Added late: Saudi's 80-year-old oil minister "forever" has taken "early retirement to spend more time with his family." Former Minister of Health will take over as Minister of Oil. Al-Naimi will forever be remembered as the "father of the trillion-dollar mistake."
Operations
Lynn Helms hints that the Red Queen has arrived
CLR with new presentation; company projects almost 200 DUCs by end of year
Statoil with another huge Skarston well
May 1, 2016: 9 of 9 new wells go to DUC status
Whiting talks $50 oil
Refinery Operations
MDU hints that the white elephant will be on the auction block in the not-too-distant future
Bakken Economy
New bank breaks ground in Watford City
Bakken's first LGBT bar to open in Williston
Optimism still exists in Williston
Bakken_101
Tyler formation oil would likely be categorized as "light" oil
Miscellaneous
Donald Trump to speak at Bismarck, ND, oil and gas conference
Halliburton/BHI merger keystoned
Friday, May 6, 2016
May 6, 2016 -- One New Permit
Active rigs:
One (1) permit --
For newbies, I track Bakken operators here (a tab at the top of each page of the blog). The Peregrine permit:
| 5/6/2016 | 05/06/2015 | 05/06/2014 | 05/06/2013 | 05/06/2012 | |
|---|---|---|---|---|---|
| Active Rigs | 27 | 85 | 186 | 190 | 210 |
One (1) permit --
- Operator: Peregrine Petroleum Partners, LTD
- Field: Hay Draw (McKenzie)
- Comments:
For newbies, I track Bakken operators here (a tab at the top of each page of the blog). The Peregrine permit:
- 32701, loc, Burlington Fee 9-16-1H, NWNW 9-146-102. There is one other well in this section, #13070, a horizontal that was drilled in 1991 (Bakken, IP 130; and then re-entered, new horizontal drilled in 2005; similar outcome; total cumulative since 1991: 143K 3/16 producing maybe 200 bbls/month but has been off-line much of the past year.
- Hay Draw is a small non-descript oil field in southwestern McKenzie County with almost no activity except for a cluster of vertical non-Bakken wells drilled decades ago; varying success.
The Jobs Report Today Was Much Worse Than Expected -- Reading The Tea Leaves -- May 6, 2016; Off The Net For Awhile
Updates
May 7, 2016: I hate to pile on, but the news keeps getting worse. Actually the news is the same -- an incredibly awful jobs report -- but analysts and journalists keep writing about it, suggesting this story may have legs. So far, none of the stories talk about any possible linkage between hiring and ObamaCare in which it now appears premiums will rise significantly. The most recent story is from The Wall Street Journal, the day after: soft jobs market clouds outlook.
Original Post
Generally when the weekly or monthly jobs report comes out, there is some initial reaction on early morning business shows but by 10:00 a.m. the news is generally over with regard to jobs.
However, now we have a headline story from Goldman Sachs saying they are "re-thinking the Fed" based on the jobs report today.
April was less than stellar for the US labor market.
Companies added just 160,000 nonfarm payrolls during the month, which was less than the 200,000 consensus estimate. Meanwhile, the unemployment rate was unchanged at 5.0%.
The economists at Goldman Sachs were particularly disappointed by the report.
The team, led by David Mericle, had forecast 240,000 new jobs, which they expected to support their call that the Federal Reserve would raise interest rates during their next Federal Open Market Committee (FOMC) meeting in June.When there are follow-up stories to the jobs report coming later in the day and especially when they are stories like this, it speaks volumes.
Think about that: GS forecast 240,000 new jobs, well above the magic number of 200,000 which is needed to avoid talk of "economic stagnation."
A report of 220,000 would have been great (in retrospect), but it would have still fallen short of GS forecasts. In fact, looking back (two hours ago) GS might have been happy with any number above 200,00 -- even 202,000.
But 190,000. Nope. 180,000. Nope. 175,000. Nope.
160,000.
Something tells me "everyone" is re-checking the numbers and I wouldn't be a bit surprised to see some extraordinary reporting to yet come out to "explain" all this.
Short-term winner, politically: Trump.
Short-term losers, politically: incumbents; establishment candidates.
This Was The Very Reason We Needed The Keystone -- May 6, 2016; Qatar Taps International Bond Market; Will Run A $13 Billion Budget Deficit This Year
Updates
May 6, 2016: a reader asked whether oil from the Tyler formation in North Dakota would be classified as "heavy" or "light." This is the best I could do. Bottom line: it appears that oil from the Tyler formation is probably about the same as oil from the Bakken formation.
1. At this post, at the bottom of the post, definition of "light" and "heavy" oil (can vary from country to country): http://themilliondollarway.blogspot.com/2016/01/look-west-january-2-2015.html.
2. At this post, a cut and paste from an earlier MRO link: http://themilliondollarway.blogspot.com/2010/10/tyler-formation-anotther-north-dakota.html.
September 26, 2013: MRO has rig-on-site targeting the Tyler; far southwest corner of the state. Marathon Oil provides some of this information which came from a reader, unidentified source.
3. An example from a Tyler well drilled back in 1958: http://archives.datapages.com/data/ndgs/data/006/011/011.html.
- 1280-acre spacing in Slope County
- lateral lengths of 4,500 feet to 10,000 feet; vertical depth of about 7,500 feet
- EURs: 380,000
- 36°API, similar to sweet Bakken crude, which ranges between 36-44°API
- USGS Tyler conventional estimates: 15 million bbls
- USGS has not provided estimate of unconventional Tyler potential
Note: some links take you to very old links on the blog. My site was "hacked" years ago and I had to change URLs. No posts were lost but some "milliondollarway" links may be broken. To get to a broken "milliondollarway" post, type in "themilliondollarway." I simply added "the" to the URL. If that doesnt' make sense or you run into problems, let me know.
On another note: many non-milliondollarway links are broken. Other sites may remove older posts; some sites have disappeared over time.
Original Post
In 2015, more than 70% of the crude oil produced in the Lower 48 states was light oil with an API gravity above 35 degrees.
At the same time, 90% of imported crude oil was heavier, with a gravity below 35 degrees API. To accommodate increasing U.S. production of light crude oil, refineries have adjusted their imports by reducing imports of light crudes.
The differences between domestic production and imports in this key oil characteristic could bring changes to petroleum refinery operations in the United States. --- EIAThat was the whole purpose of the Keystone XL. To bring heavy oil in from Canada. The oil and gas industry has this figured out years ago, optimizing their refineries for heavy oil from Canada, never expecting an administration to kill a simple pipeline.
It will take decades to undo what Obama did.
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Cash-Flow Neutrality At $35
Reuters/Rigzone is reporting:
Apache Corp's cost savings in the first three months of 2016 exceeded its own expectations and are likely to continue even if oilfield services costs rise.
The cost cuts mean the company could achieve its goal of cash flow neutrality for 2016 with oil prices at $35 per barrel and natural gas prices at $2.35 per million British thermal unit.Saudi needs $60. Just saying. And Qatar? See next story.
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Qatar: Taps Bond Markets; Will Run A $13 Billion Budget Deficit This Year
Investopedia is reporting:
Qatar became the latest Gulf Cooperation Council country intending to tap international bond markets with a planned $5 billion bond. If it is launched, it will be the first bond from the country since 2011.
With the drop in oil prices, countries across the region are turning to the debt markets.
Qatar will run a $13 billion budget deficit in 2016.
Last week, Abu Dhabi raised $5 billion from its first bond sale since 2009.
Qatar has already borrowed $5.5 billion through a bank loan concluded in January 2016. Proceeds from this bond will likely be used to repay this bridge financing. Qatar 10-year yields are currently around 2.45%.Midnight at the oasis?
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Torrance, California, Refinery Ready To Re-Start
I thought XOM sold this refinery, but the headline says it is still an XOM refinery.
The Los Angeles Times is reporting:
Exxon Mobil is expected to enter the final phases of returning its Torrance refinery to full operation this weekend, when the oil company plans to fire up a key part of the plant that helps process gasoline.
As part of its start-up procedure, Exxon Mobil plans to turn off the refinery's pollution control system for six hours, a step approved by the South Coast Air Quality Management District. That period is expected to be completed by 7 a.m. Sunday.Either the sale was delayed, or I simply forgot. [I simply forgot; it was always scheduled to close 2Q16.] Whatever.
After Torrance is fully operational, Exxon Mobil plans to sell the plant to New Jersey-based PBF Energy. The deal is expected to close by midyear.At least "they" spelled ExxonMobil correctly this time.
JCPenney: Next To Go Under? -- May 6, 2016
Updates
May 7, 2016: next? Lands' End? WSJ is reporting that the catalogue company is struggling.
Original Post
JCPenney, faced with unexpected light sales in mid-April, slashed payroll, froze overtime and took other drastic cost-cutting steps in an attempt to protect its bottom line.
As the end of its first fiscal quarter approached, the mid-priced department store told store managers to take the emergency measures because the chain faced “an expense challenge."
“We have an expense challenge for the month of April and are asking all stores to do their fair share by closely monitoring all expenses."
Employees were stunned when their hours were slashed on such short notice. The cut in employee hours saved Penney around 800 hours over two weeks — or approximately $8,000 per store.The emperor has no clothes. I may have to re-look at the rule that does not allow any individual to win multiple Geico Rock awards. Clearly, Barack Obama necessitates a re-look at this rule.
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GDP Now: May 4, 2016
Link here (dynamic link):
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 1.7 percent on May 4, down 0.1 percentage point from May 2.
The forecasts for second-quarter real nonresidential equipment investment growth and the change in private inventory investment declined following this morning's M3 report on manufacturers' shipments, inventories, and orders from the U.S. Census Bureau. While the forecasts for second-quarter real exports and real imports growth increased following the international trade report from the U.S. Census Bureau, the expected contribution of net exports to real GDP growth in the second quarter was virtually unchanged.
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