Making America Great Again -- August 7, 2017

Cove Point LNG, Maryland -- open for business -- later this year. Link here.

Dominion Energy said work on the Cove Point LNG export facility near Lusby, Maryland is 95 percent complete and on track to start service in the fourth quarter of 2017.

All of the major equipment has been set in place with the focus now turning on commissioning activities, Dominion said in its July report.

All of the five tower cranes used to transfer equipment onsite have been taken down and transported offsite, Dominion said, adding that all the barge loads and heavy haul deliveries have been transported.

Once it is completed, the liquefaction facility being built at its existing LNG terminal will have the capacity to produce 5.25 million metric tons of liquefied natural gas per year.

The production capacity has been fully subscribed with Pacific Summit Energy, a U.S. unit of Sumitomo Corporation, as well as with GAIL Global (USA) LNG, a U.S. unit of India’s utility GAIL, under 20-year terminal service agreements.

According to this site, it appears that the US will increase LNG exports from almost zero in 2016 to almost 4 trillion cubic feet by 2020 (if I'm reading the graph correctly).

If I did the math correctly, 4 trillion cubic feet LNG equals about 80 million metric tons LNG. Of that 80 million metric tons, Cove Point will account for 5.25 million metric tons (again, of course, if I did the math correctly). If you want to check the math, start with this data point: 1 million metric tons LNG = 48.7 billion cubic feet NG.

Whether or not I'm reading the graph correctly or if I did all the math correctly, at least I have a feel for the size of Cove Point vs the total amount of LNG the US will export in the out years.

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The Movie Page

Wow, wow, wow. I never expected this. This was supposed to be the summer blockbuster -- The Dark Tower.

It looks like a phenomenal dud -- The Guardian.

Four New Permits; Four DUCs Reported As Completed -- August 7, 2017

Active rigs:

$49.25↓	8/7/2017	08/07/2016	08/07/2015	08/07/2014	08/07/2013
Active Rigs	59	34	73	192	181

Four new permits:

• Operator: BR
• Field: Elidah (McKenzie)
• Comments: BR has permits for a 4-well pad in NENW 14-151-97. These wells will be east of the BR Haymaker wells if they run south. There is currently only one horizontal in that area, but it runs from the south to the north, a CLR well, #19715, Don 1-23H, a nice well.  

On permit renewed:

• 31782, Denbury, a CHSU permit in Bowman County

Four producing wells (DUCs) reported as completed (check on #20282 in a couple of months):

• 30869, 582, BR, Curtis 21-16 MBH-2NH, North Fork, t7/17; cum --
• 31974, 2,578, Statoil, Lougheed 2-11 7H, Todd, t7/17; cum --
• 31977, 2,279, Statoil, Lougheed 2-11 3H, Todd, t7/17; cum --
• 31978, 2,008, Statoil, Lougheed 2-11 4TFH, Todd, t7/17; cum --

EOG transferred four Horse Camp wells to Petroshale:

• 20090, 20091, 20243, and 20244, all in Dunn County

Markets Have Another All-Time Record Close, T+199 -- August 7, 2017

Officially, it's T+200, but my number is T+199.

S&P: on track to record four gains in five days. It did. Closes at all-time record high.

Dow 30: ninth consecutive record close; 10th consecutive day with trading gains day-over-day.

Nasdaq: star of the show all day long.

Soundbites on records: records based on fundamentals. Records based on earnings. 

WTI: CNBC talking head says OPEC might "cut the cut." Now, "everyone" seems to be saying that OPEC was unable to make any production cuts. Another talking head says OPEC might be saved by "Venezuela." I guess they forget that Venezuelan heavy oil = Canadian heavy oil. The talking head says to watch Venezuelan oil production/exports; maybe, maybe not. I would recommend watching Canadian oil. And OPEC heavy oil = Venezuelan heavy oil. Could OPEC be looking to beat Canada to the punch when/if Venezuela implodes? Might OPEC be thinking the same way as the analyst: someone (Canada or OPEC) has to replace Venezuelan heavy oil. The US summer driving season ends in a month or so. A strong argument can be made that the price of WTI will trend lower going forward.

Proof? Any proof that Canada might take up the Venezuelan slack. Yup. Here at the Oil & Gas Journal:

The number of active rigs drilling worldwide climbed by 69 month-over-month in July to average 2,041, according to Baker Hughes data. The count was up 629 year-over-year.

Canada provided most of the monthly rise, gaining 48 rigs in July compared with its June average to tally 198, an increase of 104 year-over-year. It marked the second straight month in which Canada led global gains, reflecting a better-than-expected seasonal ramp up in drilling while US rig count growth slowed.

The elevated Canadian count compared with a year ago prompted the Petroleum Services Association of Canada (PSAC) last week to lift its forecast for total wells drilled in the country during the year to 7,200 from 6,680.

PSAC now estimates 3,604 wells will be drilled during the year in Alberta, up from 1,900 in the original forecast. In British Columbia, it expects 580 wells will be drilled, up 300 from the original forecast.

Venezuela? Rig count edged up by one, now even with last year's number. Same link as above.

Avis: big miss on both top and bottom lines. Shares plunge 10% in after-hour trading. Guidance outlook not particularly good. Will talking heads mention the 800-lb gorilla in the room? Uber. The 750-lb gorilla? Lyft. My son-in-law is a great --- ah, the talking head just mentioned Uber -- example ... my son-in-law is a great example. Works for international company out of London, incorporated in Bermuda, US HQ in New York, major regional office in Atlanta and he travels all the time. He ground transportation preference: Uber. Both he and our daughter love Uber. In the "old" days he would have been a loyal Hertz customer. On their recent week-long trip to Chicago, the two of them, no rental; took Uber instead. 

Prince Salman's Plan "On Hold" -- August 7, 2017

Updates

August 13, 2017: the headline suggests things are going better for Saudi Arabia but data suggests Prince Salman's plan is still fantasy. From Bloomberg, data points:

• with price of oil recovering (sort of), the kingdom's total revenue climbed 6%
• income from crude oil jumped 28%
• but, revenue from non-oil sources fell by 17%
• spending dropped 1.3%
• that non-oil revenue? taxes and fees!
• despite the government’s efforts to decrease its reliance on oil income, its share of overall revenue rose to 62 percent in the second quarter, compared to 51 percent in the same period last year, reflecting the rise in oil prices. Non-oil income fell in the same period largely because of a decline in “other revenues,” which include returns on investments by the central bank and the Public Investment Fund. Revenue collected from customs taxes and and other taxes, including the zakat religious levy, also declined
  

Original Post 

I track the "Prince Salman Plan" at the sidebar at the right.

"On hold."

From Bloomberg:

The kingdom is converting thousands of square kilometers of sand into new cities as it seeks to diversify away from crude, create jobs and boost investment.

In the past month alone, the world’s biggest oil exporter has announced two major developments -- one covering an area bigger than Belgium and another almost the size of Moscow. That’s on top of plans to build a series of so-called economic cities -- special zones in logistics, tourism, industry and finance, an entertainment city and a $10 billion financial district.

The overall progress with the economic cities has been very slow, even before the collapse of the oil price,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC. “Since then, the pace of development has moderated even further with a number of projects being placed on hold.”

"The plan" has gone from "very slow" to "moderated even further with a number of projects being placed on hold."

Solar energy is one of those projects being placed on hold; see earlier posts.

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Bald-Faced Lie  (Bold-Faced Lie?)

James Comey stated there were no records on the Bill Clinton - Loretta Lynch meeting on the tarmac. On Friday, the Justice Department released 413 pages of documents related to the meeting. Some argue that James Comey lied. Unlikely to be any media interest. I doubt it will be in his book, either.

Not All Is Going Well In The Solar Patch -- August 7, 2017; New Tesla Bonds? Junk Rated

Updates

August 12, 2017: apparently Tesla's JUNK bonds went at $1.8 billion for 5.3%. 

August 11, 2017: Tesla's JUNK bonds are over-subscribed; will pay 5.25%.

Original Post

Junk: Phil LeBeau, the #2 cheerleader (after Musk Melon) for Tesla was just on CNBC announcing the $1.5 billion bond Tesla offering. The bonds have received a JUNK rating. I could have missed it, but I don't think Phil LeBeau mentioned these bonds have a JUNK rating. Link here.

Following the announcement, Standard & Poor's reaffirmed its negative outlook for the automaker and assigned a "B-" rating for the bond issue - deep into junk credit territory. S&P also maintained its "B-" long-term corporate credit rating on Tesla.

Now, back to the solar patch story.

Now that President Obama is no longer in office, it appears that the mainstream media is feeling a bit more comfortable reporting stories suggesting not all is going well in the solar patch.

From the StarTribune (Minneapolis/St Paul):

• Sunvia: a Georgia solar-panel and solar-cell maker, filed for bankruptcy in April, 2017; Sunvia is majority-owed by a company in Hong Kong
• SolarWorld: Oregon, joined the suit; SolarWorld is a German company
• Ten K Solar: Minnesota's only solar-panel maker of any size; Bloomington; announced in May, 2017, it was getting out of the solar-panel business
• Heliene: based in Sault Ste. Marie, Ontario; was left "out in the cold" (perhaps better said, left in the dark) when Silicon Energy, which manufactured panels for Heliene closed down

Meanwhile, St Louis Post-Dispatch reports that St Louis area companies are reeling from the bankruptcy filing of Sunvia.

I've always felt the solar panels being sold for residential rooftops reminded me of the aluminum siding craze in Williston, ND, when I was growing up there in the 50's and 60's.

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Note For The Granddaughters

Over the weekend I read a note suggesting that for three-year-olds, the "great room" in Goodnight Moon was particularly superb. I forget where I read that; perhaps in the "Review" section of The Wall Street Journal, but most likely somewhere else. Having toddlers name everything they see in the "great room" is quite compelling.

Today, coincidentally, I get this daily update from TutorTime where Sophia attends "school" and loves it:

Goodnight Moon, Margaret Wise Brown