Friday, June 7, 2019

Conan Cuts His Late-Night Talk Show In Half; Nothing About The Bakken -- June 7, 2019

I watch Conan O'Brien very, very, very infrequently. I really don't care for him (much) at all. I enjoyed him years ago, but like many, he's a one-trick pony.

I was surprised to see his show go to 30 minutes. And he's squeezed in between sitcom re-runs: Seinfeld, Big Bang Theory. Really poor placement.

Here's the spin from The Hollywood Reporter: link here. Here are my thoughts:
  • it's a fact that the #1 coveted demographic, those aged 25 - 45, have moved from television to their mobile devices (including laptops)
  • Conan is correct; he's trying to find relevancy in a digital age
  • but his biggest problem -- he is silly and he has a silly program: people can only take so much silliness. 
  • silly? Maybe that explains why TBS placed him between sitcom re-runs -- they are just as silly (having said that, Seinfeld still really, really holds up well) 
  • Johnny Carson -- the king of late night TV had exactly the right mix -- and no one can match it
  • I never had the feeling that Johnny Carson was a one-trick pony -- like Letterman, one never knew what to expect on any given night -- he was always "the same" but he always seemed to be good -- although he did get a bit long in the tooth in his last few years -- but much of that seemed to be the fact that he simply seemed bored
  • the "top 3" of late night network television: way too political
  • but Conan: he's not political. He's just too "silly" 

Saudi Arabian Crude Oil Production May Have Hit A Recent Low -- June 7, 2019

I doubt anyone really knows how accurate data regarding Saudi Arabian production is, but if this is accurate, this is astonishing. As a rule of thumb, Saudi Arabian crude oil production is around 11 million bopd. In my mind, it's noteworthy if Saudi Arabian production drops to 10 million bopd. But look at this:

In addition, Saudi Arabian production should increase int he summer pushed by domestic demand: Saudi uses crude oil to generate electricity for its air conditioning demands.

We should be getting Saudi Arbian-US import data for April, 2019, any day now. Link here.

Six New Permits; Including A Peregrine Petroleum Permit -- June 7, 2019

Active rigs:

Active Rigs6460522682

Six new permits
  • Operators: Petro Harvester Operating Company, LLC (4); Peregrine Petroleum Partners, LTD; and, Whiting
  • Fields: Lignite/Flaxton (Burke); Covered Bridge (McKenzie), Sanish (Mountrail)
  • Comments:
    • this is the first time in a long time that we've heard from Peregrine; Peregrine has a permit for a single Larson well in section 15-146-102, Covered Bridge oil field; Peregrine has eleven permits in North Dakota;
    • Whiting has a permit for a single Fladeland well in section 26-153-91, Sanish oil field;I don't track the Fladeland wells but one can get an idea of the Fladeland wells at this post;
    • Petro Harvester has permits for a four-well Lig2 pad in section 2-162-91, in Flaxton/Lignite oil fields
Peregrine: this is the information I have on Peregrine over at "Bakken operators" --
Peregrine Petroleum Partners, LTD: website
  • acquires producing and non-producing property in the heart of the Bakken; to include 22 producing wells, March 9, 2019;
  • acquiring royalty property in Divide County, press release, March 3,  2018
  • May 6, 2016: a permit for a well in Hay Draw field, McKenize County
  • April 16, 2015: Peregrine Petroleum: has six permits in North Dakota; the previous five were back in the early 1990's; this is the first new permit in North Dakota in two decades for Peregrine:
    • 23920, Peregrine Petroleum, Covered Bridge-Bakken, establish a 1280-acre unit; 4 wells, McKenzie; Covered Bridge is a 3-section field in south central McKenzie County, far from the sweet spots in McKenzie; Peregrine did have some Bakken wells back in the 1990's; there is a huge Birdbear well in this little section that has produced almost 500,000 bbls since 1983; a stripper well now
  • March 13, 2015: Peregrine drilled five (5) Bakken wells many years ago; all very short horizontal wells in the far south-central/west McKenzie County (currently not much activity); they are all still active and producing, albeit very, very little; this is the company's first permit in North Dakota since 1993
One dry hole:
  • 35419, dry/PNC, Kraken Operating, Dragseth 9-4 2TFH, Winner, from the file report:
    • "Due to a decrease in oil price and in an effort to keep a positive cash flow, Kraken Operating, LLC, has pulled the Nabors B22 rig from our Dragseth location prior to drilling all wells to this time we plan to have the Nabors B-22 rig returning to this location by 10-16-19 to continuing drilling the remaining wells to TD."
    • the daily activity report calls this a "dry" well; in fact, the scout ticket calls it "PNC." The latter is, obviously, more correct. 
    • there are "no" dry wells in the Bakken; we've discussed this before
Six producers abandoned:
  • 03844, Hess, Beaver Lodge-Silurian
  • 18631, Hess, Blou 12 in Williams County
  • 17520, CLR, JDT 24-10SH, in Bowman County
  • 10071, Rampart Energy, Jellesed in Mountrail County
  • 12196, Hess, T. Lalim in Williams County
  • 17899, Lime Rock Resources, Stroh 11-1H, in Dunn County
One producing well (a DUC) reported as completed:
  • 35091, 3,237, Hess, AN-Bohmbach-153-94-2734H-10, Sanish, t5/19; no production data; the Bohmbach wells are some huge wells and are tracked here;

... And I Love Lutefisk!

Weekly Number Of Active Oil Rigs Meaningless -- June 7, 2019

I've maintained for quite some time, probably since 2014 or thereabouts, that rig counts no longer matter (not to be taken out of context).

I was reminded of that when I saw this headline over at oilprice.

For the record:
  • oil rigs fell by 11 (to 789; or a decrease of 1.375% -- big whoop!)
  • natural rigs actually increased by 2 (to 186, or an increase of 1% -- another big whoop!)
  • overall, a net decrease of 9 rigs (or a decrease of 0.9% -- not even a 1% decrease and that's the big headline -- wow -- completely missing the point)
Much more relevant: number of wells offline for operational reasons and wells drilled to depth but not completed (DUCs). I track that in the Bakken at this site. These are wells that could be brought on line within days in some cases, weeks in all cases, if necessary.

By my reckoning there are upwards of three-years worth of inactive wells/DUCs in the Bakken. Stop drilling in the Bakken today, and the state could clip along for three years just be bringing those wells into production.

And that doesn't even count the tens of thousands, perhaps twenty thousand wells that should be re-fracked in the Bakken with modern completion strategics and state-of-the-art technology.

I don't track the numbers in the Permian but my hunch is that at some point in the future, the similar data point in the Permian will be upwards of 10 times what it is in the Bakken.

I track the number of DUCs and inactive wells in North Dakota at this site.

One can also track posts on DUCs using this "search."

Related tags:
Much more relevant than rig counts:
  • number of DUCs
  • fracking backlog
  • drilling rig efficiency
  • the EPA drilling reports (the "dashboards")
By the way, the "raw" number of rigs -- worldwide -- added or taken down is incredibly useless information. If one wants to consider the number of rigs as somewhat meaningful, we need to know:
  • regionally, the rig numbers, not the global numbers; and, 
  • rigs being added or taken down on a percentage basis
Even when the number of active rigs in North Dakota was hitting "modern" lows, North Dakota was still setting all-time production records.

Some oft-visited posts:

The Ninth Circuit Court? Really? -- Keystone XL Back On The Table -- June 7, 2019

A big "thanks" to the reader who spotted this:
A Ninth Circuit Court judge nullified a key barrier to the construction of the Keystone XL pipeline, arguing that it no longer applies after the Trump administration replaced the permit earlier this year.

Judge Edward Leavy out of Montana ruled Thursday night in favor of the Trump administration and TransCanada Corporation’s motion to dismiss.

The ruling sided with arguments that the old permit for the pipeline, which was replaced by the Trump administration in March, is no longer valid and therefore the injunction associated with it also no longer applies.

The action hands a victory to the Trump administration, which has long fought to finish construction of the international pipeline. It also opens up the door to restarting construction of the Keystone XL pipeline, which was halted in courts last fall in part due to failure to properly account for the cumulative impacts of greenhouse gases from the construction.

Trump in May signed a presidential permit as a way to jump-start the delayed construction of the 1,179-mile pipeline. The order superseded a March 2017 order.

On The 75th Anniversary -- Angela Merkel Says US Is No Longer An Ally -- June 7, 2019

Victor Hanson.
Merkel all but announced that Germany, or for that matter Europe itself, is no longer really an ally of the United States: “There is no doubt that Europe needs to reposition itself in a changed world. . . . The old certainties of the post-war order no longer apply.”

She insisted that Germany views the democratic United States as not much different from autocratic Russia and Communist China: Urging Europe to present a united front in the face of Russia, China, and the U.S., she said, “They are forcing us, time and again, to find common positions.”
And Merkel concluded that therefore Germany must find “political power” commensurate with its economic clout to forge a new independent European path.

In other words, in the calculus of the supposedly sober and judicious Merkel, the democracy that saved Europe twice from a carnivorous Germany — and Germany once from itself and once from becoming a Soviet vassal — is now similar to the world’s two largest authoritarian dictatorships, nations that not so long ago murdered respectively 30 million and 70 million of their own citizens.
And how odd a sentiment for someone who grew up in Communist East Germany, a nightmarish state whose collapse was largely attributable to the Reagan-era effort to bankrupt and roll back the Soviet empire.

Austin Chalk -- Update -- June 7, 2019

Austin Chalk: large-scale seismic survey to be undertaken.
CGG and Fairfield Geotechnologies are teaming up to conduct a large-scale, multi-client seismic survey of the Austin Chalk formation in South Central Louisiana, CGG reported Thursday.

Under their recently signed cooperation agreement to conduct a 578-square-mile wide-azimuth survey called “Bayou Boeuf,” CGG and Fairfield plan to image the Austin Chalk in portions of Avoyelles, Evangeline, Rapides and St. Landry parishes. In a written statement emailed to Rigzone, CGG added that permitting is nearly complete and acquisition is expected to start in September of this year.

“The Austin Chalk is a prospective play that has been gaining interest among operators in the industry,” stated Dechun Lin, executive vice president of CGG’s Multi-Client and New Ventures unit. “The aim of our Bayou Boeuf survey is to provide a better understanding of the geology in the area, unlocking its potential.”

A February 2018 map produced by the Louisiana Department of Natural Resources shows various oil and gas fields within the Austin Chalk.

To put that in perspective, the Bakken will produce more than 1.4 million bbls of oil every day, or 55 million bbls of oil in less than 40 days.

Unemployment Rate For May, 2019, Remains At 50-Year Low -- June 7, 2019

Jobs, from CNBC:
  • Nonfarm payrolls for May increased up by just 75,000, the Labor Department says.
  • Economists surveyed by Dow Jones expected a gain of 180,000.
  • March’s job count was revised lower from 189,000 to 153,000 and the April number was lowered to 224,000 from 263,000, for a total reduction of 75,000.
  • The unemployment rate remained at a 50-year low of 3.6%.
  • Average hourly earnings year over year in May were up 3.1%, one-tenth of a point lower than expectations.
It would be interesting to see analysis of the jobs report. For months we've been hearing that so many folks joining the workplace, that the US is running out of workers. Hmmm... the fact that May payrolls up only 75,000 suggests there may be some truth to that ...I would assume the "southern surge" folks being hired are kept "off the books." More than a million folks came across the border illegally in the last twelve months.

Drudge teased with "wage increases cool...." LOL. Hourly earnings were up 3.1% year-over-year, just a tenth of a point off the consensus.

CNBC said that "stock futures fell" after the report ... in fact, the Dow is up another 175 points today after several days of huge gains.

There is talk that the Fed could lower rates this month (June, 2019) and some folks even think the Fed could entertain a third rate cut in December, 2019.

By the way, wholesalers and retailers are now going to trade shows and putting in orders for the Christmas holidays. The China trade issue continues. It will be interesting to see how Christmas, 2019, sales play out. My hunch: better than ever.

Disclaimer: this is not an investment site. I am inappropriately exuberant about the Bakken and similarly inappropriate bullish about America. Do not make any investment, financial, job, travel, or relationship decisions based on anything you read here or think you may have read here.

The Book Page

The Life of Graham Greene, Volume II, 1939 - 1955, Norman Sherry, c. 1994. I have an autographed edition.

The war years in England. Reminds me how good we have it here in the US. Helps put everything in perspective.

The London blitz began September 30, 1940:
  • 1,300 German bombers
  • escorted by 600 fighters
  • began at 5:00 p.m.; went until 4:00 a.m. the next morning
  • seventy-six (76) consecutive devastating raids
  • united London like nothing before
  • London was empty; folks had evacuated weeks (and, in some cases, months) earlier
  • those still left in London, lived out their nights underground
  • all along the walls, bodies laid two deep
  • after a month of aerial war, "it" became routine; same groups of people in the same "tubes"
  • at first, they waited to make tea after the initial bombing; later, they were so used to "close calls," they simply made tea at 9:00 p.m.; tea and biscuits at 9:00 p.m. -- everyone paid a penny and took turns supplying the tea and sugar; lights were shaded at 10:00 p.m.; snorers ceased to arouse angry feelings -- toleration developed
  • April 16, 1941: central London experienced its worst raid
  • referred to "The Wednesday"
  • in one night, 2,000 civilians died
  • 100,000 homes destroyed
 That evening:
When the air-raid siren went on 16 April, [Graham] Greene and [his mistress] Dorothy were having a drink in the Horsehoe. Leaving the pub, they went to Frascati's and then to Victor's, hoping to have dinner before the raid got under way, but both [Frascati's and Victor's] were closed. They ended up in Czardas, sitting apprehensively next to plate-glass windows. An hour into the raid, bursting bombs in Piccadilly shook the restaurant in Dean Street, and they left, walking back to the home they shared in Gower Mews. Dorothy was on duty fire-watching and Greene went with her to her post on the roof of a garage. Before they reached the garage, they saw flares from enemy planes drifting down "like great yellow peonies." 
In spite of the severity of the raid, in all that terrible night, Greene met only one person who lost his nerve ... and he was a foreigner.

New words:
  • susurrus: although I have come across that word once before; I don't remember where
  • casuistical: related to sophistry, but the former is more "theological" than the latter; a reader suggests Bill Clinton's answer, "It depends on the definition of 'is' as a great example of casuistical. 

The Incredible Bakken -- Random Update Of A CLR Helena Well In Brooklyn Oil Field -- June 7, 2019

For full production profile, see this post.

The well:

22679, 822, CLR, Helena 3-7H, API: 33-105-02579, Brooklyn, t10/12; cum 217K 4/19; no re-frack according to FracFocus; no sundry form to indicate a re-frack; new Helena wells are now being fracked; (#34768, 3/19)

Production jump from 750 bbls/month t0 12,000 bbls/month and then levels off at 5,000 bbls/month:
  • 16x increase increase initially
  • 7x increase later 
  • a "mom-and-pop" mineral owner getting $100 / month on this well before the neighboring refrack, received upwards of $1,600/month for several months and then $700/month for an unknown number of months yet to come; in addition, that "mom-and-pop" mineral owner will now receive royalties on a several new Helena wells.
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

California Not Even Mentioned

Three Wells Coming Off Confidential List Today -- Friday, June 7, 2019 -- National Donut Day

Austin Chalk: large-scale seismic survey to be undertaken. See this post for graphics.
CGG and Fairfield Geotechnologies are teaming up to conduct a large-scale, multi-client seismic survey of the Austin Chalk formation in South Central Louisiana, CGG reported Thursday.

Under their recently signed cooperation agreement to conduct a 578-square-mile wide-azimuth survey called “Bayou Boeuf,” CGG and Fairfield plan to image the Austin Chalk in portions of Avoyelles, Evangeline, Rapides and St. Landry parishes. In a written statement emailed to Rigzone, CGG added that permitting is nearly complete and acquisition is expected to start in September of this year.

“The Austin Chalk is a prospective play that has been gaining interest among operators in the industry,” stated Dechun Lin, executive vice president of CGG’s Multi-Client and New Ventures unit. “The aim of our Bayou Boeuf survey is to provide a better understanding of the geology in the area, unlocking its potential.”

A February 2018 map produced by the Louisiana Department of Natural Resources shows various oil and gas fields within the Austin Chalk.
Back to the Bakken

Williston "enplanements" up almost 20%, year-over-year: Sloulin Field International Airport --
Sloulin Field International Airport posted a 19.9% increase in total revenue passengers for May 2019 as compared to May 2018. Total available seats increased by 19.0% while load factors increased by 0.4%. Year to date, the Airport is up 18.1% in total revenue passengers and down 1.4% in load factor, while seeing an increase of 19.2% total seats.
Wells coming off the confidential list today -- Friday, June 7, 2019: 19 for the month; 208 for the quarter;
  • 35573, SI/NC, Newfield, Goliath 150-98-5-8-5H, Siverston, producing at a 1,000 bopd, but on the SI/NC list; neighboring wells, #18641 and #18741 both offline;
  • 34768, 1,395, CLR, Helena 8-7HSL1, Three Forks 1, 57 stages; 8 million lbs; Brooklyn, producing very nicely; t3/19; cum 59K 41/19; see this note;
  • 30029, SI/NC, Hess, BB-Federal 151-95-0817H-4, Blue Buttes, no production data,
Active rigs:

Active Rigs6560522682

RBN Energy: Keyera, SemCAMS greenlight a new Montney condensate/NGL pipeline. The Montney is tracked here.
Keyera Corp. and SemCAMS Midstream, two major midstream players in Western Canada, in mid-May announced they are proceeding with the construction of their joint-venture project — a new NGL and condensate pipeline system out of the liquids-rich Montney and Duvernay plays of Alberta. The planned Key Access Pipeline System would provide the first direct competition for the transportation of NGLs and condensate out of these producing regions, currently dominated by Pembina Pipeline Co. Any and all transportation options for the movement of condensate and other NGLs out of the Montney and surrounding plays will likely be welcomed by Western Canadian natural gas producers, who are looking to capitalize on oil-sands producers’ growing demand for homegrown sources of condensate for use as diluent in bitumen transportation. Today, we provide key details about the project and how it fits into the region’s existing condensate/NGLs market.
Increases in liquids-rich natural gas production from the Montney, Duvernay and other plays have helped to lift Western Canada’s natural gas production fortunes in the past few years. We recently started examining this gas production recovery trend with the opener of our Get Me Out of Here series. The rise in the production of associated liquids, such as condensate, has begun to test the ability to move it all downstream for further processing. The task of getting liquids out of the Montney and Duvernay for a number of years has been handled by Pembina Pipeline Co.’s Peace Pipeline. Back in August 2018, SemsCAMS announced it was working with Plains Midstream Canada, a subsidiary of Plains All American, on a pipeline proposal to move condensate on what was dubbed the Montney to Market liquids pipeline. That plan now has been replaced by the KAPS project, which is now proceeding to development. (The reason for the switch by SemCAMS to working with Keyera is unclear).