The Market, Energy, Trade War, Natural Gas, And Political Page, T+48 -- July 18, 2018

CSX: CSX reports jump in profit. Cost cuts and higher freight rates boost railroad operator's second-quarter earnings. CSX reported a sharp increase in profit, and wow! Was it ever! Net income was almost a billion dollars. Actual net income was $877 million in the second corder, a 72% increase from the $510 million it earned one year earlier. Revenue increased about 6% to $3.1 billioin, boosted by higher volumes. This WSJ article has received no comments so far. La-de-da.

BRK-B: up over 2.5% in pre-market trading. Probably has nothing to do with the CSX story, but remember, Warren owns BNSF lock, stock, and barrel. Pundits suggest BRK-A/B is rising because the company has "lifted previous restrictions on buying back its own stock." Pundits suggest that Berkshire is unable to find anything worth buying. And with hordes of cash, it might as well buy back some of its own common stock. Okay.

Disclaimer: this is not an investment site. Do not make any financial, investment, travel, job, or relationship decisions based on anything you read at the blog or think you may have read at the blog.

It's not Nordstrom's, it's Nord Stream 2. Posted earlier,

The Europeans are wary of Trump and Putin meeting this week, and yet it's the Germans buying all that natural gas from Putin through a brand new $11-billion pipeline. These are the facts:

Nord Stream 2 is a gas pipeline that would allow Germany to effectively double the amount of gas it imports from Russia. In 2017, Germany used up a record 53 billion cubic meters of Russian gas, comprising about 40 percent of Germany's total gas consumption. Nord Stream 2's delivery system is designed to carry up to 55 billion cubic meters (1.942 trillion cubic feet) of gas per year.

So, to repeat: currently, Russian natural gas accounted fro 40% of Germany's total gas consumption; the Nord Stream 2 would effectively double the amount of gas Germany would import from Russia. Seems fairly significant to me. And yet, CNBC says "Trump is exaggerating Germany's reliance on Russia for energy."  CNBC was disingenuous with its argument (Trump was exactly correct, it turns out) but worse, CNBC defends Russia even as NBC calls out Trump on Russian sanctions. Seems one can't have it both ways. Unless you are CNBC/NBC/MSNBC.

Even cartoonists get it; this is not rocket science:

Only One Well Comes Off Confidential List Today -- And It's Another DUC -- July 8, 2018

NOG: announces acquisition of producing wells, about 4,100 boepd; $68.4 million in cash plus 25.75 million shares (x $3.40 = $88 million) for a total of about $150 million. Net acreage not mentioned. Recently, NOG paid upwards of $40,000 / acre. NOG also announced it has reduced annual interest payments by over $5 million and will reduce overall debt by over $63 million through a new deal and other agreements. The most recent deal: exchange 8% senior unsecured notes due 2020 by issuing over 3 million shares of common stock; this will reduce debt by almost $10 million. In pre-market trading, NOG was up almost 5%, trading near $3.40. It's 52-week high is $3.72.

Disclaimer: this is not an investment site. The NOG update is to help me better understand the Bakken and follow the oil and gas industry.


Only one well comes off the confidential list today:

• 33993, SI/NC, Hess, BB-Burk-LE-151-95-1807H-9, Blue Buttes, no production data,

Active rigs:

$66.83↓↓	7/18/2018	07/18/2017	07/18/2016	07/18/2015	07/18/2014
Active Rigs	67	59	30	73	196

RBN Energy: Mexico needs more US refined products, and more infrastructure to move and store it.

Mexican demand for U.S.-sourced refined products continues to increase, but Mexico lacks the infrastructure required to efficiently import, store and distribute large volumes of gasoline and diesel. That has spurred the rapid build-out of new port and rail terminals, new pipelines and new storage capacity on both sides of the U.S.-Mexico border. At the same time, Mexico’s state-owned energy companies are gradually opening access to their existing refined-products pipeline and storage networks — which helps a little, but not enough. Today, we discuss the latest round of midstream projects tied to U.S. exports of motor and jet fuels to its southern neighbor.

This blog is an update of our “Into the Void” series on the infrastructure that helps deliver Pemex and imported motor fuels to Mexican markets. Earlier we explained that until April 2016, state-owned Petróleos Mexicános (Pemex) was the only entity that could import gasoline and diesel to Mexico, and that until early 2017, independent/third-party importers could not use Pemex’s refined-product distribution and storage network. We also noted that competition is being introduced to Mexico’s energy markets during a trouble-filled period for Pemex’s six refineries, whose output of refined products has been declining — opening the door even wider to imports from the U.S.

We provided an overview of three key elements of Mexico’s existing refined-product logistic infrastructure. First, there’s Pemex’s network, which includes refined-product pipelines with capacities totaling more than 1 MMb/d and more than 70 storage and distribution terminals with a combined storage capacity of 11 MMbbl. Then, there are the liquids storage assets owned by Mexico’s Comisión Federal de Electricidad (CFE), the state-owned electric utility, which over the next few years plans to make available to motor-fuel logistics providers at least one-quarter (and perhaps as much as half) of its 10 MMbbl of fuel storage capacity. And then there are the marine terminals, pipes, storage and other assets owned by third parties such as midstreamers, railroads and terminaling companies. We emphasized that Mexico’s refined-products pipeline system is far from robust, and a lot of motor fuel is transported by rail and by truck.

Surprise Gasoline, Crude Oil Build At Height Of US Driving Season -- API -- July 17, 2018

Link here.

• crude oil:
• expectations: a draw of 3.622 million bbls
• actual: a build of 629,000 bbls
• gasoline:
• expectations: a draw of 44,000 bbls
• actual: a build of 425,000 bbls

EIA data will be out tomorrow about 10:30 a.m. 

XTO's Bullberry Federal Pad In Lost Bridge

Updates

March 12, 2023: production updated.

December 1, 2019: graphics and production data updated:

Original Post 

Permits issued July 17, 2018. I believe the wells will run from the north to the south, a stand-up 1280 with an overlapping 2560-acre well or two or three -- just a hunch. The wells are already on the confidential list.

The graphic:

Updates

 

March 11, 2023: initial production, frack data posted here.

 

Original Post

The wells:

 The 8-well Bullberry Federal pad:

• 35150, SI/NC-->SI/A, XTO, Bullberry Federal 24X-2H, Lost Bridge, t--; cum 95K 1/23;
  
• 35151, drl-->dry, XTO, Bullberry Federal 24X-2D, Lost Bridge, noted 1/23;
• 35152, PNC, XTO, Bullberry Federal 24X-2GXH2,
• 35153, PNC, XTO, Bullberry Federal 24X-2CXD,
• 35154, SI/NC-->SI/A, XTO, Bullberry Federal 24X-2G, Lost Bridge, t--; cum 154K 1/23;
  
• 35155, SI/NC-->SI/IA, XTO, Bullberry Federal 24X-2C, Lost Bridge, noted 1/23;
• 35156, PNC, XTO, Bullberry Federal 24X-2AXB,
• 35157, PNC, XTO, Bullberry Federal 24X-2E2,
• 35789, SI/NC-->SI/A, XTO, Bullberry Federal 24X-2DR, Lost Bridge, t--; cum 131K 1/23;
  

The two "diagonal" short laterals:

• 17045, 786, Newfield, Jorgenson 1-10H, t8/08; cum 230K 10/19; neighboring fracs may have impacted this well positively; was off line 8/19 - 10/19; cum 237K 1/23;
  
• 17086, A/AB/IA/560, Ovintiv / Newfield, Jorgenson 1-5H, t11/08; cum 342K 10/19; neighboring fracs may have impacted this well positively; was taken off-line 4/18 and is still off-line as of 8/18; huge jump in production 5/17 and 7/16 and no FracFocus indication that it was re-fracked; for more on this well, see this post, from June 7, 2017; a nice well as of 10/19, 2,000 bbls/month; cum 368K 11/22; off line 11/22;
  

Nearest well to the west:

• 32581, 1,836, Newfield, Jorgenson Federal 148-96-10-15-13H, Lost Bridge, t6/16; cum 347K 10/19; cum 448K 1/23;
  

Nearest well to the east:

• 21837, 1,398, MRO, Deep Creek USA 14-12TFH, Lost Bridge, t3/13; cum 311K 10/19; Steady Eddy; no jump in production; cum 403K 1/23;
  

Other wells on that pad:

• 21839, conf, MRO, Kottke USA 11-13H, Lost Bridge,
• 21838, conf, MRO, Levi USA 11-13TFH, Lost Bridge,
• 32434, 4,679, MRO, Stillwell 21-13H, Lost Bridge, t9/20; cum 541K 1/23;
  
• 21840, 1,380, MRO, Deep Creek 21-13TFH, Lost Bridge, t2/13; cum 332K 10/19; Steady Eddy; no jump in production; cum 424K 1/23;
  

XTO With Permits For An 8-Well Bullberry Federal Pad In Lost Bridge -- July 17, 2018

Active rigs:

$67.78↓↓	7/17/2018	07/17/2017	07/17/2016	07/17/2015	07/17/2014
Active Rigs	68	59	29	73	196

Nine new permits:

• Operators: XTO (8); Hess
• Fields: Lost Bridge (Dunn); Blue Buttes (McKenzie)
• Comments: XTO has permits for 8-well Bullberry Federal pad in SESW 2-148-96; see graphic at this post;

One producing well completed:

• 33672, 2,743, Whiting, Bibler 41-5-1HU, Stockyard Creek, t5/18; bcum 21K after 15 days with extrapolates to 43K over a 30-day month; neighboring wells: 33676; 33673; 23113; 23112; 18758;

The wells neighboring #33672:

• 33676, SI/NC, Whiting, Bibler Federal 41-5-6H, [I have been told that Whiting does not let wells go to DUC status; this may suggest a change with regard to Whiting; on the other hand it is producing; perhaps Whiting does not let a DUC go very long before completing it?]
• 33673, 2,472, Whiting, Bibler Federal 41-5-6TFHU, Stockyard Creek, t5/18; cum 13K after ten days, extrapolates to almost 40K over 30 days;
• 23113, 1,896, Whiting, P Bibler 154-99-1-5-8-15H, Stockyard Creek, t5/13; cum 308K 5/18; appears to have a jump in production after being off-line about two months;
• 23112, 1,991, Whiting, P Bibler 154-99-1-5-8-16H3, Stockyard Creek, t5/13; cum 242K 5/18; appears to have a jump in production after being off-line about two months;
• 18758, 714, Whiting, 20711 Paulson 49 1-H, Stockyard Creek, t4/11; cum 321K 5/18; a nice well with a jump in production back in 1/16;

The P Bibler wells are tracked here.