Trust But Verify -- February 21, 2016

Updates

Later, 10:08 p.m. Central Time: see first comment; a reader provides this source for another look -- http://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf. Page 12 of the download or page 7 of the EIA document as the EIA numbers the supporting documents.
 

Original Post

 

Last summer, July 29, 2015, John Kemp twittered that gasoline stocks in PADD 5 were at a historic low level, critically low in fact, according to the EIA and he posted a graph, which I included at the link. It was presented at a time when gasoline prices were coming down across the US but were stubbornly elevated on the west coast.

I was curious to see that how things have changed (or not). This link takes you to the source, a dynamic link: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WGTSTP51&f=W.

The graph can be embedded which I did:


Maybe it's just me, but it looks like the July 29, 2015, graphic was a bit of hyperbole. Gasoline stocks in PADD 5 have a predictable and explainable pattern.

For what it's worth. 

There You Have It -- Not About The Bakken -- If You Came Here For The Bakken, Scroll Down Or Go To The Sidebar -- February 21, 2016

Environmentalists conveniently forget to remind 3rd graders that Rockefeller saved the great whales from extinction. I’m reminded of that after seeing an article in this week’s issue of The Smithsonian, “Murdering History: An eyewitness report on the devastating cultural genocide being waged by ISIS and combatants in Syria’s civil war.”

Years ago I remember an occasional article taking to task the great museums in England and France (e.g., The British Museum and the Louvre) for “looting” the great treasures of Egypt and the Mideast. There were calls for these museums to return these artifact back to their home country. I doubt we will see any articles praising the early western European collectors for having saved these priceless pieces from extinction, just as Rockefeller saved the whales, but there you have it.

Over the years, I’ve probably subscribed to as many as a dozen publications at any one time, but with the internet available some years ago, and the increasingly “fluffiness” and irrelevant magazines like Newsweek, I stopped all subscriptions. Off and on I would re-subscribe to The Wall Street Journal. My favorite periodical, beginning back in 1973, was The New Yorker. After years of letting that subscription lapse, I am now, once again, a regular subscriber. I also recently subscribed to The New York Review of Books and will renew.

I will subscribe to introductory offers of $10 for an annual subscription, and through that offer I also subscribe to The London Book Review. I doubt I will be able to afford The London Book Review when it comes up for renewal. I am also a one-year subscriber to The Smithsonian, a $10 introductory offer. I won’t renew when the subscription expires.

Another article that caught my eye in The Smithsonian: Into Thin Air: High in the mountains of Kyrgyzstan, scientists and hunters are unlikely allies in an effort to protect the endangered snow leopard before it vanishes.”

I wonder if any dentist from Minnesota is tracking the snow leopard for an office trophy before the last one dies off.

“Into thin air” was coined by Shakespeare, by the way.

But I digress. It wasn’t the article itself that caught my attention so much as the coincidental juxtaposition of that article with the following article: “Power On: When Steve Wozniak booted up the Apple I, he launched a tech revolution.”

Snow Leopard was the code name for one of Apple’s recent operating systems. That operating system will no doubt vanish before the cat does. But computer code has a way of living on forever.

The Apple I article is worth the price of the single issue. With all the recent press about Apple, I think many folks have forgotten Apple’s humble beginnings, its heritage. Our younger daughter and I still take our prayer rugs to kneel on whenever we visit a new Apple store for the first time.

It is amazing how far we’ve come. In 1969, I was using a slide rule in high school. In 1972 I was waiting in line to hand my IBM punch cards to some geeky nerd (redundant) who would load them into an IBM mainframe that took up an entire air-conditioned room in the basement of a new science building which was probably designed around this single monstrosity.

In 1980 I was using basic BASIC to write basic BASIC programs for my TRS-80 computer. Looking back, it’s hard to believe the TRS-80 was called a computer. I tracked my first equity investments on that TRS-80.

In 1984 while stationed in Germany, I bought my first Apple computer — a model that was being phased out, but lasted for years after that. I had to buy it at an off-label kiosk because the Army Air Force Exchange Service (AAFES) could not come to terms with Apple as a reseller. Both AAFES and Apple were losers in that pissing contest. US military men and women are heavy tech users and early adopters. That one decision by AAFES/Apple allowed Bill Gates the key to the kingdom and it was decades before Apple was able to recover.

I’ve never owned a Wintel/PC. I’ve never used an Apple while at work. I’ve probably had a dozen different Apple computers over the years — always buying the model that was being phased out. Phased out models were always so much less expensive and they were expected to last forever, and they did. Unfortunately, newer and better and more robust models are being released so often that if one doesn’t occasionally buy a new model, one will be hopelessly lost somewhere down the road.

I’m not sure I’ll read the entire article, “OMG! We’ve been here B4: Texting isn’t the first new technology blamed for ruining personal discourse and common courtesy.” But the little I did read is interesting: modern surveys have found that teenagers who text the most are also those who spend the most time face to face with friends. Communication begets communication.

More likely: some people are more social than others. Social people socialize across the spectrum.

On the other hand, it appears that haters who comment on FoxNews..com are probably social outcasts. If not, they should be.

***********************

Poetry is very difficult for me. Try as I might, I have trouble with poetry. It took me years to understand why, but while in my “poetry phase” some years ago I finally understood why I had trouble with poetry.

Some years ago, while in my “poetry phase,” while reading Virginia Woolf’s Mrs Dalloway I thought it was prose poetry. I did not know such a “thing” existed but one can google “prose poetry” and find that, yes, indeed, it exists.

I typed the entire Mrs Dalloway in blank verse; it took me about six months to complete, typing a couple of hours every day or so. I discovered some “connecting dots” upon completing that project, which I have posted elsewhere, on another blog. To the best of my knowledge, this had not been “discovered” before. If it has, I have been unable to find any references anywhere.

I followed that up by typing the entire The Waves, also by Virginia Woolf. This was typed out differently than the novel, but not in free verse. Again, I discovered things about The Waves I would not have otherwise known but no great insights like the ones I had with Mrs Dalloway.

I write all that to talk about a one-page poem in this week’s The New Yorker that caught my attention: “Money Road” by Kevin Young, on p. 54, February 22, 2016.

I assumed “Money Road” would be about money. I was wrong.

I think a lot of folks think “The Million Dollar Way (The Bakken Oil Blog)” has to do with investments / investing in the Bakken or with investing in general. Not at all. The Million Dollar Way was the stretch of US Highway 2 & 85 that led north out of Williston. It was probably so-named during the first oil boom back in the 1950s after the car dealers built along that stretch.

The Million Dollar Way was literally and metaphorically my way out of town, leaving one life to being another. The Million Dollar Way had deep meanings and great memories for me.

“Money Road,” the poem, turns out not to be about money either but about the description of the road the writer was taking to re-discover “Money, Mississippi.” My hunch is that his “money road” is my “million dollar way.”

The poem reminded me of the essay in the September 22, 1956, issue of The New Yorker on Mr Hunter and the oyster farms on Staten Island, and on a second reading of "Money Road" I was reminded of William Least Heat-Moon’s Blue Highways: A Journey Into America.

Nine (9) More Bakken DUCs; CLR Reports A Nice Brooklyn Well -- Sunday, February 21, 2016

When you scroll through this list of wells coming off the confidential list, remember that the Saudi Surge/Price Plunge began in October, 2014. It's now been almost 16 months of pain. Pay attention to the operators still drilling.

Monday, February 22, 2016

• 29682, SI/NC, Statoil, Richard 8-5 3TFH, Banks, no production data,

Sunday, February 21, 2016

• 29612, SI/NC, Statoil, Cheryl 17-20 7H, Banks, no production data,
• 30798, SI/NC, XTO, Big Gulch Federal 41X-16A, Haystack Butte,
• 30957, SI/NC, EOG, Van Hook 67-3606H, Parshall, no production data,
• 31398, conf, Newfield, Larsen 152-96-9-3HLW, Westberg, no production data,
• 31744, SI/NC, XTO, Cheryl Federal 24X-12A, Grinnell, no production data,

Saturday, February 20, 2016

• 29683, SI/NC, Statoil, Richard 8-5 7H,  Banks, no production data,
• 29866, 697, CLR, Helena 4-7H, Brooklyn, t9/15; cum 37K 12/15;
• 30799, SI/NC, XTO, Big Gulch Federal 41X-16B,  Haystack Butte, no production data,
• 30956, SI/NC, EOG, Van Hook 68-3606H, Parshall, no production data,
• 31745, SI/NC, XTO, Cheryl Federal 24X-12E, Grinnell, no production data,

****************************************

29866, see above, CLR, Helena 4-7H, Brooklyn:

Date	Oil Runs	MCF Sold
12-2015	10447	12884
11-2015	14750	12709
10-2015	3032	3876
9-2015	8111	11575
8-2015	475	0

******************************

Championship Game -- Water Polo

Lead-Up to the 2016 Summer Olympics

FINA -- Lewisville, TX

February 21, 2016

For the Granddaughters, Especially Arianna

Team Canada without their robes depart, having just been defeated by China.

Team Australia in their robes begin to assemble in the far southwest corner. I don’t see the US team yet, but here they come. The Aussies come to the platform first, in their green robes. The crowd is loud; Team USA players in their red and black robes are on the podium. Introductions. The standard genteel two-clap response.

Australia in the dark caps; Team USA in the white caps.

This is a rematch from last night. In that game USA won. In hindsight, I suppose, the outcome was never in doubt, but it was still a nail-biter for me.

First period.

AUS takes control of the ball at the start. Third possession, AUS almost scores a goal; it would have been an unusual miss by our goalie, but fortunately she stopped it. The US goalie is simply incredible.

USA scores at 5:23 on the tenth possession of the first period.

On the 11th possession, the US steals, but cannot score, though it was a great blocked shot.

The Aussies “score” on the 13th possession but it hits the net just as the 30-second clock runs out. Another US blocked shot on the 15th possession, denies Aussie a goal.

On the 16th possession, USA had a “6-on-5” advantage but couldn’t capitalize. US steals on the 17th possession. US scores, incredibly, at 1:59 on the 18th possession; 2 - 0. It’s almost a replay of last night’s game.

Another huge, defiant blocked-shot by the US on the 19th possession. Time-out by the US with 1:20 to play in the first period; US has the ball with a 30-second clock, 20th possession when the time-out ends.

1:20 to play, first period. The US, again, has a “6-on-5” advantage. A full 30 seconds. Unable.

21st possession, AUS brings it down. The US steals; this must be the third time. 22nd possession: 15 seconds and a strong, hard shot, with 5 seconds to play. 3 - 0. Last night in the game between AUS and USA, the score at the end of the first period: 3 - 0.

Five seconds to go in the first period. Time out, AUS. AUS gets the ball at mid-pool following the US goal. Time runs out.

Second period.

Team USA controls the ball.

1st possession: turnover. 2nd possession, AUS: One-on-one — penalty shot; AUS scores, 3 - 1. The US most likely would have lost that point anyway. Somehow AUS got one-on-one next to the goalie. 3rd possession: turnover. 4th possession, AUS. Has the momentum shifted? AUS with a “6-on-5” advantage. Hard throw and goalie misses: AUS scores, 3 -2.

5th possession, USA. USA needs to settle down. Turnover. 6th possession, AUS: shot-on-goal, hits left upright.

7th possession, USA: Team USA “6-on-5” — shot on goal, bounces off, rebounded by USA. USA with second opportunity and scores at 4:46, 4 - 2.

Eighth possession, AUS: desperate shot. Ninth possession, USA: turnover. Tenth possession, AUS at 3:50. Great interception/turnover by the USA at 3:40. 11th possession, USA: again, “6-on-5.” Failed to capitalize.

12th possession, AUS, time runs out.

13th possession, USA: easy shot but misses high. But clock resets and USA has full 30 seconds. Turnover.

14th possession, AUS: still 4 - 2. Unbelievable. US goalies misses an incredibly easy shot to block. It’s 4 - 3. Last night the first half ended with the US winning, 6 - 0. Completely different today. Another turnover.

16th possession, AUS: is the US goalie off her game? Concerned? A turnover. 17th possession with 1:00 to play. Another turnover, US not doing well.

18th possession with 42 seconds, 28 second on the shot clock and after the timeout AUS will have the ball.

US has the ball, and the timeout, with 16 seconds left to play.

Second half ends with USA barely hanging unto the lead, at 4 - 3.

Third period begins with 8 minutes on the clock.

AUS controls the ball. First possession; steal by USA.

2nd possession, USA, down at this end of the pool. A steal by AUS.

3rd possession. A blocked shot; back to the USA, for the 4th possession. Bad, bad control. AUS on 5th possession: good save. USA on 6th possession. The game seems to have picked up the pace a bit. USA with ”6-on-5” advantage and finally capitalizes at 5:54; 5 - 3.

AUS with 7th possession. Re-groups at mid-pool. Substitute late. Lots of contact. USA aggressive. US takes ball, and 8th possession. Should have been a “reach-over” penalty. No penalty called. 9th possession: AUS: block and save. AUS still with ball and full 30 seconds. Sixth save by the US goalie.

10th possession, USA: again, a major foul on AUS, her second major foul. USA will get penalty shot. No score.

11th possession, AUS. Timeout with 30 seconds on shot clock; 4:06 to play in the third period. A real nail-biter.

AUS scores, 5 - 4, 3:49 to play.

12th possession, USA: AUS takes it away. Long throw and USA takes it away, 14th possession. USA seems befuddled; turnover.

13th possession to AUS. Too much time left in the period. Is USA tired out? Is US goalie tired? Poor USA ball-handling.

14th possession to USA with 2:09 to play in the 3rd period. Again, a bad throw and AUS gets the turnover.

15th possession, AUS: shot wide. USA with 16th possession at 1:14 to play. Down-pool. Back-hand, weak throw. But penalty? Ball back to USA with full 30 seconds. Full strength for both teams. 1:00 minute left; wild shot.

17th possession, AUS: US steals. 18th possession, USA with timeout and 29.83 seconds to play with 28.99 seconds on the shot clock, when game resumes.

USA needs to get last throw and last point. Fails. Weak throw.

End of 3rd quarter, with USA still barely hanging on, 5 - 4.

19 possessions in the 3rd period; 19 possessions in the second period; twenty-three periods in the first period.

Fourth period. This is it. AUS controls the 1st possession.

4th period, 7:36. Great blocked shot. USA with 2nd possession. Lousy ball-handling by the USA.  The ball in the net but 30 seconds had run out. 3rd possession over. 4th possession back to the USA; turnover; another turnover; 6th possession, back to USA with full 30 seconds. USA in typical formation; again a weak throw and a missed goal. Easily blocked. 7th possession over; great block by US goalie. 8th possession, USA: again, typical formation — bad ball handling. Same thing, over and over. Out-front center with poor throw to center in front of goalie. Turnover. Turnover for US. 10th possession for USA and a beautiful soft lob over the head of the AUS goalie at 4:58, making it 6 - 4. This was needed by the USA, but this is way too close for my comfort. I like 17 -2 games, LOL, with the USA on the winning end.

11th possession over after a block by the US goalie. 12th possession, USA: again, poor ball-handling. Turnover. AUS with strong shot. Penalty on USA player #5, first major foul. AUS will shoot penalty shot, scores, 6 -5 at 3:52 to play.

US regroups at mid-pool after the successful penalty shot by the Aussies. 14th possession; USA. Lots of whistles. “6-on-5” advantage for USA. 14 seconds on shot clock. Nope, “5-on-5” with 14 seconds. US with wide shot.

Full strength for both teams. 15th possession, AUS, with 3:15 to play. Great block by the US goalie. 16th possession by USA: Typical set-up by USA; wide shot. Not playing well today; befuddled by AUS.

17th possession, AUS, with 2:26 seconds. Another block. 18th possession, USA, with 2:16 on the clock. Another reach over by AUS. “6-on-5” advantage for USA. Good passing but lousy shot, wide.

19th possession, AUS: it’s still 6 - 5, with 1:06 seconds and a full 30 seconds on the shot clock. AUS will have full 30 seconds after AUS calls a time-out. 1.05.8 with a full seconds on the shot clock and AUS trailing by one.

Strong shot but hits top of goal and bounces back. USA rebounds. 32 seconds on the game clock; it’s keep away with 17 seconds on the shot clock. AUS with ball. USA gets the block, the turnover, and wins 6 - 5. An incredible game. Absolutely incredible. 22 possessions to finish the game.

USA undefeated this tournament beating AUS last night 8 - 5 but barely hanging on for the win today, 6 - 5.

*****************************

Awards Ceremony

Gold: USA
Silver: Australia
Bronze: China

Top scorer: two individuals tied, Makenzie Fischer form USA and Rowena (I believe) Webster from Australia

Top goalie: Kelsey Wakefield from Australia

MVP: Maggie Steffens from USA (she was one of the crowd favorites, also)
(see also Jessica Steffens, her sister, at wiki)

Maggie Steffens was the FINA Female Water Polo Player of the Year 2014:

Maggie Steffens

XOM Fails To Replace Production For First Time In 22 Years; The Apple Page -- February 20, 2016

 FuelFix is reporting: Exxon Mobil fails to replace production for first time in 22 years.

Exxon Mobil Corp. failed to replace all of the oil and natural gas it pumped last year with new discoveries and acquisitions for the first time in more than two decades.

Exxon Mobil’s so-called reserve-replacement ratio fell to 67 percent in 2015, the Irving-based company said in a statement on Friday. Prior to that, the world’s largest oil explorer by market value had achieved ratios of 100 percent or higher for 21 consecutive years.

Exxon Mobil held reserves equivalent to 24.8 billion barrels of crude as of Dec. 31, enough to continue current rates of production for 16 years, according to the statement. That is down from 17.4 years or reserves life at the end of 2014.

The company added reserves last year in Abu Dhabi, Canada, Kazakhstan and Angola. In the U.S., gas reserves declined by the equivalent of 834 million barrels as tumbling prices for the furnace and power-plant fuel made some fields unprofitable to drill.
The gas reserves removed from Exxon Mobil’s books probably will be drilled at some point in the future when prices are higher, according to the statement.

This is a huge story with many, many story lines. Missing reserve replacement by any amount is huge news but falling to 67% is quite incredible. Especially for Exxon Mobil which seems to be the gold standard for such things.

Call me crazy, call me inappropriately exuberant about the Bakken but I think this has implications for North Dakota. A reminder for newbies: Exxon Mobil has a large operation in the Bakken. 

*********************************************

The Apple Page

Apple Watch Sales Estimated at 5.1 Million in Holiday Quarter, Swiss Watch Sales in Trouble.

The latest data from Strategy Analytics reveals that the Apple Watch remained the most popular smartwatch through the fourth quarter of 2015, capturing 63 percent global market share based on an estimated 5.1 million sales in the three-month period.

Samsung trailed in second place with 16 percent market share and an estimated 1.3 million sales. Apple and Samsung together accounted for 8 in 10 of all smartwatches shipped worldwide during last year's holiday shopping season, based on the data.

Global smartwatch sales rose to an estimated 8.1 million units in the fourth quarter of 2015, an increase of 316 percent from 1.9 million in the year-ago quarter. The growth was led by North America, Western Europe, and Asia.

The record-breaking smartwatch growth contrasted the troubled Swiss watch market, which declined 4.8 percent in Q4 2015 over the year-ago quarter. Swiss watch sales totaled 7.9 million units in Q4 2015, down from 8.3 million in Q4 2014.

Swiss watch sales: 8 million/quarter. After decades of faithful customers.

Apple watch sales: 5 million/quarter.  After two years or so.

********************************

A Note For The Granddaughters

This is the scoring summary and comments of two games on the sixth night of the FINA tournament in Lewisville, TX, as a lead-up to the Olympic games in Brazil this summer.

The championship games will be held Sunday, February 21, and pairings will be finalized following these two games. [Update: the pairings were completed following the games below. USA and Australia will meet again for the championship. USA was 5 - 0 in the tournament; Australia was 4-1. ]

Brazil (white/home) vs Canada (black/guest).

From the outset, Canada looked to be the stronger team. And just after noting that, Canada scored the first goal, within the first minute or so. Brazil took five shots in the first period; three were wild, and two bounced off the top of the goal. With 40 seconds to play in the first period, Canada led 3 - 0, but Brazil made a point, ending the first period 3 -1.

Brazil scored early in the second period, but Canada came back quickly, and with 4 minutes left to play, 5 - 2, but then a Brazilian goal, 5 - 3 with slightly less than four minutes to play.

Canada continues to take long, strong shots, seeming almost to score at will. With 3:24 to play, it’s now 6 - 3 following a long shot, and a hard, direct shot into the corner of the goal.

Canada has more take-aways, seems to score at will; Brazil does score but their shots are less sure, it seems. Brazil just scored a very nice point, not often seen. An outside player threw to a teammate directly in front of the goalie and the teammate seemed to simply swat the ball into the goal. If she caught the ball, she held it for a nano-second; 6 - 4.

Canada continues to score at will. Canada passes / controls the ball much better and then takes deep, deep shots. With 1:40 to play it’s 7 - 4.

In water polo, the game can change momentum quickly, but it’s been my impression at this level of play it’s difficult for a team down 7 - 4 at the end of the half, and when the winning team seems to be playing much better, for that team to come from behind to win.

Wow, I don’t understand all the water polo rules, but all of a sudden, with one minute left to play in the first half, the game has gotten very physical. There is much more physical contact than I saw in the any of the three games I saw earlier in the week.

I saw Brazil play the US (the US won 17 - 2) but I have not seen Canada play until now.

In the last game tonight, the US will play Australia. Australia has qualified for the Olympics; the US has not. I saw Australia play the first day of the tournament; they looked very, very strong.

The end of the first half, Canada, 7, and Brazil, 4.

Either I’m more aware of it now, or there are more occurrences, but I have seen at least instances of when a Brazilian player was ejected from the pool for one possession. It occurred early in the third period, and Canada took advantage of the one player advantage, scoring, making it 8 - 4.

At 6:00 to play, Brazil scored, making it 8 - 5.

Again, much better ball handling, passing, controlling, but unable to score.

Brazil penalized, sending a teammate to the “penalty box” and Canada immediately scores. With 4:00 to play in the third period, 9 - 5. The third quarter ends 9 - 6, with Canada still ahead.

Two minutes into the fourth period, Canada scores first, making it 10 - 6. Barring a complete meltdown it’s just a matter of what the final score will be. Canada will obviously win. If this is scored like soccer tournaments I have been to, where there are not enough teams or time to play through brackets, then points still matter.

Canada scores again with 5:22 remaining, 11 - 6.

As I was saying, teams are awarded points for winning, points for tying, and points based on number of goals made. The two teams scoring the most points using this system will play for first place tomorrow afternoon.

Again, a reminder, there are six teams in this tournament. Tomorrow, the 5th- and 6th-place team will play the first game. The second game wil be played by the 3rd- and 4th-place teams, and finally, as noted, the top two teams will play for first place.

The scoring has slowed considerably. In what seemed to be slow-motion, the Canadians scored again, 12 - 6 with 3:23 left to play.

I think this was a good game for Arianna to see. She sees just how physical the game can get.

At 2:47 to play, the Brazilians score, 12 - 7. The Canadians answer, 13 - 7.

Another unanswered goal, and the Canadians lead 14 - 7 with 1:20 left to play. With good ball handling the Brazilians can’t expect to get more than two shots, and the Canadians just took away their last chance with 46 seconds to play.

And that’s the end of the game: 14 - 7, Canada.

********************************

USA vs Australia

This is the game we came to watch. It is the last game of the week before the championship games begin tomorrow.

Australia (home/white) vs USA (guest/black).

They are being introduced now. It’s a very interesting way the crowd responds, as I’ve mentioned before. A very genteel two-clap response when a team member is introduced. They haven’t take down the score form the previous game yet.

Okay, the board is set 0 - 0. It looks like a good match-up.

The US goalie blocks the first shot on goal, and Team USA comes down to score, at 5:59.

The US goalie blocks another hard, direct shot on goal, and Team USA comes to this end of the pool. A hard, direct shot; the Aussie goalie not able to stop it though it did glance off her right arm, 2 - 0 at 5:05.

Another blocked goal. US brings it down-pool. Shot-on-goal hits the goal and bounces off; I’m not sure how, but the US took the ball and shot again. Wild.

Australia takes the ball to the goal but the US takes it away. A poor possession by the US and a poor shot and it’s back with the Australians. Wow, another save by the American goalie. She is quite incredible.

Huge shot-on-goal by the US but bounces off the top of the goal with 2:21 left to play.

Wow, huge, hard, direct shot-on-goal and this time it hits its mark. That was a solid goal, making it 3 - 0.

Wow, another blocked shot by the phenomenal US goalie and Australia is denied another goal. It has to be demoralizing.

I guess it didn’t count but that last “goal” looked incredibly impressive. It’s one of those shots where the shooter has her back to the goal and flings it underhand. It went it but time must have run out.

End of first period, 3 - 0.

Second period, the US goalie has her 5th save. The US at 5:41 with a hard, direct, shot from the middle scores, 4 - 0.

One would think at this point, it’s all over, but I have great concerns about the Australians, and the momentum can easily change in water polo. Wow, another huge block by the Americans. The goalie only had to retrieve the ball that ended up in the corner of the pool.

Wow, and right down to this end of the pool, and with a hard, direct shot from the far right side, the US scores again with 4:44 left in the second period, and now it’s 5 - 0.

I’m sure the crowd feels it’s all US now but when it comes to these sports, I’m always a pessimist, always a realist, always on edge.

Two unanswered points by the Australians would change the momentum and possibly the outcome of the game.

Wow, they are good. Now it’s 6 - 0 with 3:00 minutes left. I can’t keep track of all the players, but that was the first goal by that US player.

It’s really fun to see a hard-thrown ball bounce off the top of the goal and back to the middle of the pool, to watch the swimmers in open water racing for the ball. Who will get there first, and if two arrive at almost the same time, how does one control the ball.

The US has the ball with 1:36 left to play; exclusion gives the US a one-person advantage. But they couldn’t take advantage of it.

With 49 to play, will the Australians be blanked out in the first half?

Another huge save by the US goalie.

The first half ends 6 - 0 with the Australians treading water.

Third period. Finally, with 4:30 left in the third period, in a close-in shot, our goalie can’t stop it, and the Aussies score, 6 -1. The US crowd was, no doubt, hoping for a shutout at this point, but not to be. But again, always being on the edge of my seat, another unanswered goal and the US might not look so invincible.

A huge sustained yell from the crowd: another incredible score and the US scores at 1:39 left in the third period, 7 - 1.

Australia answers but it was not definitive. 7 -2 at 1:15.

Ooooohhhh, scary — the Australians with another unanswered goal, and the score is 7 - 3 with 45 seconds left in the period. That should get the attention of the US players.

Maybe my anxiety is well-placed. At 6:42 the Aussies score and the US receives a yellow card. A double whammy. 7 - 4. Maybe I’m wrong; maybe the yellow card was on Australia. The US had a 6-5 player advantage, but couldn’t score. [Later I learn from my granddaughter that both the US coach and the Australian coach each received a yellow card.]

An Aussie score here and it becomes a nail-biter.

The US, apparently, has had enough. Her first goal of the night, and it’s 8 - 4 with 5:03 remaining.

The US goalie is just incredible. Blocked shot after blocked shot, and the US is still ahead 8 - 4 with 2:13 remaining.

With 56 seconds, the Aussies scores but it will be their last score and the US will win by two, maybe three, and possibly four points.

Let’s see.

That’s it. 8 - 5. A huge roar from the crowd.

Ramblings On A Sunday Morning -- February 21, 2016

Updates

February 26, 2016: Bloomberg graphic -- collapse of the drilling industry in the US. For me, it's not the rig count, but the production data that is important.

February 22, 2016: one of the themes I explored below was the suggestion that I did not think Saudi's rivals inside OPEC were its main concern. Today, in this tweet, there are suggestions that I was right on the mark, tweeting now:

• OPEC crude oil output capacity to rise by just 800,000 b/d over next 6 years, IEA says 

Original Post

 

Before reading this post, be sure to read the post regarding the Pershing oil field and look at the spreadsheet of the top producing oil fields in the Bakken.

At a later day, I will re-post the Pershing oil field post, breaking it up into two parts, and will go over this again, if the spirit moves me.

I assume everyone in the oil industry saw this some years ago; I noticed bits and pieces several years ago and have blogged about it, but I did not see this coming, to this extent. My hunch is that the geologists inside the oil industry saw this coming several years ago.

I wrote this quickly; have not reviewed it very well; and have not triple-checked it for errors. In a long note like this there will be typographical and factual errors. In addition, I may be seeing things that do not exist. I may be far out in front of my headlights. I'm certainly beyond my comfort zone, but this is quite something if even part of it is accurate. So here goes.

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The jury is still out: we don’t know if the Saudis opened the tap to protect their market share from Russia and/or the rest of OPEC — their publicly stated objective — and the US shale industry was simply collateral damage; or, alternatively, Saudi set out to do both: protect their market share and take on the US shale industry.

I don’t think anyone has given much thought to the third possibility: the Saudis opened the tap to take on the US shale industry and it was Russia and Venezuela that were collateral damage.

But let’s look at that for a moment. Within OPEC, Saudi hardly had rivals. Sanctions on Iran were soon to be lifted but it would take a year or two for Iran to be a true threat. The rest of OPEC was pretty much status quo; certainly everyone was increasing production against a backdrop of less demand (the Chinese economic slowdown) but in a certain sense it was not a whole lot different than what they had seen before. Venezuela was becoming a basket case long before Saudi Arabia opened the taps. Outside of OPEC, besides the US, the only Saudi rival was Russia. There is certainly evidence that Russian production was flattening or rising very slightly, again because of the global economic slowdown.

Perhaps Saudi was simply worried about Russia and Iran and market share; that’s what they said. I'm not so sure.

I’ve followed the Bakken fairly closely and I’ve said many, many times it never fails to surprise me. By blogging on it daily, I’ve been able to “predict” or talk about certain things that I had not seen in mainstream media. Perhaps all of that was in the trade journals, but much of what I saw developing was not being reported even by RBN Energy or Platts. Mike Filloon may have touched on some of these things but did not develop them. I'm sure he saw the same things I saw well before I did but he has a different audience and doesn't need the flak he would get if he wrote some of the things I've written about.

If I could see some of these things, and I assume I only understand 1% or less of what is really going on the Bakken, I can only assume oilmen were five years ahead of me, maybe ten years ahead of me. The only fallacy in that, of course, is the fact that, it appears, that no one in the oil industry saw the implosion coming (the Saudi Surge/price plunge, October, 2014). But some of that can be blamed on the Chinese slowdown and that was not as predictable.

Remember, it has been said the Saudis made a trillion-dollar mistake.

Let’s say these are the “facts”:

• Russia was producing near its capacity
• Iran would take a year or so to hit its stride
• Venezuela would implode and any increase in production by the rest of OPEC would be offset by the decrease in Venezuela’s production
• US shale production was what it was, but the US was still importing 5 million bopd, and its refineries were configured for heavier oil than Bakken light sweet crude

With those “facts” — it that enough for Saudi to open the taps and risk a trillion-dollar mistake?

I just don't see it. I keep coming back to this graph. "We" seem to be focused on the Saudi Surge, but it's hard for me to think the Saudis were more than somewhat alarmed at the rate of growth of USA crude oil production. The three big tight oil plays in the US were still nowhere near maximum capacity and there were a dozen other tight plays in the US on the sidelines.

Of course, one can argue that the risk of a trillion-dollar mistake is only known in hindsight. I am arguing that the mainstream press and folks like me know less than 1% of what’s really going on. And Saudi Arabia certainly isn't going to show its cards. The oil industry is the second "most secretive/paranoid" "entity" in the modern world. I can argue that the oilmen, and particularly the Saudis, knew something about the US shale revolution that the rest of us did not see, or if we saw it, were not particularly concerned. Remember: as important as the US oil industry is to the US, it does not define our existence. Oil is Saudi Arabia. Without oil, Saudi Arabia is the largest sandbox in the world. For Saudi Arabia, oil is an existential issue.

I will be very interested in reading the article a reader sent me just before I left last night for an international water polo tournament. I am writing this, having not read that article, which looks to be an article about Yergin talking about the shale revolution. I don’t know what he says (I will read the article later) but let’s assume the word “revolution” is not being over-used. Let’s assume that the “shale revolution” is not hyperbole. [I am purposely not reading the article until I post this. I don't want facts to get in the way of my inappropriate exuberance.]

Let’s assume we know 1% of what goes on in the oil industry and the oilmen know 1000x as much as any of the rest of us know. The Bakken was a huge scientific experiment; it was amazing how fast things changed; how fast IPs improved; how fast costs of drilling came down. All of us now see things that none of us saw in 2000 or even in 2007 or even in 2010.

The question is when did the Saudis see these things.

When did they really understand what it meant when the USGS said the Bakken was the largest continuous reservoir ever discovered in the lower 48?

When did they realize that when CLR and Whiting and XTO were publicly talking about 1 - 3% recovery of the original oil in place, those operators were lowballing what they knew? When did they realize that primary recovery at 10% might even be on the low side?

When did they realize that Harold Hamm was the smartest  / luckiest man in the world to suggest the Bakken reservoir was a trillion bbls of oil (OOIP)? He later brought it back to reality (LOL) when he went back to saying the Bakken probably held only 500 billion bbls of OOIP.

When did the Saudis realize, like the rest of us, that it wasn’t going to be just one well on every section of the geographic Bakken but much, much more?

When did the Saudis realize there might be something to the halo effect?

Early on Bentek forecast 2.2 million bopd unfettered. Did Saudi think that was another low-ball forecast? Remember, the North Dakota Bakken got to 1.2 million bopd in an astonishingly short time and with almost no infrastructure to support the drillers.

When did Saudi realize that the geographic Bakken was just a small part of the entire tight oil US resource? The sidebar at the right lists no less than a dozen other tight plays in the US in addition to the Permian, the Eagle Ford, the Anadarko, and the Bakken.

When did the Saudis realize that with one-seventh of the rigs used during the boom (30 vs 200), the Bakken roughnecks could casually drill three or four wells to total depth every day, not complete any of them, and then casually, back in air-conditioned cubicles in New York City or Tulsa or Houston, run the numbers, study the micro-seismic data and decide which wells are best to complete next. It's my understanding that North Dakota still holds the world's record for the largest micro-seismic array. I don't know if that still holds true, and even as I write it, I really don't understand it.

My hunch is that Saudi oilmen and US geologists are studying the Pershing oil field (see link above). I have to recheck the numbers but if my numbers are correct, the Bakken is revolutionary. In October, 2015, there were 36 wells producing in that field. By November, 2015, three more wells were producing in that field, but production increased by a whopping 107%. Now remember: because of the slump in prices, production from each well is begin held back. It is easy to see: many of the wells are on-line for just a few days each month when they should be on-line every day of the month. Look at how few days some of these wells are pumping; these are huge wells and BR is running them one or two or three days a month (I think there's another story there, by the way, for another day).

One month later, December, there were still 39 producing wells in the Pershing field. As far as I can tell, no low-production wells were taken off-line to be replaced by new wells. Based on my data, there have been no new wells in the Pershing for quite some time. I may have missed one or two, but even so, it would not make a difference. So, what happened in December, in regard to production, despite all the pricing headwinds and no new wells in the Pershing oil field? Yup. Producing in the Pershing oil field increased. By a lot.  By 45%. Even under “boom conditions” that would be impressive but many of the wells were on-line for just a few days in December. Imagine if unfettered, the entire Bakken jumped in production by 45% over one month.

What’s going on? Look at the case study in an earlier note (linked above). I think that’s what is going on. I’ve noticed this to some extent for the past couple of years, but when this month’s NDIC data came out it was shocking if one drilled down (no pun intended) to the data, well-by-well. 

A typical well that was drilled back in 2008 was down to the “standard” 1,000 bbls of oil/month, which by the way, is still an incredible well -- seven years old, paid for, and still producing 1,000 bbls of oil/month. Many months it produced less than 1,000 bbls. Then, incredibly, without obviously explanation, in November, 2015, it produced 5,000 bbls over 10 days, and then in December, it produced 21,000 bbls. Nothing in the well file suggested anything had been done to the well to result in this 20-fold increase in production. However, between September and November of last year, three horizontal wells paralleling this well had been fracked.

Up until “now,” there had been discussions on the best way to frack old wells — wells fracked with only a few stages (some as few as one) and with very little proppant. Some operators advocated re-fracking through the existing hole. EOG, I believe, argued that it was just cheaper and easier to simply re-drill a well and frack it using current technology and processes. Until that is sorted out, it appears there may be a third way. During this period of low oil prices, perhaps the third way is to choose carefully which DUCs to drill first. It looks like it might make sense to complete those new wells that are running parallel next to older wells, as was done in the Pershing.

It may only be temporary, this 20-fold increase in production, but it helps explain the meteoric rise that Pershing oil field has seen in crude oil production.

When did the Saudis see this coming? 2007? 2010? 2015?