Surge In Shale Production Has Led To A Glut Of Natural Gas In Argentina -- Will Cut Back On Conventional Drilling; Focus On Shale -- May 10, 2019

Okay, this is a very, very interesting story. One really needs to read the entire story linked at Platts to get the full story. I may have to re-do this entire post ...  in fact, forget this entire post ... just go to the linked Platts story; don't pass "go" -- just go to the story ...

Earlier today I posted a link to a story whose "analysts" said that the shale boom was about to go bust (no timeline given). Apparently Argentina did not get the memo. From Platts S&P Global (see link above), data points:

• Argentina's largest fossil fuel producer, YPF, will now focus on shale for production growth
• will shift away from conventional oil and gas
• the shift is aimed at reversing an expected decline in production this year
• YPF's production dropped almost 12% year-over-year, 1Q19
• dragged down by -- wow, look at this -- a 20% plunge in natural gas production
• the plays are mentioned 
• shale oil production is offsetting the conventional production decline
• YPF is running six shale oil pilots and expects to go into full-scale development on two of them in 2020 and 2021
• partnering with Schlumberger, Equinor, Chevron
• expects to take its Vaca Muerta rig count to 18 by the end of the year; up 14 from current level
• target: drill more than 100 horizontal wells this year 
• to handle the expected increase in shale oil output, the company is expanding the oil treatment capacity at a plant in Loma Campana to 130,000 b/d from 75,000 b/d by the end of the year, and building two others with 50,000 b/d of capacity each 

But then look at this:

With gas, the company is scaling back investment plans, which is one of the reasons for the drop in production.

A surge in gas production over the past few years, led by Vaca Muerta, has created a glut of supply, forcing YPF and other companies to slow production, and even temporarily shut wells. A setback stems from the sharp seasonal fluctuations in domestic demand, which go to more than 140 million cu m/d in the cold season from 90 million cu m/d in the October to April warm and mild seasons.

Spanish Harlem, Rebecca Pidgeon

Venezuelan Refineries Have Shut Down Over 90% Of Operations -- Argus Media -- May 10, 2019; In A World Of Kardashian, Be A Katie Melua

Link here.

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Katie Melua

Link here.

If you are having a bad day, her bio put things into perspective.

Are there really nine million bicycles in Beijing?

Nine Million Bicycles, Katie Melua
From wiki, regarding Nine Million Bicycles:

In 2005, Melua was criticised by writer and scientist Simon Singh for inaccurate lyrics referring to the size of the observable universe ("We are 12 billion light-years from the edge. That's a guess — no one can ever say it's true").

Melua and Singh met, and Melua re-recorded a tongue-in-cheek version of the song for BBC Radio 4's Today program that had been written by Singh:

"We are 13.7 billion light-years from the edge of the observable universe; that's a good estimate with well-defined error bars

and with the available information, I predict that I will always be with you."

Melua later said that she 'should have known better' as she used to be a member of the Astronomy club at school. 

Memo to self: Simon Singh needs to get a life. LOL.

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 A Most Peaceful State

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

It's funny how things play out. I should be a "nervous wreck" / "severely depressed" with all that's going on in Washington (DC); in the Mideast; in Korea; the Mueller Report; global warming; solar minima; the stock market; Venezuela; measles. A year ago, same circumstances, I would have been in a "bad state." Perhaps not suicidal but certainly it would have crossed my mind.

But about 72 hours ago, I found myself in a "peaceful state" I don't recall ever having been in before. I can only assume this is the kind of feeling people experience when successfully meditating. Tonight I am in that state again -- and on no meds, no alcohol, no nothing, just naturally at peace. It is truly bizarre. It's as if I've stepped through some imaginary looking glass. Into a "twilight zone," but the good kind.

And then, out of nowhere, in that/this state of peacefulness I stumble on this song. Over at YouTube, a listener captured this song perfectly, "in a world of Kardashian, be a Katie Melua."

And, yes, this video will be re-posted before the weekend is out. That's a fact.

Michael Shermer, TED

Eight New Permits -- May 10, 2019

Active rigs:

$61.666	5/10/2019	05/10/2018	05/10/2017	05/10/2016	05/10/2015
Active Rigs	66	60	50	28	84

Eight new permits:

• Operators: Cresent Point Energy (7); WPX
• Fields: Blue Ridge (Williams); Squaw Creek (McKenzie)
• Comments: 
• Crescent Point Energy has permits for a 7-well Chase Douglas pad straddling lots 2, 4, 5 / section 5-158-100 in Blue Ridge oil field
• WPX has a permit for a single Badger well in section 23-149-94, Squaw Creek oil field

Seven permits renewed:

• XTO (3): three Lawlar permits in McKenzie County
• Lime Rock Rcources (2): two Robert Sadowsky permits in Dunn County 
• Newfield: a Moberg Federal permit in McKenzie County
• Resource Energy Can-Am: a Grays State permit in Divide County

Coal: Making America Great -- May 10, 2019

Link here.

From the story:

Turkey's imports of coking coal rose in March, underpinned by higher volumes from the US and Canada.

Total imports edged up to 573,405t in March from 541,538t in February, considerably higher than 329,120t a year earlier.

Australia remains the largest supplier, but volumes dipped to 317,254t in March from 358,846t in the previous month.

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AI

Voice recognition for transcription still has room for improvement.

Shortly after dropping our car off for some very minor maintenance yesterday, we were telephoned to say the car was ready. I missed the call, but received the voice mail.

As part of my phone service, voice mail is also transcribed.

This is a screenshot of the voice mail I received:

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The Book Page

I can't say enough about this book. I checked it out of library to study the waterways of the New York City - New Jersey area. It is an excellent source.

But the telling of this part of the war for independence is absolutely incredible. This would certainly be worthy of a young military officer to read before going to any single service (US Army, Navy, or Air Force) command and staff school. Possibly light reading for one going to senior service school.

Valiant Ambition: George Washington, Benedict Arnold, and the Fate of the American Revolution, Nathaniel Philbrick, c. 2016.

Re-Posting -- US Shale Oil - Second Least Expensive Oil In The World -- May 10, 2019

From oilprice.com:

U.S. shale oil—which just four years ago was the world’s second most expensive oil resource—is now the second cheapest source of new oil supply globally, just behind the giant onshore oil fields in the Middle East, Rystad Energy said on Thursday.

North America’s tight oil has reduced costs over the past four-five years and has proven to be a competitive source of oil supply even when oil prices are not very high, according to the energy research firm.

Rystad Energy estimates in its latest cost of supply curve update that the average Brent Crude breakeven price for tight oil is now US$46 a barrel, just four dollars above the average $42 per barrel breakeven oil price for the giant onshore fields in Saudi Arabia and other Middle Eastern countries.

US oil: second least expensive in the world. In. The. World. But California prefers Saudi oil.

I think the biggest story line is the "minimal" difference between breakeven costs.

It would be interesting to see how Rystad determines "breakeven costs" for Saudi Arabia. $42 seems very high for actual production costs for Saudi Arabia (I would have assumed in the $5 to $10 range) and $42 is way to "cheap" for Saudi's budgetary requirements (publicly stated to be around $80).

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Break-Even Costs

In the Whiting earnings call, the CEO said the rate of return on "parent-well-uplift" is "infinite." I thought that was hyperbole and at the linked post, I suggested what he might have met.

Having thought about that, technically speaking, he is absolutely correct. The rate of return associated with that well was based on projections and actual production from the well without extra production as a result of the "halo" effect. If one continues to separate all those costs / the rate of return from "halo" production, then, yes, of course, the rate of return is infinite. That production was never anticipated; it was never factored into the original rate of return. The real question, of course, does it "move the needle"?