Wednesday, February 20, 2019

Concho -- February 20, 2019

I do not follow Concho. I have no interest in it. It was simply a coincidence that I used Concho as an example in a blog post earlier today to see that Concho comes up once again in discussion.

Over at Bloomberg via Rigzone: Concho may be too big to sell.


To retire three older coal-fired power units. Link here.

Global Warming Slams Much Of The US

Link here. Apparently much of Washington, DC, was shut down including most Federal offices. I did not even notice. I would have completely missed it had I not seen the Bismarck Tribune story.

And in Minnesota, link here:

Global Warming -- Powerline

Link here.

Global Warming -- The Desert

Notes from an individual who lives in Arizona and posts incredibly wonderful pictures of the desert. Photographs at today's post are particularly beautiful.  Two notes from the post regarding all the snow they got earlier this year:
I took these pictures on New Years Day, east of Phoenix.  It was bitter cold.  The current forecast is for this area along Hwy 87 to receive well over a foot of snow in the next 48 hours.
I used to live in Sedona, when CO2 was below 350 PPM.  Twenty inches of snow there is incomprehensible.  I never saw more than two or three inches.

BR With Four New Permits -- February 20, 2019

API: weekly crude oil inventories -- link here. A build of 1.26 million bbls vs an expectation by analysts of a build of 3.08 million. The EIA report will be out tomorrow.

Active rigs:

Active Rigs66564038127

Four new permits:
  • Operator: BR
  • Field: Sand Creek (McKenzie)
  • Comments: BR has permits for a 4-well Outlaw Gap / Gladstone Gap pad in SESE section 23-153-97 in Sand Creek;
Two permits renewed:
  • Whiting: a Privratsky permit in Stark County
  • Slawson: a Wolverine Federal permit in McKenzie County
Eight permits canceled:
  • Slawson (6): six Osprey Federal permits, all in Mountrail County
  • XTO (2): two Johnsrud permits, both in McKenzie County
Two producing wells (DUCs) reported as completed:
  • 33538, 1,415, CLR, Hendrickson Federal 14-25HSL, Elm Tree, t1/19; cum --
  • 35432, n/d, CLR, Syverson 4-12H, East Fork, t--; cum --;

Keeping Up With The Joneses -- Nothing About The Bakken But .... February 20, 2019

From SeekingAlpha:
Devon Energy Corporation plans to divest its Barnett shale assets in Texas and oil sands operations up in Alberta.

In conjunction with its fourth-quarter earnings release for 2018, Devon Energy Corporation announced a major strategic change going forward. The E&P company is going to separate its gas-oriented Barnett shale and oil sands operations from its liquids-oriented unconventional assets in America (specifically the Delaware Basin, STACK, Powder River Basin, and Eagle Ford plays).

Back To The Bakken -- February 20, 2019 -- What's Not To Like?

WTI: whoo-hoo! Over $57 in early trading.

Permian: to hit new milestone next month (March, 2019) -- 4 million bopd. Link here.

The Bakken by a "nose" (or should we say a "bbl") over the Eagle Ford in daily production.

Wednesday, February 20, 2019, T+49 -- The Good, Bad, And The Ugly

Bad: Minnesota: the entire state is pretty much closed today due to global warming.
Winter advisories across the state have shut down almost everything. I guess this gives Amy a chance for a do-over announcing her candidacy for president. Or not.
Ugly: Revolving door at Tesla: over at The WSJ
Tesla replaces top lawyer just after two months in latest major departure. Veteran trial lawyer Dane Butswinkas returns to a law firm, while company insider Jonathan Chang takes his place.
Ugly: Brexit: Theresa May -- tick, tick, tick -- who will go first? Maduro or Theresa May? Over at the WSJ

Good: Bullet train to nowhere: over at The WSJ.
Federal government to cancel funds for California high-speed rail. Trump administration halts $928 million in aid; Gov. Newsom calls move ‘retribution’ over wall suit.
“And by the way, I am not interested in sending $3.5 billion in federal funding that was allocated to this project back to Donald Trump, ” Mr. Newsom, a Democrat, said in his State of the State speech.
Those remarks were widely interpreted as an admission the system wouldn’t be completed as designed, though Mr. Newsom has said his remarks were misinterpreted.
Comment: don't these guys ever learn?
Ugly: The A380: from "jumbo" to "dumbo." Over at The WSJ. World’s largest passenger plane was hurt by misjudged market trends, internal dysfunction and production problems.
When Airbus launched the A380 superjumbo in 2000, it touted the two-deck plane as “the Eighth Wonder of the World.” Instead, the world’s largest passenger plane exposed dysfunction inside the European aerospace company and now offers a textbook case of a company misjudging its market and losing big.

Airbus has sunk at least $17 billion into the project yet sold fewer than half of the 750 superjumbo jetliners it promised to deliver by the end of this year. On Thursday Airbus said it would cease producing the 555-seat plane at the end of 2021.

By then, Airbus expects to have sold 251 A380s—one more than its original break-even target, set before production delays added billions of dollars in costs. At its peak, A380 deliveries never reached 5% of annual Airbus deliveries—less than half its target.
Comment: Dysfunction in the EU -- a consortium led by the strike-prone German and French workforce -- I'm shocked, shocked!
Ugly: A major new branch of the service? Never mind.
Typical of the president, he flipped on this one. The "space force" will be part of the US Air Force. He found out later (he obviously knew all the time but facts don't matter) that he can't do this unilaterally; it requires Congressional approval and, of course, that won't happen on his watch. Over at The WSJ.
Good: Making America great, just as President Trump promised, predicted:
Honda will shift some UK Civic production to North America. Over at The WSJ. England plant that produces 150,000 cars/year will close amid Brexit uncertainty. I'm hearing through the grapevine the Honda move is not unique; other companies are struggling with the uncertainty of Brexit. Companies have difficulty dealing with uncertainty. International companies with headquarters and/or operations in the UK are now hedging their bets. Honda? Moving out. By the way, my favorite of all time: my 2012 Honda Civic. Bought in Williston, ND, late 2011. I recall that the 2012 got bad reviews but I certainly didn't notice, but then again, I don't know much about cars.


Later, 8:26 p.m. Central Time: from Chesto over at The Boston Globe --

In another WSJ scoop, Amtrak is exploring the possibility of curtailing service on its long-distance routes -- which incur the railroad’s biggest losses -- to focus on service along more densely populated lines similar to the Northeast Corridor.
According to the Journal: "The goal is to revamp the way Amtrak runs trains along the aging network of national routes it already maintains, with more frequent service between pairs of cities in the fastest-growing parts of the country, such as Atlanta and Charlotte, N.C., or Cleveland and Cincinnati. . . .
But that new service could come at the cost of curtailing some long-distance routes, where storied trains like the Empire Builder and the Southwest Chief have small but fervent bases of support and lineage stretching back to the golden age of railroads."
Bad: Amtrak plans could negatively impact long-haul. Over at The WSJ.
But that new service could come at the cost of curtailing some long-distance routes, where storied trains like the Empire Builder and the Southwest Chief have small but fervent bases of support and lineage stretching back to the golden age of railroads.
Comment: This is why the Founding Fathers made sure "fly-over" country had as many US senators/state as the East Coast.

#12 in the map above -- 

City of New Orleans, Arlo Guthrie

Most Important Story Of The Week -- Geopolitical Energy -- God Smiles On The US Refiners -- February 20, 2019

The big stories.

Saudi Arabia on the ropes.

From Blomberg via Rigzone, new Brazil production adds to OPEC headache. Remember: just a few years ago folks were wringing their hands over inadequate off-shore exploration and production. Well, here goes. Data points:
  • Brazil, offshore
  • the Tartaruga Verde field (the "green turtle")
  • the giant P-67 floating oil production vessel; lit its flare tower earlier this month
  • should produce 150,000 bopd, and then plateau
  • a second platform, P-76 also 150,000 bopd should come on line later this year 
  • then, P-68 and P-77 in 2019, 
  • and, then, between 2020 and 2023: ten more 
  • let's see, that's fourteen (14 * 150,000 = 2.1 million bopd -- as much as the Bakken is predicted to produce at its peak)
  • marked the start of a Brazilian supply boom that's poised to challenge OPEC's efforts to balance the global market
Bloomberg has not forgotten about the Bakken:
The Brazilian surge, combined with more oil from shale fields from Texas to North Dakota, is set to create a headache for the Organization of the Petroleum Exporting Countries. In the worst-case scenario, it may force Saudi Arabia and Russia to roll their production cuts over into the second half of the year, testing the strength of the Riyadh-Moscow oil relationship.
Much, much more at the link.

And then, look at this: God is smiling on the US refineries! LOL.

Apparently this new Brazilian oil, at 27 degrees API, is slightly heavier than UL (Russian - Urals Light) and AL (Saudi Arabian Light). 
This new source of heavy oil from Brazil will easily displace imports from Saudi Arabia and may, in fact, impact Canadian exports.

In fact, Bloomberg also noted that:
The Brazilian surge comes at the right time as the world’s oil market is hungry for the kind of oil that the pre-salt fields pump: medium-heavy crude, ideal for refining into diesel. The production cuts in OPEC and Canada, coupled with American sanctions on Iran and Venezuela, have significantly reduced the availability of medium-heavy crude, pushing its price higher relative to the global benchmark.

Random Look At A CLR Holstein Federal Well In Elm Tree -- February 20, 2019

This is an interesting case study. This page will not be updated.

The well:
  • 32294, 2,320, CLR, Holstein Federal 13-25H, Elm Tree, t11/16; cum 634K 12/18;
The CLR Holstein Federal wells are tracked here.

If you go to that post, you will note at least two things:
  • there is an incredible amount of activity in this area; it is difficult to follow the timeline for these wells
  • #32294 was one of the earliest Holstein Federal wells drilled
By now, this well should show the typical dreaded Bakken decline. So let's check. Here's the full production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Usually, by the sixth or seventh month, we see a significant decline in the production of a typical Bakken well. Even a year after this well was first brought on line its production remained spectacular, almost equal to max produced after initial frack.

At $50/bbl x 30,000 bbls = $1.5 million / month at the wellhead.

Discerning Global Warming LIke A Scientist -- Deplorable Climate Science -- February 20, 2019

An incredible post from The Deplorable Climate Science folks.

At the sidebar at the right, I link several really, really good sites regarding global warming.

The Fallout Continues

Link here. Occasional-Cortex doubles down on her ignorance. Still doesn't get. Never will.

I hope her first town meeting in Long Island City is televised. Bring the popcorn.

The Art Page

When the young artist discovers that yellow + red = orange. She notes this early on in the video; you may have to listen closely to catch it.

She also clearly describes the landscape she is painting -- I can't catch the name but it is obviously an enchanted land or forest where her ponies live.

Sophia, age four year eight months

America's Shale Boom Keeps Rolling; Average CAPEX Cut 4%; Production Up 7%; Concho Sees Production Increase Of 28% -- Bloomberg -- February 20, 2019

Link here. Data points:
  • the industry shows no signs of abating
  • will do more with less 
  • the US will add about 1.45 million bopd this year (2019)
  • they added 1.6 million bopd in 2018
  • on average, US explorers have cut their capital budgets by 4 percent but are predicting a 7 percent increase in production
  • example: Concho
    • despite trimming its budget, Concho expects output to grow about 28% in 2019
  • overall:
    • US will likely pump 12.4 million bopd, 13 percent higher this year than in 2018
    • most of the growth will come from the Permian in West Texas and New Mexico

Why I Love To Blog -- Reason #354 -- February 20, 2019 -- Alberta To Launch Huge CBR Scheme

A recurring theme on the blog is that oil companies will find a way to get their product to market.

Two days ago I wrote:
The problem will be the "right" kind of oil. The oil companies had that figured out years ago when they went forward with the Keystone XL. Unfortunately, now the perfect storm:
  • Canada's western Canadian oil sands (heavy oil) remains landlocked
    • the Keystone XL is dead;
    • TransMountain is on life support; and,
    • Enbridge Line 3, is intensive care but likely to survive; however, it won't be nearly enough to make up the shortfall
  • fortunately, CBR is scalable
  • it will be interesting to see if BNSF will be allowed to "assist" in Canadian CBR (I doubt it; I'm sure there are rules and regulations; if not, politics will impede)
  • Venezuela, heavy oil -- we all know that story
  • Mexico, heavy oil -- some think Pemex is doomed and based on policies taken by their newly-elected president, that may be correct
  • Saudi Arabia, heavy-enough oil -- cutting back because it can't make it on $65-oil; needs $80-oil as a minimum; probably $100-oil when you get right down to it
Me? Not a bit worried. The refiners will take a hit on margins and the price of gasoline might go up, but "they" will find ways of getting heavy oil if they need it.
Now, today from Bloomberg via Rigzone: Alberta proposes huge CBR project; eyes a $1.7 billion profit. Data points:
  • the Alberta provincial government will lease 4,400 rail cars; no locomotives; over three years
  • will add 120,000 bopd 
  • province hopes to shrink Canadian crude discount by $4/bbl over two years
  • to move heavy oil (railbit) from Alberta to refiners along the US Gulf Coast
  • the province will invest C$3.7 billion to lease tanks cars and services
  • will generate C$5.9 billion in sales
  • will net: C$2.2 billion ($1.7 billion)
  • service providers: Canadian Pacific Railway Ltd; Canadian National Railway Co.
Folks in Minnesota, Nebraska will be screaming for more pipeline once they see all those oil trains creeping through their towns and villages at 5 mph.

Waiting For IPs For Ten Wells Coming Off Confidential List -- February 20, 2019

For the archives: from SeekingAlpha --also archived --
Keep in mind that Oklahoma recently raised taxes on oil & gas production in the state, and that production taxes are based on revenue. The production tax will now be 5% during the first three years of a well’s producing life before the rate goes up to 7% thereafter. Last year, the tax increase went into effect but note the higher rates haven’t been fully reflected in Continental’s financial performance yet. This is probably why Continental is expecting production taxes to increase to 8.0-8.3% of wellhead revenue this year.  [It seems interesting that Oklahoma is taxing stripper wells at a higher rate than non-stripper wells.]
Note: with regard to the CLR Pletan well below, the Pletan-Dvirnak wells are tracked here.

Wells coming off the confidential list --

Wednesday, February 20, 2019: 86 wells for the month; 189 wells for the quarter
  • 34978, 1,445, Hunt, Halliday 146-93-12-1H-4, Wolf Bay, t12/18; cum 6K over 13 days;
  • 34513, 1,235, Nine Point Energy, Fritz 150-101-32-29-8H, Pronghorn, t9/18; cum 74K 12/18;
  • 33850, 1.419, Oasis, Berry 5493 41-7 6B, Robinson Lake, t9/18; cum 92K 12/18;
  • 33094, 3,043, CLR, Sakakawea Federal 14-19H, Elm Tree, t1/19; cum --
Tuesday, February 19, 2019: 82 wells for the month; 185 wells for the quarter
  • 32173, SI/NC, Hess, CA-Anderson Smith-155-96-2635H-6, Capa, no production data,
  • 32163, SI/NC, Hess, CA-Anderson Smith-155-96-2635H-5, Capa, no production data,
  • 30536, SI/NC, Slawson, Wolf 1 SLH, Big Bend, no production data,
  • 30138, 2,574, CLR, Pletan 7-18H, Jim Creek, t10/18; cum 101K 12/18;
  • 28956, SI/NC, Hess, EN-Jeffrey-15509402215H-9, Alkali Creek, no production data,
  • 28955, SI/NC, Hess, EN-Jeffrey-155-94-2215H-8, Alkali Creek, no production data,
Active rigs:

Active Rigs66564038127

RBN Energy: will Mariner East setbacks impact LPG exports and pricing?
Energy Transfer’s Mariner East pipeline system was supposed to help resolve a growing problem for producers in the “wet” Marcellus and Utica plays — namely, the need to transport increasing volumes of LPG out of the Northeast, especially during the warmer months, when in-region demand for LPG is low. The pipeline system also was meant to spur LPG and ethane exports out of Energy Transfer’s Marcus Hook marine terminal near Philadelphia. So how are things going? Well, the now five-year-old, 70-Mb/d Mariner East 1 pipeline, designed to transport ethane and propane, has been offline ever since a sinkhole exposed a part of the pipe late last month. The 275-Mb/d Mariner East 2 pipe is finally in operation and enabling a lot more LPG to move to Marcus Hook, but for now it can only run at about 60% of its capacity. And last Friday, a key Pennsylvania regulator suspended its review of outstanding water permit applications for the remaining piece of ME-2 and the parallel 250-Mb/d ME-2 Expansion project, and threw into doubt how long it might take to finish the Mariner East system and ramp it up to full capacity. Today, we begin a series on recent Mariner East developments and explain how, despite the mixed bag of Mariner East news in recent weeks, the situation is not as bad as it may seem.