Tuesday, May 16, 2017

SM Energy Postpones Bakken Assets Sale; Exxon Mobil: Growing Dividends Mask A Shrinking Business -- Zeits -- May 16, 2017

Drawdown forecast: EIA forecasts a crude inventory drawdown of 2.2 million bbls -- Platts. At that rate, 2.2 million bbls/week, it will take 77 weeks for US crude oil inventory to get back to historical average: 350 million bbls in storage.

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Exxon Mobil: One Big Declining Utility

Link here over at Seeking Alpha:
  • Historically, Exxon Mobil reinvested capital in its business at a much faster pace than in 2016 or 2017
  • Still, historically, Exxon Mobil’s production volumes continued to decline
  • Given the deep cuts in the current capex, few years from now the company will have even greater challenges stabilizing its production
  • In this context, the recent dividend increase appears to take credit for accomplishments that are yet to happen
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SM Energy Postpones Divide County Asset Sales

Link here over at Bizjournals.
A Denver energy company has canceled plans to sell its assets in North Dakota, blaming the "uncertainty" of oil prices.
SM Energy Company earlier this year said it wanted to sell its Divide County area assets in the Williston Basin in northern North Dakota, and retained an investment bank to help make the sale.
But on Tuesday, SM Energy called off the sale.
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Process Vs Substance

With all the "stuff" coming out of Washington (DC) the last couple of days, one must remember to separate "process" from "substance." A quick scroll of the on-line edition of The Wall Street Journal will show readers what I mean. There were a couple of articles on Trump, Comey, secrets, and the Russians but then I was stunned to see this one: Moves to ease gun-carrying restrictions expand. A combination of federal and state legislation could free up limits on carrying concealed firearms. 
More states are giving their residents the right to carry a concealed handgun without permission from authorities—including two this year, bringing the total to 12—while Congress is considering legislation to make that right portable across state lines.
New Hampshire, for example, eliminated the need for permits this year, allowing anyone who can legally own a gun to carry it concealed in public.
If bills introduced by Rep. Richard Hudson (R., N.C.) and Sen. John Cornyn (R., Texas) become law, a New Hampshire resident could bring his or her concealed handgun to any other state, even those such as New York that require their own residents to undergo vetting and obtain approval from law-enforcement officials for the same right.
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The Literature Page

I just finished the biography of Bram Stoker, author of Dracula, by David J. Skal. At the end of the day, this biography becomes a reference book, perhaps important enough to be on one's bookshelf.

This review may be helpful. 

Four DUCs Reported As Completed; Nine New Permits -- May 16, 2017

Active rigs:

$48.235/16/201705/16/201605/16/201505/16/201405/16/2013
Active Rigs502883190190

Nine new permits:
  • Operators: CLR (6), BR (3)
  • Fields: Rattlesnake Point (Dunn); Sand Creek (McKenzie)
  • Comments: the six CLR Mountain Gap permits are for six wells in NWNE 10-146-96; the three BR Gladstone permits are for wells in NENE 26-153-97 (see this post)
One permit was canceled:
  • an SM Energy Melby permit in Divide County
Four producing wells (DUCs) were reported as completed, these four wells are the same pad as #19072, #19073:
  • 30533, 1,308, XTO, Dakota Federal 41X-16C, Haystack Butte, t4/17; cum --
  • 30534, 1,795, XTO, Dakota Federal 41X-16H, Haystack Butte, t5/17; cum --
  • 30760, 1,844, XTO, Big Gulch 41X-16EXH, Haystack Butte, 4 sections, t5/17; cum --
  • 30798, 1,398, XTO, Big Gulch 41X-16E, Haystack Butte, t4/17; cum --

Haynesville Experiencing A Resurgence As Takeaway Is Bottled Up In The Northeast -- Bloomberg -- May 16, 2017

Recent USGS assessment of the Haynesville.

The Haynesville is tracked here.

Today, Bloomberg with this headline story: shale play 'left for dead' gets some love as US gas rises. Data points:
  • the Haynesville helped kickstart the shale boom a decade ago
  • is in the midst of a resurgence as new well designs bring natural gas gushers to life
  • production in the Haynesville will climb for the seventh straight month in July
  • will reach its highest production number since October, 2014
  • Haynesville coming back into play because pipeline bottlenecks are stranding natural gas supplies in the eastern US
  • drillers mentioned: Exco Resources, Chesapeake Energy
  • Chesapeake using "massive amounts" of sand

DAPL Pipeline Oil Flowing? -- May 16, 2017

Updates

Wednesday, May 17, 2017: DAPL flowing: from KFYRTV -- Energy Transfer Partners informed regulators they planned to start flowing the DAPL Sunday; Monday, the operator said they were able to stick to their schedule.

Original Post

Reports last week suggested that oil would begin flowing through the DAPL pipeline over the weekend, specifically, perhaps flowing as of Mother Day's. A regular reader sent me a note today suggesting there are reports that yes, indeed, oil has started flowing.

Wow! 4.1% -- Latest GDP Now Forecast; Industrial Production Surges, Surprises Analysts -- May 16, 2017

From GDPNow:
Latest forecast: 4.1 percent — May 16, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 4.1 percent on May 16, up from 3.6 percent on May 12.
The forecast of second-quarter real residential investment growth increased from 6.0 percent to 8.3 percent after this morning's housing starts release from the U.S. Census Bureau.
The forecast of second-quarter real final sales to private domestic purchasers growth increased from 3.3 percent to 3.6 percent after this morning's industrial production (IP) report from the Federal Reserve Board of Governors.
The model’s estimate of the dynamic factor for April—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—increased from 0.32 to 0.59 after the report.
The forecast of the contribution of inventory investment to second-quarter real GDP growth increased from 1.00 percentage points to 1.20 percentage points after the IP report. Much of the increase was concentrated in motor vehicle and parts dealer inventories as motor vehicle assemblies increased 6.4 percent in April, according to the IP report.
Meanwhile, as noted earlier, US industrial production surged. From The Wall Street Journal:
  • measure of output at factories, mines, and utilities -- largest gain in three years
  • production surged 1%; forecast of 0.4%
  • manufacturing, the biggest component: up 1% month-over-month; up a whopping 1.7% over same period last year