Monday, July 15, 2019

DUCs In The Permian Continue To Build -- July 15, 2019

Someone else (Z4 Research, in this case) is following the number of DUCs also. From earlier this afternoon (July 15, 2019):
Permian growth is expected to be 34,000 bopd above July (last month July was to be up 55,000). Meanwhile Permian DUCs continued to build through June (latest data) at about the same rate they have been (up 42 this month) while overall oil shale play DUCs fell 41 in June.
Tag: DUCs.

Bakken DUCs are tracked here. The May, 2019, data (Director's Cut) will be released tomorrow.

Let Me Go My Merry Way, Charlie Rich

It's hard to believe this song was actually written by Charlie Rich -- it sounds like a much older song, a folk song from the Deep South, from a different era. Or perhaps taken from an old spiritual. I don't know. But it sounds eerily familiar.

Later, a day or so later: this song was driving me nuts. I knew I had heard it somewhere before .... a reader sent me a suggestion ...

It took awhile but I finally connected the dots. This song was driving me nuts. I knew I had heard it before.

This is the song that drove me nuts:


A reader suggested:


which was close, of the same genre, but it wasn't it.

Then, after listening to the song that was driving me nuts, listening to it over and over, I realized with each re-listening I was only a few neurons from making the connection.

Finally, I got it. I found the song. After a dozen times playing a few bars during the middle of the song, I realized I had heard the song before.

But where?

Finally, another several times listening to the song, and then it came to me, a .... movie ... a movie .. a Disney movie perhaps?

And the the last neuron connected. I had the song. You may or may not agree, but the tune, the male voice, even the message of the lyrics -- it all fit ..

... you can listen to the Charlie Rich song a few times, ...
... and then listen to Randy Newman's "You Got A Friend In Me" from Toy Story 1
It doesn't matter whether you agree with me that the two songs sound alike but for me the mystery is solved. I can go to bed tonight without this song driving me nuts. 

Agriculture -- Part 5, July 15, 2019

Updates

August 16, 2019: 2Q19 earnings -- 
  • net income of $867M in the fiscal third quarter, or $2.71 per share, compared with $$849M, or $2.59 per share a year ago
  • worldwide net sales decreased 3% Y/Y to $10B
  • segment sales: 
    • equipment -3%; 
    • agriculture & Turf. -6%;
    • construction & Forestry +1%. 
  • "Results reflected the high degree of uncertainty that continues to overshadow the agricultural sector," CEO Samuel Allen declared. "Concerns about export-market access, near-term demand for commodities such as soybeans, and overall crop conditions, have caused many farmers to postpone major equipment purchases." 
  • lowered outlook again: net sales are now projected to increase by about 4% (from a prior 5% and 7%) for fiscal 2019, with net income attributable to the company forecast to be about $3.2B (from a previous $3.3B and $3.6B).
Original Post
 
Wow, wow, wow, earlier today I posted this:
Look at this, DE: trading near its 52-week high, is up over 1% in early morning trading

Which reminds me, the China-US tariff tiff --

  • when did you last see an article on how expensive stuff is getting because of the China-US tariff war; you haven't; because it hasn't happened; 
  • generally speaking Deere's prospects can be directly correlated with how farmers are doing, or how analysts think farmers will do 
    • April 15, 2019:  170
    • May 13 2019: 135
    • July 15, 2019: 167
  • behind the scenes, my hunch is that Trump-Xi are making a lot of US agricultural deals
  • corn prices are going to come in really high later this year
  • if I recall correctly, Trump administration blinked on biofuel quotas (but don't quote me on that)
  • and, headline over at Yahoo!Finance: China's economy grows at slowest pace since 1990s (this could spur China to get serious about negotiating with Trump
Disclaimer: this is not an investment site. Do not make any investment, job, career, travel, relationship, or financial decisions based on what you read here or think you may have read here.

So, this morning I write this long note about Deere. Now tonight I notice that Tractor Supply Company (TSCO) is up over 3% in overnight futures. Checking a bit deeper it turns out that Tractor Supply came very close to hitting a 52-week high today, an intra-day high of $113.14, vs a 52-week high of $113.54. And now tonight, trading 3% higher, trading at $115.00. Very, very interesting. First Deere, then Tractor Supply. Dare we look at any others? Not tonight.

Notes From All Over -- Part 4, July 15, 2019

ICYMI: the NDIC Director's Cut (May, 2019, production data) was delayed; it is now scheduled to be released tomorrow. The Bakken Expo in Bismarck opens tomorrow, I believe. My hunch is that officials may want to use the most recent production data in their remarks. Look for at least one production record to have been broken in May, 2019. Wow, I love to blog about the Bakken.

The Bakken Expo: after opening remarks by the event organizers, Governor Brent Sanford of North Dakota will speak for 30 minutes. 

Disclaimer: I am inappropriately exuberant about the Bakken. 

NDIC:I've often said North Dakota / NDIC seems to be the most transparent regulator in the country. Regardless of what you think about California politics and its policies regarding Big Oil, the actual "transparency" of its regulatory commission is incredibly bad -- or the governor is incredibly inept.

The Desert Sun (USA Today network) reported that fracking permits in California have doubled  since the new governor entered office and he was completely unaware of that. With everything on his plate, I wouldn't expect the governor himself to track oil permits but certainly he would have a staffer that would check in on that at least once a month. Good grief. So, either it's extremely difficult to track oil and gas permits in California or the governor is incredibly inept. Whatever. This note has little to do with California and everything to do with appreciating how transparent and the NDIC is and how user-friendly its sites are.

CO2: China greenhouse gas emissions soared 50% from 2005 - 2014, inclusive. But Germany is doing its part to combat that by going coal-free.

Boeing: there was another article out today about Boeing / MAX 737 -- things not looking good and the extent to which Boeing is holding back the Dow. Having said that, all three indices apparently set new records today. Making America great.

They're reading the blog: earlier today, in a minor note, I noted that no one has talked higher consumer prices due to Trump tariffs on Chinese goods. There was lots of talk about that happening but to date there have been few examples. Well, today, over at Yahoo!Finance, they have story pushed by the AAFA CEO that Amerians will see higher prices this fall when they shop for back-to-school clothes. We'll see. If states are worried about possible high cost of clothing this fall due to tariffs, the states could declare tax-free "back-to-school" shopping for a few weekends. Texas does that every autumn: offsets any price increases and gets folks out to the malls. As for seeing increased prices due to tariffs, I doubt it. Trump/Xi agreed to suspend any new tariffs while negotiations continue.

USAA - Schwab: Schwab in talks to buy USAA's wealth management division for $2 billion. We just talked about this the other day. USAA has roughly $100 billion in wealth management assets. If Schwab pulls this off, this is a huge story. Schwab already has more than $3.5 trillion in client assets. To put that in context, Merrill Edge was reported to have a paltry $200 billion under management back in the fall of 2018. Schwab acquiring USAA wealth management division would be in the same ballpark as acquiring Merrill Lynch.

MRO With Three New Permits In The Very Prolific Bailey Oil Field -- July 15, 2019

Active rigs:

$59.317/15/201907/15/201807/15/201707/15/201607/15/2015
Active Rigs5867582973

Three new permits (#36735 - #36737, inclusive):
  • Operator: MRO
  • Field: Bailey (Dunn County)
  • Comments: MRO has permits for a 3-well Ritter/Emil/Kloster pad in section 12=146-94, Bailey oil field; as active as the Bailey oil field is, this section only has three horizontals running through it, including a section (line) well:
    • #33535, 6.204, MRO, Arkin 44-12TFH, Bailey, 4 sections, t1/18; cum 330K 5/19; see production profile below, pay particular attention to first 21 days of production;
    • #16993, 125, MRO, Buehner 44-12, Bailey, t10/08; cum 226K 5/19; came off line in 5/19; was taken off line when #33535 was fracked; had significant jump in production when it was brought back on line 5/18; see production profile below;
    • 16654, 311, MRO, Buehner 34-12H, Bailey, t8/07; cum 191K 5/19; lousy production since 2018; off line first four months of 2019; back on line for 9 days in 5/19;
Twelve permits renewed
  • Crescent Point Energy (4): four CPEUSC Jean permits, all in Williams County
  • Enerplus (2): a Huntsman permit and a Blackwidow permit, both in Dunn County
  • BR (2): two Remington permits, both in McKenzie County
  • Texakota: a Hemsing permit in Williams County
  • CLR: a Juneau permit in Williams County
  • Liberty Resources: a Herseth permit in Burke County
  • EOG: a Burke permit in Mountrail County
 *******************************************

#16993, selected production when neighboring well was fracked/tested 1/18:
BAKKEN7-20183160285937362035982266798
BAKKEN6-201830578256524868442829101005
BAKKEN5-2018131971180933041513603674
BAKKEN4-2018002220000
BAKKEN3-20180000000
BAKKEN2-20180000000
BAKKEN1-20180000000
BAKKEN12-20171520344037
BAKKEN11-2017144354865839627417
BAKKEN10-201731859909250120186861
BAKKEN9-201730845794150837214420
BAKKEN8-201731865871110792315288
BAKKEN7-201731845814124804439181

#33535:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20193175097428107709053836658
BAKKEN4-20193062516188763384647619312
BAKKEN3-201930575563156337839860871825
BAKKEN2-201928109841066275401236598731639
BAKKEN1-20193114808146061016918010168080
BAKKEN12-201811509051364386393735320
BAKKEN11-20182681778220812612845121540
BAKKEN10-20183113470134431004918987179270
BAKKEN9-2018301340213563109561721015992169
BAKKEN8-20183117882177711321221963189321546
BAKKEN7-20183120109201091775324387209571811
BAKKEN6-2018302487724753206822298420948180
BAKKEN5-20183124053240962185624700210801853
BAKKEN4-20183031906320232964930733255781489
BAKKEN3-20182529123290222561224033185032172
BAKKEN2-20181735695361703535523990126537313
BAKKEN1-201821611866046217719382181429117169

Headline Not Particularly Helpful -- July 15, 2019

Updates

July 20, 2019: a breath of fresh air. After the misleading headline and poor writing regarding a recent "pipeline leak/spill" (see original post), The Bismarck Tribune did a thousand-percent better with report of a second, similar leak, again east of Williston. Story here. Marked improvements:
  • headline clearly states it was "produced water," not oil
  • the lede provides very good description of location in general (3 miles southwest of Epping, and specifically (pastureland)
  • in the lede includes owner of the pipeline
  • leads with amount of leak in barrels (which we like but is not the industry standard) and then provides the industry standard (in gallons)
  • really, really good reporting with perfect headline
Original Post
 
The Bismarck Tribune has a headline today: "Williams County pipeline leak spills into Missouri River tributary." Two things the headline conveniently left out:
  • it was a "produced water" pipeline, not an oil pipeline (but yes, produced water probably has some oil in it)
  • the name of the tributary (all we got was "about 20 miles east of Williston; in this day and age, someone would have the exact GPS coordinates)
It appears the leak occurred "on/in" the ground and then an unknown amount of the produced water made its way to a tributary of the Missouri River; this is much different than a pipeline transiting (above, below, or through a waterway).

I'm glad these stories still make headlines: it tells me such spills are incredibly rare, to still get a headline above the fold on the front page.

This particular pipeline was owned by a midstream company involved in wastewater disposal; it was reported the same day it happened; and, regulators are already in place to observe the clean-up and mitigation.

My hunch: it will be a non-story by tomorrow, and we will be fortunate to get some type of follow-up through the Tribune