prices, the theory goes, should be moving lower.
Then this:
But the measure is faulty on two fronts.
Firstly, OECD oil inventories were relevant when rich countries were at the centre of oil consumption by a big margin. But they no longer have such status.
According to the US Department of Energy, the OECD last year accounted for just 53 per cent of global demand, down almost 10 percentage points from 62 per cent a decade ago. Moreover, oil consumption from outside the OECD will surpass oil demand from within it by about 2019. [We've been talking about this for the past several days.]
And this incredibly unenlightened statement:
When Chinese inventories are added to those of the OECD, the measure of coverage of demand drops by a hefty four days, from 58.2 days to about 54 days, suggesting a tight market.
First of all, let's get rid of the "point two" tacked unto the 58 days of supply. Give me a break. Some analyst is able to tell us that OECD (global) oil supplies work out to 58 days and 4.8 hours or 58 days, four hours, and 48 minutes? LOL. 

But seriously, we have no idea how much oil is really sloshing around in tankers or in pipelines -- if it's difficult to come up with numbers for the US (the API and EIA weekly numbers are often quite different), think how incredibly inaccurate global data is.

Then this: look at the days of supply again, from the article --
... when Chinese inventories are added to those of the OECD, the measure of coverage of demand drops by a hefty four days, from 58.2 days to about 54 days, suggesting a tight market.
Remember, a "tight number" was defined as 55 days or below. So 56 days, the Financial Times would have called it a "loose market," but at 54 days, it's a "tight market."

Tell me, truthfully, do you see any difference between 58 days and 54 days of supply for the entire OECD plus China?

The last time I looked at this was February 19, 2018.

ycharts has data as recent as February, 2018: OECD Petroleum Stocks is at a current level of 4.407B, down from 4.429B last month and down from 4.656B one year ago. This is a change of -0.51% from last month and -5.36% from one year ago.

The EIA site might be the best site for such data. Take a look at the EIA graph going back to January, 2013. It certainly appears that the range has been very, very narrow, from 55 days at the very low to 65 days at the very high. Right now, we are pretty much near the lower end but projections for mid-2019 puts us smack-dab in the middle of the range, at about 60 days.

Bottom line: none of us -- analysts or arm-chair nattering nabobs of negativity -- have a clue.

EU On The Ropes -- June 14, 2018

First, this reminder:

Then there is Brexit, and then talk of an Italian exit. Turkey isn't helping things in Europe, and, of course, President Trump's focus is shifting to China, Korea, Japan.

And, then, of course, the whole immigration issue.

Now, on top of all this, EU's growth engine says "no" to EU's renewable energy proposals.

A huge "thank you" to a reader who spotted this. This story is not going to be reported by the mainstream media any time soon. You can find it at the Euractive website:  I have no idea how a reader would ever stumble upon this gem. The headline: Germany pours cold water on EU's clear energy ambitions.
Voters across Europe have lost faith in politics partly because of “unachievable targets” on renewable energy, said German Energy Minister Peter Altmaier, who rejected calls from a group of other EU countries to boost the share of renewables to 33-35% of the bloc’s energy mix by 2030. Altmaier made the comments during an on-the-record exchange between the 28 EU energy ministers, who are gathered in Luxembourg today (11 June) for a meeting of the Energy Council.

Energy ministers are expected to thrash out a joint position on three clean energy laws which are currently being negotiated in the EU institutions – the Renewable Energy Directive, the Energy Efficiency Directive and a regulation on the Governance of the Energy Union.

“Germany supports responsible but achievable targets,” Altmaier said from the outset, underlining Berlin’s efforts to raise the share of renewables to 15% of the country’s overall energy mix.

But he said those efforts also carried a cost for the German taxpayer, which he put at €25 billion per year. “And if we are setting targets that are definitely above 30%, that means that within a decade, our share has to be more than doubled – clearly more than doubled,” Altmaier pointed out.

“We’re not going to manage that,” Altmaier said referring to an objective of putting 1 million electric vehicles on the road by 2020 in Germany. “Nowhere in Europe is going to manage that,” he claimed. “And even if we did manage to get enough electric cars, we wouldn’t have enough renewable electricity to keep them on the road,” he stressed.
So many story lines. I particularly liked that last line: even if we did manage to get enough electric cars, we wouldn’t have enough renewable electricity to keep them on the road.

By the way, the Germany announcement coincides with that of China's recent announcement to shut down solar growth

Burnaby Says Bye-Bye To Fuel Cell Venture -- June 14, 2018

Until the Trans Mountain Pipeline Expansion project came along, I was probably the only person in North America who had not heard of Burnaby, British Columbia.

Now, Burnaby, is ground zero for those who hope to stop the pipeline project.

But, it turns out, there's something else coming to a stop in Burnaby.

Reuters is reporting that Ford and Daimler will end their fuel cell joint venture based in Burnaby.
Both companies will take their respective fuel cell technology development in-house.
The Automotive Fuel Cell Cooperation Corp venture, based in Burnaby, British Columbia, will close this summer.
Despite years of research and investment by major automakers and startups, vehicles powered by fuel cells remain a tiny niche in the global vehicle market.  
Honda Motor Co and General Motors Co are collaborating on fuel cell development, and Toyota Motor Corp is ramping up efforts to mass-produce fuel cell stacks. Earlier this week, Ballard Power Systems Inc extended a contract with Volkswagen AG’s Audi unit to work on fuel cell development.

Steady As She Goes -- June 14, 2018

Active rigs:

Active Rigs62552875187

RBN Energy: will Petronas' stake finally make the LNG Canada export project a reality?
Now, with LNG demand on the upswing and the need for additional LNG capacity in the early-to-mid 2020s apparent, the co-developers of LNG Canada — Shell, PetroChina, Korea Gas and Mitsubishi — have attracted a new and significant investor: Petronas, Malaysia’s state-owned oil and gas company and owner of Progress Energy Canada, which has vast gas reserves in Western Canada. Today, we continue our review of efforts to send natural gas and crude oil to Asian markets with a fresh look at the LNG project and TransCanada’s planned Coastal GasLink pipeline, which will deliver gas to it.