Wednesday, August 7, 2019

Twitter On Fire Tonight -- Saudi Will Take All Steps Necessary To Stop Slide In Oil -- August 7, 2019

I've been blogging since 2007.

I can't recall, in all that time, the twitter "oil" community so on fire.

I vividly recall watching the market crash, watching CNBC live, September 15 (?), 2008.

I've always felt the crisis was set off by the "mark-to-market" rules.

I'm not the only one.

The news coming out of Saudi Arabia today has that same feeling, but this time with regard to oil. Scrolling through twitter tonight reminds me of watching CNBC live the day the market crashed in 2008.

American Pie, Don McLean

Williams County Budget -- August 7, 2019

From The Williston Herald, 2020 budget, preliminary, data points:
  • total budget, preliminary: $152 million
  • general fund: $45.7 million; previous, $26.6 million
  • bulk of that increase: $18 million transfer of county road projects -- appears to be all repair and maintenance
    • highway projects overall: $30.2 million

Hess Wells Sited In Section 8-151-95

The wells:
  • 30029, 3,969, Hess, BB-Federal-151-95-0817H-4, Blue Buttes, t6/19; 40K in 24 days;
  • 30027, 3,957, Hess, BB-Federal-151-95-0817H-6, Blue Buttes, t6/19; 51K in 29 days;
  • 30028, 3,724, Hess, BB-Federal-151-95-0817H-5, Blue Buttes, t6/19; 23K in 25 days;
  • 30030, 3,609, Hess, BB-Federal-151-95-0817H-3, Blue Buttes, t6/19; 22K in 17 days;
  • 30031, 3,189, Hess, BB-Federal-151-95-0817H-2, Blue Buttes, t6/19; 27K in 215 days;
The graphics:


Trivia: some readers may note #9951 near the bottom of the graphic, right in the middle (east to west) with two laterals, one running to the northeast; and one to the southwest. The first lateral was drilled back in 1983; a re-entry to the southwest some time later. The target was the Madison; it produced a total of 319K crud oil before being abandoned in 2017.

MRO Wells Sited In Section 9-150-93

For record IPs, see this post.

The wells on that one pad:
  • 35319, 5,922, MRO, Sears USA 21-16TFH, Reunion Bay, t6/19; cum 72K in 29 days;
  • 35320, 7,811, MRO, Reyes USA 21-16H, Reunion Bay, t6/19; cum 82K in 30 days;
  • 35318, 5,615, MRO, Gartland USA 31-16H, Reunion Bay, t6/19; cum 68K in 25 days;
  • 35321, 3,448, MRO, Flynn USA 21-16TFH, Reunion Bay, t6/19; cum 44K in 29 days;
  • 35322, SI/NC, MRO, Eunice USA 11-16TFH, Reunion Bay, cum 83K in 37 days; see below;
  • 19299, 608, MRO, Luther USA 31-16H, Reunion Bay, t3/11; cum 437K 2/19; off line as of 2/19;
  • 19298, 463, MRO, Luther USA 11-16H, Reunion Bay, t2/11; cum 432K 2/19; off line as of 2/19;
Note, #35322, see above:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-20192759075598747300748988045053
BAKKEN5-201910230282194933837000

To the east:
  • 34896, SI/NC, MRO, Linton USA 31-16TFH, Reunion Bay, cum 32K in 22 days;
To the west:
  • 35323, 9,614, MRO, Driftwood USA 41-17H, Reunion Bay, t5/19; cum 98K in 40 days:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-20193065754658074817964043059679
BAKKEN5-20191032090316832429630827028703

The graphic:

Recession Is "Just Around The Corner"; Gasoline Demand -- August 7, 2019

Link here.

If the Fed chairman is not following this graphic ....


Currency: with the Chinese renminbi at an all-time low, I assume Tim Cook (Apple, Inc) is locking in his wage contracts and material contracts in China. His tariffs back into the states: only 10% of "manufactured cost of his product," but I doubt Apple will cut the price of their products.

Enerplus And WPX Each With Three New Permits -- August 7, 2019

Oil plunges another 5%: WTI at $51.09, after falling 4.74%, falling $2.54 to $51.09.


Active rigs:

$51.098/7/201908/07/201808/07/201708/07/201608/07/2015
Active Rigs6066593473

Six new permits, #36819 - #36824, inclusive:
  • Operators: WPX (3): Enerplus (3)
  • Fields: Squaw Creek, McGregory Buttes
  • Comments: 
    • WPX has permits for a 3-well Omaha Woman pad in section 25-149-95, Squaw Creek;
    • Enerplus has permits for 3-well "Musical" pad in section 18-148-93, McGregory Buttes;
One permit canceled:
  • XTO: a Teddy Federal permit in Dunn County
Six permits renewed:
  • EOG (3): two Burke permits, in Mountrail County; a Wayzetta permit in Mountrail County, also
  • Petro-Hunt: two Noonan Federal permits in McKenzie County
  • North Range Resources: a Placid permit in McKenzie County
  • Denbury Onshore: a CHSU ML24 permit in Bowman County
Nine producing wells (DUCs) reported as completed:
  • 35319, 5,922, MRO, Sears USA 21-16TFH, Reunion Bay, t6/19; cum 72K in 29 days;
  • 35320, 7,811, MRO, Reyes USA 21-16H, Reunion Bay, t6/19; cum 82K in 30 days;
  • 35318, 5,615, MRO, Gartland USA 31-16H, Reunion Bay, t6/19; cum 68K in 25 days;
  • 35321, 3,448, MRO, Flynn USA 21-16TFH, Reunion Bay, t6/19; cum 44K in 29 days;
  • 30029, 3,969, Hess, BB-Federal-151-95-0817H-4, Blue Buttes, t6/19; 40K in 24 days;
  • 30027, 3,957, Hess, BB-Federal-151-95-0817H-6, Blue Buttes, t6/19; 51K in 29 days;
  • 30028, 3,724, Hess, BB-Federal-151-95-0817H-5, Blue Buttes, t6/19; 23K in 25 days;
  • 30030, 3,609, Hess, BB-Federal-151-95-0817H-3, Blue Buttes, t6/19; 22K in 17 days;
  • 30031, 3,189, Hess, BB-Federal-151-95-0817H-2, Blue Buttes, t6/19; 27K in 215 days;
Note: record IPs are tracked at this post.

Notes From All Over, Part 2 -- August 7, 2019

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

Wow: I'm in a great mood. The market is back where it should be for those wanting to invest. I doubt any company will cuts its dividends based on what is obviously a short term correction. I would imagine the "Fed" is wringing their collective hands. I have my new book for the next week for reading. Poolside in 101-degree weather.

Tesla: insurance -- oh-la-la -- from zerohedge -- next time you rent from Enterprise, or Hertz, or Avis, ask for an "exotic" car and then see what the insurance will cost you. Yes, the Tesla would be considered an "exotic" car. The car rental companies aren't dummies.
After reviewing Teslas listed at current auction, a bulk of them have minor fender benders, some have electrical issues, but most have been in fender benders that if it were a standard petrol engine automobile, would be easily fixable by a local dealership.
It seems that insurance companies are slapping salvage titles on crashed Teslas because it's "near impossible to repair them, the authorities and Tesla will prevent them being put back on the roads," said one Twitter user who was commenting on an SCA Twitter post of a newly listed crashed Tesla for auction.
Tesla: auto-pilot? Ambulance-chasing is a phrase we now see commonly associated with Tesla. From zerohedge. Does zerohedge have a problem with Musk Melon? By itself, this is a non-story, but zerohedge seems to have an agenda when it comes to Tesla.

The limbo -- how low can "we" go? (Saudi oil imported into the US), see "1980s oil glut":



Brexit. You think America has problems? Wait until "gin" is rationed. LOL.

Caliber Midstream Acquires North Dakota Assets From American Midstream -- August 7, 2019

A reader alerted me to this link, a press release: other than the headline, not much real data provided. Data points:
  • acquisition links to regional/inter-state pipelines
    • Tesoro High Plains Pipeline
    • Energy Transfer Dakota Access Pipeline (DAPL)
  • acquired 47 miles of pipeline along with related facilities
  • with this acquisition, Caliber now owns/operates 368 miles of pipeline across four service lines in McKenzie County
  • Caliber will add 11 more miles to its gathering and transmission system by year end
For newbies: there are four main counties, right now, in the Bakken:
  • McKenzie County, perhaps the most active county, centered around Watford City
  • Mountrail Country, where it all started with the prolific Sanish and Parshall oil fields (EOG and Whiting); certainly not as active as it once was but will get active when price is right
  • Dunn County, the Fort Berthold Indian Reservation, and WPX; active; huge wells
  • Williams County: a mix of great locations, less-than-great locations; activity varies; centers around Williston; Tioga, the "oil capital" of ND is also in Williams County
  • but of the non-BLM-dominated areas, the county that needs the most pipeline is probably McKenzie County
  • there is activity in other counties (e.g., Divide and Burke) but most of the current activity is in four counties that total about 8,000 square miles, or roughly 5 million square acres, which converts to about 4,000 standard 1280-acre spacing units.
Comparing size of counties, first the Permian, in square miles, TX:
  • Ward County: 836
  • Winkler: 841
  • Ector County: 902
  • Midland: 902
  • Reeves: 2,642  
  • Pecos: 4,765
New Mexico (Permian):
  • Eddy County: 4,200 square miles
North Dakota:
  • Williams County: 2,148 square miles
  • McKenzie County: 2,861 
  • Mountrail County: 1,942
  • Dunn County: 2,082
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The Book Page

I returned the two library books I had checked out, due tomorrow, and checked out a new one.

This will be a quick read: Chasing the Moon: The People, The Politics, and the Promise That Launched America into the Space Age, Robert Stone and Alan Andres, c. 2019 (50th anniversary, of course).

The big question / answer I'm looking for: how much did JFK know when he made his famous speech about landing a man on the moon and safely home again? How did he know it was feasible, technically, financially, and politically. And of the three could have precluded the outcome.

As an example: the bullet train in California:
  • probably technically feasible;
  • we're finding out that it's not financially doable; and, 
  • if not financially doable, the politics become much harder. 
Or, in a more snarky vein: JFK convinced Americans we could go to the moon; Jerry "Moonbeam" Brown couldn't even convince Californians the "need" / feasibility of a bullet train that is commonplace in Japan and China.

No Good Deed Goes Unpunished -- August 7, 2019

Saudi "over-complies."

And then the price of oil tanks.



************************************
Deal of the Year

Years ago when we were in Europe we collected a number of very nice Swarovski pieces. Swarovski had not yet been "discovered"; prices for crystal in Europe were incredibly good; and, the dollar was very, very strong, giving us even better deals.

Once we returned to the states, we could no long afford Swarovski. Of course, we had all the crystal we wanted/needed, so it was not an issue.

But then earlier this week, we happened upon a Swarovski miniature train set in the original box, brand new -- for $49 -- in a small second-hand shop. In this particular gift shop, jewelry is priced at 50% of the label. The owner/manager considered this particular Swarovski to be jewelry. So, this cost us $25.

Here is what this "retired" little train is worth elsewhere:

China -- How Well Off Is China's Middle Class? -- Considering That 60% Of The Chinese Appear To Live In Poverty -- August 7, 2019

This is an incredibly good interactive site. You might have to play around with the filters to navigate the site but once you figure it out, it's quite amazing.


Be sure to pay attention to the "key" for the above graphic:


My annotations regarding the key:



I always find it interesting how analysts "divide" / label the data. In this case, the range for the "low-income" demographic: from high ($10) to the low ($2), that's a 5x range.

The other divisions are not nearly as wide. On a scale like this, $10 is incredibly different than $2 and yet "that" is all grouped together. The "lower-middle-income" has the narrowest of range, only $10 to $20.

Although the "upper-middle-income" only has a 2.5x range ($20 to $50), that's a huge range. On a monthly basis that goes from $600/month to $1500/ month.

Of course, the biggest problem with this chart is the ">$50-income" range ("high-income"). $50months translates to $1500/month -- really -- is that where they end the graphic??

FWIW: Atmospheric CO2 Is Not A US Problem -- Except For Faux Environmentalists -- August 7, 2019

Two graphs. Comments not necessary:

Coal usage:



Atmospheric CO2 (most agree that atmospheric CO2 moves freely across international borders), link here:


"The last time atmospheric CO2 was this high, there were trees at the South Pole"

And the problem with that?

*********************************************
Later

Link here.


If the earth really was going to end in twelve years, or eleven years, or ten years, or eighteen months dues to atmospheric CO2 would we be giving "these" countries a "pass"?

Notes From All Over -- August 7, 2019

Because I'm way behind in my blogging, short clips and links. I may come back to these later. Many (most?) articles I have not yet read.

Is the US shale boom winding down? Rigzone contributor, Nicholas Newman. Link here. The headline speaks to the shale revolution:
  • as being the swing producer; and, 
  • being able to turn on a dime
For decades, OPEC was the swing producer, but due to the way OPEC operated, it was glacial in making/executing decisions.

Oil slumps into bear market: no link, story everywhere.

Venezuela: Trump imposes new sanctions. Pretty much the "death blow." Bloomberg. Even CVX at risk. In a tweet yesterday, it sounded like "Bolton" was not giving CVX any warm fuzzies.
"If Chevron leaves, the country will almost certainly nationalize its oil assets," said Muhammed Ghulam, an energy analyst at Raymond James. "Maduro is in a fight for his country. He needs all the cash and resources he can get."
Chevron is one of the leading private oil companies in Venezuela, which has more proven oil reserves than any other nation on the planet. ExxonMobil (XOM) and ConocoPhillips (COP) left years ago, after former Venezuelan President Hugo Chavez started nationalizing foreign-run oilfields.

Venezuela: rogue state -- would CVX be allowed to operate in North Korea, Iran, or Syria?


As predicted: Apple likely to absorb any US tariff cost increases on hardware. Exactly what I said just a few days ago.

The Road To Germany -- Wind Energy Is Collapsing In Germany

Anyone paying attention knows that "wind energy in Germany" is collapsing. We've followed that story for many, many years on the blog. We even devoted a "Road-To-Germany" tag just for this reason.

This is very, very interesting -- I did not see this coming. As bad as things were with regard to wind energy in Germany, I was not aware of how bad it really will become. Remember: Germany shut down a lot of alternative energy sources (e.g., coal) betting the farm, as they say, on wind. 

Now from Powerline:


The article continues:
In fact, “when in 2021 thousands of wind turbines come to the end of the 20-year subsidy period of the Renewable Energy Act, more wind turbines will be demolished on balance than new ones will be added, the wind industry fears.” It couldn’t happen to a more deserving industry.

Unlike in the past too low subsidies for wind power is not the cause this time. “It’s not about the money,” said Albers. “Too low subsidies” is an oxymoron. But here is the new twist:

The most important cause lies in the legal resistance of wildlife and forest conservationists fighting new wind farms. The BWE President referred to an industry survey of the onshore wind agency. According to its findings, more than 70 percent of the legal objections are based on species conservation, especially the threat to endangered bird species and bats.

The conservationists have a point. One of the worst features of both wind and solar energy is that they are terrible for the environment. They use up an enormous amount of land that otherwise would be available for agriculture, development or recreation. They are eyesores. And they kill huge quantities of wildlife.

OXY -- Bonds -- To Fund Anadarko Acquisition -- August 7, 2019

Updates

Later, 9:26 a.m. CT: I do not understand bonds, etc., so I may have this a**-backwards, as they say, but it certainly looks like:
  • Warren Buffett made a killing (see link below regarding the merger)
  • this really gives Ms Hollub some breathing room
A reader just sent me this -- look how "cheap" money is -- this is a huge, huge deal for everyone involved -- my two cents worth -- a huge win-win for all. A year from now things are going to look quite rosy. See disclaimer below.

Rates today:
  • 3 Month Treasury -- 1.99% 
  • 10 Year Treasury 1.61% -- 1.74% 
  • 30 Year Treasury 2.14% -- 2.27%  
Original Note
Link here, fascinating on so many levels.
Occidental Petroleum Corp. is selling $13 billion of debt to help finance its acquisition of Anadarko Petroleum Corp. after receiving over $75 billion in orders for the deal at the peak.

It’s the biggest demand for a debt sale since Saudi Arabia’s Aramco received more than $100 billion in orders in April, and a sign that investors are willing to take risk again just a day after the trade-war induced volatility shook global markets.

Occidental is selling bonds to fund the $38 billion takeover in 10 parts. The longest portion of the offering, a 30-year security, may yield around 2.25 percentage points more than Treasuries, down from initial price talk of 2.7 percentage points.

Four other investment-grade borrowers are marketing debt deals today as issuers regained their confidence after the latest flareup in the U.S.-China trade war brought sales to a near halt on Monday. High-grade credit spreads jumped 6 basis points on Monday, the biggest single-day widening relative to risk premiums since June 2016’s U.K. Brexit decision.
Much more at the link.

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

I track the OXY-Anadarko merger here.

EIA Weekly US Crude Oil Inventory Data -- August 7, 2019

Surprise (?) build.

Link here, pending.
  • US weekly crude oil change in inventory: an increase of 2.4 million bbls from previous week
  • US weekly crude oil inventory: now stands at 438.9 million bbls; about 2% above the five year average; and the 5-year average continues to increase
  • refinery operating capacity: 96.4% -- at the higher end of capacity; has been trending up over past few weeks
  • crude oil import last week: up a bit but not much
  • crude oil import average over last four weeks: almost 15% less than same period one year ago
Re-balancing:
Week
Week Ending
Change
Million Bbls Storage
Week 0
November 21, 2018
4.9
446.9
Week 1
November 28, 2018
3.6
450.5
Week 2
December 6, 2018
-7.3
443.2
Week 3
December 12, 2018
-1.2
442.0
Week 4
December 19, 2018
-0.5
441.5
Week 5
December 28, 2018
0.0
441.4
Week 6
January 4, 2019
0.0
441.4
Week 7
January 9, 2019
-1.7
439.7
Week 8
January 16, 2019
-2.7
437.1
Week 9
January 24, 2019
8.0
445.0
Week 10
January 31, 2019
0.9
445.9
Week 11
February 6, 2019
1.3
447.2
Week 12
February 13, 2019
3.6
450.8
Week 13
February 21, 2019
3.7
454.5
Week 14
February 27, 2019
-8.6
445.9
Week 15
March 6, 2019
7.1
452.9
Week 16
March 13, 2019
-3.9
449.1
Week 17
March 20, 2019
-9.6
439.5
Week 18
March 27, 2019
2.8
442.3
Week 19
April 3, 2019
7.2
449.5
Week 20
April 10, 2019
7.0
456.5
Week 21
April 17, 2019
-1.4
455.2
Week 22
April 24, 2019
5.5
460.1
Week 23
May 1, 2019
9.9
470.6
Week 24
May 8, 2019
-4.0
466.6
Week 25
May 15, 2019
5.4
472.0
Week 26
May 22, 2019
4.7
476.8
Week 27
May 30, 2019
-0.3
476.5
Week 28
June 5, 2019
6.8
483.3
Week 29
June 12, 2019
2.2
485.5
Week 30
June 19, 2019
-3.1
482.4
Week 31
June 26, 2019
-12.8
469.6
Week 32
July 3, 2019
-1.1
468.5
Week 33
July 10, 2019
-9.5
459.0
Week 34
July 17, 2019
-3.1
455.9
Week 35
July 24, 2019
-10.8
445.1
Week 36
July 31, 2019
-8.5
436.5
Week 37
August 7, 2019
2.4
438.9