QEP Reports Three High-IP Wells; Enerplus Reports One High-IP Well; September 4, 2015

Active rigs:

	9/4/2015	09/04/2014	09/04/2013	09/04/2012	09/04/2011
Active Rigs	75	196	188	192	198

Whiting canceled four permits: three Oakland permits in McKenzie County, one Skunk Creek permit in Dunn County.


Producing wells completed:

• 21789, 1,908, Enerplus, Earth Lodge 148-93-22-21H TF, South Fork, t8/15 cum --
• 29519, 2,396, QEP, P. Levang 4-14-23BH, Grail, t8/15; cum --
• 29520, 2,406, QEP, P. Levang 3-14-23BH, Grail, t8/15; cum --
• 29786, 3,392, QEP, P. Levang 2-14-23TH, Grail, t8/15; cum --

Six (6) new permits --
Operators: Petrogulf (4), Oasis, EOG
Fields: Antelope (McKenzie), North Tobacco Garden (McKenzie), Parshall (Mountrail
Comments: Petrogulf has been in the news recently:

June 17, 2015: a drilling unit in Antelope oil field that could get 16 wells;
May 29, 2015: NDIC June, 2015, hearing dockets --

• Case 24068, Petrogulf, Antelope-Sanish, establish 640-ace spacing, two units, multiple horizontal wells, McKenzie, Mountrail
• 24069, Petrogulf, Antelope-Sanish, establish an overlapping 1280-acre unit; 3 wells, McKenzie, Mountrail

February 1, 2015:

• 28523, 1,572, Petrogulf, Three Tribes 151-94-4THF, Antelope, t12/14;cum 18K 12/14;

 January 22, 2015: Petrogulf with two permits in all of 2014.

December 19, 2014: January, 2015, NDIC hearing dockets --

• Case 23580, Petrogulf, Antelope-Sanish, 16 wells on an existing 1280-acre unit, 25/36-151-94; McKenzie, a look at this drilling unit, June 17, 2015;
• Case 23581, Petrogulf, Antelope-Sanish, establish an overlapping 2560-acre unit, 3 wells, McKenzie, Mountrail

Petrogulf has twelve permits/wells in North Dakota; four are active wells; four are on the confidential list; four more today. Website for Petrogulf here. Geologist Dan Plazak.

Random Notes -- September 4, 2015

From Portland, Oregon:

Our younger daughter / son-in-law live in Portland, Oregon. Economy in Oregon, so-so.
They moved into new home a few weeks ago and bought new appliances a few weeks and finally got them delivered. Here is her note:

They got here late last night.... but the applicances arrived!

They were to come 3:30-5:30... then 4-6... and at 5:30, the delivery guy called and said they were in Welches (by Mt. Hood) and had to go to Corbett (45 minutes drive) to do a delivery and then they would be here (we are about 15-20 minutes from Corbett -- it's where our church is).

They got here at 8.

Poor (delivery) guys (getting here at 8 after a long day), but good for the store, they were flown in from Mississippi to do deliveries (mind you, this is Portland, OR, on the west coast). They were to help a week, have been here two weeks, and were asked to stay another (third week) and they said, "No, our wives and kids miss us."

In fact the store is so busy / backed up they have flown in several people from around the country to help with delivery and installation. Crazy.

So, here we have a so-so economy in Portland, OR, high taxes, etc., and the local appliance store is so busy they had to fly in extra help to make all the summer deliveries.

And then these guys wouldn't even stay around to make extra money because their wives/children miss them. In the military, one could be deployed up to 180 days without question, and then forced over 180 days with permission from headquarters. Whatever.

This tells me that, without question, at 5.1% unemployment nationwide, this country -- the United States -- is at full employment.

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Moving

I got a haircut this morning. The barber was Sandy, a full-blooded Hispanic. Her dad was born in Mexico (south of border) and her mother was born on the border, in Mercedes, TX. Sandy, herself, has lived in Irving, TX, all her life. Irving is where all the earthquakes have been. Irving has one of the largest Islamic populations in the US, and one of the largest mosques. I mentioned that Irving has probably changed over the years, but she said, "not really." Just growing by leaps and bounds. Irving sits sort of between Dallas and Ft Worth, on the south side of the airport, I guess.

She mentioned that she will probably stay in Irving until her parents move ... back to Mexico. I did not ask why they were considering moving "back" to Mexico but I assume it was to be family after all these years now that their children are grown.

I suppose it's possible they are fed up with US economy and "open-borders" policy. LOL.

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Feminization Of Men In The US

I'm not going to go into now, but I had an "a-ha" moment last night driving home from our granddaughter's soccer practice. Some years ago there was a lot of talk of feminization of the American male in the US on talk radio and there's even a short wiki stub on the subject.

Hold that thought.

In literature (and music and the fine arts), Romanticism was a response to the Industrial Society.

Now back to feminization of the American male. There may be a dot that connects urban hip-hop / urban rap. I won't get into it now, but if there is a relationship, it could explain a lot. It would be interesting if Camille Paglia or Peggy Noonan would ever write about the phenomenon / phenomena.

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Better Than Free Trash Pick-Up In Chicago

A new, huge, state-of-the-art public recreation center has just opened in Grapevine, TX, near where we live. It's quite amazing: indoor pool, water park, exercise rooms, basketball courts, handball courts, library, video monitors to watch DVDs on the big screen, and so on. It is co-located with one of the best libraries in the country, the Grapevine Public Library -- separate buildings but common parking lots. For a membership, the best rate is $170/year or about $15 month.

My wife and I planned to join a the $170 level.

But then we learned there is a better rate: free for seniors. The entire facility is free for seniors from 8:00 a.m. to 11:00 a.m. That's all I would use it anyway, three hours a day. And I'm always up at 8:00 anyway. I used to go to Starbucks until they increased their prices. Now I go to Central Market in Southlake from 7:00 a.m. to 10:00 a.m. and then the Southlake Library until 1:00 p.m.

Now, a simply change: Grapevine Recreation Center until 10:00 a.m. and then the Grapevine Library.

The $170 I'm not paying Grapevine will be offset by the increase Time Warner is charging me for faster internet. LOL.

Random Update On WMB, ETP, And Spectra -- September 4, 2015

Gasoline prices across the nation going into Labor Day weekend. California is definitely the outlier. After the 3-day weekend, I expect to see gasoline going under $2.00 in much of the south and southeast.

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Update On WMB, Spectra, ETE-ETP

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.

BloombergBusiness brings us up to date on the WMB story, being "pursued" by ETE-ETP and Spectra:

Energy Transfer Equity LP sees Williams’ natural-gas conduits in the U.S. East, especially one to New York City, expanding its operations into demand-hungry areas. For Spectra Energy Corp., also said to be in talks to buy Williams, the attraction may be the possibility of a tax write-off and the chance to bring more Canadian gas into the western U.S.

The two companies’ starkly different interests in Williams illustrate how complex the financial structure of U.S. pipelines have become. Energy Transfer retains its complicated corporate setup, with controlling interests in multiple separately traded partnerships, while Williams has sought to simplify along with other pipeline owners. The changes come as investors demand ever-increasing cash payouts. Reducing tax rates has become as powerful a driver as strategy.

Nice graphics at the link.

A big "thank you" to the reader sending me the link.

Friday, September 4, 2015

EIA "energy cookie":

The U.S. average retail price for regular gasoline was $2.51/gallon (g) on August 31, the lowest price for the Monday before Labor Day since 2004, and 95¢/g lower than the same time last year. Declines in crude oil prices are the main driver behind falling U.S. gasoline prices. Lower crude oil prices reflect concerns about economic growth in emerging markets, expectations of higher oil exports from Iran, and continuing actual and expected growth in global crude oil inventories. --- EIA 

That's good news because a lot of folks don't have jobs based on today's job report.

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Active rigs:

	9/4/2015	09/04/2014	09/04/2013	09/04/2012	09/04/2011
Active Rigs	75	196	188	192	198

RBN Energy: crude prices and China's (lack of) growth threaten the boom. (Archived.)

Projected growth in U.S. methanol production was based in large part on the expectation that domestic natural gas prices would remain significantly lower (on a per-MMBtu basis) than the price of crude oil, and that Asian demand for U.S.-sourced methanol would continue rising at a fast clip. 

Today both of those assumptions look dicey. Natural gas prices remain low, but crude prices have languished below $50/Bbl for most of the past two months, and there are worries that China (by far the world’s largest methanol consumer) may be an economic bubble about to burst. Today, we consider recent developments that could slow the long-anticipated growth in natural gas use by U.S. methanol producers.

Just over a decade ago, U.S. oil and natural gas production were on the decline and scores of petrochemical plants—including 90% of the nation’s methanol capacity--were being shut down. Now, the only constraints on domestic oil and gas output are prices (they need to be high enough to encourage drilling) and infrastructure (it needs to be sufficient to move product to market). Abundant, inexpensive natural gas has spurred interest in a variety of gas-based chemical production projects, including projects to make ammonia, propylene, and—as we will revisit today—methanol. 

A three-step process is used to produce methanol from natural gas. (No angst please; we’ve really simplified things for our organic chemistry-phobic readers). First, a steam-methane reformer (SMR) converts natural gas into a synthesis gas (syngas) consisting of carbon monoxide, carbon dioxide, water and hydrogen. Next, hydrogen is stripped from the syngas, and third, methanol is produced through a catalytic synthesis of the syngas. 

As we said a while back, about two-thirds of worldwide methanol demand (recently estimated by Methanex, the leading methanol producer, at 61 million metric tons per annum, or MTPA) is tied to its traditional use a basic chemical feedstock for making formaldehyde, acetic acid and petrochemical intermediates that, in turn, are used to make plastics, synthetic fibers, paints, resins, solvents and the like. The balance of methanol produced annually is used in “methanol-to-olefins” (MTO) plants (most of them in China) that directly convert methanol into ethylene or polyethylene; as a fuel (again, mostly in China); or as a fuel additive (it can be used to produce dimethyl ether (DME), an alternative motor fuel and sometimes replacement for propane, and to make methyl-tertiary-butyl ether (MTBE), an octane booster the U.S. has banned for domestic use but still produces for export). 

Methanol’s fastest-growing use has been in MTO plants (China now has 10 such plants, which at full capacity can consume a total of 10 metric tons per annum, or MTPA) and as a fuel; it’s been estimated that by the 2020s worldwide methanol demand may top 100 MTPA or 40 MTPA above the current level – representing about 7% per year growth.

Shocked! -- Friday, September 4, 2015; The US Is At Full Employment -- Janet Yellen And The Federal Reserve

Note: after yesterday's "first time unemployment claims" report came out, I had decided to start posting that weekly number by exception. The weekly "ups and downs" of 5,000 or less is simply background noise, and not significant. With today's shocking "new jobs number" -- a monthly report --  I'm not sure if I will stick with that decision. So, we'll see. No one saw today's number coming and my hunch is that it will be revised upward; but to get it from 177,000 to 200,000 is going to require quite a revision.

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Wow!

Regular readers know how cynical I am when it comes to the unemployment numbers and jobs reports, but the jobs report coming out this morning exceeded anything I had imagined. What was it? 177,000? Anything below 200,000 is consistent with economic stagnation. Despite energy at all-time lows and gasoline demand at all-time highs, we have 177,000 new jobs added in August. Pundits had suggested the number would be 225,000, not great, but at least with that number Bloomberg and Reuters could tell us again how good the Obama economy is doing.
But 177,000? Wow. Even I was shocked, and I'm pretty cynical. [Wow, I was wrong. I thought I had read 177,000 but, in fact, it was 173,000. An incredibly bad report.]

But the dots are easy to connect:

• hourly wages are up slightly
• minimum wage mandates and pressure for minimum wage increases grow
• stores like Wal-Mart cut employee hours
• new jobs added: way, way below 200,000
• folks dropping out of work force; new records for low participation set again
• unemployment rate drops to 5.1%

Bullets #4, 5, and 6 are the reasons the market tanked this morning. Movers and shakers and anyone paying attention know that the unemployment rate ticked down because folks are dropping out of the labor force.

President Obama has a busy day today. He will see that unemployment has dropped to 5.1% and he will move on.

By the way, the August jobs number was hardly posted when already one of the major news services was already suggesting it was due to a statistical glitch. Next month the August jobs report will magically be revised to show that the August numbers was really 350,000.

I track the numbers here. Seldom in the past six years has there been a really good jobs report despite a gazillion dollars in stimulus. Even when the numbers are somewhat good, the numbers are almost always less than expected. Back in March, for example, the report was 235,000 new jobs added -- at least it was above 200,000. But it was less than what analysts had expected.

Probably just another statistical glitch.

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Bloomberg Spin

Bloomberg saw the numbers as a great report. Wow:

Employers added 173,000 workers in August and the U.S. jobless rate dropped to 5.1 percent, the lowest since April 2008 and a level that the Federal Reserve considers to be full employment.

The gain in payrolls, while less than forecast, followed advances in July and June that were stronger than previously reported, the Labor Department said Friday. Average hourly earnings climbed more than forecast and workers put in a longer workweek, the report also showed.

Persistent hiring indicates employers were upbeat about America’s demand prospects leading up to mounting concerns of further deterioration in emerging economies. Fed policy makers meeting in less than two weeks will weigh resilient U.S. employment conditions against the recent turmoil in world financial markets as they debate the timing of any interest-rate increase.

Earlier, Bloomberg asked if this might not be the most important jobs report ever? Wow, such hyperbole. And then the jobs number did not meet Bloomberg's expectations: any number of 200,000 -- even 205,000 -- would have been a reason to uncork the champagne, but alas, only 173,000.

Even the New York Times was more honest than Bloomberg:

Despite disappointing job growth last month, the unemployment rate fell to its lowest level since early 2008, sharpening the debate within the Federal Reserve over whether to raise interest rates when policy makers meet in two weeks.

Friday’s report from the Labor Department — which estimated that employers added a less-than-expected 173,000 jobs in August even as the official jobless rate dipped to 5.1 percent — provided evidence for both camps to make their cases.