Swing Producer Or "Most Responsive Producer"? -- February 6, 2018; Chinese Crude Oil Imports Surging

Permian is now seen as #2; second to Saudi Arabia for "spare oil output capacity -- Bloomberg via Rigzone:

The U.S.’s Permian Basin is looking like Saudi Arabia, with as much as 1 million barrels of spare oil capacity ready to go into production, according to Nansen Saleri, former head of reservoir management at Saudi Aramco, the world’s largest crude exporter.

Oil producers in the Permian Basin have at least a combined 500,000 barrels a day of idle oil production capacity, according to Saleri, who is now chief executive officer of Houston-based consultant Quantum Reservoir Impact. Saudi Arabia’s spare capacity is about 1.5 million barrels a day.

The Permian Basin of Texas and New Mexico is the engine for U.S. shale production and acquisitions, helping to increase U.S. output to more than 10 million barrels a day in November for the first time in more than four decades.

Exxon Mobil Corp. is spending billions to triple output by 2025 from the Permian, where its costs are as low as $15 a barrel.

Unsaid: the Bakken can easily ramp up similarly. By the way, does anybody really believe Exxon's new play (currently very little infrastructure in place) has a break-even as low as $15/bbl?
 
Swing producer, previous posts:

• Moving from "swing producer" to "most responsive producer", November 21, 2017
• The global market no longer has any swing producer, February 1, 2017
• The definition of a swing producer, February 25, 2016
• The US is now the swing producer, August 16, 2015
• The baton has been passed; the US is now the swing producer, January 24, 2015

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

China, Russia, and Saudi Arabia

When I first saw the headline, I thought the story was more about the competition between Russia and Saudi Arabia for market share. Maybe it was. But a closer look at the graph -- wow, look at the rate of increase in China's crude oil imports. Crude oil from Saudi Arabia has remained relatively constant. Russia's? Huge increase in the amount of oil they are exporting to China. Overall: China -- crude oil imports are surging.

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

French Total To Strengthen Ties With Qatar

Link here.

Qatar Petroleum said on Monday it had signed an agreement with French oil and gas major Total to acquire a 25 percent stake in an exploration block, offshore South Africa, in a deal that would strengthen Total's ties with the Qatari energy giant.

Random Update Of An XTO Wildcat Drilled Back In 2005; What A Difference A Work-Over Makes -- February 6, 2018

Re-fracked or just lucky? A work-over back in January, 2017. Things to note:

• this is a very, very old well, look at the permit number (15923); it was drilled in the fall of 2005
• a short lateral
• identified as a wildcat at the time of the permit
• initial frack in January, 2006; open hole, 722K lbs proppant
• small re-frack in 2009; 
• no evidence of re-frack after that; see FracFocus;
• recent work-over, but not re-fracked
• XTO Lund wells in the local area have recently been fracked

So, mineral owners, who had been getting royalties from this well based on less than 200 bbls/month, will all of a sudden see a jump in their monthly check, based on 8,460 bbls/month (a 42x jump in production) (note: the 8,460 is extrapolated over 30 days). 

The well:

• 15923, 80 (no typo); XTO, Titan E-Gierke 20-1-H, Siverston, t1/06; cum 49K 12/17; recent production:

Monthly Production Data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	12-2017	21	5920	5966	23834	13911	0	13726
BAKKEN	11-2017	1	66	0	1200	180	0	173
BAKKEN	10-2017	0	0	0	0	0	0	0
BAKKEN	9-2017	0	0	0	0	0	0	0
BAKKEN	8-2017	0	0	0	0	0	0	0
BAKKEN	7-2017	0	0	0	0	0	0	0
BAKKEN	6-2017	0	0	0	0	0	0	0
BAKKEN	5-2017	19	87	227	217	256	0	152
BAKKEN	4-2017	29	176	227	230	491	0	318
BAKKEN	3-2017	31	210	229	280	602	0	313
BAKKEN	2-2017	14	114	0	248	264	0	138

The graphic:

North Dakota Refinery Projects Updated -- February 6, 2018

Perhaps readers know better what is going on with these projects or can direct me to a better link. This is the best I could find overnight.

From Stratas Advisors, dated almost two years ago: largest-yet refinery project announced for North Dakota. Data points, again, this is almost two years old:

• the state now has five refinery projects that may come online with the next ten (10) years
• the five would add a combined processing capacity of about 155 Mbbl/d
• Davis Refinery, near Belfield, Meridian Energy, begins first round of permit applications (this project has been discussed several times on the blog since then; it continues to move through the permitting process)
• update, June 13, 2018: air quality permit approved
• would be the largest new refinery int he state, and second largest refinery in ND overall
• first phase: 27,500 bopd capacity; online in 2017 (did not happen)
• second phase: permits to be filed when phase one is placed into service; will expand capacity to 55,000 bopd
• goal: fully operational by 2019
• Trenton, ND
• Dakota Oil Processing
• 20 Mbbl/day refinery
• was to have been brought on line by end of 2016
• Thunder Butte
• Thunder Butte Petroleum Services
• Makota, ND
• Berthold, ND
• Quantum Energy, Inc
• 40 Mbbl/d
• Stanley, ND
• Quantum Energy, Inc
• no further data

Great Scott! Batman -- Global Warming Hits The Great Lakes -- February 6, 2018

Updates

February 12, 2018: this is pretty hilarious. Now, this headline from Climate Depot: record snowfall amounts pile up around the globe. Examples:

• Chicago ties record with nine (9) consecutive days of snowfall
• record snowfall in Windsor, Ontario; a record 18.4 cm fell on Windsor on Friday
• snow-covered beaches in Barcelona, Spain -- yes, that Barcelona
• Michigan city's snowfall totals climbing toward record highs
• new snowfall record for Calgary, Alberta, Canada
• Arctic dips to 76F below zero; some of the coldest temperatures that people have ever experienced
• record snowfall in British Columbia
• record Montana snowfall for the season
• record snowfall in Japan kills seven
• first snowfall ever in parts of Morocco
• Chicago -- 20 inches of snow by Saturday night possible
• northern France hit by heavy snow
• nearly a thousand fishing boats trapped in ice in NE China

February 7, 2018: to all those snowfall records, we can now add Erie, Pennsylvania.
 

Original Post

 

To all those reports of cold weather overseas, we can now add the US. Over at IceAgeNow: Great Lakes ice reaches "average high" one month early. But you ask, is it really that much? Great question. Yes, the amount of lake ice is almost 4x the amount of ice as on this date last year, the warmest year in recorded history (except for all "those other" years). Percent coverage, on this date:

• 2016: 7%
• 2017: 11%
• 2018: 43%

A trend?

Posted yesterday:

The headlines keep coming: now, this -- snowfall around the world --

• Moscow: heaviest snowfall on record blankets Moscow
• Grand Prairie, Alberta: snowfall nearly doubles the previous record
• China: heavy snowfall snarls world's largest rail network  
• Moscow, again: once-in-a-century blizzard
• Spain: snow brings chaos to roads in Spain -- again

Posted yesterday but re-posting

• global warming crisis fails to appear; scientists bewildered; sea level rise grinds to a crawl; half that forecast: 3.0 mm/ year? nope, now down to 1.5 mm/year
• global temperatures drop back to pre-El Nino levels: "temps drop to levels not seen in six years"
• no link needed: Trump delivered first SOTU address in 8 years that did not mention "global warming"
• EU turns to razing forests; will produce lots of CO2 (FWIW): and in the 21st century the EU is burning wood chips from the US 
• China's CO2 emissions (FWIW) jumped 4% last year: and it' gonna be worse this year, see next story
• coal futures jump 10% in China as sever cold sweeps the country
• by the way, all that talk about "demand for oil" going to go away? LOL. Asian demand for 16,000 airplanes will drive requirement for more jet fuel (i.e., US crude oil) through 2100; all that talk about the end of the fossil fuel age is just that talk: talk fake news.

Tuesday, February 6, 2018 -- US Northeast Becomes A Net Exporter Of Natural Gas To Canada -- RBN Energy

GM: strong demand for pickup trucks and SUVS pushed operating profit to a record for the fourth quarter. The largest U.S. auto maker in terms of sales said fourth-quarter operating profit excluding one-time factors rose 19% to $3.1 billion, or $1.65 per share, easily hurdling the $1.38 average analysts’ estimate. Revenue slipped 5.5% to $37.7 billion, higher than the average analyst forecast of $36.5 billion, bolstered by strong sales of sport utilities in North America.

Toyota: on track for record profit this year, but due to weak dollar (currently movements) and one-time US tax changes. Without those special items, Toyota would be projecting slightly lower operating profit.

BP: posts first quarterly loss in more than a year, due to special items and in the long run, BP says things are fine. BP's fourth-quarter earnings increased five-fold as it benefited from higher oil prices, increased production and lower costs, reports PennEnergy.

Trucking: we've talked about this for the past year. Now the headline from The WSJ: trucking companies ordered most big rigs in twelve (12) years. A nationwide shortage of available trucks has sent shipping costs soaring, with retailers and manufacturers in some cases paying over 30% above typical rates to book last-minute transportation for cargo. Trucking companies, buoyed by strong demand and flush with cash following the recent tax overhaul, are accelerating plans to replace or expand their fleets.

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

The Apple Page

Apple HomePod review here. Great sound, not so smart. The HomePod sounds far better than the popular smart speakers from Amazon, Google—and even Sonos.

Apple iPad: remains world's most popular tablet as Apple outsold Samsung and Amazong combined. 

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

Back to the Bakken

Active rigs:

$63.28↓	2/6/2018	02/06/2017	02/06/2016	02/06/2015	02/06/2014
Active Rigs	58	40	42	137	191

RBN Energy: US northeast becomes a net exporter of natural gas to Canada. (Meanwhile, Massachusetts imports natural gas from Russia -- previously reported -- but I digress.)

In 2017, the U.S. Northeast sent more natural gas to Canada than it received, making the region a net exporter for the first time on an annual average basis. That marks another milestone in the ongoing flow reversal happening in the Northeast, led by the growth of local gas supply from the Marcellus/Utica shales.

For now, the region still relies on Canadian gas during the highest winter demand months, but imports from Canada in all the other months are increasingly unnecessary as Northeast gas production balloons further. Today, we look at evolving dynamics at the U.S.-Canadian border in the Northeast.

This is Part 2 of a series updating our analysis of changing gas flows along the U.S.-Canada border, a topic we first covered in-depth in a blog series back in 2013. We began with a macro view of total U.S. gas flows across the Canadian border. As we noted, Canadian gas production last year rebounded to the highest level in 10 years, spurred on by rising gas demand from gas-fired power generation, as well as the oil sands production in Alberta, which depends on large volumes of steam.

At the same time, Canadian producers are facing ever-increasing competition from soaring U.S. gas supply, led by enormous growth in the Marcellus/Utica shales in the Northeast. Not only is that supply growth continuing to put the squeeze on any remaining inbound flows of supply to the Northeast from other regions, including Canada, but as inbound pipeline capacity is reversed and new capacity built, it is increasingly overtaking market share of demand in other U.S. regions, as well as north of the border in Ontario, where gas-fired power generation demand has been growing.