Week 33: August 13, 2017 -- August 19, 2017

Shale oil: record after record after record being set.

EIA adds Anadarko to weekly production report -- perhaps the biggest story of the week.

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

Bakken deals
Whiting to sell some Fort Berthold area assets

Operations
Active rigs continue to slide; down to 53
Production data for June, 2017, posted
ND well with highest monthly rate of any well in ND history?
Active rigs trending down in North Dakota
QEP reports several nice Foreman wells
Random example of peculiarities of the Bakken 
$10,000 for a mineral acre in the Bakken

Fracking
Update on fracking sand strategies

Pipelines
DAPL upends region's dependence on CBR
Bakken and Canadian producers wrangle for pipeline space

CBR
Struggling 

Other formations
Two interesting wells targeting the Madison 
Watch for increased activity targeting the Madison formation

Bakken economy
Water Resource Recovery Facility, Williston, $105 million, ribbon-cutting
Cardon Global opens new office in Williston; to oversee new Williston airport (same link)
Federal funding now reaches $73 million for this $112 million project

Williston Wire -- August 18, 2017

Ribbon cutting ceremony:

• Water Resource Recovery Facility, Williston (Boomtown)
• $105 million
• Thursday, August 31, 2017; 8:30 a.m.

Hub City funding

• Williston will host legislators in bid to "earn" Hub City funding

Williston school district continues to grow: enrollment expect to top 4,000

Divide County elementary school: new school should be ready for opening day

Tioga school district: prepares for slight increase in enrollment, up slightly from last year at 455; 268 of those at Central Elementary School

Cardon Global opens new office in Williston

• Cardon Global, parent of Cardon Development Group
• selected by City of Williston in 2015 to oversee planning and development of the ew Williston Basin International Airport
• Cardon Global also selected by the city to create a 10-year, strategic economic plan

Watford City medical center

• Crestwood donates $150,000 to new medical center

Watford City: groundbreaking for Veterans Memorial Park

The Importance Of FERC -- Reminder: We Now Have A Quorum -- August 18, 2017

Story here. The court ruling today:

A federal appeals court ruled against the Constitution Pipeline Friday, in a challenge it brought against New York State’s denial of a water quality permit.

The decision is a major blow to the embattled project, which was planned to run 121 miles, carrying natural gas from the Marcellus Shale in northeastern Pennsylvania through New York State.

What next?

In an email, Williams spokesman Keith Isbell signaled the company’s next move may be to bring the matter before the Federal Energy Regulatory Commission (FERC).

“In today’s decision, the Second Circuit recognized the jurisdiction of the D.C. Circuit, and the D.C. Circuit has recently acknowledged FERC’s authority to make the ultimate decision under the Natural Gas Act,” Isbell writes. “While we would have preferred an immediate path to construction, we are pleased with the court’s resolution of this jurisdictional issue.”

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

Easier To Buy Than To Build

Link here.  Calpine sold to private equity firm in deal valued at $17 billion. The story:

Calpine announced on Friday morning that it has agreed to a sale to Energy Capital Partners in a deal valued at $17 billion. Energy Capital will pay $15.25 a share in cash, about a 50 percent premium to Calpine's share price before reports surfaced in May that the power company, one of the nation's largest, was considering putting itself up for sale.

Calpine's stock climbed sharply in after-hours trading. Calpine and Energy Capital must get regulatory approval from the Public Utility Commission of Texas, among other agencies.

If the deal goes through, it will result in a more than $9.1 million payoff for Calpine CEO Thad Hill, who owns nearly 600,000 shares of the company's stock.

Calpine, which employs about 800 in Houston, has struggled in recent years in the face of persistently low electricity prices, a surge of renewable energy and the high costs of operating fossil fuel power plants. The company reported a second-quarter loss of $219 million, significantly larger than its $29 million loss in the second quarter of 2016.

From the Calpine website:

Nice Turn In WTI Price; Nine New Permits -- August 18, 2017

Active rigs:

$48.73↑↑	8/18/2017	08/18/2016	08/18/2015	08/18/2014	08/18/2013
Active Rigs	53	33	74	193	183

Nine new permits:

• Operators: Hess (7); Petro-Hunt (2)
• Fields: Blue Buttes (McKenzie); Charlson (McKenzie)
• Comments: Hess has permits for a 7-well Sigrid-Loomer pad in NWNW 8-150-95; Petro-Hunt has permits for two more USA wells in Charlson -- always exciting to see USA wells in the Charlson

Two permits renewed:

• Whiting (2): an Iver & Minnie permit, Stark County; and, a permit for Sikes State, Mountrail County

One permit canceled:

• QEP: canceled a Vegas permit in McKenzie County (#33037)

The Market And Energy Page, Part 6, T+210 -- August 18, 2017

When will tight oil make money? A great analysis from Wood Mackenzie. Three reasons why one would not expect to see positive cash flow in the shale oil industry (think Amazon in the early years):

• early life
• high growth
• capital intensive

Operators have spent a lot of money:

• acquiring positions
• investing in infrastructure
• getting up the learning curve

The shale oil industry is in early stages; much of this is structural, not cyclical.

The analyst gets specific regarding oil prices:

• $50 oil or better: positive cash flow
• $45 - $50 oil: operators will make production/growth targets but at expense of cash flow
• below $45: operators will have to change their behavior, but it would take a full 12 months of $45-oil, and Wood Mackenzie thinks that is unlikely to happen

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