The Million Dollar Way (The Bakken Oil Blog)

Thursday, May 16, 2019

Five New Permits; WTI Trading Right At $63 -- May 16, 2019

WTI: things can't be too bad in the Mideast; WTI did go up 1.6%; up over a dollar, now trading at $63.04.

Active rigs:

$63.04	5/16/2019	05/16/2018	05/16/2017	05/16/2016	05/16/2015
Active Rigs	65	59	50	28	83

Five new permits:

Operators: CLR (4); Crescent Point Energy
Fields: Murphy Creek (Dunn County), Rainbow (Williams)
Comments:

CLR has permits for a 4-wellJack pad in lot 1/section 4-145-95, Murphy Creek
Crescent Point Energy has a permit for a single CPEUSC Dorothy well in section 30-158-98, Rainbow oil field

Five producing wells (DUCs) reported as completed:

34049, 4,527, MRO, State Kreiger 14-36H, Bailey, t4/19; cum 185K 4/20; section 36-146-94;
34048, 2,849, MRO, State Kelling 14-36TFH, Bailey, t4/19; cum 104K 4/20; section 36-146-94;
34050, 3,562, MRO, State Oster 14-36TFH, Bailey, t4/19; cum 75K 4/19; seemed to struggle early on; section 36-146-94;
34044, 4,519, MRO, Rafter 44-35H, Bailey, t4/19; cum 179K 4/20; section 35-146-94;
34046, 3,091, MRO, Two Bar 34-55H, Bailey, t4/19; cum 152K 4/20; section 35-146-94;

neighboring wells:

16736, just returned to production; see recent production profile below; Bill Connolly; back on line 3/19;
25484, off line; remains off lien 4/20;
25482, off line for only two months, early 2019; back on line 4/19;

A neighboring well:

16736, 377, MRO, Bill Connolly 21-25H, Bailey, t1/08; cum 233K 3/19; recent production; note, 4,502 bbls over 5 ays extrapolates to 27,000 bbls over 30 days; see first comment -- was re-fracked (part of the MRO re-fracking program in the Bailey ...

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2019	5	4502	3755	20278	3154	557	2030
BAKKEN	2-2019	0	0	0	0	0	0	0
BAKKEN	1-2019	0	0	0	0	0	0	0
BAKKEN	12-2018	0	0	0	0	0	0	0
BAKKEN	11-2018	1	23	440	3	19	6	9
BAKKEN	10-2018	31	844	680	243	786	420	128
BAKKEN	9-2018	30	817	910	143	766	478	58

Off For The Rest Of The Day -- Going Biking Before The Storm Hits -- May 16, 2019

This is mid-May, isn't it?

The Kennedy Klan, no doubt, is packing up, getting ready to head west to go skiing. Good for them.

Did Jeff Bezos Unwittingly Dodge A Silver Bullet? -- Thank-You Letter To Occasional-Cortex? -- May 16, 2019

NYISO.

This most incredible story is followed here.

Link here to banner story below.

One wonders.

Corporations like Amazon, and CEOs like Jeff Bezos seldom make decisions based on emotion, or so one would hope. Most of us thought that Jeff Bezos pulled the Amazon HQ2 project out of Long Island over a tiff between him and Occasional-Cortex and the Democratic leadership in Albany, NY.

Now, I'm not so sure.

Was this the real reason Jeff Bezos decided to "get out of Dodge," as they say?

Two things.

Jeff Bezos and his people would have had to know about high electricity costs in NYC and Long Island.

What's the most expensive "thing" a high tech company has? People. Okay. What's the second most expensive "thing"? Electricity. After that, everything else.

So, even before the "NY-Denies-Pipeline-Permit" story, Jeff Bezos knew that energy and the cost of electricity was going to be a huge issue. He probably never imagined that access to electricity was going to be an issue. Or access to natural gas.

His HQ2 might not have required any natural gas; it could have all been managed with electricity, but all those new employees buying homes; all those new retail stores opening in Long Island -- like restaurants, etc -- many will require natural gas hook-ups and all will require electricity -- produced by natural-gas plants served by the pipeline.

So two things:

Jeff Bezos already knew about the soaring electricity bills in NY
was Jeff Bezos aware of the natural gas pipeline expansion issue, also?

Occasional-Cortez is looking more and more brilliant every day. Jeff Bezos dodged a silver bullet.

He needs to send a thank-you note to Occasional-Cortex.

By the way, on global warming, Occasional-Cortex has already won the debate with Boring Biden. She is clearly correct; he is so wrong. Perhaps more on this later.

Warren Buffett, Vicki Hollub, OXY, Anadarko, And All That Jazz -- May 16, 2019

Updates

February 15, 2020: idle rambling on a Saturday night.

August 7, 2019: financing.

July 22, 2019: Buffett's deal --

Buffett will receive an 8% return on his preferred shares to finance the deal plus warrants to buy common shares, a similar structure the financier used before in taking stakes in Bank of America Corp. and Goldman Sachs Group Inc. Icahn claimed that at least one large investor that he knows of would have provided the financing without the warrants.

The financing deal: $10 billion. Buffet getting $800 million / year on this deal? [Ten year bond? about 2%.]

June 10, 2019: Rigzone analysis.

10,000 drilling sites
pipeline assets: $8 billion
Algerian assets: $9 billion
price of Anadarko: $40 billion
$40 billion - $20 billion (asset sales) = $20 billion
$20 billion / 10,000 wells = $2 million / well
EURs of 1 million bbls @ $50/bbl = $50 million / well

June 4, 2019: update on debt concerns here.

Original Post

Anyone who can convince Warren Buffett to spend $10 billion on shale in a 90-minute meeting has my vote.

It would be interesting to see the details. Buffett is generally pretty shrewd. My hunch: he gets his $10 billion back before OXY shareholders see their gains.

Re-posting:

OXY - Anadarko

Also from twitter: OXY-Anadarko: FT link here; data points --

$56 billion gamble
on the hot seat: Vicki Hollub
three years on the job as CEO of OXY
most ambitious move of her career
Anadarko: assets around the world, from Texas to Mozambique
will double the size of Occidental
will also saddle OXY with debts of around $50 billion
OXY's shares dropped to a 10-year low
this is the deal: after 15 years into the shale revolution, investors across the US oil and gas industry want it to start paying off for them
US acts like a "swing producer": a source of supply that can respond within months
US shale: buffers Mideast tensions

From the linked article:

To win Anadarko, Occidental had to see off its larger rival Chevron, which took some swift manoeuvring, while the two companies had competing bids on the table. Ms Hollub flew to Omaha, Nebraska for a 90-minute meeting with Warren Buffett on April 28, securing a $10bn investment from Berkshire Hathaway that allowed her to rejig Occidental’s offer to include more cash, avoiding the need to put the deal to a vote of her own shareholders.

Long, long article. Much more at the link. Archived.

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Screenshots from the FT article linked above on the OXY-Anadarko story:

From Twitter This Morning -- May 16, 2019

Twitter today:

Venezula -- tick, tick, tick -- running out of motor fuel
Brent crude oil futures rise more than a dollar in early trading: as high as $72.80; now at $72.89

WTI, right now, 9:55 a.m. CT, May 16, 2019: up $1.06, up 1.71%, trading at $63.08; whoo-hoo!
California gasoline tied directly to Brent (which trades about $10/bbl higher than WTI)
higher Brent: due to fundamentals (supply/demand) or saber-rattling?

long winter, severe winter: delaying housing construction season; negatively impacted PVC; PVC now inexpensive; could spur home building; spur consumer confidence
Argus Media launches "new face" on twitter
US crude oil reaching new destinations around the world as Chinese buying slowed
richest county in North Dakota refuses to address school needs -- again
those attacks on Saudi pipelines? funded by Iran; carried out by the Houthis
crudehead: refining margins are going to get better and better
Trump said to be annoyed with advisors pushing for armed conflict with Iran; Trump is said to be saying those advisors are getting way ahead of themselves
Platts' take on rising US crude oil inventories: due to rising imports; imports did rise (and they rose significantly, but I have trouble believing that's the reason for rising US crude oil inventories -- rising imports). If so, more heavy oil needed to balance all that light oil showing up at the refineries; and, oh, by the way, now that the winter/summer switch is complete; maintenance is complete, refining capacity will increase from current 90% -- meaning, yes, refiners need to increase heavy oil imports -- so, I've talked myself into agreeing with Platts
and, last but not least, the Houston Ship Channel re-opened to two-way traffic after wreckage removed; this "problem" was solved in almost record time; wow, I'm glad the USACE was not involved; they would still be putting together a group to study the wreck; point fingers

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