The Market And Energy Page, T+9 -- March 9, 2018

Trade war? What trade war? Ya gotta love Trump. He knows how to play the game. I'm sure "The Apprentice" helped. He learned how to "stage" cliff-hangers -- not just at the end of the season; or, at the end of an episode; but, every 12 - 15 minutes, at the end of each segment of that television show. He's carried that over to the Oval Office.

He announces something that seems extreme -- or at least the press releases something he supposedly said that seems extreme -- and then when you hear it directly from him, it's not so extreme; and then, when it's finally "pen to paper" it's even less extreme.

That "30% tariff on steel; 10% tariff on aluminum"?

Turns out that:

• it's 25% tariff on steel -- not as bad as advertised
• 10% tariff on aluminum -- anyone complaining about a half-cent on a can of beer is ...
• some countries were exempt at the "signing"
• all countries can negotiate better terms -- all countries can negotiate better terms
• Gary Cohn exposed Trump for what he is: a friend of Main Street; an enemy of Wall Street; remember, Donald Trump was a registered Democrat from 2001 to 2009

What's the problem? Where's the trade war.

Boeing: the only company that might have had a legitimate gripe. Share price for one year and for one morning (today):

Give me a break. Gary Cohn truly showed his colors. Good riddance.

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Notes To The Granddaughters

The three books I'm looking at today:

Mary Shelley, Miranda Seymour, c. 2000.

Yesterday, I read much of the following book and took notes:

Mary Shelley: Romance and Reality, Emily W. Sunstein, c. 1989.

Author says this if the first complete or definitive biography of Mary Wollstonecraft Godwin Shelley -- the only stellar English Romantic author for whom there is no complete or definitive biography.

So, we can now compare the two biographies.

The Trojan War, Barry Strauss, c. 2006. Wow, I never get tired of reading and re-reading about Homer's Iliad and Odyssey.

And finally, Octopus: The Most Mysterious Creature in the Sea, Katherine Harmon Courage, c. 2013.

It's possible I've read these books (or parts of them) before, but I do not recall.

By the way, Sophia and I attended a college/high school play last night: "James and the Giant Peach." It was the first play that her older sister, a freshman in high school, had ever participated in. She played one of the actors.

It was incredible. We will go back and watch it again tonight.

Sophia, age 3.6 years old, appeared to be enthralled and actually paid close attention to the play. For those who don't know the play, there is a scene in which James is instructed to find a magic potion from a book and then cast a spell.

When we got home, on her own, my wife was lucky enough to get three photos of Sophia doing the same and explaining to May what she was doing. Until this morning when I told her, May did not know there was a scene in "James and the Giant Peach" that involved making a potion and casting a magic spell.

Here are the photos:

This is at Sophia's house. Not ours. Sophia is fortunate enough to live in a real house, a house big enough to play "tag" and/or "hide and seek." We live in a small two-bedroom apartment -- big enough to play "hide and seek" with a four-year-old, but not big enough to do so with a five-year-old.

Random Update Of Some Incredible MRO Wells In Bailey Oil Field -- March 9, 2018

Updates

October 1, 2018: neighboring wells showed various degrees in jump in production, mostly moderate  --  #16654, #16993, #17797, #18382.

June 2, 2018, production data for two wells:

• 33400, 3,017, MRO, Ernst 14-7TFH, Bailey, t2/18; cum 85K 3/18; (#16654, #16993, #17797, #18382 -- several of these wells showed significant jump in production)

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2018	30	28579	28675	36060	28686	23943	1449
BAKKEN	3-2018	25	25338	25369	32875	20716	15863	1934
BAKKEN	2-2018	25	48021	47828	21449	31306	16495	9404
BAKKEN	1-2018	7	11991	11849	0	9909	2408	6181

• 33534, 5,113, MRO, Bronett 14-7H, Bailey 4 sections, t1/18; cum 27K over 11 days - extrapolates to 73K over 30 days; cum 133K 4/18;

 Monthly Production Data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2018	30	45938	46019	42923	33891	26910	1801
BAKKEN	3-2018	28	34633	34398	36776	26696	20265	2460
BAKKEN	2-2018	14	25950	26087	21247	15564	8376	4274
BAKKEN	1-2018	11	26905	26587	0	19516	5989	10555

Original Post 

Some of this might be a repeat from earlier posts. It's hard to keep track of everything. 

A reader reminded me that I need to follow-up on a few wells. I have some of these wells at my "Things To Follow Up On " page, but I will start the post now. However, it will be a few months before all the data is in. I can't recall if I've posted a graphic of this area previously.

The wells (all of these may or may not be on the graphic); note the IP for 6,204 for Three Forks first bench well; years ago, Lynn Helms opined that Three Forks wells, individually, might be better than middle Bakken wells; very little is known about the deeper Three Forks benches but we are starting to see a few deeper-bench Three Forks wells:

• 33535, 6,204, MRO, Arkin 44-12TFH, hard to believe it's not a typo, but this is what the sundry form shows; Arkin 44-12TFH, Bailey, 4 sections; Three Forks B1, 45 stages; 6 million lbs; t1/18; cum 126K 3/18;
• 33400, 3,017, MRO, Ernst 14-7TFH, Bailey, t2/18; cum 85K 3/18; (#16654, #16993, #17797, #18382)
• 33401, 3,161, MRO, Kenneth 24-7TFH, Bailey, t1/18; cum 67K 3/18;
• 33402, 3,040, MRO, Bethol 34-7H, Bailey, t2/18; cum 69K 3/18;
• 33403, 3,484, MRO, Stroup 34-7TFH, Bailey, t2/18; cum 73K 3/18;
• 33534, 5,113, MRO, Bronett 14-7H, Bailey 4 sections, t1/18; cum 27K over 11 days - extrapolates to 73K over 30 days; cum 87K 3/18;
  

Among the things I'm interested in:

• continued production data for the wells noted above
• the production data for these wells: #17498, #16654, #16993, #17797, #18382, #18384 (I have posted the production data for some of these wells elsewhere; not all of them are on the map below)
• things I might learn from the geologists' reports
• things I might learn from readers

Legacy Fund -- March 9, 2018

We talked about this the other day. I dare someone to find a a link to a site that provides transparency regarding the Legacy Fund. I have not looked recently and it may be easy to find, but when I did look some months ago, I was unable to find anything. I'm sure it's easy to find and I'm just looking in all the wrong places:

• monthly deposits
• where/how the deposits are invested
• the annual rate of return on Legacy Fund investments
• if the Legacy Fund has been tapped; and, if so, how much and for what

John Kemp On Saudi's Reserve Assets -- March 9, 2018

I did not bother to link / post the story suggesting that Saudi's announcement that they might target shale in their own country -- after I read the story, I found it meaningless, and more oilprice.com click bait.

And here it, John Kemp noting that Saudi might not go after shale -- I did not read the article but if accurate it speaks volumes about Saudi's oil and natural gas reserves.  Saudi is facing an existential crisis and regardless of what they might say publicly, they would go after "new" reserves in their own country if it was economically feasible.

Anyway, regardless of the idle chatter, here's John Kemp's graphic today via Twitter and my comments that follow.

Updates

March 9, 2018: Saudi Arabia's official reserve assets, monthly change in US$ billions --

Story lines:

• Saudi reserves were already dropping significantly by the time Saudi reacted with flooding the market with oil, hoping to "break" US shale
• we will never know how "bad" it would have gotten for Saudi if they had not announced they were going to open the spigots
• it is interesting: I think "we've" all forgotten the reason Saudi said they were opening their spigots; I do distinctly remember that the Saudis said it was not in reaction to US shale, and that they were not doing this to "break" US shale; I think they said they were trying to get the attention of the Iranians, which, in hindsight, seems an incredibly weak argument
• look how long it took for the "recovery" even after Saudi said they would cut production
• even with the cut in production and the "shakedown of the sheiks," the recovery is not particularly noteworthy
• when I was doing the calculations, my "rule of thumb" was that Saudi was losing about $5 billion / month during the surge; more than $5 billion loss in any month was staggering; less than $5 billion / month was noteworthy

February Jobs Report -- March 9, 2018

And more:

 

February jobs report: Wow.

• trade war? what trade war?
• forecast: 200,000
• actual: 313,000
• unemployment: remains at 4.1%
• wage growth less than expected: rising 0.1% (month); 2.6% (annualized) -- huge news for those worried about wage inflation
• last month stocks sold off "aggressively" after January's payrolls reported wage inflation of 2.8 percent annually -- the biggest gain since June, 2009
• unemployment rate was last this low in December, 2000

Optics: in one graphic, and a few links, the Drudge Report does more to "paint the picture" than all the articles; no wonder "everyone" likes Drudge -- except the alt-left and the FCC.

What to watch for: WSJ.

• unemployment rate could drop to 4.0%; I find this statistic incredibly unimportant in today's employment report
• job-growth trend: an incredibly important metric

Economists expect employers added at least 200,000 workers to payrolls for the second straight month (and fourth month in the past five). That would start off 2018 at a better hiring pace than last year’s average monthly job growth of 181,000. An acceleration in hiring runs counter to economists’ expectation for job gains to ease in a historically tight labor market.

• wages wind back: and they did -- a bit
• work force participation: more important then the unemployment rate
• volatility in certain sectors, due to small sample size, for example, black unemployment

Blink, C-in-C:

"Arctic" rigs:

$60.63↑	3/9/2018	03/09/2017	03/09/2016	03/09/2015	03/09/2014
Active Rigs	59	43	33	114	191

RBN Energy: how a refiner bet on accessible American crude, and lost.

When Philadelphia Energy Solutions (PES), owner of the East Coast’s largest refinery, recently announced it was seeking Chapter 11 bankruptcy protection, it begged a question: What happened? The answer requires a look back at the company’s original vision — namely, to capture the upside of the Shale Revolution by processing price-advantaged light, sweet crude oil produced in the U.S. — as well as a review of market developments that undermined its plan.

Today, we look at the factors that drove PES’s hopes and why, in the end, they weren’t realized. PES was formed as a partnership in September 2012 between The Carlyle Group and Sunoco Inc. to rescue the 335-Mb/d Philadelphia Refining Complex. Carlyle would hold a two-thirds ownership interest while Sunoco Inc. (which bought the complex’s Point Breeze refinery in 1988 and its Girard Point refinery in 1994) retained ownership of the remaining third. Just after the PES partnership was launched, in October 2012, Sunoco became a subsidiary of Energy Transfer Partners.