Saturday, April 6, 2019

"The Beginning Of The End Of The Bakken" -- Art Berman -- What A Doofus -- Bakken Setting New Records -- June 16, 2018

From The Bismarck Tribune:
North Dakota oil production jumped 5.4 percent in April to more than 1.2 million barrels per day, coming in just shy of the state’s record.
Director of Mineral Resources Lynn Helms called it a big surprise to see production levels within 2,500 barrels of the all-time high of nearly 1.23 million barrels per day.
“We were not expecting that kind of a surge until late May, early June,” Helms said Friday while discussing the preliminary figures.
Natural gas production increased 7.4 percent in April, setting another record at more than 2.24 billion cubic feet per day.
Now, flashback to December 8, 2017 -- "The beginning of the end of the Bakken." -- Art Berman.

What a doofus.

The Bakken is setting new records despite 2,000 wells drilled to depth and not producing (DUCs and shut-ins for operational reasons).

Flashback! Just A Few Years Ago -- April 6, 2019

Wrong on all three counts.
  • shale is/was a revolution;
  • shale plays were a great new idea; and,
  • they did not become important only as more attractive plays were exhausted (can you spell "Ghawar"?)
Link: Art Berman.

The Music Page

I've always maintained "1969" was the best year for music -- 1969, to include a few months before and a few months after -- simply because of the time lags involved -- I even have a blog devoted to music, particularly music from 1969.

I can add another bit of trivia to "1969 music." I was not aware of this -- just happened to come across it this evening:
Conceived by George Leonard, then a graduate student in humanities, Sha Na Na began performing in 1969 at the height of the hippie counterculture, and achieved national fame after playing at the Woodstock Festival, where they preceded Jimi Hendrix.
Their 90-second appearance in the Woodstock film brought the group national attention and helped spark a 1950s nostalgia craze that inspired similar groups in North America, as well as the Broadway musical Grease, the feature film American Graffiti and the TV show Happy Days.
The Three Bells, Sha Na Na

Saturday Morning, April 6, 2019, T+94, Part 4 -- More Meanderings -- Nothing About The Bakken

Alert! If going to a Hurts Donut shop today, don't use your GPS device. You could end up in Guatemala. 

Hurts Donut: it hurts to not live near a Hurts! LOL. I never would have guessed this was a big story but a reader alerted me. Nothing particularly new, but for those that don't know, see this article about Hurts Donut.
  • began in 2015
  • Tim and Kas Clegg
  • 24-hour bakery
  • quirky ingredients

There must be a lot of money in pizza, donuts, and nail polishing spas.

And all three business models rely on cheap labor from the southern border.

Week 14: March 31, 2019 -- April 6, 2019

Top non-energy story this week: the incredible US jobs report; and, here;

Top international energy story this week: OPEC production said to be lowest in four years.

Top national energy story this week: free cash flow for US oil companies set record in 2018; will continue to do well in 2019; WTI closes above $63 for the week; color Colorado's oil industry dead;

Top non-energy story in North Dakota: dinosaurs;

Geoff Simon's top ND energy stories:
Mostly legislative, school bond issues, etc
Washington State legislation could effectively ban Bakken CBR in that state
Williston airport ahead of schedule
Bakken exploration now expanding into North Dakota grasslands area

Most of the wells coming off the confidential list this week were DUCs; are operators watching the price of WTI rise; eye on free cash flow?
The number of active rigs in North Dakota fell to 60, but then recovered slightly;
MRO reported a huge Fannie USA well, low number of stages;
EOG cancels several Riverview permits

Freedom Energy with its second North Dakota permit

MRO's completion strategy: small number of stages; less proppant; and, here;

Bakken economy
Buck Sheele Family Animal Center opens across from Spring Lake Park

Saturday Morning, April 6, 2019, T+94, Part 3 -- More Meanderings -- Nothing About The Bakken

Immigration: I find the southern border immigration immensely fascinating. FDR said the only thing to fear was fear itself. Now that some time has passed, and I am able to put the southern surge into perspective, I am no longer fearful. I don't think it even bothers me any more. Why am I not concerned/worried? Except for President Trump, no US government politician currently in office seems to be concerned. And now, even President Trump, seems less concerned. He is giving Mexico another year -- which means he has dropped the subject completely -- to stop the caravans. LOL. If the citizens of California, Arizona, New Mexico, and Texas are not concerned, should anyone be concerned? Some of these states, notably California have gone so far as to provide sanctuary cities and I think I read somewhere that California was even considering going the full Monty, becoming a sanctuary state. There will be winners and losers, to be sure, but I think much of the outcome will turn out to have been counter-intuitive. If that makes sense.

Federal gasoline tax: lots of talk. It will be interesting to follow. Apparently "everyone" in Washington, DC, including President Trump supports it. A gasoline tax: the most regressive tax out there. 

NPR -- the never-ending story: I very, very, very seldom listen to NPR but on Saturday mornings when driving into work there is absolutely nothing on the radio that is worth my attention, so pushing the pre-set buttons (NPR is a pre-set button for my wife) I sometimes accidentally tune into NPR.
It may be only me but it certainly seems like PBS (television) and NPR (radio) are having huge budgetary / financial problems. In the old days, it seemed either had fund-raising campaigns only twice a year. Now, it seems the fund-raising is never-ending. This morning, yes, NPR is back to fund raising. LOL And I swear NPR was fund raising just a couple of months ago. And even when NPR is not fund-raising 24/7, they have these on-going raffles. Here in north Texas: $100 for a chance to win a cruise. Only 1700 tickets available. $170,000 seems a pittance. That hardly covers the annual salary of the director's assistant's secretary. And, oh by the way, that particular contest was extended by a week or so -- obviously they did not sell anywhere near the original allotment of 1700 tickets. I assume the cruise line is "donating" the one cruise to the lucky winner.
Measles: so far, 15 states.
From January 1 to March 28, 2019, 387 individual cases of measles have been confirmed in 15 states. This is the second-greatest number of cases reported in the U.S. since measles was eliminated in 2000. The states that have reported cases to CDC are Arizona, California, Colorado, Connecticut, Georgia, Illinois, Kentucky, Michigan, Missouri, New Hampshire, New Jersey, New York, Oregon, Texas, and Washington.
One can add Indiana to the list -- first case reported in today's news. New Mexico? Not on the list, so far. So we know it has nothing to do with the southern surge. LOL.
This will be great for physicians in training -- getting to see something they've only read about. I wonder if ObamaCare "covers" measles?
Smallpox: eradicated years ago. Specimens in only "two labs." If one wants to worry about something, that's something to worry about.

Hurricanes: researchers (and if it's NOAA, I use the term loosely), predict a "below-average" hurricane season this year.

Dinosuars: wow, that Bowman - Marmath metroplex story does not quit -- is Bowman/Marmath a metroplex or should we refer to them as the Twin Cities? Whatever. The other day a writer suggested the dinosaur story coming out of North Dakota was very likely a scam / a hoax / a fake story because we all know that "researchers" (and again I use the term loosely) scam the NEA for research grants and this guy made up this story to get research money. It turns out the reader may be correct. Here, from one of my favorite sites:
It’s a fun read, though some scientists have been expressing skepticism—perhaps borne of jealousy?
The research hasn’t been published yet in a peer-reviewed journal!
What—do we need to replicate an asteroid strike to be sure? But beyond scientific nit-picking, you just knew some liberal fossils would give the dinosaurs a run for their money in the going-extinct department. Today’s Nature magazine summary offers this short item about the article:
Scientists greeted the news with astonishment and scepticism, reports Science — partly because the big claims about dinosaurs made in the New Yorker piece have yet to be published in a scientific paper. Some have raised concerns about cultural sensitivity, saying the story has been reported as one of a white ‘Indiana Jones-like’ character in the “lonely expanses” of North Dakota, obfuscating the existence and knowledge of the Indigenous people whose ancestral territory it is. [What! You have to be fricking kidding me.]
Peer-reviewed articles: speaking of a research project not published in a peer-reviewed journal, that was the same story with the original Leigh Price paper that correctly predicted the potential of the Bakken formation. That study was never published and will probably never be published, certainly not by Leigh Price, in any peer-reviewed journal at least not on Earth. 

Saturday Morning, April 6, 2019, T+94, Part 2 -- More Meanderings -- Nothing About The Bakken

Reminder: don't use any GPS-enabled device this weekend. Perhaps not even this entire week. Perhaps not even this entire year. Just saying. Lots of bugs to work out.

Memo to Boeing: in the software update, be sure to update GPS code.

Tesla: from SeekingAlpha this morning -- (archived) --
  • Tesla is moving from a supply constrained into a demand constrained market for the Model 3.
  • The North American backlog for the higher priced variants was exhausted in Q4 of 2018.
  • Since then, Tesla has been able to pull other demand levers such as the MR, the EU, and China backlog and the SR variant.
  • However, these are creating only short-term pockets of demand, the question of whether there is enough sustained demand for 7,000 or even 5,000/week production remains unanswered.
Tesla, later: wow. After posting the above, a reader sent me a link to a podcast from the Montana Skeptic re: Tesla. One must absolutely listen to this podcast. The SeekingAlpha link above dovetails perfectly with this podcast at ZeroHedge

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 Language Page

From The Language Instinct: How the Mind Creates Language, Steven Pinker, c. 1994.

An incredibly fascinating book. Some parts of it are incredibly difficult.

Super-rules for grammar and deep structure. Chomsky. Very difficult. Not for the timid.

English. About verbs.

For a complete sentence, all verbs require a subject.

Some verbs require an object. Some don't.

Some verbs require a prepositional phrase. Some don't.

Dine and devour are two very similar verbs, with somewhat similar meanings.

Dine does not require anything but a subject: "They dine."

Devour requires an object: "They devour the turkey."

A most fascinating example of a verb requiring "everything," is the verb put. Put requires a subject, an object, and a prepositional phrase.

NO: a man puts.

No: a man puts the car.

Yes: a man puts the car into the garage.

All verbs that fit in the "put" category are stored in a special part of the brain and because language is innate/instinct with super-rules and deep structure, a child learning English immediately gets this right. Adults learning English as a second language miss out on this deep structure.

I doubt anyone has taught our four-year-old granddaughter the three "things" that the put category of words need but she instinctively knows the super-rules found in the deep structure. Or something to that effect.

I will see if I can come up with other words in the put category of words.

To show comes close:

No: He shows. (Unless on means "he" "arrives".)

Okay: He shows the dog.

Best: He shows the dog at the competition.

Or: He shows the dog to his friends.


I had a lot of fun with this.

I pushed Sophia almost to her "limits" on this one. Apparently this is one exercise she has not experienced at "school" so far. She is two months short of her fifth birthday.

I asked her to use draws in a sentence.

Her reply: "He draws a picture."

I asked her to use sees in a sentence.

Her reply: "He sees a ladybug."

Then I told her I had a very difficult one. She said she didn't want to "play" any more. But I went on.

I asked her to use puts in a sentence.

Her reply: "She puts food."

I said: "What! She puts food? What do you mean? Where does she put food?"

Her reply: "She puts food in the refrigerator."

A prepositional phrase. No hesitation. Immediate. She could have said almost anything (or nothing at all) but she responded immediately and she responded appropriately. She could have simply repeated the original reply, "She puts food." No one ever taught her the super-rules and I can guarantee no one has ever used that exact sentence when talking with/to her.

I'm sure she has heard "... put that back in the refrigerator..." or some variation, but I can guarantee she has never heard "... puts food in the refrigerator."

ND Crude Oil Extraction And Production Taxes -- A Study -- April 6, 2019

Google: anyone who has a "vested interest" in Google search and actually pays attention to Google search complains about the Google search algorithm.

Another pet peeve: blog sites that don't date their posts.

North Dakota oil and gas tax revenue study released. Link here, undated. Data points:
  • study "sponsored" by the North Dakota Petroleum Council and the Western Dakota Energy Association
  • Geoff Simon is the Executive Director of the WDEA
  • the purpose of the study: to review the oil and gas extraction and gross production tax collections by the state of North Dakota, from 2008 - 2018
  • from 2008 - 2018: $18 billion for the state
  • accounted for almost 44% of the total tax revenues collected by the state during that period
  • over the past five years, oil and extraction and production taxes accounted for more than 50 percent of all tax revenues collected by the state
Never mind ... it looks like I posted the results of this study back on January 25, 2019. See pet peeve above. 

ND oil taxes. From an earlier post:
Crude oil:
  • extraction tax, 5% of the gross value of oil production at the well
  • gross production tax (in lieu of property tax), 5% of the gross value of oil production at the well

Saturday Morning, April 6, 2019, T+94, Part 1 -- Morning Meanderings -- Nothing About The Bakken

This page is now complete and will not be updated except to correct errors.

Note: for reasons inherent in this post, there will be typographical and factual errors. This is Cashwise deli conversation, nothing more, nothing less.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, relationship decisions based on what you read here or think you may have read here.

GPS: remember, today is the day -- April 6, 2019, that any electronic device that has a GPS function, will fail today. Thank goodness April 6 fell on a Saturday today and not a Monday. But those folks flying to Minneapolis today in those 300 private jets should be prepared to have lunch in Bozeman, MT. Just saying.

Typos: I have a gazillion inconsequential typographical errors ("typos") to correct in blogs posted over the last several days. Again, I really, really appreciate readers not pointing out inconsequential "typos." But if I post something of substance that is wrong, please let me know immediately.

Boeing. If the recent report coming out of Ethiopia is correct, this is a huge problem for Boeing. At a minimum, two comments/observations:
  • Boeing said it had a software solution for a hardware problem; it turns out that the solution did not work
  • did Boeing know that its software solution would not work?
  • can a "revised" software solution fix the hardware problem?
Tesla: it was widely reported that Tesla's deliveries in March, 2019, were the worst in its history; it was also widely reported that its first quarter earnings would be significantly impacted for various reasons -- and that guidance was made before we had the March-delivery data. Question? Was Musk Melon aware some weeks ago that March deliveries would be a disaster? Something to note: in all the reporting this week about the Tesla deliveries in March there were two "factoids" not mentioned anywhere, at least I didn't see these two items mentioned:
  • int eh US, the federal credit for purchasing a Tesla has pretty much gone away
  • Tesla has lowered the price of one or two or all three of its models twice so far this quarter (I forget the specifics; I think it was only regarding one model)
And, Musk Melon says Tesla is now ready to mass produce the lower-priced Model S.
Okay, here it is, from wiki:
Tesla finally announced the long-awaited (and long-promised) $35,000 base version of the Model 3 on Thursday, but the company also dramatically reduced the starting price of its other cars, the Models S and X. Each version of those cars now costs between $12,000 to $18,000 less than they did earlier this week.Mar 1, 2019.

Texas basketball. Wow, what an incredible year for Texas basketball.
  • Texas soundly trounces Lipscomb, 81 - 66, in the NIT
  • Baylor (Waco, TX), women will play for the Women's NCAA championship tomorrow night, vs ND (Notre Dame, not North Dakota)
  • Texas Tech is in the Final Four; tonight against Michigan State, CBS, 7:40 p.m. Central
Coincidence: just as I was writing that, a young women in a bright red pullover with Texas Tech across the front walks into Starbucks. Can we say "excited"?

Commissions: quick! What is the commission on an equity trade at Schwab?

Commissions: quick! What is the commission on an equity trade at Schwab?

Story: I started investing back in 1978 or thereabouts. I can remember the exact moment/setting but I can't remember the exact date. It was a Sunday night, about 7:00 p.m. in Vacaville, CA.

I began investing with three "companies" almost at the same time:
  • life insurance
  • mutual fund
  • brokerage firm
Back in 1978 there were no discount brokers (this is technically not quite true, see history of Schwab) -- but at least for me, there were no discount brokers available. I had no choice but to open an account with a full-service brokerage account  if I wanted to invest in non-mutual fund equities. Until discount brokers came along, if I invested in equities, it was through [an unnamed full-service brokerage account (FSBA)].

I bought shares in various companies over the years and almost never sold. After about ten years -- that would be 1988 -- I quit putting "new" money into [that FSBA]. But almost all my FSBA holdings had automatic reinvestment of dividends. For tax reasons and because of the high commissions, I never sold a share of anything in that FSBA after 1988. (There must be some exceptions but I have long forgotten.)

Since 1988, I have neither bought nor sold any equities for/from the FSBA account. Occasionally I have that FSBA send me some of the cash that builds up; since all original holdings had dividends automatically reinvested, I never understood how cash built up, but that's another story for another time.

The other day I looked at my FSBA portfolio to see what was in it that might be worth selling. I found a small position in some oil company that no longer made sense. I wrote a note Thursday night to myself to contact that FSBA on Friday to sell this holding. Overnight, while sleeping on this major event in my investing history, it dawned on me that it would be impossible to calculate the long term capital gains (brokerage firms have only recently been required to provide this information for equities held longer than ten years); and, the commission would be exorbitant (in fact, the commission might be greater than the proceeds -- LOL).

Out of curiosity I went over to that FSBA chat board yesterday afternoon and asked, "Just out of curiosity, what is the commission on an equity trade [at your FSBA]?"

Wow. The FSBA associate started typing -- a little note popped up saying that the associate was typing but I could not see what he/she was typing. Then it stopped. Then it started again. Then it stopped, then it started again. I still couldn't see what was being typed, but it was taking forever. I thought it was a fairly simple question but it looked like I was going to get a short essay for an answer.

Finally, there it was. First a lot of legalese about talking to one of their advisors by phone, but to answer the question, it was $75/trade, but if I wanted to change my account to non-advisory (I've never received any advice from that FSBA regarding equities except the A, B, C, D, F ratings on holdings), my trades could be free. [I forgot to ask about the account maintenance fee which also exists.]

[Up until a couple of years ago, that FSBA also charged a commission for all automatic dividend reinvestment -- something Schwab has never done.] And then after all that, finally this, "... but because you are a preferred awards customer [or something to that effect], the first 100 trades each month are free."

Holy mackerel. The first 100 trades each month!!! Unless they consider automatic reinvestment a trading action, I haven't done 100 trades with that FSBA in ... let's see ... 1978, did I say .... 2019 ... in 41 years.

Wow, I wonder when I became a "preferred awards customer"? No one ever told me. Of if they told me, I never inquired and was never told what the benefits were.
I do believe everything I have just written is generally accurate and generally true but with perhaps a little hyperbole although I don't think so, but there could be errors, typographical and/or factual. But I write all of that for the benefit of my granddaughters and nephews and great-grandchildren and grand-nephews/nieces (do such "things" exist).

Again, the 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.