Running Out Of Drilling Locations In The Bakken? -- July 29, 2018

A few months ago someone opined that "they" were running out of drilling locations in the Bakken.

Once we start seeing this throughout the Bakken, I'll buy into that.

Disclaimer: I am inappropriately exuberant about the Bakken.

In the above graphic, the following two wells will be coming off the confidential list August 6, 2018:

• 30529, conf, CLR, Burr Federal 20-26H, Sanish, 35K in first full month;
• 30528, conf, CLR, Burr Federal 24-26H2, Sanish, 22K in first full month;

The Burr Federal wells are tracked here. 

An older well was fracked back in 2016. What does its production profile look like now that neighboring wells are being fracked:

• 30492, 506, CLR, Burr Federal 9-26H1, Sanish, t3/16; cum 271K 5/18; 

Production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2018	31	29706	29840	48441	38564	32612	5583
BAKKEN	4-2018	28	22862	22714	42221	27899	16745	10844
BAKKEN	3-2018	8	3968	3723	3691	1595	886	652
BAKKEN	2-2018	0	0	0	0	0	0	0
BAKKEN	1-2018	0	0	0	0	0	0	0
BAKKEN	12-2017	0	0	0	0	0	0	0
BAKKEN	11-2017	0	0	0	0	0	0	0
BAKKEN	10-2017	0	0	0	0	0	0	0
BAKKEN	9-2017	0	0	274	0	0	0	0
BAKKEN	8-2017	14	2388	2557	1169	1150	943	142
BAKKEN	7-2017	31	5338	5355	2800	2858	1939	814
BAKKEN	6-2017	30	5311	5228	3217	2182	1960	127
BAKKEN	5-2017	26	6219	6340	3313	3549	3370	54
BAKKEN	4-2017	23	7044	6840	4914	8229	7870	108
BAKKEN	3-2017	30	11671	12610	7715	16192	14447	1492
BAKKEN	2-2017	28	12627	12195	8362	17947	16655	1071
BAKKEN	1-2017	31	18050	17382	11010	15273	3683	11380
BAKKEN	12-2016	10	4187	4477	2306	2836	1106	1697
BAKKEN	11-2016	23	8658	8648	4774	6949	6175	694
BAKKEN	10-2016	27	14169	14218	7238	12306	11159	990
BAKKEN	9-2016	30	15949	16053	8556	13806	13628	16
BAKKEN	8-2016	31	19924	19893	10183	19703	19373	330
BAKKEN	7-2016	31	15446	15572	9534	12793	12551	242
BAKKEN	6-2016	30	20907	20774	12882	19752	18746	1006
BAKKEN	5-2016	31	18772	18542	12831	18856	13698	5158
BAKKEN	4-2016	30	13443	13480	9006	12120	9711	2409
BAKKEN	3-2016	29	12870	12560	9395	12302	10037	2265
BAKKEN	2-2016	0	0	0	0	0	0	0
BAKKEN	1-2016	0	0	0	0	0	0	0
BAKKEN	12-2015	0	0	0	0	0	0	0
BAKKEN	11-2015	2	404	379	0	1181	0	1181
BAKKEN	10-2015	0	0	0	0	0	0	0
BAKKEN	9-2015	2	898	898	0	2625	0	2625

The Burr Federal wells are monsters after neighboring wells were re-fracked. Her is another example:

• 30503, 759, CLR, Burr Federal 14-26H, Sanish, t12/15; cum 231K 5/18:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2018	31	26794	26888	31162	26753	22629	3869
BAKKEN	4-2018	25	23386	23184	20588	23079	13852	8970
BAKKEN	3-2018	5	1170	1045	1113	2537	1409	1037
BAKKEN	2-2018	0	0	0	0	0	0	0
BAKKEN	1-2018	0	0	0	0	0	0	0
BAKKEN	12-2017	0	0	0	0	0	0	0
BAKKEN	11-2017	0	0	0	0	0	0	0
BAKKEN	10-2017	0	0	63	0	0	0	0
BAKKEN	9-2017	1	87	410	67	79	23	0
BAKKEN	8-2017	21	3363	3491	2604	5822	4772	719
BAKKEN	7-2017	31	6189	6206	4290	8784	5960	2502
BAKKEN	6-2017	30	6132	5987	2823	7171	6443	417
BAKKEN	5-2017	31	6370	6177	2726	5471	5195	83
BAKKEN	4-2017	16	2725	2683	1733	2729	2610	36
BAKKEN	3-2017	31	6003	6514	3721	6934	6187	639
BAKKEN	2-2017	28	6783	6463	3787	6602	6127	394
BAKKEN	1-2017	31	7713	7668	4256	4756	1147	3544
BAKKEN	12-2016	31	9378	9603	4909	5534	2159	3311
BAKKEN	11-2016	30	10682	10247	5369	9182	8160	917
BAKKEN	10-2016	11	2968	3098	1234	2189	1984	176
BAKKEN	9-2016	25	7470	7323	3734	6795	6707	8
BAKKEN	8-2016	6	2477	2831	1125	2477	2435	42
BAKKEN	7-2016	31	12238	12029	7043	11955	11729	226
BAKKEN	6-2016	24	6787	6798	4592	7935	7531	404
BAKKEN	5-2016	31	8051	8081	4826	9950	7228	2722
BAKKEN	4-2016	30	12616	12754	7201	13045	10452	2593
BAKKEN	3-2016	31	16348	16510	10505	15553	12689	2864
BAKKEN	2-2016	29	14876	14803	12255	12575	9642	2933
BAKKEN	1-2016	31	16503	16910	13012	13940	4425	9515
BAKKEN	12-2015	22	12864	11974	9483	20109	40	20069
BAKKEN	11-2015	0	0	0	0	0	0	0
BAKKEN	10-2015	0	0	0	0	0	0	0
BAKKEN	9-2015	1	657	657	0	1480	0	1480

 

Amazon HQ2 -- Final Five + A Wildcard -- July 29, 2018

This is from USA Today, April 30, 2018:

Three betting sites.

British online betting site Oddsmakers:

• Virginia
• Austin
• Boston
• DC
• Atlanta

Irish bookie site PaddyPower:

• Boston
• Austin
• Atlanta
• Montgomery Co., Maryland
• Pittsburgh

Canada's Bovada betting site:

• Virginia
• Austin
• Boston
• DC
• Atlanta

Toronto gaining popularity at the Canadian betting site.

My two cents worth: it will be in northeast US, not Texas. Texas is a great site for fulfillment centers and tech support, but Austin is not a financial or political center.

Austin makes all three lists, but DC makes only two lists. Boston makes all three lists, and is a financial center. With 25 universities and colleges in the Boston area, I think Boston is a no-brainer for a corporate headquarters. Atlanta, also, makes all three lists, but I just don't see it.

*************************************

Energy Demand By Source

Coal isn't going away.

Crude oil will continue to grow.

Renewables will really grow, but remember: renewable energy includes hydroelectric power.

Nuclear power doesn't grow much either. And then this, US nuclear power industry on verge of collapse, July 12, 2018.

It's hard to read, but I do believe the rate of growth of natural gas is actually steeper than renewable energy in the out-years.

This Might Be The Graph Of The Year -- July 29, 2018

Updates

Later, 7:21 p.m. CDT: I mentioned Iran below, in the update,  but now I see this regarding Iran -- Iran's rial hits record low -- 100,000 rials to $1.

Iran's currency hit a record low on Sunday of 100,000 rials to the dollar amid a deepening economic crisis and the imminent return of full US sanctions.

Later, 5:22 p.m. CDT: if this is the GDP story for Saudi Arabia, imagine what it must be for Iran, and even possibly for Russia. President Trump knows that data, and that's probably why he was so incensed that Germany continues to bail out Russia (Nord Stream 2) -- a project that apparently the US mainstream media supports, based on the negative coverage they gave Trump on this issue.

Original Post

 Earlier I posted this note but it needs to have its own stand-alone post. This is what got my attention -- in the note below I highlight the challenges Russia must be having -- in the last ten years Russia has increased production by only 500,000 bbls -- just a half-million bopd -- North Dakota has practically matched Russia on growth. I grew up thinking oil in Siberia was a never-ending story. Hmmm.

But now, look at this, Saudi Arabia. Look at GDP growth year-over-over for Saudi Arabia.

It's hard to read the graph but it appears that Saudi has recorded a negative budget three years in a row, something never seen before except perhaps in the early 1990s but the budget deficit then was near the break-even mark, followed by spectacular revenue years from 2003 to 2011.

By the way, this graph seems better than what I generally see -- now I know why -- it came from ZeroHedge.

More from the article and ZeroHedge:

It wouldn't be the first time: two years ago, Saudi Arabia turned to the international debt markets for the first and has since raised at least $40 billion in sovereign debt to fuel spending. In doing so, it has increasing its debt to GDP ratio to 19 percent, but in comparison to the rest of the world's insolvent nations, that ratio makes the Saudis look outright frugal. Saudi Arabia has set itself a limit to clear its fiscal deficit by 2023, although once you pop (your bond market cherry), you don't stop. With or without Aramco, Riyadh is expected to raise billions more in debt this year.

The same goes for Aramco, which -for now - has only a modest debt load compared to other global oil giants, such as Exxon Mobil and Royal Dutch Shell, making it relatively easy for the Saudi firm to borrow cheaply, even though Aramco doesn’t disclose financial results and just like China, nobody really has any clue what is on the company's books. In fact, the risk of opening itself up is why Aramco decided against the IPO in the first place.

I don't know about "you," the reader, but this graphic is absolutely stunning. With all the headwinds -- terrorism; Yemen; Iran; US shale; Salman's Vision 2030; outlay for SABIC -- it's hard to believe Saudi can report a balanced budget any time soon. Remember, last year, Saudi said they needed $70-oil this year.  "Everyone" talks their book which suggests to me Saudi really needs  $80-oil or better.

************************** 
The Gap Grows

Peak oil? How US shale flipped the script in global oil markets. Over at oilprice.com again. Again, I've archived the entire piece in case the post disappears. Again, this article links to the 2018 global energy review by BP.

But the future played out differently than it seemed it would in the summer of 2008. Unbeknownst to most people, oil producers were experimenting with a marriage between two established oil drilling technologies — horizontal drilling and hydraulic fracturing.

The success of this marriage would unlock oil in tight oil and shale oil deposits that had previously been too expensive to recover, and would result in one of the greatest oil booms the world had ever seen. In fact, the “fracking revolution” caused U.S. oil production to turn upward in 2009, and then rise over the next seven years at the fastest rate in U.S. history.

While it is still true that OPEC produced 42.6 percent of the world’s oil in 2017, the majority of new oil production since 2008 has come from the U.S.

As I read that, my thoughts turned to the comments from two readers over at The WSJ:

The shale boys saved Obama from a total economic meltdown - now they shift into high gear. Amazing what creative people combined with private property can do. Meanwhile our "carbon footprint" keeps declining thanks to natural gas and not the government.

The shale drilling did save Obama from a complete economic meltdown - but he spent much of his 8 years fighting the pipelines to deliver the oil, he kept the USA from exporting LNG for 7 out of 8 years - but he worked really, really hard to make sure Iran pumped as much oil as possible ( so much for global warming) - makes one wonder whose side he was on? 

Wiki says the US oil and gas sector makes up 8% of the US GDP.

I've read recently that the oil and gas sector provides a third of Russia's revenues.

I assume, oil and gas contribute nearly 100% to Saudi's revenues.

I think it's important to consider that data when one looks at the graphs below, and when one does that, I think both Saudi Arabia and Russia face huge economic challenges going forward.

A third point: there's nothing to suggest that the graphic won't become even more remarkable when it's re-drawn ten years from now.

I have a bit of difficulty reconciling the above graph with the graph below which has been posted numerous times when it comes to Russia ... and then one looks at the x-axis on the graph above. Over ten years, Russia's production has only increased by one-half million bopd.

I've talked about this on numerous occasions over at "The Big Stories."

By the way, in the graphic at the top, what major continent/region is not even represented? Yup, Europe/the EU. One wonders with all the cutbacks on the continent whether the EU/Europe actually showed a decline. Of course, there's Great Britain and Norway -- but as I've noted a long, long time ago, Europe is truly at a tipping point. The most recent linked story at that site: Europe is importing a record amount of coal (February 22, 2018 -- earlier this year).

*********************************

The Katie Ledecky Page

Three Races, Three Wins

Final report from the national championships, two weeks before the Pan Pacific championships.

Ledecky prevailed by 3.12 seconds in the 400m freestyle on Saturday night and scratched out of her last event, Sunday’s 1500m freestyle. Don’t worry, she is still eligible to swim the 1500m free at this year’s major international meet, the Pan Pacific Championships in Tokyo in two weeks.

Ledecky, who holds the 11 fastest 400m free times ever, added the victory in 3:59.09 to her 200m and 800m free titles earlier this week. While Kathleen Baker broke the 100m backstroke world record later Saturday night, Ledecky was under world-record pace through 200 meters.

Wells Coming Off The Confidential List This Next Week -- July 29, 2019

For newbies:

• one has to go back a long way to find this many wells coming off confidential list in one week
• this will be seen more and more often -- 6 to 9 wells coming off confidential list on one day -- due to pad drilling
• look at the number of operators; more than usual
• generally wells with no production data suggest DUCs but not always; but I do expect to see (excepting the Kraken Operating wells), 50% to 75% of wells coming off the confidential list going to DUC status
• there are a couple of Charlson wells; they may be DUCs but when they start producing, they should be huge wells
• the WPX wells and the Enerplus wells will be nice wells; could initially be DUCs
• through November, 2018, we should see similar weekly lists 

You May Have Missed It This Year, But Next Year: Get Your Pow Wow On -- July 29, 2018

What do New Mexico and North Dakota have in common?

• lots of sun in the summer;
• oil (Permian -- New Mexico; Bakken - North Dakota);
• beautiful scenery; and, 
• pow wows.

A reader keeps me updated on "pow wows" in New Mexico and North Dakota. If I posted everything I've been sent on "pow wows" over the past two years I would have to start another blog.

But to bring you up to speed, three links:

• wiki
• Albuquerque
• Twin Buttes

Regular readers of the blog should recognize that third link, Twin Buttes. It's an incredibly good oil field in the Bakken and it's a featured oil field. At the link, scroll down to Twin Buttes and click.

The "pow wow" reader wanted to point out that the oil boom in North Dakota has really meant a lot to Native Americans fortunate enough to share in the largess. One wonders if Standing Rock would have been better off had they worked with DAPL rather than taking the alternate path. But I digress.

The Albuquerque PowWow is the biggest pow wow in the United States (at least that's my understanding).

Added: photos from the 2018 Twin Buttes pow wow at this link to the Dunn County Extra. 

I was unaware that dancers, singers, drummers, actually competed for prize money. Wow.

But look at this.

The prize money at the nation's largest pow wow pales in comparison to that now being paid for the Twin Buttes, North Dakota, pow wow.

Albuquerque, $5,000 for first place, singer:

Twin Buttes, at $15,000 for first place, 3x that of Albuquerque, and even fifth place pays more than 1st place in New Mexico:

Note: there appear to be as many spelling / capitalization variations of "pow wow" as there are of "fracking." If I've offended anyone, let me know.

Also, I do these posts quickly and there are bound to be factual and typographical errors. If any errors affect the story, let me know.

Albuquerque, population: 560,000 (2016)

Twin Buttes, population:  18 (2016)

Twin Buttes is 12 miles north-northeast of Halliday, if that's of any help for out-of-towners. Set your GPS to 7°30′59″N 102°14′47″W. 

From the Crazy Horse Museum in the Black Hills, South Dakota:

Beads were very likely from Venice, Italy.

Could This Be The End Of Renewable Energy Growth In The EU? -- July 29, 2018

The other day I posted a note that suggested -- in Australia -- that if the country simply completely cut off all solar/wind energy at peak demand (late in the afternoon) no one would even notice -- except perhaps investors in solar and wind.

Now, this from cleanenergywire:

The German energy ministry considers limiting the feed-in priority for renewable power to reduce the costs of managing grid bottlenecks, Stefan Schulze writes on Spiegel Online.

“Green power plants could generally become part of bottleneck management,” an unpublished analysis for the ministry says, according to Schulze.

By throttling down wind and solar power supply when the grid is overloaded, costs could be reduced “substantially” as opposed to the current scheme where coal and other fossil power plants are throttled down first, according to the analysis.

Costs of managing grid bottlenecks --- this was predicted some years ago.

A "thank you"to a reader for this link and comment.

The downside?

However, limiting the feed-in priority for green power, a key policy instrument for establishing renewables in the country, would increase carbon emissions from power plants by approximately one percent.

Oh, give me a break.

• Germany is importing record amounts of coal, previously reported, after shutting down nuclear plants
• even if that "one percent" figure is accurate -- and you can probably get whatever number one wants -- GIGO -- one percent is inconsequential -- compare with what China and India are emitting
• Germany would have done a lot better going to natural gas (like the US did) rather than go to renewables which require fossil-fuel backup anyway

If Germany ends its policy on giving renewables priority feed-in and levels the field, it pretty much means the beginning of the end for renewable energy growth in the EU.

The Germans must be reading the blog, "Europe at a tipping point."

Regardless of what this means for renewable energy in the EU, this is the important takeaway for me: the Europeans are finally looking at renewable energy from a rational, rather than an emotional, point of view. 

The Political Page, T+59 -- Trump's Steel Tariffs Starting To Have Desired Effect -- Op-Ed -- July 29, 2018

Updates

Later, 5:26 p.m. CDT: wow, look at this headline and story from CNN. Scott Adams noticed this past week that CNN seems to have changed its "tone." I'm seeing the same thing. This is quite interesting. And, then, of course, the publisher of NY Times requesting a meeting, and then getting a meeting, with President Trump. Trump simply wants credit where credit is due.

Original Post

Trump's steel tariffs: I have no idea who Jan van Eck is nor how reliable he might be but I assume he reports what he sees just as I report what I see.

From oilprice.com. I've archived the entire piece in case the post disappears.

************************** 
The Gap Grows

Peak oil? How US shale flipped the script in global oil markets. Over at oilprice.com again. Again, I've archived the entire piece in case the post disappears. Again, this article links to the 2018 global energy review by BP.

But the future played out differently than it seemed it would in the summer of 2008. Unbeknownst to most people, oil producers were experimenting with a marriage between two established oil drilling technologies — horizontal drilling and hydraulic fracturing.

The success of this marriage would unlock oil in tight oil and shale oil deposits that had previously been too expensive to recover, and would result in one of the greatest oil booms the world had ever seen. In fact, the “fracking revolution” caused U.S. oil production to turn upward in 2009, and then rise over the next seven years at the fastest rate in U.S. history.

While it is still true that OPEC produced 42.6 percent of the world’s oil in 2017, the majority of new oil production since 2008 has come from the U.S.

As I read that, my thoughts turned to the comments from two readers over at The WSJ:

The shale boys saved Obama from a total economic meltdown - now they shift into high gear. Amazing what creative people combined with private property can do. Meanwhile our "carbon footprint" keeps declining thanks to natural gas and not the government.

The shale drilling did save Obama from a complete economic meltdown - but he spent much of his 8 years fighting the pipelines to deliver the oil, he kept the USA from exporting LNG for 7 out of 8 years - but he worked really, really hard to make sure Iran pumped as much oil as possible ( so much for global warming) - makes one wonder whose side he was on? 

Wiki says the US oil and gas sector makes up 8% of the US GDP.

I've read recently that the oil and gas sector provides a third of Russia's revenues.

I assume, oil and gas contribute nearly 100% to Saudi's revenues.

I think it's important to consider that data when one looks at the graphs below, and when one does that, I think both Saudi Arabia and Russia face huge economic challenges going forward.

A third point: there's nothing to suggest that the graphic won't become even more remarkable when it's re-drawn ten years from now.

I have a bit of difficulty reconciling the above graph with the graph below which has been posted numerous times when it comes to Russia ... and then one looks at the x-axis on the graph above. Over ten years, Russia's production has only increased by one-half million bopd.

I've talked about this on numerous occasions over at "The Big Stories."

By the way, in the graphic at the top, what major continent/region is not even represented? Yup, Europe/the EU. One wonders with all the cutbacks on the continent whether the EU/Europe actually showed a decline. Of course, there's Great Britain and Norway -- but as I've noted a long, long time ago, Europe is truly at a tipping point. The most recent linked story at that site: Europe is importing a record amount of coal (February 22, 2018 -- earlier this year).

********************************

The Apple Page

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

Our oldest granddaughter has/had a very, very old iPhone 6. It's a "hand-me-down" from one of the parents, and may in fact be twice handed down before it got to her. It had a cracked  screen and was no longer holding a charge when she brought it to the local Apple store to have the battery replaced and the screen fixed.

When the Apple folks opened the iPhone they noted that the battery was "swollen" and completely distorted. They talked to the store manager and he said to just give Arianna a brand new out-of-the-box iPhone 6 at no charge. Not even charging what they could have for a) fixing the screen; and/or, b) replacing the battery. A brand new out-of-the box iPhone 6 at no charge.

I was quite impressed.

At the strategic level, corporate headquarters is giving local managers a lot of leeway.

At the tactical level, this tells me that boxes of iPhone 6's are still widely available but customers are moving up to newer models. If there was a shortage of iPhone 6's they would not easily give them away.

It will be interesting to see if this is validated in Apple's earnings, due to be reported after the market closes on Tuesday, July 31, 2018. Earnings forecast: $2.18.

If AAPL meets consensus, it will be the second best showing for the 3Q in the last several years: