Monday, May 20, 2019

Random Look At Nice MRO Wells In Reunion Bay, Sections 1/2-150N-93W -- May 20, 2019

The well:
  • 23176, 1,490, MRO, Tara Jo USA 34-12TFH, Reunion Bay, t1/13; cum 389K 11/18; offline 11/18; still offline 3/19; inactive;
That well, offline for the past several months, leads us to these two neighboring wells which have just been fracked:
  • 34262, 4,136, MRO, Yellow Otter USA 14-7TFH, 45 stages, 6.4 million lbs; Reunion Bay, t2/19; cum 73K 37 days; 32K over 13 days extrapolates to 73K over a 30-day month:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 34261, 5,035, MRO, Young Woman USA 44-12H, 45 stages, 8.4 million lbs; Reunion Bay, t2/19; cum 119K 53 days: 63K over 24 days extrapolates to 79K over a 30-day month:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 34260, 2,703, MRO, Walking Eagle USA 44-12TFH, Reunion Bay, t2/19; cum 44K 50 days:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Neighboring wells to the west running in the opposite direction, running north to south:
  • 18514, 672, MRO, Howard USA 11-1H, Reunion Bay, t6/10; cum 521K 3/19: recent production, note the few days in the past couple of months:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 33668, 3,278, MRO, Fannie USA 21-1H, Reunion Bay, t2/19; cum 61K 47 days
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 33667, 2,555, MRO, Dutton USA 21-1TFH, Reunion Bay, t2/19; cum 57K 52 days:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Apparently Tim Cook's Generation Raised "A Bunch" Of Socialists -- Never Have I Ever Agreed With Tim Cook So Much -- May 20, 2019

Screenshots from Drudge Report in last 72 hours.

Of course the Gallup poll suggesting 4 in 10 Americans embrace socialism doesn't support reality. Bernie, the only true socialist among the Democrat wannabes is barely able to get 20% of his party's polling. Assuming the Dems and the GOP are pretty much split 50/50, Bernie is grabbing 20% of 50% which amounts to 10% of all Americans in the polling/voting pool.

In the most recent polling, Bernie is polling 18.8%.


Regardless, apparently Tim Cook's generation raised a large number of Americans to be socialists.

Mexico Flirts With Suicide -- Op-Ed -- WSJ -- May 20, 2019

I have a tag, "Road To Mexico."

A theme on the blog: Mexico is hurtling toward the same situation we see in Venezuela.

How interesting to see an op-ed in the WSJ yesterday: Mexico flirts with suicide.

Annual Review: Average Revenue Per Employee And Fastest Growing Revenue Per Employee -- 2018 Data


May 25, 2019: from twitter --

Original Post

Released May, 2019.

Link here.

By sector, "Energy and Utilities" was number 1.

Energy & Utilities remains the top performing sector in terms of revenue per employee and the only sector with an average revenue per employee greater than $1 million. Healthcare, Mobile & Telecommunications, and Financial Services sectors are also performing well.

By company, these are the top 25 companies with the highest revenue per employee for FY18:

Among the top 25:
  • Valero Energy (1) -- $11.4 million / employee
  • Phillips 66 (2)
  • Cabot Oil & Gas (4)
  • EOG (5)
  • HollyFrontier (7)
  • ONEOK (8)
  • Exxon Mobil (10)
  • Hess (11)
  • Devon (12)
  • ConocoPhillips (13)
  • Chevron (14)
  • Diamondback Energy (16)
  • Anadark0 Petroleum (18)
  • Pioneer Natural Resources (19)
  • Concho Resources (20)
  • Marathon Oil (21)
  • Cimarex Energy (24)
Of note, missing:
  • Marathon Petroleum 
  • Apple
  • Occidental
  • Google
  • Facebook
  • Microsoft
At the other end of the scale, the 25 companies at the bottom end of the S&P 500 companies.

What If Green Energy Isn't The Future -- For The Archives

  • total nuclear, 2019: 1,767 MW
  • total coal that will close: 1,387 MW
  • in other words, closing the coal plants will almost be the same as closing the two nuclear plants which account for 23% of Minnesota's electricity generating capacity
  • I hope North Dakota and South Dakota are watching 
  • it's agreed that the Xcel plant will not be cheap but it won't be much more than rate of inflation

What If Green Energy Isn't The Future? -- WSJ -- May 20, 2019

For previous posts on this subject:
The screenshot:

Great, great, great question. I completely missed that angle when I wrote about OXY-Anadarko-Buffett earlier. Completely missed it.

The first thought someone might have to push back on this -- it's a short-term hedge by Buffett: in the short-term, over the next five years, green energy won't displace fossil fuel energy, and in fact, green energy will come up so short, that fossil fuel will do very, very well. In the short term.

That's possible. That's possibly what Buffett was thinking. He was hedging a short-term investment. Market timing.

One problem: Buffett says he does not invest for the short term. He invests for the long term.

So, that's point one: Buffett thinks long term.

Second, how many times a day does Buffett says he's bullish on America? Literally in every interview.

Now, the really, really cool part. Warren Buffett has access to the brightest minds and thinkers. His Rolodex is filled with the likes of Tim Cook and Bill Gates and T. Boone Pickens and Elon Musk. He (or his people) probably see more energy PowerPoint presentations in a week than most of us see in a year. In other words, Warren Buffett did not make a $10-billion bet on an ill-informed hunch.

It was a great headline, "What if green energy isn't the future?"

That was a great question.

But I think one could argue that a $10-billion bet in crude oil by Warren Buffett should tell other investors all they need to know about the future of green energy.

One word: batteries.

Link here. And this is after decades of research and billions of research dollars from Sony, Toyota, Apple, Samsung, Microsoft, et al.

The Apple Page

I did not read the graduation speech he gave and I won't but apparently the theme of his speech to graduates: "our generation failed you."

Hunter S. Thompson talked about this a lot. It was perhaps HST's favorite hyphenated word: self-loathing.

This is a common adjective conferred among people who ....

CLR Has Three New Permits In Epping Oil Field -- May 20, 2019

UK: the country may nationalize its energy sector. Yes, the entire sector. It appears they like the Venezuela model.

WTI: right in the sweet spot. $55 would be fine; $63 is very, very nice.

Rigs: although the number of active rigs in North Dakota, within limits, (don't take that out of context) doesn't mean a whole lot any more in the Bakken except to monitor activity to some extent,  the number has stabilized at a recent high of around 66. It would be "cool" to see the number of active rigs go to 70 this summer. It's possible with some smaller operators bringing in a rig or larger operators adding a rig, but I'm not holding my breath.

Active rigs:

Active Rigs6661512580

Three new permits:
  • Operators: CLR
  • Field: Epping (Williams)
  • Comments: CLR has permits for a 3-well Sefolosha pad in SWSW quadrant of section 23-155-99, Epping oil field; there is already one producing well in that drilling unit (#22811) and six more locations in SWSE quadrant of that section. Of those six, the far east one (#35266) has a rig on site.
Five producing wells (DUCs) reported as completed:
  • 35169, 725, Kraken Operating, Cass 4-9 2TFH, Oliver, t4/19; cum --; 
    • neighbor to the east, #21639, offline
    • neighbor to the west, #21778, offline
  • 33238, 3,541, Hess, AN-Dinwoodie-153-94-2833H-8, Antelope-Sanish, t4/19; cum --;
  • 33236, 2,706, Hess, AN-Dinwoodie-153-94-2833H-6, Antelope-Sanish, t4/19; cum --;
  • 33235, 2,154, Hess, AN-Dinwoodie-153-94-2833H-5, Antelope-Sanish, t4/19; cum --;
  • 33234, 2,471, Hess, AN-Dinwoodie-153-94-2833H-4, FrackFocus, 33-053-07886, 7 million gallons of water, Antelope-Sanish, t4/19; cum --; 
    • AN-Dinwoodie, same drilling unit
    • 19887, AN-Dinwoodie-153-94-2833H-1, t7/11; cum 251K 1/19; off line as of 1/19;
    • 33237, SI/NC, AN-Dinwoodie-153-94-2833H-7, t--; no production data;

With Little To No Fanfare, New Natural Gas Hookups In New York CIty Now "On Hold" -- May 20, 2019

This most incredible story is followed here.

A reader alerted me to this; a huge "thank you."

From ny1: National Grid ceases new natural gas hookups until pipeline is approved -- May 20, 2019.

From Watts up with that, May 19, 2019: :
The northeastern U.S.’s largest supplier of natural gas stopped processing new customer applications in New York City and Long Island after the Cuomo administration blocked a major pipeline project.
The moratorium is the second to hit New Yorkers in 2019 as a result of Democratic Gov. Andrew Cuomo’s opposition to natural gas pipelines needed to meet growing demand in the state and New England.
“We are not processing new applications for any new customers,” National Grid New York President John Bruckner said Thursday. “We’ll continue to receive requests for service, but we’re not processing them.”
From the reader, also at risk:
  • Belmont Park Arena: $1.2 billion sports arena for NHL hockey team along with associated retail / office facilities; on Long Island, Nassau County, just east of Queens
  • Nassau Hub: a $1.5 billion, 600-residential units, office, retail project
  • Ronkonkoma Hub: a $1.2 billion, 1,400-residential units, office, retail space
The reader also notes:
Although Manhattan and Da Bronx are yet to be officially cut off (different utility, Con Ed has franchise), Con Ed has already stated that they, also, expect to expand current moratorium already in place in Westchester to the rest of the city.

Almost half a million people live in government run housing in the city (the Projects). These residents almost exclusively use oil-fueled boilers for their heat and hot water. Expensive electricity is the source for cooking and drying of clothes without natural gas alternatives.
This will be a very, very interesting story to follow. The question is whether Governor Cuomo has crossed the "Rubicon"? A cursor scrolling through google searches/hits suggests if he has not crossed the Rubicon on this issue, he has come very, very close.

Think about this. Long Island has just lost Amazon HQ2 due to the leadership in Albany, NY. Now, the same leadership has put the entire NYC city area on notice that their leaders should now consider NYC and neighboring counties as no-growth cities. That is clearly the message I'm getting.

"Utility hook-ups" on Long Island are going to become the new "taxi medallions." 

The Book Page

Having read Valiant Ambition, Nathaniel Philbrick, c. 2016, a biography of Benedict Arnold, has really helped me understand the "environs" of New York City and New Jersey much better.

For example, as soon as I saw the location of the new Belmont Park Arena at wiki, I immediately "recognized" the area. For those of us in "fly-over country," we only think of NYC as Manhattan. We forget about Long Island (Queens and Brooklyn) and neighboring counties, Westchester to the north and Nassau to the east.

Likewise, the Nassau Hub, a huge, huge deal. It's also located on Long Island, Nassau County, just east of Queens/Brooklyn and just southeast of Fitzgerald's West and East eggs.

Likewise, the Ronkonhoma Hub -- another huge deal. Will be built in four phases over seven to ten years. A huge project under Governor Cuomo. Why would he jeopardize it with the craziness of denying a "routine" pipeline expansion permit? Crazy. From wiki:

In 2017, Governor Andrew Cuomo announced the groundbreaking of a new $650 million development to create a Ronkonkoma Hub near the LIRR Line, similar to the hub in the neighboring Brookhaven.

Ronkonhoma is located pretty much in the center, both east-west, and north-south, on Long Island, in Suffolk County, east of Nassau County. Suffolk County is directly across the Long Island Sound from New Haven, CT.  

By the way, that completes the four counties on Long Island: Brooklyn, Queens, Nassau, and Suffolk.

Making America Great! US To Be Net Exporter Of Gasoline First Time Since 1960 -- May 20, 2019

Almost 60 years ago: last time the US was a net exporter of gasoline.

From twitter today:

  • Obama: we can't just drill our way to lower prices.
  • Bernie: resist!
  • Buttigieg: we must change direction! 
  • Beto: re-set! re-launch! re-ject!
  • Biden: what just happened?

The "Long Pole In The Tent" -- US Crude Oil Exports -- May 20, 2019

For background, see these two posts:
The issue is the "long pole in the tent" when it comes to US crude oil exports. Today, RBN Energy provided a nice update / analysis, re-posting:

RBN Energy: crude exporters navigate gulg coast terminal constraints. Archived.
This blog is based on research from Morningstar Commodities. A copy of the original report is available here.
U.S. crude exports out of the Gulf Coast averaged more than 2.4 MMb/d in the first four months of 2019 — using infrastructure that is increasingly constrained by a lack of deepwater ports. U.S. crude is reaching destinations worldwide, with large volumes traveling long distances to Asia on gargantuan 2-MMbbl vessels — Very Large Crude Carriers (VLCCs) — loaded offshore by ship-to-ship transfer. Shipments to Europe are primarily on smaller Suezmax and Aframax vessels. Overall, the increased marine activity is testing the limits of existing infrastructure. Today, we analyze the past 16 months of crude export vessel movements and their impacts on Gulf Coast ports. (We’ll also be discussing this and other critical trends related to U.S. export markets live and in person.
Some other data points and narrative from that analysis:
We’ve covered the development of U.S. crude exports extensively in the blogosphere since the ban on most overseas shipments was lifted in December 2015. Exports from the Gulf Coast are growing and expected to increase further as new pipelines from the Permian and Eagle Ford come online over the next two and a half years (see Hard Hat and a Hammer). In the less than four years since wide-open exporting began, the rapidly developing export market has overcome a number of challenges, like poor price transparency (see The Race is On) and the lack of deepwater terminals to load exports (see Rock The Boat). Actual shipments still require considerable logistical juggling as crude is loaded from smaller tankers onto long-distance VLCCs for voyages to Asia, as detailed in Berth In Reverse. And, as we’ve been discussing in our Slow Ride series, ports like the Houston Ship Channel are contending with increased congestion and the resulting difficulties in scheduling. Plans to expand the onshore ports — and build new deepwater terminals offshore — are in the works, but funding and executing on these projects is not easy and can take many years.

With the exception of the Louisiana Offshore Oil Port (LOOP) terminal 20 miles off the Louisiana coast in the Gulf of Mexico, the Gulf Coast is not blessed with deepwater ports that can accommodate massive VLCCs. These supertankers and a handful of their giant brethren — the 3-MMbbl Ultra Large Crude Carriers (ULCCs) — require at least a 75-feet of draft to load fully and are the workhorses of long-distance oil transport between continents. Most Gulf Coast terminals are restricted to a 45-foot draft that only allows them to fully load Aframax tankers holding 500-650 MBbl of crude or to partially load Suezmax tankers that hold up to 1.3 MMbbl. Analysis of the Crude Voyager data shows that during the 16-month period from January 2018 to April 2019, 548 different vessels made a total of 1,402 crude export shipments from Gulf Coast terminals. Of these shipments, 69% involved Aframax tankers, 21% Suezmax, and 6% smaller Panamax (less than 500 Mbbl); 3% were loaded directly onto VLCCs. (As we’ll get to in a bit, many of the smaller tanker loadings were for ship-to-ship transfers to VLCCs.)
RBN Energy then provides an in-depth look at current export terminal capabilities.
The detailed logistics involved in getting U.S. crude out of Gulf Coast terminals and on their way to export markets underlines the ingenuity of shippers that have built export volumes from next to nothing to more than 2.4 MMb/d in just four years. The upcoming tsunami of crude from new pipelines out of the Permian and Eagle Ford over the next two years will surely test the export infrastructure. That’s the reason behind a slew of new project proposals to build deepwater Gulf of Mexico terminals off the coast of Freeport (TX), Texas City (TX), Corpus Christi, Brownsville (TX) and Louisiana, as well as plans to expand part of the Corpus Christi harbor channel to accommodate fully loaded VLCCs. 
If one or more of the new deepwater terminals are built, they would reduce the number of ship-to-ship transfers needed to load export cargoes. Then, in theory at least, pipelines could seamlessly feed deepwater terminals and load VLCC tankers directly and efficiently. If for any reason those deeper terminals don’t get built, expect to see increased congestion as existing Gulf Coast docks struggle to handle ever-larger crude export volumes.
Two very important data points were not addressed:
  • congestion: as we saw earlier this month, a small collision resulting in a small spill can shut down the entire port; and, 
  • as we saw last year -- and see almost every summer -- hurricanes will definitely shut down the port

The Southern Surge, Nothing About The Bakken -- May 20, 2019

One-hundred thousand new immigrants per month during the southern surge is likely to ontinue for some time.

This is where many will end up:

Also, in the hotel/motel housekeeping industry; landscaping industry; dishwashing in restaurant industry, etc., etc. All off the books, of course.

If Congress is not worried, I'm not worried. One million / year at $5,000 / year = $5,000 million or $5 billion to sustain them. The federal government will absorb that cost the first year or two but after that local communities will take over. For the federal government, $5 billion is trivial, especially when most of that money will circulate through the economy.

As far as voting goes: misplaced anxiety.

Bigger concern: the US Supreme Court uses the indentured servant argument from the past as precedent and allows states to include illegal immigrants in their population totals. Of course, to get that number, the illegal immigrants will have to be counted.


I've not looked at the market in about two weeks and have no plans to look at it until the China trade issue is "settled" -- in quotes, because the issue will "never" be settled.

All we will get are temporary truces.

But I happened to see something over at zerohedege regarding Tesla, so was curious. If I recall correctly, I read somewhere that $234/share was the magic number -- it had something to do with Musk Melon's personal risk. I see that Tesla dropped below $200/share (zerohedge) and today is trading at $202.

Google: Tesla today wsj -- link here.

From the linked article:
Tesla Inc. TSLA shares fell to their lowest level in a year Monday amid growing concern regarding the demand for its Model 3 vehicle and the electric car maker’s balance sheet.

The Palo Alto, Calif., company’s stock fell about 5% to $200.33 after Wedbush Securities analysts slashed their price target on the company’s shares to $230 from $275. The analysts cited concerns around Tesla’s growth prospects and underlying demand for the Model 3 in the U.S. over the coming quarters.

In April, Tesla reported one of its worst quarterly losses in history as revenue declined 37% from the prior quarter to $4.54 billion. Vehicle deliveries in the period fell 31% from the fourth quarter. The company is in the midst of proving it can sustain demand for the Model 3 after lowering the price of the sedan to $35,000.

“We have continued concerns around Tesla’s ability to balance this ‘perfect storm’ of softer demand and profitability concerns which will weigh on shares,” the Wedbush analysts said in a research note.

A Tesla representative couldn’t immediately be reached for comment. 
Generally, it's easy to get a statement from Musk Melon.

A lot of Teslas are sold in the Dallas-Ft Worth area.

I saw one in the Starbucks parking lot today. Once they have a few miles on them they look like any other used sedan in the lot. Just saying.

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.

No matter how many miles there are on a Chevy Corvette, Ford Mustang, or Porsche, they all retain their luxury or muscle-car look.

The Price Of Gasoline And The Mix Of Vehicle Sales -- May 20, 2019

The link to this article was sent to me by a reader last week.

It's a difficult article to follow, for two reasons:
  • too many ads which interrupt the flow of the article;
  • the writer seems to be focused on three things, making it unclear what the writer was primarily interested in
But after re-reading it closely, the writer had three points:
  • the mix of privately sold vehicles in the US is overwhelmingly leaning towards trucks (70%) vs sedans (30%)
  • the sales lots across the country are filled with trucks and cars
  • the price of gasoline has little correlation with the mix of truck/sedan sales
Actually, the writer had really only one point: to sell subscriptions to his pay site but that's a different story.

It should be noted that the definition of trucks is broad:
  • anything that is not a sedan
  • pickup trucks, SUVs, and minvans (yes, even minvans)
The writer's conclusion:
  • little correlation between the price of gasoline and the mix of vehicle sales in the US
The article, by the way, is an advertisement disguised as a news article for the writer's research firm.

His conclusion:
The dramatic shift in sales to the truck segment is the strongest contributor to the bull case but also the biggest threat if the mix of sales shifts back towards cars as it has in the past. So, if not gasoline prices, then what causes the cyclical shifts in sales mix between cars and trucks? If you'd like a comprehensive answer to that last question, please contact us for pricing information.
Pricing information for a subscription to his pay-site.

If you are wondering what the writer is talking about when he says "bull case": he's talking about investing in automobile manufacturers. As long as trucks remain the big seller, automobile manufacturers will do very well; the margins are greater on trucks than on sedans. So, even if overall vehicle sales are down, automobile manufacturers can continue to do well if they sell high-margin "trucks."

By the way, we've talked about this more than once on the blog. The price of gasoline is but one data point in this equation. Two other data points are much, much more important.

First, the total amount spend on gasoline over a year is not all that great in raw numbers regardless of the price of oil when one actually runs the numbers which I've done several times.

Second, the price paid per gallon is a lot less important than how much one actually drives. When prices are high, consumers can easily combine driving trips to save on gasoline. Likewise, they can drive less fast. It's amazing how much gas can be saved driving cross-country at 55 mph compared to 85 mph. Driving not at all on days when one does not go into work would be a huge savings. Etc. Etc.

By the way, here in north Texas, the least expensive grade of gasoline is incredibly affordable, back down to $2.49 or thereabouts. One can actually find gasoline for $2.09/gallon in Ft Worth, Texas, according to gasbuddy.

We Start Out With 66 Active Rigs In North Dakota This Week -- May 20, 2019

Russian corrosion: posted on May 15, 2019 --  worse than initially reported. Today, this over at twitter regarding the Russian pipeline --

Texas: Texas governor says it's time to turn off red-light cameras in Texas. The legislators have voted to kill the red-light cameras. Now on Governor Abbott's desk. 

WTI: $63.16. Sounds like normal-normal.

Back to the Bakken

Wells coming off confidential list over the weekend, Monday -- Monday, May 20, 2019:
  • 35583, SI/NC, XTO, Halverson 13X-33CXD, Capa, no production data,
  • 34753, 589, Lime Rock Resources, Williams Sadowsky 9-4-9H-142-96; Manning, t12/18; cum 36K 3/19;
Sunday, May 19, 2019:
  • 35584, SI/NC, XTO, Halverson 13X-33BXC, Capa, no production data,
  • 35151, drl, XTO, Bullberry Federal 24X-2D, Lost Bridge, no production data,
  • 34903, SI/NC, Hess, SC-Gene-154-98-0805H-1, Truax, no production data,
  • 34872, 589, Oasis, Dixon 5602 42-34 4B, Bonetrail, t12/18; cum 67K 3/19;
  • 31561, SI/NC, Slawson, Submariner Federal 6-23-20TFH, Big Bend, no production data,
Saturday, May18, 2019:
  • 35585, SI/NC, XTO, Halverson 13X-33EXF, Capa, no production data,
  • 35154, SI/NC, XTO, Bullberry Federal 24X-2G, Lost Bridge, no production data,
  • 34902, SI/NC, Hess, SC-Gene-154-98-0805H-9, Truax, no production data,
The Hess Gene / JCP wells in Truax field are tracked here

Active rigs:

Active Rigs6661512580

RBN Energy: crude exporters navigate gulg coast terminal constraints. Archived.
This blog is based on research from Morningstar Commodities. A copy of the original report is available here.
U.S. crude exports out of the Gulf Coast averaged more than 2.4 MMb/d in the first four months of 2019 — using infrastructure that is increasingly constrained by a lack of deepwater ports. U.S. crude is reaching destinations worldwide, with large volumes traveling long distances to Asia on gargantuan 2-MMbbl vessels — Very Large Crude Carriers (VLCCs) — loaded offshore by ship-to-ship transfer. Shipments to Europe are primarily on smaller Suezmax and Aframax vessels. Overall, the increased marine activity is testing the limits of existing infrastructure. Today, we analyze the past 16 months of crude export vessel movements and their impacts on Gulf Coast ports. (We’ll also be discussing this and other critical trends related to U.S. export markets live and in person.