Thursday, July 12, 2018

Active Permits Back Up To 67 -- July 12, 2018

Active rigs:

Active Rigs67582873190

Two new permits:
  • Operator: Enerplus
  • Field: Heart Butte (Dunn)
  • Comments: permits for a 2-well Blackwidow/Huntsman pad in SESW 32-149-92;
Five permits renewed:
  • Crescent Point Energy (4): four CPEUSC Jean permits in Williams County
  • Liberty Resources: a Herseth W permit in Burke County
Two permits canceled:
  • BR (2): a Rollacleetwood permit and a Glacier permit, both in McKenzie County
No DUCs reported as completed.

Trade War? What Trade War? T+42 -- July 12, 2018

Nasdaq: closes at a record high.

S&P 500: near 2,800

Dow: up over 200 points.

WTI: holds, and closes above $70 -- barely. That's fine.

Theresa May, UK, talking "free trade agreement" with US in concert with Brexit.

Sounds like protests in London are muted.

Notes to the Granddaughters
The Book Page

Without question, in "our" thirty-years-plus-one-day career in the US Air Force, the best assignment was our first overseas tour, Bitburg Air Base. Facebook has a page devoted to Air Force members who served at Bitburg. It's that special.

I've just finished The Quiet American by Graham Green, the story of a journalist and (probably) a spy for the OSS assigned to Saigon during the First Indochina War, the war in which the French were fighting in Vietnam and before the Americans got heavily involved. Graham Greene mentions the battle at Phat Diem, 1951, and the book was published in 1955, so it obviously takes place sometime between those two years.


Sixty-three years ago.

For a youngster, 20 years of age back in 1955, he/she (and most likely a "he) would be 83 years old today. Probably not many still living that can say they were in Saigon/Hanoi back in 1955. For those that can, I can only assume the memories would be haunting. A lot of "what-ifs."
Great, great book. It is amazing how Graham Greene, writing in the early 1950's was able to foreshadow events that took place ten years later.

If you have not had your "fill" of Vietnam, and have not discovered Graham Greene, this is a great place to start.

A love triangle: the narrator/journalist, Thomas Fowler, an older fellow, a journalist, English, probably in his 50s; Alden Pyle, an idealistic 26-year-old American agent, probably OSS; and, Phuong, a young (maybe 18 years old) Vietnamese woman; their lover. In Los Angeles, through my Japanese mother-in-law, and in the US Air Force, I met many Asian war brides. The stories were very, very similar. The ones who survived with a marriage intact seemed to be the rare ones.

Tesla Hits 200,000 Threshold -- July 12, 2018

From SeekingAlpha:
  • Tesla has crossed over 200K electric vehicle sales in the U.S. this month
  • new Tesla buyers after December 31 will see a 50% reduction in the federal tax credit available to $3,750 for another six months before another 50% reduction takes effect
  • at least 14 different states also offer EV tax incentives, with varying levels of rebates, perks, credits or exemptions
  • the EV automaker beat GM and Nissan to the 200K mark, although those automakers will also soon hit the threshold
  • while there's been plenty of debate about what the potential impact on EV demand will be as the tax incentives head lower - the implications are difficult to forecast with the Trump Administration waiting in the wings to potentially issue new EV rules.
See poll at sidebar at the right.

By the way, this is likely why there was a "discrepancy" in Tesla's most recent "delivery" announcement.

Someone noted that:
  • Tesla has 400,000+ reservations
  • Tesla had upwards of 20,000 automobiles ready for delivery
  • Tesla delivered around 10,000 automobiles in the most recent reporting period (month? quarter? I forget) 
  • folks wondered why those 10,000 automobiles weren't delivered, or if Tesla was "fudging" some numbers?
  • the explanation: by holding those 10,000 vehicles for delivery after July 1, 2018, that put the 200K threshold reached (poor grammar but you know what I'm saying), and thus extending the full rebate for one more quarter, before the phase out begins
My comments:
  • just one explanation; the facts may be wrong; the explanation may be bogus
  • but it's good cocktail chatter
  • if I see you at a cocktail party and you bring this up, I will buy you your next non-alcoholic drink
But this is the important point: by going over the 200K threshold on July 1, 2018, Tesla customers get the full credit for this quarter (the entire quarter) plus the following quarter, and that's why it takes "us" to December 31 before the phase out begins. Some will incorrectly state that for Tesla the phase-out has begun. No, the phaseout does not begin until January 1, 2019. And by then, a lot could change.

Texas Friendly -- Paying It Forward

Every night, starting about 9:00 p.m. and lasting until 5:00 a.m. major road construction is the norm on the north side of DFW airport where Texas highways 26, 114, 121, and 360 converge (and now the Texas light rail under construction). In some spots, the four lanes (with off-ramps and on-ramps, up to six lanes) narrow to one lane. The traffic backs up for a mile or two but steadily moves forward. It keeps moving forward because folks in the long line generally make room for new cars merging from closing lanes. I am impressed with how helpful most folks are.

About two weeks ago while blogging/reading in Starbucks, a 20-something African-American sat across from me, not ordering anything to drink, but constantly looking at his mobile phone and generally looking a bit unhappy. After about ten minutes, I offered my Starbucks card to him and asked him if he wanted anything to eat or drink. Wow, did he break out into a big smile. "No, " he said, "I'm just waiting for a friend. And, actually I don't like coffee anyway." About five minutes later his friend arrived and he seemed very happy.

Two nights ago while blogging at McDonald's a 20-something white male sat at the table next to me -- it was the only place the restaurant had an outlet. He was charging his mobile phone which had just died. He was on his way from Dallas back to Arkansas and without "maps" on his mobile phone he had no idea where he was. He was not even aware he had just exited I-35W, the main thoroughfare out of Ft Worth. He also did not order anything, just checked his messages, etc. After a bit, I asked him if he had any money for something to eat; he said he did, and shortly after that, he went to get something to eat. We didn't talk much but it was clear he was happy about "Texas friendly."

A week ago, May and I went to dinner with our son-in-law, daughter, and the granddaughters. We split the cost of the meal, but in addition, we covered the tip. Our son-in-law suggested that the tip we left was more than twice what was necessary. I told him that May's mom was a waitress -- she worked in Japanese restaurants in Los Angeles until she could work no longer. That was the end of the discussion about tipping.

Decades ago, in a different life, in a land far, far away, I hitchhiked from Los Angeles to Sioux Falls, SD. I had $4.00 in my pocket when I set out form LA. Probably four dollars and some additional change. A driver picked me up on the outskirts of Los Angeles and we drove to Las Vegas (long story, short) where he bought me dinner. I still had my $4.00. A hunting party picked me up on the north side of Las Vegas and drove me to St George, Utah. They stopped for breakfast and bought my breakfast, telling me that I could leave the tip. They left the table to pay the bill for four of us. I have long forgotten how much I left but I bet I had less than a dollar for the rest of the trip back to Sioux Falls.

"1031 Exchange" Information

Housekeeping note: I have added a link to a page regarding "1031 exchanges" at the sidebar at the right. It's under the general heading "Handbook for Mineral Owners," found right under the "archive icon link."

Reminder: this blog is not an investment site. I post this mostly to help me better understand the oil and gas sector and the Bakken. Until I started following the Bakken, I had never even heard of "1031 exchanges." Something suggests that these exchanges may work for "stuff" unrelated to oil and gas, and maybe that's why our apartment complex seems to get a new owner (usually out of California) every three or four years.

Update On The "Delta Refinery" In Trainer, PA -- July 12, 2018

I no longer follow the "Delta refinery" and I have definitely "lost the bubble" regarding that refinery and Bakken CBR, but at one time it was quite a story. The original post and updates are at this link.

Update: according to ArgusMedia, profits at the "Delta refinery" helped "stem" rising jet fuel costs. The byline is "Houston." From the article:
  • the highest refinery profits since 2015 helped to cut Delta Air Lines' second quarter fuel costs by 4¢/USG, the airline said today
  • the 185,000 b/d refinery in Trainer, Pennsylvania, reported a $45mn profit on sharply-higher third-party fuel sales compared to the same quarter last year. Third-party refinery sales — the sale of non-jet fuel produced at Trainer — generated $216mn, compared to $67mn in the same quarter of 2017.
  • Delta plans to take the refinery down in the fourth quarter for extensive maintenance
I don't know the source of oil for this refinery -- whether it's still Bakken CBR or not.

Libyan Production Coming Back On Line -- WTI Plummets 5% -- Multiple Sources -- July 12, 2018

I'm sure I'm missing something, but every headline I'm reading (I often don't read the story) says that the price of oil plummeted yesterday -- as much as 5% in some cases -- because production was coming back on line in Libya.

So, here's the screenshot from Platts twitter feed regarding Libya:

Give me a break. So, analysts are telling me that WTI fell 5% yesterday because Libya production was coming back on line. And this is just production; it still has to get to the port and shipped. Give me a break. Less than a 100,000 bopd. Is that right? The global oil market is around 100 million bopd. The Libyan export number is a rounding error. North Dakota alone, out of three or four counties, produces 10x that amount, and virtually all of North Dakota's production is exported out of state. I think the price of oil is driven by "talk" in many, many cases.

WTI is now below $70/bbl -- at least it was earlier this morning. Haven't checked recently.

Wow! A Lot Packed Into This "Oilprice.Com" Screenshot -- July 12, 2018


Later, 6:39 p. CDT: See first comment:
Gasoline output from our refineries rose by 388,000 barrels per day to a record high of 10,699,000 barrels per day during the week ending July 6th, while
gasoline product supplied fell by 594,000 barrels per day...
our exports of gasoline rose by 699,000 barrels per day to 1,186,000 barrels per day....
Now, I can see us exporting light sweet crude on one hand, and importing sour crude that refineries are optimized for on the other, but gasoline is gasoline, no? so why are we exporting so much overseas that we have to import it from the Saudis?
Original Post

1. Saudi Arabia exporting gasoline to the US. First time ever. Apparently. Remember all those stories that Saudi Arabia was increasing production. This is one reason why: Prince Salman is increasing refining in his own country. Domestically, he needs more production. The other reason for increasing production recently: it's summer in Saudi Arabia and Saudi always increases production in the summer (all things being equal) to produce electricity for air conditioning.

2. WTI has dropped below $70. WTI is priced at Cushing. Must be excess of WTI at Cushing. "Every" oil is down "at the moment," except a slight rise in Brent -- I believe there's a "worker's strike" in the North Sea.

3. But look at that Iranian story: if accurate, Iran's gasoline imports dropped 36% year-over-year. Link here. Apparently this is due to the fact that Iran has brought a huge new refinery on line -- in prepartin for sanctions?
Iran imported 36 percent less gasoline than a year earlier during the first quarter of the Iranian year beginning on March 21 in what may well be a signal the country is shoring up its domestic supply as the start of U.S. sanctions draw near.
Iranian media quoted the managing director of the National Iranian Oil Products Distribution Company as saying that the average daily gasoline imports stood at 5.7 million liters during the first quarter. State news agency IRNA separately reported that the import decline was linked to the start of gasoline production at a new refinery, the Persian Gulf Star Refinery.
A senior executive from NIOPDC’s parent company said Iran imported an average 13 million liters daily of gasoline during the first half of Iranian 2017, but by the last quarter of that year, this had slumped to about 5 million liters daily.
4. The trope continues: "high US gasoline prices and US gasoline prices are increasing."

Note: Production Data For Hess BB-Chapin/BB-Federal Wells In Blues Buttes -- Updated -- July 12, 208

Link here.

Three Hots And A Cot; Free Medical Care For Red Fawn Fallis -- July 12, 2018

DAPL's Red Fawn Fallis: Federal court sentencing to 57 months in federal prison; followed by three years supervised release; charged with firing a handgun three times as officers tried to arrest her.
  • one of the higher, if not the highest, profile cases
  • will probably expedite handling of hundreds waiting for trial
  • attorney argued for shorter sentence suggesting that Fallis is ... and I can't make this up ... "on the precipice of great things" 
Wells coming off confidential list today:
  • 34069, 1,581, Hess, AN-Double Bar V-152-95-0106H-1, Antelope, Sanish, t5/18; cum 16K after 22 days;
  • 33049, 1,269, Oasis, Patsy 5198 14-17 13B, Siverston, 50 stages; 9.9 million lbs, mesh, white, ceramic, t1/18; cum 163K 5/18;
Production data for #33049:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Active rigs:

Active Rigs65582873190

RBN Energy: the Nueva Era pipeline provides yet another outlet for Texas gas -- Eagle Ford to Mexico.