Friday, March 1, 2019

"We've" Got A Secret -- Meridian/Davis Refinery Announces "Secret Partner" -- March 1, 2019

Link to The Williston Herald:
The parent company building the nation’s first greenfield refinery since 1976 in North Dakota has secured a silent partner to handle its midstream logistics.
Meridian Energy Group, which is building the Davis Refinery in southwestern North Dakota, announced Wednesday that it had signed a letter of intent with an industry leading firm for midstream logistics support. Midstream generally refers to pipeline companies.
The unidentified company will build, own and operate the crude oil and refined product midstream and logistics facilities for the greenfield refinery, which will allow Meridian to focus on operations inside the Davis plant.
Spirit In The Sky, Norman Greenbaum

Never Would Have Happened Under Previous Administration -- US Approves TransCanada Pipeline, Keeping America Great -- March 1, 2019

Making America great. Link here.
  • Mountaineer XPress natural gas pipeline project
  • will link the Appalachian basin's natural gas supplies with global markets
  • $3.2 billion project
  • 170-mile pipeline in West Virginia
  • will increase natural gas capacity by 2.7 billion cfpd (333,000 boe)
  • approval will allow TransCanada to start partial in-service of its Gulf Xpress Project, a network of seven new compressor stations in KY, TN, and MS
  • will significantly increase the reach of low-cost, US-produced NG from the Appalachian Basin
  • investment in Gulf XPress: $600 million
  • Gulf XPress: additional capacity of 530,000 million cfpd (sic) -- I wonder if that isn't supposed to be 530 million (or 530,000 mcfpd)?
Note this:
In mid-February, TransCanada said it had revised upward its project costs for the Mountaineer XPress project to US$3.2 billion, due to delays in regulatory approvals from FERC and other agencies, higher contractor costs due to unusually high demand for construction resources in the region, inclement weather during construction, and changes in contractor work plans to mitigate delays. 
Something tells me the delays occurred "under" the previous administration.

For Los Angeles:
February Has Never Been This Cold In "Weather-Recorded" History

Link here.

For Bismarck, ND:
A Record Cold February

Link here.

From the linked article:
Meteorological winter in Bismarck was the coldest since 1979, according to the National Weather Service. 
Meteorologists measure winter from Dec. 1 to the last day of February. The 2018-19 winter had an average temperature of minus 0.4 degrees, said meteorologist Ken Simosko. 
Bismarck's meteorological winter was the fifth coldest on record, after 1979, 1887, 1875 and record 1936 — which had an average temperature of minus 11.4 degrees.
Pancakes For Dinner

Rigs Hold Steady In North Dakota; Seven New Permits -- March 1, 2019

Active rigs:

Active Rigs67594135119

Seven new permits:
  • Operators: XTO (4); Whiting (2); MRO
  • Fields: Sorkness (Mountrail); Sanish (Mountrail); Chimney Butte (Dunn); 
  • Comments: 
    • XTO has permits for a 4-well Sorkness pad in section 36-157-93, in Sorkness oil field
    • Whiting has permits for a 2-well Oppeboen pad in section 5-152-91 in the Sanish oil field;
    • Marathon has a permit for a Gould well in Chimney Butte, section 23-146-94
Six permits renewed:
  • Slawson (4): four Wolverine Federal permits, all in McKenzie County
  • Kaiser-Francis (2): a Lady4 permit and a Solo permit, both in Stark County
Nine permits reinstated:
  • BR: eight Cleetwood permits and one Rollacleetwod permit, all in McKenzie County
Three permits canceled:
  • QEP: three MHA permits in Dunn County

It Could Be Colder -- Thank Goodness For Global Warming -- March 1, 2019

We are likely to hit record cold lows this weekend / Monday, here in north Texas.

The "cold" will start tonight, get severe on Sunday, through Sunday night and into Monday morning -- with a wind chill Fahrenheit temperature of 8 degrees Monday morning.

Can one imagine what it would be if it weren't for global warming? Maybe a wind chill of 6 degrees!

The absolute temperature could very well tie the all-time record low.

The middle granddaughter has a soccer game Saturday.

Amazon To Launch New Grocery Chain

Link here.  Apparently "Whole Paycheck" not panning out as planned. Look for "Whole Paycheck" to restructure, renamed five years from now.

If I were Bezos, I would put the first Amazon-7-11 in Long Island City. 

March 1, 2019

I have a Katie Ledecky page. I may need to add a Hailie Deegan page. Link here.


Little Deuce Coupe, The Beach Boys

Producing More, Spending Less -- March 1, 2019

Link here.
For U.S. shale companies, 2019 will see a boost in production and a decrease in capital spending, according to analysis by Rystad Energy.
After analyzing fourth quarter 2018 earnings reports from 45 U.S. shale operators, Rystad found that, on average, companies planned on 15 percent growth in oil production while cutting capital spending by five percent.
However, oil supermajors ExxonMobil and Chevron plan on spending more this year on the heels of strong 4Q 2018 earnings propelled by Permian production.

“If this growth rate is representative for the entire 9.5 million barrels per day oil output currently achieved in the Lower 48 states excluding Gulf of Mexico, we are then talking about nearly 1 million barrels per day of oil production growth from the U.S.,” said Abramov.

Friday, March 1, 2019, T+58 -- The Japanese Enter The US Tight Oil Play

The Japanese enter the US tight oil play, link here:
Inpex Corporation revealed Friday that its subsidiary, Inpex Americas Inc, has reached an agreement with GulfTex Energy to acquire “multiple development and production assets” in the Eagle Ford play in Texas.
Most assets pertaining to the purchase are located in Karnes County, Inpex revealed. The acquisition marks Inpex’s entry into the U.S. tight oil development and production business.
Headquartered in Japan, Inpex Corporation is the country’s largest exploration and production company. Inpex is currently involved in approximately 70 projects across more than 20 countries, including the Ichthys LNG Project in Australia as operator. The company’s president and CEO is Takayuki Ueda.

Toilet paper: last year, the anti-straw lobby forced companies to start cutting back on plastic straws. Now it's toilet paper. Link here. Average American is said to use three rolls of toilet paper/week. Does anyone really believe that?

ATT, link here;
Time Warner is one of the largest media and entertainment companies in the world, controlling a number of popular brands including TNT, TBS, CNN, and HBO, as well as the Warner Bros. line of enterprises.
ATT will be able to market Time Warner's massive pool of content to other cable companies and consumers. It would also aim to collect usage data regarding viewership of the content, with the ultimate goal being able to construct a digital advertising arm to compete with major rivals like Facebook (FB) and Google (GOOG).

ATT-Time Warner: 98 companies that ATT-Time Warner will own at this link

Who needs a lift? 

Energy Transfer's Bakken Update -- SeekingAlpha -- March 1, 2019

Energy Transfer's Bakken update -- SeekingAlpha - link here. Archived.

  • Energy Transfer LP is considering further expanding the Bakken Pipeline
  • covering the size of the opportunity Energy Transfer LP is capitalizing on in terms of transportable oil volumes
  • management doesn't think any additional pipe would need to be laid down to make a potential capacity expansion happen, at least as the project is envisioned today
  • Enbridge, Inc., MPLX LP and Phillips 66 Partners LP also own a stake in the Bakken Pipeline
Energy Overview


Link here.

Making American Great -- One Haircut At A Time -- March 1, 2019

Link here to The WSJ.

Pete McGarity opened Headlines Barber Shop in Odessa in 1998 and has ridden the boom-bust cycle before. This time around he decided to capitalize on it.
In 2017, Mr. McGarity spent about $25,000 to retrofit a trailer into a custom, mobile barber shop. That October, he drove it about an hour west to Pecos, Texas, and parked in front of the town’s only grocery store, hoping to catch oil field workers between shifts. It was an instant success.
“It was crazy, it went berserk,” says Mr. McGarity, 48. “I’d show up around one o’clock and we’d cut until after midnight.”
These days Mr. McGarity sends the trailer to Pecos, which is closer to the oilfields, six days a week with five barbers, who cut hair all day long. A cut costs as much as $40, more than the $25 he charged before the boom. There is usually a long waiting list, but patrons can cut the line if they pay $60, or $75 with a shave, a popular option with oil workers.
“It is flooded with oilfield workers galore, and these guys tip well,” he says.
Mr. McGarity’s barbers are raking it in. Those who venture to Pecos can make anywhere from $130,000 to $180,000 per year, he said. He is considering investing in additional trailers to send to farther-flung towns in the oil patch and says the additional revenue may allow him to retire soon. If there’s a bust, he’ll just store the mobile shops until things come back, he adds. 
Some of the folks commenting at the story reference the Bakken. Here are aerial photos of the state to include the Bakken

For more of Vern Whitten's photographs, follow the tag.

Inappropriately Exuberant About The Bakken -- Again -- March 1, 2019

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.

The market: who wudda thought?

Forbes investing course 101: climbing a wall of worry. Decades ago, I took the Forbes investing course. I've read some of Benjamin Graham, don't remember much.

WTI: fundamentals suggest that oil should be trending lower and yet it is trending higher.

Tea leaves: everything suggests the market will continue to trend higher, but the jump today was quite remarkable it seems, but still the Dow is still not much above 26,000.

TSLA: at the end of today, the company will have about $1 billion less cash than it had yesterday, if reports are correct. Right now the Yahoo!Statistics page shows Tesla has $3.69 billion in cash or $21.34/share. We'll see if that changes next week. Unless it's already changed and I missed it. TSLA is down almost 8% in early morning trading, off $25 and trading for about $295. It certainly appears that investors are not happy with:
  • the $1 billion debt payment
  • the announcement that show rooms are cloing
  • the announcement that the company continues to lower the MSRP on its cars
Back to the Bakken

Disclaimer: I am inappropriately exuberant about the Bakken. I often make simple arithmetic errors. I often mix facts with opinions with extrapolations with assumptions and it is often hard to tell them apart. I do this for my own benefit to help understand the Bakken. 

I've linked the CLR Pasadena wells several times in the past few weeks, it seems. Another CLR Pasadena well came off the confidential list today. I wonder if anyone paid attention to the frack strategy:
  • 34591, 2.635, CLR, Pasadena 4-11HSL, Banks, 68 stages; 13.5 million lbs, t11/18; cum 137K 1/19;
From FracFocus:
  • 12,616,683 million gallons of water
  • water: 88.25564% by mass
  • calculating proppant mass from that data (link here
  • 12,616,683 gallons of water * 8.35 pounds/gallon of water = 105,349,303 pounds of water
  • 142.956 million lbs
  • 100-88.25564 = 11.744%
  • 0.11744 * 142.956 million lbs = 16.79 million lbs sand
  • my calculations from FracFocus are always on the high side for the lbs of proppant but always in the "ballpark" as they say
From the NDIC well file:
  • well spud date: February 17, 2018
  • rig spud date: March 10, 2018
  • cease drilling: April 1, 2018
  • TD: 22,606'
  • tVD: 10,967.31' (0.31 feet = 3.72 inches)
  • target: middle Bakken
  • the curve landed at 10,987.61' TVD, approximately 13' below the top of the target zone and approximately 22' into the middle Bakken
  • for the targeted lateral section, the targeted TVD zone ranged between 9' and 27' below the top of the middle Bakken
  • for those interested, the Neset geologist's report is incredibly detailed describing the lateral drilling
  • drilling cased in the lateral section approximately 2' above the top of the target zone
  • the rate of penetration average 250 feet/hour
  • background gas average 869 units with a maximum of 3,539 units
  • lateral #1 reached total depth with an estimated 91.9% of lateral footage within the middle Bakken target zone; 5.0% of the total footage is estimated to be above the target zone; 3.1% is estimated to be below the target zone
In the production profile below, note:
  • the most recent month show, 1/19, was only 12 days of production; 22,286 extrapolates to 55,715 bbls/30 day-month
  • the first full month of production, a full 30 days, was 63,845 bbls
  • the first nearly full month of production after all was said and done, 42,580 bbls
  • So, in three months, had they been full 30-day months: about 162,000 bbls x $50 at the well head = $8.1 million
  • cost to drill / complete a well: $6 - $8 million in the Bakken; I assume this one was at the "high" end
  • this well will produce for 35 years
Production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

March 1, 2019

Wells coming off confidential list today -- Friday, March 1, 2019: 9 wells for the month; 9 wells for the quarter
  • 34614, 1,666, CLR, Anderson 4X-4H1, Willow Creek, 45 stages; 6.5 million lbs, t10/18; cum 106K 1/19;
  • 34591, 2.635, CLR, Pasadena 4-11HSL, Banks, 68 stages; 13.5 million lbs, t11/18; cum 137K 1/19;
  • 33849, 555, Oasis, Berry 5493 41-7 7T, 50 stages; 9.9 million lbs; Robinson Lake, t9/18; cum 94K 1/19;
  • 33237, SI/NC, Hess, AN-Dinwoodie-153-94-2833H-7, Antelope-Sanish, no production data,
  • 33236, SI/NC, Hess, AN-Dinwoodie-153-94-2833H-6, Antelope-Sanish, no production data,
  • 33235, SI/NC, Hess, AN-Dinwoodie-153-94-2833H-5, Antelope-Sanish, no production data,
  • 33091, 3,029, CLR, Sakakawea Federal 8-19H, Elm Tree, 62 stages; 15.3 million lbs, t12/18; cum 39K 1/19;
  • 32816, 1,272, CLR, Brandvik 10-25H2, Corral Creek, 60 stages, 7.7 million lbs, t12/18; cum 88K 1/19;
  • 24047, SI/NC, Petro-Hunt, State 154-94-31C-32-3H, Charlson, no production data,
Active rigs:

Active Rigs67594135119

RBN Energy: look how far we've come understanding the impacts of the TETCO outage on Appalachia gas markets.
In a world where Marcellus/Utica natural gas supplies and Gulf Coast gas demand are increasingly interdependent, what would happen if flows along a critical route connecting the two regions were disrupted? The market caught a glimpse of that on January 21, when an explosion on Texas Eastern Transmission’s 30-inch line in Noble County, OH, shut down flows through its Berne compressor, which serves as a key gateway for Gulf Coast-bound gas out of Appalachia. Partial service was restored a few days later, but a chunk of the capacity remains offline as repairs are completed, and southbound volumes are running at 60% of what they were prior to the outage. Not too long ago, an outage severing Northeast producers’ access to a major takeaway route to the Gulf would have hammered Northeast supply prices, even during the peak winter demand months. But as expansion projects have vastly improved pipeline connectivity within Appalachia and takeaway capacity out of the region, they’ve transformed how some of those legacy long-haul pipelines function and even the role they play in the market. The TETCO outage provides a glimpse into what that will mean for the Northeast and its downstream markets. In today’s blog, we begin a series looking at the implications of a well-connected Marcellus/Utica, starting with a recap of the TETCO event and its immediate impacts on southbound flows.