Staggering Initial Production Records Set By CLR? From A Reader -- June 27, 2018

Updates

June 29, 2018: an update here with a huge jump in production.

Original Post

A reader just sent me this:

I don't think this has been reported publicly yet, but Continental just drilled some huge (I think a record for Continental Resources) wells in Dunn County.

• The Mountain Gap 7-10H (#33120) had total oil production in May 2018 of 84,473.81 barrels.  

• The Mountain Gap 8-10H1 (#33121)had total oil production in May 2018 of 70,098.66 barrels. 

• [From the reader] I haven't checked, but I think these may be the highest oil production months for any oil well drilled in the Bakken by Continental.

Some similarly high production records set by MRO. 

I track the CLR Mountain Gap wells here.

When I last updated these two wells, they were SI/NC but they are now back on conf status and early production numbers are available at the NDIC site but certainly not the information that the reader has provided. NDIC data is current through April, 2018; the reader says the high production numbers were reported in May, 2018. These are the two wells:

• 33121, SI/NC, CLR, Mountain Gap 8-10H1, Rattlesnake Point, production data, see below;
• 33120, SI/NC, CLR, Mountain Gap 7-10H, Rattlesnake Point, production data, see below;

It appears all Mountain Gap wells have been fracked and should be reported soon.

Only production data available at the NDIC site:

33121, a Three Forks well:

Date	Oil Runs	MCF Sold
4-2018	8686	0
3-2018	406	0
2-2018	106	0

33120, a Middle Bakken well:

Date	Oil Runs	MCF Sold
4-2018	7658	0
3-2018	317	0
2-2018	123	0

Off The Net For Awhile, But Couldn't Sign Off Without Posting This Most Coincidental Screenshot -- June 27, 2018

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String After String Of Trump Wins

Here's Another One

From The Washington Times:  full story --

The Justice Department said Wednesday it has begun distributing hundreds of millions of dollars in grant money that had been tied up in a major court battle over sanctuary cities.
Byrne Justice Assistance Grants are used by localities and police departments across the nation to pay for equipment, training, personnel or other pressing needs.

The Trump administration last year said it would condition the money on localities’ willingness to cooperate in holding illegal immigrants for pickup by federal deportation officers.

Chicago sued, saying the conditions weren’t part of federal law.

A federal district judge had ruled for Chicago, but [and] issued a nationwide injunction saying the conditions couldn’t be applied to any Byrne grants.

The Justice Department put nearly $200 million in 2017 money on hold as the case proceeded.

But on Tuesday an appeals court narrowed the ruling, saying that while the district court could decide the fate of Chicago’s practices, it couldn’t tie the hands of the entire country.

Trump has now won four important court cases in the past few weeks (days?):

• the travel ban
• an abortion issue
• union dues 
• grant money to non-sanctuary cities

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Notes to the Granddaughters

I finished Max Boot's The Road Not Taken. I had to watch Tinker, Tailor, Soldier, Spy again. I think I've watched it a dozen times. More on this later.

Tinker, Tailor, Soldier, Spy is clearly on my list of top ten movies. The criteria for top ten list: I have to be able to watch it at least seven times in seven days and still not get tired of it.

Canada At A Tipping Point -- June 27, 2018 -- Portal, ND, In The News -- Bloomberg

Over at "the big stories," I have a section on the US Energy Revolution. This page was begun back in early 2013, and I continue to add to it, but not consistently. There's just too much going on to keep up.

I also have a section called "Europe at a tipping point." The page begins with this short commentary and links:

European Energy became a big story on May 18, 2013, when the EU Council President predicted that  Europe might become the only continent in the world to depend on imported energy.

Within that story:

• The European renewable energy has been a disaster. 
• The future of fracking in Europe and Great Britain is "on hold."
• Europe is running out of fossil fuel. Great Britain will run out of natural gas in three years.
• The Crimean debacle, spring, 2014: Russia inks huge natural gas deal with China in response.

It looks like we may have to add Canada to this list. Talk about a dismal report regarding Canada. This article from oilprice needs to be read slowly. Trudeau seems to be taking Canada down the same road as Venezuela and Australia but doing it slightly differently. The countries may be doing things differently and for different reasons, but the outcome could certain by the same.

The more I read about global energy and the decisions some foreign leaders are making, it appears more and more there are only three countries that are really serious about growing their energy sector: Russia, Saudi Arabia, and the United States.

The linked oilprice story takes you to a Bloomberg story. Read them both.

The oilprice story begins:

Canada has the world’s third-largest crude oil reserves, but the country seems determined to pretty literally keep these in the ground. This determination becomes strikingly obvious when Canada is compared with its southern neighbor.

In the United States, they write, the number of oil and gas rigs are increasing—currently at its highest level since 2015, the height of the oil price crisis. In Canada, on the other hand, there has been an exodus of oil majors including Shell, ConocoPhillips, and Equinor, among others.

In the United States, capex in the oil industry is forecast by an Oil and Gas Journal poll to rise by 9.1 percent to US$132.5 billion this year alone. In Canada, total oil investment is seen falling by 2 percent to US$30.11 billion (C$40.1 billion).

Of course, there is a clear difference between the energy policies that the two neighbors’ governments are pursuing. Washington is all about energy independence, even energy dominance. Trump’s administration has been working consistently towards ensuring the best possible investment climate for oil and gas producers, much to the chagrin of environmentalists and the renewable energy industry.

Ottawa, conversely, has been clearly in favor of what might very loosely be called the green lobby. This has proven a challenge recently, as the federal government had to step in and buy the Trans Mountain pipeline expansion project from Kinder Morgan after the company refused to move forward with it in the face of strong provincial government opposition from British Columbia. Despite this move, caused as much by desperation as by any desire to have the pipeline built, Ottawa has on the whole been playing against oil.

And much, much more.

The Canadian dollar is worth US 75 cents.

Now the original Bloomberg article. It begins:

In a rural patch of prairie along the U.S.-Canadian border, the towns of Portal, North Dakota, and North Portal, Saskatchewan, couldn’t be closer. They share a fire department, and the first eight holes of the local golf course are in Canada, while the ninth and the club house are in the U.S.

But here in the Bakken shale patch, one of North America’s most-prolific oil fields, the U.S.-Canada border represents a drillers’ divide.

Spurred by a surge in crude prices, North Dakota’s production is rising more than three times faster than its counterpart in the Bakken region of Saskatchewan. The output difference between the two countries runs deeper than the shared field.

While U.S. drillers deploy more rigs than any time since 2015 amid a fracking surge in the Permian Basin, companies including ConocoPhillips, Royal Dutch Shell Plc and Equinor ASA have sold operations or pulled out of Canada’s oil sands, the world’s third largest source of crude reserves.

And more:

A shortage of pipelines and a regulatory environment that’s often slower and less certain than in the U.S. has helped spark the flight of capital southward, said Tom Whalen, chief executive officer of the Petroleum Services Association of Canada, a trade association representing oil servicing companies.

“We [Canadians] are kind of dying by our own sword,” Whalen said in a phone interview. “We are making it very difficult to do business.”

And more:

A new tax law in the U.S. has helped oil companies by reducing the corporate rate and allowing companies to write off some assets sooner than in the past.

Routine licensing for a well in Alberta takes 79 to 119 days versus 30 to 60 days in Texas, according to a report last year by the Canadian Association of Petroleum Producers.

Enerplus Corp. Chief Executive Officer Ian Dundas estimates that 10 years ago, his company allocated 90 percent of its capital spending to properties in Canada and 10 percent to its U.S. holdings. Those percentages have been reversed, he said in an interview.

NDIC reported today that Enerplus has permits for a 10-well pad in Antelope oil field.

Much, much more at the article. 

Wow, It Never Quits -- LNG, LNG, LNG, And More LNG; Making Panama Great Again -- June 27, 2018

Articles sent to me by readers. Thank you very much.

The first article, a press release: ONEOK will expand its natural gas pipeline infrastructure in the Permian Basin and Oklahoma to a total of 1.7 billion cubic feet per day. The press release goes on to list several projects.

• 1.7 billion cubic feet per day / 6,001 = 285,000 boe per day
• these are the projects
• expansion: 150 million cf/d expansion, ONEOK's WesTex Transmission system, from the Permian Basin to delivery points in the Texas panhandle; if enough interest, could be expanded to 450 million cf/d; 4Q18;
• expansion: 150 million cf/d expansion of the ONEOK Gas Transportation system from two NG processing plants in the STACK and SCOOP to eastern Oklahoma to join the interstate grid; 1Q19;
• expansion: 100 million cf/d westbound expansion of the same system; 1Q19;
• new: a project to make the Roadrunner Gas Transmission bidirectional; will supply 750 million cf/d of eastbound transportation capacity from the Delaware Basin to the Waha area; 1Q19;
• most of this will be done with additional compression facilities
• look how fast this will occur: we'll talk about this later when we talk about Canada

The second article, SFGate: Panama Canal opens way for more LNG tankers with US exports rising. But first, before we get to this story, do you remember the negative article by The NYT suggesting the Panamanians would not succeed with their Panama Canal project? The "Panama Canal expansion" tag will bring up The NYT article plus many related articles. The original post regarding The NYT article and updates are at this post.

Now back to the SFGate article, data points:

• the Panama Canal Authority will ramp up the movement of massive LNG tankers through the canal beginning in October of this year (2018)
• under new rules:
• the ships can traverse the canal at night
• two at a time can be on Gatun Lake
• the changes will let two tankers move through the canal in different directions at the same time
• the authority will also better identify "ghost bookings": companies that reserve slots in advance, then fail to show up

Other data points:

• the US currently has two operating LNG export terminals; there will be four (4) more export terminals in 2020
• China is now the world's largest natural gas importer
• China is not putting any tariffs on natural gas imports

And more:

• the canal celebrated it's second anniversary of the expansion yesterday (Tuesday, June 26, 2018)
• so far: 
• 372 LNG tankers have gone through the locks; 
• 337 moved through on the same day they had reserved a slot; 
• the remaining ships were tankers that showed up with no reservation, and all but five moved through on the same day; 
• the rest waited three to four days at most
• the canal is averaging less than a trip a day for these tankers
• in October, a second daily slot will become available
• the canal has a total of 10 slots per day available for reservations
• a new analysis suggest the locks may be able to handle as many as 13 a day

Making Panama great again. Doing it on their own. Can you imagine the additional revenue this country will begin to take in after October?

The Enerplus Tortoise / Turtle Pads

Locator: 10010TURTLE.

First the graphic:

Now the wells. These are really incredible wells. Look at their cumulative production to date, and then note they are less than four years old. Bakken wells are expected to produce oil for 30 years and during their lifetime will be fracked numerous times. Primary production from Bakken wells right now probably return in the neighborhood of 12 - 15% (over their lifetime) but Mark Papa has suggested the next shale breakthrough will be getting that primary production to 50% (previously posted).

To the west, the original tortoise and turtle pad, with a few butterflies:

• 27591, 2,079, Enerplus, Monarch 152-94-32D-29H, Antelope, Sanish, t12/14; cum 521K 4/21 with huge bump in 7/17; cum 559K 12/22; cum 570K 7/23; cum 578K 1/24;
  
• 27590, 1,608, Enerplus, Viceroy 152-94-32D-29H TF, Antelope, Sanish, t12/14; cum 565K 4/21; produced 50K+ in one month (2/14); cum 589K 12/22; cum 595K 7/23; cum 602K 1/24;
  
• 27589, 171, Enerplus, Swallow Tail 152-94-32D-29H, Antelope, Sanish, t11/14; cum 531K 4/21; a huge bump 11/15; cum 561K 12/22; cum 570K 7/23; cum 583K 1/24;
  
• 27588, 1,867, Enerplus, Snapper 152-94-33C-28H, Antelope, Sanish, t11/14; cum 523K 4/21; a huge bump 7/15; off line 7/19; remains off line 8/19; back on line 10/19 with nice bump in production; cum 583K 12/22; cum 596K 7/23; cum 607K 1/24;
  
• ***27587, 2,188, Enerplus, Softshell 152-94-33C-28H TF, Antelope, Sanish, t11/14; cum 839K 4/21; incredibly good well with multiple bumps in production; off line 6/19; remains off line 8/19; back on line 7/10 but weird production; only reporting one day but production is obviously a full month; cum 900K 12/22; cum 916K 7/23; cum 925K 1/24;
  

To the east, the second tortoise and turtle pad:

• 35059, PNC, Enerplus, TF1-LL, Ridley, Antelope,
  
• 35060, PNC, Enerplus, TF1, Loggerhead, Antelope,
  
• 35061, PNC, Enerplus, TF2, Aldabra, (the giant tortoise in the Seychelles)
• 35062, A/IA/1,018, Enerplus, was SI/NC-->1,018, Enerplus, Leatherback 152-94-33C-28H, Antelope, t9/19; cum 223K 8/20; AL; 42 stages; 10 million lbs; taken off line 9/20; remains off line 4/21; back on line; this is what a "mature" basin looks like; cum 276K 12/22; cum 290k 7/23; cum 298K 1/24;
  
• 35063, 1,291-->1,291, Enerplus, TF1, Tortoise 152-94-33C-28H-TF1, Antelope-Sanish, t9/19; cum 377K 4/21; cum 435K 12/21; cum 473K 12/22; cum 492K 7/23; cum 505K 1/24;
  
• 35064, IA/687-->687, Enerplus, middle Bakken, Hawksbill 152-94-33D-28H, Antelope-Sanish, (a link to the turtle), t9/19; cum 241K 12/20; off line 1/21; back on line; cum 312K 12/21; cum 366K 12/22; cum 385K 7/23; cum 400K 1/24;
  
• 35065, A/IA/520, SI/NC-->520, Enerplus, Map 152-94-33D-28H-TF1, Antelope, t9/19; cum 333K 1/21; GL; 43 stages; 15.6 million lbs; (there is a common map turtle), remains off line 12/20; back on line 1/21; off line 3/21; back on line, cum 397K 12/21; cum 425K 12/22; cum 439K 7/23; cum 445K 1/24;
  
• 35066, 372, Enerplus, Painted 152-94-33D-28H, Antelope-Sanish, t9/19; cum 425K 4/21; GL; cum 474K 12/21; cum 504K 12/22; cum 515K 7/23; cum 521K 1/24;
• 35067, SI/NC-->326, Enerplus, TF2, Box 152-94-33D-28H-TF2, Antelope-Sanish, t9/19; cum 286K 1/21 GL; remains off line 12/20; back on line 1/21; cum 327K 12/21; cum 337K 12/22; cum 337K 5/23; offline; struggling; cum 337K still struggling, 1/24 offline;
  
• 35068, SI/NC-->1,306, Enerplus, middle Bakken, Terrapin 152-94-33D-28H, Antelope-Sanish, t9/19; cum 341K 4/21; cum 356K 8/21; off line 9/21; cum 369K 12/22; cum 377K 7/23; cum 383K 1/24;
  

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The Art Page

Coincidentally, our middle granddaughter, this past weekend, at a painting workshop, chose a photograph I took of a tortoise in the Galapagos years ago when the US Air Force was studying drug smuggling in that part of the world for her first pastel. The challenge: to use certain colors to highlight an otherwise dull photograph.

Something Tells Me This Does Not Bode Well For Iraq -- Shell Turns Over Major Field To Iraq; Exits -- Can't Come To Agreement, Cutting Their Losses; Iraq Losing Expertise And Adult Leadership -- June 27, 2018

From oilprice.com, data points:

• unable to come up with an agreement, Shell and Iraqi state-run Basra Oil Company part ways
• Majnoon oilfield
• Shell was the operator and holder of 45% at Majnoon
• Malaysia's Petronas owned 30%
• Iraq's Missan Oil Company held 25%
• production: 235,000 now; plans to increase to 400,000 bpd in the "coming years"
• Anton Oilfield Services and Petrfac have a two-deal to operate the field on behalf of Basra Oil Company

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Back to the Bakken

$72.41↑↑	6/27/2018	06/27/2017	06/27/2016	06/27/2015	06/27/2014
Active Rigs	65	59	30	75	193

Eleven new permits:

• Operators: Enerplus (10); Resonance Exploraiton
• Field: Antelope (McKenzie): Russell (Bottineau)
• Comments: Enerplus has permits for a 10-well tortoise and turtle pad in SWSE 33-152-94; see graphic below; the Enerplus tortoise/turtle pads are tracked here;

Again, another day with no DUCs reported as completed.

Sixteen Reasons -- June 27, 2018

On June 13, 2018, I posted sixteen reasons why I thought the "tea leaves" were suggesting the price of oil would continue to rise.

Since then, a few more reasons could be added, including the "technical difficulties" in western Canada (posted earlier today) and the "technical difficulties in the Neutral Zone (posted yesterday).

Be that as it may, "crude oil" is at its highest in four years and it doesn't appear to be a fluke, or short-lived.

• WTI: $72.90; up almost 3.4%; up over $237/bbl
• LLS: $76.23; up about 0.75%; up about 60 cents/bbl -- this correlates closely with DAPL-Bakken
• Brent: $77.72; up about 2%; up about $1.60/bbl
• OPEC Basket: $72.69; up about 0.75%; up about 50 cents/bbl
• West Canadian Select: $47.53; up over 5.4%; up about $2.45/bbl

Gasoline demand: data has been released. Unremarkable. Almost identical demand one year ago. A reader suggested that "gasoline demand" data is based on the amount of gasoline delivered to service stations. That would make sense. Obviously no one is actually measuring individual purchases during the past week. If so, the data would lag a week or so what is actually occurring.

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A Most Impossible Job

From Max Boot's The Road Not Taken, page 363:

Being secretary of defense was, from the start, an almost impossible job. Although the National Security Act of 1947 had created this post to preside over the Army, Air Force, Navy, and Marine Corps, it gave the officeholder scant power.

The first secretary of defense, the Wall Street banker and former Navy secretary James Forrestal, spent his tenure locked in internecine battles with the military services over their funding and missions. He left office in 1949 a broken man, suffering fro what psychiatrists diagnosed as the equivalent of combat fatigue. Just two months later, he jumped to his death from the window of the naval hospital where he was receiving psychiatric treatment.

Apple Brittle -- June 27, 2018

I haven't watched any television or followed the market (except very, very peripherally) for the past two weeks. I had planned to stay away for a week or so until we got through the "silliness," as Hillary would say.

But I haven't missed televions and it's likely I will avoid television and the market for most of the rest of the summer. Obviously it's impossible to completely avoid the market. A couple days ago my wife mentioned in passing that the market had given up all its gains for 2018.

Buying opportunities.

I continue to check my cash accounts -- the only "new" money I get these days is from dividends. And when my cash accounts, via dividends, reach at least $100, I buy more shares of whatever I'm accumulating at the moment. Yes, even as little as $100. Fully invested. Commissions are so inconsequential these days.

My one concern: AAPL.

It's hard to believe that AAPL could falter, but without question, the hardware business that the Apple Corp is in is strictly a commodity. There are many, many competitors.

Our middle granddaughter is taking coding classes this summer. The engineers teaching them want the students to use the Firefox browser when coding in Java. If they don't have Firefox, their next (and only other) option is Google Chome.

Our middle granddaughter says she won't use Firefox because it is not as secure as the other browsers (she is eleven years old), and she won't use Safari despite the fact she is using an Apple computer.

I only use Firefox. Even though I am an Apple fanboy, I don't use Safari. It seems slow. But maybe that's just me.

In California public schools, the recommended laptop for students is the Google Chromebook and the Google Chrome browser, of course.

Apple used to have the "monopoly" on public schools, but apparently not in California -- were Apple is based.

Apple has the ecosystem. That's hard to beat.

But Apple music: others can do it. I think Amazon with its Amazon store could give Apple a run for its money with regard to music.

Apps? One would think that Apple has the market cornered but it certainly seems Google and Amazon are doing a better job with "home apps."

I'm worried that as good as Apple is, it's brittle.

Apple brittle (first definition: hard but liable to break or shatter easily).

I don't worry about anything else.

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The Literature Page

Having given up television, I have more time to read. I set a goal to read one consequential book each week for the rest of my life.

For me, to read one consequential book each week for the rest of my life, requires a "different way of doing it."

I've started my first consequential book (which I will talk about later). The problem I have, is that I generally tire of just reading one book at a time; I need to have a couple to choose from at any given time.

So, this is how one solves the problem. One Monday of each week, I check out a consequential book from the city library. I then return it the following Monday, regardless how far I get through it. If it's really, really good, I will finish it in a week. Whether it's good or no, by the end of the week, I've pretty much "figured out" the book. I know what it's about, I know where it's headed, and if necessary, I can always skim through the rest of the book.

If that makes sense.

The book I've been reading off and on for the past several months for pleasure is Edmund de Waal's The White Road (my own copy, not a library copy). I think he (or the publisher) designed the book jacket after the Beatle's White album. It's not a book I want to read quickly. I want to savor it. Read it slowly, and start a chapter over now and then. Get distracted and look something up on the internet that de Waal mentions.

But the consequential book I am reading, which I just checked out from the library two days ago: The Road Not Taken: Edward Lansdale and the American Tragedy in Vietnam, Max Boot, c. 2018.

I think this is the first historical book I've read on Vietnam. I've read very, very few books on Vietnam (I can think of only Tim O'Brien's books as examples). the  about Vietnam, but it's a biography of Edward Lansdale.

Incredibly good book if one is interested in this sort of thing.

There are three themes interwoven through the book that interest me:

• the actual history of the development of the CIA and the problems that arose that still haunt us today (think Iran and Guatemala)
• the tragedy of Vietnam (the subtitle of the book); so many missed opportunities (20/20 hindsight but lack of flexibility is the common theme)
• the personal life of Lansdale -- personal affairs are called "personal" for a reason; the #MeToo movement cannot be funneled into a sound bite; humans are complex social creatures; men are from Mars; women are from Venus; limerence;

With regard to the second bullet, my worldview is that President Obama let the US intelligence agency and some of his closest advisors develop and execute his foreign policy; was very duplicitous and disingenuous, and certainly not as bright as his supporters would like one to believe; as modern as he was, he was very "old school" when it came to foreign affairs; he was not flexible.

President Trump, again, this is my worldview, ... nope .. I'm not going to get started.

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Perspective

Photo taken at the end of the two-day water polo tournament in nearby Southlake, TX. Arianna's team won all four of their games and most of them by a lopsided margin.

Sophia was there to watch all four games over the two days.

They were enjoying a post-tournament cupcake.

An Unreported Story -- Re-Posting -- June 27, 2018 -- Making America Great Again

Because no one else is reporting it (except Fox Business which "blogger app" won't link), I will post this story again, but as a stand-alone post.

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.

First, my original post:

Making America great again. This story is being reported at Fox Business (unable to link). Look at the amount of American money flowing back into America. Before I post the graphic, here's the lede:

Despite President Trump's tit-for-tat trade barbs, America’s CEOs are not wasting anytime in taking advantage of his tax reform plan. Over $300 billion was repatriated to the U.S. in the first quarter, according to the Bureau of Economic Analysis (BEA) -- the most on record.

“U.S. firms that used to build their factories overseas in order to avoid U.S. taxes, they stopped in their tracks because of the tax bill, they are bringing all the money home,” said Kevin Hassett, chair of the president's Council of Economic Advisers, during an interview on FOX Business’ Varney & Co. in June.

Now the graphic -- staggering -- 

Now the comments from the reader who sent me the link:

The media is burying this story - virtually unreported. And even this article makes light of the ripple effect. $300 billion moved back to the USA in the first quarter of 2018.

That's ~ $1000 per man/woman and child in MAGA land. [In all fairness, the Dems, particularly their leader, Nancy Pelosi, suggests that to Americans, $1,000 is "peanuts."]

Free advice, and worth every penny.... I think the market is going to go gangbusters. (The Dow has retained a ~30% gain since the day Trump was elected. I think that's the baseline - remarkable as that gain has been.)

Again, that huge surge -- straight up.

Three things:

• that's just for one quarter $305 billion repatriated; 
• equates to about $1,000 for every woman, man, child in the US -- including the new immigrants 
• estimated additional tax revenue: $46 billion

Stop The Presses! US Crude Oil Inventories Plunged Almost 10 Million Bbls From Previous Week -- June 27, 2018

Link here. Data points:

• US crude oil inventories: decreased by a staggering 9.9 million bbls -- this is absolutely unprecedented. I have followed the data weekly for the past two years, and never, never, anything like this
• US crude oil inventories now at 416.6 million bbls; I forget, but I think I posted by "new" norm was 400 million bbls (the "old norm" was 350 million bbls -- decades of data)
• US crude oil inventories now 4% below the five year average for this year of the year
• refineries operating at an incredible 97.5% capacity -- rarely ever higher than this; generally in the 93% range
• gasoline production right on historical average: 10.1 million bbls/day
• distillate fuel production slightly above historical average at 5.4 million bbls/day

Gasoline demand: pending.

Oil prices immediately follow weekly release of US crude oil inventories:

• WTI: $72.62; up almost 3%; up over $2/bbl
• LLS: $76.23; up about 0.75%; up about 60 cents/bbl -- this correlates closely with DAPL-Bakken
• Brent: $77.68; up about 2%; up about $1.50/bbl
• OPEC Basket: $72.69; up about 0.75%; up about 50 cents/bbl

The Market, Energy, And Political Page, T+27 -- June 27, 2018

NOG: I'm sure this was announced earlier but I'm not sure I posted it. NOG now released the announcement in a press release:

• NOG will acquire producing assets in the Williston Basin of North Dakota
• a negotiated exchange agreement with an institutional holder of its 8% senior unsecured notes
• NOG will acquire small amount of daily production and 1,900 acres of the Pronghorn area
• Pronghorn: southwestern part of the state? the southern Bakken; Whiting's neighborhood around Belfield, ND;
• exchange agreement will result in a debt reduction of $10 million in exchange for common stock
• NOG, over the past two weeks, now has entered into agreements to retire almost $54 million of its remaining notes

Canadian deficit. This is quite amazing. It speaks volumes about how really small the Canadian economy is. I saw the article earlier but did not post it; seemed irrelevant, but when I saw the actual percent -- wow. From CBC, buying Trans Mountain pipeline could add 36% to Canadian deficit. Imagine that. Canada didn't buy a Fortune 500 company; it didn't buy Amazon. Canada bought one of many Kinder Morgan projects and just by buying that one project, a Canadian study suggests it could ultimately increase the Canadian deficit by 36%. I find that quite ... incredulous? It certainly sounds like Kinder Morgan got a heck of a deal.

The Permian is a monster. I said the same thing a few days ago, and the article in Hobbsnews/Business Wire, I think, is nothing new. Just a repeat of what's been said over the past few days. Data points:

• Permian Basin oil production will more than double from 2017 - 2023
• adjective used: "stunning"
• the Permian's stunning level of growth will comprise more than 60% of net global production growth in those five to six years
• at 5.4 million bopd in 2023, the Permian production will exceed that of any OPEC country other than Saudi Arabia
• nearly 41,000 new wells and $308 billion in upstream spending will drive that growth
• $308 billion / 41,000 =  $7.5 million / well; that number suggests the cost of drilling/completing a Permian well is going to come way down in the out years
• in the past two years, production from just this one region has grown more than any other entire country in the world -- Daniel Yergin
• $308 billion, context: the Permian saw $150 billion in investment from 2012 - 2017

Small towns are booming -- thanks to oil prices -- The WSJ. Data points -- actually none worth posting. Only one town was mentioned, Hobbs, New Mexico, and not much was even said about that.

Making America great again. This story is being reported at Fox Business (unable to link). Look at the amount of American money flowing back into America. Before I post the graphic, here's the lede:

Despite President Trump's tit-for-tat trade barbs, America’s CEOs are not wasting anytime in taking advantage of his tax reform plan. Over $300 billion was repatriated to the U.S. in the first quarter, according to the Bureau of Economic Analysis (BEA) -- the most on record.

“U.S. firms that used to build their factories overseas in order to avoid U.S. taxes, they stopped in their tracks because of the tax bill, they are bringing all the money home,” said Kevin Hassett, chair of the president's Council of Economic Advisers, during an interview on FOX Business’ Varney & Co. in June.

Now the graphic -- staggering -- 

Canada Loses 10% Of Its Westen Canadian Production Due To "Technical Difficulties," As The Kuwaitis Would Say -- June 27, 2018

Active rigs:

$71.13↑↑	6/27/2018	06/27/2017	06/27/2016	06/27/2015	06/27/2014
Active Rigs	65	59	30	75	193

RBN Energy: western Canadian Crude takeaway constraints to ease, but only temporarily.

The weeks-long shutdown at Syncrude Canada’s oil sands production facility in northeastern Alberta will alleviate pipeline takeaway constraints that have significantly widened the price spread between Western Canadian Select (WCS) and West Texas Intermediate (WTI) crude oil.

But when Syncrude returns later this summer, there’s every reason to believe that the constraints will too, as will the need for significantly more crude-by-rail shipments. Railed volumes out of Western Canada have been increasing in recent months, but not by enough to avert WCS-WTI differential blowouts to $25 and even $30/bbl.

The catch is that most of the rail-terminal capacity built a few years ago is mothballed, and that railroads are reluctant to dedicate more locomotives and personnel unless shippers make one-, two- or even three-year commitments to take-or-pay for that logistical support.

Today, we consider the ongoing challenges Western Canadian producers face in moving their crude to market.

The biggest news in the crude oil business the past few days was OPEC’s June 23 announcement that its members will be increasing their output by as much as 1 MMb/d.

But the runner-up was likely the news that Syncrude’s 360-Mb/d operation may be offline through the end of July — a shutdown triggered by a power outage.

Syncrude accounts for nearly 10% of Western Canadian production, and the suspension of flows from its production facility north of Fort McMurray, AB, opens up a lot of space on the region’s takeaway pipelines — pipelines that have been running at or very near capacity for months. Syncrude’s troubles and their effects on Western Canada’s takeaway constraints are very likely to be only temporary, though. The underlying problem — insufficient pipeline capacity and profit-sapping differentials — isn’t going away.