Monday, November 3, 2014

Has EOG Moved On? -- November 3, 2014

In addition to earlier notes regarding the lack of much EOG activity in the Bakken in the last six months, this is an interesting side story. From Rigzone:
A change in leadership at an American Indian reservation in North Dakota wouldn't normally get a whole lot of attention. But come Tuesday, the oil industry will be watching this dusty area of the state as two reformers vie to become tribal chairman, an office with outsized power over the course of the state's booming oil industry.
That's because the reservation's Three Affiliated Tribes of Mandan, Hidatsa and Arikara (MHA) Nation control roughly a third of North Dakota's oil output.
In the past two years alone, production on the MHA Nation has jumped 145 percent, cementing the state's role as the second-largest U.S. oil producer after Texas.
The reformers, Damon Williams, the tribal attorney, and Mark Fox, the tax director, each propose tighter environmental regulations. They also promise to ensure more money goes directly to projects that improve life for the 12,000 tribal members on the 980,000-acre reservation.
In other words: this stands to make things more complicated for the oil industry. So far, oil companies aren't saying a whole lot about the leadership change.
EOG Resources Inc, the largest oil producer on the reservation, said its goal is "to maintain good relationships with tribal members regardless of the election's outcome."
Marathon Oil Co and Exxon Mobil's XTO Energy declined comment.
The North Dakota Petroleum Council, an industry group, said the candidates each have an "open demeanor and are willing to sit down with companies, state and federal agencies" to resolve regulatory questions.
Lynn Helms, head of North Dakota's Department of Mineral Resources, the state's oil regulator, is blunter: Oil producers are "deeply concerned," he said, adding: "drilling on the reservation could be slowed." That's because if the tribes give stricter scrutiny to environmental issues, more stringent rules could mean more obstacles for new drilling permits.
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Amazon: Incredible Customer Service
A Note to the Granddaughters

This is quite a story. I couldn't find a replacement lens cover for a camera in the local big box stores. I ordered "the best" I could find on Amazon, hoping it would "fit." The lens cover arrived very quickly but unfortunately it did not fit.

I put the lens cap back in the OEM packaging and simply sent it back to the Amazon partner in the original mailer. I included a note thanking them for their quick service. I told them not to worry about a refund. It was my mistake and the process for a refund would likely be cumbersome for a $5.00 item.

Tonight, out of the blue as Shakespeare might have coined, just three days from when I mailed the package, I got an e-mail note from Amazon saying they would credit my account.

I am totally amazed. I have never had one bad experience with Amazon.

[I remember some years ago, Amazon accidentally sent me two identical items when I had just ordered one. I called them asking for details on returning the second item. They said it was not worth the trouble of receiving it and restocking it, telling me to simply keep the second item and consider it a "gift" from Amazon.]

[Years ago, a similar story in the US Air Force during one of the Gulf Wars. I assume it was the first George Bush war, but they seem to run together. Thousands of units of blood were being sent from the states to the Mideast in anticipation of hostilities. I was stationed at Bitburg Air Base, Germany, at the time, one of the staging areas for the blood headed toward the theater of operations. For some reason, long forgotten, an active duty member needed to send a unit of his own blood back to the states which he might need. The Bitburg AB lab officer thought it could not be done: thousands of units of blood going east and he would be sending one unit west. He was sure that some well-meaning airman would see the one unit, assume an address error and re-route it back to Bitburg. But lo and below, like a fish swimming upstream, that single unit made it back to Walter Reed. Some things just boggle the mind.]

On Tap For Tuesday Earnings -- November 4, 2014

A lot of stuff has been posted very, very quickly. I assume there are errors. If this information is important to you, go to the source. This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or think you may have read here. Do not make any travel plans based on what you read here.  

Announcements today:
  • EOG: press release; $1.31;
  • Sempra Energy (SRE), before market open; $1.24; beats by 16 cents; profit rises 16%; 
  • Linn Energy (LINE), before market open, 41 cents; actual, 53 cents; press release;
  • Targa Resources (TRGP), before market open; 65 cents; actual, press release; 
  • Midstates Petroleum (MPO), after market close, 10 cents; beats by 18 cents;
  • Oasis (OAS), after market close, 73 cents: misses by 19 cents;
  • ONEOK (OKE), after market close, 38 cents; beats by a penny;
  • ONEOK Partners (OKS), after market close; 63 cents; missed by 24 cents;
  • Pioneer Natural Resources (PXD), after market close, $1.27; $1.35; announces public offering of 5.75 million shares; beats by 10 cents;
  • Devon Energy (DVN), after market close, $1.24; beats by 11 cents; output jumps 19 percent;
  • Valero Energy (VLO), before market open; $1.57; beats by 45 cents;

SolarCity (SCTY), after market close; a loss of $1.11;


Reminder: this is not an investment site. Do not make any investment, financial, or relationship decisions based on anything you read here or think you may have read here. Do not make any travel plans based on what you read here or think you may have read here 

With the current slide in oil prices, a reader asked whether it was better for a small oil company to be privately held or publicly traded. That is a bit beyond the scope of this blog, but ... there it is ... the poll is at the sidebar at the right. 

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A Note for the Granddaughters

It was the usual Monday night driving schedule for me tonight. At 5:30 I drove the younger one to soccer and at 7:00 I drove the older one to water polo. It was the first night back on "regular time" -- we "fell back" one hour last night. It was noticeably darker when we arrived at the soccer fields at 6:00 p.m.

What an incredibly beautiful evening. Thunderstorm clouds were moving in but they were not active, and were not expected to be active until tomorrow morning. The soccer field lights were on; the soccer team would be practicing "under the lights" which always seems so much more pleasant, so much more inviting.

The parking lot was overfilled with cars; there were many season-ending games for older players being played, apparently, along with the younger-player practices. I don't think I saw an old car there; all newer models, lots of SUVs, and even more F-150s' (this is Texas). This really is a great country.

On the way back to pick up the older granddaughter, there seemed to be a lot more cars on the road than usual; the drivers, if not the cars, all seemed happier and peppier. Everyone seemed to be driving a bit faster with lots of jack-rabbit starts at the intersections. No doubt it was the inexpensive gasoline that made the Texas autos and their drivers seem so happy. The least expensive gasoline I saw was $2.57, but the "average" price seems to be $2.69.

When I saw the $2.57/gallon price, I wondered if we might see gasoline sell for under $2.00 before the driving season begins again, next Memorial Day, 2015. I personally can't see it, but I suppose it's possible.

Maybe at $2.69 folks still aren't all that excited about the price of gasoline, but if it gets to $2.19 in the DFW area (or the equivalent in your area), it's going to be quite a story. I never thought I would see the day that the price of gasoline would drop so quickly and so far, with the possibility of further decreases.

Flashback: CNN, 2011 -- "Gasoline Prices Won't Be Lowered By Increased Domestic Drilling" -- CNN Money -- Posted November 3, 2014

Updates

December 27, 2014: if there was any one story that cemented my decision to stop blogging about the Bakken, it was this one, the one below as reported at CNN. At some point I guess I just got tired of beating my head against the wall. I started the blog for my own use -- to learn about the Bakken. HTML, hyperlinking, and a webpage seemed the best way for me to track and link articles. At some point I thought others might be interested in what I was learning, and so I went public with the blog.

Over time, it became clear that the audience was changing. By coming in "late," the "new" audience did not seem to understand the purpose of the blog. I thought about ending the blog ever since 2012, I suppose, but I hung in there. Readers provided me a lot of links that really helped. But when my data points seemed to start confusing readers, I thought it best to quit the blog. Actually, I will continue to track the Bakken -- I continue to learn much about it -- but it will no longer be public. It's been a great run.

Original Post

From Carpe Diem:
CNN Money in 2011: “Gas prices won’t be lowered by more domestic oil drilling, domestic production can’t possibly move gas prices from $4 to $3 per gallon,” see full story here.
Kudlow: "drill, drill, drill."

Saudi just lowered its prices today -- pundits say it was to compete with US shale.

My 30-second sound bite: "It's all about market share. Saudi does not want to lose market share. What market? California."

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Ebola Burning Itself Out

The US military has yet to build one treatment facility, but the US will get credit for stemming the tide. Well played, Mr Obama. 

I posted this on October 8, 2014 (it was sincere, and not sarcastic as can be inferred from the entire note:)
When Ebola is conquered, and it will be, President Obama should share in the Nobel Prize for Medicine for that feat. That will be one he has earned.
I find the Ebola story incredibly interesting on so many levels, but especially in the medical arena. There will be a lot of research papers coming out of this most recent epidemic. I wish one nurse had been a bit more savvy, but in the big scheme of things, I repeat what I said early: in their own arenas, no major political figure made any missteps in regard to handling this epidemic.

A lot of  credit goes to the US military for taking on yet another ver difficult mission, and this time, with little guidance. I have all the respect for these young men and women in our US military. If asked to endure 21 days of quarantine, they do it without making it an issue. Life is not about; it's about whom they serve and protect.

Ballard's Madison Well Comes Up Dry; Venezuela Starts Importing Oil; WPX Will Report A Huge Well In The Bakken Tuesday -- November 3, 2014

Biggest story of the day: MDU bailing on the Bakken. MDU will "market" its Fidelity exploration and production division. Rumors (but then there are always rumors): Oasis could be doing the same thing. Maybe some big operator could scoop up both Oasis and Fidelity. Add Fidelity to the list that includes OXY USA.

Wells coming off confidential Tuesday:
  • 26610, 876, Newfield, Hoffman 149-98-14-23-2H, Pembroke, t7/14; cum 30K 9/14;
  • 27301, drl, Zavanna, Husky 33-28 6H, Williston, no production data,
  • 27606, drl, BR, Bullrush 34-10MBH-B, Elidah, no production data,
  • 27704, dry, Ballard,Drovdal 13-2, Wildcat, a Madison well; 1.5 miles SE of Maxbass, ND; Bottineau County; the geologist report states the well was spud May 5, 2014, and reached TD of 4300' MD on March 14 (sic) ... yes; the sundry form said the spud date was May 1.  I assume TD was reached May 14. Another form stated the re-entry date was May 4, and total depth was reached May 12; so, take your pick.
  • 27728, 1,458, WPX, Ruby 31-30HX, Antelope, Sanish formation; the app says Three Forks B1; 33 stages; 5.2 million lbs sand, t8/14; cum 57K 9/15;
  • 28199, 230, Petro Harvester, Busch 5-1H, Portal, Midale formation, the Midale is part of the Madison group; 8 stages; 426,100 pounds sand; t8/14; cum 6K 9/14;
  • 28233, dry, Statoil, Myron 9-4 5H, Squires, no file report available yet;
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27728, see above, WPX, Ruby 31-30HX, Antelope:

DateOil RunsMCF Sold
9-20142666724565
8-20142904834917
7-2014554439
 
Active rigs in North Dakota:


11/3/201411/03/201311/03/201211/03/201111/03/2010
Active Rigs186181188194152

Wells coming off the confidential list over the weekend, today were posted earlier; see sidebar at the right. 

Six (6) new permits --
  • Operators: Emerald (2), Whiting (2), Hess, Enduro
  • Fields: Boxcar Butte (McKenzie), Sanish (Mountrail), Alger (Mountrail), Little Deep Creek (Renville)
  • Comments:
One (1) producing wells completed:
  • 21373, 2,451, Statoil, Barstad 34-14 5H, Alger, t9/14; cum 5K 9/14;
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Huge Development, I Suppose In Some Quarters, Though Regular Readers Are Probably Not Surprised (For The Record, I Am Surprised)

Venezuela starts importing oil. And, yes, Venezuela is the country with the largest oil reserves in the world -- even more than Saudi Arabia, though by a slim margin -- unfortunately, the "wrong" kind.
Venezuela, a major exporter of crude oil for decades, has started importing oil to meet domestic demand that it cannot currently fulfill.
It is the first time in the century-long history of Venezuela’s state-owned oil industry that it has imported oil, and it is focusing on Russia and Algeria.

Venezuela has hundreds of millions of barrels of extra-heavy crude. But it needs to dilute that with lighter varieties from elsewhere in order to refine it or sell it elsewhere, USA Today said. 
In addition, other countries’ massive reserves, including the United States’, is driving oil prices down internationally, causing Venezuela to lose more money.
It's too bad we don't have a president who understands oil. Here is an opportunity to trade US light oil (Bakken oil) for heavy oil which our own US refineries need. Allah must be laughing.

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Global Warming Wallops Maine

Reuters is reporting: Rare early season storm brings record-setting snowfall to Maine.
A rare early season snowstorm brought 50-miles-per-hour (80-kph) winds and record-breaking snowfall to parts of Maine overnight, leaving more than 140,000 homes and businesses without power on Monday.
Governor Paul LePage declared a limited state of emergency as slippery driving conditions, downed trees and white-out conditions led to a spike in accidents and shut down many local roads.
According to unofficial observations reported to the National Weather Service, Cary in eastern Maine got the most snow, 21 inches. Orrington got 17, Hampden recorded 15.5 inches and Bangor got more than a foot.
Record low hits Miami also. CBS Miami is reporting:
A cold snap set new record low temperature Sunday morning in Miami.
The thermometer at Miami International Airport tumbled to 52 degrees breaking the date’s previous record of 54 degrees set in 1993.
What South Florida considers a “normal” or average low for this time of year is 70 degrees, this morning the area woke up to a twenty degree dip from the norm.
Some communities across interior sections of western Broward and Miami-Dade counties dropped into the 40’s.
In West Palm Beach, the temperature dipped to 49 degrees, below the previous record of 51 degrees in 1993.
I think the warmists predicted that the winters would be colder and would start earlier. Something they called "counterintuitive." The rest of us called it "bullshit." SecState John Kerry, floating in space, calls it "something very important." Meanwhile, on his watch, ISIS is about ready to take Baghdad. But that's not being reported in US mainstream media.

OXY USA Reports Three Huge Wells -- That's Only The Headline -- November 3, 2014

Here are the three wells:
  • 26077, 940, OXY USA, Evelyn Stroh, 3-17-20H-143-96, Fayette, 30 stages, 900,000 lbs sand, t5/14; cum 74K 9/14;
  • 26078, 842, OXY USA, Evelyn Stroh 2-8-5H-143-96, Fayette, 30 stages; 900,000 lbs sand, t5/14; cum 79K 9/14;
  • 26079, 1,336, OXY USA, Harry Stroh 2-8-5H-143-96, Fayette, 30 stages; 900K lbs sand; t5/14; cum 100K 9/14;
Note the amount of proppant used. I rounded the number; in two cases the actual amount was slightly less than 900,000 lbs of sand; in the third case, the actual amount was 904,000 lbs of sand. Generally, operators are using 4 million lbs of proppant, and some operators (notably EOG and CLR) are pushing upwards of 10 million lbs and even upwards of 14 million lbs.

I often make factual and typographic errors, but I believe these are accurate numbers. If this information is important to you, go to the source, the NDIC.

I track the Stroh wells (Cabernet and Fayette fields) here. 

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Carpe Diem's Map of the Day

Link here: fracking = a better income.


Top five counties in the United States for largest increases in median income, 2010 - 2013:
  • #1, Williams County, North Dakota
  • #2, Cleburne County, Arkansas
  • #3, Stark County, North Dakota
  • #4, Rowan County, Kentucky
  • #5, Perry County, Kentucky