Friday, September 6, 2019

How Much Do Folks Like EVs? Only If They Get A Tax Break -- September 6, 2019

From Bloomberg: electric car sales fall for first time after China cuts subsidy.  Data points:
  • sales drop 14% in July 
  • slowdown highlights the effect of government subsidies
  • global EV sales fell for the first time on record in July after China scaled back purchase subsidies
  • monthly sales worldwide fell 14% to about 128,000 plug-in passenger EV
The big question: why would China cut subsidies on EVs?

One word: coal.

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Friday Night

Sweet Memories, Ray Charles and Mary Ann Fisher
 
Maybe it's the sake, but it seems YouTube keeps getting better and better.

A Nice Jump In Production: An Alfred Old Dog Well In Reunion Bay -- September 6. 2019

This page will not be updated. The Alfred Old Dog wells are tracked here. All of the AOD wells are very, very nice wells; most (if not all) are pushing 500K or more total production).


The well:
  • 26154, 1,842, WPX, Alfred Old Dog 19-18HD, Reunion Bay, t9/14; cum 451K 7/19;  off line late 2018;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-20191921702249118630542071658
BAKKEN6-20193039963984203156224703358
BAKKEN5-201931483849142180680546741452
BAKKEN4-201930414343101883583045232
BAKKEN3-20193150365011283770851106304
BAKKEN2-201928695968483926979253193583
BAKKEN1-2019318802876548531238565234758
BAKKEN12-2018311191112008737516758513310190
BAKKEN11-201811286328003137403018921782
BAKKEN10-20181000500
BAKKEN9-20180000000
BAKKEN8-201823595259066227837434094204
BAKKEN7-201816472945168947665424493626
BAKKEN6-20188653727392918642166
BAKKEN5-20183143034396154160535284147
BAKKEN4-20183054615415170611248105060

CLR With Three More LCU Jessie Permits; Fourteen Permits Renewed -- September 6, 2019

Active rigs:
$56.659/6/201909/06/201809/06/201709/06/201609/06/2015
Active Rigs6165563375

Three new permits, #36942 - #36944, inclusive:
  • Operator: CLR
  • Field: Long Creek
  • Comments: CLR has three more LCU Jessie permits; section 13-153-99, Long Creek oil field; the CLR LCU is tracked here;
Fourteen permits renewed:
  • Petro Harvester (4): three FLX permits and a Tafelmeyer permit, all in Burke County 
  • QEP (4): four MHA permits, all in Dunn County
  • Bruin (3): two Sylte Mineral Trust permits and one Berg permit, all in Williams County
  • EOG (2): two Burke permits in Mountrail County
  • MRO: an Archie permit in Dunn County
One producing well (a DUC) reported as completed:
  • 34940, 3,388, Hess, EN-Kulczyk-154-94-2029H-13, Alkali Creek, t7/19; cum 8.5K over 4 days;

The Incredible BR Croff Wells Have Been Updated -- September 6, 2019

This page will not be updated. The Croff wells are incredible. This is an example of just one of them. The rest are similar. One Croff well is still on conf list.

The BR Croff wells in Croff oil field are tracked here. Updates here; wells of interest.

The well:
33143, 1,245, BR, Cross 22A MBH, Croff, t10/17, cum 437K 7/19; full production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-2019303090130813709140573393421157
BAKKEN6-2019302071220597803736971297227175
BAKKEN5-201931937893202634337043361118
BAKKEN4-20192058665881118421160197571356
BAKKEN3-2019315746576910221988219197613
BAKKEN2-2019285809589715727000
BAKKEN1-20192924942249399177229822260
BAKKEN12-2018221958519603668424087240350
BAKKEN11-2018302715627174999940370402980
BAKKEN10-201831271532730299071041045005835
BAKKEN9-2018302676226573922218289168401377
BAKKEN8-2018312769827842993133594335170
BAKKEN7-20183129849297081230437070369970
BAKKEN6-20183027782278381061039544394700
BAKKEN5-20183126849268621129032257321800
BAKKEN4-20183029233292841174831345312710
BAKKEN3-20183138042378341370030319302420
BAKKEN2-201827154271543111059535952920
BAKKEN1-20182514425144483186820481420
BAKKEN12-2017241093210976219511338112780
BAKKEN11-2017241123511099505612759115561143
BAKKEN10-201717159715973278202740

XTO Reports Two Huge Bobcat Federal Wells in Bear Creek; A Whopping 18 Million Lbs Proppant -- September 6, 2019

The XTO Bobcat Federal wells are tracked elsewhere. This page will not be updated.

Note this well which was recently fracked:
  • 34356, 1,305, XTO, Bobcat Federal 14X-35A, 60 stages; 18 million lbs, Bear Creek, t6/19; cum 92K in 43 days;
Full production profile to date:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-20193169550700756111727115269110
BAKKEN6-20191322011206411594423567192434240
BAKKEN5-20191001337000
BAKKEN4-201926657014992102301023

And then look at this well with an IP of 30:
  • 34358, 30 (no typo), XTO, Bobcat Federal 14X-35EXH, 60 stages; 12 million lbs, Bear Creek, t5/19; cum 77K 7/19; 
Production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-20193162002618065224572970205470916
BAKKEN6-2019131497414228180601599780767921
BAKKEN5-201917395095639440944

Jobs

Updates

September 8, 2019: yes, the mainstream media reported that the "jobs report" was a disaster. In fact, we now have non-mainstream media op-eds that suggest the "job report" was stellar. Some data points:
  • the unemployment rate held at 3.7 percent, near a 50-year low
  • unemployment among African Americans and Hispanics also hit all-time lows last month
  • op-ed: 
Just before the 2016 presidential election, when President Obama’s economic defeatism was still the order of the day, the Congressional Budget Office 10-year economic projections predicted the economy would add about 2 million new jobs from the end of 2016 through the end of 2019. Thanks to the shift to a common-sense, pro-growth agenda, however, we’ve actually gained an impressive 6.1 million new jobs since end of 2016 — more than 2 million in just the last 12 months, including 130,000 new jobs in August.
Original Post 

This is the story the mainstream media won't report, link here:
The number of people employed in the United States hit a record 157,878,000 in August, the 21st record set under President Donald Trump, according to the employment report released today by the Bureau of Labor Statistics.
That's an increase of 590,000 from the record 157,228,000 employed in July.
The unemployment rate held steady at 3.7 percent. For blacks, the unemployment rate dropped to a record low of 5.5 percent last month. And for Hispanics, the unemployment rate was 4.2 percent in August, which ties the record low set earlier this year.
CNBC reporting that it was a horrible jobs report.  [Compared to what?]

Wow, wow, wow -- huge miss -- huge story -- non-farm payroll, link here, and here:
  • month-over-month change
    • forecast/consensus: 163,000
    • range: 150,000 to 180,000 (actually I saw some numbers greater than 205,000)
    • actual: 130,000
  • market:
    • Dow futures, immediately before report: up 120 points
    • Dow, immediately after report: up 120 points
    • investors not happy; an hour later, at the open, the Dow up 10 points
  • unemployment: steady at 3.7%
  • participation rate: 63.2% vs consensus of 62.9%
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.

More:
  • Nonfarm payrolls added: 130,000 vs. 160,000 expected
  • Unemployment rate: 3.7% vs. 3.7% expected
  • Average hourly earnings MoM: 0.4% vs. 0.3% expected
  • Average hourly earnings YoY: 3.2% vs. 3.0% expected
July’s employment figure was revised to 159,000, down from the 164,000 positions previously reported. The labor force participation rate ticked higher to 63.2%. The manufacturing sector added 3,000 positions in August.

Establishing The Value Of Crude Oil Storage In The Shale Era -- RBN Energy -- September 6, 2019

DUC. DUC. DUC. Goose.

Re-posting as a stand-alone. Big story.
RBN Energy: establishing the value of crude oil storage in the shale era. Archived.
Here at RBN, we frequently receive questions about our thoughts on the value of storage. Whether it be crude, natural gas, or NGLs, we answer like any good consultant, “It depends.” What operational need does this storage serve? Where is it located? Does it have optionality for receipts and deliveries? These factors and many more can affect both the strategic and tactical value of a storage asset. Those assets that are integrated into midstream systems and facilitate movements from the upstream to the downstream are generally better poised for success. Those attempting to carve out a niche in isolation or relying on uplift purely from commodity price fluctuations … well, good luck to them. Today, we begin a series examining the value of — and changing markets for — crude oil storage.
Crude oil storage is an integral part of the midstream sector, which (as its name suggests) occupies the market midway between the upstream production of crude and other hydrocarbons at the wellhead and the downstream refining or exporting of oil. As such, the role of crude storage is to facilitate the transfer of oil as it works its way down the line from the lease to the refinery or export dock. That includes moving the various grades of oil across distances, from Point A to B, over a period of time — days or a month or more — as price differentials and economics dictate. This is an important distinction because it means that midstreamers must employ different strategies to capture value in dynamic markets than buyers and sellers in the upstream and downstream sectors. Over time, upstream and downstream folks have had to adapt to manage the commodity price risk that they face. They’ve accomplished this through a variety of financial instruments and physical trades, including a combination of term contracts, spot transactions, physical forwards, futures, options and other derivatives.

Four Wells Coming Off Confidential List Today -- September 6, 2019

Non-farm payroll: posted

Statistics: interesting, interesting story from PennState on more cost-effective method for finding shale gas. I am 1000% confident that Harold Hamm has been using this method for years. Corroborates a blog reader who says "statistical analysis" is the answer.

Big oil circles Permian riches: from Bloomberg, link here. Data points:
Independent producers in the Permian Basin of Texas and New Mexico are trading much lower than when Chevron Corp. bid for Anadarko Petroleum Corp. in April. Royal Dutch Shell Plc and ConocoPhillips have expressed interest in bulking up in shale at the right price. Exxon Mobil Corp.’s chief said Wednesday his company is keeping a “watchful eye” on the Permian for potential deals.
Oil’s drop to near $55 a barrel, from $75 in October, is putting pressure on shale producers at a time when investors are losing faith in an industry that has burned about $200 billion of cash in a decade. Despite record U.S. output, the S&P index of independent exploration and production companies is trading near its troughs of 2008 and 2015, when crude prices sank south of $35 a barrel. The producers are now worth just 4.5 times their earnings before certain items, compared with 9 times about a year ago.
“It’s clear there are many E&Ps trading well below the Chevron valuation watermark from April,” said Michael Roomberg, who helps manage $4.4 billion at Miller/Howard Investments Inc. He expects “several additional deals over the next several quarters, and wouldn’t be surprised if the majors are involved.”
Pioneer Natural Resources Co. or Concho Resources Inc., which have both struggled this year, would be a good fit for Exxon, while Shell may look at smaller players like WPX Energy Inc. and Cimarex Energy Co., according to Tudor, Pickering, Holt & Co.
Comment: I posted my story on the Oasis Permian acquisition before I saw this article. Something to think about.
XOM: getting ready to pounce. Exxon will reap $4 billion with sale of 20 oil and gas assets in Norway. Just announced. Link at Reuters. In 2017, Exxon's net production from these assets was around 170,000 boepd. At $50/boe, that works out to $3 billion/year.

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

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Back to the Bakken

Wells coming off confidential list today -- Friday, September 6, 2019: 19 for the month; 151 for the quarter:
35811, conf, WPX, Ruby 31-30HG, Antelope, the Ruby wells are tracked here:

DateOil RunsMCF Sold
7-20194256548139

35751, SI/NC, XTO, Tom State 34X01HXE, Alkali Creek, no production data;
35090, 1,094, Liberty Resources, AZ 158-93-13-24-4MBH, Enget Lake, t3/19; cum 96K 7/19;

DateOil RunsMCF Sold
7-20191454817068
6-20191701017148
5-20192050419105
4-20192154922837
3-20192239616776

34306, SI/NC, XTO, Rough Federal 44X-23B, North Fork,

Active rigs:

$55.429/6/201909/06/201809/06/201709/06/201609/06/2015
Active Rigs6265563375

RBN Energy: establishing the value of crude oil storage in the shale era. Archived.
Here at RBN, we frequently receive questions about our thoughts on the value of storage. Whether it be crude, natural gas, or NGLs, we answer like any good consultant, “It depends.” What operational need does this storage serve? Where is it located? Does it have optionality for receipts and deliveries? These factors and many more can affect both the strategic and tactical value of a storage asset. Those assets that are integrated into midstream systems and facilitate movements from the upstream to the downstream are generally better poised for success. Those attempting to carve out a niche in isolation or relying on uplift purely from commodity price fluctuations … well, good luck to them. Today, we begin a series examining the value of — and changing markets for — crude oil storage.
Crude oil storage is an integral part of the midstream sector, which (as its name suggests) occupies the market midway between the upstream production of crude and other hydrocarbons at the wellhead and the downstream refining or exporting of oil. As such, the role of crude storage is to facilitate the transfer of oil as it works its way down the line from the lease to the refinery or export dock. That includes moving the various grades of oil across distances, from Point A to B, over a period of time — days or a month or more — as price differentials and economics dictate. This is an important distinction because it means that midstreamers must employ different strategies to capture value in dynamic markets than buyers and sellers in the upstream and downstream sectors. Over time, upstream and downstream folks have had to adapt to manage the commodity price risk that they face. They’ve accomplished this through a variety of financial instruments and physical trades, including a combination of term contracts, spot transactions, physical forwards, futures, options and other derivatives.

North Dakota Connection To The Jerry Jones-Comstock Deal -- September 6, 2019

From The WSJ, June 12, 2019:
U.S. natural gas prices have fallen to three-year lows at a time of year when they should be rising. Shares of gas producers are in the pits.
But Jerry Jones, the owner of the Dallas Cowboys, has bet more than $1 billion on the fuel. Mr. Jones said this week that he was putting up $475 million of his own money to help Comstock Resources Inc. buy a larger shale-gas rival, Covey Park Energy, for about $1.6 billion.
The deal follows another last year in which Mr. Jones sold Comstock North Dakota oil wells valued at more than $600 million in exchange for a controlling stake in the public company. The latest deal brings to about $1.1 billion his wager on the prolific Haynesville Shale in Louisiana and East Texas where Comstock and Covey both drill.
So, now down the rabbit hole, as one of my readers would say.
Under a letter of intent signed with Jones' oil and gas companies, Arkoma Drilling and Williston Drilling, Frisco, Texas-based Comstock will buy interests in oil and gas properties in North Dakota for $620 million in stock (there's no debt associated with the assets).
So, was Comstock Resources named after Comstock, ND, or Comstock, TX, or something else? With Comstock, ND, nowhere near the oil-producing Williston Basin, I can guarantee that the company was not named after the ND community. The same can probably be said about Comstock, TX.

NDIC well search suggests that Comstock Resources owns minerals in North Dakota but is not an operator.

From the company's website:
The Bakken Shale Properties that we acquired from Jerry Jones include 348 producing wells, 85 drilled but uncompleted wells and 7 undrilled locations.
Reserves attributable to these properties were estimated at 22.8 million barrels of oil and 49.3 billion cubic feet of natural gas. These properties generated $155.1 million of revenues in excess of operating costs, excluding depletion, depreciation and amortization in 2017.
On August 14, 2018 we closed our agreement with Jerry Jones, Dallas businessman and owner of the Dallas Cowboys Football Club Ltd., under which he contributed oil and gas properties in North Dakota in exchange for common stock in the Company.
The contribution provides us with substantial cash flow to invest in our high return Haynesville shale drilling program and the capital to further grow our drilling prospect inventory through acquisitions of new leases and producing properties.
Natural gas? Connect this dot, posted yesterday, "Texas wind not enough. Next-day power prices at the ERCOT North hub soared from $130 per megawatt hour for Wednesday to an all-time high to f$973.75 for Thursday."

By the way, look at that last item in the company's website link posted above:
The contribution provides us with substantial cash flow to invest in our high return Haynesville shale drilling program and the capital to further grow our drilling prospect inventory through acquisitions of new leases and producing properties. 
Oasis is doing the same thing: using free cash flow from the Bakken to fuel its Permian expansion. 

CLR Cancels Three LCU Jessie Permits -- Less Than A Month After Announced -- September 6, 2019

See the Daily Activity Report, dated September 5, 2019.

The three permits were promptly re-named and then promptly canceled.

A Re-Look At The Oasis Permian Acquisition -- September 6, 2019

I'll let others opine on this if they want, but after looking at the most recent Oasis Petroleum presentation and looking at the past blogs on the Oasis Permian acquisition, "things don't ring true," and/or a lot of things simply don't make sense. At least to me.

First, these are my notes on the most recent Oasis corporate presentation.

These area from previous posts regarding the Oasis Permian acquisition.
Snapshot of Bakken operators.

The Economy, Part 1 -- September 6, 2019

I'm not watching television so it's possible I'm wrong, but it certainly seems a lot of big economic news is not being ...

.... whatever.

Let's just get to it.

Jobs. ADP employment surged in August. And it was across the board. "Recession is right around the corner." Link here.



Cheap money. This is a bigger story than I think most folks realize. I've talked about it numerous times -- if not on the blog, in e-mail to readers. But money is really cheap right now. How cheap is it. Apple issued $7 billion in bonds to buy back $7 billion of its own stock. Years ago my dad perfected the tactic of using cheap money to buy shares in Apple but that's another story for another time. LOL. But back to the "cheap money" story. Link here.



Recession is right around the corner

Fed: the case can now be made for each of the following Fed options --
  • do nothing
  • do something: cut rates a quarter of a percent
  • go big: cut rates a full half basis point (half a percent) 
  • go rogue: raise rates a quarter of a percent