Tuesday, March 31, 2020

Notes From All Over, Early Evening Edition -- March 31, 2020

Can you say "US Supreme Court"?

Texas Wuhan flu: the governor extends "sanctions." Interestingly, auto traffic at rush hour seems a bit busier than last week. I guess more folks are finding that their job is essential. Essential to keep them from going nuts at home. The city isn't making it any easier, closing city parks. I don't think the governor said anything about closing down parks. Whatever. Now we'll have five-year-olds on bikes on city streets. Whatever.
Most irritating: companies telling me "they are here to help" when they are closed and under-staffed. Whatever.
Saudi Arabia In Deep Doo Doo

Saudi has two sources of income: oil and tourism.

Let's correct that: Saudi had two sources of income: oil and tourism. 

OIL: from a SeekingAlpha contributor. Some nice data points. I will archive this article. SA articles generally end up behind a paywall. From the article:
From the time period of 2014 to 2016, Saudi Arabia attempted to crush the U.S. shale industry, believing the shale industry couldn't produce oil at a breakeven basis for less than approximately $70 per barrel. They were completely wrong in that assessment, as we all know.

In 2014 Saudi Arabia had foreign reserves of $737 billion. In 2015 they had to spend a minimum of $250 billion of its foreign reserves, reserves they say that are lost forever.

It also went from a budget surplus to a record deficit in 2015 (at that time) of $98 billion. The majority of projections have Saudi Arabia with budget deficits through up to 2028.
With breakeven Brent of $84 per barrel, those projections would probably extend further if the country decides to attempt to drive the competition out of the market with more production and lower prices.

The IEA states that OPEC, from 2014-2016, lost about $450 billion in oil revenue as a result of low prices. To return to those levels or worse, at a time they're still trying to figure out how to bolster their foreign reserves and budgets, is unwise to say the least.

It's going to get even more tense amongst OPEC members when they come under enormous stress as a consequence of Saudi Arabia boosting oil production (including tapping oil reserves from storage) and exports.
TOURISM: this has previously been noted, albeit in passing, on the blog. From aljazeera:
Saudi Arabia has asked Muslims to wait until there is more clarity about the coronavirus pandemic before planning to attend the annual Hajj pilgrimage, the Minister for Hajj and Umrah said on state TV on Tuesday, March 31, 2020.

Earlier this month, Saudi Arabia suspended the year-round Umrah pilgrimage over fears of the new coronavirus spreading to Islam's holiest cities, an unprecedented move that raised uncertainty over the annual Hajj
Both were huge revenue sources for the government.

BR With Five New Permits In Elidah Oil Field -- March 31, 2020

Active rigs:

Active Rigs4366604930

 Six new permits, #37479 - #37484, inclusive:
  • Operators: BR (5); Sinclair
  • Field: Elidah (McKenzie); Lone Butte (McKenzie)
  • Comments:
    • BR has permits for a 5-well F Jorgenson pad in SESW section 11-151-97, Elidah oil field;
    •  Sinclair has a permit for a Saetz Federal permit in NWSW 36-147-98, Lone Butte oil field;
One producing well (a DUC) reported as completed:
  • 35697, drl, Oasis, Joplin 5397 42-32 9B, Eagle Nest, t--; cum --;

It's hard to believe that these are the first Bakken permits for BR this calendar year (as far as I can tell).

Producing wells sited in that same section:
  • 18983, 494, CLR, Rolfsrud 1-11H, 24 stages; 2.5 million lbs; sand and ceramic; Elidah, t10/10; cum 323K 2/20; 
  • 27561, 960, CLR, Rolfsrud 3-11H1, Elidah, t7/14; cum 162K 2/20;
  • 27562, 993, CLR, Rolfsrud 2-11H, Elidah, t7/14; cum 215K 2/20; 
The section line well to the west:
  • 27820, 1,392, BR, Rolfsrud Bull 44-10MBHULW, t10/14; cum 218K 10/19; off line as of 11/19;

Lowest I've Seen So Far 95 Cents/Gallon -- March 31, 2020

Way cheaper than milk. Competes with bottled water on price.

Daily Local Grocery Story Visit

Wuhan flu, north Texas, DFW-area: I stopped by our local grocery story quite late in the afternoon. The parking lot was quite empty and not much foot traffic noted in the store. As well stocked as I've seen it with at least "everything" adequate, with a couple of exceptions. Still no paper products: toilet paper and paper towels. Plenty of whole wheat/honey wheat bread but no "white" bread (except in the bakery section. I've never seen so many eggs. Refrigerated dairy seems adequate.

On another note, the city seems to have closed down the local park. They've closed the parking lots. One can still enter the park to ride bicycles, job, walk dogs, but it sure looks like there will be a sign up tomorrow saying the park is closed.

Thinking Like A Wartime President -- March 31, 2020

Thinking like a wartime president.

The Paleontology Page

Today's review of paleontology was the transition from fish to mammal-like reptiles, which for the most part:
  • tectonic plates;
    • Vaalbara
    • Rodinia
    • Gondwana in the southern hemisphere
    • Pangaea
  • evolution of amphibians
  • the Triassic extinction (fourth in severity of the five major extinction episodes)
    • also called the Triassic-Jurassic extinction; global; 76% of all marine and terrestrial species about 20% of all taxonomic families; 
    • believed to be the key moment that allowed the dinosaurs to become the dominant land animals on earth
  • the Permian-Triassic extinction (the "mother of all extinctions);
    • 96% of all marine species and 70% of all terrestrial vertebrate species becoming extinct; even insects too a big hit; the only one in their (insect) history;
  • the "Noah" of the survivors of the Permian-Triassic extinction? a pig-like herbivore, genus Lystrosaurus

From A Jack To A King -- Wow, The Bakken Never Quits -- March 31, 2020

From a jack to a king. LOL.

From a Jack to a King, Ned Miller

Elvis' version here.

It's hard to believe I missed this one. I don't think I've posted this one before but it's possible. Nope, I don't think so.

Jump in production from 2,000 bbls/month to 16,497 bbls/month; no re-frack according to FracFocus or NDIC file report.

The well:
  • 22617, 448, CLR, Sorenson 1-21AH, 30 stages; 2.8 million lbs, Alkali Creek, t2/13; cum 343K 2/20;
The CLR Sorenson wells are tracked here.

A reader comments on this well

Graphics: also at the Sorenson link above --

Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Random Look At The "Halo" Effect In The Bakken -- March 31, 2020

Four huge Kraken wells were fracked/stimulate/tested on/about July, 2020. These four wells "cut right across" an old Kraken well, almost perfectly perpendicularly. Note the "halo" effect on the old Kraken well, #22563. This old well, by the way, is an incredibly short horizontal, coming in at only 14,626 feet TD..

The wells:
  • 36010, 860, Kraken, Bigfoot 23-11 LW 1H, Sanish, t7/19; cum 206K 1/20; a 46K month;
  • 36011, 902, Kraken, Bigfoot 23-11 2TFH, Sanish, t7/19; cum 170K 1/20; a 31K month;
  • 36012, 1,748, Kraken, Bigfoot 23-11 3H, Sanish, t7/19; cum 254K 1/20; a 54K month;
  • 36013, 1,564, Kraken, Bigfoot 23-11 4TFH, Sanish, t7/19; cum 224K 1/20; a 41K month;
The old well:
  • 22563, 704, Kraken, Hukkanen 11-23H, Sanish, t6/12; cum 168K 1/20;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The graphic:

What about those two other older wells? Glad you asked:
  • 22853, 687, Kraken, Isaac 11-23H, Sanish, t7/12; cum 144K 1/20; "halo effect"; jump from 600 bbls/month to 2,800 bbl/smonth;
  • 16935, 780, Kraken, Frandson 11-23H, Sanish, t6/08; cum 144K 1/20; "halo effect" less noticeable, and did not last as long, from 750 bbls/month, to 2,500 bbls/month, but quickly dropped back to 986 bbls in January, 2020;

Notes From All Over, Early Tuesday Morning Edition -- March 31, 2020

Biden koan: another one. I can hardly wait until he posts his first haiku.

Canadian dollar: link here. Looks like 1.4205 overnight. Bloomberg noted the same thing about a week ago. Sources say that  the Canadian loonie hit its all-time low on January 21, 2002, sliding to 61.79 cents US. On January 7, 2016, the Canadian dollar stood at 70.95 cents US. Almost exactly one year ago, Financial Post warned Canadian dollar could sink to record low of 62 cents. If 70.95 cents was the 10-year low, then I believe the Canadian dollar has set a new 10-year record low, at around 70.42 cents US. [One hour later, 5:44 a.m. CT: looks like a huge jump -- now touching 1.4235 or 70.25 cents US.] [Mid-day trading:a high of 1.43241 or 69.812 cents US.]

Saudi, an existential issue: Saudi's oil war could bankrupt the kingdom. Warning: consider the source. From March 15, 2020:
Those with a functioning memory may have thought that last week’s (~ March 10, 2020) decision by Saudi Arabia to maximise oil production to crash oil prices and bankrupt U.S. shale producers was an early April Fool’s Day joke.
Apparently, though, it is not, and collective amnesia seems to have gripped senior Saudis and other OPEC members alike about how disastrous the last Saudi Arabia-led attempt to destroy the U.S. shale oil industry from 2014 to 2016 actually was. Appalling though the consequences were last time for Saudi and its now-much-poorer allies, this time around things are likely to be much, much, worse.

The last time the Saudis tried this exact same strategy in 2014, it had a much greater chance of success than it does now.
Back then, it was widely assumed that U.S. shale producers could not produce oil on a sustained basis for a breakeven price of less than around US$70 per barrel of Brent. Saudi also had record high foreign assets reserves of US$737 billion in August 2014, allowing it real room for manoeuvre in terms of sustaining its SAR-US$-currency peg and covering the huge budget deficits that would be caused by the oil price fall caused by overproduction. In addition, Russia at that point was just an interested observer on the sidelines.

Saudi Arabia was so confident in its plan that in October 2014 during private meetings in New York between Saudi officials and other senior figures in the global oil industry, as analysed in full in my latest book on the global oil markets, the Saudis revealed that the Kingdom was willing to tolerate Brent prices ‘between US$80-90 per barrel for a period of one to two years’.
This was a 180 degree turn from the previous understanding by other OPEC members that Saudi was their champion, doing its best to keep oil prices high in order to boost the prosperity of OPEC member states. Saudi, nonetheless, at the New York meeting, made it clear that it had two clear aims in pursuing its overproduction/oil price crashing strategy. The first of these was to destroy (or at least slow down progress in) the developing U.S. shale energy industry and the second was to pressure other OPEC members to contribute to supply discipline. This marked a significant divergence from the acceptable range of prices previously stated by then-Saudi Oil Minister Ali al-Naimi as being: “US$100, US$110, US$95,’ per barrel.
More at the link. Best part of the op-ed? The opening line, "Those with a functioning memory..." Well, that certainly leaves out the Democrat presumptive nominee for president.

But wow, we're back at $100+ as the real number the Saudis need to stay solvent. They are truly in deep doo-doo.

We should see Saudi's February, 2020, foreign reserve assets posted tomorrow.

More. A lot of typos in the article at this link, and not sure of the source, but the data points are very interesting.
  • coming up against coronavirus
    • Saudi Arabia, population, 35 million, foreign reserve assets: $440 billion
    • Russia, population, 147 million, national welfare fund, $156 billion
  • the power of the Saudis is limited. “The current oil prices put an end to the ambitious program of renovation of the country. The Ministry of Finance of Saudi Arabia intends to reduce budget expenditures in 2020 by 30%. Riyadh will be much harder to implement generous social obligations, which may lead to growing discontent in the Kingdom
  • According to experts Bloomberg David Fickling, if the cost of oil prices even in the $50-55 (two times higher than it is now) by 2024, foreign exchange reserves, Saudi Arabia will fall to five-month sum of imports and just a few months Kingdom, considered one of the richest in the world, will be in “incredible crisis”.
It's very possible that in my lifetime I will see the fall of the House of Saud.

No Wells Coming Off The Confidential List Today -- March 31, 2020

Active rigs:

Active Rigs4366604930

Wells coming off confidential list today --None. There was no September 31 six months ago.

RBN Energy: COVID-19 shutdowns compound weak gas demand fundamentals. Archived.
While the crude oil market meltdown has taken center stage in recent weeks, and for good reason, the natural gas market is bracing for its own fallout.
The CME/NYMEX Henry Hub April futures price, which was already at a multi-year low, buckled last week, falling to as low as $1.602/MMBtu on March 23, and expired Friday at $1.634/MMBtu, the lowest April expiration settle since 1995.
On its first day in prompt position, the May futures contract yesterday eked out a late-day, 1.9-cent gain that brought it back up near $1.70/MMBtu as traders continued weighing competing market factors. Gas futures earlier in March were initially buoyed by the assumption that the low oil-price environment would slow associated gas production — and it will, eventually. But that initial bullish sentiment was quickly usurped by the more immediate effects of demand losses resulting from the economic slowdown caused by COVID-19, as well as from mild weather. Today, we look at how these developments are shaping gas supply-demand fundamentals heading into the gas storage injection season.

Monday, March 30, 2020

What I'm Watching -- March 30, 2020

Will Canadian dollar hit ten-year low this week? Link here.

Gas Buddy, Oklahoma City: still retailing at 99 cents/gallon.

MacRumor Lives Up To Its Namesake?

We'll see.

This is pretty exciting. We are expecting Apple Inc to launch a new low-cost iPhone sometime this year.

A new case designed for the new low-cost iPhone has been spotted in the wild. In Best Buy to be exact.

Link here.

Best Buy employees, apparently, have been told not to merchandise these cases until Sunday, April 5.

At the link:
We don't know what Apple is going to call its new phone, but in rumors, it's been referred to as the "iPhone 9," a missing ‌iPhone‌ number, or the "iPhone SE 2" due to its rumored $399 price tag.
The new ‌‌iPhone‌‌ is said to be identical to the iPhone 8 but with an A13 chip inside, featuring a 4.7-inch display, a single-lens rear camera, thick top and bottom bezels, and a Touch ID Home button. It is expected to come in space gray, silver, and red color options, and we're expecting 64 and 128GB storage capacities.

A CLR Morris Well That Just Reached 500K Bbls Cumulative Crude Oil -- March 30, 2020

This is not unexpected. The Carson Peak / Morris wells have been highlighted on numerous occasions and are followed here. This is the most recent of the Carson Peak / Morris wells that have gone over 500,000 bbls cumulative crude oil:
  • 18858, 715, CLR, Morris 3-26H, Oakdale, Bakken, t5/11; cum 500K 2/20; off-line 8/19; back onl ine as of 3/19;

Closer Look At Slawson Well That Recently Went Over 500K Cumulative Crude Oil -- March 30, 2020

The well, see this post for additional information:
  • 19255, 718, Slawson, Muskrat Federal 1-28-33H, 40 stages; 3.7 million lbs; Van Hook, F, t1/11; cum 550K 2/20
Note: this well is still flowing without a pump. At least according to the NDIC file report.

The graphic:

Maybe this would be a good time to start talking about the meme: " ... running out of good locations to drill in the Bakken."

Whiting: New Permit In Bully Oil Field -- March 30, 2020

Contango: the note in the screenshot below is not news. RBN Energy talked about contango back on March 19, 2020.

Back to the Bakken

Active rigs:

Active Rigs4366604931

One new permit, #37478:
  • Operator: Whiting
  • Field: Bully (McKenzie)
  • Comments:
    • Whiting has a permit for another well on the Sorenson pad in lot 3 section 6-148-99, Bully oil field; see graphics below;
Five permits renewed (these were posted on the daily activity report dated April 1, 2020):
Rimrock Oil (4): four Skunk Creek permits, Dunn County
NP Resources: one Roosevelt permit in Billings County

Whiting's New Sorenson Permit In Bully Oil Field

The graphics for Whiting's new perit in Bully oil field:

Laying Down Rigs -- March 30, 2020


Active Rigs4466604931

Nationwide, weekly report:

From Focus on Fracking, link here:
Continental Resources and Whiting Petroleum Corporation are among the latest operators with Bakken assets announcing sharp drops to capital expenditures in the wake of an ongoing price war between Russia and OPEC.
Continental said it will reduce its 2020 capital expenditures by 55 percent, dropping its 2020 capex to $1.2 billion.
Whiting will cut capex by 30 percent, or $185 million, dropping its total capital budget to between $400 to $435 million.
For Continental, this translates to a reduction of six rigs in the Bakken, dropping it from nine to three for 2020. Continental will also cut rigs in Oklahoma, going from 10.5 to about four rigs there.
Whiting, which had already made some cuts last year, said it will drop another rig and another completion crew within the next month.
Continental expects the revision to its capex to have slight impact on production statistics. It is projecting the drop in crude oil production will be less than 5 percent.
Whiting said its cuts will have “moderate impact” on 2020 crude oil production, but deferred specifics to more formal guidance that it will release during its first quarter earnings call.
Continental’s Chief Executive Officer Bill Berry said the company is also looking at cost-saving initiatives across its operations to remain free cash flow positive, and expects to remain cash flow neutral even under $30 per barrel WTI. 
Norway's Equinor is halting activity at its US shale assets as part of measures to slash spending in response to the oil price collapse, the company said Wednesday, March 25, 2020.
All drilling and well completion activities at Equinor's gas-focused US shale assets are being suspended to cut spending and "produce the volumes at a later period", the company said.
The majority of Equinor's US shale production comes from the eastern Marcellus gas play which is targeted at consumers in New York State.
The move, which followed an announcement to suspend share buybacks, is part of a wider 20% cut in organic capex for 2020 to around $8.5 billion from $10 billion-$11 billion , Equinor said. The company also said it will reduce planned exploration spending this year to $1 billion from around $1.4 billion and cut operating costs by around $700 million compared with original guidance.
Much, much more at the link.

Before WWI

This is simply impossible to fathom. From Edmund de Waal's The Hare With The Amber Eyes, c. 2010:
"[In 1914] Victor (the author's great-grandfather) had become a subject of his Majesty Franz Josef, the eighty-four-year-old Emperor of Austria, King of Hungary and Bohemia, King of Lombardy-Venetia, of Dalmatia, Croatia, Slavonia, Galicia, Lodomeria and Illyria, Grand Duke of Tuscany, King of Jerusalem, and Duke of Auschwitz.
One can see traces of the Holy Roman Empire in this list of holdings.

I did not recognize Lodomeria and was wrong about Illyria.
  • Illyria: much of the Balkan peninsula, think Macedonia in the south and then extending north;
  • Lodomeria: the area currently straddling the borders of modern-day Poland, Ukraine and Belarus.
The Movie Page

I watched "Citizen Kane" from beginning to end for the first time ever last night, on TCM. Superb. For its time. Fascinating and engaging.

Most disappointing: I did not feel any emotional attachment to any of the characters, save perhaps Joseph Cotten's Jedediah. I was particularly unimpressed  with Dorothy Comingore, but I am in the minority. From IMDB:
Dorothy Comingore earned a place in motion picture history for her role as the second Mrs. Kane (the Marion Davies to Orson Welles's William Randolph Hearst) in Citizen Kane (1941). It was an extraordinary performance, justifiably praised by critics and public alike. She was apparently slated to be on the short list for an Academy Award. However, there was to be no stardom in films for this talented actress.
I may have to re-watch the movie just to watch her more closely. But I can't imagine re-watching the movie any time soon. One wonders if the movie's biggest problem is this: the trailers / marketing stills are unable to "captur"e the movie. 

On another note, it is truly amazing that Ted Turner acquired this movie as part of the library he bought when establishing TCM. What an incredible bit of luck.

On the other hand, earlier in the day I watched The Heart Is A Lonely Hunter was superb, and I could easily imagine watching this movie several times a year. It won't quite make my top ten movie list but would probably be among the top twenty.

A Closer Look At An EOG Well Coming Off Confidential List This Week -- March 30, 2020

See also this post for the sister well

The well:
  • 33433, 1,933, EOG, Liberty LR 42-1109H, 33-061-04029, Parshall, t10/19; cum 114K 1/20; 38K month; 
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

  • fracked, 7/5/19 - 8/6/19 -- again, one month frack;
  • 14.8 million gallons of water; large (typical EOG) frack; 85.8% water by mass;
  • only seven frack ingredients listed in addition to water/sand
  • friction reducer: 0. 03711
From the file report:
  • still confidential; file not yet scanned in;
  • TD: 23,636 feet
  • permit: 1920-acre drilling unit; middle Bakken; sections 9/10/11-151-91;

North Dakota Rig Count At 45 -- Will Drop More -- March 30, 2020

First things first: focus on fracking -- blog -- every Sunday night -- released -- scroll through quickly to find items of interest -- some observations --
  • several long updates on the DAPL ruling 
  • Whiting, CLR cost-cutting measures
  • Equinor halts US shale activity -- much there of which I was unaware
  • excellent discussion of US crude oil in storage
Back to the Bakken

Active rigs:

Active Rigs4566604931

Reminder: wells coming off the confidential list during Bakken 4.0 and don't report an IP are tracked here.

Wells coming off the confidential list over the weekend, Monday -- Monday, March 30, 2020: 83 for the month; 254 for the quarter, 254 for the year:
  • 36969, A, Slawson, Whirlwind 7-31TFH, Big Bend, t--; cum 2K over 6 days, then shut in;
  • 36933, drl, Petro Harvester Operating, WOB1 33-28 163-90 C, Woburn, t--; cum 13K 1/20;
  • 36667, A, Slawson, Hunter 9-17-8H, Big Bend, t--; cum 9K over 13 days;
  • 36128, 591, Lime Rock Resources, State 7-25-36H-144-97L, Cabernet, see this post; t101/19; cum 82K 1/20; a 23K month;
  • 33433, 1,933, EOG, Liberty LR 42-1109H, Parshall, t10/19; cum 114K 1/20; 38K month;
Sunday, March 29, 2020: 78 for the month; 249 for the quarter, 249 for the year:
  • 36502, drl, WPX, Skunk Creek 1-12HW, South Fork, t--; cum 8K over 23 days;
  • 35934, 583, Lime Rock Resources, Shuck 7-33-28H-144-97, Little Knife, t10/19; cum 46K 1/20;
Saturday, March 28, 2020: 76 for the month; 247 for the quarter, 247 for the year:
  • 36932, drl, Petro Harvester, WOB1 04-09 162-90 C, Woburn, t--; cum 872 bbls over two montsh;
  • 36503, drl, WPX, Skunk Creek 1-12HA, South Fork; see this post; t--; cum 10K over 22 days;
  • 35965, 1,028, Lime Rock Resources, Karyk 7-24-13H-144-97L, Cabernet, see this post; t10/19; cum 71K 1/20;
  • 34600, drl, MRO, Verne USA 24-21TFH, Reunion Bay,
RBN Energy: outlook for oil/gas/NGL supply, demand and prices -- completely blown away. I think I will simply archive this one. It's a keeper.

Sunday, March 29, 2020

German Finance Minister Commits Suicide Over Coronavirus Worries -- March 29, 2020

"Seriously? No!" -- Paraphrasing The President -- March 29, 2020

Trump to the couple formerly known as the Sussex Royals: "Seriously? No."

From The [London] Guardian:
Before marrying into the royal family, Meghan had described Trump as being “misogynistic” and “divisive” during his 2016 presidential campaign, pledging her vote for his rival Hillary Clinton, and threatening to move to Canada if he won.
LOL. "They" all promised to move to Canada if Trump won. "No one" did.

Furthermore, they aren't eligible for that $2,900 check.

Updating Some Very Nice XTO Little Pete Federal Wells -- March 29, 2020

XTO's Little Pete Federal wells were updated a little over a year ago. The Little Pete Federal wells are tracked here.

At the last update, at least one of the Little Pete Federal wells was off line. Let's see how it's doing. Spoiler alert: really, really well.

The well:
  • 32221, 962, XTO, Little Pete Federal 31X-3HXE2, Bear Creek, t7/17; cum 226K 1/20;
Note full production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

A sister well has a very similar production profile, but even better:
  • 32220, 1,080, XTO, Little Pete Federal 41X-3DXA, Bear Creek, t7/17; cum 280K 1/20; off line as of 7/18; back on line 4/19; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare