Friday, February 23, 2018:33819, 728, Mabel Levings 14-23HY, Mandaree, minimal production, Three Forks B1, 41 stages; 6.1 million lbs; t11/17; cum 11K 12/17;
33508, 704, Lime Rock Resources, State 6-25-36H-144-97, Cabernet, for a Cabernet well should have been a bit better; 50 stages; 6 million lbs; t8/17; cum 60K 12/17;
33437, SI/NC, MRO, Tipton 34-11H, Bailey, no production data,
33436, SI/NC, MRO, Gifford 34-11TFH, Bailey, no production data,
33132, 1,223, Whiting, Nelson 11-18H, Truax, a very nice well; 34 stages; 9.7 million lbs, mesh and large only; t9/17; cum 105K 12/17;
31081, 539, Bruin E&P, Fort Berthold 148-94-35C-26-10H, McGregory Buttes, Three Forks;; producing, but expected better; t9/17; cum 30K 12/17; from the geologist's report: the primary pay zone was 21' to 36' under the top of the Three Forks; ability to detect 0 to 10,000 gas units which translates as 0 to 100% typical naturally-occurring hydrocarbon mixtures; background gas levels were low; the target window was 15' thick, 34' below the Three Forks top; two trips were required; the majority of the well bore was drilled within the target window with 96.1% (9,568') drilled inside the target window and 3.9% (389') outside.
23963, SI/NC, WPX, Arikara 15-22HX, Reunion Bay, no production data,
Thursday, February 22, 2018:
33507, 560, Lime Rock Resources, State 5-25-36H-144-97, Cabernet, not bad, but for a Cabernet well should have been better; 100% of the lateral exposure to the ideal geological target window; no shale strikes or sidetracks; t8/17; cum 62K 12/17;
33352, 2,159, Whiting, Nelson 21-18-2TFH, Truax, 44 stages; 10.3 million lbs, t9/17; cum 101K 12/17;
23966, SI/NC, WPX, Arikara 15-22HY, Reunion Bay, no production data,
Wednesday, February 21, 2018::
33583, SI/NC, MRO, Sundby 24-11TFH, Bailey, no production data,
33443, SI/NC, MRO, Marlene 34-11TFH, Bailey, no production data,
33435, SI/NC, MRO, Hugo 34-11H, Bailey, no production data,
31858, 1,118, Whiting, McNamara 41-26H, Sanish, 45 stages; 10.4 million lbs; large/medium/small, t9/17; cum 116K 12/17;
31672, 1,076, CLR, Rath Federal 7-22H, 56 stages; 17 million lbs; TD=25,305 feet, t9/17; cum 59K 12/17;
Tuesday, February 20, 2018:
23967, SI/NC, WPX, Arikara 15-22D, Reunion Bay, no production data,
33542, SI/NC, BR, Outlaw Gap 14-23MBH-A, Sand Creek, no production data,
Monday, February 19, 2018:
33581, SI/NC, MRO, Olea 24-11TFH, Bailey, no production data,
33544, SI/NC, BR, Outlaw Gap 24-23MBH-A, Sand Creek, no production data,
33543, SI/NC, BR, Outlaw Gap 24-23TFH-A, Sand Creek, no production data,
Sunday, February 18, 2018:
33580, SI/NC, MRO, McFadden 14-11H, Bailey, no production data,
33497, 925, Liberty Resources, Kaitlyn 158-93-30-31-4MBH, East Tioga; 27 stages; 6.5 million lbs; t8/17; cum 73K 12/17;
Saturday, February 17, 2018:
33868, 1,698, Abraxas, Yellowstone 4HR, North Fork, 41 stages; 7.4 million lbs; t12/17; cum 28K after 22 days;
33599, SI/NC, MRO, Gravel Coulee 14-11TFH, Bailey, no production data,
33582, SI/NC, MRO, Morrison 24-11H, Bailey, no production data,
30320, 528, Nine Point Energy, Anderson 148-100-7-6-4H, Buffalo Wallow, 30 stages; 6.5 million lbs, large/small, t8/17; cum 60K 12/17;
29550, 1,407, CLR, Bonneville 5-23H1, Rattlesnake Point, Three Forks B1, 55 stages; 9.4 million lbs, t8/17; cum 85K 12/17;
Monday, February 19, 2018
Glut Or No Glut -- Idle Chatter On A Monday Night -- Not Ready For Prime Time -- Feburay 19, 2018
Updates
February 20, 2018: oilprice.com talks about this also. And here we go again, Saudi Arabia is redefining "surplus" (as I noted below) and apparently getting ready to move the goal posts:
Other analysts have gone further. Citigroup and Goldman Sachs both estimate that the surplus has probably already been eliminated, meaning that the oil market has already reached the long-sought “balance” for which OPEC is aiming.
But as success draws near, oil prices are still not where OPEC wants them. The group is considering changing the way it measures “balance” in the market, for several reasons.
First, what constitutes the five-year average for inventories has changed significantly, with that period of time increasingly encompassing surplus years.
The level of inventories that was “average” for the period of 2011-2015 is substantially lower than the “average” for 2013-2017 — the latter period includes more than three years in which the market suffered from a glut. [The "trillion-dollar-mistake" Saudi Arabia foisted on itself trying to break the US shale industry.]
In other words, the five-year average inventory level is a moving target, and because it has been rising quite a bit, bringing global inventories down to that threshold is not as impressive as it would be if using an older five-year period. [Exactly what I've been saying for quite some time.]
As a result, Saudi oil minister Khalid al-Falih suggested that OPEC would meet to discuss using a different metric. ["Move the goal posts.] One option would be to use the “forward demand cover,” Bloomberg reports, or the number of days that the current stock of inventories could supply the global market. This would arguably be a more accurate measurement because it would incorporate the fact that demand has climbed significantly in recent years.Again, look at the range we're talking about -- it's pretty narrow -- between 60 and 65 days of inventory:
Original Post
Disclaimer: in a long note like this there will be typographic and factual errors. I have not yet had the chance to double-check much of this. I often mis-read things. I often see things incorrectly. I often make simple arithmetic errors. I am inappropriately exuberant about the Bakken. I am inappropriately bullish when it comes to oil. If this is important to you, I would go to the source. Finally, the purpose of posting this is articulated in my welcome page/full disclaimer page, linked at the top of the blog.
Huge Bloomberg article: when success isn't enough. Saudi Arabia says re-balancing has worked. Bloomberg says "OPEC has almost cleared the oil glut, but Saudi Arabia wants to go further." The article includes this graphic:
So, what's wrong with that graph? Huge "fake news." What's wrong with the graph? There are three things wrong with that graph.
Yup, you guessed it. This is the first problem: the graph only shows the numerator. We don't have the denominator. All we have is the IEA telling us what that organization considers "surplus" or "glut." The denominator is the total amount of global oil sitting in storage. The graph doesn't provide that information, nor is there any other graph accompanying the article that provides that information. The x-axis is from 0 to 400 million bbls. But does 400 million bbls represent 1% of total inventory or 10% or 50%? Does the 400 million bbls represent two days of global demand or ten days or fifty days. The graph tells me nothing except that the glut has dropped from 350 million bbls to 50 million bbls. But I still don't know how many days inventory the world has.
The second problem with the graph has already been intimated: it is simply the "surplus." But how is "surplus" defined?
But this is the most glaring problem with the chart. It only goes back to February 2016! Give me a break. That's two years and almost all of that time has been spent burning off the glut caused by the Saudi Surge, Saudi's "one-trillion-dollar mistake. They announced the surged in November, 2014; it really didn't star to take effect until March, 2015, and when the Saudis threw in the towel, announcing in November, 2016, they were going to cut back on production, it took until May, 2017, to really see the effect, and we still -- nine months later -- still have a surplus.
That graph is meaningless.
Fake news. Or rather, "incomplete data."
At a minimum we need to see historical data going back ten years and we need to see it measured in days of supply. We need to see the historical denominator: the the global inventory of crude oil, not just the surplus. We also need to see "projections." It's hard to find that data if one doesn't subscribe to sites that have that data.
So, we will do the best with what we have.
From here on out, we're talking OECD inventories.
How much oil is currently in OECD inventories. About 3 billion bbls in round numbers (I'm sure you can find any number you want -- no matter what number you find, it's not very accurate. We've been through this before. But for our purposes, 3 billion bbls is good enough, in the graphic below, from this source:
300 million bbls / 3 billion bbls = 0.1 or 10%. That was a huge number, ten percent.
100 million bbls / 3 billion bbls = 3%. I don't know about you, but for me 3% is practically a rounding error when the accuracy of the numerator and denominator are largely suspect. The law of large numbers probably helps us out.
I can't get my hands around big numbers. So when I come to stuff like this, I put in amounts I can understand. Let's say I was living on the margin and I only had $10 left in my pocket to get through the week. If I was lucky and found a dollar lying on the ground, I would have 10% more than I did a moment earlier. If I found only a quarter, I would have 2.5% more. Ten percent seems a lot more than 2.5% but in fact, my $11 isn't going to go much farther than $10.25.
So, that leads us to the next question. How far does 3 billion bbls (the total amount in OECD storage) take us?
Well, fortunately we have a graph for that. Not only that, but we have some projections from the EIA which I trust a whole lot more than the IEA (or OPEC or Saudi Arabia). Here's that graph.
Note:
- first, the graph goes back farther than February, 2016, at the end of the Saudi Surge but still nowhere near burning off all that excess
- second, we now have historical data before the surge -- we see three things
- ten-year minimums
- ten-year maximums
- the days of supply just before the Saudi Surge; during the Saudi Surge; and projections
- (by the way, it's now plan to see why we had $100-oil before the Saudi Surge -- OECD crude oil inventories were at 10-year minimums -- wow -- what a great graph
- third, we have a range of how long these inventories would last
- minimum: 55 days
- maximum: 65 days
- again, I don't know about you, but I don't see a whole lot of difference between 55 days and 65 days (yes, I know for traders this is huge, but ...)
- fourth, look at the current and near-term projections for days of supply: smack dab in the middle of the range (actually, a bit higher than the mid-point if you look really, really closely)
- [digress: so, go back to the incomplete data supplied by IEA above: they interpret the chart to suggest that the glut has been erased (down to 50 million bbls of excess inventory [1.7%; almost a rounding error]) and yet the EIA graph shows us smack dab in the middle, with about 60 days of supply]
- fifth, look at the projections and you will note two things (maybe three):
- we never get below 60 days of supply;
- the line actually inclines slightly; and,
- near the very end, the projection actually hits the maximum (where the light blue shaded are drops to 63 days and the green line actually approaches 63 days almost immediately thereafter)
- sixth, and then I'll quit with this graph: even with the Saudi Surge we only got to 65 days out vs the middle of the range, 60 days of supply -- you mean to tell me that's what all the fuss was about -- 65 days of supply vs 60 days of supply?
Now look at this graph, from ycharts.com:
Again, this tells me no one really has a good handle on exactly how much crude oil there is in storage. There's a huge difference between 3 billion bbls and 4.5 billion bbls, especiall when the numerator is 50 million bbls. [I doubt all the crude oil in all the new pipelines across America has been tallied, just as one example.]
Lots of verbiage but the bottom line for me: the IEA graphic showing 60 days of supply is the most complete graphic and tends to be supported by the ycharts graph.
By the way, another interesting article from The Financial Times back on March 28, 2011: "OECD oil stocks data offer limited insight." Maybe the OECD data is better today than it was in 2011, but I have my doubts. It may be worse.
Houston! The Shaden Has Set Sail! -- Supertanker Test Successful -- US Oil On Saudi-Supertanker Headed For China -- February 19, 2018
Updates
April 12, 2018: right on schedule. The Shaden should be in port Friday, April 13, 2018.
April 9, 2018: ping received April 9, 2018 -- tanker northbound along east coast of southern Taiwan.
March 28, 2018: in the Indian Ocean, heading toward Singapore, on its way to China.
February 25, 2018: updated position today suggests the supertanker will be going around the tip of South America rather than through the Panama Canal.
February 24, 2018: updated position here.
Original Post
You can track the supertanker Shaden at this site. It took me a little bit of time to navigate (no pun intended) the site but when you figure it out, it's kind of fun. It will be interesting to see if it goes through the recently widened Panama Canal.
From the Bloomberg article:
The flood of U.S. oil exports stepped up a gear on Monday after the first fully laden supertanker sailed from an American port, alleviating a bottleneck that’s limited overseas shipments.
The Louisiana Offshore Oil Port, or LOOP, the only deep water port in the U.S. able to handle the industry’s biggest tankers, said in a statement it had successfully completed the first loading of a very large crude carrier. Shipping data compiled by Bloomberg show the tanker is the Saudi Arabian-owned Shaden, now heading to the Chinese port of Rizhao.
"There could not be a better time to offer this service as domestic production surpasses 10 million barrels per day in the ever-dynamic global crude oil market," said LOOP LLC President Tom Shaw.
LOOP said the "shipper of record" was the trading arm of Royal Dutch Shell Plc. However, data compiled by Bloomberg showed the Shaden was booked last month by Unipec, China’s biggest oil trader. a unit of the country’s refining giant China Petroleum & Chemical Corp., or Sinopec.
LOOP didn’t disclose what kind of oil the Shaden loaded, but traders said it was unlikely U.S. shale oil. It’s more likely to be a mix of crude pumped out of the U.S. Gulf of Mexico.
Putting The $7-Billion Saudi Solar Power Project Into Perspective -- February 19, 2018
Link to Saudi's $7-billion solar project. Apparently not enough.
Today, oilprice.com is reporting that Saudi Arabia plans to build sixteen (16) nuclear reactors within the next 20 - 25 years -- total cost: over $80 billion. [By the way, isn't that what the California bullet train is now expected to cost?]
Today, oilprice.com is reporting that Saudi Arabia plans to build sixteen (16) nuclear reactors within the next 20 - 25 years -- total cost: over $80 billion. [By the way, isn't that what the California bullet train is now expected to cost?]
Saudi Arabia currently uses about 25 percent of its oil production domestically, and as the World Nuclear Association recently noted, while production is unlikely to rise substantially, this is not the case with demand for electricity, which is booming.
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Tulip Season
The Market And Energy Page, T+29 -- February 19, 2018
Oil companies starting to buy back their shares. Whoo-hoo!
Disclaimer: this is not an investment site. Do not make any job, travel, relationship, financial, or investment decisions based on what you read here or think you may have read here.
From The Wall Street Journal today: oil companies starting to buy back their shares.
Link here at SeekingAlpha.
Simply not appealing.
Disclaimer: this is not an investment site. Do not make any job, travel, relationship, financial, or investment decisions based on what you read here or think you may have read here.
From The Wall Street Journal today: oil companies starting to buy back their shares.
Several oil and gas producers, including Pioneer Natural Resources Co. and Anadarko Petroleum Corp., have started the year by initiating or enlarging share-repurchase programs. The buybacks reflect oil prices that have climbed enough for them to drill profitably and shareholders who have urged companies to focus more on the bottom line.It would be nice to see more dividend increases also (some companies have already reported that they will increase dividends or distributions).
It also suggests that energy producers think their shares, which have lagged behind the broader market, are underpriced.
Buying back stock reduces the number of shares in the market, boosting the value of those remaining. Doing so is a reversal from the past three years when energy producers pumped new stock into the market to raise cash so they could pay down debt and keep rigs drilling.
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The SandRidge / Midstates Merger -- Michael Fillon
Link here at SeekingAlpha.
Simply not appealing.
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Photograph By Sophia
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