Friday, June 22, 2018

Quick Note -- Derailment -- June 22, 2018


June 25, 2018: Officials say rail traffic should be running through this area again by Thursday, this week (June 28, 2018).

Original Post

I'm too tired to do much more than post the story and the photograph. A reader sent me the story; the reader's nephew took a photo with a drone; they sent me the photo.

First, the story, at this link: a derailment in Iowa, 160 miles north of Omaha. Warren Buffett might be interested in driving out to see it. It's one of his trains, a BNSF train.

Second, the photo. The article does not capture what a derailment looks like.

I think one can assume if the Keystone XL were completed, this spill would not have taken place.

WTi Surges; Active Rigs In North Dakota Up To 65 -- June 22, 2018

Active rigs:

Active Rigs65592975189

Seven new permits:
  • Operator: Hess
  • Field: Blue Buttes (McKenzie)
  • Comments: Hess has permits for a 7-well Charlie Loomer pad in NENE 7-150-95 (see graphic below)
One permit renewed:
  • Slawson: a Minx Federal permit in Mountrail County
One permit canceled:
  • Hunt: an Oakland permit in Mountrail County
Graphic: proposed area for the 7-well Charlie Loomer pad; I assume it will look like the 7-well pad to the east in the graphic below --

The other 7-well pad to the east: #33908 - #33913, inclusive: all SI/NC

Other wells in this area:
  • 17125, 713, Hess, BB-Rice-150-95-0718H-1, Blue Buttes, t10/08; cum 357K 4/18; was recently off-line; now back on line; no jump in production;
  • 23968, 1,348, Hess, BB-Rice-150-85-0718H-2, Blue Buttes, t3/13; cum 320K 418;
  • 23969, 1,188, Hess, BB-Rice 150-95-0718H-3, Blue Buttes, API: 33-053-04441, t4/13; cum 334K 4/18; 
Huge jump in production for #23969, frack focus does not show that this well was re-fracked; a re-work in late 2017:
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

No Good Deed Goes Unpunished -- June 22, 2018

From SeekingAlpha:
  • Sempra Energy's  request to build a 47-mile gas pipeline known as Line 3602 in San Diego County is rejected by the California Public Utilities Commission
  • SRE's San Diego Gas & Electric had argued that the pipeline was necessary to replace an old line that was constructed nearly 70 years ago, but a CPUC administrative law judge last month recommended commissioners reject the utility’s plan
  • the CPUC backed the administrative law judge's findings, which is says were based on the utility’s projections for natural gas supply and its own natural gas reliability standards
Apparently in some earlier assessment, SRE was reassuring its customers and its shareholders that "things" were okay. No good deed goes unpunished.

California deserves better. You can't have it both ways.

The Road To Williston

This is what happens when folks:
  • don't want to tackle really serious problems; a meeting is only so long;
  • run out of things to do and run out of ways to spend taxpayers' money; and/or
  • want to appear like they are doing something 
By the way, unlike much of America, Williston has incredibly good sidewalks -- at least in the "old" part of Williston that I know well. "No one" walks on those sidewalks and between the sidewalks and the parking "lanes," there is more than enough room to bike. At least from my narrow, cynical, curmudgeonly mind. [Wow, I'm glad my "comments" section doesn't work.]

I got a huge chuckle out of this. Mind you, I'm a huge fan of bicycling. I'm not sure I'm a fan of bicycle lanes anywhere in urban traffic.

Having said that: they say there are two seasons in North Dakota -- winter and August. Or maybe, winter and the construction season (August). Not exactly bicycling weather seasons, except maybe August.

During the entire time I was growing up in Williston, and the many times I have been back there as an adult, I have seen exactly three bicycles on Main Street.

The screen shot says these would be "new" bike lanes. That suggests there are bike lanes already there but the city would like to put "new" bike lanes in place of the "old" bike lanes. I'm probably misreading that. More likely, the city "wants to put in bike lanes on Main Street."

Why WTI Surged Today -- June 22, 2018

Earlier this afternoon, I noted that WTI was up  $3.00 today on an announcement that OPEC/non-OPEC would be increasing production by about a million bbls/day. The "OPEC basket," interestingly, dropped $1.54/bbl.

Screenshot at that time:

Then, after I get home from running some errands, I see that oil closed at an even higher level. Screen shot now:

[Note: I'm not going to change the typo in the screen shot above; it should read "3:11 p.m. CDT.]

There are many, many reasons for the price of oil to be trending higher right now, but having said that, about the only thing I know that is different between 8:00 a.m. this morning and 4:00 p.m. this afternoon is the OPEC/non-OPEC announcement.

I've always said predicting the price of oil is a fool's errand. and that was certainly true today. We all knew that the price of oil was going to go up with the OPEC announcement -- it had been telegraphed all week -- but, hey, give me a break, does it make sense that the price of oil will go up when Saudi Arabia says it plans to produce more oil? LOL. Again, remember, other than that announcement, as far as I know, nothing else changed. And, on top of that, "everyone knew" that they were going to raise prices.

The "OPEC basket" held steady at the close but lost over 2% for the day, about $1.54/bbl. Prince Salman needs $80-oil to launch his Saudi Aramco IPO. Several years ago he had hoped for $100-oil.

Half the world, including Goldman Sachs (upstairs), says "lower for longer."

Meanwhile, the other half of the world, including Goldman Sachs (downstairs), there is going to be another bull run in the price of oil.

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

Having said that, I'm quite happy with my investment strategy.

Note: I have not watched any business news, news in general, or talk shows on television since one week ago Friday. My plan is to wait at least one more week with no television (except sports, comedies, and an occasional movie) which brings us to 4th of July week and I definitely won't be watching any television during that week. So, another two weeks. I have no idea what the talking heads are saying: only what I read on a few select sites on the internet and what readers send me.

On June 13, 2018, I posted another installment of sixteen reasons why the price of oil will be going up. I made a huge error, of sorts, at that post.
This could all be greatly affected if Russia and Saudi Arabia agree to increase production. We will know more by the end of June / July. "Those" tea leaves suggest Russia and OPEC will raise production using the excuse that loss of production in Iraq, Iran, Venezuela and global demand forecasts for 2019 necessitates such action.
Technically I was correct, but in fact, I expected the price of WTI to fall -- short term -- if OPEC/non-OPEC announced an increase in production. On that I was wrong.

One last thought: if someone asked me why WTI shot up as much as it did today, this is my answer:
Go back to the sixteen reasons -- and play the song while you are at. None of the sixteen reasons have changed. This is what is new, what happened today. Saudi Arabia said it will increase production, but Saudi is afraid of overshooting the target again (like they did, 2014 - 2016) and so, in their timidity, raised production so slightly in the big scheme of things, traders/speculators are pretty confident that the oil sector is behind the "eight ball" when it comes to production. Which is very bullish for oil.
Why did the "OPEC basket" fall today? I think it has to do with the strength of the dollar.

Random Update Of Several Whiting Park Oil Field Wells -- June 22, 2018


June 23, 2018: see this post. This should help explain the "original post" below. 

Original Post 

This page will not be updated. Updates will be made at the original post, linked below.

Much appreciated, direct from a reader, since the comments section not working for some reason on this blog (the comments section works find on my other "blogger app" blogs).

 I think the reader is referring to this post.

From the reader:
We spoke a year ago, and you provided me the great map up above with the direction Whiting would drill, north or south in section 12. [I believe the reader is talking about 12-140-100.]
Whiting did drill one well going north, then left the area, right after we spoke.
They came back on 06/14/2018! I would imagine they will drill all wells this time, and not leave again, as I imagine they are tired of renewing the permits in Park?
I am looking forward to find out what fracing technique they use, number of stages, and what the first IP data will be on these wells. I am also curious if they end up drilling the two wells in section 15, even though the map has never been updated with those permits.
I look forward to seeing how this all turns out! I plan on driving over there this Saturday, as I live only 20 minutes away, and take some pics. I will forward them to you.
Wells under discussion (more data below):
  • 28055, 1,754, Whiting, Smith Federal 41-13PH, Park, t5/15; cum 276K 4/18;
  • 28056, 2,282, Whiting, Smith Federal 44-12PH, Park, t4/15; cum 391K 4/18;
  • 32288, SI/NC, Whiting, Smith Federal 34-12-2PH, Park,
I believe the reader is referring to this post and the graphic at that post (as noted above):

Several comments:
  • it's frustrating that "comments" don't work, so I really appreciate the reader writing directly
  • I hope I have the correct section, correct wells
  • 28055, runs south, API - 33-007-01831: Three Forks, 17 stages; 1.6 million lbs; 20/40 white sand (small); and, 40/70 white sand (large); FracFocus reveals only one frack, 2/25/15 - 3/2/15; 2.8 million gallons of water which corresponds with the small amount of proppant
  • 28056, runs north with a sidetrack: Three Forks, 30 stages; 2.977 million lbs; 20/40 white sand (small); and, 40/70 white sand (large); the frack report is buried in the file report; need to scroll a long, long way down;
  • 32288, runs north, parallels #28056: SI/NC 
  • one wonders if frack in #28055 was complete or some failed stages
  • I would assume we would know when Whiting fracks #32288; neighboring wells should come off line
Other wells in the area:
  • 20526, 2,446, Whiting, Smith 34-12TFH, Park, t9/11; cum 376K 4/18; 
In section 15:
  • 24159 (running north), 1,195, Whiting, Pronghorn Federal 14-10PH, Park, t2/15; cum 130K 4/18;
  • 24158 (running south), 954, Whiting, Pronghorn Federal 11-15PH, Park, t2/15; cum 120K 4/18;
  • 24157 (running south), 1,179, Whiting, Pronghorn Federal 21-15PH, Park, t2/15; cum 131K 4/18;
  • I do not know which permits in this section the reader is referring to that have have not placed on the NDIC map

Just Released -- USGS Survey Of The Eagle Ford -- June 22, 2018

For release, June 22, 2018 -- USGS estimates 8.5 billion bbls of oil in Texas' Eagle Ford Group. “This assessment is a bit different than previous ones, because it ranks in the top five of assessments we’ve done of continuous resources for both oil and gas,” said USGS scientist Kate Whidden, lead author for the assessment. “Usually, formations produce primarily oil or gas, but the Eagle Ford is rich in both.” Some data points:
  • map at the link: a very, very thin footprint in southern Texas, stretching from the western border with Mexico to Louisiana
  • estimate of undiscovered, technically recoverable resources in continuous accumulations
  • one of the most prolific continuous accumulations in the United States, and is comprised of mudstone with varying amounts of carbonate
  • continuous oil and gas is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences, such as those in conventional accumulations. Because of that, continuous resources commonly require special technical drilling and recovery methods, such as hydraulic fracturing
  • the USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources of onshore lands and offshore state waters. The USGS assessment of the Eagle Ford Group was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol
  • the new assessment of the Eagle Ford Formation may be found online
Many analysts combine crude oil and natural gas liquids when they talk about "oil and gas production." Often the EIA does: in this case, crude oil and NGLs = 10.4 billion bbls.

66,000,000,000,000 / 6,001 = 10,998,166,972 boe.

If I've done the arithmetic correctly -- disclaimer -- I often make simple arithmetic errors -- the Eagle Ford is about 50/50 crude oil-NGLs / natural gas.

With regard to natural gas, this link (also above). The numbers below come form multiple sources; many data points are old; and many will opine that the Marcellus and Utica are much bigger than currently assessed:
  • Russia: 6,000 trillion cubic feet
  • Iran: 1,000 trillion cubic feet
  • Qatar: 900 trillion cubic feet
  • Turkmenistan: 600 trillion cubic feet
  • US: 350 trillion cubic feet
  • #11: Australia: 152 trillion cubic feet (as of January, 2014). (See this post.)
Now, let's go back and re-run the numbers that were posted earlier:
  • October 18, 2017: USGS survey -- 300 trillion cubic feet of natural gas, up from roughly 70 trillion cubic feet in its last survey in 2010.
  • Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
  • Qatar: 800 trillion cubic feet, wiki, conversion

After Announcement, WTI Jumps $2.15/Bbl -- June 22, 2018

Oil output increasing. It's official. OPEC-non-OPEC (Russia) agree to increase production. No link; story everywhere. But look at this, WTI immediately after announcement -- 

Also, note that the US has asked Japan to stop importing Iranian oil. Yesterday, Iran accused the US of interfering with global oil trade. Well, duh.

That $2.15/bbl jump in the price of WTI is very, very interesting.

Notes to the Granddaughters

From wiki:
The Renaissance began in Florence, Italy, in the 14th century. Various theories have been proposed to account for its origins and characteristics, focusing on a variety of factors including the social and civic peculiarities of Florence at the time: its political structure; the patronage of its dominant family, the Medici; and the migration of Greek scholars and texts to Italy following the Fall of Constantinople to the Ottoman Turks. Other major centres were northern Italian city-states such as Venice, Genoa, Milan, Bologna, and finally Rome during the Renaissance Papacy.
I was unaware of the close relationship between the Pope and the House of Medici. Pope Eugenius IV moved the pontificate from Rome to Florence in 1434 where the Medici bankers were based. 

An interesting brief history of the Renaissance -- again, which began in Florence -- can be found in Gavin Menzies 1434: The Year a Magnificent Chinese Fleet Sailed to Italy and Ignited the Renaissance, c. 2008, particularly chapter 17. See also Zheng He.

The yield from rice fields is some several times that of wheat. I was unaware that the growing of rice was such a big deal in Italy. From the net:

Italy is the largest rice producer in Europe, and the Lombardy and Piedmont regions are Italy's rice bowl. Rice production in Italy started around the middle of the 15th Century. Today, japonica rice varieties are planted under irrigated conditions in large and highly mechanized farms.

From conigliera:
Asian rice was brought to the Middle East sometime around 1000 B.C., and the most likely route of introduction in Europe was through Spain, conquered by the Moors in the 8th century A.D. Although rice was known to the Romans, and mentioned by Pliny in his Natural History, it was only thought to have some medicinal properties and was not grown by them as a food source.
It was not until the 15th century that rice cultivation spread to Northern Italy, where the fertile swampy plains of the Po river valley provide suitable growing conditions.
In a letter written in 1475 the Duke of Milan claimed that from the one sack of rice he sent as a gift to the Duke of Ferrara 12 sacks could be harvested, if properly cultivated.
This impressive yield led to rice being quickly diffused throughout the region, but up until the mid-19th century only that one variety of rice- called Nostrale- was grown. In 1839 a Jesuit priest, Padre Calleri, returning from the Phillipines imported 43 different rice varieties, and it was from this stock that Italians began to experiment with the varieties that could best be adapted for use in Northern Italy’s temperate climate.
From Menzies, p. 204:
In many ways, the Po River resembles a smaller version of the Yangtze. Both rivers carry melting snows from the mountains eastward to the sea. Both suffer from flash floods and are controlled by a network of canals, locks, sluices, and dams. The waters of both are used to form extensive rice field. The exact date when the Po was first utilized for rice is not known (see above). Clearly it predated 1475 but by how much? Menzies suggests it was after 1435 when Taccola's first drawings of pumps appear, and probably after 1438, when his drawings of lock and sluice gates first appear. 

The Market, Energy, And Political Page, T+22 -- June 22, 2018

Oil output increasing. It's official. OPEC-non-OPEC (Russia) agree to increase production. No link; story everywhere. Will post separate stand-alone post.

Pax Trump on the Korean Peninsula? This is huge. Anyone who followed the fall of the Berlin Wall understands what I'm talking about. This is absolutely huge. First time since the armistice?

Saudi increasing exports. From, this screenshot. The graphic compares the delta between current data (the dates on the x-axis vs October, 2016, export data:
  • since October, 2016, Saudi's crude oil exports were focused on Asia
  • finally, recently, Saudi's crude oil exports are now including non-Asia area

The Apple Page

The Supreme Court takes Apple's position: one needs a court warrant for phone location data. But remember, Apple is making it more and more difficult for the company (Apple) to actually be able to unlock an iPhone.

Friday, June 22, 2018

More DUCs: unfracked wells growing in the Permian. Link here.
The number of Permian wells that were drilled but left unfinished surged to 3,203 last month, a 90 percent increase from a year earlier and the highest since the Energy Department began tracking them in 2013. Postponing fracking, the final stage of drilling, reduces the supply a company needs to ship to markets. The jump in unfinished wells is a harbinger of oil producers actually shutting down older wells.

Permian pipelines probably will be totally full in three or four months, Pioneer Natural Resources Co. Chairman Scott Sheffield said in an interview Wednesday. Those constraints will compel some drillers to shut off wells.
“Some companies will have to shut in production, some companies will move rigs away, and some companies will be able to continue growing because they have firm transportation,” Sheffield said, using the industry jargon for guaranteed pipeline contracts.
EOG Resources Inc., the world’s second-largest independent oil producer, also sounded the alarm, warning that smaller operators that haven’t already locked in pipeline space will soon feel the brunt.
More LNG: link here.

Guyana: ExxonMobil announces eighth discovery offshore Guyana, a press release. Data points:
  • eighth discovery offshore Guyana at the Longtail-1 well; EUR: 500 million BOE
  • drilled to 18,000 feet in 6,365 feet of water
  • Liza Phase 1 will consist of 17 wells; will produce up to 120,000 bopd
  • first oil is expected in early 2020
  • Phase 2 similar to Phase 1; 220,000 bopd
  • a third development, Payara, is planned to follow Liza Phase 2
Back to the Bakken

Active rigs:

Active Rigs63592975189

RBN Energy: widely varied interests coalesce against coal and nuclear bailouts.