Tuesday, July 9, 2019

Why The Bakken Is So Intriguing -- July 9, 2019

Hubbert's peak oil theory says that once an individual well starts to decline, it's production cannot increase. 

The well:
  • 17614, 1,595, EOG, Austin 20-29H, Parshall, t9/09; cum 816K 5/19; off line as of 5/18; back on line as of 11/18;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-2019313128314111282535225330
BAKKEN4-20193033703367115725502183125
BAKKEN3-201931505950872391380135463
BAKKEN2-201928515351522591332931010
BAKKEN1-201931527053362638288826360
BAKKEN12-2018315004497825052259198027
BAKKEN11-2018303940381227001820156313
BAKKEN10-20182670918120
BAKKEN9-201800380000
BAKKEN8-20180000000
BAKKEN7-201800480000
BAKKEN6-2018100012120
BAKKEN5-2018211196125036179216208
BAKKEN4-2018301969190052628237313
BAKKEN3-20183119762044582694238559
BAKKEN2-2018281945186002440219420
BAKKEN1-201831213121382263823860

Why The Bakken Is So Intriguing -- July 9, 2019

Note: the jump in production -- almost 6,000 bbls in only 7 days in this somewhat "older" Bakken well.

The Equinor Cheryl wells are tracked here.

The well:
  • 29610, 3,651, Equinor/Statoil, Cheryl 17-20 5H, Banks, t12/16; cum 249K 5/19;
Full production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20197596155853523143391392615
BAKKEN4-20190000000
BAKKEN3-20190000000
BAKKEN2-20190000000
BAKKEN1-20190030000
BAKKEN12-20185162320701253493745070
BAKKEN11-201811425140754012849678190
BAKKEN10-20181886118767617821161195170
BAKKEN9-2018261145911301908531288289450
BAKKEN8-20182612174125741086033869310570
BAKKEN7-20183122234218301358743601405780
BAKKEN6-20182822603223471827844603389133246
BAKKEN5-20187345933308441717467005
BAKKEN4-20180000000
BAKKEN3-20180000000
BAKKEN2-201800740000
BAKKEN1-201831103311791431762672630
BAKKEN12-2017241539315547813231808293441302
BAKKEN11-201729217172218014074496224769351
BAKKEN10-20171310159101816652195411859697
BAKKEN9-201730211432067311255437514175921
BAKKEN8-201731176691762610412383643660864
BAKKEN7-2017211252712276738325668215653096
BAKKEN6-20171145824807378112410117793
BAKKEN5-2017311892518824139174594243562402
BAKKEN4-2017991318912693219192183465
BAKKEN3-20170000000
BAKKEN2-2017002640000
BAKKEN1-201714113661133376772008218414403
BAKKEN12-2016101281812587913825967197565203

Notes From All Over -- Part 1 -- July 9, 2019

DAPL: The activist is not the man who says the river is dirty. The activist is the man who cleans up the river.-- Ross Perot.

Reminder: next Director's Cut scheduled to be released at 3:00 p.m. CT, July 15, 2019 -- that would be next Monday. 

Wow, there was a lot of news today. I will run through it quickly and come back to it if a) I find time; b) it still interests me; and, c) has any relevancy to the Bakken. In other words, unlikely that I will return to this stuff.

First things first. Time to turn the music on. We will start with Charlie Rich, my current "go-to" favorite. Later: now it's Gypsy by Fleetwood Mac -- always reminds me of our dating days in Los Angeles: May's favorite group at the time; getting trapped in the Velvet Turtle in Los Angeles on Chinese New Year's Eve; St Elsewhere.

EPD - ETP: to the Supreme Court of Texas.
The case has been viewed by the Texas legal community as the most important business dispute between two Texas companies since Joe Jamail’s epic Pennzoil-Texaco victory in the 1980s, which yielded a $10 billion bill for Texaco.
The court hinges on a "he-said, he-said."
No agreement was signed for a lucrative joint venture; just a handshake. EPD eventually went with Enbridge, jilting ETP. ETP says the oral agreement should suffice. Not a lot of money involved in the big scheme of things, I suppose, for the parties involved, but if the Supreme Court of Texas agrees that oral agreements can stand ...
EPD: increases its dividend to 44 cents/common unit, to be paid August 13, 2019. This distribution, which represents a 2.3 percent increase over the distribution declared with respect to the second quarter of 2018, is the partnership’s 60th consecutive quarterly distribution increase. Earlier today there was a very, very negative article on investing in the oil sector. Whatever.

EPD: continues to prove why its such an excellent dividend stock -- Motley Fool. Currently yields 6%. In a down market today, EPD rose.

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.

ENB: commences open season for Canada's Express Pipeline. Huge deal.
The shippers will be able to carry oil from Hardisty, Alberta, to Express Pipeline LLC pipeline, which operates the portion of the Express Pipeline in the United States. Per the company, the shipper will appreciate this open season since the pipeline bottleneck problem prevents transportation of sufficient oil from the Western Canadian Sedimentary Basin.
NOG: analysts see a huge move (up or down) for NOG soon; analysts don't know which way NOG will move, but the trading pattern suggests something's "up." Zacks. I've made my decision but I won't say anything until after earnings report for 2Q19 is released.

WTI: nice little move. Up 84 cents now (7:21 p.m. CT) after API report today. Trading above $58. Could hit $60 again by the end of summer. Another huge development.

Tesla: prices could surge -- Musk. June, 2019, EV sales here.

Is this why Elon Musk said prices could surge? We will get back to this one. This is a big story. From Bloomberg, the US and the EU are getting "more anxious" about EV battery component shortages.

Or this: eleven autonomous driving software engineers have left Tesla over the past few weeks.

For Tesla newbies: I can't find it now, but there's a marketing term for what Musk Melon does. Whenever things look bad, he makes an outlandish statement to drive sales. With lots of bad news today, Musk Melon did it again: "Buy a Tesla now, folks, because this autumn the prices are going to surge."

Dell, Montana: population 35.
Basically a gas station and a general store along the side of the highway. But get this: out in the middle of nowhere this gas station/general store has four EV charging stations. Not sure if they still work. Link here (if you don't believe me, google "ev charging station dell montana." Screenshot:

Global economy: bearish signs. Consider the source. For these guys, it's always a bearish outlook.

Ecuador - CVX: Ecuador drops the last case against CVX. CVX today? Flat.

Hope springs eternal: we mentioned this yesterday; no link then. Here's the link
“I have no doubt in my mind that U.S. shale will peak, plateau and then decline like every other basin in history,” Saudi Arabia’s Energy Minister Khalid al-Falih said in Vienna this week, as reported by Bloomberg. Apparently alfalfa did not get the memo. See next entry. Alfalfa is going to be waiting a long time for the US shale sector to "peak, plateau, and then decline."
The memo. Link here

TransMountain: could be TransAlaska. Link at Calgary Herald

For my son-in-law in Portland: a 1971 Ford Bronco story.
The Ford Bronco holds an important place in automotive history.
After World War II, GIs came back to America, bought Army surplus Jeeps, and created a new sport—off-roading.
The Jeeps were small and uncomfortable. In the mid-1960s, Ford developed a more spacious vehicle to fill this niche—the Bronco.
[Notable competition at the time included the Jeep Wagoneer.]
A durable and reliable four-wheel drive truck, you could take it camping or to the mountains. [Ford built the Bronco from the mid-1960s to the mid-1990s; the company recently announced it would launch a new iteration in 2020.]
Caps and hats: a reader suggests a Democrat alternative to the MAGA cap.

MDU / Las Vegas: mega-resort contract.
MDU Resources Group, Inc. announced today that its subsidiaries, Bombard Electric, LLC, and Bombard Mechanical, LLC, have been awarded contracts for electrical and mechanical construction at Resorts World Las Vegas, a mega-resort under construction on the Las Vegas Strip.
Bucket list: we've talked about this before -- I don't have a "bucket list."
I'm retired. A "bucket list" sounds like a "jobs list." I don't have plans for the weekend; I don't know what I'm doing tomorrow; I don't even know what I will be doing three hours from now. I thought about that on the long drive from Montana back to Texas this past weekend, a two-night, three-day trip. We had no plans on the way back from Montana, no "bucket list" to complete.
But when we passed the "opal capital of America" it dawned on me: I had a "how 'bout" moment. Instead of a "bucket list," I have a "how 'bout" philosophy. When driving down the road if I pass something that looks interesting, I saw to 5-year-old Sophia, "how 'bout stopping at the opal capital of America?" If she says "yes," the turn signal goes on and we leave the highway for a "how 'bout" moment.
Enterprise: best rental car company in the business. Bar none.

***************************
Back To School After Her Montana Vacation

57 Active Rigs In North Dakota; Nine New Permits; Ten Permits Renewed; Five DUCs Reported As Completed -- Hardly A Basin That Sounds Like it's Slowing Down -- July 9, 2019

API: huge US crude oil draw:
  • forecast: a draw of 3.081 million bbls
  • actual: 8.129 million bbls
  • WTI? flat
Active rigs:

$57.837/9/201907/09/201807/09/201707/09/201607/09/2015
Active Rigs5765562974

Nine new permits, #36696 - #36704, inclusive
  • Operators: BR (5); WPX (2); Iron Oil (2)
  • Fields: Elidah (McKenzie County); Spotted Horn (McKenzie); Antelope Creek (McKenzie County)
  • Comments:
    • BR has permits for a 5-well Muri/Sanmuri pad in section 27-151-97, Elidah oil field
    • WPX as permits for a 2-well Pronghorn pad in section 27-150-94, Spotted Horn oil field
    • Iron Oil has permit for a 2-well Antelope pad in lot 2/section 5-148-101
Five producing wells (DUCs) reported as completed:
  • 34560, 818, Abraxas, Ravin 12H, North Fork, t5/19; cum 17K after 25 days;
  • 35299, 2,552, WPX, Minot Grady 26-35HT, Squaw Creek, t6/19; cum --;
  • 32622, 1,656, Whiting, Gilfer 21-15-1HU, Epping, t6/19; cum --
  • 34932, 1,972, Whiting, Peterson 41-15-5TFH, Epping, t6/19; cum --;
  • 34933, 1,976, Whiting, Peterson 41-15-6HU, Epping, t6/19; cum --;
Ten permits renewed:
  • EOG (4): four Burke permits, all in Mountrail County
  • CLR (4): two Olympia permits and two Charleston permits, all in Williams County
  • Resource: a Beetle permit in Divide County
  • Whiting: a Tomchuk permit in Stark County

Notes From All Over -- July 9, 2019

Oops! "We" did it again: it is being reported that Egypt has detained an Iranian tanker.

**************************************
EV Sales/Deliveries In June, 2019

Link here.

Total number of EVs sold/delivered in the US in June, 2019: 37,818
  • Tesla (combined, 3 models): 25,700
  • Tesla market share: 68%
  • nearest competitor, Chevrolet Bolt EV: 1,659 (4%)
  • only four non-Tesla makes: greater than 1,000 units/June sold; all below 2,000
And now Musk says by the end of the year (2019), the price of the Tesla could spike.

TSLA: at $229, flat today. TSLA was trading at $365 in early December, 2018.

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.

Batteries: posted elsewhere on the blog, but here it is again --
Is this why Elon Musk said prices could surge? We will get back to this one. This is a big story. From Bloomberg, the US and the EU are getting "more anxious" about EV battery component shortages.
Think about this. If automobile manufacturers can't come up with enough nickel or cobalt to meet battery demand when so few EVs are actually being sold, think what it will be like if we ever get to the tipping point with EVs. And then note this: EVs are not the only sector relying on batteries for renewable energy projects. Think wind turbines and solar farms. This is going to be very, very interesting to watch. Not one thing suggests EVs are the solution to any problem.
 

Out And About In The Bakken -- July 9, 2019

Another well goes over 500K bbls of oil:
  • 30074, 981, Slawson, Howo 2-4-33MLH, Big Bend, t4/15; cum 515K 5/19;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20193139774353156632592255425
BAKKEN4-20193036264073153127441757453
BAKKEN3-2019201644136410731387102885
BAKKEN2-2019151029659699709331195
BAKKEN1-201923146522088391308101030
BAKKEN12-20183113486609111077609169
BAKKEN11-2018292648259911932016150684
BAKKEN10-2018262732309711151966835710

Back in production:
  • 29688, 779, Hess, SC-Bingeman-154-98-0904H-4, Truax, t8/15; cum 135K 5/19;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20193123612337357532082490710
BAKKEN4-20193024392426351537803214565
BAKKEN3-20192322362200333823171506803
BAKKEN2-20190000000
BAKKEN1-20190000000
BAKKEN12-20180000000
BAKKEN11-20180000000
BAKKEN10-201800420000
BAKKEN9-2018000037370
BAKKEN8-2018510884719353344573
BAKKEN7-20183116821276104458225509190
BAKKEN6-2018301111957766485831641641

And coming out of production (in fact all four wells on two neighboring pads are off line: #29170, #29170, #29169, and #29168); I assume the BR West Kellogg wells about a mile to the east are being fracked:
  • 29169, 905, CLR, Kellogg Ranch Federal 3-32H, Elidah, t9/15; cum 336K 5/19; off line as of 4/19;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20190000000
BAKKEN4-20191618752086108533231622782
BAKKEN3-201931359737482107649121503511
BAKKEN2-201928334330712065931986390
BAKKEN1-201931375339662306898367231469
BAKKEN12-201830404537682770846658181834

Making America Even Greater Tomorrow -- July 9, 2019

Some years ago, RBN Energy provided a "what's coming" list with regard to LNG export terminals for the US. Now, RBN Energy is providing a similar list regarding new offshore crude oil terminals.

The key word there: offshore

From RBN Energy today:
While expansion projects at onshore terminals allow their developers to build off of existing infrastructure, what they cannot do — at least so far — is enable their docks to fully load deep-draft, 2-MMbbl VLCCs, which are the most cost-efficient waterborne means for transporting crude long distances (like from the Gulf Coast to Asia).
To fill a VLCC to the gills, you need more than 72 feet of draft, and to get that along most of the Texas and Louisiana coast, you typically have to go out at least several miles. Hence, the growing importance of deepwater offshore terminals like the Louisiana Offshore Oil Port (LOOP), which since the early 1980s has been receiving VLCCs fully laden with foreign crude — and since early 2018 has been sending out a small but growing number of VLCCs filled to the brim with U.S.-sourced oil.
LOOP is still the only Gulf Coast facility capable of fully loading VLCCs.
Otherwise, VLCCs exporting crude are generally reverse lightered in specified deepwater lightering areas in the Gulf — a couple of onshore terminals (Moda Midstream’s Ingleside facility near Corpus Christi, and Seaway’s Texas City terminal) can load VLCCs about halfway at their docks, then top them off via reverse lightering.
The initial round:
  • EPD: a 2-million bopd Sea Port Oil Termianl (SPOT) 30+ miles off the coast of Brazoria County, TX
  • Enbridge/Oiltanking: a proposed 2-million bopd Colt Offshore Loading Terminal about 30 miles south of Freeport, TX
  • Jupiter MLP: a 1-million bopd terminal project six miles off Brownville, TX
  • Tallgrass Energy: a proposed 1-million bopd terminal near the mouth of the Mississippi River and Venice, LA
  • Trafigura: a proposed 0.5-million Texas Gulf Terminal 15 miles off Corpus Christi
  • Carlyle Group: Lone Star Ports, onshore crude export terminal on Harbor Island, near the entry to the Corpus Christi Ship Channel; would deepen the channel entry to 75 feet to allow full loading of VLCCs
Latest: two newer offshore crude export terminals; both filed applications with MARAD over the past few weeks --
  • Sentinel Midstream: a proposed 1-million bopd Texas GulfLink project; 33 miles off the coast of Freeport, TX
  • Phillips 66: a proposed 1-million bopd Bluewater Texas Terminal (Bluewater, for short); 17 miles off Corpus Christi
As a reader suggested when RBN Energy posted the LNG export terminal list, just because a company has filed an application doesn't mean the project will get off the ground (or in this case, get off the water). So, that's the disclaimer, as it were.

So, let's add up the "export capacity" for the above listed proposed projects:
  1. EPD: 2
  2. Enbridge: 2
  3. Jupiter: 1
  4. Tallgrass: 1
  5. Trafigura: 0.5
  6. Carlyle (onshore): unknown, but let's call it 1 million b/d
  7. Sentinel: 1
  8. Phillips 66: 1
  9. Total: almost 10 million bopd new export capacity
Is 10 million bopd plausible? See this note posted earlier today. Wood Mackenzie says the Permian will add 4 million bopd takeaway capacity by 2022 and that will still be much less than required by the mid 2030s.

Just imagine when the rest of the world runs out of oil (as predicted by the Peak Oilers) and the US government applies a $25/barrel tax on all outgoing crude oil to pay for "Medicare For All." Something tells me Occasional-Cortex will be able to do the math by then. Okay, I'm joking (choking?) on that one.

What a great country.

Click On The Link At Your Own Risk .... July 9, 2019

Disclaimer: I am not responsible for contributing to your addiction if you click on the link.

I simply don't have time for this.

Link here.

I never should have clicked on the link.

I can't quit watching ... and it's 30 minutes long. And now I'm hooked.

********************************
The Book Page

One of my favorite openings to any book was from Isak Dinesen's Out of Africa:
I had a farm in Africa, at the foot of the Ngong Hils. The Equator runs across these highlands, a hundred miles to the North, and the farm lay at an altitude of over six thousand feet. In the day-time you felt that you had got high up, near to the sun, but the early mornings and evenings were limpid and restful, and the nights were cold.
I was reminded of that when reading Norman Sherry's biography of Graham Greene, volume II: 1939 - 1955, page 153:
Greene swore in Ways of Escape that for the first six months in Freetown [Sierra Leone] he was a happy man, for he was in a land he loved: though the evidence of his letters suggest his happiness and his love were intermittent. Yet in retrospect, he felt able to quote Kipling: 
"We've only one virginity to lose. And where we have lost it here our hearts will be."
'At thirty-one in Liberia I had lost my hear to West Africa.' -- Graham Greene, letter.
Greene's liking for West Africa is best expressed in Hargreaves's conversation in The Human Factor:
It's what politicians call a realistic policy, and realims never got anyone very far in the kind of Africa I used to know. My Africa was a sentimental Africa. I really loved Africa ... The Chinese don't, nor do the Russians, nor the Americans ... How easy it was in the old days when we dealt with chiefs and witch doctors and bush schools and devils and rain queens. My Africa was still alittle like the Africa of Rider Haggard.
And the Africans liked the eccentric British.

Making America Great -- The Permian -- July 9, 2019

All last week we were inundated with stories coming out of Saudi Arabia and Russia that the two would simply out-wait the US. It looks like the wait will be quite awhile.

This story over at Rigzone is really quite remarkable: how fast the Permian is growing and how much more infrastructure is needed.

Here is Wood Mackenzie's take:
  • the takeaway capacity in the Permian is way behind production potential of the Permian
  • expect another wave of pipeline construction by the end of the decade (are you listening Saudi Arabia, Russia?)
  • "as production growth expands well into the 2030s, US Gulf Coast-bound pipeline capacity will tighten -- repeat -- well into the 2030s, pipeline capacity will tighten
  • by the mid-2030s, Permian pipeline utilization will exceed 92% in the absence of further investment
  • a moderate overbuild will occur early next decade
  • by the end of 2022, approximately 4 million bopd of new capacity will be added
  • repeatby the end of 2022, approximately 4 million bopd of new capacity will be added; that's literally around the corner; no state lines to cross; no international issues; no federal government interference; it's all Texas, baby
  • this 4-million-bbl build assumes seven (7) proposals for new Permian pipelines
  • two to three years of overbuild but production will then catch up
  • "We are in the midst of one of the largest crude infrastructure investment booms in US history, with much of the investment focused on the Permian basin. As massive as this current investment wave is, we don't think the story is yet finished."
  • even after this build, Wood Mackenzie anticipates another all for up to 500,000 bpd for the Permian, during the middle to latter half of the next decade
All that talk by the Saudi energy minister that the kingdom will simply out-wait the US is simply that: talk.

******************************
Newfield To Divest Its Natural Gas Assets in Oklahoma's Arkoma Basin

Story here.

*******************************
Polling? More Fake "Science"?

How accurate can polls be when, for Bernie Sanders:
  • The Economist: 9%
  • all other polls: 13% (Quinnipiac) to 19% (Politico) for Sanders
Yes, the dates of the polls may be key, but still ....

Link here.

At 9%, he's just one of the pack well behind Biden; at 19%, he's a contender.


*********************************
Flashback

Posted elsewhere on the blog earlier, but definitely worth re-posting: https://www.zerohedge.com/news/2016-11-10/trumps-geographic-landslide.

Two Wells Coming Off Confidential List Today; Active Rigs Back To 60 -- July 9, 2019

Note: temporary weight restrictions in place on Williams County roads due to rain. 

Wells coming off the confidential list today -- Tuesday, July 9, 2019: 8 for the month; 8 for the quarter;
  • 35544, SI/NC, WPX, Delores Sand 29-32HY, Antelope-Sanish, no production data,
  • 34095, 2,457, CLR, Colter 8-14H1, 41 stages; 10.2 million lbs; Bear Creek, t3/19; cum 75K 5/19;
Active rigs:

$58.097/9/201907/09/201807/09/201707/09/201607/09/2015
Active Rigs6065562974

RBN Energy: new entrants in the race to build offshore crude export terminals, part 6.
The competition to develop the one or possibly two new offshore crude oil export terminals that the U.S. will likely need by the mid-2020s has been under way for more than a year now, and the field of contestants continues to expand. Within the past few weeks, both Phillips 66 and Sentinel Midstream filed applications with the U.S. Maritime Administration (MARAD) — Phillips 66’s project would be located off the coast of Corpus Christi and Sentinel’s in the waters off Freeport. And who knows, maybe another deepwater project or two capable of fully loading Very Large Crude Carriers (VLCCs) might still be in the offing. Today, we update our series on prospective offshore crude export terminals with a look at the P66 and Sentinel project details revealed by their applications to MARAD.
One of the more interesting questions in the U.S. energy business today is which of the seven individual companies and joint ventures planning to build new deepwater terminals for exporting crude off the Texas and Louisiana coasts will be the first to reach a final investment decision (FID) on their project. The query regarding who crosses the FID line first is particularly important because, as we said a couple of weeks ago, the Gulf Coast — with an estimated 5.1 MMb/d of crude export capacity in place — will likely need at least another 1 MMb/d of capacity by 2024 or so as production keeps rising in the Permian and other major shale plays. While still more export capacity may be required in the mid-2020, the palpable fear of a capacity overbuild suggests that only a few of the proposed offshore terminals (and onshore-terminal expansion projects) will be able to secure the necessary throughput commitments to advance their plans to construction.