Natural Gas? The Energy Story This Winter? I Thought It Would Be New England. It Might Be British Columbia -- October 23, 2018

Updates

October 26, 2018: follow-up; prices spike.  

Original Post 

Wow, isn't this the height of irony?

Quick! Name the Canadian province that was instrumental in killing the TransMountain Pipeline expansion project (crude oil). Yeah, British Columbia.

Quick! Name the company that built, sold, and if built, will be the operator of the TransMountain Pipeine. Yup, TransCanada. 

So, now fast forward. From oilprice.com and also at the FortisBC webpage:

A natural gas pipeline explosion that occurred earlier this month near the city of Prince George will reduce supply to British Columbia by between 20 and 50 percent this winter, the gas distribution company said in a statement.

FortisBC said that although it had planned on having the ruptured pipe up and running by mid-November, it will not be able to fill it to capacity. At best, it would operate at 80 percent of capacity for the winter.

So, British Columbia is facing winter with a significant natural gas shortage.

FortisBC is turning to -- you got it -- to TransCanada for help.

To compensate, FortisBC said it was in talks with TransCanada to increase the flow along the Southern Crossing pipeline from Alberta. At the same time, the company said, it was working with industrial gas consumers to optimize their consumption. In its update, the company appealed to household consumers to also try and optimize their consumption of the fuel during peak demand season.

I could be wrong but I think TransCanada's Southern Crossing (Gas Transmission Northwest -- GTN) transports natural gas to the US west coast (Washington State, Oregon, and California) from western Canada. One wonders if there could be a domino effect on US west coast. Maybe a reader knows.

From the home page of FortisBC:

Due to transmission constraints, FortisBC is reaching out to customers to let them know that our regional natural gas supply, including the province, will be limited to 50 to 80 per cent of normal levels.

This means that the natural gas system will be challenged in times of high demand throughout the winter. As such, FortisBC is asking all of its customers to be conscious of their natural gas use and conserve energy wherever possible.

On Friday, October 19th, Enbridge released a statement announcing that, subject to regulatory approval, they expect their ruptured 36-inch natural gas transmission line to be repaired and in service by mid-November. However, both the 36 and 30-inch transmission lines will only be running at 80 per cent capacity and are not expected to return to maximum operating pressure throughout the winter.

We are actively working to make more gas available for our customers. For example, we’ve worked with TransCanada to maximize output of the Southern Crossing pipeline that feeds into the Interior from Alberta and are actively working with industrial customers to optimize their energy use – keeping them running while minimizing system impacts. We are also working on securing additional natural gas in the open marketplace to best support the province’s gas supply.

At the FortisBC home page:

Random Update Of Another Incredible MRO Well In Reunion Creek -- October 23, 2018

This well is one of a number of incredible MRO wells. It came off the confidential list in May, 2018, but was a DUC. I don't recall if I have posted the first ten days of production:

• 32971, 8,702, MRO, Whitebody USA 14-23H, Reunion Bay, t8/18; cum 40K after ten days: 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2018	10	39659	38738	32589	48655	0	46071

• crude oil: 39,659 bbls over 10 days extrapolates to 118,977 bbls over 30 days
• mcf natural gas: 48,655 mcf (8,107 boe) over 10 days extrapolates to 24,323 boe over 30 days
• total: extrapolates to 143,300 boe over 30 days;

This page won't be updated. The other incredible MRO wells on this pad and in this area have been previously noted at a number of posts.

I'm waiting to see what a neighboring well, #19446, will do. It has just come back on line; it's a lousy well; curious if it's improved after neighboring wells have been fracked.

The Slawson Gabriel Wells In North Tobacco Garden

Overshadowed by all the news this week, this Slawson well (#24520) reported, and it's time to look at the other wells on the same 4-well pad:

• 24520, 1,458, Slawson, Gabriel 4-36-35H, North Tobacco Garden, 44 stages; 8.6 million lbs, t7/18; cum 28K 8/18; 
• 24519, 1,358, Slawson, Gabriel 5-36-25TFH, North Tobacco Garden, t7/18; cum 32K after one month;
• 23556, 920, Slawson, Gabriel 1-36-25H, North Tobacco Garden, t7/18; cum 39K after about two months;
• 24518, 2,449, Slawson, Gabriel 6-36-25TFH, North Tobacco Garden, t7/18; cum 27K after about two months;

Two wells running parallel and in same direction, lying east to the 4-well Gabriel pad:

• 21250, 2,568, Slawson, Gabriel 3-36-25H, North Tobacco Garden, t11/11; cum 276K 8/18;
• 24521, 1,628, Slawson, Gabriel 7-36-25TFH, North Tobacco Garden, t6/18; cum 45K after about 3 months;

Most incredibly, a Three Forks well running parallel BUT opposite direction, lying west of the pad, but also fracked recently:

• 32617, 1,157, Oasis, Oyloe 5199 14-26 12TX, North Tobacco Garden, t10/17; cum 236K 8/18;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2018	31	21821	21867	39503	32855	5193	27352
BAKKEN	7-2018	27	16327	16259	41509	25718	14870	10578
BAKKEN	6-2018	0	0	0	0	830	830	0
BAKKEN	5-2018	6	2557	2557	2523	8170	4803	3307
BAKKEN	4-2018	30	21695	21695	16858	58157	12364	45493
BAKKEN	3-2018	23	21493	21564	14680	43645	18470	24945
BAKKEN	2-2018	28	27099	27115	14859	48864	24319	24265
BAKKEN	1-2018	31	25908	26023	16222	42170	24411	17449
BAKKEN	12-2017	31	30946	30744	19718	46087	25518	20259
BAKKEN	11-2017	30	28410	28410	19409	40645	21428	18917
BAKKEN	10-2017	29	34224	34224	24966	44481	7595	36596
BAKKEN	9-2017	8	5715	5715	5203	9647	4513	5064

Have We "Jumped The Shark" In The Permian -- October 23, 2018

Headline story over at Rigzone that made twitter, and I'm not making this up: "Nostra Terra acquires 8 potential Permian wells." Data points:

• Nostra Terra Oil and Gas Company (NTOG) is UK-based
• acquired Mesquite Prospect in the Permian Basin
• potential: eight -- yes, eight -- horizontal wells 
• the UK is excited about a second horizontal well in England -- yet to be drilled/completed -- so a report that any UK company that might report eight horizontal wells must be really exciting for the Brits
• NTOG acquired 1,384 acres. Wow.
• and it continues: this acquisition will represent a 308% increase in the company's total Permian Basin acreage position -- can't do the math -- are we talking an original position of 250 acres in the Permican for NTOG until this acquisition? Yes, there it is -- it "quadrupled" the company's footprint in the Permian -- 4 x 250 = 2,000 acres
• the CEO was even impressed that the wells to be drilled will not only be directional, but also horizontal
  
• potential: initial production of 9,000 bbls/month for each well
• anything less than 20,000 bbls/month initial production in the Bakken I consider a disappointment
• cost? 1/8 carried working interest in the first well and $150,000 cash
• $150,000 / 1,384 acres = $100 / acre

I must be missing something in this story. Or it was a a really, really slow news day.

API Reports Huge Crude Oil Build; WTI Plummets Almost 5% -- October 23, 2018

WTI plunges:

• down almost 5%
• lost over $3/bbl
• now trading barely above $66

API weekly crude oil inventories: huge, huge build.

I started tracking weekly crude oil inventories about two years ago to get "a feel" for this metric. In all that time, I never saw a swing (build or draw) of more than 6 million bbls in one week and that was incredibly rare. There may have been an occasional exception. I've long forgotten. But anyone who follows the weekly number will be / should be stunned. The API reports a huge build of almost 10 million bbls of crude oil. Who saw it coming? Regular readers might have. Remember this graphic? This is from last week. We will see this week's "gasoline demand" tomorrow afternoon. It will do one of two things: it will continue to slide, or it will show a very, very slight increase but it won't be enough to get anyone excited.

Active rig list:

$66.04↓↓↓↓	10/23/2018	10/23/2017	10/23/2016	10/23/2015	10/23/2014
Active Rigs	68	54	34	68	194

Four new permits:

• Operators: CLR (2); Liberty Resources (2)
• Fields: Haystack Butte (McKenzie); Gros Ventre (Burke)
• Comments: Liberty Resources has two new permits in section 23-159-93; and, CLR has two new Palmer Federal permits in Haystack Butte in section 25-149-98.

Six permits renewed:

• Hunt (3): two Trulson permits in Mountrail County and one Halliday permit in Dunn County
• Zavanna (2): two George permits in Williams County
• Bruin E&P: one Borrud permit in Williams County

Five producing wells (DUCs) reported as completed:

• 33737, 2,026, Hess, BB-Federal B-151-95-2122H-8, Blue Buttes, t9/18; cum --
• 34217, 1,052, Hess, RS-Howell-LW-156-91-1107H-4, Ross, t9/18; cum --
• 34219, 836, Hess, RS-Howell-LW-156-91-1107H-2, Ross, t9/18; cum --
• 34220, 1,256, Hess, RS-Howell-LW-156-91-1107H-1, Ross, t9/18; cum --
• 34218, 679, Hess, RS-Howell-LW-156-91-1107H-3, Ross, t9/18; cum -- 

Note: neighboring well to the new RS-Howell wells is off-line but it's a great well --

• 17720, 399, Hess, RS-Howell-156-91-1207H-1, Ross, t2/09; cum 462K 7/18; it will be interesting to see what this well does when it comes back on line;

Note: #33737 is on a 5-well pad; this one was the first to report; the others are SI/NC, but I believe they have all been fracked; will soon report; #18250 parallels the wells coming from this 5-well pad; still off line;

Afternoon Note -- October 23, 2018

WCS: how much is Alberta "losing" because the TransMountain Pipeline expansion was killed? $100 million / day. Per day. Around $60 million / month goes into the North Dakota Legacy Fund. Divided by 30 days that works out to $2 million / day. Compare that to $100 million / day in Alberta. British Columbia's First Nation is costing Alberta $100 million / day.

Colorado: the top 2018 energy story in Colorado will be Proposition 112, if voters vote to "pass" it. Opponents argue that it will "remove" 58% of future minerals (including oil) from Colorado.

Tesla: great optics. Could surprise. From CNBC:

Shares of Tesla were up more than 12 percent Tuesday afternoon after a noted short seller, Andrew Left of Citron Research, said he's changed his mind and is investing in the company's stock. "Tesla is destroying the competition," Left said in a research note.

Khashoggi: bad optics for MbS. His image is forever tarnished. It's going to be really, really hard (impossible?) for any westerner to have a photo op with MbS. If no westerner is willing to have a photo with MbS does that mean the end of MbS? Very possibly. He's not the only prince in the palace. Being seen with others / saving face is huge in the Mideast. Not sure how MbS can survive.

The Red Queen: Netflix. Link here. Netflix's new $2 billion in borrowing raises Wall Street eyebrows.The streamer's long-term debt has soared north of $10 billion, though Moody's says ratings and outlook remain stable. From the linked article:

Longtime skeptic Michael Pachter of Wedbush Securities says the additional debt did not come as a surprise, considering Netflix's penchant for reporting negative cash flow. "It is precisely what we modeled," says Pachter. "So long as they burn cash, they will have to raise capital to fund their content spending."

Netflix is a victim of its own success. Its original content streamed on demand has proved so popular it has attracted many copycats, so Netflix must spend wildly to keep up with relative upstarts like Amazon, CBS All Access, HBO Now and Hulu.

It also must replenish what it is gradually losing from Warner Bros. and Disney, as each of them prepare to launch their own services next year that will directly compete with Netflix.

This means that if Netflix users want to stream episodes of Friends or the movie Coco, for example, they eventually won't have the option without signing up for yet-to-be named services from Warners and Disney, respectively.

Wow, if this doesn't sound like the Red Queen on her treadmill.

And I would argue that "video content" is entirely different than oil. "Video content" grows stale; loses value over time. Oil tends to never go out of favor; does not grow stale; and tends not to love value over time. So, we'll see. But Netflix? Certainly sounds like the Red Queen on her treadmill.

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Medicare For All

I would consider myself a fiscal conservative. I would like to see the "big numbers." I'm not convinced that the US can't afford "Medicare for all." There would have to be some tweaking but my hunch is that if Trump had time -- he doesn't -- he could get it done.

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ISO New England

Watch in real-time. Look at three things, in this order:

• the five-minute real-time LMP graph and five-minute real-time LMP list
• the $250/MWH spike during the middle of the night
• staying at $50/MWH much of the entire day (as of 1500
• the system load: forecast vs actual
• middle of the night
• 1500 - 2100 (current)
• fuel mix
• renewables at 1900

Later, 1800: yup, here it comes. Spot is now slightly over $81 / MWH. Peaked at $110/MWH in the evening hours.

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What Goes Around, Comes Around

From The Williston Herald:

Northwest District Judge Benjamen Johnson refused to close the courtroom during the testimony of a teenager and his mother in the upcoming trial of Bryton Dahl.

The judge ruled that a victim's concern about "embarrassment" doesn't preclude a defendant's right to a speedy, public, trial, as guaranteed in the Sixth Amendment, US Constitution.

Wow.

EOG And Petroshale (?) Look To Put "Multiple Wells" On Two 640-Acre Units In Spotted Horn -- October 23, 2018

From the November, 2018, hearing dockets:

• Case (not permit) 27091, EOG, Spotted Horn-bakken; establish two 640-acre units; "multiple wells" on each 640-acre unit; the units: W/2 of sections 30/31 and E/2 of section s30/31-150-94; McKenzie

Proposed unit:

Existing wells:

• 17197, 284, Petroshale, Chase 21-30H, Spotted Horn, t11/08; cum 75K 8/18; lousy well; May 24, 2018 -- Petroshale acquired this well from QEP; QEP acquired this well from Tracker Resource, in October, 2016; Tracker acquired the well from Sundance Energy, February, 2014; drilled by Sundance; permitted by Sundance Energy Indiana, Inc, 2008; talk about an unloved well; and now it's a stripper.
• 35269, conf, Petroshale, Bear Chase 1MBH, Spotted Horn,
• 35270 (rig on site/conf), Petroshale, Bear Chase 1TFH, Spotted Horn,
• 35271, conf, Petroshale, Bear Chase 2MBH, Spotted Horn,

• 19341, 645, EOG, Bear Den 05-31H, Spotted Horn, t10/11; cum 181K 8/18; short lateral;
• note: 13 permits PNC'd near #19341

Random Update Of Inactive Wells And DUCs In The Bakken -- October, 23, 2018

This information is tracked elsewhere and that's where it will be updated (if I continue to do updates). This page will not be updated.

DUCs are pretty much "steady state," though technically they are noticeably increased since a year ago.

The number of inactive wells seems to have decreased significantly since a year ago.

DUCs and inactive wells are more closely correlated, all things being equal, with pad drilling compared to non-pad drilling.

The raw data of inactive wells and DUCS (first line, DUCs in blue):

August, 2018: 925, down 18 from previous report
inactive: 1,427, down 59

July, 2018: 943, down 50 from previous report
inactive: 1,486, up 28

June, 2018: 993, up 38 from previous report
inactive: 1,458, down 111

May, 2018: 955, up 13 from previous report
inactive: 1,569, down 48

April, 2018: 942, up 26 from previous report
inactive: 1,521, down 132

March, 2018: 916, up 15
inactive: 1,653, down 1

February, 2018: 901, up 48
inactive: 1,654, down 100

January, 2018: 853, down 24
inactive: 1,554, up 85

December, 2017: 877, down 6
inactive: 1,469, down 23

November, 2017:

October, 2017:

September, 2017: 853, down 10
inactive: 1,444, down 54

August, 2017: 863, down 26
inactive: 1,498, up 20

July, 2017: 889, up 34
inactive: 1,478

June, 2017: 865, up 35
inactive: 1,458, down 53

May, 2017: 830, unchanged
inactive: 1,511, up 45

April, 2017: 830, up 141
inactive, 1,466, up 167

March, 2017: 689, down 110
inactive: 1,299, down 312 (need to correct typo at that post)

February, 2017: 799, down 3
inactive: 1,611, down 67

January, 2017: 802, down 5
inactive: 1,678, up 105

December, 2017: 807, down 32

November, 2017: 839, down 21
inactive: 1,519, up 16

October, 2017: 860, unchanged
inactive: 1,500 (unchanged (AB and IA)

September, 2017:

August, 2017: 888, down 24
inactive: 1,514, up 44

July, 2017: 912, up 25
inactive: 1,486, down 98

June, 2017: 887
inactive: 1,584

May, 2017: 931, up 39
inactive: 1,584, down 6

Disclaimer: in a long note like this and with so many numbers, and no triple-checking and no NYT fact-checker, there will be factual and typographical errors.

Update On Two CLR Whitman Wells -- October 23, 2018

Updates

December 19, 2018: updated here.

Original Post  
The CLR Whitman wells are tracked here.

See this note.

Now the update of two of these wells.

The wells:

• 20210, 803, CLR, Whitman 2-34H, Three Forks, Oakdale, API - 33-025-01259; t9/11; cum 1.597 million bbls 8/18; see production profile below; FracFocus: no re-frack; original frack, 24 stages; 2.4 million lbs sand; in addition to the 1.6 million bbls of oil, a cum of 1650315 MCF gas (275K boe natural gas -- so we're talking close to 2 million boe so far; [Update: this well went off-line 9/17, and did not come back on line until 8/18; in 8/18, only four days of production of 2,075 bbls which extrapolates to 15,000 bbls in one month;
• 20212, 482, CLR, Whitman 3-34H, middle Bakken, Oakdale, API - 33-025-01261; t9/11; cum 181K 5/18; see production profile below; well, isn't this interesting -- yup, this well was fracked 9/23/17 - 10/5/17; 9.8 million gallons of water; 84% water; 15% sand; sundry form in file report: 61 stages; 14.5 million lbs sand; [Update: this well went off line 4/18 and came back on line 8/18; in 8/18 produced 4,731 bbls over 4 days which extrapolates to 35,000 bbls in one month;

20210:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2018	4	2075	1375	1231	2073	1580	443
BAKKEN	7-2018	0	0	0	0	0	0	0
BAKKEN	6-2018	0	0	0	0	0	0	0
BAKKEN	5-2018	0	0	0	0	0	0	0
BAKKEN	4-2018	0	0	0	0	0	0	0
BAKKEN	3-2018	0	0	221	0	0	0	0
BAKKEN	2-2018	0	0	0	0	0	0	0
BAKKEN	1-2018	0	0	0	0	0	0	0
BAKKEN	12-2017	2	0	0	19	0	0	0
BAKKEN	11-2017	3	22	0	21	1	0	0
BAKKEN	10-2017	3	2	38	0	1	0	0
BAKKEN	9-2017	16	3829	3858	232	4800	4703	0

20212:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2018	4	4731	4441	2378	4621	3785	786
BAKKEN	7-2018	1	67	67	84	4	0	3
BAKKEN	6-2018	1	1	138	0	0	0	0
BAKKEN	5-2018	0	0	403	0	0	0	0
BAKKEN	4-2018	16	3239	3127	473	2465	2376	0
BAKKEN	3-2018	19	5486	5631	756	4317	4139	50
BAKKEN	2-2018	25	5310	5088	595	4445	4261	0

CLR's Corporate Presentation -- September, 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.

CLR's September, 2018, corporate presentation, Barclays Global CEO-Energy Power conference.

Link here. These presentations "disappear" over time.

41 slides.

Annual production (exit rate)

• 2010: slightly below 50,000 boepd
• 2018: 320 boepd

OPEC -- spare capacity approaching historically low levels; opens the door to US exports

• spare capacity (percent of global supply): 5%
• % of global liquids supply: 4%
• most interesting; mentioned yesterday (PEMEX/Bakken) -- global demand for light, sweet crude

CY 2018

• 20% to 24% production growth year-over-year
• slightly below $1 billion free cash flow
• unhedged focus on oil; 95% of rigs are targeting oil
• budget breakeven at low $40 WTI
• for investors, note this: may spin off its "minerals" division (new joint venture if I remember correctly)

Bakken EURs

• "uplifted" once again
• 60-stage completions = higher EUR type curve

ROR

• ROR, at $50 oil
• 2011: 0%
• 2014: 10%
• 2015: 20%
• 2017: 40%
• 2Q18: 80%
• ROR: at $70 oil
• 2015: 60%
• 2017: 80%
• 2Q18: 180%

EURs: 70 "60-stage" optimized completions

• 1.2 million-bbl type curves; hit 250K at 280 days
• 70 optimized high stage completions hit an average of 300K at 280 days
• rapid expansion across the Bakken
• first fifteen years: 12 wells/year
• past three years (2015 - 1Q18): 157 wells/year

Slide 30: decline rates -- leveling out; Bakken decline rate no worse than SCOOP/STACK

Debt

• declining
• YE 2015: $7.1 billion
• 2Q18: 6.0 billion
• long-term target: $5 billion
• earliest debt maturity is 2022 bonds (callable)
• 4.5% average interest rate in 2Q18
• unsecured credit facility: $1.5 billion revolver; fully undrawn at 6/30/18

Margins, slide 33

• 2015: 61%
• 2016: 57%
• 2017: 67%
• 2Q18: 74%

Update On CLR's Miles-Kennedy Wells -- October 23, 2018

I have a lot of spare time today, so there may be a lot of nonsense posted. I may not be able to post much tomorrow until later in the day.

So, where were we with these wells? From this post, but early production numbers are now available.

In fact all of these wells are now on confidential status. They were once on the SI/NC list but are now back on the confidential list. The Miles-Kennedy wells are tracked here.

• 33220, 1,111, Miles 8-6H1, Dimmick Lake, t7/18; cum --
• 33221, 1,696, Miles 7-6H, Dimmick Lake, t7/18; cum --
• 33222, 1,173, Miles 6-6H2, Dimmick Lake, t8/18; cum -- 
• 33223, IA, Miles 5-6H, Dimmick Lake, t--;
• 33224, 1,133, Kennedy 8-31H1, Dimmick Lake, t7/18; cum --
• 33225, 1,592, Kennedy 7-31H, Dimmick Lake, t8/18; cum --
• 33226, 962, Kennedy 6-31H2, Dimmick Lake, t8/18; cum -- 
• 33227, A, Kennedy 5-31H, Dimmick Lake, t--; cum --

33320, first bench:

Date	Oil Runs	MCF Sold
8-2018	1423	1682
7-2018	8201	12444
5-2018	916	0

33221, middle Bakken:

Date	Oil Runs	MCF Sold
8-2018	29397	50469
7-2018	19032	33147
5-2018	2518	0

33222, second bench:

Date	Oil Runs	MCF Sold
8-2018	27290	41428
7-2018	5616	8432
5-2018	1001	0

33223, middle Bakken:

Date	Oil Runs	MCF Sold
8-2018	11995	17419
5-2018	814	0

33224, first bench, 33-053-07877, fracked 2/14/2018 - 3/8/2018, 12.7 million gallons of water; 12.3% sand by weight:

Date	Oil Runs	MCF Sold
8-2018	11026	18558
7-2018	9810	17337
5-2018	560	0

33225, middle Bakken, 33-053-07878, fracked 2/14/2018 - 3/8/2018, 12.2 million gallons of water; 12.3% sand by weight:

Date	Oil Runs	MCF Sold
8-2018	45054	78131
7-2018	14655	26328
5-2018	787	0

33226, second bench, 33-053-07879, fracked 1/21/2018 - 2/11/2018, 8.9 million gallons of water; 11.3% sand by weight:

Date	Oil Runs	MCF Sold
8-2018	20734	34353
7-2018	5198	8665
5-2018	1294	0

33227, middle Bakken:

Date	Oil Runs	MCF Sold
8-2018	16498	26582
6-2018	611	0
5-2018	1533	0

Comments Section Generating Spam -- October 23, 2018

Updates

October 24, 2018: Very interesting. The spammers must have google accounts. I find that very, very interesting and completely unexpected. I opened comments only to those with google accounts / or shut down comments except for those with google accounts, and the spam kept coming, so I stopped all comments. I will shut off comments for about a week and then open them up again.

Original Post

 
Spam.

About two weeks ago I started getting on average one "anonymous spam" comment per day. That has gradually increased to several per day. It looks like they are coming from overseas in which students are taking an English class to learn how to a) read and write English; and, b) how to surf the blogosphere.

This anonymous spamming used to bother me but now that I understand what's going on, it's no big deal.

I will shut down comments (except for those with Google accounts and who have signed in) for a few days and then open comments up again. I've found this works quite nicely. So we'll see.

The Energy, Market, And Political Page, T+71 -- October 23, 2018

A side-by-side picture: worth a thousand words.

The link for the photo above: https://www.infowars.com/photos-numbers-at-trump-rally-dwarf-those-at-obama-event/.

Note how the media cropped the photo on the left. If the photos were taken from the same "vantage" point, it would have been even more startling. The photo on the left reminds me of a political gathering that I attended as editor of the college newspaper in Sioux Falls with George McGovern in attendance on the eve of the presidential election, back in 1972.

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The Physics Page

From Howard Bloom's 2016 The God Problem. I have read the book once. It's a hard book to read. I am now going back and re-reading it, with special attention on certain sections.

It wasn't until I was a sophomore or junior in college that I learned about the second law of thermodynamics -- at least as far as I recall. I assume it was introduced to me in high school physics in my senior year, if not in chemistry in my junior year, but if so, I wasn't paying attention.

The second law has to do with entropy. I remember it only too well in my first year at college. I never understood it; I could never do the equations; and in the qualitative sense, I could never accept it. I was relieved that it was never mentioned again (as far as I can recall) after the first year of college.

It's interesting that Howard Bloom, pages 40 - 44, argues the same thing. He says the second law of thermodynamics was based on the "steam engine," and that the cosmos is not a steam engine.

In the next section, pages 45 - 49, he questions the randomness of the universe. He seems to question for example, how DNA could have just "happened randomly." The six-monkeys-at-six-typewriters-typing-all-of-Shakespeare-if-given-enough-time paradox.

It sounds like he doesn't "believe it." Whether he accepts it or not (and I don't think he accepts it), he certainly questions it. After the Big Bang, only three atoms were formed: hydrogen, helium, and lithium. Every atom after that was created from stellar nucleosynthesis -- atoms made by the stars.

The author finds that incredible and feels it was not random. He feels there were basic "rules" at the time of the Big Bang that set everything in motion. And the "rules" resulted in only three atoms as a direct result of the "explosion." He implies that if the universe really was random, there would have been an infinite number of species of atoms following the Big Bang as the elementary particles banged into each other. As he says,

Our universe [did not] blat out more than a zillion to the zillionth power new forms of atoms, as the probabilistic equations of randomness would imply. Far from it. [The universe produced] just three rigidly constrained species of atoms. Hydrogen. Helium. Lithium. Only three atoms, in a universe of zillions of particles? And all of these atoms appearing pretty much at the same time? With astonishing supersynchrony? That doesn't make any sense. It doesn't follow the rules of randomness.

Reading this section a section time, I finally understood where the author was going in this 563-page book. 

It's a hard book to read, but I think he could have made it easier to follow by moving some of the chapters on John Conway and Steve Wolfram to the front of the book (in easy-to-understand English) and then repeated and expanded that information in the latter chapters as he brings things to conclusion. He needed to explain in clear English in the introduction or the first chapter where he was headed and how he planned to get there.

This is another one of those books that high school seniors planning to major in the sciences in college should read during the summer before entering college.

Speaking of college. One of the most ridiculous "insights" a journalist has pointed out in the past 24 hours: the ratio of rich students to poor students at Harvard University is 23 - 1. I did not read any farther, so I don't know if he's talking about the entire university or of just the undergraduates. I'm surprise the ratio is that low, 23 to 1. What should the ratio be? By the way, I believe I read somewhere that if one is accepted to Harvard University, tuition is not an insurmountable problem.

MRO Wells In Quiet Area Of The Bakken Coming Off Confidential List Are DUCs -- October 23, 2018

Some important MRO wells are now coming off the confidential list; they are DUCs but it will be interesting to see what the company has.

A lot of pundits have said there are limited drilling locations in the Bakken -- and I understand the concern -- perhaps a blog on that some other day.

These new MRO wells are nice to see because they are being completed in a relatively quiet area in the Bakken, but near some very nice locations.

The wells in question? The 5-well pad in NWNE 21-145-96. They are on conf list now but based on scout ticket, it appears they will be running north. One well was PNC'd, so now just four wells. The neighboring well, #17999, drilled back in 2009, is a lousy well, but it held the lease by production. It was taken off line recently for about six weeks: all of May, 2018, and first 15 days of June, 2018.

FracFocus does not show any frack data.

Jim Creek is located between two very good fields, Rattlesnake Point to the north and Murphy Creek to the south.

The graphic:

Morning Note; WTI Continues To Trend Down -- October 23, 2018

Khashoggi? Hardly mentioned in international oil and gas news. 

What if you held a party and no one came? Looks pretty dismal in Riyadh. Link here.

WTI: continues to trend down.

For newbies: the definition of a "frack spread" at this link.

“A frack spread, sometimes referred to as a frack fleet, is a set number of equipment that a pressure pumper – an oilfield service company – uses for hydraulic fracturing,” explained Matt Johnson, Principal with Primary Vision. “This includes a combination of fracturing pumps – also referred to frack pumpers and/or pumping units, data trucks, storage tanks, chemical additive and hydration units, blenders and other equipment needed to perform a frack stimulation.”

Johnson said that his company’s frac spread counts have shown a clear growth trend sector-wide over the past 18 months.

In addition, Johnson said that his company has reported that insurance premiums on the frac pad have been increasing as a result of inexperienced hires.

Since January, Primary Vision has reported some fluctuation in frack spread activity but Johnson said the latest movement has been upward.

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Back to the Bakken

One well coming off confidential list today:

• 34667, SI/NC, MRO, Veddy 44-16H, Jim Creek, no production data, see this post.

Active rigs:

$68.07↓↓	10/23/2018	10/23/2017	10/23/2016	10/23/2015	10/23/2014
Active Rigs	71	54	34	68	194

RBN Energy: Enbridge and Michigan's long-awaited deal on Line 5.

For 65 years, Enbridge’s Line 5 has been a critically important conduit for moving Western Canadian and Bakken crude oil and NGLs east across Michigan’s upper and lower peninsulas and into Ontario, where the now-540-Mb/d pipeline feeds Sarnia refineries and petrochemical plants. Some crude from Line 5 also can flow east from Sarnia to Montreal refineries on Line 9.

But Enbridge has been under increasing pressure to shut down Line 5 over concern that a rupture under the Straits of Mackinaw might cause major environmental damage. At long last, the state of Michigan and Enbridge have reached an agreement to replace the section of Line 5 under the straits by the mid-2020s, and to take steps in the interim to enhance the existing pipeline’s safety. In today’s blog, we consider the significance of the Enbridge pipeline and of the newly reached accord.

As any music lover or sports fan knows, the Mick Jaggers and Tom Bradys of the world get all the attention, but lesser-known members of the band or the team help make the stars shine. The same holds true in the midstream sector, as evidenced by Enbridge’s Line 5, a 645-mile pipeline that is part of the company’s much larger Canadian Mainline and Lakehead systems.

Line 5 originates at the company’s terminal in Superior, WI, and runs east/southeast through Michigan to Sarnia, ON. The Superior terminal is the end point for five elements of the Mainline/Lakehead systems ­— Line 1, Line 3 and Line 4 from Edmonton, AB; Line 67 from Hardisty, AB; and Line 2B from Cromer, MB — and has the capacity to handle 2.8 MMb/d of incoming and outgoing liquid hydrocarbons (most of them light, medium or heavy crudes).

Line 5 is one of five pipelines out of Superior; it transports “batches” of either light crude, light synthetic crude or NGLs that are sourced primarily in Western Canada (and also in the Bakken) and bound for either Michigan, Sarnia or Montreal. At the Straits of Mackinac — the four-mile-wide water passage between Michigan’s upper and lower peninsulas (and Lake Michigan and Lake Superior) — the 30-inch-diameter, single-pipe Line 5 splits into two 20-inch-diameter, parallel pipes that are anchored along the strait’s lakebed.