Poll Results: Whether North Dakota August, 2015, Production Would Exceed One Million BOPD

Oil:

• August, 2015: 1,186,444
• July, 2015: 1,206,996 (final, revised) 

Delta, crude oil production:

• 1,186,444 -1,206,966 = - 20,522
• 20,522 / 1,206,966 = 1.7% decrease month-over-month

Poll: will North Dakota crude oil production exceed 1 million bopd in the August, 2015, Director's Cut?

• Yes: 85%
• No: 15%

August, 2015 Data, Director's Cut -- October 13, 2015; Fracklog Increases; Production Down Slightly

August, 2015, data here.

I track the "cuts" here. 

Disclaimer: this update is always done in haste; typographical and factual errors are likely. This is for my use only. If this is important to you, you should go to the source. 

Note: facts and opinions are interspersed in the note below. Do not make any investment or financial decisions based on what is posted below; there will be factual and typographical errors. If this information is important to you, go to the source. 

The August data is posted at this link: https://www.dmr.nd.gov/oilgas/directorscut/directorscut-2015-10-13.pdf

Important data points:

• Today, pricing: $35.00
• Bakken price in September: $31.17
• Fracklog: 993 (79 more than at end of July, previous reporting period)
• Completions: 115 (119 in July, 2015) -- more wells going to SI/NC status
• Statewide flaring: 20% (no change from previous month) 

Delta, crude oil production: 

• 1,186,444 -1,206,966 = - 20,522
• 20,522 / 1,206,966 = 1.7% decrease month-over-month

Oil:  

• August, 2015: 1,186,444
• July, 2015: 1,206,996 (final, revised) 
• June, 2015: 1,211,328 (final)(second highest; highest was December, 2014)
• May, 2015: 1,202,615 (final)
• April, 2015: 1,169,045 (final)
• March, 2015: 1,190,502 (final); 1,190,582 bopd (preliminary)
• February, 2015: 1,178,082 bopd (revised, final); 1,177,094 (preliminary)
• January, 2015: 1,191,198 bopd (all time high was last month)
• December, 2014: revised, 1,227,483 bopd (preliminary - 1,227,344 bopd - preliminary, new all-time high)
• delta: see above

Producing wells:

• August, 2015: 13,016 (preliminary -- new all-time high)
• July, 2015: 12,965 (final revised -- new all-time high)
• June, 2015: 12,868 (final revised -- new all-time high)
• May, 2015: 12,679 (final revised -- new all-time high)
• April, 2015: 12,545 (final revised -- new all-time high)
• March, 2015: 12,443 (final revised -- new all-time high)
• February, 2015: 12,199 (final revised -- new all-time high)
• January, 2015: 12,181 (preliminary -- new all-time high)
• December, 2014: 12,134 (preliminary, new all-time high)
• November, 2014: 11,951 (revised); 11,942 (preliminary, new all-time high)
• October, 2014: 11,892; revised 11,942 (preliminary, new all-time high)
• September, 2014: 11,758 (revised); 11,741 (preliminary; new all-time high)
• August, 2014: 11,565

Permitting: 

• September, 2015: 154
• August, 2015: 153
• July, 2015: 233
• June, 2015: 192
• May, 2015: 150
• April, 2015: 168
• March, 2015: 190
• February, 2015: 197
• January, 2015: 246
• December, 2014: 251
• November, 2014: 235
• October, 2014: 328
• September, 2014: 261
• August, 2014: 273
• All-time high was 370 in 10/2012
  

Pricing: 

• Today, 2015: $35.00
• September, 2015: $31.17
• August, 2015: $29.52
• July, 2015: $39.41
• June, 2015: 47.73
• May, 2015: $44.70
• April, 2015: $38.33; $36.25 (lowest since February, 2009, and January, 2015) (all-time high was $136.29 7/3/2008)
• March, 2015: $31.47
• February, 2015: $34.11
• January, 2015: $31.41
• December, 2014: $40.74
• November, 2014: $60.61
• October, 2014: $68.94
• Sept, 2014: $74.85
• August, 2014: $78.46

Rig count:

• Today:  67 - lowest since November, 2009, when it was 63 (all time high was 218 on 5/29/2012)
• August: 74
• July: 73
• June: 78
• May: 83
• April: 91 (lowest since January 2010)
• March: 108
• February: 133
• January: 160
• December, 2014: 181
• November, 2014: 188
• October, 2014: 191
• Sept, 2014: 193
• August, 2014: 193
• July, 2014:  192

Director's comments:  [see source]

The number of well completions rose sharply from 119 (final) in July to 115 (preliminary) in August.

Drilling rig count: 

• rig count increased 1 from July to August; decreased 3 from August to September, and dropped 4 more this month (October)
• dropped 5 from June to July
• dropped 5 from May to June
• dropped 8 from April to May
• dropped 17 from March to April 8
• dropped 25 February to March
• dropped 27 from January to February
• dropped 7 from November to December
• dropped 21 from December to January
• dropped 23 from January to date of previous month's Director's Cut

Rig utilization: [see source]

• no change
• 20,000+ feet rigs: 40% (down from 45% last report)
• shallow well rigs: 20% (also down from 25% last report)

Well completions: 

• August: 115 (preliminary)
• July: 119 (final)
• June: 149 (final)
• May: 116 (final)
• April: 102 (final -- astounding drop)
• March: an astounding 194 (final)
• February: 42
• January: 63
• December: 173 (preliminary)
• November: 48

Weather: 

• one significant precipitation event in the Minot
• 6 days with wind speeds in excess of 35 mph (too high for completion work)
• no days with temperatures below -10F

Wells waiting to be completed:  

• At end of August, an estimate 993 wells waiting to be completed; 79 more than end of July
• At end of July, an estimated 914 wells waiting to be completed, 70 more than at end of June
• At end of June, an estimated 844 wells waiting to be completed
• At end of May, an estimated 925 wells were waiting to be completed, no change
• At end of April, an estimated 925 wells were waiting to be completed, an increase of 45
• At end of March, an estimated 880 wells were waiting to be completed, a decrease of 20
• At end of February, an estimated 900 wells waiting to be completed, an increase of 75
• March, 2015, Director's Cut -- 825 wells -- an increase of 75-- January data
• Previous Director's Cut -- 750, a decrease of 25
• Red Queen: 110 - 120 completions per month to maintain 1.2 million bopd

Flaring: 

• capture target, current, January - December, 2015: 77% (actual, 80%)
• capture target, April, 2016 - October, 2016: 80%(had been 90%)
• capture target, November, 2016 - October, 2018: 85%
• capture target, November, 2018 - October, 2020: 88%
• capture target, after October, 2020: 91%
• flaring today: 20%, same as last month
• finally, the Tioga gas plant was up slightly to 92% of capacity (88% last month; 90% prior; and, 93% previous to that)
• the Lake Sakakawea gas gathering expansion project was approved, but it was approved too late for the 2015 construction season, resulting in a one-year delay.

Gas capture statistics:  

• statewide: 80% (October 2014 target was 74%; CY 2015 capture target is 77%)
• FBIR Bakken: 77% (was 81% last month)
• NOTE: the daily volume of gas flared from July to August was up 9.5 MMCFD; May to June was up just 1.6 MMcfd; previous month the volume of flaring increased 30  MMCFD (previous month increased 23.5 MMCFD (a reversal from last month when flaring had decreased month-over-month)
• NOTE: previously announced -- ONEOK announced plans to hook up 700 wells in the Bakken (natural gas hook-ups)

Fracking policies/regulations: (see source linked above; way too much to post)

Tuesday, October 13, 2015 -- Part III; GDP Now Lowers 3Q15 Estimate

Tweeting now: IEA report says Russia's oil output at 'record high' in first eight months of 2015, up 8.9% on year, on drilling development boom.

No links; story everywhere: Planned Parenthood admits selling baby parts; will discontinue practice. Disingenuous in their press release announcing new policy.

Early winter: Unseasonably cold; early snowfall; winter begins? When growing up in Williston, I remember the weather being "seasonable" until the end of October. I remember most Halloweens as being warm enough to enjoy trick-or-treating, but near the end of my time as a trick-or-treater, the Halloweens seemed to be getting much colder (freezing), but then again, maybe I was just getting "soft."

GDPNow:

The GDPNow model nowcast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 1.0 percent on October 9, down from 1.1 percent on October 6. The model's nowcast for the contribution of inventory investment to third-quarter real GDP growth ticked down 0.1 percentage point to -2.1 percentage points after this morning's wholesale trade report from the U.S. Census Bureau.

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The Apple Page

Apple has released new desktop Macs. Incredible. Base model at $1,099: 21.5 inch monitor; 8GB RAM and one terabyte (TB) of storage. A terabyte of storage and 8GB RAM for the price of what a laptop iMac used to cost (or still costs, perhaps). And, of course, the desktops range a whole farther -- up to 27 inch; RAM configurable up to 32 GB; 2 TB storage; and, retina 5K. And just a few years ago, "4K" was all the rage. My only complaint: to make the Mac aesthetically appealing, the slots are still in the back. It would be nice if they could be up front for easier access.

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6,001 Pounds

Coming in at just over 6,000 pounds, the Tesla Model X qualifies for a $25,000 federal tax deduction. The Los Angeles Times is reporting:

The loophole, identified as section 179 of the Internal Revenue Service code, was originally part of a stimulus package meant to encourage small-business owners to spend more freely on heavy equipment — urging farmers to buy new tractors, or contractors to buy new trucks.

Limited to passenger vehicles weighing more than 6,000 pounds — most passenger cars and light trucks do not qualify — the deduction became known as the "Hummer tax loophole" because it gave write-offs to buyers of the giant, gas-guzzling Hummer H1 and H2 military-style trucks.

The Model X comes in at "just over 6,000 pounds."

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Speaking of Tesla

Those "falcon" wing-doors added significantly to the weight of the car. The roof of the car had to be significantly strengthened to support those wing-doors. Elon Musk ballyhooed the doors, allowing very tight parking between other cars and still allowing passengers to get out. Unfortunately the front seat (driver and "shotgun") have standard doors which negates any space-saving by the wing-doors.

Originally analysts felt the wing-doors were placed there for "novelty" and most likely they were but by adding weight to the car, buyers qualify for a huge federal deduction.

Most analysts assume the wing-doors will fade away in the next iteration of Model X. If you can't engineer wing-doors for the driver, the major purpose of the wing-doors is ... well, simply not there.

No Evidece of Groundwater Contamination From Fracking In Pennsylvania -- October 13, 2015

A report on NPR this morning while driving the granddaughters to school: no evidence that fracking results in any contamination of aquifers; Pennsylvania; Yale researcher; definitive study. To be published in the prestigious Proceedings of the National Academy of Sciences. There was some ground water contamination but "fingerprinting" revealed that it came from surface spills; not fracking. Levels of "contamination" did not exceed allowable limits.

Here's the NPR link.

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Unexpected: Good News For Truckers

The Wall Street Journal is reporting:

After years of spending long hours behind the wheel without seeing their paychecks grow, U.S. truck drivers now have employers fighting for their services.

Many freight haulers have in the past year pushed through their biggest raises in decades. Truck-stop job boards and satellite radio airwaves are saturated with want ads, some offering sign-on bonuses topping $5,000 and free bus tickets to drivers willing to switch employers. Companies are equipping their fleets with satellite televisions and other amenities to make life on the road more comfortable.

It is a bonanza for drivers like Alex Topolse. The 34-year-old Auburn, Maine, resident said he went from flipping burgers and doing seasonal warehouse work to driving a chemical tanker truck in 2013. He said he liked the work but moved to a company based closer to home—and was offered a 50% raise. He said he has already received two small raises with his new employer and is on track to earn nearly $70,000 this year. 

So, what's the deal?

Drivers are in demand in the shifting $700 billion trucking industry. Business is booming because the economy is expanding and the strong dollar is increasing demand for imported goods that must be transported from ports to cities and towns nationwide, though growth has cooled recently. At the same time, interest in the profession is waning. 

And, of course, we just saw that Warren Buffett/BNSF story on double track from Chicago to Los Angeles. The tea leaves suggest a great US economy.

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Train Wreck

The Wall Street Journal is reporting:

Healthcare trusts created nearly a decade ago to cover medical expenses for hundreds of thousands of Detroit’s hourly retirees reported a funding shortfall of $20.7 billion last year, more than quadruple the gap recorded in 2013, according to government filings.

It is unclear whether the gap could eventually force the funds—established by the United Auto Workers union to take retiree medical liabilities for factory workers off the car companies’ books—to cut costs and trim benefits.

The trusts representing retirees at General Motors Co. , Ford Motor Co. and Fiat Chrysler Automobiles NV recorded net assets of $60 billion last year, down less than a percentage point from the previous period.

But the funds’ benefit obligations grew 23% to $80.84 billion from 2013 to 2014. At the end of last year, the trusts were 74% funded versus 93% in the prior year.

The three trust funds spent a total of $3.2 billion last year paying out medical benefits for retirees. The fund attributed the larger shortfall to a change its discount rate and actuarial assumptions.

Nothing to see here, folks. Sounds like a simple accounting change. Not to worry. Washington has this under control.

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Waiting For The March, 2016, Issue? 

I've never subscribed, but maybe it's time.  The Wall Street Journal is reporting:

Playboy Enterprises Inc., which helped usher in the sexual revolution but has stumbled in the digital era, said it no longer would publish nude photos in its flagship magazine, which built its reputation on spreads featuring pop-culture icons such as Marilyn Monroe, Farrah Fawcett and Madonna.

Playboy, which already has reconfigured its website to make it “safe for work,” said it would unveil a redesign to its magazine with the March 2016 issue. The publication has a circulation of about 800,000, down from a height of 5.6 million in 1975, according to Alliance for Audited Media.

It will be interesting to see if the "new" Playboy is placed "uncovered" on newsstands like Cosmopolitan, and whether it can be sold in Iraq and Afghanistan. I'm not holding my breath.

Tuesday, October 13, 2015

Active rigs:

	10/13/2015	10/13/2014	10/13/2013	10/13/2012	10/13/2011
Active Rigs	68	191	184	192	195

RBN Energy: LNG -- floating storage and regasification units.

Depending on whom you believe, the international liquefied natural gas (LNG) market is either struggling through a period of oversupply and rock-bottom prices or poised for a new round of demand growth based on that low-cost supply abundance. (Hint: The answer may well be both of the above.) For electric and natural gas utilities that want to become LNG importers as quickly—and as cheaply--as possible, an increasingly popular option is buying or (more likely) chartering a floating storage and regasification unit, or FSRU. Today, we look at the growing use of FSRUs and how they may boost the LNG market.

The LNG-laden tankers departing from the world’s growing list of liquefaction and export terminals (a list soon to include Cheniere Energy’s Sabine Pass facility in Louisiana) are destined for import and regasification terminals in Asia, Europe, Latin America and elsewhere—even hydrocarbon-rich locales like Kuwait. Traditionally, these LNG-receiving facilities have been built on land, next to long piers where LNG tankers dock and offload their cargo. Increasingly, though, LNG importers are turning to FSRUs--LNG tankers fitted with special equipment that enables them to receive, store and regasify (or vaporize) LNG. It’s hard to say for sure yet, but FSRUs may eventually become a significant factor in the international LNG market.

Turkey and Russia at odds over Syria -- Bloomberg/Rigzone:

It’s taken less than a year for Russian President Vladimir Putin to go from hailing Turkey as a potential linchpin in natural gas supplies to Europe to shunning it.

As the nations fall out over the conflict in Syria, Moscow-based Gazprom PJSC, the world’s largest gas producer, said last week it would cut the capacity of a planned link to Turkey and on to Europe by 50 percent. Turkish President Recep Tayyip Erdogan warned Russia last week that energy cooperation could suffer because of the former Soviet nation’s violation of his country’s airspace and military buildup in the region.

That’s a far cry from last year, when Putin said Turkey could become an energy hub for southern Europe as the proposed link under the Black Sea would help Russia reduce its dependence on gas transit via Ukraine, the current route for more than 10 percent of Europe’s gas.

Putin feels able to change tack on Turkey, the second-largest customer for Russian gas, because in September he agreed to expand the Nord Stream pipeline that links Russia directly with Germany.

“Putin is betting on Nord Stream, but that bet is risky," Sijbren de Jong, energy security analyst at the Hague Centre for Strategic Studies, said by e-mail. "Can Gazprom really afford to annoy Turkey and forgo gas revenues? Hardly."

Russia relies on oil and gas for about half of its budget earnings and is adept at mixing its energy policies with political aims. It stepped up energy cooperation with Turkey and China last year as relations with the EU and the U.S. soured over the Ukraine conflict and profits from gas sales in Europe slumped on weaker commodity prices.