Proposition 112 In Colorado -- For The Record -- October 25, 2018

Updates

October 26, 2018: setback proposition will pass if polls are correct. Polling shows 52% of Colorado folks in favor of setbacks.

Original Post 

Two readers sent me a link to this article / op-ed piece regarding Proposition 112 in Colorado. The second reader wondered whether I was aware of this issue since he has not seen one post on the blog regarding Proposition 112.

Here was my "not-ready-for-prime-time" reply:

I am very aware of Prop 112 / Colorado. Interestingly, another reader sent me the link to this same article earlier today -- it adds yet another wrinkle of which I was not aware.

I have purposely not mentioned this issue (Prop 112) on the blog (or if I have, I have forgotten) it's because I generally don't want to get into the back and forth of unsettled issues. I know I am inconsistent on that. I'm sure you can find many, many cases in which the issue had not been settled and I continued to blog about it.

As an example, before the DAPL was decided, I wrote about it often but that only because for the Bakken it was impossible to ignore, and the blog is focused on the Bakken. Having said that, I tried very hard to not get into the day in / day out opinion pieces on the merits of the DAPL. I could have spent 24/7 on the DAPL. I'm sure readers will remember it differently than how I remember it. 

I almost never blogged about the activity by the protestors and I have almost no blogs on the court trials of those arrested.

But for me, the Colorado / Prop 112 issue seemed so "peculiar" to Colorado with little direct impact on the Bakken so I chose to ignore it and planned to report on it when the vote comes in.

What I will now add (not in the original e-mail):

Perhaps the real reason I am not posting this story (Proposition 112 / Colorado): if passed, this measure will be so incredibly harmful to the state that I don't even want to think about it. 

One wonders how many oil companies now headquartered in Denver or who have offices in Denver will simply pack up and leave if the measure passes. I think they all will. I saw it happen in Williston after the last boom in the 1980s. When the bust came in late 1980s, or whenever it was, the oil companies simply left ... literally overnight. All of them -- except perhaps Hess (it remained in the oil capital of North Dakota: Tioga).

Wow, think of the repercussions all the way, up and down the entire oil and gas industry. Even the airline industry servicing Denver would be cut back significantly. When I think of the "oil capitals" in the United States, there are not many: Houston, Ft Worth, Dallas, .... Denver? Wow, can you imagine Denver coming off that list?

When one starts thinking about the economic effects on Colorado if this measure passes, it's almost unfathomable. 

Again, this whole post is "not ready for prime time," but I felt obligated to at least respond to readers who were wondering how I could be missing, perhaps, the biggest energy story in the 2018 election, even if the response is pretty lame. 

Most Fascinating -- October 25, 2018

Updates

October 26, 2018: the meeting was a dud! See this note. The beginning of the end.

Original Post 

From twitter:

Earlier, MbS said he would remember who supported him  / who attacked him after the Khashoggi murder.

Finally,  someone has also said never let a crisis go to waste.

Eleven New Permits -- October 25, 2018

Active rigs:

$67.33→	10/25/2018	10/25/2017	10/25/2016	10/25/2015	10/25/2014
Active Rigs	68	54	35	68	194

Eleven new permits:

• Operators: WPX (7); CLR (4)
• Fields: Mandaree (Dunn); Brooklyn (Williams)
• Comments: CLR has permits for a 4-well Boise/Boston pad in section 24-155-98; WPX has permits for a 7-well St Anthony pad in section 9-149-93;

Operator transfer: another 25 Madison wells transferred from Hess to Scout Energy Management; all in the Medora Heath-Madison unit.

The Market, Energy, And Political Page, Part 5, T+68 -- October 25, 2018

Fitzsimmons: COP hits a grand slam.

• ConocoPhillips' Q3 EPS report was proof positive its strategic plan is working to perfection
• led by the company's leading Eagle Ford position, it earned over half-a-billion bucks in the Lower 48 segment
• the Alaska segment also was very strong, delivering net income of $427 million, up more than 4x yoy
• COP is one of the highest quality global E&P companies in the energy sector and is a free cash flow cow at current oil and gas prices.

Original Post

First slide below, from the COP 3Q18 presentation. 

• Adjusted earnings y-o-y --
• 3Q18: 1,595 million
• 3Q17: 198 million
• ratio: 8x
• On a per share basis, y-o-y --
• 3Q18: $1.36
• 3Q17: $0.16
• ratio: 8.5x

And yet oilprice.com says:

ConocoPhillips reported on Thursday a fourfold jump in its third-quarter earnings, easily beating analyst expectations, as higher oil prices helped the U.S. firm to book higher realized prices across all commodities. ConocoPhillips posted third-quarter earnings of US$1.9 billion, or US$1.59 per share, up from US$400 million, or US$0.34 per share, earnings for the third quarter of 2017. Adjusted earnings—excluding special items —came in at US$1.6 billion, or US$1.36 per share, jumping from adjusted earnings of US$200 million, or US$0.16 per share, in Q3 2017.

Apparently, many, many ways to report things -- "four-fold = 8x"?

COP: earnings call today. Slides here. Fourteen slides.

ISO New England: stayed well below $100 this morning. But it's going to be interesting to watch when we have first "cold snap" in Boston.

The gap widens, link here. Natural gas is up 1.43% today.

I still think the "natural gas story" could be the energy story of the year (calendar year 2018) -- the real question is whether it will be US regional, US national, regional/global, or global. US regions to watch: New England. Outside the US: British Columbia along the coast.

The Market, Energy, And Political Page, Part 4, T+68 -- October 25, 2018

Drill, baby, drill: this would not have happened under Bush II or Sir Saint Obama -- link here --

The first oil and gas production wells in federal Arctic waters have been approved by U.S. regulators.

The Bureau of Ocean Energy Management on Wednesday announced it issued a conditional permit for the Liberty Project, a proposal by a subsidiary of Houston-based Hilcorp for production wells on an artificial island in the Beaufort Sea.

The approval follows through on President Donald Trump’s promise of American energy dominance, said Interior Secretary Ryan Zinke. Comment: I cannot recall an Interior Secretary (in the last twenty years), moving as quickly as Ryan Zinke. He must know that he may only have four years.

The Arctic and Obama's dithing. And many, many articles on closer cooperation between Russia and China to develop the Arctic. Here is just one of many.

Because of Obama's dithering -- or more accurately, his policy decisions -- he gave the Russians/Chinese an opportunity to move into the Arctic well ahead of the US. Fortunately I don't think it will matter but had Obama been elected for a third and fourth term (Hillary), the US would have written off the Arctic. I don't think folks realize it but oil exploration in the Arctic is about a lot more than just oil / natural gas production. Just as NASA's space program was about a lot more than just landing a man on the moon ... and returning him safely to the Earth. Tang. LOL. By the way, whatever happened to Tang. From wiki:

The Tang brand is currently owned by Mondelēz International, a 2012 North American company split off of Kraft Foods Inc. 

Then:

Sales of Tang were poor until NASA used it on John Glenn's Mercury flight in February 1962, and on subsequent Gemini missions. Since then it has been closely associated with the U.S. manned spaceflight program, and created the misconception that Tang was invented for the space program.

It wasn't. When was Sputnik? 

The Soviet Union launched it into an elliptical low Earth orbit on 4 October 1957.

If Tang was not invented for the space program the timing was certainly coincidental. LOL. Again, from wiki:

Tang was formulated by General Foods Corporation food scientist William A. Mitchell in 1957, and first marketed in powdered form in 1959.