The Paradox Basin

General

See this post.

Updates

February 2, 2018: petrolithium and the Paradox Basin.

August 14, 2017: The region is home to the Paradox Basin, which is estimated to hold between a quarter to a third of the nation's domestic potash resource.

June 29, 2016: BLM to okay 6,000 new Newfield wells (MDU no longer involved, after selling Fidelity).

December 17, 2015: random update on the Moab/Paradox Basin, from MDU perspective.

May, 2015: Cane Creek shale of the Paradox Basin, geology report/summary.

November 1, 2014: random update on the Moab/Paradox Basin:

An interesting thing happened after Fidelity Exploration and Production Co. started drilling near the entrance to Dead Horse Point State Park.

Cane Creek Well 12-1 let loose.

Without the aid of pumps or fracking, the oil just flooded out — more than 600,000 barrels in its first year, making it the nation’s most productive on-shore well in 2012.

The hydrocarbon bounty, however, includes unexpectedly large amounts of methane and other components of natural gas that Fidelity has to burn off because there is no way to get those fuels to market.

To solve its delivery problem, the company proposes an intensive network of pipelines that is fueling a backlash among red-rock recreationists and preservationists alike.

My understanding was that when this well hit in 2012, it was the largest onshore well in 2012 in the lower 48. In February, 2014, it was still flowing without a pump; I don't know if it still is.

April 13, 2014: Million-plus EURS in the Paradox Basin for MDU, far exceeding Fidelity EURs in the Bakken.

Original Post 

Ah, yes, the things I forget to link. I just noticed that among the myriad oil basins I have linked at the sidebar at the right, somehow I forgot to include the Paradox.

Here is the USGS pdf on the Paradox Basin, dated 2011.

Here are a few posts from the blog that are relevant:

• The Paradox Basin: an MDU teaser / cryptic comment -- November 4, 2012
• Million-plus EURs far exceeding those in the Bakken could be a game changer -- April 13, 2014
• Fidelity announces a nice well in Paradox Basin -- April 25, 2012

WTI Nearing $40/Bbl -- March 17, 2015

I believe Citi said WTI could go to $20. They said that some weeks ago.

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Off The Net For Awhile

When in Boston, I rode my bicycle regardless of the weather, including on the days the city was shut down due to snow. I didn't always ride far, but I rode almost every day.

Here in DFW metroplex this past "winter," I've gotten very lazy -- I didn't ride much during inclement weather.

To correct that, this will be the summer I dedicate to biking again. I will look on it as my last summer to bike. Hopefully that won't be the case, but after a long, dismal "winter" here in the DFW metroplex, I really look forward to some great biking weather.

So, with that, I'm off again. Have a great day, everyone. 

OXY USA Posts Another ... OXY USA Well -- March 17, 2015

Three of four wells go to DRL status, and OXY USA has another ... drum roll ... OXY USA well.

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And The Blame Game Begins

Did misleading EIA statements send oil into freefall? OilPrice.com reports. I don't know if Oil Price has a history of archiving their articles. How this plays out is yet to be seen.

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Printing Money

It appears to some that the only difference between Greece and the US is that the latter can print its own money. The US reached its debt limit this week. So has Greece.

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Funny How Folks See Things

There will be a lot of discussion about ObamaCare's new numbers, but the fact remains: ObamaCare is high-priced catastrophic health insurance. The health care industry is going to do very, very well because of ObamaCare. Folks are paying high premiums but will seek less medical care because they cannot afford the deductibles or the co-pays. "Bad policies" -- those that consumers liked but health insurance companies did not like, were deemed "illegal" under ObamaCare and those were the policies folks lost.

The stories from the administration coming out now are to help sway the Supreme Court. IBD.com is reporting:

The Obama administration says more than 16 million have gained insurance, thanks to ObamaCare. But a closer look at the numbers shows they're once again playing fast and loose with the data.

A two-page report from the Dept. of Health and Human Services claims the uninsured rate fell from 20.3% to 13.2% since ObamaCare began.

Officials there cheered this news, with one saying that "nothing since the implementation of Medicare and Medicaid has come close to this kind of change."

It's not what it seems. To get to its 16 million number, HHS uses Gallup poll data — not the Census Bureau's far more comprehensive survey — for its calculations.
Gallup does show a drop in the uninsured rate. Although its numbers differ from the administration's, it finds that the rate dropped from around 17% in 2013, where it had been since 2011, to 12.9% in Q4 2014.

Whatever numbers are used, the administration conveniently overlooks the fact that those years of high uninsured rates were also when the economy was in the middle of Obama's jobless recovery.

I remember when I first started talking about the "Affordable Care Act," I was taken to task for calling it ObamaCare by Obama apologists who monitored the blog for accuracy. LOL. Now, "everyone" calls it ObamaCare .... except the White House. 

Disclaimer: this is not an investment site. Do not make any financial, investment, or relationship decisions based on what you read here or what you think you may have read here. Just remember, the health insurance industry wrote the Affordable Care Act. By the way, the editorial in yesterday's Los Angeles Times suggesting a middle ground as an option for the Supreme Court completely misunderstands the issue.

Update On Bakken -- Helms; Housing Starts Plunge; The Cheese Fell Off His Cracker A Long Time Ago -- March 16, 2015

The Bismarck Tribune is reporting:

“I think we’ve seen the worst of it,” Lynn Helms, director of the Department of Mineral Resources, said of layoffs.

As stockpiles of cheap oil -- waiting for better prices -- grow at storage facilities around the U.S., a storage shortage is mounting. North Dakota oil industry representatives predict the oversupply will have substantial affects on the workforce and the economy in the state.

Ron Ness, president of the North Dakota Petroleum Council, maintains that the financial strength of every company is going to be tested in the coming months.

State oil production declined 3 percent in January to about 1.2 million barrels per day, Helms reported Thursday. He said the production decline is coming as wells age and new wells are not replacing them.

Ness said it won’t be a freefall but production declines likely will persist. Companies need to complete 115 wells a month to hold production steady, according to Helms, who expects production to decline and rise in a cycle – three months of decline followed by a surge as unfinished wells are brought online.

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Conflicted

The Los Angeles Times is reporting:

As millions of private employees lost their pension benefits in recent years, government workers rested easy, believing that their promised retirements couldn't be touched.

Now the safety of a government pension in California may be fading fast.

Feeling the heat is the state's huge public pension fund, the California Public Employees' Retirement System, known as CalPERS.

The fund spent millions of dollars to defend itself and public employee pensions in the bankruptcy cases of two California cities — only to lose the legal protections that it had spent years building through legislation.

The agency's most significant setback came in Stockton's bankruptcy case. The judge approved the city's recovery plan, including maintaining employees' pensions, but ruled that Stockton could have legally chosen to cut workers' retirements.

As the focus now shifts 400 miles south — to the city of San Bernardino's bankruptcy case — the pension fund faces a new legal challenge from two companies owed $50 million. The companies say it's illegal for the city to continue paying CalPERS to fund workers' pensions while they get nothing.

"This is significant," Tatum said. "It has put a chink in CalPERS' armor."

San Bernardino could be the first city in California to consider cutting worker pensions in a bankruptcy.

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Housing Starts Plunged

 But It's Just Temporary

One word you don't want to hear when talking about housing starts: plunge.

The spin never quits -- bad news is always "temporary." CNBC is reporting:

U.S. housing starts plunged to their lowest level in a year in February likely as harsh weather kept building crews at home, in the latest indication that the economy hit a soft patch in the first quarter.

Groundbreaking tumbled 17 percent to a seasonally adjusted annual pace of 897,000 units, the lowest level since January 2014, the Commerce Department said on Tuesday.
January's starts were revised up to a 1.08 million-unit pace from the previously reported 1.07 million-unit rate. February's decline was likely a temporary setback for housing as permits for future construction rose 3 percent last month.

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The Cheese Fell Off His Cracker A Long Time Ago

George Carlin on Johnny Carson

Tuesday -- Happpy St Patrick's Day -- March 17, 2015; Newfield Suspends Drilling In Utah's Uinta Basin

A word you do not want to hear used when describing housing starts: plunge.

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Disclaimer: this is not an investment site. Do not make any financial, investment, or relationship decisions based on what you read here or what you think you may have read here.

From Yahoo!In-Play:

ConocoPhillips announced its 2015 to 2017 capital budget and growth outlook; co reduces annual capital expenditures to ~$11.5 billion, versus the co's previous plan of ~$16 billion: Co announced its 2015 to 2017 capital budget and growth outlook. Details of the 2015 to 2017 plan will be reviewed at the co's upcoming Analyst and Investor Meeting on April 8, 2015.

Greenbrier announces that it received new orders in its second quarter ended February 28, 2015 for 10,100 railcar units valued at $1.09 bln: Orders for the quarter include double stack intermodal cars, covered hopper cars primarily for grain transportation, refrigerated and insulated boxcars, gondolas and tank cars, both for transportation of crude oil and other commodity types.

Samson Oil & Gas reports February production was significantly higher due to a number of North Stockyard being returned to production: Co provides its monthly update. Co reports February production was significantly higher due to a number of North Stockyard being returned to production. All of the infill development wells drilled in North Stockyard during 2014 are now in a position to be produced, however given the low oil price, 6 of the wells will remain shut in pending the recovery of the oil price.

• All wells in the North Stockyard field are currently being produced at lower than maximum capacity due to pipeline constraints and the weak oil price. 
• All of the 17 drilled in fill wells in North Stockyard have now been fracked and cleaned out and are capable of producing however 6 are currently shut in, waiting on an improvement in the oil price.

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Active rigs:

	3/17/2015	03/17/2014	03/17/2013	03/17/2012	03/17/2011
Active Rigs	111	191	185	205	170

RBN Energy: Newfield suspends drilling in the Utah's Uinta basin.

Newfield Exploration - the largest crude oil producer in Utah’s Uinta basin - has temporarily suspended new drilling operations there in response to lower prices. Other producers in the region have reduced their drilling and capex budgets as well. The cutbacks stem in part from the extra logistics expense required to deliver and process the thick yellow and black “waxy” Uinta crudes that do not flow at room temperature. Today we describe how low prices are impacting Uinta basin production.
The Uinta Basin (pronounced you-IN-tah, sometimes spelled Uintah) located about 150 miles southeast of Salt Lake City in Northeast Utah, has produced crude oil since the 1950’s. As we previously described back in 2013, the strange looking yellow and black waxy crudes produced from the Uinta Basin resemble shoe polish at room temperature.

Since 2011 the basin has attracted a lot of producer interest with crude output increasing from new horizontal drilling as well as the use of enhanced recovery on older wells through water flooding. Production stood at about 50 Mb/d in January 2011 but has more than doubled since then to 110 Mb/d by the end of 2014 (source: Bentek). Granted that expansion pales beside the nearby Bakken crude boom that saw output jump threefold from 400 Mb/d to 1300 Mb/d over the same period, but it is significant when you consider the logistical challenges faced by producers to get their Uinta waxy crude to market and processing it. Those challenges arise from the fact that Uinta waxy crude does not flow unless it is heated and unlike Canadian bitumen, can’t be diluted using light hydrocarbons as diluent. 

Waxy crude also requires specialized refinery configuration to handle its high paraffin content that few refiners outside Utah have developed.  As a result, these crudes have traditionally been consumed close by at Salt Lake City refineries – delivered heated in special insulated trucks - placing a firm ceiling on production based on how much waxy crude those refineries can process.

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Trainwreck

Regular readers read this years ago -- accurately predicted -- this was the very first non-advertising supported blog to predict that ObamaCare heralded the demise of employer-provided health insurance. MarketWatch is reporting:

Could employer-provided health insurance be going the way of employer-sponsored pension plans?

Rick Lindquist, president of Zane Benefits, which specializes in individual health insurance reimbursement for small businesses, says: Not only could it happen; it’s happening already.

Lindquist and Pilzer’s Salt Lake City, Utah-based company stands to profit if employers shift from traditional health insurance and toward their defined-contribution reimbursement system. In that model, employees are given a flat amount of cash from their employers — say $500 a month — told to buy a health-care plan with it and that their firms will cover their medical costs.

Q: Why are employers moving away from offering health insurance?

Lindquist: There will be a massive shift; in fact, we’re in the middle of it. People categorize this as employers dumping health insurance. Yes, they stop offering insurance but they don’t stop offering benefits. They’re just changing they way they deliver them and replacing them with defined-contribution plans. It could save millions of dollars for employees and employers.

Q: How fast is this switch happening? A: In our book, we project that by 2017, the majority of small businesses that now offer health insurance will switch to defined-contribution. This is being led by small-business owners. But it doesn’t stop there. A few years ago, some big companies [Verizon and AT&T] leaked documents saying they were evaluating dropping health insurance plans.

Some big companies will drop their plans and that will have a snowball effect. We project that 90% of all businesses will drop offering health insurance plans in the next 10 years. Why don’t we see more big companies doing this? They don’t understand it. Plus, there’s a cost to make the transition: To avoid a revolt, you need to educate employees, which is hard. It will happen.

I predicted this would happen, though I thought I read somewhere the IRS / HHS said employers could not "manage" ObamaCare this way. Maybe I misread.....