Streamers And Skyfall -- February 23, 2015

We haven't had a story on "streamers" in a long time.

Last time was about a year ago.

But we have an update today. A reader sent me this link to MailOnline reporting that at least 130 "streamers" were seen in "anticipation" of a huge solar farm going live.

More than 100 birds have been injured during testing of a new solar power farm.

Biologists say 130 birds caught fire mid-air while entering an area of concentrated solar energy created by the 110-megawatt Crescent Dunes Solar Energy Project near Tonopah, Nevada.

Experts believe the birds may have been attracted by the glow of the farm’s tower, but the project’s owners, SolarReserve, say they have found a way to reduce the fatalities.
In a test, one third of the project’s 10,000 mirrors were moved to focus sunlight at a point 1,200 feet above ground level – at approximately twice the height of its tower.

It took biologists just an hour and a half to notice the first of the ‘streamers’ – birds that catch fire and leave a trail of smoke in the air -when entering the field of solar energy.

"Streamers" -- or as the say in southern California: Kentucky Fried Chicken. Brings a whole new dimension to "roadkill."

The best line in that story: "... the project's owners say they have found a way to reduce the fatalities."

Yes, don't turn on the switch.

Skyfall.

Skyfall, Adele

Not Ready For Prime Time -- February 23, 2015; Apple Surges (Relatively Speaking) On A Down Day For The Market

A reader wrote me suggesting that he sees low oil prices for "several years" (as do other pundits).

This was my reply:

I agree with you, trying to predict oil prices is a fool's errand, as the WSJ or one of the print media outlets said recently.

Two data points that folks don't talk about much:

1. I don't know when we will see the low in the price of oil, but whatever it is and whenever it occurs, that's the "re-set" as Hillary would call it. Whether the low is $50 or $40 or $20, at some point oil will hit its low. I'm pretty convinced that the low of $20 or $40 or won't last for years; possibly $50, but I doubt it; even $60 for several years seems a stretch. But whatever the low is, that will be the new "low," the new re-set going forward. If the the low hits $20, and oil goes back to $40 in 2017, that's a doubling in price. I'm not looking for those numbers, but just suggesting how the "re-set" becomes quite interesting -- for investors.

2. Saudi Arabia needs $100-oil to balance their budget; they say they have huge cash reserves and they say they can go quite some time at much lower oil prices. Most OPEC countries need significantly more than $100 oil to balance their budgets (and, yes, I know their published data is subject to question and subject to hyperbole) but I doubt any of the OPEC countries are in as good a shape as Saudi Arabia. At some point something has to give. If we have $40 - $60 oil for "several years,"most of the Mideast, Russia, Venezuela, north Africa, and west Africa are in deep, deep trouble.

All the money being funneled to support such states as Palestine by Saudi Arabia will go by the wayside and Palestine will be an even bigger issue. 

So, for me: two things --

1. There is or will be a new re-set when valuing oil investments;
2. Several years of $40 - $60 oil will wreak havoc on countries I've mentioned above (right now the US market can barely handle Greece leaving the EU). 

I wrote that note a few days ago.  I posted this note today because of this comment: Several years of $40 - $60 oil will wreak havoc on countries I've mentioned above.

 So, why is that important. There are hints that "the countries listed above" are already feeling the impact. CNBC/Financial Times is reporting:

Members of Opec have discussed holding an emergency meeting if crude continues to slide, according to Nigeria's oil minister, in a sign of their growing alarm over the impact of a lower oil price on their economies.

The comments by Diezani Alison-Madueke come three months after the cartel's decision to hold production at 30m barrels a day, even as the oil price has plunged since mid-June. That move, driven by Saudi Arabia and its Gulf allies, marked a sharp deviation from Opec's traditional strategy of adjusting production to keep prices high.

The group's main objective is now to defend market share, despite dramatically reduced revenues. The price plunge has forced energy companies all over the world to rewrite their investment plans, and caused a major slowdown in the US shale oil industry.

But it has also thrown the fiscal balances of big oil producers such as Nigeria, Venezuela and Russia into disarray. 

Expanding on the original note.

Quick: name the terrorist groups "working" in west Africa. Al-Qaeda and Boko Haram. Quick: where is Boko Haram active? The Daily Signal is reporting:

Across the continent in West Africa, Boko Haram “maintained a high operational tempo in 2013 and carried out kidnappings, killings, bombings and attacks on civilian and military targets in northern Nigeria, resulting in numerous deaths, injuries and destruction of property in 2013.”

Two things the government won't have if it doesn't have oil money: a) money to fight the rebels; b) money to keep their citizens happy.

Russia has similar problems, particularly among the Muslims in former republics of the USSR and along Russia's borders.

But it's not just the oil-producing countries that are at risk of increasing social disarray. Some Muslim countries -- or quasi-countries -- depend on money from Saudi Arabia (and perhaps other oil-producing OPEC countries): think Arafatland. (See also this post of August 20, 2015.)

And that's the first problem: oil at $20 - $40 works in favor of the terrorists. When "they" talk about "disarray," that's code for a) civil unrest; and, b) terrorist events.

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Apple Hits A New High On A Down Day 

Yahoo!Finance noted that AAPL hit a new high. That's something of an understatement. Considering a "down day" on the market, and the downward trend apparently led by technology and oil, it's interesting that AAPL is surging, relatively speaking. I expected a move one way or the other, up or down, maybe to the tune of 50 cents, but here we are, with AAPL up over $3.00 and nearing $800 billion in market cap. And that's on NO news.

Unless this was the news. Macrumors is reporting:

Apple announced on Monday that it will invest €1.7 billion to build and operate two new data centers in Europe. The state-of-the-art facilities will be located in County Galway, Ireland and the Central Jutland Region of Denmark, powering Apple's online services such as the App Store, iTunes Store, iMessage, Maps and Siri for European customers.

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Snow Day Agenda

Our granddaughters had a "snow day" -- actually an "ice day" due to freezing rain last night and then a quarter-inch/half-inch of ice on roads today. They spent the day with us. This was the rough agenda for our older granddaughter:

Random Update Of An EOG Round Prairie Well -- February 23, 2015

The well:

• 19927, 725, EOG, Short Prairie 8-1224H, Round Prairie, 2 sections, AL, t11/12; cum 163K 12/14;

[For newbies, the above is my shorthand (no one else uses it) -- well file number, the IP, current operator, legal name of the well, oil field name,  spacing unit is 2 sections [1280-acres], AL = artificial life [pump], the date the well was tested (after it was completed/fracked) and the cumulative production to date, 163,000 bbls as of December 31, 2014, the most recent data available.]

From the NDIC website (basic subscription required; easy to get; $50 annually; well worth it if one has mineral rights):

NDIC File No: 19927   
Well Type: OG     Well Status: A     Status Date: 11/5/2012     Wellbore type: Horizontal
Location: SWSE 12-154-104       Latitude: 48.170116     Longitude: -103.997924
Current Operator: EOG RESOURCES, INC.
Current Well Name: SHORT PRAIRIE 8-1224H
Total Depth: 20466     Field: ROUND PRAIRIE
Spud Date:  6/23/2012
 Completion Data
   Pool: BAKKEN     Perfs: 10716-20466     Comp: 11/5/2012     Status: AL     Date: 1/21/2013     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 162,746     Cum MCF Gas: 100835     Cum Water: 344407
Production Test Data
   IP Test Date: 11/6/2012     Pool: BAKKEN     IP Oil: 725     IP MCF: 456     IP Water: 4040

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	12-2014	31	5043	4836	6937	3727	3572	0
BAKKEN	11-2014	30	3446	3258	6447	2608	2466	0
BAKKEN	10-2014	22	1960	1861	5566	1367	1260	0
BAKKEN	9-2014	25	4078	4196	5916	3419	3297	0
BAKKEN	8-2014	31	6350	6556	8449	4874	4565	154
BAKKEN	7-2014	31	5392	5041	8382	4449	4294	0
BAKKEN	6-2014	30	4932	5614	7777	3961	3811	0
BAKKEN	5-2014	31	4791	4835	8836	3644	3489	0
BAKKEN	4-2014	30	5168	4831	9115	3771	3621	0
BAKKEN	3-2014	31	5125	4842	8536	3730	3575	0
BAKKEN	2-2014	28	3786	4034	8504	2499	2362	0
BAKKEN	1-2014	31	5242	5154	10009	3426	3271	0
BAKKEN	12-2013	31	3918	3556	9319	2633	2480	0
BAKKEN	11-2013	30	3313	3801	8867	1645	1497	0
BAKKEN	10-2013	31	4969	4623	11146	3111	2956	0
BAKKEN	9-2013	30	4591	4816	10830	3129	2981	0
BAKKEN	8-2013	31	5008	5085	12169	3241	3086	0
BAKKEN	7-2013	31	4934	4855	12221	3096	2943	0
BAKKEN	6-2013	30	4665	4412	12063	3319	3170	0
BAKKEN	5-2013	31	6198	6713	15543	2730	2147	433
BAKKEN	4-2013	30	7368	7188	16578	3771	3621	0
BAKKEN	3-2013	31	10075	9951	20787	8200	8048	0
BAKKEN	2-2013	26	9582	9398	18537	4761	4634	0
BAKKEN	1-2013	18	8663	9085	17199	5706	5620	0
BAKKEN	12-2012	31	18886	19207	40858	6549	1862	4532
BAKKEN	11-2012	20	15263	14111	43816	7469	0	7374

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Comments (disclaimer -- I have no background or formal training in the oil and gas industry; what follows is simply my opinion; many will disagree; no one should make any decisions based on these comments; it is simply idle chatter; if this information is important to you, you should visit more credible sources):

This was my original description of the Round Prairie oil field:

Round Prairie is about a 20-section oil field west of Williston, right on the Montana state line. It is all prairie. It looks like the field is owned by EOG. The wells are mediocre but they were probably completed before EOG started using newer completion techniques. They should all hit 100,000 bbls in three or four years (some already have); some might take a bit longer. But they should all pay for themselves, and are all good enough to ensure more drilling in this area.  With the exception of one well, they are all producing between 1,000 and 6,000 bbls/month.

That, of course, was written before the slump in oil prices. It appears the entire field is "held by production," so there won't be any hurry to initiate new drilling until prices recover -- and because this is not the best spot in the Bakken, one would not expect new drilling until oil prices are significantly higher (back in the $80-range, at least).  Again, remember this is simply opinion, idle chatter. I have nothing to base this on except my following the Bakken for several years.

A typical well in a mediocre field will probably produce around 400,000 bbls of oil over its 20 - 40-year-lifespan assuming oil prices support continued operation of the well.  The total production of a well is referred to as the estimated ultimate recovery (EUR).

The biggest expense for this well, now, is probably getting rid of the water. This well is producing more water than oil right now and all that water has to be trucked out and brought to a saltwater disposal well. 

The well is capturing all its natural gas; no natural gas is being flared. 

If the price of oil returns to the $100-range, a well like this one would probably be re-worked several times in its life-time. 

It's hard to say whether this well will be re-fracked. Its initial fracking was a pretty impressive 48 stages using almost 10 million pounds of sand. It was also a fairly deep well: the middle Bakken about 10,500 feet deep vertically. So, a relatively expensive well.

The biggest unknown is whether this well will be choked back due to the slump in oil prices and whether it will be shut in if the slump in the price of oil persists.

Pajama Day And Sledding Day -- North Dallas -- February 23, 2015

That's clear ice in the parking lot, I assume about a quarter-inch to a half-inch thick.

Halcon With Another Huge Well In Eagle Nest -- Almost 110K In Less than Five Months

Disney announces:

A one-day ticket for either Disneyland or California Adventure in Anaheim, California, is now $99 for anyone 10 or older, the company said. That's up from $96.

Wells coming off the confidential list over the weekend, Monday:

Monday, February 23, 2015
28393, drl, XTO, Lundin Federal 31X-9G, North Fork, no production data,
29052, 836, CLR, Robert 1-13H, Stony Creek, t11/14; cum 35K 12/14;

Sunday, February 22, 2015
28015, drl, Petro-Hunt, USA 153-95-23C-14-2HS, Charlson, no production data,
28398, 2,529, Whiting, Gunder T. 21-30H, Lonesome, t8/14; cum 62K 12/14;
28399, 2,836, Whiting, Gunder T. 21-30-2H, Lonesome, t8/14; cum 53K 12/14;
28411, 1,070, Hess, SC-Barney-1LE-154-98-1819H-1, Truax, t1/15; cum 10K 12/14;
28883, 182, Murex, Machelle Annette 8-5H, Musta, t10/14; cum 25K 12/14;

Saturday, February 21, 2015
19296, drl, SHD Oil & Gas, Golden 22-31H, Deep Water Creek Bay, no production data,
27279, 2,946, HRC, Fort Berthold 148-94-19C-18-5H,  Eagle Nest, t8/14; cum 109K 12/14;
27903, 577, Emerald, Lloyd Christmas 1-4-9H, Heart River, t814; cum 15K 12/14;
28410, 527, Hess, SC-Barney-154-98-1819H-5, Truax, t12/14; cum 7K 12/14;
28737, 1,423, CLR, Uhlman 1-7H, Banks, t1/15; cum 2K 12/14;
28935, drl, CLR, Alfsvaag 3-31H1, Crazy Man Creek, no production data,

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27279, see below, HRC, Fort Berthold 148-94-19C-18-5H,  Eagle Nest:

Date	Oil Runs	MCF Sold
12-2014	21506	14238
11-2014	20376	15795
10-2014	22665	30475
9-2014	28564	45392
8-2014	15550	5140

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The Mother Lode

Our seven-month-old granddaughter loves Cheerios. Here she is: she hit the mother lode!