Tuesday, August 7, 2018

Whiting With Permits For An 8-Well Pad In Tier 2 -- August 7, 2018

Active rigs:

Active Rigs66593473192

Ten new permits:
  • Operators: Whiting (8); EOG (2)
  • Fields: Pembroke (McKenzie); Parshall (Mountrail)
  • Comments: Whiting  has permits for an 8-well Berg Trust Federal pad in NWNE 27-149-98; there is only one well in that drilling unit now:
    • 20596, 101, Whiting, Smokey 15-22-34-15H, Pembroke, t51/12; cum 233K 6/18; the file report show that #20596 was fracked 12/18/2011; 2 stages; 96,779 pounds of proppant; and then fracked again, 6/28 - 7/2/2012 with 25 stages; 2.8 million lbs; with an initial IP of 2,010 on 7/5/12; the permit shows this well  was to be a Three Forks well; and the original legal name suggests it was to be a Three Forks well;
      • FracFocus: no data;
      • August 25, 2011: a sundry form asking that this well's name be changed from Smokey....15H3 to Smokey 15-22-34-15H -- which suggests that after the original permit, KOG decided to target the middle Bakken rather than the Three Forks

CLR Reports 2Q18 Earnings And Production -- August 7, 2018

Press release here.

From the press release (transcribed; some rounding):
  • net income: $243 million; $0.65 per diluted share
  • adjusted net income: $273 million; $0.73 per diluted share
  • free cash flow, annual target maintained: $800 - $900 million
  • production guidance for 2018 raised to 300,000 boepd, or 24% y/y growth
  • exit rate guidance increased to 325,000 boepd, up 10,000 boepd fro prior guidance 
  • capital expenditures guidance increased from $2.3 billion to $2.7 billion
  • mentions the $220 million Franco-Nevada deal reported yesterday
  • average daily production 2Q18 up 26% y/y to 284,000 boepd
  • production expenses for 2Q18 improved 13% y/y to $3.49 per boe
  • record results and type curve uplifted to 1.2 million boe per well
  • initial production, for 35 wells: 2,282 boepd day average 24-hour IP flow rate
  • first company Bakken well to achieve 30-day rate over 3,000 boepd
CLR, after hours: flat at $62.21. CLR fell about 1% during the day preceding the press release.

See first comment. The reader was referring to the well at this post

Random Look At FracFocus Data For CLR's Miles 5-6H -- August 7, 2018

A reader asked if FracFocus ever makes a mistake.

The reader noted this:
According to FracFocus it looks like Miles 5-6H (#33233), API -- 33-053-07876, shows a total base water volume of 2.7 million gallons. The other ones that were fracked near the same time were in the 10 - 12 million gallon range.  
My reply, edited, paraphrased:
  • FracFocus does "not" make mistakes (there are always exceptions to any rule)
  • note the dates of the fracks of the well under discussion and two wells on same pad:
    • Miles 5-6H: 33-053-07876 -- 3/10/2018 - 4/24/2018 which is way too long for a frack
    • Kennedy 8-31H1: 33-053-07877 -- frack, 2/14/2018 - 3/8/2018
    • Miles 6-6H2: 33-053-07875 -- frack, 3/10/2018 - 3/25/2018
  • putting everything together, my opinion: 
    • FracFocus did not make a mistake
    • it's a failed frack (at least initially; we will have to wait for the official report to see where it stands; if the frackers were able to recover)
Had the dates of the frack suggested a normal timeline for a typical frack, then I would have suggested that CLR was simply testing the effect of fracking neighboring wells, and doing a "minimal frack" on this well, as a "science experiment."

The reader contacted CLR and provided this summary of that discussion:
I emailed the CLR Senior Analyst for this area as we just received division orders for them.  She stated that they had production in July, but I could not get any more information out of her as to numbers.  I guess we will just have to wait until the August pay stub to see what July produced.
Screenshot of FracFocus data for this well:

Trump Treat

Our older daughter bought me a gift from Trump Hotels during her recent trip to Chicago.

She said the folks at Trump Hotels were incredibly friendly and helpful.

Oasis (OAS) Pops Almost 6% On Earnings -- August 7, 2018


Oasis earnings here.
  • EPS: ten cents versus seven cents forecast (that's a pretty good beat); compares to a loss of five cents a year ago; an earnings surprise of over 40%;
  • revenues: $501.34 million -- a 27% surprise; compared to revenues of about half that amount last year, $254 million
Press release here

Oasis orporate presentation:

Disclaimer: this is not an investment site.

Oasis Midstream Partners earnings, press release.

NG plants in North Dakota

Click on graphic to enlarge.
Saudis and Tesla

Saudi Arabia takes $2 billion interest in Tesla. TSLA shares pop.

The Book Page

From Darwin's Fossils, Adrian Lister, c. 2018

The voyage Charles Darwin was on lasted five years, most of it on and around South America.

It is amazing how "economic" his activities were and how incredibly "lucky" he was. Makes one wonder.

Economic: shortly after arriving in South America, his main hunting-ground at Punta Alta, on the Pampas coast of Argentina, just north of Patagonia, was only 500 feet by 500 feet.

500 feet x 500 feet.

He collected a relatively small number of fossils there but no fewer than seven demonstrated distinct types (genera) of mammal, while six more were collected from other sites (seven sites altogether). Of these 13 specimens, only two were known at the time, and six were names on the bsis of Darwin's specimens.

Many of the species discovered by Darwin are now celebrated elements of the South American fossil fauna of the last ice age, some 100,000 to 12,000 years ago.

On only his second day of fossil-hunting in South America, Darwin found the largest and heaviest single fossil of the entire voyage, belonging to the largest and heaviest land mammal ever to live in South America. While a party from the ship went fishing, Darwin went fossil hunting and found this specimen.

He correctly identified that first find, that first huge skull, as belonging to Megatherium, a great beast that had been named by French anatomist Georges Cuvier.

The earliest discovery of Megatherium had been a largely complete skeleton unearthed on the banks of the Lujan River, west of Buenos Aires, in 1788. Discovered by a Dominican friar, Manuel Torres, it was sent to Madrid, where it became the first fossil mammal skeleton ever to be assembled and mounted for public display.

From drawings only Cuvier identified it and named it Megatherium americanum in 1796. Cuvier place it within his 'edentate' order of mammals, along with living sloths, anteaters, armadillos and some others, and presciently suggested that it was a gigantic sloth.


Darwin's discovery of four genera of large ground sloths was remarkable, and also serendipitous in that the area in which he was collecting happened to be the only region where all four could have been found together. Mylodon is distributed in the southern half of the [South American] continent, Glossotherium in the northern half, and Scelidotherium in the middle. The genus Megatherium is widespread, M. americanum is known mainly from Argentina. Only in the Pampas region and La Plata basin do they overlap. The different forms of their skulls, and teeth and limbs, show how several species could have co-existed in the Late Pleistocene, using different food and habitat resources. [Did the writer interchange species and genera?]

Thirty Years On, How Well Did Global Warming Predictions Stand Up? -- August 7, 2018

From The WSJ: James Hansen issues dire warning s in the summer of 1988. Today, the earth is only modestly warmer. From June 21, 2018. Number of comments, so far: 1,454.
Thirty years of data have been collected since Mr. Hansen outlined his scenarios—enough to determine which was closest to reality. And the winner is Scenario C. Global surface temperature has not increased significantly since 2000, discounting the larger-than-usual El NiƱo of 2015-16. Assessed by Mr. Hansen’s model, surface temperatures are behaving as if we had capped 18 years ago the carbon-dioxide emissions responsible for the enhanced greenhouse effect. But we didn’t. And it isn’t just Mr. Hansen who got it wrong. Models devised by the United Nations Intergovernmental Panel on Climate Change have, on average, predicted about twice as much warming as has been observed since global satellite temperature monitoring began 40 years ago.

As observed temperatures diverged over the years from his predictions, Mr. Hansen doubled down. In a 2007 case on auto emissions, he stated in his deposition that most of Greenland’s ice would soon melt, raising sea levels 23 feet over the course of 100 years. Subsequent research published in Nature magazine on the history of Greenland’s ice cap demonstrated this to be impossible. Much of Greenland’s surface melts every summer, meaning rapid melting might reasonably be expected to occur in a dramatically warming world. But not in the one we live in. The Nature study found only modest ice loss after 6,000 years of much warmer temperatures than human activity could ever sustain.
Several more of Mr. Hansen’s predictions can now be judged by history. Have hurricanes gotten stronger, as Mr. Hansen predicted in a 2016 study? No. Satellite data from 1970 onward shows no evidence of this in relation to global surface temperature. Have storms caused increasing amounts of damage in the U.S.? Data from the National Oceanic and Atmospheric Administration show no such increase in damage, measured as a percentage of gross domestic product. How about stronger tornadoes? The opposite may be true, as NOAA data offers some evidence of a decline. The list of what didn’t happen is long and tedious.
This, more recently, from today, from Watts Up With That?
It has been 30 years since the alarm bell was sounded for manmade global warming caused by modern industrial society. And predictions made on that day—and ever since—continue to be falsified in the real world.
The predictions made by climate scientist James Hansen and Michael Oppenheimer back in 1988—and reported as model projected by journalist Philip Shabecoff—constitute yet another exaggerated Malthusian scare, joining those of the population bomb (Paul Ehrlich), resource exhaustion (Club of Rome), Peak Oil (M. King Hubbert), and global cooling (John Holdren).
Consider the opening global warming salvo (quoted above). Dire predictions of global warming and sea-level rise are well on their way to being falsified—and by a lot, not a little. Meanwhile, a CO2-led global greening has occurred, and climate-related deaths have plummeted as industrialization and prosperity have overcome statism in many areas of the world.
Take the mid-point of the above’s predicted warming, six degrees. At the thirty-year mark, how is it looking? The increase is about one degree—and largely holding (the much-discussed “pause” or “warming hiatus”). And remember, the world has naturally warmed since the end of the Little Ice Age to the present, a good thing if climate economists are to be believed.
Turning to sea-level rise, the exaggeration appears greater. Both before and after the 1980s, decadal sea-level rise has been a few inches. And it has not been appreciably accelerating.
“The rate of sea level rise during the period ~1925–1960 is as large as the rate of sea level rise the past few decades, noted climate scientist Judith Curry. “Human emissions of CO2 mostly grew after 1950; so, humans don’t seem to be to blame for the early 20th century sea level rise, nor for the sea level rise in the 19th and late 18th centuries."
Temporary, at best.

By the way, the tea leaves suggest there is simply a (relative) lull in advocacy for green energy in the United States.  Once Trump is out of office, either in early 2021, or 2025, the US will return to the global warming fold. The Walmart story at this link is part of the tea leaves.
Walmart has now become a huge consumer of green power, getting about 28 percent of its electricity from renewables. It’s the eighth largest corporate buyer of wind and solar power worldwide since 2008.
Walmart’s pledge to almost double green usage, unveiled by current CEO Doug McMillon, means using 15.7 billion kilowatt hours of wind and solar energy in 2025. That would exceed the levels set by 140 companies that have also committed to switching to green power. And for comparison, that extra power would be about the same amount consumed by the entire nation of Turkmenistan (pop: 5.4 million) in 2015.
The campaign comes as the cost of wind and solar is plummeting. So Walmart’s efforts aren’t all altruistic, of course. It won’t discuss its energy costs or how much it saves, but notes that in many places renewable energy is cheaper than electricity from fossil fuels.

The Market, Energy, And Political Page, T+68 -- August 7, 2018

Apparently, US stock market indices -- some, not all, hit new records yesterday. 

It looks like another great day for the investor class.

Disclaimer: this is not an investment site.

BRK: lots and lots of stories about BRK. Cash horde:
I was told that BRK bought 15 million more shares of AAPL in 2Q18 and I posted that yesterday, I believe. Now I see this (which I previously missed):
At the same time, his war chest is far higher than he wants, even as Berkshire plows money into holdings such as Apple Inc. Berkshire bought $6.1 billion of equities in the second quarter, while selling or redeeming $4.77 billion, according to regulatory filings. The company’s stake in Apple rose to $47.2 billion at the end of June, up from $40.7 billion at March 31, the filings show.
  • at the end of 1Q18, his Apple was worth $40.7 billion. 
  • on March 29, 2018, AAPL closed at $171.61. Works out to 237,165,666 shares.
  • on June 29, 2018, AAPL closed at $187.97. Works out to 251,103,900 shares.
  • delta: 13,938,234 shares. Yup, just about 15 million shares as reported.
Trucking: now that BRK owns BNSF, one can probably use UNP as a proxy. UNP has a market cap of $111 billion, pays 2%, and is trading near its 52-week high. I bring that up because of this interesting little data point. I assume investors have been watching all the trucking stories lately: shortage of drivers; regulators cracking down on truckers (driving hours, etc.); cost of diesel. Winners: rail.

Off Twitter: I used to enjoy following PennEnergy over at Twitter but then fewer and fewer PennEnergy tweets. I checked again today. PennEnergy's last tweet is dated May 16, 2018. Corporate must have said "enough is enough" for some reason. If interested in PennEnergy free articles, here's their link.

I'll Be Your Baby Tonight, Bob Dylan
Geologic Time
From Darwin's Fossils: The Collection That Shaped The Theory Of Evolution, Adrian Lister, c. 2018.
In 1841, as Darwin was preparing his voluminous geological observations for publication, John Phillips formerly (sic) named the Palaeozoic, Mesozoic, and Cenozoic Eras, roughly corresponding to the old 'Pimary/Transition', 'Secondary' and 'Tertiary' periods.
Darwin employed the term 'Palaeozoic' in his Geological Observations on South America, published in 1846, although he retained 'Secondary' and 'Tertiary' for the two later periods, and we employ the latter term (in formal use until 2004) when describing Darwin's observations.
The Paleozoic now dated to 541 - 252 million years ago, and among its characteristic fossils are trilobites, brachiopods, and early fishes.
The Mesozoic ('Seconday') spans 252 - 66 million years ago and is best known for dinosaurs and ammonites.
The Cenozoic spans from 66 million years ago to the present day, and is often known as the 'Age of Mammals.'
The Cenozoic incorporates the old Tertiary division up to around 2.6 million years ago and the Quaternary (the time of the most recent ice ages) thereafter.
The latter term, Quaternary, was added in 1829 but was not employed by Darwin and did not enter common usage until much later.
  • Paleozoic Era (Primary/Transition) -- the periods or epochs (6):
    • Cambrian (think, "Cambrian explosion")
    • Ordovician
    • Silurian
    • Devonian
    • Carboniferous
    • Permian
  • Mesozoic (Secondary) -- the periods or epochs (3):
    • Triassic
    • Jurassic
    • Cretaceous
  • Cenozoic (Tertiary / Quaternary) -- the periods or epochs (7):
    • Tertiary
      • Paleocene
      • Eocene
      • Oligocene
      • Miocene
      • Pliocene
    • Quaternary
      • Pleistocene
      • Holocene

Only Two Wells Coming Off Confidential List Today -- August 7, 2018


Later, same day, 2:48 p.m. CDT -- no surge? First, they said Saudi Arabia increased production and exports to US to highest level since April, 2017 (see below), and now just hours later, from same source, ".... Saudi Arabia surprises by reducing production and exports...." What a joke. WTI? Flat today; in fact, lower at the close than at the opening but slightly in the green for the day.

Original Post

Enbridge: expects $7 billion of projects to come into service this year (2018).

Surge: amount of oil Saudi Arabia sent to the US last month -- July, 2018 -- was the most in 15 months. We'll see the official EIA data in about two months.  Data points:
  • Saudi to the US: one million bopd
  • that's a 36% jump from June, 2018
  • it was the single biggest monthly flow since April, 2017
You probably noticed has far the price of gasoline has dropped in your neighborhood in the past couple of weeks.

And yet, Bloomberg recently reported that Saudi's overall production decreased in July. Previously posted.

Disclaimer: this is not an investment site.

Wells coming off the confidential list today:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 33933, SI/NC, BR, Three Rivers 1C TFH, Charlson, no production data,
Active rigs:

Active Rigs66593473192

RBN Energy: oil, gas, and NGLs from the Permian. RBN Energy announces PermiCON 2018.

The Book Page

No, this is not going to be about a book that I'm reading. It's not even going to be about a book that's yet available for reading.

This is about a book that is yet to be published. For all I know it has been written but the author and publisher cannot agree on a title. The inspiration for the book came from The Picture of Dorian Gray. But in this case, instead of being set in an English room with a portrait of a mad (?) man, it is set in a cabin in the Pacific Northwest.

The title: The Carver's Cabin.

Some weeks ago, passing articles back and forth with a reader, the eagle-eyed reader spotted this -- "... a two-story carver's cabin had been built."

Neither of us had heard of a carver's cabin and no amount of googling provided an answer. Overnight I heard from the reader. Apparently she was losing sleep over this issue. She e-mailed the writer of that newspaper article asking for the "meaning" of a carver's cabin.

Well, duh. It's a cabin in which one carves.


Actually, it's so much more and so much more specific and so much more interesting.

It turns out to be a cabin -- at least in this story and in the Pacific Northwest -- where totem poles are carved.

To wit:

With Tom Lafortune

Only one thing could have made this video better: a cameo appearance by "the log lady" from Twin Peaks.