Thursday, October 4, 2018

The Price Must Be Right! Nine Producing Wells (DUCs) Reported As Completed -- October 4, 2018


Active rigs:

Active Rigs64593268190

Seven new permits:
  • Operators: Oasis (6); Lime Rock Resources
  • Fields: Alger (Mountrail); Dimond (Burke)
  • Comments: Oasis has permits for a 6-well Merritt pad in NWNE 24-156-93;
Nine permits renewed:
  • Resource Energy Can-Am (4): two Ranger and two Troper permits, all in Divide County
  • Slawson (3): three Wolverine Federal permits in McKenzie County
  • SHD (2): a Mufasa and a Rocky permit, both in McLean County
Two permits canceled:
  • Petro-Sentinel: a Miller permit and a Coyote Creek permit,both in Bowman County
Nine producing wells (DUCs0 reported as completed:
  • 33645, 1,874, WPX, Hidatsa North 14-23HUL, Reunion Bay, t9/18; cum --
  • 33393, 3,242, WPX, Hidatsa North 14-23HD, Reunion Bay, t9/18; cum --
  • 33394, 2,783, WPX, Hidatsa North 14-23HC, Reunion Bay, t9/18; cum --
  • 33395, 2,878, WPX, Hidatsa North 14-23HB, Reunion Bay, t9/18; cum --
  • 33397, 22,662, WPX, Hidatsa North 14-23HA, Reunion Bay, t9/18; cum --
  • 34190, 1,397, Missouri River Resources, FBIR Packineau 14X-4F HTF,  Squaw Creek, t7/18; bcum 60K after 61 days;
  • 34189, 1,626, Missouri River Resources, FBIR Packineau 14X-4B HBK, Squaw Creek, t37K after 50 days;
  • 34187, 1,183, Missouri River Resources, FBIR Packineau 14X-4E HBK, Squaw Creek, t7/18; cum 60Kafter 55 days;
  • 34188, 453, Missouri River Resources, FBIR Packineau 14X-4A HTF, Squaw Creek, t7/18; cum 24K after 37 days;

Off The Net

I am shutting "it" down for awhile. I don't know if it will be for a few hours or a few days. Most likely just a few hours.

I won't reply to e-mail for awhile but I will see it all.

My blog is full of typographical errors -- I will eventually correct those I find. If I've made a really, really bad typographical error that affects the story, please let me know. Minor spelling errors, grammatical errors -- ignore. I'm paying Sophia to correct those.

Comments won't be posted while I'm off the net; some folks are still having trouble getting their comments posted. If that happens, send me an e-mail directly. The e-mail address is at the sidebar somewhere. Unless directed otherwise, all comments are posted anonymously.

Good luck to all. 

In the meantime, enjoy some great photographs of the Bakken and North Dakota.

OPEC Is Hardly The Problem -- October 4, 2018 -- The List, Right Down The Line

Wow, I'm in a good mood.

Finally, the market is dropping -- I've been waiting for a buying opportunity and it looks like we're going to get it. Maybe the Dow (irrelevant) will fall another 150 points before the day is over. And since it's not Friday, we have all day tomorrow to think this through. Wow, what a great country.

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

But that's not the real reason I'm in such a good mood. I'm in a great mood because it finally dawned on me that everyone is blaming the wrong "person" for hiding "spare capacity." LOL.

This is where the real problem lies, right down the line:
  • landlocked Canada: Trudeau, Sir Saint Obama, Soros, Steyer, faux environmentalists have killed, deferred, delayed four pipelines that would have brought millions of bopd to the market -- and it was the "right" kind of oil (Northern Gateway, Keystone XL, Trans Mountain Expansion, Line 3)
  • GoM: Sir Saint Obama pretty much slowed things down in the GoM 
  • US offshore, "the Florida syndrome": Florida, California, Virginia, North Carolina
  • France: has banned fracking "forever"
  • Venezuela: Bernie Sanders' socialism
  • sanctions on Iran: I support the sanctions but the US can't blame OPEC for production shortages when the US bans oil from a major OPEC producer
  • sanctions on Russia: ditto
  • California: the left stymies domestic oil production
  • Colorado activists trying to do the same in Colorado
  • Brazil: Florida syndrome
  • Mexico: see Venezuela
I'm probably missing a few but OPEC is hardly the problem.

Right Down The Line, Lucius

LOL -- US State Department Accuses OPEC Of Hiding Spare Capacity In Venezuela, Libya; The "Real Answer" To Where All That "Spare Capacity" Is Hiding -- October 4, 2018

The writer of this article admits she does not know how the EIA arrived at its conclusions but suggests that OPEC "spare capacity" could include:
  • Iran (sanctions)
  • Venezuela (imploding)
  • Libya (exploding)

The article:
The U.S. State Department has lashed out against OPEC, accusing the cartel of hiding 1.42 million bpd in spare oil production capacity, S&P Global Platts reports, citing a statement sent to it by the State Department.
The State Department said figures from the Energy Information Administration suggested that OPEC was withholding 1.42 million bpd of spare capacity and the department was working with the cartel to “produce the spare capacity,” as S&P Global Platts put it.
The way this “hidden” number of barrels was calculated was not revealed.
In its latest Short-Term Energy Outlook, the EIA estimated OPEC’s spare production capacity at 1.66 million bpd. Most of this must be Saudi Arabia’s spare capacity, and one cannot forget that the spare capacity of Venezuela is questionable, as is the spare capacity of other troubled oil producers such as Libya and Iran.
To make matters more confusing still, the International Energy Agency last month estimated OPEC’s spare capacity at 2.7 million bpd and is fast declining. Bloomberg quoted a warning from the international agency that the producers who had promised to offset any loss of supply from Iran would not be able to deliver on this promise.
So, the writer is suggesting that the US State Department could be including Iranian oil as a source of "spare capacity." LOL.

Iran is a "troubled producer." Okay.

Clearly, the US State Department does not want to call out "Saudi Arabia" by name so it blames OPEC.

Libya might be a "troubled producer," but I would consider Iran a "sanctioned producer."

By the way, with global demand/supply at 100 million bopd in round numbers, Libya at 1 million bopd in round numbers is irrelevant.

It doesn't appear oil traders are particularly concerned: oil is down across the board today, certainly not on its "relentless" march to $100 oil.
Interestingly, Iraq, #4 in world production is not even mentioned in the article (I might have missed it). My hunch is that where all the spare capacity is being hidden, along with weapons of mass destruction. LOL.

Somewhat old data, but instructive, from wiki, global production by country. One has to go all the way to #20, just above Great Britain, to get to Libya:

Seriously: you want to know where the "spare capacity" is hiding? Remove China from the list above; remove Iran from the list above, and #7 Canada moves to #5. Canada has huge amounts of "spare capacity" but no one can get to it because it's landlocked and four pipelines that could move Canadian oil have been killed, deferred, or delayed by Trudeau, Soros, Steyer, Sir Saint Obama, and other faux environmentalists.

In the out years, Colorado, by banning fracking, will be another country hiding "spare capacity." France has banned fracking forever, and is also hiding a lot of "spare capacity."

This whole "US State Department blaming OPEC for hiding spare capacity reminds me of the "Little Red Hen" children's story.

What The Mormon Church And The Porn Industry Have In Common -- October 4, 2018

This is one of those article I had no interest in reading, but for some reason or another I decided to slog through it. It was well worth it. This paragraph alone was worth the price of admission:
Elemental servers sold for as much as $100,000 each, at profit margins of as high as 70 percent, according to a former adviser to the company. Two of Elemental’s biggest early clients were the Mormon church, which used the technology to beam sermons to congregations around the world, and the adult film industry, which did not.
The article is a cover story article over at Bloomberg.

Tag: what the Mormon church and the porn industry have in common

I'm preaching to the choir, but as you read that article, if you don't understand Trump's concern with China, you are not paying attention.

The hardware hack was very, very, very clever. 

I did not read the article closely enough to see if Bloomberg gave the Trump administration any credit in its Chinese policies.

Random Note On Oasis In Willow Creek -- October 4, 2018

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

I know there are at least a few readers interested in Oasis.

In one of the hottest fields in the Bakken, Willow Creek, Oasis has a whole backlog of wells completed but still on the conf list; their early production suggests very nice wells, about 50 to 60K in first two to four months. In addition, it appears the effect these new wells will have on exiting wells will be significant. Finally, Oasis is a long way from starting a re-frack program in Willow Creek, but when the do, it should be quite spectacular.

Just my two cents worth.

Willow Creek has been updated.

Oasis Hanover wells are tracked here; the graphic has been updated.

Oasis Hanover Federal Wells In Willow Creek Are Going To Be Incredible -- October 4, 2018

The Oasis Hanover Federal wells in Willow Creek have been updated. Willow Creek, itself, is followed here but has not been updated in a very long time.

This is already a great field for Oasis and it's going to get much, much better based on production profile of this well:
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Truck Orders Plateau -- Let's See What The Next Twelve Months Bring -- October 4, 2018

Link here.
New figures suggest the boom in trucking business may have reached a plateau.
Orders for big rigs eased back last month after two record-setting months, as fleets ordered 42,800 new Class 8 trucks, the heavy-duty trucks that haul goods long distances.
Demand remains strong, with the orders up about 90% from last September, but the 19% drop from August’s record of 53,069 came as other measures of trucking demand signal this year’s robust expansion is leveling off.
The orders have been growing this year as strong U.S. shipping demand that has fueled a rapid increase in freight rates and a scramble to find available trucks.
But shipments on trucking spot markets declined 12% from August to September. And the American Trucking Associations’ for-hire truck tonnage index slipped 1.8% from July to August, while the 4.5% year-over-year gain in that measure was the smallest increase in 13 months.
A one-month one-off hardly merits a story? Let's see what the next twelve months bring.

The Fed

Link here.
The U.S. economy is experiencing “a remarkably positive set of economic circumstances,” Federal Reserve Chairman Jerome Powell said Wednesday, suggesting that he sees little risk the current economic expansion will be knocked off course.
“There’s no reason to think this cycle can’t continue for quite some time, effectively indefinitely,” Mr. Powell said in a moderated discussion with PBS News Hour’s Judy Woodruff, at the Atlantic Festival in Washington.
Mr. Powell’s comments echoed remarks he made Tuesday, where he said he doesn’t see evidence the labor market is at risk of overheating or of price pressures accelerating. He also pushed back Tuesday against criticism that Fed officials are underestimating the prospect of inflation overshooting the central bank’s 2% goal.
Mr. Powell said he continues to believe inflation will rise as unemployment continues to fall, a framework known as the Phillips curve. But he acknowledged that so far, wage increases haven't promoted price inflation, and said “it’s a bit of a mystery” why the tight labor market hasn’t led to stronger wage gains.
I assume Steve Liesman over at CNBC will spend days trying to parse Powell's comments and then try to determine what "for quite some time" actually means. 

I have trouble believing that "for quite some time" means less than two years. But if the economy goes south, as they say, a lot of folks are going to blame the Fed. A lot of folks do not understand the reason for raising "rates" when there is no sign of inflation.

Jim Cramer is one of those folks.

Health Insurance Update -- October 4, 2018

Link here.

The average cost of employer health coverage offered to workers rose to nearly $20,000 for a family plan this year, according to a new survey, capping years of increases that experts said are chiefly tied to rising prices paid for health services.
Annual premiums rose 5% to $19,616 for an employer-provided family plan in 2018, according to the yearly poll of employers by the nonprofit Kaiser Family Foundation. Employers, seeking to blunt the cost of premiums, also continued to boost the deductibles that workers must pay out of their pockets before insurance kicks in.
“That’s one of the things that lets them reduce premium costs, shifting more of the cost to workers,” said Gary Claxton, a vice president at the Kaiser Family Foundation.
McDonald Gardens LLC, a retailer and landscaping company in the Virginia Beach, Va., area, has about 100 full-time workers. To deal with the rising cost of coverage, it raised the deductible on its most widely used health plan to $4,000 a year, from $3,000. The company also increased its own premium contribution.
I can't get my head around this. We're well beyond any likelihood of bringing health care costs down in the US. The big question is how to compare these expenditures, not dollar amount, but as percentages:
  • military spending -- total, including classified 
  • military spending -- total, without classified
  • military spending -- absolutely necessary
  • military spending -- fair share
  • basic income for all
  • Medicare for all
  • Medicare as it is now
  • Social Security -- total
  • Social Security Disability
  • interest on federal debt
  • total worth of top 1% in US
  • total worth of top 5% in US

Continuing Claims For Unemployment At 45-Year Low -- October 4,2 018

The headline you will only see here: with regard to jobless claims, the 4-week moving average is at a 45-year low. Forty-five years ago was 1973. 
  • folks working are not drawing (or drawing less) government benerits
  • folks working are paying into social security
  • many folks working are paying federal income tax
  • some folks working are paying state income tax
  • some folks working are buying Apple Watches
  • almost all folks take some type of motorized transportation to work
  • almost all motorized transportation uses crude oil derivatives
  • what's not to like
  • a lot of working people won't find time to get away from their jobs to vote
Jobs: wow, low numbers.
  • forecast: 213K
  • actual: 207K -- wow
  • the 4-week average for continuing claims fell 13,000 in lagging data for the September 22 week to 1.665 million which is a 45-year low
Sioux Falls

Bloomberg got the headline wrong, but the story is great, nonetheless. The headline:

Why Sioux Falls Is Booming South Dakota’s biggest city isn’t a college town or a state capital or in the Sun Belt. So how does it keep growing and growing?

In fact, Sioux Falls is a college town: it has a university and a college, I believe.
There are 63 metropolitan areas in the U.S. (out of 382 total) that saw their populations grow by 10 percent or more from 2010 through mid-2017, according to estimates compiled by the Census Bureau. That compares with an increase of 5.5 percent for the nation as a whole, and 6.5 percent for its metropolitan areas — which, just to be clear on what we’re talking about, are defined as “one or more counties that contain a city of 50,000 or more inhabitants, or contain a Census Bureau-defined urbanized area and have a total population of at least 100,000 (75,000 in New England).”
Thirty-nine of these fast-growing metros are in the South and 19 in the West. This should come as no big surprise, given that these two regions are estimated to have accounted for 86 percent of the country’s almost-17-million-person increase in population since 2010. None of the fast-growth areas is in the Northeast, but there are five in the slowest-growing of the four regions delineated by the Census Bureau: the Midwest.
One of these Midwestern standouts, Iowa City, Iowa, is home to a large research university, a frequent catalyst for local economic success. Another, Des Moines, Iowa, is a state capital with a metro-area population of 645,911, which is in keeping with urbanist Aaron Renn’s dictum that “If you want to be a successful Midwestern city, it helps to be a state capital with a metro area population of over 500,000.”
Two, Bismarck and Fargo, North Dakota, have been beneficiaries of a big shale-oil boom in their state.
That leaves Sioux Falls, South Dakota, which has seen its metro-area population rise 13.5 percent since 2010 (and 68.8 percent since 1990), to 259,094.
There’s no major university in town; local legend has it that city fathers were given the choice 150-plus years ago between the University of South Dakota and the South Dakota State Penitentiary, and they opted for the latter because they figured it would bring more jobs. 1 The state capital, Pierre, is more than a three hours’ drive away. The signature local industry used to be meatpacking — and there’s still a big, exceptionally fragrant Smithfield Foods Inc. pork-processing plant along the Big Sioux River about a mile north of downtown.
MDU Acquires Sioux Falls Construction Company

From press release:: Sweetman Construction Company of Sioux Falls, SD; will become part of Knife River Corporation.

Pales in comparison to what Oasis has become. Just saying.

A Headline We Won't See Today -- October 4, 2018

The headline you will only see here: with regard to jobless claims, the 4-week moving average is at a 45-year low. Forty-five years ago was 1973. 
  • folks working are not drawing (or drawing less) government benefits
  • folks working are paying into social security
  • many folks working are paying federal income tax
  • some folks working are paying state income tax
  • some folks working are buying Apple Watches
  • almost all folks take some type of motorized transportation to work
  • almost all motorized transportation uses crude oil derivatives
  • what's not to like
  • a lot of working people won't find time to get away from their jobs to vote
Jobs: wow, low numbers.
  • forecast: 213K
  • actual: 207K -- wow
  • the 4-week average for continuing claims fell 13,000 in lagging data for the September 22 week to 1.665 million which is a 45-year low
Back to the Bakken
Active rigs:

Active Rigs65593268190

RBN Energy: part 5 --unconstrained northeast gas supply growth spells trouble for Henry Hub. See this post also.
With the addition of new large-diameter natural gas pipelines like Energy Transfer Partners’ Rover Pipeline and Enbridge and DTE’s NEXUS Gas Transmission, the dog days of severely depressed gas prices in the U.S. Northeast will be diminishing (though not disappearing entirely), but they are just getting started for its downstream markets. After years of constrained natural gas supply growth, Northeast takeaway capacity appears to be outpacing regional production volumes more and more, and RBN’s analysis of production economics suggests that, left unconstrained, the Marcellus/Utica gas market is set to unleash an incremental 8 Bcf/d into the broader U.S. gas market by 2023, with the bulk of that volume targeting consumption in the Midwest and Gulf Coast regions. In today’s blog, we walk through our outlook for Northeast takeaway capacity and gas production, and by extension, U.S. gas supply.
Previously we looked at the influential role that Northeast gas production has had on the U.S. supply-demand balance for the better part of this decade. Lower-48 dry gas production has climbed 15 Bcf/d over the past five years, from 65 Bcf/d in 2013 to about 80 Bcf/d averaged over the course of 2018. According to our friends at OPIS PointLogic, we’re currently producing about 84 Bcf/d. Appalachia’s Marcellus/Utica shales have accounted for the lions share of that supply growth. As impressive as that growth has been, it has come haltingly, measured by perpetual takeaway constraints and severely depressed prices relative to Henry Hub and other destination markets.