And With This Willie Nelson Song, I'm Heading To Bed -- February 25, 2016

Back To Gas Lines In Los Angeles Tonight -- February 25, 2016

The Los Angeles Times is reporting:

The slide in California’s gasoline prices could abruptly end Friday, with prices possibly jumping 30 cents a gallon due to seasonal changes in the state’s refinery operations, a consumer advocacy group predicted Thursday.

“The move marks an end to fire-sale prices on remaining winter stocks” of gasoline, Consumer Watchdog said.

Prices often climb in California this time of year because refineries switch from the winter blend of fuel to the more expensive summer blend required in the state.

Also, in the LA Times: SpaceX scrubs rocket launch again, two minutes before launch. This reminds me of NASA in the early days. No link. Not worth the effort.

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You Had To Be There

Our 19-month-old granddaughter helped with the circuit but when it came time to to photograph it, she wanted to run the camera. Needless to say there were too many things to keep track of, but all in all, I think we did a pretty good job with the snap-on circuits and the camera.


The more I watch this, the more I enjoy it. I had two problems: Sophia, 19-months-old, wants to handle the camera to film the action, and I'm having trouble getting the "helicopter" to do what it is supposed to. But Sophia is a trooper and doesn't give up. Tomorrow, I will try to teach her that the electricity only runs one way in diodes. LOL.

Four (4) New Permits; MRO Reports Two High-IP Wells -- February 25, 2016

Active rigs (we first hit 38 rigs on February 18, 2016; then back to 39, then back to 38 today):

	2/25/2016	02/25/2015	02/25/2014	02/25/2013	02/25/2012
Active Rigs	38	121	190	181	204

Four (4) new permits --
Operators: Oasis (2), SM Energy (2)
Fields: North Tobacco Garden (McKenzie), Burg (Divide)
Comments:
Four producing wells reported as completed (this corrects an error from an earlier report that said these permits were canceled:

• 29381, 2,449, MRO, Trinity 14-21H, Bailey, 4 sections, t2/16; cum --
• 29382, 1,100, MRO, Ringer 14-21TFH, Bailey, 2 sections, t2/16; cum --
• 29536, 862, Hess, EN-Sorenson B-155-94-3526H-5, Alkali Creek, t1/16; cum --
• 29767, 673, Hess, EN-L Cvancara-155-93-2627H-9, Robinson Lake, t1/16; cum --

Wells coming off the confidential list Friday:

• 24276, 543, Triangle, Triangle 150-101-36-25-8H, Rawson, t9/15; cum 68K 12/15;
• 29685, SI/NC, Statoil, Richard 8-5 XW 1 TFH, Banks, no production data,

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24276, see below, Triangle, Triangle 150-101-36-25-8H, Rawson:

Date	Oil Runs	MCF Sold
12-2015	9137	11981
11-2015	17837	19345
10-2015	12384	10434
9-2015	20674	23207
8-2015	7263	5605

EOG Reports -- February 25, 2016

EOG Resources: Q4 EPS of -$0.27 beats by $0.04. Revenue of $1.8B (-61.3% Y/Y) misses by $380M.

CLR: transcript; 

Halcon Resources: forecast a gain of 23 cents; a loss of $3.56/share but adjusted, 41 cents / share; huge beat;

Apache: forecast a loss of 47 cents; actual $19.07 per diluted common share, but when adjusting, only 6 cents per share loss; will cut CAPEX by 60%;

WPX: forecast a lost of 20 cents/share; reports a loss of 24 cents/share;

CHK: On Wednesday, Colorado-based FourPoint Energy LLC announced it would take on some 3,500 Chesapeake wells in Oklahoma and Texas for a price tag of $385 million in a deal that sent Chesapeake’s stock up 23 percent. The asset sale will mean a full withdrawal of Chesapeake from the Western Anadarko Basin, but the market loves the idea. It’s a lifeline for Chesapeake, which has reported an annual loss of some $14.7 billion and needed a big savings win to get back in the game and keep bankruptcy fears at bay. In the fourth quarter, the company reported a $2.2 billion net loss. For FourPoint, it means it will now own all of Chesapeake’s Western Anadarko basin assets. Last July, the Colorado company moved to acquire $850 million in assets owned by two Chesapeake subsidiaries in Oklahoma. The new deal is expected to close by 29 April this year.

CLR: a loss of 23 cents vs a projected loss of 21 cents/share; Revenue of $575.5 million topped expectations of $569.3 million but declined from $1.3 billion a year ago. stock is soaring 13.25% to $20.30 Thursday after the company released its fourth quarter 2015 earnings yesterday after the market closed and said it would cut planned capital spending this year by 66%. 

Yergin Ahead Of The Conference -- February 25, 2016

Over the weekend I rambled on about the Bakken and in passing mentioned an article sent to me by a reader about a recent speech Daniel Yergin had made. I had not yet had a chance to read it but said I would get back to it. (Unfortunately it did not say anything we did not already know; overall, somewhat disappointing, but the quick 30-second historical soundbite was nice.)

FuelFix is reporting:

Prominent energy expert Daniel Yergin believes the energy industry’s day of reckoning is here, amid the sudden and unrelenting rush of crude that has drowned oil markets for a year and a half.

This has happened before. In the 1930s, Texas suddenly overflowed with oil. Twenty years after that, it happened in Russia and the Middle Eastern countries. Then, in the 1980s, a tidal wave of oil from the United Kingdom’s North Sea, Alaska’s North Slope and Mexico presaged a ruinous oil bust. Now, the rapid-drilling shale oil producers in Texas and North Dakota that brought on the bulk of the world’s supply growth in recent years are dealing with the self-inflicted wounds of overproduction and high levels of debt.

A new reality which requires a "re-adjustment:

Such a cut is still unlikely, Yergin said, because of how shale oil has changed the industry. Unlike virtually every other way to extract crude from the earth, shale drilling doesn’t take longer than a few months. It has an average cycle time of 80 days, according to Goldman Sachs, meaning local oil companies can put oil on the market almost as fast as Saudi Arabian oil can arrive in the United States by ship.

That means if OPEC cut production, it couldn’t support prices for long. Higher-cost shale drillers would have an incentive to restart their rigs in West Texas and soak up any market share left behind. In November 2014, OPEC decided not to curb its production.
“OPEC said if there’s going to be some effort to stabilize the market, it’s not just going to be us,” Yergin said. “It was an adjustment to a new reality.”

Yergin doesn't have much to add to what has already been written here, there, and everywhere.
This is his conclusion:

“If we have decent global growth, then it does seem to you’ll see the rebalancing of the market will happen in the second half of 2016 or 2017 and under those circumstances you could see prices in the $40 to $50 range later in the year,” Yergin said.

My thoughts: at $50-oil, the US shale industry survives; Saudi Arabia struggles; and Venezuela implodes. Even at $75-oil Saudi Arabia won't fare well. It budgets for $100-oil and that was before things turned nasty for them in the Mideast.