A Reminder: Kraken Acquired Kaiser-Francis Wells In Mountrail County -- September 5, 2019

From 2018: Kaiser-Francis transfers its Mountrail wells to Kraken.

Egg On My Face -- September 5, 2019

Yesterday, I wrote:

Big energy story from yesterday. Just happened to catch it. Haven't seen it yet anywhere on the net (without googling). I'm going to wait an hour or so, and then if the story doesn't pop up I'll google it.

That "big energy story"?

Must have been bogus.

The "tip" came from a Starbucks "source." I was unable to find the story after an exhaustive search which suggests the "tip" was wrong.

The Starbucks "source" said that on Tuesday, September 3, 2019, the "IMO" voted unanimously not to extend the IMO 2020 rules. That, the "source" told me was the reason oil shot up in price. LOL. I have "egg" on my face. No story.

But, I told the "source," that if his story were true, there were be ways around it. First, there would be waivers, but even more so, some countries would simply ignore this European mandate.

And here it is, "The First County to Abandon IMO 2020," oilprice.com, via Yahoo!Finance:

Indonesia announced last week that it would not enforce the upcoming IMO 2020 rule requiring marine vessels to burn bunker fuels containing no more than 0.5 percent sulfur on its domestic shipping fleet.

The country thereby became the first “rat” to jump from the IMO ship. Indonesia’s actions may have a noticeable impact on at least the Asian bunker fuel market.

According to Reuters, the country made its decision in reaction to the high cost of new, cleaner fuels.

Instead of complying with the IMO mandate, Indonesian-flagged vessels can keep burning high-sulfur fuels within Indonesian markets. Reuters added that this policy would continue until the domestic supply of low-sulfur fuel increases. As one official stated, “We always put forward national interest as consideration [sic] in making the decision.”

I'm convinced every Asian country will follow suit.

So, what is IMO?

It is a "specialised agency of the United Nations."

My hunch is that IMO 2020 will be extended / relaxed / waivered on a case-by-case basis. If not, Asia wins, Europe loses, and the US falls somewhere in the middle.

Idle Comment -- September 5, 2019

I look at every well that comes off the confidential list every day; I've been posting for a dozen years or so, and it is absolutely remarkable how good the wells are getting in the Bakken, and on top of that, the number of multi-well pads keeps growing, and the number of wells on a multi-well pad continues to grow.

Someone recently pointed out that the NDIC decision some years ago to make the standard drilling unit 1280 acres was absolutely a stoke of genius. On top of that, the NDIC seems to have a handle on managing conflicts over "who owns what" when deciding to whom a certain permit might be awarded.

This is not atypical. I just looked at the geography of the area immediately around a well that came off the confidential list today:

• to the north: eleven wells within one mile, all of them producing; eight of them relatively new;
• on the same pad as the new well coming off confidential list today: four wells; this was the first of the four wells to come off the confidential list
• to the south, about a half-mile away: a brand new permitted 6-well pad; none of these wells spudded yet;
• to the south, about a mile away: an older producing middle Bakken well
• Total: about 17 wells along a 2-mile stretch, and the area is clearly "under-developed"

I haven't heard anyone complain about the "decline rate" in the Bakken in a long, long time. For one thing, it turns out the "decline rate" does not follow Hubbert's theory.

At less than $60, operators are still focused on Tier 1 middle Bakken with some operators also targeting more upper bench Three Forks wells. But if WTI were to move higher, there would be more movement into Tier 2 areas. The upper bench Three Forks lags well behind where it could be and "we" haven't even started with the lower benches in Tier 1 to say nothing of Tier 2.

And every well fracked before 2012 will have to be re-fracked at some point.

I find it amazing what operators are doing with 40 - 60 active rigs (the actual number of active rigs, depends on the definition of active rigs).

Weekly EIA US Petroleum Report -- September 5, 2019

EIA weekly petroleum report, link here:

• US crude oil inventory decreased by 4.8 million bbls; on top of a huge decline last week; huge draw, considering....
• WTI after report came out: up 2.17%; up $1.22/bbl; trading at $57.48
• US crude oil inventories at 423.0 million bbls; at the five-year average for this time of year
• gasoline demand graph will show up later this afternoon
• refineries at 94.8% capacity, about average
• total products supplied over last four-week period was up 1.6% from same period last year

Imports: US crude oil imports from Saudi Arabia now less than 350,000 bopd.

Re-balancing:

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 6	January 4, 2019	0.0	441.4
Week 7	January 9, 2019	-1.7	439.7
Week 8	January 16, 2019	-2.7	437.1
Week 9	January 24, 2019	8.0	445.0
Week 10	January 31, 2019	0.9	445.9
Week 11	February 6, 2019	1.3	447.2
Week 12	February 13, 2019	3.6	450.8
Week 13	February 21, 2019	3.7	454.5
Week 14	February 27, 2019	-8.6	445.9
Week 15	March 6, 2019	7.1	452.9
Week 16	March 13, 2019	-3.9	449.1
Week 17	March 20, 2019	-9.6	439.5
Week 18	March 27, 2019	2.8	442.3
Week 19	April 3, 2019	7.2	449.5
Week 20	April 10, 2019	7.0	456.5
Week 21	April 17, 2019	-1.4	455.2
Week 22	April 24, 2019	5.5	460.1
Week 23	May 1, 2019	9.9	470.6
Week 24	May 8, 2019	-4.0	466.6
Week 25	May 15, 2019	5.4	472.0
Week 26	May 22, 2019	4.7	476.8
Week 27	May 30, 2019	-0.3	476.5
Week 28	June 5, 2019	6.8	483.3
Week 29	June 12, 2019	2.2	485.5
Week 30	June 19, 2019	-3.1	482.4
Week 31	June 26, 2019	-12.8	469.6
Week 32	July 3, 2019	-1.1	468.5
Week 33	July 10, 2019	-9.5	459.0
Week 34	July 17, 2019	-3.1	455.9
Week 35	July 24, 2019	-10.8	445.1
Week 36	July 31, 2019	-8.5	436.5
Week 37	August 7, 2019	2.4	438.9
Week 38	August 14, 2019	1.6	440.5
Week 29	August 21, 2019	-2.7	437.8
Week 30	August 28, 2019	-10.0	427.8
Week 31	September 5, 2019	-4.8	423.0

EV Sales Data -- August, 2019

Spreadsheet is starting to fill in.

Link here.

Note: the site says there are problems with accessing the site. It took longer than usual for the spreadsheet to download.

Tesla deliveries are estimates.

Bellwether - Tesla:

• Model 3: from 21,00 in June, to 13,450 in July, and now, 13,150 in August (we've talked about this before -- either Tesla no longer has a waiting list, or Tesla logistics is really, really screwed up)
• Model X: from 2,725 in June (at that rate, only a small niche), down to 1,825 in August
• Model S, the inexpensive model: from 1,750 in June, to 1,050 in August

And remember, from yesterday, August was a huge month for automotive companies. Perhaps one of the best months since 2014, or thereabouts.

So, who else is selling EVs?

• the hybrid, Toyota Prius Prime, down from 2,950 last month to 2,500 in August -- again, one of the hottest car sales months in years, and Prius Prime shows a sales decline

Nissan Leaf: runs about 1,200 units / month when things are going well

BMW i8: 90 units in August, 2019 which pretty much tells me all I need to know about the luxury EV market.

And with that, off the internet for awhile. This is like watching paint dry. Good luck to all.