Canadian CBR, Slawson, The Dockets, And All That Jazz, Page 4 -- September 3, 2018

Profits? How good was the last quarter. Russian oil giants more than doubled their combined profits in the first half, trouncing estimates thanks to a weaker ruble and rebounding prices. And with output curbs easing, the influx of cash is set to continue. Bloomberg.

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Huge, Huge Story For Appalachia

Making America Great Again

Making America great again. As you read this story, remember, Hillary's goal was to put millions of miners out of work. Trump's goal was to put Americans back to work. Let's swing over to Appalachia. Appalachia Development Group awards contract for $3.4 billion ethane storage hub. Wow, it never quit. Link here.

First, some background (see link below):

The goal of the Research Team was to complete a geologic study of all potential options for subsurface storage of NGLs along and adjacent to the Ohio River from southwest Pennsylvania to eastern Kentucky, with a similar study along the Kanawha River in West Virginia.

This involved the mapping and identification of areas where the Salina F Salt is at least 100 feet (ft) thick and suitable for solution mining; mapping and identification of areas of the Greenbrier Limestone that are at least 40 ft thick and suitable for hard-rock mining; and mapping the thickness and extent of sandstone reservoirs in depleted gas fields and gas storage fields that could be converted to NGL storage.

The Research Team defined an Area of Interest (AOI) on both sides of the Ohio River that extends from southwestern Pennsylvania in the north as far as the Kanawha River Valley in southern West Virginia, and conducted a regional stratigraphic study of all potential storage candidate formations and reservoirs in this area. Each of the individual stratigraphic units or intervals was defined in the subsurface based on well-log patterns that marked the top and bottom of each. These log tops were then correlated throughout the AOI, enabling the construction of regional stratigraphic cross sections as well as thickness and structure maps. Individual sandstone reservoirs were identified within this regional stratigraphic framework, as appropriate.

Now, data points from the linked Rigzone article:

• multibillion-dollar regional storage complex for NGLs
• sourced from the Marcellus, Utica, and Rogersville shale plays
• ADG and Parsons: joint venture: the buildout of the Appalachia Storage and Trading Hub (ASTH)
• first phase: pre-front end engineering design (FEED)
• subsequent phases: would include constructing the $3.4 billion project and its long-term operation
• the ethane storage hub will act as a catalyst for more than $36 billion in follow-on petrochemicals investments and the creation of more than 100,000 long-term jobs
• DOE: a $1.9 billion loan guarantee (I doubt Hillary's DOE would have done this -- the guarantees would have gone to her renewable energy cronies and Russian uranium friends)
• with the $1.9 billion loan guarantee, the group now seeks $1.4 billion in private investment (so while couch potatoes are watching hundred-thousand-dollar deals with Mark Cuban, the real investors are looking at US energy)
• this link takes you to the study: 2017 Appalachian Oil and Natural Gas Research Consortium study

Speaking of which, whatever happened to the proposed Badlands NGLs project? The last presentation was May, 2016.

On another note, a great time to re-read the New York Times reporting on natural gas shale revolution which they called a scam/hoax.

Wednesday -- November 19, 2014; Natural Gas Futures Soar; UBS Warns Ultra-High-Net-Worth Face "Risks"

From Yahoo!In-Play: McDonald's notches new session high of 97.18, vacillating between its 200 sma and last week's peak at 96.90/97.18. This is the third time out of the last four sessions it has probed its 200 sma. Its four month high from Sep is slightly above at 97.30. Another beneficiary of low gasoline prices? 

From Yahoo!In-Play: 10:11 am Natural gas futures soar, hits new HoD, now up 4.7% at $4.44/MMBtu (Dec contract). I can hardly wait to see the natural gas fill rate this week, and next week. One to three more days for this storm to be followed by another storm.

This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. I post quickly and frequently; typographical and factual errors are likely. If this information is important to you, go to the source.

Trading at new highs on a down day for the Dow: KMP, TGT, TXT, WMT.

IPs for wells coming off the confidential list today have been posted. This post. Fidelity reports a very nice well.

Active rigs:

	11/19/2014	11/19/2013	11/19/2012	11/19/2011	11/19/2010
Active Rigs	185	184	185	204	159

RBN Energy: takeaway capacity and "Plan B" for the Marcellus. The opening paragraph is quite incredible:

The economics of natural gas production in the dry Marcellus, the wet Marcellus and the Utica are so favorable—and the shale gas resource so bountiful—that the only real limit on how much the Marcellus/Utica plays can produce is the capacity of the pipeline network in the Northeast and neighboring regions to take gas to market.

And there’s the rub, because the region’s gas transmission infrastructure was designed decades ago to deliver large volumes of gas to the Northeast, not away from it. That’s why the midstream sector has made “a new plan, Stan,” and is now in now in the midst of a major reworking of the pipeline system—not just within and near the Marcellus/Utica but just about everywhere east of the Mississippi. 

The $30 billion re-plumbing effort and its effects on the gas market as a whole are the subject of RBN’s latest Drill-Down Report, “50 Ways to Leave The Marcellus” which is available today to Backstage Pass members. In today’s blog, we provide an overview.

Remember that NY Times article some years ago about the "economics won't work when it comes to natural gas"?

Under the Obama watch: Rich hoard cash as their wealth hits record high. CNBC is reporting:

The amount of individuals that hold more than $30 million in assets has climbed to a new record in 2014, according to a global survey on Wednesday, which also warned that a lack of diversification meant that this wealth is not protected from shocks to the financial system.

12,040 of these new ultra high net worth (UHNW) individuals were minted in the year ending June 2014, said the Wealth-X and UBS World Ultra Wealth Report released on Wednesday. This meant a 6 percent increase from last year which pushed the global population of these millionaires to a record 211,275.

With the annual gross domestic product of the U.S. closing in on the $17 trillion mark, according to the World Bank, this means that the ultra-rich now have almost twice the wealth of the world's largest economy (sic).

I assume some of these UHNW reside in the US. And, I assume the HNW numbers have increased by even a larger percentage here in the US.

But then this laughable punch line:

Nonetheless, Simon Smiles, chief investment officer at UBS Wealth Management, warned of the risks the wealthy few face.

I'll gladly take the risks if I'm moved into that list of 211,275.

No, I did not read the rest of the article, so I do not know what could possibly be the risks these 211,275 face.

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Global Warming 2014 - 2015

The unnamed 2014 autumn polar vortex: the headlines started appearing November 11, 2014:

• Minnesota shatters snow record from 1898 -- predicted by warmists -- global warming will result in more snow 
• Arctic blasts pummels USA -- unexplained; stuff happens 
• Only six (6) states not expecting snow in coming week (and one of them may be Hawaii) 
• Winter still a month away 
• Twelve (12) years since Dallas has had two consecutive days so cold  
• Wyoming wind chill warning: 35 below  
• Central Ontario snowfall could reach 20 inches  
• Cold to freeze East  
• Shattering snowfall records in Minnesota, Wisconsin, Michigan -- predicted by warmists -- global warming will result in more snow 
• All 50 states brace for freezing temperatures -- November 13, 2014 
• Cold freeze moves east -- November 13, 2014 
• Denver cold shatters two records, including low temp record set in 1882 -- November 13, 2014 
• Coldest November in decades -- November 14, 2014 
• Michigan tow receives one month's snow -- in one day --November 14, 2014 
• Storm dumps four (4) feet of snow on Wisconsin town -- November 14, 2014 
• Ice on Lake Superior -- almost a month early -- November 16, 2014 
• Harsh cold to set records in south, freeze northeast -- November 16, 2014
• Snow on the ground in DFW area; 27 degrees -- November 17, 2014 
• 50% of nation covered in snow -- November 17, 2014 (this was on ABC Nightly News, also)
• Most snow this early in a decade -- November 17, 2014
• Four (4) feet of snow expected in upstate New York -- November 17, 2014
• Record cold in Boise, Idaha, Monday morning, possibly again Tuesday -- November 17, 2014
• Deep freeze blankets USA -- November 18, 2014
• Coldest November morning since 1976 -- November 18, 2014
• 1,360 records shattered in one week -- November 18, 2014
• "Global warming" activists huddle together together in Capitol -- November 18, 2014
• I-90 closed in Buffalo, NY; snow -- November 18, 2014
• Buffalo, upper NY state gets slammed -- November 18, 2014
• 74 inches of snow predicted overnight in Buffalo, NY -- November 18, 2014 
• Cuoma deploys organized militia (National Guard) -- November 18, 2014 
• 7 feet of snow in upstate New York -- November 19, 2014
• Natural gas futures soar -- November 19, 2014 
•  Snow stranded in NY; 100+ trapped; man trapped in 12-ft drift -- November 19, 2014
• Supersnow, stranded in NY -- November 19, 2014
• 8 feet and counting -- November 19, 2014
• Biggest power grid hits monthly record -- November 19, 2014 
• Cuomo calls for "NFL Snowday" -- November 20, 2014
• Forecast: three more feet! -- November 20, 2014

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At Least It's Hard To Catch

Reuters is tweeting:

World Health Organization says the Ebola outbreak in West Africa remains intense, with 533 new confirmed cases reported in the week ending Nov. 16.

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Very, Very Hard To Catch

This is incredibly exciting. Over at the Huffington Post:

Scientists working at CERN's Large Hadron Collider near Geneva, Switzerland have discovered two never-before-seen subatomic particles, the nuclear research facility announced today.

Dubbed Xi_b'- and Xi_b*-, the particles are "heavyweight" particles known as baryons.

Like the proton, the new particles are made up of three quarks but are more than six times as massive.

Two more particles to add to the Standard Model (or as the CERN physicists said, "beyond the Standard Model."

I will mention this to the older granddaughter on our walk home from school later this afternoon. 

Follow-Up on the NYT Article on Natural Gas Scam

Link here.

In what now seems like the distant past, The New York Times wrote a series of articles suggesting that industry practitioners were raising questions about the economic performance of the gas shale wells and thus whether the extent of the resource was over stated.  Those articles were written in late June and generated a firestorm of reaction within the natural gas industry, but also among Washington politicians. What followed was disclosure that a handful of E&P companies, active in the gas shale business, had received subpoenas from the Securities and Exchange Commission (SEC) for their records of well performance and the economics of behind their reserve calculations. The data was sought to compare with the companies' disclosure regulatory filings and investor presentations of the operational risks, production performance and economics of these gas shale wells. At the time the subpoenas were disclosed, we wrote about it in the Musings (last July), fully anticipating that there would be further disclosures. Since mid-summer, there has been no activity arising from the subpoenas. 

Go to the link for the rest of the story.

Bottom line: SEC has 4,000  employees. They have one geologist.

NY Times: Natural Gas -- Another "Enron" Scam? Nope. It Looks LIke NY Times/MSNBC Blew It

Update

July 8, 2018: update here. 

August 21, 2017: at 75 mn t/y, US LNG exports will soon rival Qatar's at 77 mn t/y. The competition will get intense. 

October 6, 2016: the Utica and the Marcellus continue to defy skeptics. 

October 29, 2011: Rigzone -- Musings on the NYT story on natural gas.  This story refuses to die.

October 29, 2011: US to export LNG.

September 15, 2011: Rosy outlook for natural gas.

July 31, 2011: The New York Times trying to walk back the shoddy reporting they did on this story. 

July 29, 2011: the New York Times folks need to read the 2Q11 CHK conference call transcript.

June 27, 2011: Here is the "source" for the article that started this whole thing. 

The numbers on major shale companies financial statements do not add up, said Deborah Rogers, advisory council member for the Federal Reserve Bank of Dallas.

"I have to say that after all the work I've done I think there is some sleight of hand in the balance sheets," said Rodgers in a CNBC interview.

Rogers, a former stock broker for Merrill Lynch, started questioning shale companies' financial statements after listening to a speech in 2009 by Aubrey McClendon, CEO of Chesapeake Energy, one of the largest shale gas companies.

June 26, 2011: I think I was scammed! See "original post" below. Here's the real story, with dateline of June 26, 2011 (today):

Two unexpected gushers in northeastern Pennsylvania are helping to illustrate the enormous potential of the Marcellus Shale natural gas field.

Each of the Cabot Oil & Gas Corp. wells in Susquehanna County is capable of producing 30 million cubic feet per day -- believed to be a record for the Marcellus and enough gas to supply nearly 1,000 homes for a year. The landowners attached to the wells, who leased the well access, numbering fewer than 25, are splitting hundreds of thousands of dollars in monthly royalties.

"There was definitely excitement among the team that planned out these wells and executed their completion," said Cabot spokesman George Stark.

Drilling companies knew the Marcellus held a lot of gas. They just had to figure out a way to get it out, and they say they're getting better at it all the time.

June 26, 2011: At the link below, look at the dates of the e-mails referenced (2009). In addition, the article is undated. It appears that the NY Times / MSNBC was completely off target. It appears this article was written back in 2009; since then the natural gas industry has exploded (no pun intended) and doing very, very well. It's also possible the entire article was a hoax. A big thank you to "Anon 1" for noting the dates on the e-mails that were the basis of this article.

Original Post

Natural gas drilling may not be all that it is fracked up to be -- [update: at least according to an outdated article in the NY Times. The industry has proven the NY Times wrong.]

Link here. (Update, August 30, 2015: this is so interesting. The NY Times has removed this article.)

Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States. 

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.” 

This story is definitely an "out-lier," a story that does not mesh with the vast number of articles suggesting the opposite.

Then I looked at the source of the article: the New York Times and MSNBC.

There are two facts that cannot be overlooked: a) the industry is finding more and more natural gas everywhere they look around the world; and, b) there is such a glut of natural gas in the US right now, the country is getting ready to export it overseas.

But maybe the Times and MSNBC are correct, and that's why the coal industry continues to thrive.

A big thank you to "Gary" for sending me the link.