Thursday, February 28, 2019

Peak Oil? What Peak Oil? Global Crude Oil Supply -- A Glut -- February 28, 2019

Link here.


Overhang.

To say the least.

72 million bbls. 

On the producer side, OPEC inventories remain elevated, up 15 million year-on-year. Saudi says it is their country's responsibility to keep the oil market balanced -- if so, how did they let this get out of control?
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Did Elon Musk Make His BIG Announcement Yet -- The Announcement Was Supposed To Have Been Made At 5:00 P.M ET -- February 28, 2019

Updates

Later, 9:02 p.m. CT: yes, I guess that was the "big news." Elon Musk closing showrooms. Oh, and, finally bringing the $35,000 Model 3 to market. Link at WSJ.

Original Post 

Link here.

Tesla website down. Clicking on Tesla website directs one to a "teaser" page.

All orders are suspended pending the announcement.

Apparently Tesla announced a $35,000 Model 3, and plans to close most physical stores and galleries. It will be interesting to see if the Tesla store in downtown Southlake, TX, across from the Apple store.

Closing "all" / "most" physical stores doesn't seem to be a good marketing mood, but then, again, what do I know? I enjoyed going into the Tesla showroom in Southlake, and it must have given folks a "warm feeling" to know there was someone they could to in person about the car. So, shutting down showrooms seems to be nothing more than a huge admission that the company needs to find cash wherever possible.

By the way, the company has a-nearly-$1 billion loan due tomorrow, Friday, March 1, 2019.

But it looks like that was the "big" news. This from CNN.
To achieve the $35,000 price tag, Tesla said it was shifting sales worldwide to online only. It was also changing its return policy, allowing customer to bring back a car within 7 days or 1,000 miles for a full refund. 
When asked by a reporter whether he anticipated Tesla will turn a profit during the first quarter of 2019, Musk said it isn't likely — but Tesla could be in the black by Q2. 
Tesla had a rough 2018 after months of manufacturing hangups and delays rolling out the Model 3. But the company surprised investors by posting back-to-back quarterly profits at the end of 2018. 
But it hasn't all been good news: Tesla announced it was laying off about 7% of its full-time workers in January. 
So, I have no idea what's going on.

In anticipation of the announcement, Tesla was up $5/share in trading during the day, but after-hours, after the announcement, shares dropped $11.
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Making American Great -- First-Ever Deployment Of Borstar Polyethylene Technology In North America -- February 28, 2019

From Rigzone:
Bayport Polymers LLC (Baystar) reported Thursday that it has officially broken ground on its new 625,000 metric ton-per-year polyethylene (PE) unit at its facility in Pasadena, Texas.
According to Baystar, the unit will mark the first-ever deployment of Borstar PE technology in North America and will produce enhanced PE products for demanding applications. The company, a 50/50 joint venture owned by Total Petrochemicals and Refining USA, Inc. and the Borealis AG-NOVA Chemicals Inc. JV , stated that it expects the PE unit to start-up in 2021.
Baystar is also building a 1 million ton-per-year steam cracker in Port Arthur, Texas, that will process ethane and supply feedstock for its existing and new PE units at Pasadena.
“This new Borstar unit will more than double the site’s capacity ..."
Borstar? Apparently a proprietary plastic. 

Meanwhile, in Alaska, too many pipeline? The state might give up North Slope natural gas pipeline, LNG export terminal. Link here. Why? Despite marketing efforts and about $1 billion in engineering and environmental work, the project has not attracted customers and faces increasing competition from other LNG projects. The project at risk was a proposed 800-mile, 42-inch-diameter gas pipeline from the North Slope to an LNG export terminal on the Kenai Peninsula in southcentral Alaska.

Natural gas reserves on the North Slope? Estimated to be 35 Tcf.
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XTO With Two New Permits; Twenty-Two Permits Renewed -- February 28, 2019

MDU: Knife River acquires Texas aggregate deposits. Press release.
  • 570 acres of land near Marble Falls, TX
  • seller: Capitol Aggregates Inc
  • Honey Creek property has access to a major rail line
  • Knife River anticipates building a rail loading facility

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Back to the Bakken

Active rigs:


2/28/201902/28/201802/28/201702/28/201602/28/2015
Active Rigs67574138119

Two new permits:
  • Operator: XTO
  • Field: Siverston (McKenzie)
  • Comments: XTO has permits for a two-well Arlys pad in section 31-150-97 in Siverston oil field
Twenty-two permits renewed:
  • Hess (9): a mix of EN-Weyrauch B permits, SC-JW Hamilton permits, the former in Mountrail Country, and the latter in Williams County
  • Whiting (5): five Tarpon Federal permit in McKenzie County
  • XTO (4): four Henry Federal permits in McKenzie County
  • Texakota (2): a Hemsing permit and a H. Borstad permit, both in Williams County
  • MRO: a Satrum permit in Dunn County 
  • EOG: a Hardscrabble permit in Williams County
One permit canceled:
  • Luff Exploration: a Charles permit in Bowman County
Two producing wells (DUCs) reported as completed:
  • 29401, 518, Lime Rock, State Gresz 5-26-35H-143-98, Hungry Man Butte, t2/19; cum --;
  • 29399, 706, State Gresz 3-26-35H-143-98, Hungry Man Butte, t2/19; cum --;
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Random Update Of An Old Petro-Hunt USA Well In Charlson Oil Field -- February 28, 2019 -- Coming Up On One Million Bbls Crude Oil

Updates

March 13, 2019: mystery solved; see this post. Hubbert's peak oil theory states that once a well starts to decline it never recovers. Another nail in that coffin.


March 13, 2019: look at the jump in production -- not re-fracked according to FracFocus; nor is there any sundry form suggesting this well was re-fracked:

Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-2019311866018742503324830176766939
BAKKEN12-2018159183833030481068490861496
BAKKEN11-20180000000
BAKKEN10-20181232613644743708758111197
BAKKEN9-20183092779448198516977142652503
BAKKEN8-2018319216904021161796017618126
BAKKEN7-201831972498732209178901759579
BAKKEN6-201830106501110228551646116076176


February 28, 2019: the original note was posted in late 2017 (see below). I was curious to see how this well was doing. According to FracFocus this well has never been refracked. The NDIC file's last sundry form was dated February 18, 2016.

The well:
  • 20342, 1,430, Petro-Hunt, USA 153-95-4B-9-1H, 33-053-03453, Charlson, t11/11; cum 910K 12/18; 
    • 1,370,174 mcf = 228K boe
    • 910K bo crude oil
    • total boe: 1.1379 million boe 
Look at the production profile since 7/17: a few months this well was producing about 9,000 bbls each month, but then taken off one for about two months, and then produces the equivalent of 18,000 bbls in one month.

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-2018159183833030481068490861496
BAKKEN11-20180000000
BAKKEN10-20181232613644743708758111197
BAKKEN9-20183092779448198516977142652503
BAKKEN8-2018319216904021161796017618126
BAKKEN7-201831972498732209178901759579
BAKKEN6-201830106501110228551646116076176
BAKKEN5-20183111129105732472170021670482
BAKKEN4-201830111911139025491651415353952
BAKKEN3-2018311171011530243316543163270
BAKKEN2-201828111341123024701623115528508
BAKKEN1-2018311272412821290218163179470
BAKKEN12-20173113263129402992176331734374
BAKKEN11-201730131171345431081676982098351
BAKKEN10-2017311443914496328219217019001
BAKKEN9-2017301267412004368216658016477
BAKKEN8-20174501690858618390
BAKKEN7-20173151755311460810878920

As soon as one looks at the updated graphic, one sees exactly what has happend.
The index well -- the one we are looking at is #20342.

The three neighboring wells:
  • from the north: 
    • 32533, fracked/tested 12/18; huge production -- 15K in first 23 days;
    • 32532, fracked/tested 12/18; huge production -- 16K in first 16 days; 
  • from the south:
    • 30685, fracked/tested 8/17; huge production -- almost 200K in less than a year and a half;
So, again, another example of an older well that keeps on jumping in production when neighboring wells are fracked. Several years ago, one operator suggested that studies showed that these examples worked best when at least three neighboring wells were fracked simultaneously around an older well. If so, the study must have been based on very little data; the Bakken was not quite old enough to have had many examples of three neighboring wells being fracked simultaneously around an older well when that "study" was cited. Whatever. 

Anyway, here's the updated graphic:


Hubbert said his theory applied not only to oil fields and basins, but also to individual wells. Once a well started to decline, it had reached its own "peak oil" and would never show increased production. And so it goes.

Original Post

The well:
  • 20342, 1,430, Petro-Hunt, USA 153-95-4B-9-1H, 33-053-03453, Charlson, t11/11; cum 747K 8/17;
Based on data from FracFocus, this well has never been refracked.

Production to date:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-20173151755311460810878920
BAKKEN6-2017305032503240573026873220
BAKKEN5-20173150544857418896227176029
BAKKEN4-201730533756095278791852260
BAKKEN3-20173157065469480897287560
BAKKEN2-20172853435422447830381080
BAKKEN1-20173166186749572932191050
BAKKEN12-201627495849284057677745641
BAKKEN11-20163059816106513851183020
BAKKEN10-20163161336120552941291960
BAKKEN9-20163061735929557943592260
BAKKEN8-20163168987184617106639790660
BAKKEN7-2016286046583048277987493105
BAKKEN6-201630642465895337351707765
BAKKEN5-20163167966533558819379770
BAKKEN4-20163069467205607903888280
BAKKEN3-20163173017386622821080000
BAKKEN2-2016246513615762677797172415
BAKKEN1-201623570458626889394907899
BAKKEN12-20153179458148794146731437086
BAKKEN11-2015308636843394115703154930
BAKKEN10-2015308957914610541434513804345
BAKKEN9-2015308520821368116447103415896
BAKKEN8-2015318888915379616914618010518
BAKKEN7-201531108631100213332018419081886
BAKKEN6-2015301029510306104415883156730
BAKKEN5-20153111035107078671575215291245
BAKKEN4-20153011438115408871848796808597
BAKKEN3-20153110827109417101207611640219
BAKKEN2-2015289185913754599069304406
BAKKEN1-201531123961279674625669232872165
BAKKEN12-201431144581453310391560872398279
BAKKEN11-20141556755310700666006569
BAKKEN10-201431152601577032715982104885277
BAKKEN9-2014963405735189645343902000
BAKKEN8-20140000000
BAKKEN7-20140000000
BAKKEN6-20140000000
BAKKEN5-20140000000
BAKKEN4-20142000000
BAKKEN3-20140000000
BAKKEN2-20140000000
BAKKEN1-20141236873884267605105967
BAKKEN12-2013319592969374615683015655
BAKKEN11-201330961793336721911890969818
BAKKEN10-20133110431103507371571097765718
BAKKEN9-20133010349101607091555485896755
BAKKEN8-20133110993118577961953925919063
BAKKEN7-20133111322106858322078811820453
BAKKEN6-201330113671172685720668146918989
BAKKEN5-201331122961179289921189240418569
BAKKEN4-201330125591262989922272357218490
BAKKEN3-201331132391323495720581148105554
BAKKEN2-201328125831282795620032186461190
BAKKEN1-20133114595144421100248271213812472
BAKKEN12-2012311554815648114726279511120951
BAKKEN11-20123016056159161259281491214415795
BAKKEN10-20123117610177671331310201963611167
BAKKEN9-20123018315183661573357041397721517
BAKKEN8-2012312136921695184035574296215735
BAKKEN7-2012302113020982165435137267478180
BAKKEN6-2012302467924635201239531365682753
BAKKEN5-201231270392753019213779637465114
BAKKEN4-2012302874228340208238850318876753
BAKKEN3-20123128251280471752367981798118601
BAKKEN2-2012292550125435138130823280372582
BAKKEN1-2012313003430262155340472345735689
BAKKEN12-20113133358333241563404522146218774
BAKKEN11-2011142128420366117724965024867
BAKKEN8-20110000000

The graphic:


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Someone Must Be Rolling Over In His/Her Grave -- February 28, 2019


Wow, the Founding Fathers really had their "act" together.

I wonder if he will be campaigning in West Virginia, Kentucky, Ohio, et al, for Trump in 2020. 

Upon hearing that news --

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QEP Update Following The Failed VEAC Deal -- February 28, 2019

QEP today:


News article, link here:
Colorado-based QEP Resources Inc.'s board of directors started a comprehensive review of alternatives to maximize shareholder value, which may result in a merger or divestment of the company.
The company will be in talks with the fund manager Elliott Management Corp. and other unnamed companies interested in a potential deal, according to a Feb. 20 news release. In January, Elliott offered to acquire the entire company at $8.75 per share in cash.
QEP:
  • 236 million shares outstanding x $9 = $2.1 billion
  • currently trading at about $7.75
  • market cap: $1.82 billion
  • enterprise value: $4.37 billion
  • total debt: $2.51 billion
  • cash: $0 
  • Bakken: 2.5 million bbls crude oil over three months = $0.5 billion annually
  • Permian: 5 million bbls crude oil over three months = $1 billion annually
The Permian:
  • 50,000 acres
  • at $20,000 / acre worth at least $1 billion
Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on anything you read here or think you may have read here.

Disclaimer: I often make simple arithmetic errors; I often misread things. I have no degree in finance. I have formal education or experience in the oil and gas market. I do have experience pumping my own gasoline at the local service station.
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Monopoly -- 2019 -- Numbers


$5,000 Cash
301AA -22
302BA
303CA -29
304DA -19

$5,000 Groceries
305AB -26
306BB-20
307CB -19
308DB

$2,000 Gift card
309AC
310BC -21
311CC -21
312DC -- 23

$2,000 Fandango movies
313AD -22
314BD -18
315CD
316DD --23


$1,000 Cash
317AE - 10
318BE
319CE -21
320DE -23

$1,000 Gift card
321AF
322BF --25
323CF --18
324DF -26


$500 Grill and groceries
325AG -- 33
326BG --18
327CG
328DG - 23

$500 grocery gift card
329AH -18
330BH -31
331CH - 29
332DH

$1 million cash
333AI -18
334BI -19
335CI -
336DI
337EI -17
338FI - 26


$1 million vacation home
339AJ -22
340BJ -30
341CJ
342DJ -17
343EJ
344FJ - 23

$5 Cash
345AK - 27
346BK - 26
347CK - 27
348DK



$5 Grocery Gift Card
349AL --16
350BL --24
351CL
352DL  -6


$10 Cash
353AM
354BM -6
355CM -19
356DM  -21

$10 Grocery Gift Card
357AN - 20
358BN
359CN --15
360DN  - 26

$20 Cash
361AO -24
362BO
363CO -29
364DO- 13

$25 Cash
365AP
366BP -21
367CP --19
368DP - 22


$25 Grocery gift card
369AQ -20
370BQ -26
371CQ -28
372DQ

$50 Grocery gift card
373AR -23
374BR
375CR -18
376DR - 28

$100 Cash
377AS - 24
378BS - 22
379CS
380DS  -21


$100 Grocery gift card
381AT
382BT -19
383CT -17
384DT-- 24


$200 Family picnic
385AU -L,8
386BU -23
387CU - 9
388DU

$300 Wireless headphones
389AV -10
390BV -22
391CV
392DV -22


$100,000 cash or boat
393AW --17
394BW
395CW --21
396DW - 26
397EW

$30,000 pair of jet skis
398AX
399BX -34
400CX -20
401DX
402EX -29

$25,000 Home theater
403AV
404BY
405CY -22
406DY -22
407EY - 25

$20,000 College tuition
408AZ
409BZ - 22
410CZ -24
411DZ
412EZ -15


$10,000 Cash
413A$ -20
414B$ -25
415C$ -25
416D$
417E$

$7,500 Family vacation
418A# -36
419B#
420C#
421D# -23
422E# -18



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Natural Gas Fill / Draw -- February 28, 2019

Link here.


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Random Update Of An EOG Austin Well -- February 28, 2019

I think I've posted this one earlier.

This page won't be updated.

This is a pretty nice jump in production for mineral owners. Neighboring wells are being fracked. This well is far to the east in the Bakken. Look at cumulative production to date, over 700,000 bbls and this was a short lateral. Wells on conf in the immediate area: #32718, #32719, #32720.

The neighboring well that was recently fracked:
  • 32718, conf, EOG, Austin 465-1113H, Parshall, t--; cum --;
DateOil RunsMCF Sold
12-2018213114565
11-2018213493691
10-2018292125218
9-2018427289120
8-201870931402

The well:
  • 17075, 2,310, EOG, Austin 9-11H, Parshall, t6/08; cum 732K 12/18;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20183151055160396209418357
BAKKEN11-20183042884275286137211280
BAKKEN10-20183137383674461105978918
BAKKEN9-2018127577914352511580
BAKKEN8-20180000000
BAKKEN7-20180000000
BAKKEN6-20180000000
BAKKEN5-201815616635226745570
BAKKEN4-2018301324132076147212280
BAKKEN3-2018311381138154147312156
BAKKEN2-2018281261119948133311060
BAKKEN1-2018311413147780149912470

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The Math Page

Pretty soon Sophia can help me check the math of some of these posts.

Calculator
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Thursday, February 28, 2019, T+57 -- In Progress

Wow, so much going on today, -- gonna be a great day --

So I don't forget:
  • UNP:
  • 4Q18 GDP didn't disappoint:
  • Saudi Arabia cuts crude oil supply to US gulf: link here. Link here.
  • US oil imports at 23-year low; output hits another record. Link here.
  • Jobs.
  • Natural gas.
  • Weather.
So, let's get started.

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.

UNP: pays 2%; trading near its 52-week high. 4Q18 earnings reported January 24, 2019 --
  • record fourth quarter net income of $1.6 billioin or $2.12/share, which represents 29 and 39 percent increase, respectively when compared to 4Q17
  • guidance for 2019 -- note that UNP is projecting less frack sand to be shipped:

Weather: one of the worst winters on record in the US northern tier. Haven't heard a word about global warming. But this summer, one hurricane and the news will blame it on global warming.

Jobs: link here --
  • increased more than expected
  • prior week revised to show more than 1,000 more applications received than previously reported
  • forecast: 220,000 claims
  • actual: 225,000 claims
  • four-week moving average: fell 7,000 to 229,000 (the partial government shutdown created the volatility)
  • number of people on unemployment rolls increased to a 10-month high, suggesting some slowing in the labor market
  • combine that with recent Fed remarks on likelihood of "being patient" on rate increases
GDP, 4Q18, link here:
  • US economy slowed to 2.6% but "it still shows lots of muscle" -- MarketWatch
  • 3Q18: 3.4%
  • 2Q18: 4.2%

Saudi Arabia cuts crude oil supply to US gulf: link here. Link here. I knew they had "cut," but I did not realize it was this much. Wow! Saudi Arabia has cut by more than half from a year ago its crude oil deliveries to the US gulf coast.
  • This month (February, 2019): 1.6 million bbls (that's for the entire month)
  • One year ago, February, 2018: 5.75 million bbls
But then look at this:
"We could see Saudi oil imports declining to zero into the U.S. Gulf Coast," said Andy Lipow, president of Lipow Oil Associates in Houston. U.S. President Donald Trump’s recent comment via Twitter that oil prices are too high won’t stem the current declining trend, as "OPEC and non-OPEC members feel prices are too low, and they will do what it takes to put the market back in balance." 
Government data showed Wednesday that total Saudi crude imports to the U.S dropped to 346,000 barrels a day last week, the lowest in data going back to 2010.
But because Obama killed the Keystone XL, US refiners will still need Saudi Arabian heavy oil. 

US oil imports at 23-year low; output hits another record. Link here. Data points:
  • on a weekly basis, the lowest in 23 years
  • lowest level since 1996
  • 5.92 million bopd
  • down 1.61 million bopd
  • Saudi Arabia: fell to 346,000 bopd
  • domestic crude oil production "skyrocketed" to 12.1 million bopd
  • Saudi Arabia says oil markets to "balance" by April, 2019
Also from the report:
Using a 4-week average, U.S. imports of Saudi crude dropped to the lowest since May 1987. Saudi production collapsed between 1985 and 1986, at one point flirting with the 2 million barrel-a-day mark, as the kingdom lowered its production to defend higher oil prices.
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The Music Page

Lady Gaga successfully transitioned from music to the silver screen. Whether she has a repeat performance on the Big Screen, hard to say. Madonna sort of did it. Cher to some extent also succeeded. Barbra Streisand did.

Having listened to the Amy Winehouse catalogue (Amazon music) I am convinced that Amy could have been and should have been the next diva to get an Oscar role in a big-budget movie. Her "friends" let her down.

Having said that I'm not a big believer in the "woman is victim" myth. I am of the Camille Paglia school on this issue. With 426 million views:

Back to Black, Amy Winehouse
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