Sunday, August 26, 2018

The Road To Mexico .... Merges With The Road To Venezuela -- August 26, 2018

It doesn't a rocket scientist to see where Mexico's socialist president is going to take the country. Unless I'm missing something, AMLO is going to do the same thing to Mexico that Maduro did to Venezuela. Headline over at oilprice: Mexico's new president (AMLO) to deal blow to oil industry.

AMLO has two goals:
  • reduce his country's dependence on gasoline from the US
  • increase crude oil production
The graph might be a big difficult to read. The best way to read it is to look at the "2016" debacle first; then look at "2017" with wild volatility; and the look at "2018" and "projected 2018" -- all lines trend down ... from 2.6 million bopd in early 2016 to now about 2.1 million bopd now. The floor appears to be 2.0 million bopd.

This is actually a whole lot easier to read, from tradingeconomics:

It will be interesting to see if putting the "old" Pemex back in control will reverse the downturn.
Mexico’s oil production has been declining for over a decade, falling to 1.9 million barrels per day recently, down from 3.4 mb/d in the mid-2000s. The IEA sees output falling by another 130,000 bpd this year, due to the aging offshore oil fields, although that is a narrower decline compared to the 235,000 bpd the country lost last year.
AMLO is aiming to boost production by 600,000 bpd over the next two years, which will be a monumental task. If he is to succeed, AMLO is betting that Pemex will lead the way.
Back in January, 2018, oilprice saw "light at the end of the tunnel." It appears that this will all come undone over the next two years. 

Now, gasoline.
AMLO wants $2.6 billion to rehabilitate Mexico’s six aging oil refineries, plus more than $8 billion to build a new refinery from scratch. The idea is to cut down or even eliminate gasoline imports from the United States.
My hunch: if he gets support to rehabilitate the aging oil refineries there will be huge cost overruns. A new refinery? Not going to happen.

Sunday Evening

Sophia got out the chess game, but she only set up the pieces. She is pretty good at getting all the pieces in the correct location, but she doesn't yet know how to play the game.

We had just come in from swimming -- 94 degrees today. I did not realize my hair had thinned out so much on top.

Wells That Will Coming Off The Confidential List This Next Week -- August 19, 2018

Six months ago it was the end of February -- coldest part of the winter in North Dakota.

Monday, September 3, 2018
34597, conf, MRO, Sheldon USA 21-30TFH, Reunion Bay, no production data, 
32529, conf, Petro-Hunt, USA 153-95-4A-9-8H, Charlson, no production data, 
30522, conf, CLR, Burr Federal 15-26H1, Sanish, some production,
29710, conf, CLR, Thorvald 3-6H, Rattlesnake Point, some production, the Thorvald wells are tracked here;

Sunday, September 2, 2018
32965, conf, Oasis, Ceynar 5198 12-5 4B, Banks, huge well; 125K in less than four months;

Saturday, September 1, 2018

Friday, August 31, 2018
None (there was no February 31)

Thursday, August 30, 2018
None (there was no February 30)

Wednesday, August 29, 2018
None (there was no February 29) 

Atmospheric CO2 -- July, 2018

CO2 now, for July:

One year ago, July, 2017: 407.25.

Say what you want, I just can't get to excited about a move from 407.25 parts per million to 408.71 parts per million. Up about 1.5 parts per million over one full year. For the entire globe. Atmospheric CO2 is "seasonal."

In July, 2016, it was 404.39, so it seems to have "leveled off" this past year -- FWIW. 

Geologists Looking For Fracking Sand Source In North Dakota -- Fracking Sand Costs -- Transportation -- August 26, 2018

Cost of sand / transportation:
So, in round numbers, maybe:
  • $60 / ton for fracking sand (up from $20 / ton at the beginning of the Bakken boom)
  • $150 / ton for shipping by truck (?)
But here's the best analysis, perhaps, from a PDF that I cannot link, a PLG presentation at JPMorgan, January 11, 2018:

Notice the cost to get the sand the last mile!

Now the article sent to me be a reader, data points:
  • operators looking for "local" source of fracking sand to cut down on shipping costs
  • operators using an average of 2,500 to 5,000 tons / well
  • from the article:
Fred Anderson, geologist with the North Dakota Geological Survey, authored a study in 2011 that said North Dakota sand sources approach oil industry standards for use in fracking but are lower in overall quality than other U.S. sources.
There's a renewed interest in that research, however, as demand for sand increases and companies experiment with lower-cost options.
"They're accepting sands that we probably never would have accepted 10 to 15 years ago," said Monte Besler, owner of FRACN8R Consulting in Williston.

For CLR, twenty million lbs of sand = 10,000 tons
  • product at $60/ton = $600,000
  • transportation at $150/ton = $1.5 million
  • sand + transportation: upwards of $2 million 
At a more conservative 5,000 tons, the cost can come down to $1 million (sand + transportation).