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Wednesday, August 21, 2019

From Twitter Today: Rigs And Cushing -- August 21, 2019

Two graphics.

I do not recall any analyst, at the time, stating widely and publicly that Cushing would not reach its full capacity. A link would have been nice. Trust but verify.


Rigs don't matter ....  except to those who have not adjusted their thinking from conventional to unconventional drilling ...


Gasoline Demand -- Steady As She Goes -- August 21, 2019

Link here:


Hardly suggests a "recession right around the corner." By the way, two nights ago mainstream media clarified what "they" meant by "right around the corner." They suggested the recession is likely to be seen in early- to mid-2021. Of course, that was just one source.

Active Rigs Back Up To 64; The Amber Renee And Sophia Drake To Be Re-Entered -- August 21, 2019

Active rigs:

$55.688/21/201908/21/201808/21/201708/21/201608/21/2015
Active Rigs6461523276

Eight new permits, #36881 - 36888, inclusive)
  • Operators: Oasis (4); XTO (2); Murex (2)
  • Fields: Willow Creek, Haystack Butte, Sanish
  • Comments:
    • Oasis has permits for a 4-well Cliff Federal pad in lot 1 / section 5-152-100, Willow Creek
    • XTO has permits for 2-well Ernest Federal pad in section 19-148-97, Haystack Butte
    • Murex has permits to re-enter two wells in the Sanish, the Sophia Drake and the Amber Renee (see this post)
Five producing wells (DUCs) reported as completed:
  • 32927, 239, Sinclair, Sinclair State 5-36H, Robinson Lake, t7/19; cum --;
  • 35164, 736, Hunt Oil, Halliday 146-92-19-18H-3, Werner, t7/19; cum --;
  • 35361, 809, Hunt Oil, Halliday 146-92-19-18H-6, , Werner, t7/19; cum --;
  • 36044, 1,683, Kraken Operating, Ruffing 27-34 5H, Lone Tree Lake, t7/19; cum --;
  • 36045 1,302, Kraken Operating, Ruffing 27-34 4H, Lone Tree Lake, t7/19; cum --;

Permits To Re-Enter The Amber Renee; Drill The Sophia Drake -- August 21, 2019

I would be hard pressed to find another well that I've tracked as much as I've tracked the Amber Renee, or posted as many updates. The Amber Renee was an early well, and an incredible well. I was surprised it was taken off line. There was never any explanation. I kept it on my "things to follow up" page for years and then about two months ago finally removed it; it appeared nothing was going to happen.

Then, all of a sudden, it (and the Sophia Drake) show up today on the daily activity report (to be re-entered, #36887 and #36888).

The two wells:
  • 18408, 1,945, Murex, Amber Renee 25-36H, Sanish, t2/10; cum 822K 11/13; last full month of production, 11/13 with 7,000 bbls/month;
  • 30312, PNC, Sophia Drake 25-36H, Sanish, no indication this well was ever spud;
Offset well, less than a mile away:
  • 17263, 3,124, Murex, Chandler James 25-36H, Sanish, t10/08; cum 1.146306 million bbls 6/19; producing about 2,000 bpm as of 6/19;
Previous posts:

Here are just a few of the posts where I've mentioned or updated the Amber Renee.

Earlier notes from elsewhere in the blog regarding the Amber Renee:
And many, many more minor updates.

Now, today in the daily activity report, permits for both the Amber Renee and the Sophia Drake to be re-entered. Not yet on conf list.

Amber Renee:


Sophia Drake:


Permit to re-enter the Amber Renee




Permit to re-enter the Sophia Drake

 
Permit to drill the original Amber Renee:
  

A Very Nice Producing Croff Oil Well Comes Off Line -- August 21, 2019

The well:
  • 22377, 1,482, Petroshale/SM Energy, Anderson 5-14H, Croff, t7/12; cum 467K 4/19; off line as of 4/19;
The graphics:



Flight To Safety? The Road To Germany -- August 21, 2019

Updates

August 26, 2019: at the conclusion of the G-7 summit, Stuart Varney --
Varney believes that it is time for America's European allies to get on board with the President's agenda. 
"Europeans are frankly scared of America. Their economies are sinking.  They've entered the fantasy land of negative interest rates. Their money is pouring over here, and they just don't know what to do
My advice -- jump on the Trump train and quit whining about Iran and climate change," advised Varney. 
Think about it, energy, money, economy ...
  • on energy: Europe is in deep trouble; the only continent that will have to import all its oil
  • on energy: Europe, dependent on Russia
  • on money: flight to safety -- EU money flowing to the US
  • on economy: EU will head into recession before the US; and the US may not enter a recession; the US still has more arrows in its quiver; the EU is pretty much out of arrows
The EU really has only one way to "slow" the US -- get the US to waste its vast resources / its vast advantages on "global warming" / "climate change" / "extreme weather."

By the way, I've not seen any stories in the longest time about "extreme weather" in Europe. Europeans have that figured out, also.

By the way, did Macron get anything for surprising Trump and inviting Iran to the G-7 summit. Not that I've heard.

Original Post
 
This is so cool.

Folks are wondering why the yields on US Treasuries are falling.

One of the blog's readers provided an answer to that question some days ago. Now The Wall Street Journal provides the same answer.

The readers of the blog never fail to amaze me.


************************************
Phoning It In



"Did you hear? Yeah, like I'm going to pay Angela Merkel 5% on my bonds. LOL. I'm buying MDU. They say electricity demand will surge in the Bakken over the next twenty years. Yeah, I know MDU is not the sharpest knife in the drawer -- whatever. Best bet? F. Paying almost 7%. The Ford family is huge. The cousins are living off Ford's dividends. You think F will cut their dividend? LOL. Hey, what are you doing for lunch? Okay. I'll have my people talk to your people."

Bakken Readers Never Cease To Amaze Me -- August 21, 2019

A reader sent me this link regarding an open house in Valley City earlier this summer for Drug Plastics.

I was curious. What does "Drug Plastics" do and why was the expansion necessary?
Drug Plastics in Valley City will be installing four new bottle processing machines to greatly increase their manufacturing capacity for a new client.
First, the photo at the link for the facility in North Dakota:


Now, look at this URL: https://www.cannabistech.com/directory/drug-plastics/.

Note the logo at the website. It matches the logo at the Valley City facility.

And what does "Drug Plastics" do?

From the website:


North Dakota ships light, sweet oil (CBR) to Pennsylvania, and Pennsylvania ships plastic back to North Dakota to make plastic containers for marijuana.

What a great country!

But as the reader noted: why aren't we making that plastic here in, say, Tioga?

And why does a Pennsylvania-based plastics company have a plant in North Dakota? Let me count the ways:
  • inexpensive electricity
  • educated and motivated workforce
  • right-to-work
  • lower wages (because cost-of-living less expensive in North Dakota)
  • fewer regulations to get a plant up and running
  • lower taxes
  • less crime
But the biggest question: who is that new big client that required expansion at the plant? Let me guess. A company out in Portland, Oregon, or San Francisco, CA. 

Assumptions -- August 21, 2019

Let's assume full years.

2015 - 2019, inclusive: five years.

Let's assume 1.1 million bopd produced in the state during those five years.

1.1 million x 365 days x five years = 2,000 million bbls of crude oil produced in those five years.

Let's assume there was a spill of 11 million gallons or 300,000 barrels.

Let's assume my calculator doesn't make mistakes.

300,000 / 2,000,000,000 = 0.00015 or 0.015%.

For the archives.

Let's assume no arithmetic errors which is a huge assumption.

Let's assume it was a really, really slow news day in Grand Forks yesterday.

Hess -- Best-Performing US Oil Company So Far This Year -- August 21, 2019

Re-posting:

From The WSJ --
Hess Corp. has emerged as the best-performing U.S. oil company this year.
The reasons have little to do with the American fracking boom. Instead, Hess’s popularity with investors is rooted in a small South American nation.
The New York-based company holds a 30% stake in an immense offshore oil field being developed by Exxon Mobil Corp. in Guyana that appears poised to become one of the most lucrative megaprojects in years.
The company’s shares have surged more than 50% in 2019, the biggest increase of any major U.S. oil operator, excluding companies acquired in deals.
It is a peculiar scenario for Hess, one of the largest shale producers in North Dakota: shareholders are excited about a prized asset it has an interest in, but doesn’t control.
Hess acquired its stake in Guyana from Royal Dutch Shell PLC in 2014 for an undisclosed price.
The company initially estimated the resource total at about 500 million barrels of oil. Now it appears to be at least 12 times that amount, making it one of the most significant discoveries in decades.
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. But I do have to say that I started accumulating Hess about a year ago but for all the wrong reasons. It might make up for holding on to some real "dogs" that I should have sold years ago. Whatever. 

Germany, Hess -- Cleaning Out The In-Box -- August 21, 2019

How do you solve a problem like Germany? -- WSJ, August 19, 2019 -- data points -- op-ed by the WSJ editorial board --
  • Berlin prepares to cave to the Keynesians but could do so much better
  • Germany might cautiously cobble together a Keynesian stimulus policy for its recession-enaced country
  • IMF wants Germany to "use" its fiscal headroom to avert a recession; headroom?
  • a balanced budget
  • government debt below 60% of GDP
  • but this is how they want to spend the stimulus money:
  • public works
  • lay more high-speed internet cables
  • fill in potholes on the autobahn
  • worst idea: some form of cash-for-clunkers tax handout to support the auto industry
  • Germany's worst problem: regulations
This was what caught my attention:
A dishonorable mention goes to Mrs. Merkel’s Energiewende (energy transformation), which is driving up costs for businesses already struggling with trade war, taxes and regulation. The chemical industry, Germany’s fifth-largest in contribution to GDP, is in an eight-year slump owing in part to rapidly rising energy costs, as Deutsche Bank noted last week. Many medium-sized companies aren’t exempt from surcharges that subsidize renewables, which aren’t reliable enough to provide the steady power that chemical plants require.
***********************************************
Hess

From The WSJ --
Hess Corp. has emerged as the best-performing U.S. oil company this year.
The reasons have little to do with the American fracking boom. Instead, Hess’s popularity with investors is rooted in a small South American nation.
The New York-based company holds a 30% stake in an immense offshore oil field being developed by Exxon Mobil Corp. in Guyana that appears poised to become one of the most lucrative megaprojects in years.
The company’s shares have surged more than 50% in 2019, the biggest increase of any major U.S. oil operator, excluding companies acquired in deals.
It is a peculiar scenario for Hess, one of the largest shale producers in North Dakota: shareholders are excited about a prized asset it has an interest in, but doesn’t control.
Hess acquired its stake in Guyana from Royal Dutch Shell PLC in 2014 for an undisclosed price.
The company initially estimated the resource total at about 500 million barrels of oil. Now it appears to be at least 12 times that amount, making it one of the most significant discoveries in decades.

Legacy Fund Deposits For August, 2019, Have Posted

Link here.


August, 2019: $55,073,428.30 --
  • exceeds the deposit average for 2019
  • exceeds the deposit average for five of the past eight years (excludes current year)

EIA's Weekly Petroleum Report -- August 21, 2019

While we're waiting, existing home sales (US), mortgage rates are really, really low and might go lower:
  • prior: 5.270 million
  • prior revised: 5.290 million
  • consensus: 5.385 million
  • actual: 5.420 million
  • m/m change: up 2.5%
  • y/y change: up 0.6%
I still don't see the data that the average American on the street sees "a recession just around the corner."

 
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The Weekly Petroleum Report

WTI: up about 65 cents; trading at $56.74, about at the sweet sport for all involved.

EIA's weekly petroleum report: link here.
  • weekly US crude oil inventories: fell by 2.7 million bbls
  • weekly US crude oil inventory: 437.8 million bbls, about 2% above the five-year average, and that five-year average keeps building
  • refiners operating capacity: 95.9% of their operable capacity; nearing high end of what is generally reporte
  • imports continue to fall; down by almost a half-million bopd from the previous week
  • imports are almost 11% less than the same four-week period last year (and those numbers keep falling)
  • total product supplied: now solidly above 20 million bpd, up 3% from same period last year
  • jet fuel product supplied was up 4% compared with same four-week period last year
  • gasoline up 1.5% from same period last year
  • we'll see the gasoline demand numbers and graphic later today
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
Week 38
August 14, 2019
1.6
440.5
Week 29
August 21, 2019
-2.7
437.8