Eleven New Permits; Seismic Event Halts Fracking In Great Britain Temporarily -- October 26, 2018

Fitzsimmons: COP hits a grand slam. See this post for more.

• ConocoPhillips' Q3 EPS report was proof positive its strategic plan is working to perfection
• led by the company's leading Eagle Ford position, it earned over half-a-billion bucks in the Lower 48 segment
• the Alaska segment also was very strong, delivering net income of $427 million, up more than 4x yoy
• COP is one of the highest quality global E&P companies in the energy sector and is a free cash flow cow at current oil and gas prices
• for those keeping track - after another $900 million of share buybacks during the quarter - COP's outstanding share count at the end of the quarter was 1.172 billion, down 4% from year-end 2017. That means COP generated an estimated $1.62/share in free cash flow during Q3 alone. Even with another 7% increase in the quarterly dividend in the last month to $0.305/share, the quarterly dividend equates to only 18% of the free cash flow the company generated during the quarter. Point is, COP's biggest problem these days is what to do with all the cash it's generating. Answer: Share buybacks and proof that the company was not joking when in July it announced it was expanding the 2018 planned share repurchases by 50% to $3 billion and increased the total share repurchase authorization from $6 billion to $15 billion. Simply put, COP is a cash cow at current global and domestic oil and gas prices.

Also, from the Fitzsimmons contribution at SeekingAlpha, this was notable:

In responding to a question on the Q3 conference call about when Eagle Ford production would start to top-out and level off, Al Hirshberg - EVP of Production & Drilling - said:

So, there's still more room for us to run there and more room for us to grow .... we're not in the flattening out mode like we have talked about in the Bakken where we were looking to kind of hold steady. The Eagle Ford is going to continue to grow for quite some period of time. It's not the – the flat spot on is not in sight. It's not something that's going to happen next year.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what your read here or what you think you may have read here.

Breaking news: at last count, the Germans had zero (0) horizontal oil wells; the French had zero (0) horizontal wells; and the Brits had two (2) new horizontal wells permitted. Earlier this week, while the first of two UK wells was being hydraulically fractured, a micro-seismic event (0.4 on the Richter scale) was noted; the operator was alerted to proceed with "all due caution." Sometime in the last twenty-four hours, another seismic event was noted; this time, the event registered 0.76  the Richter scale. Well, let Tsvetana tell the story:

Less than two weeks after Cuadrilla resumed hydraulic fracturing in the UK for the first time in seven years, the company paused fracking at its drilling site in northwest England on Friday morning after a 0.76 on the Richter scale micro seismic event was recorded, the latest of some dozen seismic events since fracking started, but one that was above the 0.5 threshold requiring a halt.

According to regulations, in case of micro seismic events of 0.50 on the Richter scale or higher, fracking must temporarily be halted and pressure in the well reduced.

On Friday morning, a 0.76 on the Richter scale event was recorded, in an event classed as “red” in the traffic light monitoring system regulated by the Oil and Gas Authority, Cuadrilla said today, adding that “All the relevant regulators were informed without delay and we have verified that the well integrity is intact.”

Work will now pause for at least 18 hours and is expected to resume in the morning on Saturday, October 27, the company said.

Comment: I assume if much more of this goes on, the Brits will join the French and the Germans with zero (0) new horizontal wells.

This is interesting. In the US, most of us like to believe that seismic events associatied with fracking are due to injecting produced water / brine produced from fracked wells back into salt water disposal wells. It has been my understanding that fracking itself was not associated with seismic events. I believe Oklahoma has had the most experience with this issue.

If I recall correctly, at least one seismic event has been associated with oil and gas activity in North Dakota but I thought it was believed to be associated with injecting produced water into a salt water disposal well. I've long forgotten the specifics. I think it's been over a year since I've read any articles coming out of Oklahoma regarding seismic events. However, the first hit returned by a google search just now was to a Business Insider article dated February 2, 2018, and yes, the correlation was with disposing produced water into saltwater disposal wells and not due to fracking directly.

*************************************

Back to the Bakken

Active rigs:

$67.49↑	10/26/2018	10/26/2017	10/26/2016	10/26/2015	10/26/2014
Active Rigs	67	53	36	68	194

Eleven new permits:

• Operators: WPX (6); Kraken Operating (3); Lime Rock Resources (2)
• Fields: Spotted Horn (McKenzie); Lone Tree Lake (Williams); Murphy Creek (Dunn)
• Comments: WPX has permits for a six-well Bird Bear / Hackberry pad in 35-150-94; Kraken Operating has permits for a three-well Ruffing pad in 22-157-99; and Lime Rock Resources has permits for a 2-well a "Twist and Neal" pad in lot 2, section 4-143-95; 

Thirteen permits renewed:

• EOG (6): six Hawkeye permits in McKenzie County
• Bruin E&P Operating (5): two Johnson permits; one Sylte permit, two Helstad permits, all in Williams County
• QEP (2): two Vegas permits, both in McKenzie County

Two permits canceled:

• Oasis: a Hendricks permit, and a McFarland Federal permit, both in Williams County

Six producing wells (DUCs) reported as completed:

• 33795, 138, Crescent Point Energy, CPEUSC Nelson 8-30-31-157N-99W TFH, Lone Tree Lake, t9/18; cum 5K after 14 days;
• 33789, 385, Crescent Point Energy, CPEUSC Nelson 5-30-31-157N-99W MBH, Lone Tree Lake, t9/18; cum 9K after 14 days;
• 33793, 158, Crescent Point Energy, CPEUSC Nelson 4-30-31-157N-99W MBH, Lone Tree Lake, t9/18; cum 8K after 14 days;
• 31419, 2,009, Rimrock Oil & Gas, Moccasin Creek 16-26-27-13H, Moccasin Creek, t6/18; cum 64K 8/18;
• 31420, 1,396, Rimrock Oil & Gas, Moccasin Creek 16-26-27-12H3, Moccasin Creek, t6/18; cum 70K 8/18;
• 32630, 2,018, Rimrock Oil & Gas, Moccasin Creek 16-26-27-13H3U, Moccasin Creek , t6/18; cum 69K 8/18; ("H3" suggests a "third bench" well, but in fact this is a Three Forks first bench; the earlier Moccasin Creek wells were KOG permits; this was a Whiting permit)
• Note: #22462, a middle Bakken well, is on this same 4-well pad; it is back on-line; no jump in production; 

The Market, Energy, And Political Page, Part 2, T+67 -- October 26, 2018

The Deep State: Let's see. In less than a week, "they" can capture the guy who apparently has been sending hoax mail bombs, but yet, two years later, with thousands of high-profile, high-paid lawyers, and the full weight of multiple government agencies, no smoking gun reported regarding Russian collu.......gotta go.

Good luck to all.

The Energizer bunny: Never sleeps and excels at multi-tasking despite his young age:

The president was probably 1) getting the briefing on the bomber, 2) reviewing the notes for his next meeting, and then ... 3) takes the time to tweet.

Spam: due to spam, the "comments" section has been turned off. I plan to turn "comments" capability back on next week.

The Manchin-Collins defense: from CNN --

Senator Joe Manchin, a West Virginia Democrat, and Senator Susan Collins, a Republican from Maine, said they believed Ford when she said she had been sexually assaulted but that they didn't think there was corroboration to prove it was Kavanaugh. 

That will likely be the MbS defense: the Saudis will admit that the Khashoggi murder was premeditated but they will argue there is not enough evidence to prove the Crown Prince was involved. Good. That's cleared up.  

*******************************

Snarky

If one can ignore four really "bad" things about this film, it's a great film:

Breakfast At Tiffany's

Follow-Up On Natural Gas Prices In Pacific Northwest After Pipeline Explosion -- October 26, 2018

See this link:

• BC asks TransCanada for help;

At the link, I asked:

• One wonders if there could be a domino effect on US west coast. 

And, now, just days later, we have the answer:

The map:

It's Not Over Until It's Over -- The "Ordinary High Water Mark" Study -- October 26, 2018

Link at The Bismarck Tribune.

The Board of University and School Lands voted unanimously Thursday to contract with an engineering firm to do additional work related to a study of the Missouri River boundary, a process expected to take several months.

A new study of the ordinary high water mark of the Missouri River will require the North Dakota Department of Trust Lands to issue refunds or adjustments to bonus and royalty payments.

But Land Commissioner Jodi Smith said the study adopted last month by the North Dakota Industrial Commission does not give the commission enough information to proceed with those payments. The report does not allocate acreage above or below the ordinary high water mark.

Sounds like probate court, just at a higher level. 

I don't have a tag for this story. I never thought there would be so many articles on this.

Riparian. I do have a tag for "riparian." LOL.

The Hanford Glass Plant -- Now I Understand -- October 26, 2018

Link here. A regional (?) story picked up by the British tabloids.

Employees at a nuclear plant (sic) have been told to "take cover immediately" following an incident involving plutonium and uranium tunnels. 

A text message was sent to workers at the Hanford Vit Plant in Washington around 6am local time - or around 2pm in the UK. 

The message reportedly read: "WTP Alert: The WTP Site is in Take Cover. Go to the closest Take Cover facility now. Avoid eating or drinking until further notice." "Await further instructions." –– ADVERTISEMENT –– NBC reported the warning was issued as a precaution to workers in the 200 East Area of Hanford after steam was observed coming from Plutonium/Uranium Extraction Facility (PUREX) Tunnel 2 during a tunnel filling operations. 

There was no indication of a release of hazardous material.

A nuclear plant? Yes, but not exactly what I was thinking. A nuclear waste treatment plant. See this link.

In southeastern Washington state, Bechtel National, Inc. is designing, constructing, and commissioning the world’s largest radioactive waste treatment plant for the U.S. Department of Energy (DOE).

When complete, the Hanford Tank Waste Treatment and Immobilization Plant, also known as the Vit Plant, will process and stabilize million gallons of radioactive and chemical waste currently stored at the Hanford Site.

The 56 million gallons of waste are a byproduct of national defense plutonium-production efforts during World War II and the Cold War era. It resides in 177 aging underground tanks. Of these, more than 60 have leaked, contaminating the subsurface and threatening the nearby Columbia River.

The plant will use vitrification technology to stabilize the waste. Vitrification involves blending the waste with glass-forming materials and heating it to 2,100 degrees Fahrenheit (1,149 degrees Celsius). The molten mixture is poured into stainless steel canisters to cool and solidify. In this glass form, the waste is stable and impervious to the environment, and its radioactivity will safely dissipate over hundreds to thousands of years.

The vitrification process has been used successfully at other radioactive waste clean-up sites. But it has never been attempted at the scale of or on waste as complex as that stored at Hanford. The Vit Plant is a feat of engineering and construction at an unprecedented level. It is the largest undertaking of its kind and one of DOE’s most technically challenging clean-up projects.

The Vit Plant is the first nuclear facility to be built in the U.S. in decades. The construction site spans 65 acres and includes four major nuclear facilities – Pretreatment, Low-Activity Waste Vitrification, High-Level Waste Vitrification and the Analytical Laboratory. The largest of the structures is the Pretreatment Facility. It has a footprint equivalent to 1.5 football fields and will be 12 stories tall. Operations, maintenance and infrastructure facilities complete the complex. Overall, the Vit Plant requires more than 260,000 cubic yards of concrete, 40,000 tons of structural steel, and nearly 1 million feet of piping.

***********************************

Dallas Museum Of Art

Vitrine.

See this post for this link:

• the Wittgenstein Vitrine at the Dallas Museum of Art, February 26, 2016