Friday, July 20, 2018

Tale Of Two States -- July 20, 2018

It would be crazy to make any conclusions based on a single month of data, but this is quite staggering.

First, California:
  • added only 800 jobs in June, 2018

Meanwhile, Texas:
  • led the nation in job growth in June, 2018; added 42,000 jobs in June
  • note where "42,000" would be on the California chart
  • California: 40 million
  • Texas: 30 million
Peak electricity:

Thirteen New Permits -- July 20, 2018; Petro-Hunt Acquires 130 Divide County Wells From SM Energy

Active rigs:

Active Rigs68593170195

Note: the reports WTI at $68.11; the crawler at CNBC says WTI closed at a bit over $70 (perhaps different contracts)

Thirteen new permits:
  • Operators: Petroshale (5); MRO (4): Hess (3); Resonance Exploration
  • Fields: North Fork (McKenzie), Killdeer (Dunn), Alkali Creek (Mountrail), Sergis (Bottineau)
  • Comments: Petroshale has permits for a 5-well Tailgunner Federal pad on lot 1, section 18-149-96;
Eight permits renewed:
  • BR (6): six CCU Gopher permits in Dunn County
  • EOG (2): two Burke permits in Mountrail County
Four producing wells (DUCs) completed:
  • 33910, 2,046, Hess, BB-Sigrid Loomer-150-95-0817H-7, t7/18; cum --  (#16610)
  • 33909, 2,282, Hess, BB-Sigrid Loomer-150-95-0817H-6, t7/18; cum --
  • 33908, 1,939, Hess, BB-Sigrid Loomer-150-95-0817H-5, t7/18; cum --
  • 33907, 2,489, Hess, BB-Sigrid Loomer-150-95-0817H-4, t7/18; cum --
Change of operator: 130 wells  from SM Energy to Petro-Hunt
  • a lot of good wells involved in this deal
  • all in Divide County
  • oldest permit: 15761
  • newest permit: 32766

Wind "Drought" In UK Continues -- July 20, 2018


July 20, 2018: lack of wind leaves UK turbine investors short-changed -- from  The wind drought:
It’s been a stifling summer of disappointment for investors in the UK’s wind farms, which a heatwave has put at a standstill that’s seen a major drop in power generation eat away at millions of pounds in profits.
As a prolonged ‘wind drought’ ensues, British energy giant SSE has announced an £80-million (around $104 million) reduction in quarterly profits, with both offshore and inland wind farms experiencing 15 percent lower output than originally anticipated.
SEE also said that electricity output from hydropower stations was 20 percent lower than expected.
The dismal numbers from the company’s first fiscal quarter indicated to investors that the full-year results may also take a hit, prompting share prices to plunge more than percent to £13.50 on Thursday.

Original Post
Previously posted, back on July 11, 2018:
Wow, talk about perfect timing.

I just posted an entry in which all agree: renewable energy is one of the least efficient ways to go about replacing coal consumption in a short period of time.

The article did not say what the least efficient way to go. Most likely that's nuclear power. It takes ten years to get the permits, and then another ten years to build the damn thing. Assuming all goes well.

So, here we have a most interesting story.

Apparently, those living in the United Kingdom are learning that:
a) the wind doesn't blow all the time (except over Menwith Hill);
b) wind power is not dispatchable; and,
c) their Kingdom does not have a good answer for energy when the wind quits blowing
Here's the story. Huge thanks to Don; I would have missed it.
  • Britain has gone nine days with no wind generation
  • forecasts show the doldrums to persist for another two weeks
  • day-ahead power prices are the highest level for this time of year for at least a decade
  • except for a surge forecast for June 14th, the forecast is for the wind to stay low for at least the next two weeks
  • UK turbines can produce about as much power as 12 nuclear reactors when conditions are right
  • recently, wind generated about 4.3% of the Kingdom's electricity
  • coal output has dropper near zero
  • gas and nuclear power have picked up the slack, 54% and 25% respectively
  • repeat: natural gas is now supplying more than half of the Kingdom's electricity requirements, and that's without all those Teslas which Musk promises us we will see next year
So, the Kingdom's answer? I can't make this up:
  • A new nuclear reactor. The financing push begins soon. Whenever that might be.
Great graphics, by the way, as usual, at the linked Bloomberg article. 

By the way, one more thing: this wind-thing won't happen during the winter. Had it happened during the winter it would be a catastrophe for England. In the summer, not so bad. Just higher prices.

The Market, Energy, And Political Page, T+50 -- July 20, 2018

Politics: wow, I love this president. The first one since Teddy Roosevelt, I think, who actually seems to be very, very comfortable "in his skin," as they say. He doesn't seem to have a need to have speech writers write everything for him. He remains spontaneous, speaks his mind, gives folks "something to talk about." Never a dull moment. I don't know. It seems better that we have the leaders of the two countries with the largest nuclear arsenals to actually be talking face-to-face. Sometimes I think folks have forgotten the Cold War of the 1950s. Just rambling.

Natural gas. I don't know what others are thinking, but I think this graphic is incredibly remarkable. If this was under a different administration and/or if it was a snapshot taken a decade ago, one would think the problem is lack of production, but today, the US has record amounts of production, and record amount of reserves, and yet, the EIA forecasts the natural gas "injection" will hit a new low this autumn. Absolutely amazing. Maybe I'm missing something. Maybe it's that third potline that Alcoa will be re-starting later this summer. I don't know. Just rambling.

Thought experiment: one of the things I enjoy most when driving the granddaughters to various events, is to try to "step out of my body," and look at the world from a distance, our "place in the universe" as it were. I find it absolutely remarkable all the life forms and all the color compared to the rest of the universe. There seems to be a huge jump from what we see on Mars or Venus or Pluto to what we see on earth. And there doesn't seem to be any examples of anything "in between." It's almost an "all or nothing" phenomenon.

CLR's Thronson Wells In Alkali Creek

The graphic:

The wells:
  • 33351, 2,624, CLR, Thronson 4-21H1, Alkali Creek, very high gas units, TD = 26,126 feet, 84 stages; 14.5 million lbs (about 175K/stage), a very nice well; t1/18; cum 146K 5/18;
  • 33350, 2,424, CLR, Thronson 5-21H, Alkali Creek, a very nice well, TD = 25,967 feet, 79 stages; 14.1 million lbs (about 180K/stage); t1/18; cum 106K 5/18;
  • 29671, 754, CLR, Thronson Federal 6-21H2, Alkali Creek, t8/15; cum 363K 5/18; 
  • 29670, 1,195, CLR, Thronson Federal 7-21H, Alkali Creek, t8/15; cum 318K 5/18;
  • 29668, 1,122, CLR, Thronson Federal 8-21H1, Alkali Creek, t8/15; cum 361K 5/18;
  • 29667, 1,109, CLR, Thronson Federal 9-21H, Alkali Creek, t8/15; cum 3257K 5/18;
  • 22618, 907, CLR, Thronson Federal 1-28AH, Alkali Creek, 4 sections, TD = 21,354 feet, 30 stages; about 3 million lbs sand/ceramic , t2/13; cum 2317K 5/18;
  • 22620, 946, CLR, Thronson Federal 2-28AH, Alkali Creek, 4 sections, t2/13; cum 257K 5/18;
Production profiles.

DateOil RunsMCF Sold


DateOil RunsMCF Sold

29671, a Three Forks second bench well; 45 stages, 8.2 million lbs (large/small sand; small ceramic), looks like it took about 19 days to drill to TD:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

BHGE Misses Estimates -- July 20, 2018

New Jersey: on July 1, 2018 -- less than three weeks ago -- it was reported that New Jersey was going to rely on internet "on-line" sales tax to make up a huge budget deficit. Hold that thought. LOL. 

Do you know who's not worried about the trade war? The chairman of the Federal Reserve.
Two data points: his testimony suggests he feel the economy is accelerating; and, his testimony suggests there it is not likely that planned interest rates will not be taken off the table, confirming that he thinks the Fed needs to "cool the economy." Unless he did not get the memo on tariffs and the trade war, one would think the Fed would consider that before raising rates. And as long as the Fed feels comfortable raising rates, that tells me they're not worried about the trade war. 
BHGE: misses estimates; EPS of $0.10; misses by 4 cents; seems like a pretty big miss; revenue of $5.5 billion but missed estimate by $20 million.

Steel / iron ore -- making America great again. Seriously. From SeekingAlpha:
  • Cleveland-Cliffs +6.9% premarket after posting strong Q2 earnings and revenue beats and raising its full-year sales volume outlook.
  • CLF says Q2 U.S. iron ore pellet sales volume totaled 6M long tons, up 38% from 4.3M long tons in the year-ago quarter, driven by increased customer demand and the impact of the previously disclosed adoption of the new revenue recognition accounting standard.
  • Q2 realized revenues of $112.60/ton rose 16% Y/Y, primarily due to increased steel pricing and pellet premiums, which are magnified by favorable contract structures.
Disclaimer: this is not an investment site.

Back to the Bakken 

Wow, look at all the wells coming off the confidential list today (reporting these may be delayed: family commitments from now until 9:30 a.m.):
  • 33959, SI/NC, Crescent Point Energy, CPEUSC Bennie 8-20-17-157N-99W TFH, Lone Tree Lake, no production datta,
  • 33906, SI/NC, Petro-Hunt, USA 153-95-9A-15-1HS, Charlson, no production data,
  • 33351, 2,624, CLR, Thronson 4-21H1, Alkali Creek, very high gas units, TD = 26,126 feet, 84 stages; 14.5 million lbs (about 175K/stage), a very nice well; t1/18; cum 146K 5/18;
  • 33350, 2,424, CLR, Thronson 5-21H, Alkali Creek, a very nice well, TD = 25,967 feet, 79 stages; 14.1 million lbs (about 180K/stage); t1/18; cum 106K 5/18;
  • 34347, SI/NC, XTO, FBIR Walker 41X-36DA, Heart Butte, no production data,
  • 33341, drl, XTO, Dakota Federal 42X-36E, Bear Den, no production data,
  • 32806, 1,068, CLR, Oakdale 8-13H2, Jim Creek, producing, nice but not remarkable; t1/18; cum 67K 5/18;

For newbies: the new wells -- #33351 and #33350 -- were extended long laterals, 79 and 84 stages; about 175K pounds/stage which is slightly on the low side of the usual 200K pounds/stage in the Bakken;

The CLR Thronson wells: are followed here

Active rigs:

Active Rigs68593170195

RBN Energy: gas transportation expansions in western Canada.
Despite intensifying competition from U.S. natural gas producers — or because of it — Western Canadian gas producers are ramping up their long-term commitments for intra-basin takeaway capacity from the Montney Shale, as well as for capacity at both intra-provincial and export delivery points. Not only has there been a slew of new project announcements in the region, but in some cases, commitments reportedly have exceeded proposed capacity during open seasons. Today, we provide an update of gas pipeline expansion projects in Western Canada.
We’ve talked quite a bit in recent months about the worsening gas supply congestion along U.S.-Canadian border regions, which is heating up the competition between U.S. and Canadian natural gas producers. Natural gas production growth on both sides of the border has been outpacing demand growth. 
Western Canadian producers have been contending with gas transportation constraints right where production is growing the most, in northwestern Alberta and eastern British Columbia (BC). Last fall, the Alberta gas market experienced extreme bottlenecks that left production stranded and sent area gas prices spiraling to negative territory. The ramp-up of winter heating demand helped ease the constraints, but the negative pricing briefly returned this past spring.
Part of the problem is that production growth is increasingly concentrated in the eastern BC and northwestern Alberta areas of the Montney, and pipeline gathering and takeaway capacity has been playing catch-up, especially as plans for LNG exports from the region have faced continual delays or have gotten derailed entirely. The other factor is that while intra-provincial demand is also growing — from gas-fired power generation and oil sands projects — the connectivity between the supply and delivery areas has lagged as well. Over the past few years, regional pipeline operators have responded with expansion plans to debottleneck the supply areas and connect producers to downstream markets. These expansions will shape how Canadian producers navigate the increasingly competitive North American gas market over the next few years. So, next, we take a closer look at recently built and planned projects.

The Burn In Burnaby -- Camp Cloud Has Gotten An Eviction Notice -- July 20, 2018

Purely coincidental. Earlier today I posted a "Burnaby 101" post.

Tonight I see the city of Burnaby ordered the eviction of the Trans Mountain pipeline protest camp. The city says Camp Cloud has violated multiple bylaws; protesters have no plans to leave. Those living in the camp have 72 hours to close it down, or the city will do it for them.