Tuesday, October 1, 2019

North Dakota -- First Snow Of The Season -- Marmarth, ND -- October 1, 2019

Link here.

Enerplus Is Starting To Report the Daffy Duck Wells -- October 1, 2019

This page will not be updated. The "Daffy Duck" pad will be followed here.

Four "Daffy Duck" wells coming off the confidential list today:
  • 34440, 1,084, Enerplus, Mallard 148-93-20B-29H-TF, McGregory Buttes, t4/19; cum 126K 8/19;
  • 34439, 627, Enerplus, Daffy 148-93-20A-29H, 43 stages; 10.5 million lbs sand, McGregory Buttes, t4/19; cum 149K 8/19;
  • 34438, 619, Enerplus, Muscovy 148-93-20A-29H-TF, McGregory Buttes, t4/19; cum 143K 8/19;
  • 34437, 927, Enerplus, Canvasback 148-93-20B-29H, McGregory Buttes, t4/19; cum 136K 8/19
Frack data: pending.


Production profiles:
  • #34439, 149K in less than five months, 43 stages; 10.5 million lbs:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

An older well in the area:
  • 20883, 724, Enerplus, Hans 20-21H, 23 stages; 1.7 million lbs, McGregory Buttes, t4/12; cum 331K 8/19:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

They're Reading The Blog -- Californians Love Saudi Oil -- October 1, 2019


Later, 9:21 p.m. CT: I posted the original note earlier today. This evening, while proofreading and correcting typographical errors, I came across this story in LosAngelesCBSNews:

From the linked article:
Gas price hikes were blamed on unplanned maintenance issues at the Chevron and Marathon refineries in Los Angeles County and the absence of imported gasoline, according to the Automobile Club of Southern California.
Absence of imported gasoline? And why was that? Gasoline shipments from Europe to the Middle East surged after the attack on Saudi assets. Re-posting:
But look at this, link here:

From Reuters, the linked article:
Gasoline exports from Europe to the Middle East and Asia are set to surge this week after recent attacks on Saudi Arabia’s oil facilities crippled output at the kingdom’s refineries.
Over 400,000 tonnes of gasoline and gasoline blending components have been booked in the past week for loading between Sept. 21 and Sept 26 out of northwest Europe with Mideast Gulf delivery options, shipping data shows. The flow is the equivalent of around 500,000 barrels per day. [Why didn't they say that to begin with; who in the ... measures gasoline in "tonnes"? I guess you do when loading a sea-going tanker. LOL.]
It is unclear where the cargoes will end up, but traders said that Saudi Arabia’s state-run oil company Aramco is seeking to buy large volumes of refined oil products.
Europe’s exports of gasoline and blending components to Saudi Arabia averaged 60,000 bpd in the first five months of the year, according to data analytics firm Vortexa.
Original Post

They're reading the blog. LOL. I don't know how often I've said this: Californians prefer Saudi oil.

But here it is, in the WSJ over the weekend:

From the linked article:
Following the attacks on Saudi Arabia’s oil facilities last month, many forecasters warned that gas prices would spike. Yet prices have hardly budged—except in California, where they are surging due to policies that have made the state more reliant on foreign oil.
Gas prices in the Golden State have shot up 30 cents a gallon in the last week amid problems at in-state refineries to a statewide average of $4.03 a gallon and may be headed higher. Prices rose a mere 10 cents nationwide in the week after the attacks on Saudi facilities and have since ticked down a few cents.
A big reason gas prices didn’t spike after the Saudi attack is growing U.S. shale oil production, which has doubled since 2012 to about 12.5 million barrels a day and added about six million barrels to global supply. This has more than offset the 5.7 million barrels that were temporarily knocked out of Saudi production.
Yet oil production in California has declined about 18% since 2012 as older wells are exhausted and regulatory costs make it less profitable to drill new ones. California has made up for its declining domestic production by importing more foreign oil by tanker, especially from, you guessed it, Saudi Arabia—which emits more CO2.
Regulatory costs have also forced many refiners in the state to close. The California Energy Commission notes that “the cost of complying with environmental regulations and low product prices will continue to make it difficult to continue operating older, less efficient refineries.” Few refineries outside of the state produce the unique fuel blends required by California.
Thus when California refineries experience problems, retailers must import foreign gasoline at steep prices, a challenge partly exacerbated by the outages in Saudi Arabia. Add California’s 61-cent-a-gallon gas tax—the highest in the country—and this is why its gasoline prices are now nearly $1.40 higher than the U.S. average and $1.70 more than in Texas
Much more at the linked article.

As usual, the comments are the best part.

Active Rigs In North Dakota Back Up To 60 -- October 1, 2019

WTI: continues to slide; trading below $54/bbl.

Active rigs:

Active Rigs6063583368

Six new permits, #37024 - #37029, inclusive:
  • Operator: Enerplus
  • Field: Mandaree (McKenzie County)
  • Comments: 
    • Enerplus has permits for six "string instrument" wells on a pad in Mandaree oil field, section 3-149-94
Four permits renewed:
  • NP Resources: four Trotter Federal permits, McKenzie
Trotter reminds me: Sophia and I are reading Black Beauty, by Anna Sewell, which has become a tradition in "our" house. I read that book to each of Sophia's older sisters when they were about the same age as Sophia is now. We will read a chapter every one or two days; the chapters are very, very short, usually three to four pages. Once we complete the book, then we will read it again, and perhaps read it a third time. By the third time, Sophia, like her older sisters, should be able to read some of it on her own.

With that in mind, put the following in the correct order, from slowest to fastest:
  • canter, gallop, lope, pace, trot, walk
Two "hints":
  • it "all depends" is a very correct answer; and, 
  • there is no one, definitely correct answer

Hess Is Reporting Some Great Wells In Blue Buttes -- October 1, 2019

This page will not be updated.

The definition of an ideal well: a well that pays for itself in six months and then generates free cash flow for 35 years. 

The wells in this area have been updated. Hess has recently reported some incredible wells in this area:
Examples follow.

Note that #34206 produced over 200,000 bbls in less than nine months.

Note that #30027 had a 50K+ month (50,483 bbls in 29 days).

34206, 2,954, Hess, BB-Chapin-151--95-0506H-10, 60 stages, 8.4 million lbs, mixed sand; t12/18; cum 201K 8/19;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

30027, 3,957, Hess, BB-Federal-151-95-0817H-6; t6/19; cum 134K 8/19; 
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

30029, 3,969, Hess, BB-Federal-151-95-0817H-4; t6/19; cum 113K 8/19;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

COP To Use New Diluent To Thin Canadian Bitumen -- October 1, 2019

The new diluent: a condensate, a light hydrocarbon, produced from natural gas wells. Interesting. Article does not say from where the condensate will come. All I know is that North Dakota has a lot of it and is relatively close to Alberta.

Later: see first comment regarding source of diluent --
Trend has been, for a while, for more use of local Canadian lease condensate. There's a fair amount of growing shale gas/condensate in AB and BC. This replaces (i.e. is cheaper than) local syncrude or imported plant condensate* or naphtha from the US.

So I really doubt, they are using Bakken oil. There's not really that much higher API condensate in the Bakken anyways. And even if they were using some before, the metatrend is really in the opposite direction. Using local cheap diluents versus importing from the US (as Canadian shale production has grown).

*Plant condensate is the byproduct of a wet gas (NGL) processing plant. It is very high API gravity (60+). It's the "second squeeze". The "first squeeze" is the simple lease separator. Lease condensate is usually about 50 or so API. 

North Kore set to resume nuclear talks with US in "coming days," according to source at Twitter.

Here We Go

Discussed for the past several months. Interactive Brokers forced Schwab's hand(s).

From The WSJ: Schwab ending online trading commission on US-listed products. Wow, wow, wow.

E*Trade, Ameritrade, need to follow suit, I would assume. Tectonic.
Charles Schwab Corp. said it would eliminate commissions on trades made on its mobile and web channels, rattling the online brokerage industry.
Shares of brokerage companies E*Trade Financial Corp. and TD Ameritrade Holding Corp. fell by 16% and 20% respectively after the market opened Tuesday.
The move also sent shares of Charles Schwab down 6.2%.
The change applies to commissions for stocks, exchange-traded funds and options listed on U.S. or Canadian exchanges. The San Francisco financial-services company currently charges a commission of $4.95 for online U.S. stock, ETF and options trades.Charles Schwab said clients trading options will continue to pay 65 cents per contract.
Immediate impact:
  • Schwab shares down almost 10%.
  • E*Trade shares down over 20%.
  • Ameritrade shared down over 22%. 
And Here We Go, Again

Amazon to open new chain of grocery stores. Will not be in same niche as Whole Foods.  Los Angeles, Chicago, Philadelphia. Relatively small. Target: middle income customers. Link at WSJ.

Current Events, Part 2 -- October 1, 2019

Ford: will release 3Q19 sales data early tomorrow morning, apparently just before the market opens. 

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.   

Note: the following includes opinions interspersed with facts. It may be hard to tell which is which.

US soybeans: China buys one million tons of US soy after tariff waivers -- Bloomberg, reported today. Data points:
  • CHINA gave the waivers -- hugely interesting!! Just as the president predicted -- China needs food more than we need their plastic toys
  • 12 - 15 cargoes, or as much as one million tons
  • but it appears that China gave waivers for another two million tons in purchases
  • which is on top of the two million to three million in waivers awarded last week
  • remember: the "spin" last month was that the soybean shortfall China was experiencing could be met by other western countries; so much for that "spin" (fake news)
Trump rally -- next one just announced!
  • previously announced, the rally in Ill-Hand Omar's backyard, somewhere in Minnesota, October 10, 2019
  • next one after that, in Jerry Jones' backyard, somewhere in Dallas -- ah, here it is -- American Airlines Center -- Dallas, TX -- October 17, 2019 
  • the GOP is raking in millions of dollars off the impeachment inquiry
Politics: 2020 election --
  • Romney vs Pocahontas or Romney vs Hillary
Light vs heavy (remember: Bakken, Eagle Ford, and Permian -- light, sweet oils):

Six Wells Coming Off Confidential List Today -- October 1, 2019

The fourth quarter begins with a bang -- six wells coming off the confidential list today -- Tuesday, October 1, 2019: 6 for the month; 6 for the quarter:
  • 34761, 1,248, Whiting, Berger 24-10-1TFH, Tyrone, t4/19; cum 85K 8/19;
  • 34594, SI/NC, Hess, EN-Weyrauch B-LE-154-93-3031H-1, 
  • 34440, 1,084, Enerplus, Mallard 148-93-20B-29H-TF, McGregory Buttes, t4/19; cum 126K 8/19;
  • 34439, 627, Enerplus, Daffy 148-93-20A-29H, McGregory Buttes, t4/19; cum 149K 8/19;
  • 34438, 619, Enerplus, Muscovy 148-93-20A-29H-TF, McGregory Buttes, t4/19; cum 143K 8/19;
  • 34437, 927, Enerplus, Canvasback 148-93-20B-29H, McGregory Buttes, t4/19; cum 136K 8/19
Active rigs:

Active Rigs5963583368

RBN Eenrgy: ethane prices may rise with steam-cracker demand, but not by much.
The U.S. ethane market has experienced major ups and downs in the past couple of years. First, there was sharply rising demand from new steam crackers, a fractionation-capacity crunch and soaring ethane prices. Then came an ethane demand slump, plummeting prices and a big jump in inventories. More recently, though, the market seems to have returned to a state of relative equilibrium. Ethane prices have settled in — at least for now — at about 22 cents/gallon (gal), a couple of pennies below where they had been standing rock-steady before all hell broke loose. Ethane demand from existing steam crackers is rising again, and new cracker capacity is coming online. The questions now are, with demand on the upswing, will ethane prices be rising too — and, if so, by how much? And what does that mean for steam cracker economics? Today, we discuss recent developments in the ethane market and explain why there’s good reason to believe that ethane prices won’t be spiking anytime soon.
Earlier we explained that ethane is unique among the so-called NGL “purity products” in that it can either be "rejected" into the natural gas stream at gas processing plants and sold (at the price of gas) for its BTU value or extracted from mixed NGLs (through fractionation) like its purity-product brethren and sold to steam crackers (to produce ethylene and other petrochemical byproducts) or to a very limited number of power plants as fuel. 
Comment: how far we've come! I vividly remember in the early days of the blog I completely misunderstood the concept of "rejection." A reader explained it to me. Much, much appreciated at the time, and still appreciated.

Tax-Sharing/Oil Revene On The Reservation -- October 1, 2019

Previously posted and first published by argusmedia back on April 3, 2019, but worth a re-look in anticipation of the October Director's Cut with August, 2019, production data.

The story: North Dakota tax-sharing law for native American tribes will have dramatic impact on production from the Fort Berthold reservation / Dunn County. Data points:
  • definitions:
    • tribal trust lands: land "owned" by all Native Americans residing on the reservation; "public" land as it were
    • fee lands: privately held lands that are leased
  • the history of "allotment" -- "public" vs "private" on Indian reservations can be found here -- the General Allotment Act of 1887 (Dawes Act) -- to me, sounds much like the Homestead Act of 1862;
  • previous North Dakota law:
    • "trust" or "public" land on the reservation: a 50/50 split with the state of North Dakota
  • new law:
    • "trust" or public" land on the reservation: 80/20 split with the state of North Dakota, with most going to the tribes
    • fee lands: 80% to the states; 20% to the tribe (I'm not sure if that means private individuals who leased the land are now sharing their royalties with the tribe in general; perhaps a reader can help me out)
  • Fort Berthold: almost a million acres (980,000 acres)
    • trust lands: 423,000 acres
    • the rest: privately held fee lands; federally owned lands; homestead lands
  • the reservation is home to the MHA nation, or Three Affiliated Tribes (TAT): the Mandan, the Hidatsa, and Arikara
  • the dispute that led to changes and current law began in 2015 ...
    • when lawmakers reduced the tax on overall production from 11.5pc to 10pc without buy-in from tribal authorities. The dispute gave rise to industry concerns that some production might end up with a double tax
  • new plan had bipartisan and tribal support
  • major obstacle for increased production: flaring (discussed monthly in the Director's Cut) 
The next Director's Cut is scheduled to be released October 18, 3:00 p.m, which I believe is a Friday. Link here for schedule. That Director's Cut will have production data for the month of August, 2019.

My hunch, as long as we are on the subject:
  • 99% chance that North Dakota will set another all-time BOEPD production record
  • better than 75% chance that North Dakota will set the third consecutive monthly all-time BOPD production record
  • it should be noted, that unlike oil, there is a huge delta between produced natural gas and sold natural gas

Current Events, Part 1 -- October 1, 2019


Later, just after market open, 9:05 a.m. CT: after "green" futures overnight, the Dow is down about 30 points in early trading.
  • AAPL: up $2.75; up about 1.22%; trading at $226.72
  • F: green but flat; Ford, Maindra agree to form JV in India; Ford with 49% stake;
  • UNP: down again today; down $1.84
  • EW: down $.172
  • SRE: down 54 cents
Original Post

UAW strike: wearing thin for those on strike. Missed their first paycheck and are starting to have second thoughts. Link at WSJ.

Tesla: the numbers come out later this week. Will deliveries hit a record or will they miss by a "few thousand"?

What do the insiders know ... with regard to the Tesla numbers? The market will tell us ... TSLA shares, futures, right now ... 5:29 a.m. CT, October 1, 2019 ... closed down $1.26 yesterday (0.52%); up $1.07 in trading now (futures) ... I guess no one knows. LOL. Trading at $240.

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.

  • the Dow has been up overnight, all night; dropping back a bit now as we get closer to the open; but look at futures for these:
    • SRE: pending
    • AAPL: after a great day yesterday (up $5.15, up 2.35%, closed at $224); in futures, up another $1.03/share
    • T: a nice day yesterday, up again today in futures
    • EW: pending
    • UNP: pending
The rally has begun to fizzle. CNN.

Al Franken: new sexual harassment allegation ... just days after he said he was considering another run for the US Senate.

Politics: for anyone paying attention, it's obvious that Hillary Clinton's war room is "running the show" on Capitol Hill.

Making Texas Great

Announced by President Trump yesterday -- mainstream media won't carry the news -- link here: https://www.foxbusiness.com/markets/trump-billions-of-dollars-worth-of-us-investments-auto-companies.
  • Navistar: will build a new truck factory in San Antonio, TX -- 600 permanent mobs; 
  • Apple: will build its new Mac Pro in Austin, TX (previously announced)
OPEC's September Oil Production Drops To Near Decade-Low

Link at Reuters. Data points for September, 2019, production:
  • 28.9 million bpd
  • down 750,000 bpd from August's revised figure
  • the drop  would have been larger had it not been for Aramco's decision to drawdown stored crude from its inventories to make up the almost 6 million bpd shortfall
  • outside sources put Saudi's production at around 8.5 million bpd, well below its "nameplate" capacity of 11 - 12 million bpd
  • lowest monthly total since 2011
  • traders not concerned; price back to pre-attack levels (the September 14, 2019, attacks on a Saudi Arabia processing and export terminal; and, an oil field)
October target, Saudi Arabia:
  • total production: 9.89 million bpd
  • exports: "around" 6.8 million bpd

Canadian Heavy Oil Exports Surge

Exports to Asia surge since May, 2019. Data points from Reuters:
  • surge began before the September 14, 2019, attack on Saudi
  • Canadian crude exports may have doubled
  • came on the heels of US sanctions on Venezuela in late January
  • heavy oil to China, India, South Korea, and Europe (which sounds like everywhere but the US South America, and the Antarctic)
  • see graphic at this link -- it's interesting -- there was a spike in May but is now falling back towards historic levels -- FWIW