Monday, May 6, 2019

Idle Rambling, The Market -- May 6, 2019

Last week these top US economy stories:
Today's swing in the market speaks volumes.

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

SRE: will report before market opens tomorrow. Expectations: $1.68/share on sales of $3.1 billion. Last year: $1.43/share on sales of $3 billion. Also here, SeekingAlpha: $1.69/share.

DNR: will report in the a.m. before market opens; expectations: 9 cents/share.

FANG: reports after tomorrow's close; $1.38.

How relevant is OPEC? Headlines that all-out war in the Mideast was about to break out and oil hardly moved. Tea leaves suggest Russia will maintain reduced production or even cut a bit more.

Leaked? One has to ask why? When we "played" war games at Air War College, we "gamed" intelligence "leaks" to the press. This leak? I think it's to let Iran know that "we" know what they are "thinking." Maybe that will be enough to make them "think twice." From The WSJ this evening --
Unusually specific intelligence reports about fresh Iranian threats to American forces in the Middle East triggered a request by the U.S. military command in the region for additional assistance as a deterrent against possible aggression.

Military uniform: see this article on the new US Army uniform. This is what caught my eye:
the Army plans to roll out the new uniforms to all soldiers starting in 2020. Soldiers will even be given the option to buy a retro-styled leather bomber jacket to go with the uniform. The US Air Force did that several years ago but the jackets were only authorized for a subset of officers. It's possible the Air Force bomber/fighter jacket program has been expanded. So many great memories.

Interest rates: by the way, did you all see interest rates fell today? Exactly what Trump has been asking for .... and the Fed won't help out. More than one way to skin a cat, as they say.

Sinclair Renews Sixteen Permits; Three Other Operators With Seven New Permits -- May 6, 2019

Active rigs:

Active Rigs6262492785

Seven new permits:
  • Operators: XTO (4); Rimrock (2); Whiting
  • Fields: Capa (Williams); South Fork (Dunn); Sanish (Mountrail)
  • Comments:
    • XTO has permits for a 4-well Linda pad in section 22-155-95, Capa oil field;
    • Rimrock has permits for a Skunk Creek pad in section 2-148-93, South Fork oild field;
    • Whiting has a permit for a single Lindseth well in lot 4/section 1-154-92, Sanish oil field;
Sixteen permits renewed, all by one operator, and all in McKenzie County:
  • Sinclair: two Diamond permits; six Forest USA permits; two Horovitz permits; and, six Yauch permits

Who Wudda Thought? WTI Much Cheaper Than Light Sweet Malaysian Kimanis Crude -- May 6, 2019

From twitter this morning. Who wudda thought.

This can't be good news for Malaysia.

Non-Bakken Stuff -- May 6, 2019

Fake news?

Spot on! It's been my contention for quite some time that the "southern surge" will work out just fine. I'm not saying that it's right way of doing things, but the end-game is not all that bad. The US needs a lot more sub-$15/hour employees. Today, this headline:
The US allows 30,000 more visas for seasonal workers

Polls -- 2020 Democrat presidential nomination, link here:
  • Biden widens lead; pretty much at expense of Bernie; others maintain
  • Bernie fading; at 16%
  • Pocahontas - Kamala - Buttigieg: 8% at best
  • Beto: 5%
  • Booker: 2%
  • Amy gets a lot of press; not much polling (1.6%)

Oasis Reports A Huge Aagvik Well In The Banks; Over 325K BOE In Less Than Five Months; Also, Huge "Halo" Effect -- May 6, 2019

The well:
  • 34037, 1,787, Oasis, Aagvik 5298 41-35 3BX, 50 stages; 9.9 million bls; Banks, t11/18; cum 219K 3/19; 
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Total production:
  • MCF: 638,187 MCF = 106,347 boe
  • crude oil: 219,374 bbls
  • = 325,721 boe in less than 5 months
From the file report:
  • 8 miles north of Watford City, ND
  • fourth of five wells to be drilled north on this pad
  • the pad is set up as a 1280-acre spacing unit
  • target: middle Bakken
  • spud; then re-entered on April 2, 2017 (sic); most likely a typo, should be "2018"?
  • problems with the vertical; hole cemented back, and sidetracked
  • this sidetrack was deemed a failure
  • sidetracked again; this time successful
  • curved completed in 11.5 drilling hours
  • successfully deconflicted other wellbores in the area; lower Bakken shale
  • this horizontal was calculated to be about 7 feet TVD from another existing wellbore
  • reached TD on April 18, 2018
  • drilled from surface casing to total depth in 16 days
  • wellbore in the desired target interval for 64% within target
  • over/under passes were required to avoid hitting Aagvik 1-35H and the Lundeen 4-26H
  • no shale strikes
So, how did the Aagvik 1-35H and Lundeen 4-26H do?

The Lundeen 4-26H is still off-line. Will check back on this well in a few months.

But look a tthe Aagvik 1-35H that runs diagonally "across" the new Aagvik wells,
  • 17986, 501, Oasis, Aagvik 1-35H, 33-053-03008, Banks, t12/09; cum 213K 3/19; FracFocus, not re-fracked; full production profile at this post; huge "halo" effect; better than the "initial" production; 
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

When I see things like this in the Bakken, I still find it amazing that companies like SM Energy exited the Bakken to go elsewhere. What were they thinking?

Another Phenomenal Bruin Fort Berthold Well ; 140K In Less Than Five Months -- May 6, 2019

The well:
  • 29135, 1,958, Bruin, Fort Berthold 147-94-1B-12-6H, McGregory Buttes, t11/18; cum 141K 3/19; 
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Top Story In Paris Over The Weekend -- HIgh Gasoline Prices -- May 6, 2019

From a reader after I posted the graphic below:
France, 1Q19 -- GDP 0.3%; current unemployment 8%; gasoline priced over $5.00/gallon.
The US left wants the US to be like the EU. Need I say more?
 I filled gas Friday at Fleet Farm in Fargo. Price was $2.51.9 with 4 cent discount. Gas retailers have access to three pipelines in Fargo. Competition.

Eleven Wells Coming Off The Confidential List Today -- May 6, 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 think you may have reader he.

Note: I am inappropriately exuberant about the Bakken.

Fitzsimmons: over at SeekingAlpha -- Enbridge has 30% upside.

Wells coming off the confidential list over the weekend, today -- Monday, May 6, 2019: 19 wells for the month; 114 wells for the quarter
  • 35200, 2,194, WPX, North Mabel 2-35HS, Mandaree, t3/19; cum --;
  • 32511, 220, BR, CCU Mainstreeter 6-1-25MBH, Corral Creek, t3/19; cum --;
  • 29135, 1,958, Bruin, Fort Berthold 147-94-1B-12-6H, McGregory Buttes, t11/18; cum 141k 3/19; see production data here;
Sunday, May 5, 2019: 16 wells for the month; 111 wells for the quarter
  • 35201, 2,396, WPX, North Mabel 2-35HB, Mandaree, t3/19; cum 19K 27 days;
  • 35006, SI/NC, Hess, CA-Ferguson Smith-155-95-3031H-5, Capa, no production daa,
  • 34427, 773, Oasis, Martin 5302 11-4 2B, Rosebud, t11/18; cum 91K 3/19;
  • 34040, 613, Oasis, Aagik 5298 41-35 6T, Banks, t11/18; cum 100K 3/19;
  • 34039, 733, Oasis, Aagvik 5298 41-35 5B, Banks, t11/18; cum 122K 3/19;
  • 34037, 1,787, Oasis, Aagvik 5298 41-35 3BX, Banks, t11/18; cum 219K 3/19; over 325K in less than five months;
Saturday, May 4, 2019: 10 wells for the month; 105 wells for the quarter
  • 35203, 2,615, WPX, North Mabel 2-35HW, Mandaree, t3/19; cum --;
  • 35007, SI/NC, Hess, CA-Ferguson Smith-155-95-3031H-6, Capa, no production data,
The Aagvik wells are tracked here.

Active rigs:

Active Rigs6462492785

RBN Energy: re-contracting issues for older Permian crude pipelines.
Old age and treachery will always beat youth and exuberance. So the saying goes, and it often holds true for midstream projects as well as people. Many times we’ve written that existing pipe in the ground beats new pipeline projects; it’s frequently easier and faster to expand the capacity of an older pipe than it is to build an entirely new pipeline. But eventually, contracts on these old pipelines expire, and as they do, shippers may have new, more attractive options — maybe proposed new pipes offer better connections to gathering systems, the ability to segregate batches of crude oil, and/or access to more desirable markets.
Most importantly, they probably are willing to charge a lower tariff. In the Permian, we’ve seen a slew of new pipelines advance to construction by promising lower and lower shipping costs to move crude from West Texas to the Gulf Coast. Today, we look at how older pipelines’ re-contracting efforts will be affected by their competitors’ lower tariffs and operational advantages.
Existing Permian pipelines, from RBN Energy: