Setting Us Up For $200 Oil -- Again -- June 1, 2015

30-second soundbite: considering where "we" are with regard to global oil and the strength of the US dollar, all-in-all, this was a pretty good day for oil bulls. And, no, this is not an investment site.

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With today's Wall Street Journal article on the slump in oil prices, I was reminded of the list I posted back in January.

Countries on the watch list with plummeting oil prices:

• Venezuela
• Russia
• Jordan
• Lebanon
• Nigeria
• Brazil 

One can add Columbia to the list.
 
From today's Wall Street Journal article:

Oil bulls ought to be cheered by news from Colombia last week.

Ecopetrol, the country’s national oil champion, cut its projection for oil and natural-gas output in 2020 by more than 400,000 barrels of oil equivalent a day. Assuming 82% of that is oil—in line with output last year—that is roughly 350,000 barrels of incremental supply off the table.

That is a lot. The International Energy Agency’s medium-term projection has production from outside the Organization of the Petroleum Exporting Countries rising by 3.4 million barrels a day by 2020 compared with 2014. Ecopetrol’s retrenchment equates to roughly 10% of that.

Except that it doesn’t really. The IEA, anticipating Ecopetrol’s struggles, wasn’t banking on a Colombian gusher. Indeed, it expects the country’s oil output to fall by 150,000 barrels a day by 2020. Certainly, at less than $68, 2020 oil futures don’t indicate panic.

That isn’t to say the risk of expected barrels evaporating isn’t real. Take Brazil. The IEA sees its production rising almost 900,000 barrels a day by 2020, roughly a quarter of the projected non-OPEC increase. But Petróleo Brasileiro, accounting for about 90% of Brazil’s oil output, has become a byword for corruption and missed targets.

And Petrobras, as the company is known, is due to announce new, likely reduced, guidance soon.

Scandal aside, what ails Petrobras, as well as Ecopetrol, is the need to curb spending as lower oil prices constrain cash flow and access to capital, undermining growth plans. In the IEA’s outlook, emerging markets, including such oil powerhouses as Russia, account for virtually all the cuts in forecast supply relative to last year’s outlook.

There are a lot of story lines here. I would love to opine on some of them but folks would think I'm nuts (if not certifiably "nuts," then at least inappropriately exuberant when it comes to oil). So, we'll let it go at that. For now. 

Maybe I'm just wearing rose-colored glasses:

Rose-Colored Glasses, Jon Conlee

Four Keynote Speakers At An International Energy Conference: Every North Dakota US Senator Is A Keynote Speaker -- June 1, 2015

The annual EIA conference on current energy issues is two weeks away. 

This is normally something I would "blow off," but look who the keynote speakers are. From an EIA press release:

The U.S. Energy Information Administration (EIA) will hold its 2015 Energy Conference on June 15 and 16 in Washington, DC.

This two-day event provides the opportunity to meet and network with energy analysts, decision makers, and EIA staff. Last year more than 900 people from industry, government, and academia attended EIA's conference.

Session topics include:

• Effects of changing world oil prices: production, economy, and geopolitics 
• North American energy markets 
• The role of emerging electricity storage technologies 
• Natural gas: domestic and global markets 
• Greenhouse gas emissions: power and methane 
• Developments in hydrocarbon gas liquids markets 
• Electricity distribution markets in the 21st century 
• Energy by rail and water 
• Energy infrastructure needs and options 
• New data in residential and commercial energy consumption 

Government keynote speakers include:

• Dr. Ernest Moniz, U.S. Secretary of Energy 
• Pedro Joaquín Coldwell, Secretary of Energy, Mexico 
• John Hoeven, U.S. Senator 
• Heidi Heitkamp, U.S. Senator

Look at the session topics again. North Dakota has a seat at the table with regard to almost every issue regarding energy these day:

• obviously, oil, economy, and geopolitics
• obviously, NA energy markets
• perhaps not so obvious, electricity storage technologies; but with wind energy, it's obvious
• obviously, natural gas but not as much as the Marcellus, Utica
• greenhouse emissions: flaring
• developments in hydrocarbon gas liquids markets: fertilizer? CBR conditioning, ethane
• obviously energy by rail and water (CBR to the east coast; by barge to the gulf)
• energy infrastructure needs and options: the IS the Bakken

Most interesting to me is that although renewable energy (solar and wind) can be tucked into any of the sessions, there were no BIG sessions called

• winning the war on coal
• sandbagging pipelines 
• why wind works even if the stats don't
• why solar works even if the stat don't

Missing from the keynote speakers' roster

• either one of the Koch brothers
• Tom Speyer 
• Bill Clinton

Golden China Restaurant To Open In Williston In Early June; Paddlefish Season Very Successful This Year -- June 1, 2015

Just a reminder:

A new restaurant is opening its doors in June. The Badlands Town Center has announced Golden China will be opening in early June of 2015. The restaurant will feature hibachi, sushi and a buffet. It is located at 910 42nd St. W., adjacent to the Badlands Town Center retail complex.

I'm thinking about another road trip to the Bakken, the weather is so incredibly nice now, and school responsibilities are less, but not sure yet. Regardless, I missed the paddlefish season. The state site is here.

In early May, Reuters had a story on paddlefish in North Dakota. It's a bit unclear to me, but it appears the "regular" season runs from May 1st to May 31st but the "regular" season can be shortened as conditions dictate. It looks like this year's season was to end May 11th but then extended four more days for those who already had a tag but had not yet snagged a paddlefish. One can get an updated report at the Scenic Sport website. Apparently opening day set a record with more than 180 paddlefish cleaned at North Star Caviar.

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Supreme Court Starting To Hand Down Rulings

First on the docket: "vacation home" mortgages cannot be voided in bankruptcies. Unanimous. Well, that was easy. That should burst the housing bubble.

Second on the docket: private enterprise can't set wardrobe requirements in retail outlets.

Third: on Facebook, threatening to kill your spouse and others in the same room is not enough to make "a reasonable person feel threatened." Well, that's a relief.

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A Scam

I've said this from the beginning: EVs, Wind, Solar -- one big scam. You just had to realize that early, get in quick, get the tax subsidies, build your moat, and then move on. The Los Angeles Times finally figured it out:

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.
And he's built those companies with the help of billions in government subsidies.

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.

"He definitely goes where there is government money," said Dan Dolev, an analyst at Jefferies Equity Research. "That's a great strategy, but the government will cut you off one day."

Well, maybe The Los Angeles Times had it figured out a long time ago, but it a) took time to gather the data; and, b) they decided to report the story now that Musk/Tesla is moving its battery shops to a better business environment: Nevada.

Random Update Of The Three Oldest Wells In North Dakota That Are Still Active -- June 1, 2015

I believe these are the three oldest wells drilled in North Dakota that are still active (I could be wrong, and would be thrilled if anyone can provide names of wells that are older and still producing). These wells are celebrating 61 years of production this year.

• 537, 458/421, Hess, Lalim-Ives Unit A 1, Tioga oil field, Madison/Devonian, t3/54 (Madison) and 9/68 (Devonian); cum 152K (Madison last produced 5/68); cum 1.93 million bbls (Devonian, still producing about 500 bbls/month; as high as 1,340 bbls 11/13)

• 498, 292, Hess, Tioga-Madison Unit L-132HR, Tioga oil field, Madison, t7/54; cum 1.95 million bbls; still producing about 250 bbls/month; I can't say for sure, but it looks like this well was re-entered and a lateral was drilled in 2006;

• 443, 409, Hess, Beaver Lodge-Madison Unit S-27HR, Beaver Lodge oil field, t8/54; cum 742K 3/15; still producing about 350 bbls/month; from the file report, 7/03; total drilling days for this re-entry -- 9 days; "Amerada Hess drilled the Beaver Lodge Madison Unit S-27HR2 as a re-entry second leg horizontal well to produce a good Madison trend that is currently not being produced by horizontal technology. The vertical well bore was drilled at an earlier date to a depth of approximately 8,511 feet. The first lateral was drilled along an azimuth of 220 degrees, parallel to the fracture trend, with a vertical section of 1805 feet, approximately 1600 feet being in the Rival B1/B2 Porosity target. The second lateral was drilled along an azimuth of 170 degrees in a southeast direction for a total of 11,098 feet measured depth with a vertical section of 2466 feet in the Rival B1/B2 Porosity target." If I understand the report correctly, the well is producing from the second lateral. If I understand this report, the re-entry was a horizontal, but it was not fracked artificially; it followed the natural fracture trend.

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Location of #498:

Production profile of # 443 about the time it was re-entered and a lateral drilled:

MADISON	5-2004	31	4805	4820	21949	41907	41907	0
MADISON	4-2004	30	5173	5163	23205	56131	56131	0
MADISON	3-2004	30	5001	5006	23203	57781	57781	0
MADISON	2-2004	29	4807	4799	24131	55456	55456	0
MADISON	1-2004	31	5457	5456	26999	66636	66636	0
MADISON	12-2003	31	7070	7054	27840	79653	79653	0
MADISON	11-2003	30	5329	5409	23213	62713	62713	0
MADISON	10-2003	29	8214	8440	34235	45545	45545	0
MADISON	9-2003	30	7545	7182	32328	46165	46165	0
MADISON	8-2003	6	163	160	577	2216	2216	0
MADISON	7-2003	0	0	9	0	0	0	0
MADISON	6-2003	16	358	371	1320	962	962	0
MADISON	5-2003	28	801	801	2381	2013	2013	0
MADISON	4-2003	30	808	802	2276	1996	1996	0
MADISON	3-2003	31	631	630	2819	1857	1857	0
MADISON	2-2003	28	650	650	2385	1759	1759	0
MADISON	1-2003	31	731	732	2871	1845	1845	0
MADISON	12-2002	31	851	849	2492	2155	2155	0
MADISON	11-2002	30	814	814	3010	2369	2369	0

Laterals for #443:

Monday; This Is Not An Investment Site; EPD To Acquire Midstream Assets In Eagle Ford -- June 1, 2015

Wells coming off the confidential list this weekend, Monday have been posted.

From MDU press release:

MDU Resources Group, Inc. announced today that the Dakota Prairie refinery initiated diesel product sales to the market on May 15. The 20,000 barrels-per-day refinery is the first greenfield fuels refinery built in the U.S. since 1976 and is co-owned and operated with Calumet Specialty Products Partners.

 From Seeking Alpha, DOE approves more LNG exports from Alaska terminal:

• Exxon Mobil says it received authorization from the U.S. Energy Department to export liquefied natural gas to non-free trade agreement countries from its proposed Alaska LNG terminal.
• The project includes a liquefaction facility, an 800-mile pipeline, up to eight natural gas compression stations and at least five take-off points for in-state gas delivery, as well as a gas treatment plant on Alaska's North Slope, where XOM already has operations at Prudhoe Bay and Point Tomson.
• Other participants in the Alaska LNG project include BP, TransCanada, and ConocoPhillips

Active rigs:

	6/1/2015	06/01/2014	06/01/2013	06/01/2012	06/01/2011
Active Rigs	80	189	187	215	173

RBN Energy: School of Energy now on-line.

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Odds and Ends

This is not an investment site. Do not make any investment or financial decisions based on what you read here or think you may have read here.

US consumer spending in April weakest in 3 months, blamed on three things: wintery weather; people saving their money; and, global warming.

Ford Motor Company will release May, 2015, US sales Tuesday but here's a preview: Ford will have a better second half. This is very, very interesting: GM has been forced to discount prices on full-size trucks by at least 13% due to demand for Ford’s redesigned F-Series. The initial success of the all-new aluminum body F-Series is undeniable. The F-Series is generating increased revenue, with average transaction prices around $42,500, up $3,200 from a year ago.

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Enterprise Products announces an agreement to acquire all member interests in EFS Midstream for $2.15 bln, paid in two installments: Co announced it has executed definitive agreements to purchase all of the member interests in EFS Midstream from affiliates of Pioneer Natural Resources Company  and Reliance Industries Limited for $2.15 billion.

• EFS Midstream provides gas gathering, treating, compression and condensate processing services in the Eagle Ford Shale. 
• The EFS Midstream system includes approximately 460 miles of natural gas gathering pipelines, 10 central gathering plants, 780 million cubic feet per day of natural gas treating capacity and 119 thousand barrels per day of condensate stabilization capacity. 

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Market Not So Efficient? Eh?

Yahoo!Finance asks the question: why are investors willing to pay so much for equity these days? I assume the writer does not subscribe the efficient market theory. Goldman's answer:

American stocks are definitely pricey, with the median stock carrying a higher valuation than 98% of the time in the last 40 years, says Goldman Sachs. While low interest rates and inflation help explain this, they don’t make equities a bargain for anyone looking for future returns.

One reason that folks are paying up for richly priced stocks is that money – for many – is not much of an object right now. U.S. companies have issued some $700 billion in new debt so far this year. That’s ahead of the all-time record pace set last year – and is enough to pay off the total national debt of Greece two times over.

Companies, through their own profits and all that debt raised, are acting as if no price is too high to buy their own stock. Share repurchases are on track to exceed $600 billion this year.