Gasoline Could Drop Below $2.00 / Gallon In North Texas -- June 10, 2019

The other night I noted that gasoline was priced at $2.159 near Texas Motor Speedway, northwest of Dallas-Ft Worth.

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Williston High School

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The Saga Continues

Link here. Despite court win, the Keystone is no closer to completion.

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Global Warming 

Best global warming site on the net.

Cleaning Off The Desktop -- June 10, 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. 

I'm cleaning off the desktop.

1. Smart phones. I am blown away by the smart phones these days, everything they can do. I have an iPhone SE, 4-inch, smallest screen available. Love it.

2. Search. Interesting story on Apple's partnering with Google as its search engine.

3. Investing. Barron's: Chevron and four other oil stocks to play the Permian Basin boom. In today's (June 10, 2019) issue. I was surprised to see Chevron at the top. On "google.news" on my little iPhone I can read the entire article; on the MacBook Air, it's behind a paywall. Go figure.

4. Shale. After listening to the two presentations (YouTube) sent to me by a reader yesterday/today, I now understand the Permian better. The presentations are posted here. I now understand why horizontals in the Bakken are "long" laterals and "extended reach" laterals whereas the Permian are still "shorter" laterals. I think "mom-and-pop" investors can make this fact work for them.

5. Pipelines. Motley Fool has an article on Energy Transfer today (also, June 10, 2019). It begins:

Energy Transfer has invested billions of dollars in expanding its midstream infrastructure over the past few years. Many of these projects have recently entered service, which is fueling a big uptick in earnings. During the first quarter, for example, cash flow was up nearly 40% versus the year-ago period. That has the company on track to increase its earnings by about 13% from 2018's total.

However, one thing that Energy Transfer's management team made clear on its recent first-quarter conference call is that the company still has plenty of growth up ahead. Overall, it sees three main drivers that should fuel growth in the coming years: LNG, China, and oil pipelines.

.... an agreement with Shell that provides the foundation to further develop the Lake Charles LNG export facility toward a potential final investment decision or FID ...  put Energy Transfer and Shell on track to approve construction early next year, which could enable them to have it in service and generating cash flow by late 2024 to early 2025.

6.  Eraserhead. I've never seen this movie; I desperately want to see it but I won't buy or rent the DVD and I  haven't looked for any internet streaming options. I desperately want to see it but I'm afraid I will be disappointed so I have not made an effort to find it. Now, "tonight" -- or rather early tomorrow morning, TCM will show Eraserhead. It comes on about 2:30 a.m. Not sure if it's worth getting up to watch. I'll be in bed by 11:30 p.m. -- should I get up at 2:30 a.m. to watch it. Normally, I would but I will be picking up Sophia and her mother at the DFW airport tomorrow at 9:50 a.m.  So, we'll see. [Later: no, I did not get up to watch it. Will have to wait for another opportunity.]

7. Really? Unanimous? Right, wrong, or indifferent -- whether you "like" the outcome or not, it's nice to see that, at least in some cases, the justices still "follow the law of the land." Did I mention that the ruling was unanimous? From the AP:

The Supreme Court ruled unanimously Monday against workers on oil drilling platforms off California who argued they should be paid for the off-work time they spend on the platform, including sleeping.

The high court said that federal law applies to the workers and doesn't require them to be paid for nonworking time spent at their work location on the Outer Continental Shelf. The workers had argued that California law, which would require them to be compensated for that time, should apply. 

8. Alexa. I honestly don't understand the controversy. I love the Echo and Alexa. It's incredible. If you don't like Alexa listening in on you:

• don't buy the Echo in the first place;
• if you do have it, turn it off when you're not using it;
• live alone and don't talk out loud to yourself

9. Homeless in Seattle. From Bloomberg -- "Amazon led a tax rebellion. A year later, Seattle is gridlocked." Trying to blame Amazon for the homeless problem in Seattle. Give me a break.

10. Going broke: the website that is a project of the Democratic Party’s primary think tank, is facing dire financial troubles and bleeding staff, according to primary-source documents viewed by The Daily Beast. Words I love seeing in the same sentence: Democratic ... Party's ... think ... tank ... facing ... dire ... financial ... troubles. I particularly like the word dire. The name of the website: ThinkProgress.

11. Another EV battery fire. Audi. From Fortune. Or "misfortune." "... no more prone to battery fires..." then why is this a headline story? Look at the huge number of cars involved in the recall: 1,664. LOL. 1,664. Generally we see automobile recalls involving millions of vehicles. Not a thousand.

Volkswagen AG luxury brand Audi is recalling its first all-electric vehicle due to the risk of a battery fire.

The company issued a voluntary recall of approximately 540 E-Tron SUV models sold in the U.S. because of a risk that moisture can seep into the battery cell through a wiring harness glitch. The company isn’t aware of any fires or injuries because of the flaw, which affects a total of 1,644 models, he said.

The E-Tron, which went on sale in the U.S. in April, is Audi’s first fully-electric car and one in a wave of contenders from traditional automakers looking to challenge Tesla Inc.’s dominance of the segment. While electric vehicles are no more prone to accidents or fires than gasoline-powered cars — and might be less so, according the National Highway Traffic Safety Administration — the lithium-ion battery technology that powers them is still evolving, and there is no consensus on safe system design.

12. Uber Eats: $5 McDonald's meal. $15 delivery charge. Soggy French fries. [No, I did not do this; read about it on the internet some days ago; didn't get the like. Probably a fake story.]

13. Hero traitor. Two new biographies of Benedict Arnold reviewed in winter issue of Claremont Review of Books:

• Turncoat: Benedict Arnold and the Crisis of American Liberty, Stephen Brumwell, Yale University Press, 384 pages
• The Tragedy of Benedict Arnold: An American Life, Joyce Lee Malcolm, Pegasus Books, 336 pages

14.  Shale. Five screenshots from the presentations posted earlier today. The "breakeven" presentation is an "older" presentation: the breakeven has certainly not increased since then.

And There You Have It ..... June 10, 2019

Stories and links everywhere, but zerohedge is as good as any. Sent to me by a reader. Thank you.

From google today:

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 Oman? A Muslim Nation?

Link here. 

In a bid to reduce its reliance on crude oil revenues, the sultanate of Oman has announced a slew of new taxes on products ranging from tobacco and alcohol to port and energy drinks, citing Oman’s Secretariat General of Taxation.

Beginning June 15th, pork meat, tobacco, and alcohol as well as energy drinks will be subject to a 100-percent tax, with carbonated drinks subject to a 50-percent levy. Last November, a senior Oman government official said the taxes could generate around US$260 million in annual revenues.

Fifteen Producing Wells (DUCs) Reported As Completed; WTI In A Trading Range -- Two New Permits -- June 10, 2019

NBA: game 5 tonight, 7:00 p.m. CT. [And, now, game 6, Thursday, June 13, 2019.]

Active rigs:

$53.30	6/10/2019	06/10/2018	06/10/2017	06/10/2016	06/10/2015
Active Rigs	64	61	52	28	82

Two new permits: pending

• Operator: Crescent Point Energy
• Field: Blue Ridge (Williams)
• Comments: Crescent Point Energy has permits for a two-well pad in lot 1/section 4-158-100, Blue Ridge oil field

Four permits renewed:

• Nine Point Energy: two Gibbins permits in Williams County
• Liberty Resources: one Sundhagen permit in Williams County
• Petro-Hunt: one Louis Tully Federal permit in McKenzie County

Fifteen producing wells (DUCs) reported as completed:

• 35573, 1,285, Newfield, Goliath 150-98-5-8-5H, Siverston, t5/19; cum 8K over 6 days;
• 34966, 1,412, Bruin, Fort Berthold 152-94-11B-14-18H, Antelope-Sanish, t5/19; cum 9K over 13 days; neighboring wells: #25524 (off line), #25525 (off line), #25526 (off line), #23550 (huge jump), #18426 (no jump) , #23554 (offline), #23555 (offline);
  
• 34965, 1,536, Bruin, Fort Berthold 152-94-11B-13-12H, Antelope-Sanish, t5/19; cum 18K over 17 days;
• 34964, 1,214, Bruin, Fort Berthold 152-94-11B-14-11H, Antelope-Sanish, t5/19; cum12K over 15 days;
• 34963, 1,521, Bruin, Fort Berthold 152-94-11B-14-10H, Antelope-Sanish, t5/19; cum --;
• 34962, 581, Bruin, Fort Berthold 152-94-11B-14-9H, Antelope-Sanish, t5/19; cum --;
• 34961, 468, Bruin, Fort Berthold 152-94-11B-14-8H, Antelope-Sanish, t5/19; cum --;
• 33066, 952, XTO, Deep Creek Federal 44X-5C, Lost Bridge, t3/19; cum 36K over 46 days;
• 33065, 952, XTO, Deep Creek Federal 44x-5B, Lost Bridge, t3/19; cum 34K over 45 days;
• 35832, 1,331, Whiting, Moline 31-14-4TFH, Tyrone, t5/19; cum -- ;
• 35833, 1,341, Whiting, Moline 31-14-4H, Tyroe, t5/19; cum -- ;
• 35834, 531, Whiting, Moline 31-14-5TFHU, Tyrone, t5/19; cum -- ;
• 35092, 3,019, Hess, AN-Bohmach-153-94-2734H-9, Antelope-Sanish, t4/19; cum 6K over 6 days;
• 35094, 2,578, Hess, AN-Bohmbach-153-94-2734H-7, Antelope-Sanish, t41/9; cum 13K over 10 days;
• 30646, n/d, LR, Sorenson 8-16H, Alkali Creek, according to FracFocus, fracked 3/8/19- 3/29/19; 9.96 million lbs; water, 85%;

Shale Oil Retirement Party Update -- June 10, 2019

I'll come back to this later. Streamed live on February 27, 2018.


Second link sent by reader. EIA, November 16, 2017:

US Crude Oil Imports -- Update -- June 20, 2019

Link here.

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The Book Page

I'm in the process of winnowing my library.

If I had a thousand books at one time I am not trying to reduce that number to a hundred books.

Maybe ten books on ten subjects: art (10), religion (5), grilling (1) /cocktails (9), literature (20), biographies (10), biology (10), chemistry (10), physics (10), math (5), popular culture (10).

One book I will keep: The Vital Question: Energy, Evolution, and the Origins of Complex Life, Nick Lane, c. 2015. I've read it at least twice. I'm reading parts of it again this week.

  

I've blogged about it before.

Jargon 101 -- The Bakken Revolution -- June 10, 2019

Sources

See "original post" below.
Latham and Watkins (a pdf will download).

Wikipedia.

Schlumberger.

 

Investors:

• how to calculate volatility with spot and strip prices, Motley Fool, May 10, 2017.
• how to calculate annualized volatility, Motley Fool, October 20, 2016.
• roll yield defined, Investopedia, July 9, 2021 (note how recent this article was posted).
  

Updates

October 5, 2019: brand new; very new; jargon for the shale revolution; Bakken 2.5. 

Later, 1:28 p.m. CT: patting myself on the back (sorry). But this is what makes blogging so rewarding.  A reader wrote, and a big "thank you" to him:

Very likely that you are the "halo" word man. I've heard it here and little elsewhere.

Really not proven yet statistically and for the longest time would irk me when you would cite an individual well versus doing a statistical review. But you definitely described the IDEA well. And the funny thing is lately there are some little inklings of support for your concept (WLL conference call). Still have my doubts, but have to be fair and not that in your favor.

I've heard Red Queen from the peak oilers the most. I suspect it has been around the oil patch for a long time even before that. But I first heard it used in context of shale by Rune L. of The Oil Drum: http://theoildrum.com/node/9506

[Note that the Bakken has more than doubled the Rune Red Queen prediction. And this was their tour de force, republished, pushed, super science-y...and butt-wrong.] 

Thank you so much. As mentioned before, I don't have the money, time, resources, intelligence to do a statistical study of the "halo" effect.

Original Post

 

This is really, really cool.

From North American Shale, May 6, 2019. More specifically, from the magazine's "2019 Bakken Report."

I do believe the MDW was the first blog to have used many of these words and phrases: in almost all cases, the jargon came from other sources, but I know that I have used a few words, phrases, acronyms before I saw them in the wild. One acronym I definitely used before I saw it in the wild: crude-by-rail (CBR). Possibly, long-reach laterals. One that I use that I have not seen used by others, referring to laterals longer than two miles: extended reach, or super-long-reach laterals. Another phrase I often use: Red Queen. I do not recall where I first that phrase.

A huge phenomenon first mentioned at the blog: "the halo effect." The industry now refers to it as the "parent-well-uplift" phenomenon. This phenomenon was not mentioned by North American Shale. Whether this phenomenon will "move the needle" for shale operators is still to be determined, but for individual small "mom-and-pop" mineral owners the phenomenon is not trivial.

This article is archived.

It was interesting to note that North American Shale did not refer to the "Bakken revolution" as a "retirement party." By the way, if it is a retirement party:

• it's a helluva party; and, 
• it sure is lasting a long, long time

North American Shale did not mention "peak oil" or M. King Hubbert.

Later, after posting the above, a reader sent me this link (see first comment). If you have two hours (or put it on background, which I did), the short-term outlook for US shale, streamed live on February 27, 2018:

Rigzone Analysis Of The OXY-Anadarko Deal -- June 10, 2019

Link here.

The OXY-Anadarko deal is tracked here.

Wow, Wow, Wow -- EOR Using Natural Gas; Seeing A 30% To 70% Improvement In Production In Older Wells -- June 10, 2019

From Bloomberg via Rigzone:

At least five producers, led by EOG Resources Inc., are experimenting with shooting highly-pressurized natural gas into past-their-prime wells that have seen their output slip. The wells are then capped to build up pressure inside with the aim of dislodging any oil still hiding in the rock.

Note: there are three others posts regarding EOR using natural gas.

Other notes from the linked story:

The methodology’s been used in conventional wells elsewhere with both natural gas and carbon dioxide for years, but it’s just now emerging in America’s fracked shale fields.

The win-win goal: The trapped gas is put to work, and there’s a 30%-to-70% gain in oil output from older wells, according to EOG.

In late 2018, Permian flaring -- the burning off of associated gas -- more than doubled from a year earlier to 500 million cubic feet a day, and that’s likely to rise.

Generally, the use of injected gas is known as enhanced oil recovery, or EOR. Initially, EOG was the main company using natural gas to boost shale oil output, Krishnamoorti said by telephone. "But the fact is that now we have seen four other producers do it," he said. “And with remarkable results.”

EOG has been experimenting with EOR for at least three years in the Eagle Ford basin. Gas injection can potentially extend crude production volumes in older wells by 18 to 24 months, Krishnamoorti said. What’s still to be determined is how well EOR works in different types of rock formations.

For the most part, producers have disclosed little specific information about how well the new method performs, even in the Eagle Ford, where it is increasingly being adopted. 

Much, much more at the link.

20,000 PSI Blow-Out Preventer Designed/Built For GOM -- Making America Great -- June 10, 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 read here.

From Rigzone: NOV claims history-making sale. Data points:

• seller: National Oilwell Varco, INC (NOV)
• buyer: Transocean Ltd
• sale: two 20,000 psi (20K) blowout preventer (BOP) stacks
• NOV contends that it is the first oilfield equipment manufacturer to successfully design, engineer and sell such a package
• the 20K BOP stack is designed for use with extremely high-pressure reservoirs and can be used in ultra-deepwater
• the sale follows five years of work by NOV's Rig Technologies segment
• the initial BOP stack deployment should occur in 2021 on a 20K well in the Gulf of Mexico

Idle Rambling On A Monday Morning -- June 10, 2019

Rig counts are meaningless (don't take that out of context).

In round numbers, I would suppose, North Dakota is producing about 1.4 million bopd.

The last several months the number of active rigs has been running right around 65 +/- a couple of rigs.

But look back in June, 2016, 28 rigs.

	6/10/2019	06/10/2018	06/10/2017	06/10/2016	06/10/2015
Active Rigs	64	61	52	28	82

How much oil was North Dakota producing back in March, 2016? 1.1 million bopd.

March, 2016:

• active rigs: 32
• DUCs: 920
• inactive wells: 1,523
• total: 2,443
• oil production: 1,111,421 bopd (final)

March, 2019 (most recent data)

• active rigs: 64
• DUCs: 968
• inactive wells: 1,697
• total: 2,665
• oil production: 1,390,138 (preliminary; final will be out this month)

I don't see a whole lot of difference between 1.4 million bopd and 1.1 million bopd -- well, not at least compared to the number of active rigs: 64 vs 32. And 32 rigs was not even the record low for the Bakken boom. By June, 2016, it was down to 28.

Houston Chronicle on rig counts, back on December 21, 2018.

Eleven Wells Coming Off The Confidential List -- June 10, 2019

Wells coming off the confidential list over the weekend -- Monday, June 10, 2019: 30 for the month; 219 for the quarter;

• 34695, 1,601, CLR, Rolf 6-17H1, Brooklyn, t4/19; cum --;
• 32208, 145, BR, CCU Atlantic Express 32-19MBH, Corral Creek, t5/19; cum --;

Sunday, June 9, 2019: 28 for the month; 217 for the quarter;

• 34696, 1,324, CLR, Rolf 5-17H1, Brooklyn, t4/19; cum 17K after 13 days;
• 34693, 1,376, CLR, Springfield 3-8H1, Brooklyn, t3/19; cum 40K 42 days;
• 34088, 645, Oasis, Aagvik 5298 13-26 10T, Banks, t1/19; cum 106K 4/19;
• 30031, SI/NC, Hess, BB-Federal-151-95-0817H-2, Blue Buttes, no production data,

Saturday, June 8, 2019: 24 for the month; 213 for the quarter;

• 34805, 878, Nine Point Energy, Erickson 155-102-26-25-8H, Squires, t12/18; cum 103K 4/19;
• 34694, 2,006, CLR, Springfield 2-8HSL, Brooklyn, t2/19; cum 68K 4/19;
• 32207, 164, BR, CCU Atlantic Express 32-19TFH, Corral Creek, t5/19; cum --;
• 32206, 232, BR, CCU Pacific Express 32-19MBH, Corral Creek, t4/19; cum --;
• 30030, SI/NC, Hess, BB-Federal-151-95-0817H-3, Blue Buttes, no production data,

Active rigs:

$54.25	6/10/2019	06/10/2018	06/10/2017	06/10/2016	06/10/2015
Active Rigs	64	61	52	28	82

RBN Energy: from $200/MMBtu to $1/MMBtu gas, PNW market volatility continues. PNW: Pacific Northwest.

Three months ago, the Pacific Northwest natural gas market recorded the highest trade in U.S. spot gas price history. The region at the time was dealing with extreme winter heating demand, a pipeline outage that limited access to gas supply and storage deliverability issues –– all of which were compounding constraints in the power markets. The result was a feeding frenzy that led gas prices to skyrocket to as much as $200/MMBtu at the Sumas, WA, hub on March 1. Fast forward to today — prices there have crumbled, falling to as low as $0.80/MMBtu in trading last week. Winter demand has dissipated, pipeline and storage constraints have eased, and the region is now dealing with an entirely different — even opposite — set of problems. Today, we take a closer look at the factors behind these latest price moves.

The winter 2018-19 natural gas market was one of the most chaotic in recent memory, with the NYMEX Henry Hub futures contract swinging from nearly $5/MMBtu in November 2018 to less than $2.60/MMBtu a few months later. The physical market also posted both the highest and lowest spot trades ever seen in the U.S.: the $200/MMBtu at Sumas, WA, (again, on March 1) and a negative-$9.00/MMBtu at Waha in the Permian on April 4.

The Waha market, which, after recovering from record low, negative prices and treading above zero earlier in May, again plunged into negative territory in the last week of May. The Sumas market too has seen its share of angst in recent weeks, which is the focus of today’s discussion.