This is very much in agreement with what Saudi spokesmen seemed to have been saying all along. I assume if Saudi wishes to create a glut, all they have to do is increase production, and then we can really watch the price of oil fall.SummaryThe phrase "oil glut," as it relates to the current situation in the market, has been used by financial and general interest media in the past two months so frequently that one may get an impression that it represents a generally accepted explanation of the recent oil price collapse. At a closer examination, one might discover that the term conveys a somewhat distorted picture of the current dynamics in the oil market.
- The severity of the oil price drop appears to be in disconnect from some “supply glut” indicators that remain at moderate levels.
- The price decline does not appear to be caused by an inventory pile up throughout the delivery and storage chain but rather by the lack of supply or demand elasticity.
- The current imbalance between supply and demand appears to be much “softer” than in the 2008-2009 correction and may be easier to address.
Sunday, December 21, 2014
Is The Oil Glut A Myth -- Zeits -- Seeking Alpha -- December 21, 2014
Over at SeekingAlpha, the article summary and lede:
The Red Queen Is Running Faster And Faster -- Average Production Per Well Per Day -- December 21, 2014; ObamaCare Re-Enrollment Apparently Not Required; Enrollees Will Be Automatically Re-Enrolled
The following data, through 2010, was posted back on January 11, 2012. I was curious what the numbers show now. These are the updated annual NDIC numbers -- year, daily oil per well (annual production) -- # of wells (change from previous year):
On another note, the Peak Oil folks just cannot give up. For the archives: it is now confirmed, the IPs of new Bakken wells are declining. It should be noted that the study only went back to November, 2013. The author if of the belief that the "initial 24-hour production number" strongly correlates with how well that well will do. I wouldn't give the author's conclusions much credence. It should be noted that there at least three new issues affecting production: a) new flaring rules; b) new conditioning rules; c) the plummet in oil prices. These issues are relatively new but oil companies have seen them coming (at least the first two) for several months now. I take the study with a grain of salt. That, and $1.89, will get you a Starbucks coffee.
Back on December 3, 2014, I posted:
- 2013: 83 (314 million) -- 10,301 wells (change: 1,932 wells)
- 2012: 80 (243 million) -- 8,369 wells (change: 1,808 wells)
- 2011: 64 (153 million) -- 6,561 wells (change: 1,261 wells)
- 2010: 58 (113 million) -- 5,300 wells (change: 700 wells)
- 2009: 48 (80 million) -- 4,600 wells (change: 400 wells)
- 2008: 41 (63 million) -- 4,200 wells (change: 400 wells)
- 2007: 33 (45 million) -- 3,800 wells (change: 300 wells) -- the first year of the Bakken boom
- 2006: 31 (40 million) -- 3,500 wells
- 2005: 29 (36 million) -- 3,400 wells
- 2004: 26 (31 million) -- 3,400 wells
- 2003: 24 (29 million) -- 3,400 wells
- 2000: 27 (33 million) -- 3,300 wells
- 1990: 28 (37million) -- 3,600 wells
- 1980: 46 (40 million) -- 2,400 wells
- 1970: 37 (22 million) -- 1,600 wells
- 1969: 37 (23 million) -- 1,700 wells
- 1960: 39 (22 million) -- 1,500 wells
- 1951: 72 (26,196 bbls) -- one (1) well, by the way
On another note, the Peak Oil folks just cannot give up. For the archives: it is now confirmed, the IPs of new Bakken wells are declining. It should be noted that the study only went back to November, 2013. The author if of the belief that the "initial 24-hour production number" strongly correlates with how well that well will do. I wouldn't give the author's conclusions much credence. It should be noted that there at least three new issues affecting production: a) new flaring rules; b) new conditioning rules; c) the plummet in oil prices. These issues are relatively new but oil companies have seen them coming (at least the first two) for several months now. I take the study with a grain of salt. That, and $1.89, will get you a Starbucks coffee.
****************************
Another ObamaCare "Gotcha"
Back on December 3, 2014, I posted:
This is actually pretty clever; I did not see this one coming.
There must be at least a dozen telephone carriers with whom I can contract for cellular service, including Verizon, ATT, Sprint, several regional carriers, and probably even over the internet (TimeWarner or Dish) if I was that clever. But I contracted with Sprint twenty (20) years ago and never switched. I still use Sprint.
We have two options for internet and television here in the DFW area: TimeWarner and Dish (there may be others; I'm not aware). I signed up with TimeWarner when I got here, the same carrier I had had for 13 years in San Antonio. I will probably stay with TimeWarner forever; I don't even look at Dish offers.
In Texas, electric utilities are de-regulated; consumers can switch utilities willy-nilly every month if they want. I have been with one utility since I arrived and have no plans to switch.
It turns out that consumers of health care insurance share the same behavior. Even though there is an annual "open season," very few consumers switch health care once they have a policy. Sure, they have to re-enroll, but usually they just get a note (electronic or snail mail) that says they are automatically re-enrolled if they do nothing.Now, just a few days later, this is being reported as BIG news. In fact, it's not BIG news (see above). It's hardly news; it's simply a wrinkle on what BIG HEALTH CARE already does. If you are currently enrolled in ObamaCare and for any reason "fail" to re-enroll for calendar year 2015, DO NOT DESPAIR: apparently, the government is going to automatically enroll you in the program they feel is best for you depending on whatever data they already have on you. I cannot make this up. The Washington Times is reporting:
ObamaCare sign-up trap: Sign up at healthcare.gov one time in your life and we will never let you go. If you don’t continually re-enroll each and every year, CMS will keep you on the plan that it chooses because, after all, CMS knows what’s best and they always make the best decision. Oh, and if you don’t believe that, please go to the 600 million dollar website that will give you all kinds of testimonials handcrafted by MIT professors.
MROs Higher Density Pilots -- December 21, 2014
Back in January, 2014, I posted links to CLR's density projects.
A reader sent me the link to MRO's recent corporate presentation. Marathon also has four (4) operated high density pilots in three major areas: its Myrmidon, Hector, and Ajaz prospects. From my "Snapshot" page:
A reader sent me the link to MRO's recent corporate presentation. Marathon also has four (4) operated high density pilots in three major areas: its Myrmidon, Hector, and Ajaz prospects. From my "Snapshot" page:
- Myrmidon: northwest corner of the reservation
- Marfa: MRO's largest area; southwest of the reservation; borders the reservation, Dunn County -- Marfa DOES NOT show up on most recent presentation
- Hector: eastern area of Marfa, just outside of the reservation, Dunn County
- Ajax: continuation of Marfa, southwest of Marfa, Dunn County
- Brodahl Pilot: 6 x MB; 6 x TF1, 4Q14 spud
- TAT USA 34 Pilot: 6 x MB, 6 x TF2, 6 x TF2, 1Q15 spud
- Lucy Fleckenstein Pilot: 6 x MB, 6 x TF1, spud August 2014
- Hecker Pilot: 6 x MB, 4Q14 spud
Leucistic Bald Eagle Spotted In Forest Outside Flagstaff, AZ -- December 21, 2014
We arrived safe and sound. We took a most leisurely trip from DFW metroplex (Texas) to southern California, actually staying in motels along the way, something I wouldn't do if traveling alone. This really is an incredible country. I never get tired of driving cross country.
If we didn't have the granddaughters we would take a meandering, unplanned trip across the states visiting friends. My wife does not know this yet, but I am seriously thinking of returning to Dallas via Las Vegas, then Denver, then south to Texas. It would add 400 miles to the return trip, 1800 miles vs 1450 miles. Hmmm.....
My wife loves "The Big Bang Theory" so part of the way we played a variation of Sheldon's "Periodic Table, Name The Element Game." In our game, we picked a category, such as movie actors. My wife went first: George Clooney. The letter before "C" ( the first letter of the last name) is "B." So I said Brad Pitt (the first letter of the first name). Then she said Oscar de la Rente ("O" being the letter before "P"). Even though Oscar was a fashion designer to the stars and not an actor I let her use that name. Then I "Q" -- the letter before "R" and I said Quentin Tarantino. And then we quit. We didn't know if the last name should have been "de" or "la" or "Rente."
We took a 3.77 mile walk to the local grocery story to buy groceries this morning. Everything is almost exactly 50% higher here than in Texas. One bolillo in Texas costs 25 cents; here 33 cents. Yoplait yogurt, 10 for $7 here; in Texas, 10 for $6.00. A "crown" of fresh broccoli is $1.79 / lb here; 77 cents/pound in Texas. The list could go on, but one gets the point.
Remember: This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. I post quickly and frequently; typographical and factual errors are likely. If this information is important to you, go to the source.
One of the nice things expensive motels along Route 66 do for visitors is provide them free copies of local newspapers and the USA Today. I didn't have a chance to read the newspaper while driving (had I been alone, I would have, but my wife gets really mad when I read while driving).
I see the front page of the weekend edition of USA Today says the Fed was responsible for this last spectacular trading week of the year: "Fed to the Rescue" --
I see both Kuwait and Saudi Arabia are still in favor of giving their national natural resource away; spokesmen in both countries said there was not reason to cut production.
I assume there's a corresponding story out there that says China and Japan are sending "thank you" notes and holiday greetings to OPEC. Mr Putin's Christmas is probably not going so well.
Harold Hamm suggests the number of active rigs in North Dakota could go as low as 90. About half where they are now.
I have of lot of e-mail to go through and I will eventually get to all of it. I can't decide how the blog should evolve or change going into the New Year. I have been having so much fun looking at the MRO re-fracked wells I've delayed getting back to other subjects.
I'm still amazed with all the non-coverage about that proposed new casino west of Williston. The source said there would a ceremonial ground-breaking October 24, 2014, but I don't recall any photograph to capture the moment. The casino will be on native American ground that I don't think many kew existed in that location. It would be ironic if Caterpillar unearthed huge native American ceremonial burial grounds in that exact location. Something tells me it would cause a minor stir, but once a plaque was laid, the Caterpillar would get back to work.
Oh, by the way, that reminds me: we saw a beautiful bald eagle soaring and then landing on top of a tree in the Flagstaff, Arizona, area. We were on I-40 heading out of town when I saw a huge bird with white wing tips; I followed it and fortunately it perched at the top of a tree to the right of us. And it was clearly a bald eagle. I was not aware that bald eagles had white wing tips, but again, google comes to the rescue. Look at this, a similar eagle in Alaska, this is really, really cool:
If we didn't have the granddaughters we would take a meandering, unplanned trip across the states visiting friends. My wife does not know this yet, but I am seriously thinking of returning to Dallas via Las Vegas, then Denver, then south to Texas. It would add 400 miles to the return trip, 1800 miles vs 1450 miles. Hmmm.....
My wife loves "The Big Bang Theory" so part of the way we played a variation of Sheldon's "Periodic Table, Name The Element Game." In our game, we picked a category, such as movie actors. My wife went first: George Clooney. The letter before "C" ( the first letter of the last name) is "B." So I said Brad Pitt (the first letter of the first name). Then she said Oscar de la Rente ("O" being the letter before "P"). Even though Oscar was a fashion designer to the stars and not an actor I let her use that name. Then I "Q" -- the letter before "R" and I said Quentin Tarantino. And then we quit. We didn't know if the last name should have been "de" or "la" or "Rente."
We took a 3.77 mile walk to the local grocery story to buy groceries this morning. Everything is almost exactly 50% higher here than in Texas. One bolillo in Texas costs 25 cents; here 33 cents. Yoplait yogurt, 10 for $7 here; in Texas, 10 for $6.00. A "crown" of fresh broccoli is $1.79 / lb here; 77 cents/pound in Texas. The list could go on, but one gets the point.
Remember: This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. I post quickly and frequently; typographical and factual errors are likely. If this information is important to you, go to the source.
One of the nice things expensive motels along Route 66 do for visitors is provide them free copies of local newspapers and the USA Today. I didn't have a chance to read the newspaper while driving (had I been alone, I would have, but my wife gets really mad when I read while driving).
I see the front page of the weekend edition of USA Today says the Fed was responsible for this last spectacular trading week of the year: "Fed to the Rescue" --
The Dow Jones industrial average's 421-point gain Thursday was its best single-day jump in three years. The Fed's message Wednesday that it's in no rush to raise rates fueled the two-day rally, boosting the Dow 709 points it biggest two-day gain since 2008. "The mini-correction is over," said a really, really smart person.In the business section of the same USA Today there was an article accompanying the front page story: Five Things Lifting The Dow Skyward --
- friendly Fed
- friendly Fed (yes, repeated)
- cheap oil (investors rethinking their initial negative reaction
- stock inventory (if I remember, I might post something on this)
- a big reverse of "bearish" bets
*****************************
I see both Kuwait and Saudi Arabia are still in favor of giving their national natural resource away; spokesmen in both countries said there was not reason to cut production.
I assume there's a corresponding story out there that says China and Japan are sending "thank you" notes and holiday greetings to OPEC. Mr Putin's Christmas is probably not going so well.
Harold Hamm suggests the number of active rigs in North Dakota could go as low as 90. About half where they are now.
| 12/21/2014 | 12/21/2013 | 12/21/2012 | 12/21/2011 | 12/21/2010 | |
|---|---|---|---|---|---|
| Active Rigs | 181 | 192 | 189 | 196 | 160 |
I have of lot of e-mail to go through and I will eventually get to all of it. I can't decide how the blog should evolve or change going into the New Year. I have been having so much fun looking at the MRO re-fracked wells I've delayed getting back to other subjects.
I'm still amazed with all the non-coverage about that proposed new casino west of Williston. The source said there would a ceremonial ground-breaking October 24, 2014, but I don't recall any photograph to capture the moment. The casino will be on native American ground that I don't think many kew existed in that location. It would be ironic if Caterpillar unearthed huge native American ceremonial burial grounds in that exact location. Something tells me it would cause a minor stir, but once a plaque was laid, the Caterpillar would get back to work.
Oh, by the way, that reminds me: we saw a beautiful bald eagle soaring and then landing on top of a tree in the Flagstaff, Arizona, area. We were on I-40 heading out of town when I saw a huge bird with white wing tips; I followed it and fortunately it perched at the top of a tree to the right of us. And it was clearly a bald eagle. I was not aware that bald eagles had white wing tips, but again, google comes to the rescue. Look at this, a similar eagle in Alaska, this is really, really cool:
A leucistic bald eagle (Haliaeetus leucocephalus) with white wing tips and white talons flies along the Chilkoot River in the Chilkoot Lake State Recreational Site near Haines, Alaska. The white wing tips and talons are caused by a leucistic condition -- a condition of reduced pigmentation resulting in white patches.I was absolutely unaware of any such thing. Now, if only this leucistic bald eagle will steer clear of wind turbines. Wow, what a travesty, 38 golden eagles killed by wind turbines in two Wyoming counties.
These patches of white can occur while the rest of the animal is colored normal. Unlike albinism, the eye color is normal.
The eagle has been spotted on both the Chilkoot and Chilkat Rivers for several years.
Saturday, December 20, 2014
Random Update Of An MRO-Re-Fracked Well, 16778 -- December 20, 2014
Production profiles of an MRO re-fracked well:
Production profile of this well when it was first completed and started producing:
This is the production profile of the well after MRO re-fracked or whatever they did with the well (note only 19 days in August, and production 13,000 bbls):
- 16778, 354, MRO, Jack Pennington 21-28H, Reunion Bay, 0 stages; 524,020 lbs, t8/08; cum 177K 10/14;
Production profile of this well when it was first completed and started producing:
| BAKKEN | 11-2008 | 25 | 4837 | 5073 | 910 | 2118 | 0 | 2118 |
| BAKKEN | 10-2008 | 31 | 4734 | 4304 | 840 | 2073 | 0 | 2073 |
| BAKKEN | 9-2008 | 24 | 4197 | 4072 | 993 | 1838 | 0 | 1838 |
| BAKKEN | 8-2008 | 27 | 6092 | 5828 | 2573 | 2668 | 0 | 2668 |
This is the production profile of the well after MRO re-fracked or whatever they did with the well (note only 19 days in August, and production 13,000 bbls):
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 10-2014 | 31 | 22074 | 22065 | 8613 | 19059 | 7862 | 8653 |
| BAKKEN | 9-2014 | 23 | 19564 | 19734 | 10275 | 17440 | 4240 | 10975 |
| BAKKEN | 8-2014 | 19 | 13230 | 13194 | 4390 | 11511 | 3464 | 7935 |
| BAKKEN | 7-2014 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| BAKKEN | 6-2014 | 6 | 336 | 188 | 44 | 314 | 15 | 232 |
| BAKKEN | 5-2014 | 31 | 1424 | 1420 | 240 | 1460 | 891 | 383 |
| BAKKEN | 4-2014 | 30 | 1376 | 1452 | 221 | 1349 | 858 | 311 |
| BAKKEN | 3-2014 | 31 | 1277 | 1240 | 218 | 1165 | 479 | 500 |
| BAKKEN | 2-2014 | 28 | 1222 | 1135 | 184 | 1280 | 745 | 367 |
| BAKKEN | 1-2014 | 31 | 1358 | 1584 | 222 | 1351 | 861 | 312 |
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