Wednesday, December 4, 2019

For The Archives -- An Obituary -- December 4, 2019

Page 82, the last page of the November 2nd - November 8th edition of The Economist. Here is the internet link, behind a paywall. It is interesting that the internet "header" is different than the hard copy.

Third paragraph from the end:
In the cities he conquered he set up offices to take in taxes and traffic fines, register babies and licence (sic) marriages, as in a proper state. He imposed the sharia in which he was expert: hands hacked off for stealing, whippings for drunkenness, adulterous women stoned. He also expanded it, justifying everything smoothly with holy writ. Unbelievers were expelled or killed if they did not pay their taxes. Yazidis were driven from their homes and their women abducted to be sold and raped with organised (sic) efficiency. Enemies were crucified, burned alive, drowned in cages, beheaded with slow saws, while everything was filmed and posted online for the world to observe and dread. He sometimes shared the videos first the kufr women he kept chained in a nearby room for his own pleasure. Raping an infidel woman was a spiritual exercise that brought a believer close to God.

Saudi Aramco IPO -- The Economist's Perspective -- December 4, 2019

The Economist. Hard copy. (I assume the internet edition is behind a paywall.)

November 2nd - 8th, 2019.

Front cover, "To The Last Drop: Saudi Arabia's Strategy to Survive The End Of Oil."

Op-ed on page 11.

Three-page essay, starting on page 61.

First from the op-ed, page 11, near the end of the op-ed, verbatim:
America, meanwhile, remainswedded to oil, which meets 40% of its energy needs. Its thirst has been satisfied by the fracking boom, especially in he Permian basin in Texas. Yet fracking is dirty and new projects need an oil price of $40 - $50 a barrel to break-even, at twice the level Aramco requires. For the sake of the climate and efficiency, the fracking industry should eventually shrink. That, though, would make America more reliant on foreigners, just as its politics have turned inward.
Now, from the essay, page 63:
Aramco's breakeven costs for new projects, even after tax, are $31, according to Rystad Energy's data, slightly higher than Iran, Iraq or Kuwait but less than half the level of Russiant and wo-thirds the level in America.
From the NDIC, breakevens in the Bakken, released August 15, 2019:


One comment: The Economist again disingenuously omits the fact that Saudi Arabia's budget is based on its only export product: oil. Several years ago Saudi said it needed $100/bbl to balance its budget. When the price of oil plummeted, Saudi Arabia initially said they only needed $80/bbl and then said they could meet their budget even at $60/bbl (Brent). Production costs are important, even for Saudi Arabia, but failing to state the budgetary requirements for Saudi Arabia completely misses the bigger picture. 

MRO With Six New Permits; One DUC Reported As Completed -- December 4, 2019

Active rigs:

Active Rigs5664533964

Six new permits, #37241 - #37246, inclusive --
  • Operator: MRO
  • Field: Killdeer (Dunn)
  • Comments: 
    • MRO has six permits for lot 4 / section 3-145-94, Killdeer oil field
One permit was renewed:
  • BR: a Hawktail permit in Dunn County
One permit was canceled:
  • Oasis: a Hendricks permit in Williams County
One producing (DUC) was reported as completed:
  • 29568, 99, SHD, Wiley 24-30H, Deep Water Creek, t10/19; cum --;

Colombia Crude Oil Exports To US Plummet Week-Over-Week -- December 4, 2019

Imploding? From twitter --

Colombia's crude oil exports to the US crumbling, link here;

Having said that, Colombia's exports to the US are very "volatile." (See first comment.)

I assume Colombia's oil is "heavy oil." If it's Castella Blend, it's very, very, very heavy:

For comparison, western Canadian select, WCS, heavy oil, has an API of 20.9. Bakken, a very light oil, is in the 41+ range.

EIA's Weekly Petroleum Report; WTI Surges -- December 4, 2019

Weekly Petroleum Report:
  • US crude oil in storage: 447.1 million bbls
  • week-over-week oil in storage: decreased by a whopping 4.9 million bbls
  • refiners operating at 91.9% capacity; slowly creeping up; well below the norm;
  • crude oil imports are down over 20% over the same four-week period last year
  • all things being equal, WTI should be up nicely, unless movers and shakers knew these numbers last night; so let's check WTI: up 3.67%; up $2.06; trading at $58.16 -- back to where it was last week when it plunged; 
Re-balancing (note: many lines/weeks hidden to keep graph manageable):
Week Ending
Million Bbls Storage
Week 0
November 21, 2018
Week 1
November 28, 2018
Week 2
December 6, 2018
Week 3
December 12, 2018
Week 4
December 19, 2018
Week 5
December 28, 2018
Week 43
September 18, 2019
Week 44
September 26, 2019
Week 45
October 2, 2019
Week 46
October 9, 2019
Week 47
October 17, 2019
Week 48
October 23, 2019
Week 49
October 30, 2019
Week 50
November 6, 2019
Week 51
November 14, 2019
Week 52
November 20, 2019
Week 53
November 27, 2019
Week 54
December 4, 2019

Update On Three Western North Dakota Newspapers That Announced Their Closure Last Week -- December 4, 2019

From last week: top North Dakota non-energy story:
Now, some good news -- two of the three are "business as usual" after an angel drops in to purchase The Herald of New England and the Adams County Record. From The Dickinson Press

Notes From All Over, Part 1 -- Wednesday, December 4, 2019

Random thoughts: things that amaze and/or amuse me.

Alexa: sometime in February, 2019, I wrote:  
Alexa: control your television set. Right now (2/19) I can make phone calls from Alexa/Echo Dot without lifting a finger; and I can listen to news and music from Echo Dot without lifting a finger. Why can I not select channels, control volume, and move from streaming to DVD to live television via Alexa/Echo Dot. 
Update: I now see that Alexa can do exactly that; voice command/control of your television (Amazon Fire TV Cube). Here's how to do it.

Telephone calls. I had completely forgotten that I could initiate and make telephone calls through Alexa without lifting a finger. The scary thing: I have no idea how Alexa does it. I did not do a thing except plug the Echo / Dot into the outlet.

Alexa hears everything. Yesterday, Alexa was playing jazz while we were eating lunch. I whispered to my wife something about Alexa. Alexa immediately cut in: despite our whispering, she had heard what we were talking about. Creepy. In a good sort of way. Why haven't "we" moved "911" emergency phone calls to Alexa, or maybe we have. I don't know. But I see all kinds of good uses for Alexa with regard to home invasion prevention if folks would worry less about privacy issues and more about safety issues. Don't take this out of context. But seriously, if I am experiencing an incapacitating event, and all I can do is shout, "Alexa, get me help," would I care if someone at Amazon heard that cry for help, identified my location, and sent "911" call to local fire department/police department? Probably not.

Polls. As "important" as Iowa and New Hampshire seem to be with regard to caucuses and primaries only 60-some days from now, we haven't seen a new Iowa poll or a new New Hampshire poll in quite some time.

Mars. I get a kick out of gazillionaires telling us we need to prepare to leave this planet for something else, like the moon or Mars. Let's just start with water. What amazes me is not that the Earth has any water at all, but it has so much water. As hard as "they" have looked, scientists apparently haven't had much luck finding oceans of water on any other planet in the universe.

Water. Speaking of water, Lake Mead is doing quite well this year, at least compared to 2017 and 2018. California mountains just received six feet of snow. Roads impassable but once cleared, ski resorts are going to have a great year. I've skied several times over the years -- we talking snow skiing here -- I've also water skied -- but as enjoyable as snow skiing is, it certainly is a lot of work. Just getting to the mountain; then the rentals; then the crowds; the awkward ski boots clomping through the chalets; multiple layers of clothes; uncomfortable lifts. I'm getting too old for this. This may be the first year in many years that I completely avoid the ski thing.

Hillary: recalculating .... recalculating ... recalculating. 

Back to Energy

Rigs don't matter: some people still don't get it. I run across all kinds of articles suggesting the US oil industry is in such disarray considering WTI is at $55 and yet oil companies and service companies can't seem to make money. Latest: Halliburton. Halliburton is closing its Oklahoma office, cutting 800 jobs. That headline, taken out of context, would suggest the US oil industry is in a huge recession, and US oil production is coming to an end. And yet, US production continues to set all-time records. And rig counts keep dropping. But somebody must be making money.

Biggest losers of the US shale "bust." From oilprice via Yahoo!Finance. I've said the same thing for years -- the only folks who have not made money in US shale are buy and hold investors. But I certainly wouldn't call US shale a bust.

Apple: worth more than the entire US stock index's energy sector. -- Financial Times. Paywall, but headline says it all. And that's the problem with paywalls, and media business models. The headline says it all, and we don't see any ads.

Saudi Aramco IPO: Prince Salman now has a real business to run. LOL. I've not read one thing to suggest the "new company" is anything but a scam, or at best, a "bond." You make your investment and then get a dividend. Does anyone see any growth in this "company"?

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

Bakken wells. I've spent the last few days updating the Antelope oil field. The wells are incredibly good. Only folks who have been following the Bakken from the beginning really know how good these wells are. I wish I knew the Permian as well so I could make a comparison, but I'm pretty much left with the EIA dashboards to compare. And based on what little I know, mano a mano, Permian well vs a Bakken well, there is simply no comparison. These Antelope-Sanish wells are incredible. I still don't understand the geology of the Antelope. I thought it was all "Sanish" but sundry forms suggest both Three Forks ("Sanish") and middle Bakken are found in the Antelope oil field.

Missouri Ridge

Missouri Ridge oil field: I had forgotten all about the Missouri Ridge oil field until this past week. I had completely forgotten that I even linked it at my site linking oil fields I track. But there it is, the Missouri Ridge oil field, which I first discussed on August 11, 2011, almost a decade ago. Ten years ago we were not talking about tier one or tier two or tier three oil fields in the Bakken but had we been, I doubt I would have considered Missouri Ridge a tier one location. But, wow, it's turned into quite a field based on recent Oasis wells.

Back in 2011: here is how much oil has been taken out of those three sections by formation:
  • Missouri Ridge-Bakken: 79,000 bbls
  • Missouri Ridge- Birdbear: 1,248,034 bbls (yup, million)
  • Missouri Ridge-Madison: 464,857 bbls
  • Missouri Ridge-Red River: 1,274,334 bbls (yup, million)
  • Missouri Ridge-Stonewall: 738,000
Production as of September, 2019 (confidential production not included in these totals):
  • Missouri Ridge-Bakken: 6,279,497 bbls (43 wells)
  • Missouri Ridge- Birdbear: 1,353,746 bbls
  • Missouri Ridge-Madison: 501,240 bbls
  • Missouri Ridge-Red River: 1,274,401 bbls
  • Missouri Ridge-Stonewall: 764,393 bbls

Only One Well Coming Off The Confidential List Today -- December 4, 2019

Active rigs:

Active Rigs5564533964

Just one well coming off the confidential list today -- Wednesday, December 4, 2019: 13 for the month; 218 for the quarter:
  • 35610, 1,078, Hess, RS-Flickertail-156-91-1720H-3, Three Forks, 36 stages; 8.4 million lbs; sand, no ceramic; Ross, t6/19; cum 56K 10/19;
    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
RBN Energy: an asset-level evaluation of midstreamers' 2020 prospects.
As a most eventful decade for the U.S. energy industry draws to a close and 2020 looms, it’s a perfect time to consider what’s ahead for the midstream sector — and, more important from an investor’s standpoint, for the individual companies within it. The last few years have driven home the point that while all midstreamers are impacted to some degree by what happens on a macro-level, the relative success of each company is tied to the myriad decisions its leaders make over time regarding which basins and hubs to focus on and which assets to build, expand, acquire or divest. Assessing these micro-level assets and the contributions they each make to a company’s bottom line requires particularly deep analysis. Today, we discuss key themes and findings from East Daley Capital’s newly issued 2020 Midstream Guidance Outlook.