The Million Dollar Way (The Bakken Oil Blog): 12/07/18

Friday, December 7, 2018

Short-Cycle Projects = Shale -- December 7, 2018 -- 68-Year-Old Pelagic To Become Mother For 37th Time

From OGJ -- Chevron will increase 2019 CAPEX -- data points:

2019 CAPEX: $20 billion
upstream / downstream
CAPEX will focus on:

the Permian
additional shale and tight development
major capital project at TCO in Kazakhstan (recently posted)

focused on short-cycle projects
more than two-thirds of spend projected to realize cash flow within two years

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68-Year-Old Pelagic To Become Mother For 37th Time

Updates

Minutes later, at 9:21 p.m. CT: wow, it never quits. I try to post a straight news story, no politics, no controversy, and then I get this from a reader?

"Oldest albatross? No. Hillary is still hanging around and she's 71 years old."

But it appears she has indeed laid an egg: she and her husband are now selling tickets to their evening events on "Groupon."

Original Post

Top story of the day, at least for me. From The Guardian: world's oldest known wild bird to become a mother for 37th time.

From the linked story:

In sea mariner lore, an albatross is considered a good omen, and for almost seven decades, one bird has spread generations of blessings across the Pacific Ocean.

Wisdom, a 68-year-old Laysan albatross believed to be the world’s oldest known wild bird, has returned to her home at the Midway Atoll national wildlife refuge for yet another winter – and laid yet another egg to add to the already impressive brood that she has built up over an impressive lifetime.

Biologists with the US Fish and Wildlife Service think the almost-septuagenarian has birthed and raised as many as 36 chicks over the years. Should her latest egg with her longtime lover, Akeakamai, hatch, fledge and take to the open sea, it will be her 37th. Wisdom was first banded in 1956 by biologist Chandler Robbins, who estimated that she was about five years old at the time.

Albatrosses are known for their long life spans and often outlive their researchers – Robbins died in 2017 at the age 98 – but what makes Wisdom unique is that researchers have been able to monitor her habits for so long. She may or may not be the oldest wild bird, but she is the oldest known wild bird, and her habits have been lovingly documented by the fish and wildlife service over social media.

Eight New Permits; CLR Reports Four Completed DUCs -- Nice Wells -- December 7, 2018

Active rigs:

$52.61	12/7/2018	12/07/2017	12/07/2016	12/07/2015	12/07/2014
Active Rigs	64	53	39	64	188

Eight new permits:

Operators: CLR (7); Lime Rock Resources
Fields: Brooklyn (Williams); Hamlet (Divide); Fayette (Dunn)
Comments: CLR has permits for a 2-well Gjorven Federal pad in 21-155-98; CLR also has permits for a 5-well Imsland pad in 31-160-95; Lime Rock has a permit for a Schneider well in 33-143-96;

Four producing wells (DUCs) reported as completed:

34643, 1,651, CLR, Anderson 10X-4HSL1, Crazy Man Creek, t10/18; cum 26K in 21 days;
34642, 1,874, CLR, Anderson 9X-4H, Willow Creek, t11/18; cum 32K in 22 days;
34625, 2,059, CLR, Anderson 7X-4H, Willow Creek, t10/18; cum 33K in 22 days;
34624, 1,740, CLR, Anderson 6X-4H1, Willow Creek, t10/18; cum 26K in 22 days;

Five permits renewed:

Petro Harvester (4): four FLX4 permits in Burke County;
EOG: a Libery LR permit in Mountrail County;

Mars Lander InSight Faked; Landed On A Bakken Oil Pad -- December 7, 2018

I knew it! I knew it!

The recent Mars landing was faked. Mars InSight did not land on Mars. It landed on a large Bakken oil pad. The pad has been staked and covered with "scoria." The oil company has not yet started drilling.

From this site:

Everyone who has traveled through western North Dakota has noticed the colorful reddish layers and brick-like masses of baked and fused clay, shale, and sandstone that color and shape the landscape.

These baked materials, known as clinker (or locally as "scoria"), formed in areas where seams of lignite coal burned, producing heat that baked the nearby sediments to a form of natural brick. Clinker beds typically range from a few feet to 50 feet or so thick in western North Dakota, but much thicker beds are found in Wyoming and Montana.

This is the video of Mars InSight landing on the oil pad about 23 miles northeast of Williston. There are several hints that prove this is in North Dakota. See if you can spot them.

Mars InSight Lands In The Bakken
Obviously the wind was the big giveaway. That is "North Dakota wind." North Dakota wind has its own "fingerprint." UND School of Meteorology catalogues winds from throughout the universe and the "wind" in this video has the North Dakota Wind Fingerprint, #UN.SS.EA.NA.ND.WD.3891092.

Other hints: there are no trees. None. There are only one or two places where there are no trees within NASA's landers, and one of them is North Dakota.

Second: how did the camera crew arrive on Mars to take video of the InSight landing? Impossible. No, the cameramen were on a huge wind tower near Tioga.

Third: in the far distance, on the horizon, starting at 41 seconds one can see a farm house and two out-buildings that are clearly the old Manger homestead near Epping.

Finally, and most convincing, other than the constant wind, there were no clouds. From "Home on the Range:

oh, give me a home
where the buffalo roam, where the deer and the antelope play;
where seldom is heard a discouraging word,
and the sky is not cloudy all day.

Yeah, I know. You're asking, "So, where are the buffalo and the deer and the antelope?"

Well, you don't see sage grouse either, do you. They're nocturnal.

Huge "thanks" to a reader who brought this to my attention.

17-Year-Old New Owner Of Bowling Alley In The Bakken -- Bakken Economy -- December 7, 2018

Burger King, Sidney's newest business, is now open for business at 416 N. Central at the Shops at Fox Run from 6 a.m. to 11 p.m. daily. Sidney was chosen for their newest restaurant because of its high traffic location on Highway 200. There are also plans for expansion into Williston. The Sidney store currently has 55 employees but they are hiring.

Bowling: Just like a massive mechanical pin-setting machine, there are a lot of moving parts when you operate a small business. "It's been really good - I mean, sometimes it can be stressful," says Trent Hunskor, "but it actually is really a lot of fun to do." Hunskor is the owner and operator of Lam's Lanes on Main Street in Newburg. Last year, with the help of his parents, the 17-year-old fixed up the city's beloved 4-lane bowling alley, got up to speed on the nuts and bolts, and flipped on the neon "open" sign. Newburg is NNE of Minot, off the main road about midway between Mohall and Bottineau.

"Mind The Gap" As The Brits Would Say -- December 7, 2018

EIA natural gas report.

North American Rig Location

From D'GIS Consulting. This post will be linked at "Data Links" under "Data Base" and "Maps and Metrics." This one's a good one. A huge thanks to D'GIS Consulting.

It may take a moment to load.

Wage Inflation? Nope. Not Enough Workers? Nope. Economy Booming? Nope. Fed Plans To Raise Rates To Slow The Economy? Yup -- December 7, 2018

... and then folks wonder what the market is tanking. This has nothing to do with tariffs. This is all about the Fed.

From CNBC: job growth falls short of expectations in November.

155,000 payrolls created vs 198,000 estimate -- see below -- using the new numbers, 155,000 is right at "economic stagnation"
nonfarm payrolls increased by 155,000 in November, the Labor Department says
economists surveyed by Dow Jones had been expecting payroll growth of 198,000
the average hourly earnings gain of 0.2 percent fell short of estimates for a 0.3 percent increase
October's jobs count was revised lower from an initially reported 250,000 to 237,000.

Again, Trump saw this coming. I find it amazing he gets these things right. The smartest guys in the room, regarding jobs, wages, the economy, supposedly the "Fed." And the Fed continues to raise rates and plans to raise rates again this month. About the last thing that's needed right now. And Trump was very, very aware of this. Weeks ago.

I quit tracking "jobs" data some months ago. As a reminder, linked at the sidebar at the right:

The Magic Numbers (changed with the Trump administration -- see earlier pages -- at the link -- for previous "magic numbers")

First time claims, unemployment benefits: 275,000 (> 250,000: economic stagnation)

New jobs: 150,000 (< 150,000 new jobs: economic stagnation)

Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters.

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And With This, I Think I Will Call It A Morning -- See You Later Today

I had a dozen pair of very expensive cowboy boots, each with a different exotic leather, including shark, elk, elephant, ostrich, that I had purchased over the years, mostly from a western boot and clothing store at the south end of Williston, on the west side of the street. I'm sure folks remember that store. The first purchases were made in the 1970s; most in the early 80s. Most of the boots had never been worn; all were in pristine condition, and all in original boxes.

About one year ago, I gave them all away -- free, no receipt, no tax write-off, nothing -- I simply walked into a western boot store on Main Street, Grapevine, TX, asked the owner if she would like a dozen pair of incredibly nice boots. She had a huge business in re-selling top-of-the-line boots. All I wanted was to make sure the boots got a nice home. I took photographs of all of them and that was it. Never looked back. I don't know her name; she doesn't know mine.

I never thought about the possibility the boots might have been confiscated had I taken them to California.

And yes, one was python.

Re-Posting: Millennials -- December 7, 2018

Locator: 10001DEMOG.

Updates

May 9, 2023: Gen A (alpha: born after 2010); first mention. Sophia.

April 16, 2022: how Gallup "defines" the generations, or, link here (wiki, slightly different):

generation Z (born 1997 - 2004): 18 - 25 years old. Arianna (2003), maybe Olivia (2007).
millennials (Y) (born 1981 - 1996): 26 - 41 years old. Laura (1983)
generation X (born 1965 - 1980): 42 - 57 years old. Kiri (1979), Josh.
baby boomers (born 1946 - 1964): 58 - 76 years old. Bruce, May.
traditionalists (born before 1946): over 76 years old.

March 2, 2019: two "wings" of Millennials -- generation Y (1981 - 1991) and generation Z (1991 - 2001). Broad definition of "millennials": those reaching adulthood in the early 21st century. That's a very, very wide range. That would almost include some 30-ish year-old parents with teenage millennials -- in other words, millennials raising millennials.

December 8, 2018: see also --

2030 - turning point in US demographics; aging population (defined as >65 years of age)
infoplease

From infoplease:

0 to 19: 80 million: (generation Z, iGen)
20 to 34: 60 million (the millennials)
35 to 54: 80 million (generation X)
55 to 74: 40 million (baby boomers)
over 74: 20 million

December 8, 2018: in the original post I mentioned that it might be wise to take Occasional-Cortex seriously. From wiki:

Post-Millennial is a name given by the U.S. Department of Health and Human Services and Pew Research in statistics published in 2016 showing the relative sizes and dates of [Generation Z, the iGen].

The same sources showed that as of April 2016, the Millennial generation surpassed the population of Baby Boomers in the USA (77 million vs. 76 million in 2015 data), however, the Post-Millennials were ahead of the Millennials in another Health and Human Services survey (69 million vs. 66 million).

Original

Re-posting from an earlier post. Our oldest granddaughter was talking to me about the various generations on our drive back from water polo practice last night. I had forgotten how long the "millennial" generation lasts, for those born between 1984 and 2000. So, those who are as young as 18 to as "old" as 34 years of age in 2018. Wow, that's the group that are now becoming the middle-level managers of US businesses, and soon to take over as CEOs, project managers, etc. Some are being elected to Congress.

Someone mentioned yesterday that it would be wise to take Occasional-Cortex seriously. She may be a ditz, but she will change the conversation, and sometimes that is all it takes. Age 29, born 1989. A real millennial.

Beto: age 46, but first elected to US House in 2012, six years ago, age 40. Born 1972, generation X.

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Demographics

Wiki now has a page on "millennials."

Follows "Generation X"; precedes "Generation Z." Therefore, also known as "Generation Y."

Note: the correct spelling -- two "n's."

For various reasons, I'm going to update the following post by making one change. I'm changing the years of birth for millennials (previous, 1983 - 1998) to 1984 - 2000 (comes pretty close to range that wiki gives).

Millennials. Lots of talk these past few weeks about "millennials." Time to re-look at the "definitions. From an earlier post:

I had forgotten the "definition" of "Generation Z" but vaguely recalled blogging about it:

Definitions:

iGen, generation Z, centennials: 2000 -

oldest iGen: 2000 - 2005 (my thoughts -- teens in 2018)

middle iGen: 2006 - 2011 (my thoughts -- middle schoolers in 2018)

younger iGen: 2012 - (my thoughts -- pre-K in 2018)

millennials, generation Y, 1984 - 2000

younger millennials (part of generation Y, children of baby boomers): 1992 - 2000

older millennials (part of generation Y, children of baby boomers): 1984 - 1991 (in 2017: 26 - 34)

generation X: 1965 - 1983 (no precise dates, late baby boomers)

baby boomers: 1946 - 1964

Definitions (from this site)

iGen, generation Z, centennials: 1996 --

millennials or generation Y: 1977 - 1995 (18-year span)

generation X: 1965 - 1976 (11-year span)

baby boomers: 1946 - 1964 (18-year span)

traditionalists or silent generation: born 1945 and before

Birth years important to me:

2014: youngest iGen
2006: middle iGen
2003: oldest iGen

At age five years of life, for

the youngest iGen, 2019 - Apple's iPhone X
the middle iGen, 2012 - Apple's iPhone 4s
the oldest iGen, 2009 - Apple's iPhone 3g

There was a huge jump from iPhone 3, 4 to iPhone 6, 7, 8 and, then iPhone X. Based on iPhone models, the middle and oldest iGen generations are very similar; however, the youngest iGen generation is almost a new generation, being so much different than older iGen individuals.

I Wonder If Buyer Gets The Mineral Rights? Probably Not -- Friday, December 7, 2018

Largest ranch on the market (as in, up for sale) is in Texas. Link here. Data points:

Lely Ranch near Big Bend State Park
has been owned by a foreign dairy magnate since the 1960s
70,000 acres
West Texas
airstrip; 4,286-foot Cerro Tren Peak; creeks and arroyos
brick headquarters home on the property
45 miles from Marfa

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The Tesla My Wife Promised Me For Christmas

... but perhaps not this Christmas.

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Better Get An Oil Story For This Post

"The US pipeline industry is boomiing." -- contributor over at oilprice.

More accurately, the "US pipeline industry is undergoing huge transformation."

From the lede at the linked article:

Every once in a while, a new technological development shakes up a conservative sector.

In the oil and gas industry, the shale revolution has changed the business in multiple ways. The U.S. has been transformed from one of the world’s leading oil importers into the world’s largest producer of oil and gas. Fracking in the Permian basin has created bottlenecks as the existing infrastructure cannot cope with rising production. Producers are not able to get all the oil and gas to customers, creating a price differential with the WTI benchmark. On average, shale oil producers in the Permian basin receive $10 to $13 dollars less for each barrel compared to WTI levels.

It is not only energy companies that are benefitting from rising production, pipeline manufacturers are also reaping the rewards. Globally, the U.S. ranks #1 in pipelines planned and under construction. Most of the oil and gas pipelines planned for 2019 and 2020 will connect the Permian Basin with consumers and export terminals in the Gulf of Mexico. However, the additional capacity will create another problem by moving the bottleneck from transportation to the facilities on the coast.

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.

Words matter: when Art Berman said "shale was a retirement party" that pushed more talk of $100-oil and folks may have acted on that talk. Now that we see what the "shale revolution" has wrought, we have $50 oil.

December 7, 2018 -- A Day That Will Live In Infamy

Pending today:

November jobs report.

EIA natural gas report.

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When Sage Hits The Fan

Trump To Dump Sage

Before folks get too upset with all this, remember, Barack Obama gave carte blanche to wind farm operators to kill hawks and eagles.

There will be a ton of stories on Trump's proposed action. It will be interesting to see if he can take the heat. This could be the "yellow vest" moment for US faux environmentalists.

First example from CNN: huge picture of beautiful sage grouse. Then the story

The Trump administration moved to amend Obama-era protections on the habitat of the sage grouse bird, potentially opening up vast areas of land in the western United States for oil and gas drilling.

According to The New York Times, the new plan would reduce the bird's habitat to 1.8 million acres, and would make 9 million acres of land available for "drilling, mining and other development."

"The BLM recognizes the authority of the individual states in managing wildlife and that plans at the federal level for managing habitat should not be one-size-fits-all," said Heather Feeney, spokesperson for the Bureau of Land Management, in a statement.

Environmental groups were swift to criticize Interior Secretary Ryan Zinke and the department's proposed changes.

Why do I get the feeling that Ryan is trying to save his job?

Federal vs states rights. And a lot of folks feel that the states can manage their backyard better than Washington, DC. I tend to agree.

By the way, from a science / biology point of view, there's much more to this story than is being reported.

The Market, Energy, And Political Page, T+ 31 -- December 7, 2018

US becomes net exporter of oil, fuels for first time in decades: The WSJ.

I had several posts on this subject last night. Why would I add yet another story that says the same thing?

Because of the sub-headline: fracking boom briefly propels US to symbolic milestone of "energy independence."

And another opportunity to post one of my favorite YouTube clips:

What a doofus
Back to the linked article:

The shift to net exporter from importer, detailed in weekly data from the U.S. Energy Information Administration, may be short lived. Still, it demonstrates that America is moving closer to achieving “energy independence” as the shale revolution makes the country one of the world’s top oil producers and reshapes global markets.

Reducing American dependency on oil imports has been an intense focus of executives and presidents from Jimmy Carter to George W. Bush, none of whom anticipated a renaissance in U.S. drilling.

Wow, mentioning "previous presidents" and Jimmy Carter, specifically, is crazy talk.What do previous presidents have to do with guys like Harold Hamm, Mark Papa, Aubrey McClendon, geologists, pad managers, roughnecks, truck drivers, surface owners, state and local governments -- those who really made this possible?

Mentioning the likes of Jimmy Carter in the lede for an article like this is crazy talk and demeans the real "heroes."

Irony: The most anti-Big Oil president in US history couldn't stop this train:

Pearl Harbor-- December 7, 2018

Miscellaneous screenshots.

It's a bit hard to see on this graph, but Canadian CBR now exceeds Bakken CBR.

CLR Reports Another Huge Wiley Well Today -- December 7, 2018

One one well coming off the confidential list today -- Friday, December 7, 2018:

33108, 1,547, CLR, Wiley 12-25H, Pershing, 4 sections, 51 stages; 8.3 million lbs, t7/18; cum 121K 10/18; the Wiley wells are tracked here:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2018	31	23410	23403	9129	50143	45479	4412
BAKKEN	9-2018	30	27645	27605	16636	59202	53819	5113
BAKKEN	8-2018	25	22053	22134	14660	46372	43165	3008
BAKKEN	7-2018	31	35281	35198	34250	73203	68781	4174
BAKKEN	6-2018	15	12662	12585	15645	23509	22039	1301

Active rigs:

$51.57	12/7/2018	12/07/2017	12/07/2016	12/07/2015	12/07/2014
Active Rigs	63	53	39	64	188

Price of neighborhood regular unleaded gasoline: $1.89.

RBN Energy: major fundamental shifts swing crude oil prices in Canada.

For months, the crude oil market had Canada figured out. Production was growing, bit by bit.

Pipelines were maxed out. Railcars were hard to come by but were providing some incremental takeaway capacity. Midwest refineries, a big destination for Canadian crude, went in and out of turnaround season, moving prices as they ramped-up runs. Overall, the supply and demand math was straightforward also, tilted towards excess production.

Canadian crude prices were going to continue to be heavily discounted for the next year or two, until one of the new pipeline systems being planned was approved and completed. Western Canadian Select (WCS) — a heavy crude blend and regional benchmark — was averaging at a discount to West Texas Intermediate (WTI) near $40/bbl in November, dragging down Syncrude prices with it.

As the market was settling in for a long, cold winter in Canada, a bombshell dropped:

Alberta’s premier announced on December 2 (2018) that regulators would institute a mandatory production cut, taking 325 Mb/d of production offline, and that the government would invest in new crude-by-rail tankcars. That announcement has had a massive impact on prices, with WCS’s differential narrowing to $18.50/bbl most recently. In today’s blog, we look at several catalysts for the recent swing in Canadian prices, and how the recent governmental intervention will impact differentials.

The fact that Canadian crude has been heavily discounted to WTI at the Cushing (OK) hub is nothing new. We most recently discussed these price differentials and analyzed the price breakdown last spring.

Canadian prices have been subject to massive discounts due to a severe lack of takeaway capacity. WCS has been steadily trading at a double-digit discount to WTI for years due to a limited number of outlets for barrels.

WCS had averaged a discount of $26/bbl in 2018 before widening even further to $50/bbl on October 11.

Syncrude, WCS’s lighter brother (red line), had been averaging a $5/bbl discount before blowing out to $30/bbl in October and $34/bbl in early November. During that time, there was a myriad of bad news engulfing Canadian crude differentials.

The Keystone XL pipeline project, which finally appeared to be heading for daylight, was hit with another ruling from a federal judge to halt construction. Canadian producers Canadian Natural Resources, MEG Energy, Cenovus Energy and ConocoPhillips all announced they were going to cut back on some production until prices improved. And many of those same producers also announced they had signed year-or-longer commitments to ship crude via rail, signaling that they were worried enough about long-term pipeline constraints that they would roll the dice on more expensive, binding take-or-pay rail deals.

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Friday, December 7, 2018