Wednesday, October 31, 2018

Absolutely Staggering -- Nothing About The Bakken -- October 31, 2018

From the October 30, 2018, NYC presentation:

Post-Halloween Evening Out

This is the last year of trick-or-treating for all in this picture except for Sophia. It's kind of sad. Kind of sad? Very sad.

It is the evening of the day. I sit and watch the children play. Smiling faces I can see but not for me. I sit and watch as tears go by ... wow ... life is too fleeting ...

As Tears Go By, Marianne Faithfull

Ordinary Low Water Mark

Years ago, while stationed in Germany, we visited Normandy often ... but not enough. This is one of my favorite Monet paintings. It hangs in the Kimbell Museum here in Ft Worth -- we were down there today for a Halloween outing.

From the Kimbell webpage:
This beautiful beach scene near Le Havre, where the artist grew up, was one of two landscapes that launched Monet’s career when exhibited in 1865 at the Paris Salon, the vast, well-attended survey of contemporary art sponsored by the French government.

Where's Newfield? -- October 31, 2018


Later, 9:12 p.m. CDT: immediately -- and I mean immediately -- after post the note below, asking where Newfield was, and suggesting that MRO had bragging rights in the Bakken, a reader immediately -- and I mean immediately -- responded with THE list (see first comment):

1. Continental
2. Oasis
3. Marathon
4. Bruin
5. WPX
6. Kraken (Selling Williams, bought out Kaiser-Francis in Mountrail)
7. XTO
8. Petro-Hunt, LLC (Charlson Field is amazing!)
9. Whiting
10. Newfield
Dead last: Hess Corp. for under producing on each well.
Murex doesn't drill.
Zavanna hardly ever drills.
 Original Post

We'll get back to Newfield later (perhaps) but while looking something up I came across this from the blog, from October 12, 2011:

Isn't that quaint? An IP of 3,731 and look how excited I got. These days an IP of under 4,000 in the Bakken barely gets my attention. Take the IP to 7,000 and I still get excited, but 4,000? Ho-hum.

But look at that. That was back in 2011, and it was a short lateral. It really was a good well.

I'm really not sure what Newfield is doing in the Bakken any more.

To the best of my knowledge it is still active in the Bakken, but I sure haven't heard much about it.

Earlier this year:
But I didn't pay much attention to the article. I never would have thought of Newfield being the best producer in the Bakken. Right now, I'm thinking those bragging rights belong to MRO right now. 

For Halloween

It's Good To Be Alive, Imelda May

The Energy Gap Between The EU And The US Will Continue To Widen -- October 81, 2018

Over at "the big stories," there is a link, "Europe at a tipping point." One begins to wonder if Europe has passed the point of "no return."

On our drive to Ft Worth (Texas) this morning I mentioned to my lovely wife that the gap between the US and Europe -- at least regarding energy -- is going to only get wider and wider. I don't think she was listening to a word I was saying.


Tonight, this article over at

Data points:
  • rising oil and energy prices have sent inflation in the EU to the highest in nearly six years
  • annual energy prices are soaring; now up 10% yoy
  • the annual inflation rate in the EU is now the highest since December, 2012
  • Germany: inflation in the EU's biggest economy -- the highest in more than 6 1/2 years
  • the IEA is worried about "demand destruction" for energy products
  • when it's freezing outside this winter I doubt we will hear much about "demand destruction"
  • whatever happened to renewable energy?
  • we were stationed in Germany for seven years back in the 1980s and 1990s. We found heating oil then "prohibitively" expensive even then compared to what we were used to paying in the US; I can only imagine how expensive heating oil has gotten in Germany;  
But think about this:
  • the price of oil has been trending down for the past six months; and even at its recent high, it wasn't all that bad; imagine how Europe will do when the price of oil really begins to surge;
  • there's a reason the Europeans want the US to embrace the "global warming" scam -- that's the only thing that can slow the US down when it comes to energy

Absolutely Staggering: New Petroleum / Natural Gas Records Being Set By The US -- October 31, 2018

Fast and furious: I was out and about all day so I am behind in my blogging. Now with Halloween this evening, I will be delayed even further. There is a lot of stuff to blog so it's going to be a long, long night.

Unedited (okay, maybe just a little): I was going to post a similar story as the one below but when I got home I saw that a reader had already done it (the story) for me. Read this slowly; let it sink in; think about what this means (there will be a short quiz following):
  • the US has (again) broken records for oil and gas production, adding over 0.4 million bopd last month to break past 11.3 million bopd based on today's 914 monthly report (covering August)
  • Texas, GOM, ND, CO, OK, AK, WY, NM all up strongly
  • natural gas is also setting new records, with over 2 BCF/d of added production. Overall gas with second month over 100 BCF/d. Lower 48 approaching 95 BCFd. 
News article:

EIA report:
Interestingly, Rystad had predicted a massive increase this month, in excess of the STEO prediction.
They were the only analysts to stick up for EIA last fall, when people like Harold Hamm and Mark Papa, let alone the shale haters, were all criticizing EIA as too growth optimistic. But even Rystad underestimated how massive the month would be. We are now more than 2.1 million bopd higher in production than exactly one year ago. So much for peak oil. Amusingly, the peak oilers were dissing Rystad just a day ago:
Oh...and even the Gulf of Mexico is setting records. Broke past 1.8 million bopd last month for first time. Latest EIA report is now over 1.9 million bopd.

Maybe Snopes can write an article "fact checking" the peak oilers?


I remember very well those comments by Harold Hamm, and particularly Mark Papa, under-estimating what the Bakken was going to do. It is truly amazing. I admit it: I was swayed by Mark Papa -- after all, he's considered one of the smartest men alive when it comes to the Bakken.

Snopes? LOL.

Also, of course, my monthly memos to Art Berman and Jane Nielson.

This still remains one of my all-time favorite posts, from December 8, 2018 --
From November 30, 2017:
"Shale is not a revolution -- it's a retirement party. Shale plays were not some great new idea. They became important only as more attractive plays were exhausted." -- Art Berman.
With regard to Mark Papa, here's the post from March 11, 2018

In the note sent by the reader it was noted:
  • Texas, GOM, ND, CO, OK, AK, WY, NM all up strongly
If Proposition 112 in Colorado passes, one can remove that state from the list above. Wow, if the voters pass that proposition it will truly be a Grimm fairy tale for that state, every bit as unfortunate as the "golden goose" story.

WTI Breaks Below $65; A Whopping Nineteen New Permits Recorded Plus Two Permits Renewed; None Canceled; Net: Twenty-One Permits -- October 31, 2018

Fast and furious: I was out and about all day so I am behind in my blogging. Now with Halloween this evening, I will be delayed even further. There is a lot of stuff to blog so it's going to be a long, long night.

Active rigs:

Active Rigs69533470193

Nineteen new permits:
  • Operators:
    • CLR (6): six more permits in Brooklyn field, 24-155-98
    • Liberty Resources (6): permits for six wells on an Albertson E pad in section 22-158-93
    • BR (5): permits for five Tailgunner wells in lot 1, section 18-149-96
    • Whiting (2): permits for two Sondrol wells in section 30-149-98
  • Fields: Brooklyn (Williams); Enget Lake (Moutrail); North Fork (McKenzie); and, Juniper (McKenzie)
  • Comments:
Two permits renewed:
  • Whiting: two Faiman permits in Dunn County

The Market, Energy, And Political Page, T+ 79 -- October 31, 2018

OMG. John Kemp alerts us to fact that China's purchasing managers' index fell to 50.2 from 50.8, month-over-month. OMG! Is that statistic even reproducible? Statistically significant? Worse, he points out, China is reporting the slowest expansion in activity since July, 2016. Meanwhile, US confidence is at 18-year high. Sounds like the Chinese have to make a decision. Ignore Trump or get on with business. Winners don't quit and quitters don't win.

This is rich! Megyn Kelly slams media for "invasion of privacy." The invasion: complains of paparazzi outside her home. Wow. As if. Whatever.

Happy Halloween -- October 31, 2018

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

Yellen; remains concerned the economy could overheat. A nice worry to have. The Fed can prevent that. 

Rare: I don't see this often, but oil stocks are moving in pre-market. DNR up 5%. 

GM: pops 10% in pre-market trading. See "Cramer note" below.

EPD: beats; shares up 2%.

EOG: live webcast, Friday, November 2, 2018; 9:00 a.m. central time.

Consumer confidence: US consumer confidence surged in October to 18-year high. At almost 138, it is at the highest level since September, 2000.

BP: doubles profit; best quarterly results in over five years; may be able to pay for BHP acquisition in all cash.

Cramer: last night he said the"fiscal year" for many mutual funds ends October 31. Is the fairly regular "October surprise" "manufactured" by Wall Street?

EIA: weekly crude oil inventory report -- link --
  • US crude oil inventories, increased, confirming API data yesterday: increased by 3.2 million bbls; at 426 million bbls, 2% above the five-year average for this time of yeaf
  • refineries are at operating well off their capacity; at 89.4%
  • gasoline production was slightly above my threshold of 10 million bbls per day
  • distillate fuel production right at my threshold of 5.0 million bbls per day
  • total products supplies up 5.4% from same period last year
  • gasoline product supplied relatively unchanged
  • distillate fuel supplied increased by a whopping 14.2% from same period last week
  • jet fuel product supplied down almost 4% from same four-week period last year
Gasoline demand: I'm almost afraid to look. Link here.

Back to the Bakken

Insert sad face here: there are no wells coming off confidential list today.

Active rigs:

Active Rigs68533470193

RBN Energy: a new drill down report on Northeast gas takeaway capacity and basis.
The U.S. Northeast natural gas market has had a volatile few weeks. Regional gas production has surged, averaging 30.4 Bcf/d in the second half of October (2018), up 800 MMcf/d from the first half of the month and up nearly 1 Bcf/d from the September average. Normally (for the past several years), those kinds of supply gains, particularly in a shoulder month and during maintenance season, would have one result: Marcellus/Utica prices taking a nosedive. But that’s not exactly the case this year. Instead, Appalachian spot prices have been on a wild ride the past few weeks, swinging from barely $1.00/MMBtu (or more than $2.00/MMBtu below Henry Hub) on October 8, to over $3.00 (just $0.12 under Henry) on October 24 — the highest levels seen at this time of year since 2013, both in terms of outright prices and basis differentials to Henry Hub. The catalyst is nearly 3 Bcf/d of new takeaway capacity from the growing producing region that has been added in recent weeks, including, most recently, partial service on a brand-new route on Enbridge/DTE Energy’s 1.5-Bcf/d NEXUS Gas Transmission. What does this latest round of expansions and the resulting basis strength mean for the Northeast and its downstream gas markets? In today’s blog, we discuss highlights from our new 26-page report on evolving Northeast gas takeaway capacity utilization and additions, and their effects on price relationships.
For years, the U.S. Northeast gas market has been defined by rapid production growth, perpetual transportation constraints, distressed supply prices and stranded producers — a topic we’ve covered extensively in the RBN blogosphere over the years. These market conditions have had a domino effect on the broader U.S. gas market — turning a traditionally demand-driven market into a net gas supplier for the U.S., flipping regional prices on their heads and prompting massive midstream investment to reverse gas pipelines so they flow out of the burgeoning Marcellus/Utica shale.