Wednesday, February 27, 2019

Whiting's Periot Wells Northeast Of Williston

I've always thought of Dollar Joe as CLR's field, and I've always thought Dollar Joe was a good field. Apparently Whiting had the same thoughts. Wonderful land.

Wonderful Land, The Shadows

Look how under-developed this area is:

The wells:
  • 16413, IA/171, Whiting, Sheldon 34-20H, Dollar Joe, t3/07; cum 182K 8/19; off line as of 9/19; remains off line 3/20; back on line 10/20; cum 187K 7/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 34214, 788, Whiting, Periot 24-20TFH, 33-105-04606, Dollar Joe, fracked 10/17, 6.6 million gallons of water; 89.9% water by mass, t11/18; cum 120K 3/20; cum 156K 7/21;
DateOil RunsMCF Sold
  • 34213, PNC, Whiting, Periot 34-20TFH, Dollar Joe:
  • 27666, 1,723, Whiting, Periot 44-20HU, 33-105-03416, Dollar Joe, fracked 10/17, 6.7 million gallons of water; 88.8% water by mass, t11/18; cum 184K 3/20; cum 224K 7/21;
DateOil RunsMCF Sold
  • 34212, PNC, Whiting, Olson 31-29TFH, Dollar Joe
  • 27667, PNC, Whiting, Olson 31-29H, Dollar Joe
  • 34211, PNC, Whiting, Olson 41-29TFH, Dollar Joe
  • 27665, loc, Whiting, Olson 41-29H, Dollar Joe

Amazon -- Oops! I Did It Again -- February 27, 2019


Later, 10:04 p.m. Central Time: I wasn't the only one that spotted this. After the original post, I noted the story at ZeroHedge:

Re-posting. Stories like this sometimes get buried and deserve a second look.

Oops! Amazon did it again: Amazon will back out of deal to lease building in downtown Seattle over tax issues.
Amazon is abandoning a prominent downtown Seattle office project 10 months after it threatened to do so if the city imposed a new business tax.
While the Seattle City Council ultimately reversed itself on the so-called head tax, Amazon confirmed Wednesday it will not occupy the 722,000 square feet of space it had leased in the Rainier Square tower under construction at 5th and Union.

The lease was one of the biggest in Seattle history — enough space to hold at least 3,500 employees and perhaps up to 5,000.

The Book Page

From The Making of the Atomic Bomb: Richard Rhodes, c. 1988.
At the Solvay Conference, Brussels, 1927 ... in attendance .... Niels Bohr (second only to Einstein), Max Planck, Marie Curie, Hendrick Lorentz, Max Born, Paul Ehrenfest, Erwin Schrödinger, Wolfgang Pauli, Werner Heisenberg and a crowd of others ...

Einstein refused to accept the idea that determinism on the atomic level was forbidden ... And so he refused point-blank to accept the [Heisenberg] uncertainty principle, and tried to think up cases in which the principle would not hold.

Einstein would produce a challenging thought experiment at breakfast, the debate would go on all day, and, as a rule, by suppertime [the physicists] would have reached a point where Niels Bohr could prove to Einstein that even his latest experiment failed to shake the uncertainty principle.

Einstein would look a bit worried, but by the next morning he was read with a new imaginary experiment more complicated that the last. This went on for days, until Ehrenfest chided Einstein -- they were the oldest of friends -- that he was ashamed of him, that Einstein was arguing against quantum theory just as irrationally as his opponents had argued against relativity theory. Einstein remained adamant (he remained adamant to the end of his life where quantum theory was concerned).
The Experts

For the rest of the story, visit this link.

Update On Natural Gas Hook-Ups In New England -- February 27, 2019

This story seems to becoming a recurrent theme in New England. 

From Chesto over at The Boston Globe:
The municipal utilities that serve Holyoke and Middleborough just imposed separate moratoriums on new natural gas hookups, citing supply constraints. Is your community close behind?

Probably not. The two biggest gas providers in Massachusetts, National Grid and Eversource, say their supplies are adequate for now.

But some in the industry speculate that we’re approaching a major inflection point, as the region’s strained pipeline system shows signs of failing to keep up with demand. Pipeline expansions get more difficult to build politically every year. To the anti-gas forces in the environmental community, the moratoriums reaffirm their arguments about the need to wean Massachusetts off the fossil fuel.

That won't be easy. Natural gas remains a dominant fuel source for New England’s power plants. It also remains the preferred heat source for any new developments -- except in the growing list of communities with moratoriums in place.

These bans on new hookups started popping up in Western Massachusetts about four years ago. Berkshire Gas imposed moratoriums in an eight-town region stretching from Greenfield to Amherst; Columbia Gas did the same next door, in Easthampton and Northampton.

Northeast Energy Direct, the controversial Kinder Morgan pipeline proposal, could have helped ease the pain there. But resistance was too strong, and Kinder Morgan nixed it. Berkshire informed its waiting list of 300-plus potential new customers last fall that no help would be coming soon.The capacity issues in that area eventually caught up with Holyoke Gas & Electric, which imposed its own moratorium on new service on Jan. 28. Columbia Gas is pursuing projects to increase circulation in the Springfield area. But those, too, face formidable opposition.

The Middleborough Gas and Electric Department moratorium this month was more of a surprise, the first true supply-related ban in the eastern part of the state. General Manager Jackie Crowley told utility commissioners that a lateral pipeline that feeds Southeastern Massachusetts has been at capacity for some time. The utility’s system load has continued to grow, but there are no new projects on the horizon to address its need for more gas. Crowley says she wanted to get the word out before the spring construction season starts, so builders could seek alternatives.

As a small utility, it’s difficult financially for Middleborough to build liquefied gas storage tanks, to sock away gas for cold days when it’s in short supply. Crowley says she is talking to Algonquin pipeline owner Enbridge about increasing capacity, but a long-term solution could be years away.

Several Cape Cod towns already face similar bans on hookups, but a National Grid spokeswoman says those were imposed a few years ago to ensure system reliability while the company upgraded a mid-Cape pipeline. They are on track to be lifted this spring. But she also concedes the company could face challenges serving new natural gas customers given how hard it is to get a pipeline expansion approved.

Tamara Small, chief executive of developer group NAIOP Massachusetts, can’t help but feel the chill. NAOIP members already suffered through a lockout by National Grid of union workers and a state-imposed, safety-related moratorium last year. Those are over, but the backlog is considerable. The emergence of new moratoriums, she says, sends the wrong message to businesses looking to expand here.

The natural gas industry’s foes see these moratoriums as a sort of vindication. Environmental advocates say it’s time to get more serious about other, greener options: rolling out heat pumps for warmth, and turning to cleaner sources of electricity such as Canadian hydropower and offshore wind. Maybe the industry is indeed reaching an important tipping point. But which way it will tip depends on who you ask.

Whiting With Four Permits In Sanish Oil Field -- February 27, 2019

Active rigs:

Active Rigs66574138119

Four new permits:
  • Operator: Whiting
  • Fields: Sanish (Mountrail)
  • Comments: Whiting has permits for a TTT pad in section 4-154-91, in Sanish oil field
Ten permits renewed:
  • BTA (3): three Barkland permits in Golden Valley County
  • NP Resources (2): two Ellison Creek Federal permits in Billings County
  • Resource Energy Can-Am: one Olav permit in Divide County
  • White Butte Oil Operations: one Jore Federal permit in McKenzie County
  • Whiting: one Bartleson permit in Mountrail County
  • CLR: one Salem permit in Williams County
  • Slawson: one Armada Federal permit in Mountrail County
Four producing wells (DUCs) reported as completed:
  • 32462, 179, Petro-Hunt, Hank Katie 15-20HN, Ambrose, t2/19; cum --;
  • 35326, 944, Kraken, Pocasset 32-29 5H, Oliver, t2/19; cum --;
  • 35325, 892, Kraken, Pocasset 32-29 6TFH, Oliver, t2/19; cum --;
  • 35324, 1,183, Kraken, Pocasset 32-29 7H, Oliver, t2/19; cum --;

Wednesday, February 27, 2019 -- Nothing About The Bakken

Phillips 66: Michael Fitzsimmons over at SeekingAlpha. Predicts PSX will increase its dividend by 12.5% to 90 cents/share. Currently trading at $97.64; Fitzsimmons thinks shares could go to $125. Currently paying $3.20 or 3.29%. At MarketRealist, share appreciation perhaps to $103, but also suggests a double-digit dividend increase in 2019 (if you want to see a lot of ads, click on that MarketRealist link).

Oops! Amazon did it again: Amazon will back out of deal to lease building in downtown Seattle over tax issues.
Amazon is abandoning a prominent downtown Seattle office project 10 months after it threatened to do so if the city imposed a new business tax.
While the Seattle City Council ultimately reversed itself on the so-called head tax, Amazon confirmed Wednesday it will not occupy the 722,000 square feet of space it had leased in the Rainier Square tower under construction at 5th and Union.

The lease was one of the biggest in Seattle history — enough space to hold at least 3,500 employees and perhaps up to 5,000. 
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.

Housing sales: all that hand-wringing a week or so ago about the slump in housing sales is history. The slump occurred during the partial government shutdown and in retrospect it appears the housing industry is more sensitive to government slowdown than most anticipated. Whatever. Today is it is being reported that US pending house sales rise 4.6%. The number of existing homes that went under contract in the U.S. rose strongly in January, a sign of improvement for the housing market at the start of the year.

The Fed: slowing down on rate increases? Some even suggest next "rate action" could be a cut.

5G: a lot of articles about 5G rollout. I'll believe it when I see it. It's going to be expensive for individual users.

Billionaires. 2018 data.  
  • 2,470 billionaires worldwide
  • 430 less than previous year (2017)
  • total wealth of US billionaires decreased 9% to $9.6 trillion
    • 1% wealth tax = $96 billion 
    • US debt: $22 trillion
    • $22 trillion / $96 billion = 230 years (and, of course, that does not into account interest payments due on the $22 trillion)
  • US added 13 billionaires
  • China added 52 billionaires
  • Chinese Shu Ping, female, and her husband, become the richest restaurant owners in the world; $8.4 billion
  • top of the list: Jeff Bezos:  $147 billion
    • Bill Gates, #2, at $96 billion
    • Warren Buffett, #3, at $88 billion -- who is giving away his wealth in incredibly small amounts but getting a lot of press for doing so
  • China: 658 billionaires
  • US: 584 billioinaires
  • Germany: 117 billionaires

Oasis 4Q18 Presentation Posted

Link here.

In reply to a reader, I wrote:

1. Moving south Cottonwood to top tier is perhaps the most interesting bit of trivia from the presentation

2. Dropping to two rigs in North Dakota, from three; will have two rigs in the Bakken and two rigs in the Permian (I think that's correct).

3. Montana: not sure what to make of that. It would be interesting to know the production tax in Montana vs North Dakota. You can see how Production Tax in North Dakota dropped from $7.66 /bbl to $3.78 (2014 to 2015) -- slide 6; dropped to a low of $3.09 but is now creeping back up and back ot $4.44 now. I read often that oil companies watch Production Tax in Texas, Oklahoma, ND very, very closely. As recently as October, 2018, production taxes in Montana were a problem: Tax rates holding back Montana’s oil and gas industry.

Going through the presentation, things that caught my eye:
  • Oasis claims to be the "first E&P to live within cash flow during downturn, with highly capital efficeint spending" 
  • initial Painted Woods wells are outperforming company's expectations
  • south Cottonwood now top-tier
  • 2019 development plan generates free cash flow at $50/bbl
  • net acres:
    • Bakken: 414,000 (that surprised me -- about equal to Whiting)
    • Delaware: only 23,000 net acres
  • production, 4Q18:
    • Bakken: 82,300 boepd
    • Delaware: 6,000 boepd
  • production growth year-over-year seems to be leveling off
  • plan, 2019: new spacing test in N Alger in advance of developing top-tier acreage in N Alger and S Cottonwood
  • Williston asset producing free cash flow to fund Delaware growth
  • plays in Williston Basin:
    • Montana
    • Red Bank
    • Painted Woods -- Oasis-enhanced completions
    • Indian Hills
    • Wild Basin
    • S Cottonwood
    • Alger
  • Bakken productivity for Oasis
    • 30,000 boe per 1,000 feet lateral in 2018; Oasis says it ranks #2 among peers in this metric

EIA Weekly Crude Oil Inventory Report -- February 27 2019

Link here.
  • US crude oil inventories: plummeted by a whopping 8.6 million bbls
  • US crude oil inventories: at 445.9 million bbls is now only 3% above the five-year average (which continues to increase) -- but 3% is significantly less than the 6% we've been seeing
  • US crude oil imports: down by 1.6 million bopd -- quite remarkable; averaged just under 6 million bopd
  • US refineries operating at 87.1% capacity; better than last couple of weeks, but still well below historic operating capacity
  • jet fuel supplied still greater than previous year; up 2.5% compared to same four-week period last year
Following EIA report, WTI:
  • surged over 3%
  • up $1.74/bbl
  • now trading at $57.24 
Reaction to weekly report:

Re-balancing to 400 million bbls -- won't happen in my lifetime (and, oh, by the way, the "historic norm" for US crude oil inventories was 350 million bbls -- so 400 million bbls remains a very, very robust inventory for US crude oil -- especially in light of "Occasional-Cortex talk" that oil won't be needed at all in a few years):

Change w-o-w
In Storage
Weeks to RB to 350 Million Bbls
Week 0
November 21, 2018
Week 1
November 28, 2018
Week 2
December 6, 2018
Week 3
December 12, 2018
Never at this rate
Week 4
December 19, 2018
Never at this rate
Week 5
December 28, 2018
Never at this rate
Week 6
January 4, 2019
Never at this rate
Week 7
January 9, 2019
A long, long time
Week 8
January 16, 2019
Won’t happen in my lifetime
Week 9
January 24, 2019
Won’t happen i my lifetime
Week 10
January 31, 2019
Won’t happen in my lifetime
Week 11
February 6, 2019
Won’t happen in my lifetime
Week 12
February 13, 2019
Won’t happen in my lifetime
Week 13
February 21, 2019
Won’t happen in my lifetime
Week 14
February 27, 2019
Won’t happen in my lifetime


Whiting's 4Q18 Corporate Presentation

Later, the transcript. Maybe I'm missing something but I found the entire conference call lacking in much substance. Mostly, the CEO talked about his team, what a wonderful fit they were, and how well they were doing. The slides had great detail, but the call itself was severely lacking. Again, I may have missed something. I fault the analysts.

From the conference call, this was of interest:

Q from Neal Dingmann:
And then just secondly, in the release, you speak about converting some of your acreage to the core areas. Will you continue to -- my question is really going forward, will this continue to be a focus on delineation like this or will your Bakken program become more virtually all developmental soon? 
A from CEO Brad Holly:
Yeah, great question, Neal. I think our philosophy even up to a year ago was that the Halo would expand in the Bakken, that it had been contracted just due to low commodity prices and as we stepped out in these areas, we saw really good subsurface, geologic features and mapping and we really felt like generation 4.0 and now 5.0 completions could unlock those areas. Everywhere that we've stepped out so far, we've seen very positive results, very positive results, first apparent wells, very positive results versus offset wells from older generations. And so we're very excited about what we're seeing in all the areas that we've tested so far, and we feel like that those areas that we used to call tier 2 have kind of moved into our core development areas.  

The slidesLink here.

Includes great Genscape graphe of CBR terminals in the Bakken. 

Plays in the Williston Bakken  (net acres = 470,443))
  • North Williston (Williams County and a small area in south Divide County)
  • East Williston (Mountrail County); also Pronghorn
    • two rigs; one frack spread
    • Pod 8 Project
    • Pod 9 Project
    • Sanish/Parshall (82,248)
    • McNamara Project 
    • Bartelson Wells
    • Pronghorn (southwest -- Billings/Stark counties) (80,740)
  • South Williston (northern McKenzie County and eastern Montana)
    • one rig; one frack spread
    • East Missouri Breaks (29,874)
    • West Missouri Breaks (52,170)
    • Foreman Butte (57,215)
    • Hidden Bench (74,999)
  • Stenehjem Generation 5.0
    • Loken wells
    • Mallow wells
    • Stenehjem wells
  • Foreman Butte Acquisition
    • $130 million purchase price funded from free cash flow; closed July 31, 2018
    • 54,833 net acres: overlap Hidden Bench and East Missouri Breaks
    • 1,290 boepd at closing
    • $2,400 / acre
    • Foreman Butte
    • Loken wells
    • Stenehjem wells
Frack/Completion Strategies:

Only One Well Comes Off Confidential List Today -- February 27, 2019

WLL (Whiting), link here:
  • 4Q18: adjusted earnings of a loss of 5 cents/share vs estimate of 53 cents;
  • 4Q18: total revenue of $473.23 million, vs estimate of $496.51 million;
  • full year daily production: 127,980 boepd, an increase of 8% year-over-year
  • crude oil production: 88,645 bopd during 4Q18; a 3% increase over 3Q18
  • net cash from operating activities: $1.092 billion
  • free cash flow: $280 million 
  • guidance: 2019 CAPEX of $800 - $840 million; to grow operated Williston Basin total production 11% and oil production 15% year-over-year
  • 4Q18: adjusted earnings of ten cents/share, vs estimate of 9 cents; down from 12 cents in 4Q17
  • 4Q18: total revenue of $338.4 million, vs estimate of $329.7 million; up from $326.6 million in same period last year
D (Dominion): increased quarterly dividend by 10%; from 83.5 cents/share to 91.75 cents/share, or $3.67/share (annual) going forward vs previous $3.34/share (annual); 16th consecutive year in which the annual dividend rate rose from the previous year's rate; paying about 4.5%;

Making America great again: Fiat Chrysler (FCA) to open Jeep factory in Detroit, invest $4.5 billion in southeast Michigan; link here --
Detroit will get a Jeep factory, the Motor City’s first new auto assembly plant in a generation, as part of a $4.5 billion manufacturing expansion in southeast Michigan by Fiat Chrysler that will mean nearly 6,500 new jobs, the company announced Tuesday.
FCA said it would convert the Mack Avenue Engine factory to an assembly plant for the next-generation Jeep Grand Cherokee and a new, large Jeep SUV. In all, the company said it will add production at five factories in metro Detroit.
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.

WTI: up over 2%; up over $1; trading at $56.69. Some suggest oil prices could soar on trade war truce.

Back to the Bakken

Only one well coming off confidential list today -- Wednesday, February 27, 2019: 112 wells for the month; 215 wells for the quarter
Active rigs:

Active Rigs66574138119

RBN Energy: the liquefaction train ramp-up process and timelines.
With about 30 million metric tons per annum (MMtpa) of liquefaction capacity scheduled to come online in 2019, feedgas deliveries are poised to be the biggest driver of Lower-48 natural gas demand this year. The timing of this emerging export demand growth from these complex, multi-process facilities will come down to a veritable obstacle course of construction and testing timelines and regulatory approvals. Understanding these factors will be key to anticipating the gas-market impacts of the oncoming demand. Today, we begin a short series breaking down the liquefaction train commissioning process and what it tells us about the timing of incremental feedgas demand over the next several months.