US crude oil monthly production: EIA, link here. From a reader:
EIA monthlies coming out tomorrow.
JUN (reported 2 months
delay) was at 10.674 million bopd. The peak oilers are predicting
10.55. I am thinking more like 10.8. But always interesting to watch
(like the NDIC report).
The usual: active rigs, RBN Energy, wells coming off confidential list.
The usual: market; WTI; TSLA; AAPL; Bakken operators;
Hard copy letter to Senator Heitkamp (e-mail sent earlier this evening).
Lobster book.
Relatively free day.
**************************************
Soybeans
From a reader:
The Minnesota soybean trade group says:
“Taiwanese trade officials and Minnesota business leaders Thursday signed a
letter of intent to purchase more than a billion dollars of soybeans from
farmers in Minnesota and Iowa over the next two years. . . . The pledged
maximum value of the purchase is to be up to $1.56 billion, which equates to
approximately 3.75 million acres of soybeans.”
It sounds like this is a response to the trade trouble with China. Not
anything related to North Dakota, but it’s quite possible the USDA is
encouraging direct food export talks with Taiwan to undermine China and of
course help farmers.
My thoughts:
I'm sure Trump's team "suggested" to Taiwan this might be a nice
quid pro quo for all the military aid we give Taiwan .... and, at the same time, stick a
chopstick in Premie Xi's eye. LOL
This was recently posted, but I missed a small but interesting point. When ONEOK announced it was going to build yet another natural gas processing plant, I was unaware that they had not yet completed the one they are currently building, Demicks Lake 1. From The Bismarck Tribune:
A company that’s constructing a new natural gas processing
plant in the core of the Bakken announced plans this week for a second
plant, doubling the size of the project.
Oneok plans to construct Demicks Lake II in McKenzie County, adding 200 million cubic feet per day of processing capacity.
Demicks
Lake I, which also will have a capacity of 200 million cubic feet per
day, is under construction but expected to reach capacity soon after
it’s complete, Terry Spencer, Oneok president and CEO, said in a news
release.
That increased the need for the Demicks Lake II plant, a $410 million project.
I think this simply incredible. It's a big story that yet another natural gas plant is being built, but to learn that it would be oversubscribed as soon as it was completed, and would necessitate expansion or another processing plant altogether.
**********************************
Manic Monday
Yeah, I know it's Thursday, but "manic Thursday" doesn't work. LOL.
Wow, I'm in a great mood.
I try to ride my bike every day, even during the winter. I remember riding during snow days in Boston. Slipping and sliding.
Every day I ride, I grade the riding conditions on a scale of 0 - 10, in half point increments, based on: wind; precipitation/humidity; and, temperature (seasonally adjusted).
Temperature is seasonally adjusted because one can "dress" for the weather. The other two are not seasonally adjusted --
Best riding weather is 8.0 - 10.0, obviously. I generally won't ride if the number is below 6.0. Vertical snow might drop a half point, but horizontal snow easily knocks off four or five points. Rain? Depends. But a light drizzle, only a half point or so. A sudden downpour, four or five points. I won't start out in a downpour, but I occasionally get caught in one (poor planning on my part and I deserve no sympathy).
I do not allow any day to get a grade greater than 10.0 but if I could, today's grade would have been 12 to 14. They used to call this weather "Indian summer" but to be politically correct, I guess we either call it "Native American summer" or ... whatever.
Wow, it was gorgeous today.
**************************
What A Great Country
I biked to Starbucks this morning, about 6:00 a.m. Sunrise at 7:14 a.m. I had been there about 90 minutes. At 8:00 a.m. my wife telephoned to tell me the "GasCap" light lit up on the dashboard of our very old Chrysler minivan, closely followed by the "EngineLight."
I left my back pack; my computer; my cellphone -- everything -- on "my" chair at Starbucks, and promptly got up and walked up to the Firestone Service Center about a block away. I told my wife I would meet her there. She arrived shortly thereafter. Chris, at Firestone, said he would take care of it, but he said the $100 diagnostic test that was mandated by the company would not be worth it. He said to go down the street to Chrysler and buy a new gas cap ("do not buy an after-market gas cap") -- if that doesn't solve the problem, he would gladly see me and take care of the problem.
My wife arrived, we drove down to Chrysler, and got the gas cap. The problem was solved.
My wife brought me back to Starbucks -- my stuff was still there -- someone saw me leave earlier and wondered -- but with my bike still there, they knew I would be coming back ...
Later, my wife called to confirm that the"EngineLight" also disappeared. I bought a $20 Jimmy John's gift card and gave it to Chris at Firestone on my bike ride home.
*****************************
The Bakken
I'm not going to post any new data here, but suffice to say, the Bakken is staggering. Absolutely staggering. I hope folks reading the blog are getting that same feeling. If not, I'm obviously not doing my job.
The following was e-mailed to the addressee at 8:24 p.m., Thursday, September 27, 2018. A hard copy will be mailed tomorrow.
*********************************** Auto-Reply
Page views, 10:37 p.m., Thursday, September 27, 2018: 11,446,980.
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September 27, 2018
The Honorable Senator Mary K. Heitkamp
US Senate
SH-516 Hart Senate Office Buildng
Washington, DC 20510
Subj: Judge Kavanaugh nomination
Dear Senator:
I am the webmaster of the "Million Dollar Way," a blog which takes its name from the nickname Williston residents gave US Highway 2 & 85 on the north wide of Williston following the first oil boom back in the 1950s.
The blog is focused on the Bakken oil boom. A google search of "Bakken oil blog" suggests it is the most frequently visited blog for those interested in this subject. At the height of the boom it generated about 6,000 "visits" per day. Now, that number is around 3,000.
Rarely I place a poll on the blog. Today's poll was quick and to the point and will be "live" for only 24 hours:
Kavanaugh: "thumbs up" or" thumbs down."
The committee hearing in which the accused and the accuser testified ended about two hours ago. The poll results as of 8:07 p.m. September 27, 2018:
Kavanaugh:
thumbs up: 49 votes (86%)
thumbs down: 8 votes (14%)
The poll is unscientific; the likely voter is someone who is interested in the Bakken oil boom.
A reader sent me the August, 2017, production number for the wells based on his pay stub:
33220 - Miles 8-6H1 1,423
33221 - Miles 7-6H29,397
33222 - Miles 6-6H227,289
33223 - Miles 5-6H11,995
33224 - Kennedy 8-31H111,025
33225 - Kenney 7-31H45,053
33226 - Kennedy 6-31H220,733
33227 - Kennedy 5-31H16,497
The following has been minimally edited and is not ready for prime time. Opinions only. Idle chatter. I am inappropriately exuberant about the Bakken:
When I saw the numbers I replied:
As I told the other reader regarding the production numbers from his pay stub -- the numbers that operators
are now reporting for the Bakken are simply incredible.
Remember, when
we were excited about seeing 3,000 bbls / month for a new well? This
gets back to the percent of original oil in place (OOIP) that operators
are getting out of primary production. At one time, they said only 1- 3%
return of OOIP; then up to as much as 12%. When you go from 3% to 6%,
that's double the production. Imagine going to 12% -- one wonders if we
are starting to see that? Idle chatter.
The writer replied:
In the early days, a $700 check was unbelievable. The 3,000-barrel-a-month well was great and if we got to 175,000 barrels, it took a really
long time. Now we are looking at wells in the same area that could
easily surpass 175,000 in less than 6 months.
And of course, we know
that they will drill upwards of 24 wells in these sections, all with
higher monthly output.
I’m interested in the latest USGS survey that is
supposed to come out next year. The numbers have to increase
exponentially as to OOIP and prove again that this is a world class
asset.
I look to other sections in this area where Oasis is looking at
more than 50 wells per drilling unit. Can you imagine 45K barrels a
well x 50 wells per month? Mind blowing to say the least.
In
addition, the parent Kennedy and Miles wells (Kennedy 3-4, Miles 3-4)
are now at 12,000 barrels a month. Prior to these latest wells being
drilled, they were only at 3,000 barrels a month on a good month.
Time to send that note to Jane Nielson and Art Berman.
**************************
Previously Post July, 2018, Data From The Same Reader
I was going to"erase" this data when
I got the official NDIC data, but I've decided to keep the data for archival purposes.
A reader was kind enough to send me
an update on production of these wells based on his pay stub. I cannot
verify these and there may be typographical errors. When I get the
official NDIC data, I will update the data. But a huge "thank you" to
the reader for sending this note providing an update now that neighboring wells have been completed and the parent wells (Kennedy 3 and Kennedy 4 are back on line).
From the reader:
The pay statements don't show how many days the wells were producing. With that being said, two of the parent wells had a substantial increase in production after coming back on line.
the Kennedy 3 well:
July (unknown number of days): 15,509 bbls oil -- this is an old well; completed in February, 2015, and the most recent production (July, 2018) was the fifth-highest producing month in the life of this well
June (22 days): 8,243 bbls
prior to that: in the 4,000-bbl/month range
the Kennedy 4 well (same comments as above with regard to number of days):
July: 12,337 bbls of oil (fifth most productive month; also completed February, 2015)
prior to that: in the 5,000-bbl/month range
as for the new wells, they reported the following (unknown number of days):
Outages could threaten New England's natural gas market -- Genscape.
Look at the conclusion:
New England is currently forecasted to cool over the next two weeks,
bringing significant downside risk, but unexpected heat waves could
cause power demand spikes.
Cold snaps could create
residential/commercial gas demand for heating, which takes priority over
gas demand for power. The ISONE demand forecast for September 24 – 25
only predicts ~15.3 GW of peak load over the next three days.
Power
demand was much higher during the last major Stony Point outage on
August 16 and 17, peaking at 22.6 GW. During the last few major Stony
Point outages, Algonquin Citygate prices did not blow out, but merely
spiked.
During the outage this past August, AGT basis spiked to $1.13
after averaging $0.29 for the month up to that point.
Still, this is
Algonquin’s longest and most impactful maintenance event in recent
memory, and plenty of upside risk abounds in New England’s gas and power
markets. Genscape’s power and natural gas analysts will continue to
monitor Algonquin and ISONE and update this blog in real-time as these
outages progress.
I've read a lot of "expert" analyses in the oil and gas sector over the past eleven (11) years -- since 2007 -- and this one really surprises me. No one has to "read between the lines.
This blows me away:
During the last few major Stony
Point outages, Algonquin Citygate prices did not blow out, but merely
spiked.
During the outage this past August, AGT basis spiked to $1.13
after averaging $0.29 for the month up to that point.
31774, conf, Bruin E&P Operating, Fort Berthold 151-94-27A-34-16H, t7/18; cum 436K 4/19;
Date
OilRuns
MCF Sold
7-2018
60338
16676
For newbies: 60,000 bbls of crude oil in one month is
incredible. Some wells don't produce that much oil in two years. We are
seeing more and more such wells in the Bakken. Although unusual, I'm not
sure I can call #31774 production data below an "outlier."
After posting that note above, a reader sent me this note, with regard to that well:
You showed last months production on this well 60,338 bbls
Look at this month: 96,182 bbls My royalty statement.
Almost 100,000 bbls in one month, verified from a pay statement. I replied to the reader:
Wow, I know I am inappropriately exuberant about the Bakken but I think
folks are way under-estimating what the Bakken is capable of producing.
That is absolutely amazing.
Memo to self: notes need to be sent to Jane Nielson and Art Berman. The former said there might be "some oil" in the Bakken. The latter said he saw the beginning the end of the Bakken two years ago. One of the two is a recognized expert in the US oil sector.
Last Friday, September 21, 2018, we were told the NDIC would release the results of the "Ordinary High Water Mark" study "this week." This week ends tomorrow. At least "normal business hours."
I know the utilities are always quick to ask for rate changes so this must have simply been an oversight by MDU forgetting to request a decrease in electric rates for its customers. Perhaps MDU did make the request; I don't know. But the article says MDU was "ordered" to reduce its rates.
For those who wonder where this came from, one word: Trump.
In January, the North Dakota
Public Service Commission ordered the company to report savings from
its reduced federal income tax rate. As a result, it was determined MDU
should return $8.5 million annually to customers, Commissioner Julie
Fedorchak said.
After
some discussion, the commissioners unanimously voted to amend the
original proposal, which would have allowed the company to keep
$300,000, to instead give the full value of the tax credit to
ratepayers.
$8.5 million / 410,000 / 12 = $1.73 / customer / month, I guess. Assuming I did the math correctly. A typical monthly bill, I suppose, would be about $250 so, now, about $249.
I assume MDU will add a processing fee of $2.50/month to cover the administrative headaches involved, including a letter to all its customers them they will see a lower electricity rate in the coming months. Just a hunch about the processing fee.
Note: the NDPSC ruling, I would assume applies only to MDU's ND customers, but that's where the majority of its customers are located.
Just call me angel of the morning, came out in 1968 ---
Just Call Me Angel Of The Morning, Merrilee Rush
And the last one for the day, the girl with the dragon tattoo ...
The Immigrant Song, Karen O, Trent Reznor, Atticus Ross
And now I forget what I was going to post? Oh, yes, this one. No hurricanes this summer. Florence was a tropical storm by the time it hit landfall -- earliest hurricane now projected no sooner than October 15, and the season ends sometime in November....
**************************************
The Quota Page
Lessons From The Lobster: Eve Marder's Work in Neuroscience, Charlotte Nassim, c. 2018.
From page 12:
In autumn 1965, Eve went to college intending to become a civil rights lawyer. Her mother, Dorothy Marder, had become a well-known photographer, chronicling the social activism of the late 1960s to the 1980s, such as the anti-nuclear and anti-Vietnam movements. Eve didn't even consider science, although as a little kid when asked what she wanted to be when she grew up, she used to say "a scientist" because the first time she said it she got praise and attention. Eve wanted to go to a West Coast college, but her parents vetoed that idea.
Instead, she went to Brandeis, then a young university, still small but with a growing reputation. It had been founded in 1948 at a time when Harvard and Yale ran quotas to limit the number of Jewish students and faculty.
A most famous Yale alumnus "testifies" today in the US Senate chambers.
Back to Eve Marder. Slightly younger, but a contemporary of Lynn Margulis. Eve was quite a bit younger than James Watson; his book came out in 1953. Marder was born 1948.
This is an incredibly difficult book to read, once one gets into the "science" part of the book. I've read much of the book, but I started by reading chapter 3 and then part of chapter 4 before it got too depressing. Then back to the introduction.
Now I'm reading chapter one, her college years. Wow! It brings back incredible memories. The late 60's. I missed the social unrest of the early 60's -- two reasons: a) geographical; and, b) timing. I missed it by two or three years if one uses the Common Era calendar. But graduating from high school in 1969 fifty miles from Tioga, ND , I was twenty years behind what was going on in Massachusetts or Berkeley. Or the rest of the world, for that matter.
But, wow, I wish I could post the five or six pages that Charlotte Nassim writes about Eve Marder's college years.
1967: she is beginning her junior year; switches abruptly from politics to biology. To switch to biology, she had to have completed a course in organic chemistry. Her only option: a summer course at Harvard. She struggles but gets the necessary "B" to have the credit transferred to Brandeis.
Brand new: the word "neuroscience" was first used in 1964. And that was where, in 1967, Eve Marder was headed.
In 1967, when Eve wrote her first "real" college biology paper, inhibitory transmission in the brain had not been described. That would become Eve's focus: neuronal inhibition.
Eve's first real research experience began -- as luck would have it -- in Albert Szent-Györgyi's laboratory at Brandeis. From wiki:
Albert Szent-Györgyi von Nagyrápolt September 16, 1893 – October 22, 1986) was a Hungarian biochemist who won the Nobel Prize in Physiology or Medicine in 1937. He is credited with first isolating vitamin C and discovering the components and reactions of the citric acid cycle. He was also active in the Hungarian Resistance during World War II and entered Hungarian politics after the war.
From wiki:
Brandeis University is an American private research university in Waltham, Massachusetts, 9 miles west of Boston.
Founded in 1948 as a non-sectarian, coeducational institution sponsored by the Jewish community, Brandeis was established on the site of the former Middlesex University. The university is named after Louis Brandeis, the first Jewish Justice of the U.S Supreme Court. In 2015, it had a total enrollment of 5,532 students on its suburban campus spanning over 235 acres. The institution offers more than 43 majors and 46 minors, and two thirds of the undergraduate classes have 20 students or fewer. It is a member of Association of American Universities since 1985 and the Boston Consortium which allows students to cross-register to attend courses at other institutions including Boston College, Boston University and Tufts University.
The university has a strong liberal arts focus, and is known to attract a geographically and economically diverse student body, with 72% of its non-international undergraduates being out state, 50% of full-time undergraduates receiving need-based financial aid, 13.5% being recipients of the federal Pell Grant, and having the 8th largest international student population of any university in the United States.
And I'll end with this, from page 16:
In the academic year 1968 to 1969, students all over the country were protesting against the Vietnam War. The Brandeis campus boiled over with sit-ins and strikes. Even couldn't possibly be a scab. Her way out was to work in the lab in the evenings and on weekends, having convinced herself that htese hours didn't count: if she worked in her own time, she wasn't breaking the strike.
Szent-Gyorgyi had a different and much more serious attitude toward politics and political engagement, shaped in Hungary. He laughed, or perhaps scoffed, at the ruse, but he strongly advised her not to go to Berkeley for graduate school because of the danger of being caught up in politics.
I graduated from high school in 1969. The love of my life in the early 1970's was two years ahead of me; she would have been caught up in those same sit-ins at Rutgers.
Decreased royalties: a reader wrote me this morning telling me that her royalty income was cut in half month-over-month -- largest decline in recent memory. No reason given. But if Iowa Supreme Court scuttles the DAPL, expect more of the same. Four acres and a mule.
The market is surging:
DOW (irrelevant): up 110 points after a slow start this morning
all other major indices up
AAPL: up $4.76 (up over 2%)
YUM: flirting with 52-week highs
YUMC: well off its highs
EW: hit an intra-day 52-week high
COP: up about half a percent
CVX: up about a third of a percent
UNP: up about 3/4th of a percent -- thank you Ms Why-own-a LaDuke when you can rent one?
consensus: 4.3% -- does anyone here recall a GDP increase of 4.3% in the past two decades?
Real consumer spending --
consensus: 3.8%
The Bakken is back. Actually it's been back for a year or so, but Rigzone's lead story today -- "Move Over, Permian, The Bakken Is Making A Comeback." Article includes a great photo of an oil well three miles southeast of Williston. [Of course, great news until the Iowa Supreme Court says those four acres belong to the farmer, and the DAPL needs to butt out.]
Totally cool: Total sees $100 oil. Nine out of ten now say we will see $100 oil. Goldman Sachs says oil will stay in the $70/$80 range. oilprice sees $1,000 oil. But doesn't say exactly when.
Oofta! Norway's central bank fears an oil price spike. What, me worry?
Wells coming off the confidential list today -- Thursday, September 27, 2018
34288, 1,126, Kraken Operating, Stevenson 31-30 4H, Oliver, 60 stages, 15.67 million lbs, t4/18; cum 81K 7/18;
Date
OilRuns
MCF Sold
7-2018
22719
12007
6-2018
21834
12134
5-2018
19136
11212
4-2018
17318
11529
34287, 1,074, Kraken Operating, Stevenson 31-30 3TFH, Oliver, 60 stages; 15.7 million lbs, t4/18; cum 76K 7/18;
Date
OilRuns
MCF Sold
7-2018
19053
10377
6-2018
20091
12517
5-2018
18177
11612
4-2018
18490
10851
34286, 1,108, Kraken Operating, Stevenson 31-30 2H, Oliver, 60 stages, 15.7 million lbs, t4/18; cum 80K 7/18;
Date
OilRuns
MCF Sold
7-2018
13292
4579
6-2018
22636
13939
5-2018
21190
12573
4-2018
22095
12589
33579, 2,072, CLR Mountain Gap 11-10H1, Rattlesnake Point, 64 stages, 15.3 million lbs, t6/18; cum 71K 7/18;
Date
OilRuns
MCF Sold
7-2018
34339
23119
6-2018
35544
36896
4-2018
228
0
3-2018
517
0
30827, 1,740, WPX, Behr 19-18HT, Reunion Bay, 41 stages, 6.1 million lbs, t7/18; cum 34K after 31 days;
Date
OilRuns
MCF Sold
7-2018
33474
6217
29690, drl, Hess, SC-Bingeman-154-98-0904H-6, Truax, no production data,
U.S. LNG exports have climbed from zero three years ago to more than 3
Bcf/d now, and export capacity is set to grow to more than 10 Bcf/d by
2023. With the U.S. emerging as a dominant player in the global LNG
landscape, international players are now increasingly susceptible to the
day-to-day fluctuations of the U.S. natural gas market — a highly
liquid, fungible and interconnected arena that’s propelled by constantly
shifting transportation economics. The global LNG market inevitably is
also moving toward spot-oriented trading based on short-term economic
conditions. Thus, prospective buyers of U.S. LNG considering pre-FID
projects increasingly need to understand the ever-changing U.S. gas flow
and pricing dynamics. At the same time, U.S. market participants trying
to understand how 10 Bcf/d of LNG exports will affect the domestic
market also will need to closely track LNG activity, including feedgas
flows and prices. In today’s blog — which launches our new LNG Voyager
service — we look at how U.S. onshore gas market dynamics are affecting
gas supply costs at the Sabine Pass LNG facility, and considers what
this might mean for several of the pre-FID projects.
As you’ve probably figured out by now, today’s blog is a naked advertorial for our new LNG Voyager service,
a report featuring U.S. natural gas and LNG insights for the global
market. Before we get to our analysis, allow us a moment here to provide
a bit of background about this new report. Given the significance of
the burgeoning U.S. LNG exports market — both to domestic and global
trade — we’ve developed a comprehensive fundamentals tool to closely
track the metrics, milestones and impacts of these shifts as they
unfold.
But as we alluded to above, this is just the beginning. There are four
more projects on the way. Additionally, there are more Northeast
takeaway pipeline expansions in the works that will allow
Marcellus/Utica production to balloon to nearly 40 Bcf/d over the next
five years, up from about 29 Bcf/d currently, with a major chunk of that
incremental volume targeting LNG export demand along the Gulf Coast
(see Dog Days Are Over).
Feedgas pipelines are feeling the growing pains of the influx of gas
supply, with constraints developing on existing capacity. As the market
adapts to the new realities that come with rising export demand, the
global LNG market will face growing exposure to the day-to-day
volatility of the U.S. gas market.
