Friday, May 15, 2020

Notes From All Over, The Late Night Edition -- May 15, 2020

From the [Australian] Financial Review:
Amusingly, Saudi Aramco made repeated references to COVID-19 in its results but was a little more coy in mentioning its starring role in the short, nasty and brutish price war it launched in March against its frenemy Russia.
Net income fell to $US16.6 billion from $US22.2 billion at the same time last year – and that was on a realised crude oil price of $US51.80 a barrel.
Wells idled in North Dakota, dated April 16, 2020:
State Mineral Resources Director Lynn Helms said Tuesday that companies have shut 4,600 wells since the start of March. The idled wells account of about 260,000 barrels per day of oil, The Bismarck Tribune reported.
Director's Cut, March, 2020, data posted today

The Permian:

BR With Four New Permits in Croff Oil Field -- May 15, 2020

Active rigs:

Active Rigs1365595127

Four new permits, #37578 - #37581, inclusive --
  • Operator: BR
  • Field: Croff (McKenzie)
  • Comments: 
    • BR has permits for four wells on a Mathistad / Croff pad in lot 3, section 2-149-96; all are 225' FNL; average about 2000' FWL
Eight permits renewed:
 The EOG permit renewed this date:
  • 31253, loc, permit renewed May 15, 2020; EOG, West Clark 126-0136H, lot 4 1-151-95; Clarks Creek; 960-acre drilling unit; Three Forks B3; target: Three Forks 3rd bench, TVD-RKB, 10,811;

Wow, Wow, Wow -- Tesla Moving Hook, Line, And Sinker (Or At Least The Cybertruck) To Texas -- May 15, 2020

Link at ZeroHedge.
Several days after Tesla CEO Elon Musk threatened to move out of California after a highly publicized spat with Alameda County over Musk's push to reopen Tesla's Fremont Plant and force workers to return despite questions about safety ...

After President Trump spoke out in Musk's defense, Alameda County folded and Musk mostly got his way.

But apparently, the bad taste that the incident left in Musk's mouth has prompted him to leak a story about Tesla picking Austin, Texas, as the site of its next Gigafactory. Tesla has three "gigafactories" - one in Nevada, one under construction in Berlin, and one in Shanghai.

The news was reported by Elektrek, a blog and frequent recipient of Tesla-related leaks, which it often reports uncritically, leading many to suspect that the blog's "extremely reliable source" is none other than Musk himself.

As Elektrek notes ... the timeline is "surprisingly aggressive" (just like all of Musk's "timelines").

Giga Texas is expected to produce the new Tesla Cybertruck.

According to a reliable source familiar with the matter, Tesla CEO Elon Musk is set on bringing the next Tesla Gigafactory, or now Terafactory, to Austin, Texas, or at least close to the city.

The people familiar with the project said that Musk has tasked the engineering team working at Gigafactory Nevada, to start the process for the new factory, which is expected to make the Tesla Cybertruck electric pickup truck and the Model Y.

Tesla’s CEO also reportedly wants to move extremely fast.

We are told that the decision for the site is not set in stone since Tesla was apparently given a few options in the greater Austin area, but Musk is said to want to start construction extremely soon and aims to have Model Y vehicles coming out of the plant by the end of the year.

It would be an even more aggressive timeline than Gigafactory Shanghai. 
I am now a huge fan of  Elon Musk. Go Elon!

Bakken Oil To Belarus -- A First -- May 15, 2020

This is really cool. Link here. I don't often see "Bakken," "Aframax," and "Belarus" all in one sentence.

The 80,000-mt Aframax of Bakken crude -- roughly 600,000 barrels -- started loading Thursday in Beaumont, Texas, and is set to depart Sunday, according to Belarus' Belta news agency, citing Belneftekhim press secretary Alexander Tishenko. The tanker is due to arrive in the Lithuanian port of Klaipeda in early June, he said. The crude will be refined at Belarus' Naftan refinery.
The State Department announced the shipment Friday, saying it was a competitive deal by US trader United Energy Trading, with the assistance of US firm Getka and Polish partner UNIMOT.
Bakken crude trading along the US Gulf Coast has fallen quiet in recent weeks, sources have told S&P Global Platts. June barrels of the grade in Nederland were assessed Thursday at a $1.90/b premium to the NYMEX WTI Calendar Month Average, or a 2 cent/b discount to WTI at the Magellan Houston terminal.
US Gulf Coast crude differentials have risen sharply in recent days. Bakken USGC pipeline crude has averaged at a 93 cents/b premium to the WTI CMA so far in May, much stronger than April's average $5.77/b discount.
While the US has never sent crude to Belarus until now, it sent the country a small amount of refined oil products, 58,000 barrels, in 2004, US Energy Information Administration data showed.

Notes From All Over -- The Early Evening Edition - May 15, 2020

This is really cool. Link here. I don't often see "Bakken," "Aframax," and "Belarus" all in one sentence.

More of the story here.

Global Oil Prices

Link here:

Twitter, earlier today:

NDIC Director's Cut -- March, 2020, Data

Disclaimer: usual disclaimer applies. As usual, this is done very, very quickly. It is not proofread. There will be factual and typographical errors on this page. If this is important to you, go to the source. It is generally updated in segments, so until the entire report is completed, there may be old data still present. 

Link here.

Month-over-month crude oil production decreased by 1.6% ... having said that, this was an incredibly good report ... considering all the headwinds ...

Crude oil production (bopd) came in very, very good, considering:
  • first month that "global economy" really started to tank due to Wuhan flu;
  • completions: huge jump in the number of completions -- up to 120 completions (preliminary) compared to 57 the month before and 70 the month before that
    • as a reminder, completions dropped from 70 wells in January, to a meager 57 wells in February (average 2.258 wells/day vs 1.966 wells/day); ; the greatest amount of oil produced by a Bakken well is in its first full six months after being fracked; a decrease in the number of completed wells is historically problematic;
  • DUCs decreased by almost 5%; the greatest amount of oil produced by a Bakken well is in its first full six months after being fracked; the completion of DUCs made a huge difference this month (March, 2020);
Disclaimer: As usual, this is done very, very quickly. It is not proofread. There will be content and typographical errors on this page. I need to check the figures later. If this is important to you, go to the source.
The Director's Cut
Data For March, 2020
North Dakota Oil and Natural Gas Production

Disclaimer: usual disclaimer applies. As usual, this is done very, very quickly. It is not proofread. There will be factual and typographical errors on this page. If this is important to you, go to the source.

Link here to past reports.

A huge, huge "thank you" to Lynn Helms and his staff at the NDIC getting this information out in a timely and transparent manner. I am not aware of any other state that does such a good job providing such data.
Crude oil production:
  • March, 2020, preliminary: 1,428,273 bopd (96% from the Bakken/Three Forks; 4% from legacy pools)
  • previous months: 
    • February, 2020, final: 1,451,681 bopd
    • January, 2020, final: 1,430,511 bopd (all-time time was November, 2019)
    • December, 2019, final: 1,476,777 bopd
    • November, 2019, final:1,519,037 bopd -- new all-time high after final figures come in;
      • revenue forecast: 1.4 million bopd
    • October, 2019, final: 1,517,936 bopd -- previous all-time high
    • September, 2019, final, 1,443,980 bopd -- very, very wet September that impacted oil fields
    • August, 2019, final, 1,480,475 bopd (previous all-time high)
    • July, 2019, final: 1,445,934 bopd (previous all-time high)
    • June, 2019, final: 1,425,230 bopd (previous all-time high)
  • month-over-month, bbls: decreased by 23,408 bopd  (March, 2020 -- February, 2020)
  • month-over-month, percent: -1.6%  (March, 2020 - February, 2020)
Gas production:
  • March, 2020, preliminary: 3,125,895 MCF/day (new all-time high); 87% capture;
  • February, 2020, final: 3,109,750 MCF/day (new all-time high at that time); 87% capture;
  • Previous months: 
    • January, 2020, final: 3,019,938 MCF/day; 84% capture rate (improved, month-over-month)
    • December, 2019, final: 3,061,412 MCF/day; 84% capture rate (improved, month-over-month)
    • November, 2019, final: 3,165,585MCF/day; new all-time high on a per-day basis; all time on a monthly basis, October, 2019)
      • 83% capture
    • October, 2019, final: 3,070,616 MCF/day
      • 81% capture
    • September, 2019, final: 2,946,391 MCF/day (note -- fell below the 3-billion threshold previously reported)
    • August , 2019, final: 3,014,419 MCF/day -- an all-time high
    • July, 2019, final: 2,944,816 MCF/day
    • June, 2019, final: 2,885,293 MCF/day
BOE, March, 2020, preliminary:
  • March, 2020, preliminary
    • natural gas: 3,125,895 MCF/day = 520,896 boe
    • crude oil: 1,428,273 bopd
    • total boe, preliminary for March, 2020: 1,949,169 boepd
  • all-time high, November, 2019: 2,046,547 boepd
Producing wells:
  • March, 2020, preliminary: 16,263 -- if this number holds (and it will), this sets a new all-time high for producing wells
    • previous high for previous wells: October, 2019: 16,169
  • February, 2020, final: 16,149
  • January, 2020, final; 16,014
  • December, 2019, final; 16,042
  • November, 2019, final: 16,110
  • October, 2019, final: 16,169 (new all-time high)
  • September, 2019, final: 16,115
  • August, 2019, final: 15,964 (all-time high was 15,954, July 2019)
  • July, 2019, final: 15,954 (another new all-time high)
  • June, 2019, 15,752
Wells off-line:
  • March, 2020, preliminary:
    • inactive: 2,161 
    • DUCs: 975
    • total: 3,136 
    • March: it makes sense that inactive wells are up; DUCs are down; when DUCs are completed, neighboring wells are shut in to protect them; 
  • February, 2020, final: 
    • inactive: 2,091
    • DUCs: 1,027
    • total: 3,118
  • January, 2020, final:
    • inactive: 2,607
    • DUCs: 1,024
    • total: 3,631
  • December, 2019, final:
    • inactive: 1,920
    • DUCs: 958
    • total: 2,878
  • November, 2019, final:
    • inactive: 1,726
    • DUCs: 919
    • total: 2,645
  • April, 2020: 61 (considering all that is going on, this is not bad)
  • March, 2020: 68
  • February, 2020: 60
  • January, 2020: 61
  • December, 2019: 67
  • November, 2019: 79
  • October, 2019: 126
  • September, 2019: 92
  • August, 2019: 127
  • July, 2019: 141
  • June, 2019: 127
Rig count:
  • Today: 12 (all-time high was 218 on 5/29/12)
  • March, 2020: 52 
  • February, 2020: 54
  • January, 2020: 55
  • December, 2019: 55
  • November: 55
  • October: 56
  • September: 61
  • August: 62
  • July: 57
  • June: 63
Fort Berthold Reservation data partitioned out.

  • March, 2020, preliminary: a whopping 120 wells were completed in March, 2020
  • February, 2020, final: 57
  • January, 2020, final: 70 (revised)
  • December, 2019, final: 88 (revised)
    • revenue forecast: 90
  • November, 2019, final: 92
  • October, 2019, final: 102
  • September, 2019, final: 117 (revised up from 94) (revised a second time, up from 112)
  • August, 2019, final: 102
  • July, 2019, final: 137
  • June, 2019, 102 (revised, last month's report); revised again, now, 123
  • May, 2019, 113 (final)
 Gas capture:
  • statewide, captured: 87% (flat)
  • statewide, captured:
    • March, 2002: 2,711,084 MCF/day  -- captured -- new all-time high
    • February, 2020: 2,699,065 MCF/day (final) new all-time high
    • January, 2020: 2,553,067 MCF/day (final)
    • December, 2019: 2,557446 MCF/day (final)
    • November, 2019: 2,594,922 MCF/day (new all-time high)
    • October, 2019:  2,524,405 MCF/day
    • September, 2019: 2,429,487 MCF/day
    • previous all time high was May, 2019: 2,287,761 MCF/day
    • FBIR Bakken:
      • March, 2020: 83%
      • January, 2020: 83%
      • December, 2019: 81%
      • November, 2019: 81%
        October, 2019, captured: 70% (was 79% in September)(75% reported two months ago, August, 2019)
Off line, to end of March, 2020: 3,136 -- back in January, 2020, it as -- 3,631; 
  • DUCs: 975 (down 52 from the 1,027 in February
  • inactive well count: 2,161 (up 70 from 2,091 in February)
  • wells off line for operational reasons are tracked here;  
  • if I recall correctly, December, 2019, was a fairly "mild" winter by North Dakota standards;
  • January: huge jump in DUCs and inactive wells; 
  • February, 2020, was a fairly mild month, as I recall; 
  • March, 2020: DUCs down a bit, but inactive wells out-numbered DUCs
A year earlier, March, 2019, the "off-line well" data:
March, 2019:
  • DUCs: 968, up 74 from last report
  • inactive: 1,697, up 30 from last report
  • total: 2,665 (up from 2,561 last month; this represents about 1,000 more wells than will be drilled this calendar year; 2,561 is about what North Dakota will complete every three years)
  • I do believe that this (2,665) represents an all-time high)
Rig count:
  • Today: 12
  • April: 35
  • March: 52
  • February: 54

Notes From All Over, Noon Edition -- May 15, 2020

Williston: This is so, so cool. Thirty 3 opens in Williston. Link here.
Opening a new business is always a risk, but it's even more so during a global pandemic. Lounge Thirty 3, a new wine, beer and espresso establishment opens Wednesday in Williston.
Owner Megan Wold has been working on the project since late 2019 but faced delays because she was expecting her fourth child, then came COVID-19.
She said she didn't have to make too many adjustments from the Governor's guidelines for reopening bars and restaurants because she already operates on a small scale.
"We're thinking because they know how small the space is anyways and that they know the environment that they're looking to get into, if they didn't feel comfortable, they wouldn't come out. So that's kind of our thought-process with the lounge. And of course you know we are going to sanitize between each customer and everything like that," says Wold.
Polar bears: anyone paying attention knows that the polar bears are doing just fine, thank you. There are so many positive stories regarding polar bears, but here's one from Watts Up With That
  • northwest Atlantic
  • harp seal population surging; at 7.6 million, up from 7.4 million in 2014
  • harp seals are important for Davis Strait polar bears
  • some say the bear population may have grown substantially since the last survey in 2007
  • Davis Strait is the only subpopulation of polar bears officially considered to have 'likely increased' at 2018 by Environment Canada;
Murphy Oil: to close Legacy Arkansas, Calgary offices.

Canadian dollar, link here: sinks from a high of $0.7130 to $0.7087 over last twelve hours.

Just chill:


Six Years Old In A Few Weeks

Saudi Arabia Has A Huge Storage / Production Problem -- Selling Their Oil At Cost -- May 15, 2020

I'm assuming the "OPEC Basket" price noted at the graphic at this link is incorrect, but it has been this way for 24 hours now with at least one update. The "OPEC" site has "OPEC Basket" at the mid-$20s.

Having said that, a twitter scroll suggests Saudi Arabia has a huge storage/production problem. Saudi continues to increase the number of tankers (VLCCs and ULCCs) carrying oil out of the Mideast. Or better said, independent sources are reporting that. Bloomberg reported another 30+ tankers are now en route to the US.

There are currently -- just a single snapshot in time -- 117 tankers en route to China:

There are only four (rational) reasons why Saudi Arabia would want to continue giving away their oil below cost, or very close to breakeven costs:
  • maintain/protect market share (their stated reason for the surge);
  • get all that on-shore oil out of harm's way and in friendly waters;
  • continue to put pressure on US shale with ultimate goal to cripple US shale; and, 
  • shutting down production/shutting in wells in old fields risks losing wells, and possibly the fields themselves;
It's probably a combination of the four.

But this is a huge double whammy for Saudi Arabia. Think about it. If they had enough on-shore storage that was well-protected, they could be storing it there, either free, or at much lower costs. Instead,
  • they are paying exorbitant floating day-rate fees (or they've bought the tankers earlier and now own them); and, 
  • selling their oil in the mid-$20 range at best.
From Bloomberg/Rigzone:

76 Trombones, Judy Garland

On another note, this came in as a comment the other day. I don't want to lose that comment, so here it is again. It has to do with EIA's US crude oil supply in days, which the EIA now estimates to be 42. days. A writer who follows this much more closely than I do, and who understands it much more closely that I do wrote:
I figure there was an 18,160,000 barrels per day global surplus in April ....times 30 days would mean 544,800,000 more barrels were produced than used, and hence had to be stored somewhere 
With global demand revised down to 81.30 million barrels per day, that means "we" have added 6.7 days to global supplies in just one month

NDARC Down To Thirteen -- May 15, 2020

NDIC Director's Cut scheduled for release later today, 2:00 p.m. Link here

OPEC basket price, link here: $24.93.


Saudi tankers to the US: more then 30 tankers to the US scheduled for May, June. The more-than 50 million barrels of Saudi crude on the water threaten to disrupt a positive supply development: U.S. crude stockpiles declined for the first time since January and inventories at the Cushing, Oklahoma storage hub contracted by the most in months. Bloomberg via Rigzone.

RBN Energy: crude export volumes key to balancing market.

Back to the Bakken

Two wells coming off the confidential list today  --  Friday, May 15, 2020: 48 for the month; 98 for the quarter, 325 for the year:
  • 35385, SI/A, CLR, Palmer 5-25H1, Haystack Butte, t--; cum 4K over 5 days;
  • 35382, SI/A, CLR, Palmer Federal 10-25H, Haystack Butte, t--; cum 69K over 32 days;
Note: the CLR Palmer / Palmer Federal wells are going to be huge wells; they are tracked here

Active rigs:

Active Rigs1365595127