Prior to today, over at "Bakken operators" these were most recent entries for CLR (2017 - 2018):
2Q18 presentation: step change in well performance across the Bakken
May, 2018, presentation: 796,000 net acres in the Bakken; 161K boepd, up 48% over 1Q17; 1,100 mboe EUR type curves ($7.9 million) vs 980 mboe EUR type curves in 2017; see SeekingAlpha article;
adjusted net income: $337 million; 40.90 per diluted share
results topped Wall Street expectations: Zacks -- 81 cents/share
revenue
revenue: $1.28 billion
results topped expectations: $1.21 billion
production
production, average 3Q18: 296,900 boepd (beats 3Q18 guidance and consensus)
production, average 3Q18: 164,605 bopd (up 5% sequentially; and up 17% yoy)
percentage oil: 164,605/296,900 = 55%
Bakken production
167,643 boepd; up 23% yoy; compare with 161K boepd back in May, 2018;
7K x 365 days = 2,555K (2.5 million bbls) x $50 = $127 million and my hunch it didn't cost an extra penny to grow that production -- at least not many extra pennies; the wells are just getting that much better; and costs are coming down;
expects strong finish for CY2018 with "70 of our forecasted 2018 Bakken wells scheduled to be completed by year end"
shares are up 28% in last 12 months; trading at around $50
production records hit
added two rigs in the Bakken, bringing its current total to eight
production is expected to average 1.3 million bbls in November, 2018 -- EIA
oil production remains unhedged
some rivals, including EOG and Pioneer Natural Resources have warned investors that hedging may affect profits
Natural gas: holding steady at $3.20. US market: another "ugly" day on Wall Street
Louis Rukeyser: where are you when we need you?
Iran sanctions: Iraq expects exemption. Which, of course, makes no sense. Trump calls out Germany for buying natural gas from Russia, and then Iraq expects exemption for helping Iran? The swamp.
CLR releases 3Q18 earnings: link here; some new records set; snapshot here; this is the one everyone has been waiting for; will discuss it later. Next up: WLL, OAS, EOG, NOG.
Active rigs:
$67.04↓
10/29/2018
10/29/2017
10/29/2016
10/29/2015
10/29/2014
Active Rigs
67
53
34
69
190
Nine new permits:
Operators: Abraxas; CLR
Fields: North Fork (McKenzie); Brooklyn (Williams)
Comments: Abraxas has permits for a 5-well Jore pad in lot 2, section 2-149-97; and, CLR has yet another set of four permits in Brooklyn oil field; this is for a 4-well pad in 26-155-98;
Brooklyn:
I need to update this field, but for newbies, CLR is drilling the heck out of this field. I am absolutely convinced that CLR has an entire division dedicated full time to this non-descript field north of Williston. I would not consider it one of the best spots in the Bakken but it is certainly in the neighborhood. More importantly, I think, is what CLR must be learning from pad drilling and fracking in tight plays. But maybe I'm wrong; maybe Brooklyn is a better field than I realize and CLR is simply lucky. LOL. Not likely. The Brooklyn oil field as it looks today.
Three permits renewed:
EOG: three Wayzetta permits in Mountrail County
Five producing wells (DUCs) reported at completed:
33792, 234, CPEUSC Berner 9-19-18-157N-99W TFH, Lone Tree Lake, t9/1; cum -- ;
33796, 64, CPEUSC Berner 8-19-18-157N-99W TFH, Lone Tree Lake, t9/18; cum --;
33790, 385, CPEUSC Berner 5-19-18-157N-99W MBH, Lone Tree Lake, t9/18; cum --; 6K after 14 days;
33794, 374, CPEUSC Berner 4-19-18-157N-99W MBH, Lone Tree Lake, t9/18; cum --; 7K after 14 days;
33791, 213, CPEUSC Berner 9-19-18-157N-99W TFH, Lone Tree Lake, t9/18; cum --; 3K after 14 days;
I could "take or leave" the article -- while reading it -- until I saw who wrote it: Simon Flowers, Chief Analyst and Chairman for Wood Mackenzie. Even so, it's a pretty typical Forbes article: great promise but at the end, a big letdown.
At Forbes: what next as Big Oil moves in on US tight oil?
Before I get to the article -- look at that headline -- what next as Big Oil moves in on US tight oil? This is a very, very timely question -- if any doubt, look at COP's earnings transcript.
Now, to the Forbes article.
He begins:
What does tight oil have in common with FAANG stocks? Answer: tight oil is arguably the upstream equivalent of these tech sector leaders. It’s the hot investment play in the oil and gas index, it’s outperformed What does tight oil have in common with FAANG stocks? Answer: tight oil is arguably the upstream equivalent of these tech sector leaders. It’s the hot investment play in the oil and gas index, it’s outperformed.
Note to self: memo to Art Berman and Jane Nielson.
Data points from the linked article:
Big Oil needs exposure to that growth
Big Oil is muscling in
their move began with BP's $10.5 billion acquisition of BHP, July, 2018
[COP, lucky with BP; XOM, lucky with XTO; odd "man" out? ChevronTexaco?]
ExxonMobil, Chevron, Shell, and BP: have assembled tight oil assets that include the Permian
Equinor with sizable Bakken exposure
production climb, tight oil for Big Oil:
2018: 0.7 million bopd
2026: 2.2 million bopd (projected peak)
2026: tight oil will account for 10% of the majors' total production; one-fifth (20%) of liquids
and look at this for all the doubters and critics: going forward, returns from tight oil will beat all but the very best conventional and deep-water alternatives
[and, initial investment and long-term commitment in tight oil is a whole lot less than deep-sea)
majors' inventory of yet-to-drill wells will generate an average IRR of 45% ($65 Brent); well above the 16% weighte average for pre-FID conventional projects
what's next?
the majors will want still more tight oil
the industrialization of extraction means tight oil is increasingly a scale game
120 operators operating in the Permian Wolfcamp: there will be consolidation
what about the have-nots?
Total and Eni say "no" to tight oil
it's hard for an outsider to justify buying into tight oil
XOM, CVX, BP, and RDS: had legacy US lower 48 positions
Bottom line for investors:
Investment in tight oil isn’t exactly risk free. Tech stocks are
demonstrating in the current sell off that hot sectors have their downs
as well as ups. As the world’s marginal barrels, tight oil’s value and
cash flow are very sensitive to oil price. The plays are far better
understood now after several years of development, and production growth
for the next few years looks reasonably assured.
Yet the clue is in the name, “tight” oil. The geology should not be
underestimated, and the challenges of extracting at a commercial cost
will mount as operators begin to move out beyond the sweet spots into
tougher rocks. For the Permian, that likely comes after 2020. It could
go either way.
And what he doesn't mention: over time, and it appears to be coming sooner than later, most of hte US is turning "against" fracking. North Dakota is holding in there; Oklahoma will probably hold on; and, of course, Texas will hold on, but after that, it's anyone's bet. Think Proposition 112 in Colorado and the NY Times article today on fracking on federal lands. The latter will last only as long as Trump is in office.
I think Russia and Saudi Arabia see that, and both are willing and able to wait.
Meanwhile, WTI continues to fall. Down another 55 cents today.
Good luck to all. I'm off the net for awhile.
My favorite song in 1964 (?). My favorite memory in middle school: my mom giving me a dime every so often to play the pinball machine at the Huddle (?) on Main Street and 6th Street East at lunchtime -- just across the street from Central (Junior High - Middle) School. This song, red licorice, and pinball. That's all I needed. And a dime.
Last Kiss, The Cavaliers
And, then, of course, my other favorite song of 1964: "Pretty Woman" by Roy Orbison. And then all the early Beatle songs. My mother brought a 1964 Beatles album from England for me. How did she ever know?
Wow, I must have had a dozen other favorite songs in 1964. No Walkman. No iPod. No iPhone. No Apple Watch. How did we all survive?
Gasoline: in the local area (north Texas; DFW area; residential service stations), I see unleaded regular gasoline
is going for $2.43 / gallon. It may be slightly less expensive down the
street. I may see later this evening when I take Arianna to water polo.
By the way, her team won both games in yesterday's "one-day tournament."
They won decisively and Arianna scored two goals.
By the way, COP is also very, very bullish on the Eagle Ford according
to their 3Q18 earnings call. When I see the valuation placed on the
Permian and the valuation placed on the Eagle Ford, it suggests to me
that the Bakken is well under-valued. But I am inappropriately exuberant
about the Bakken.
NASCAR: Joey Logano won Martinsville; will probably cost him the title. Martin Truex will see to that; probably one of the best / most exciting races I've seen (and I don't like short track) but it ended on a very, very sour note; had this been football, Logano would have been hit with an unsportsmanlike penalty
NFL: LA Rams shock Green Bay; actually, the LA Rams shocked all of us
World Series: incredible
For the record books: it was said that for the first time ever, four major /professional sports venues were represented in one metropolitan area -- or something to that effect. Yesterday, in Los Angeles, home teams in four major sports franchises hosted visitors: hockey (LA Kings); basketball (Boston Lakers); football (LA Rams); and I forget the fourth. Soccer? I guess so. Los Angeles FC hosted Sporting KC. Oh, that's right. The fourth was the World Series. The LA Dodgers hosted the Boston Red Sox. So, in fact, five major sports franchises were playing home games in Los Angeles yesterday.
************************************
Back to the Bakken
Wells coming off confidential list over the weekend, Monday:
Monday, October 29, 2018:
34509,SI/NC, MRO, McKinley USA 24-7TFH, Van Hook, no production data,
31260, NC, Oasis, Kjorstad 5300 34-22 5B, Willow Creek, a nice well -- listed as NC but it's been fracked and is producing very, very nicely; no IP or test date provided on scout ticket; t--; cum 92K 8/18;
Sunday, October 28, 2018:
34508, SI/NC, MRO, Dearborn USA 24-7TFH, Van Hook, no production data,
Saturday, October 27, 2018:
34799, 533, Hunt, Nichols 156-90-10-15H-4, Ross, t9/18; cum 13K after one month;
34507, SI/NC, MRO, Bursha USA 14-7H, Van Hook, no production data,
31261, NC, Oasis, Kjorstad 5300 34-22 6T, Willow Creek, a huge well --listed as NC but it's been fracked and is producing very, very nicely; no IP or test date provided on scout ticket; t--; cum 80K 8/18;
Crude oil production in the Niobrara region in northeastern Colorado
and eastern Wyoming has quadrupled since the start of the 2010s, and now
tops 600 Mb/d. Fortunately for producers in the Niobrara’s
Denver-Julesburg (D-J) Basin and Powder River Basin (PRB), midstream
companies not only developed enough new pipeline takeaway capacity to
transport all those incremental barrels, they overbuilt. As a
result, the region — unlike the Permian and Western Canada — currently
has no crude-oil pipeline constraints, something that makes the Niobrara
even more attractive to producers.
But part of a pipeline system now
moving crude out of the D-J is being repurposed to carry NGLs instead,
and with D-J and PRB crude production still rising, you’ve got to
wonder, is a takeaway shortfall on the horizon? Today, we continue our
series on the Rockies’ premier hydrocarbon production area and the
infrastructure needed to serve it, this time focusing on crude oil.
Previously we said that crude production in the D-J Basin and PRB took off during
the Shale Era, soaring from less than 140 Mb/d in January 2010 to a peak
of nearly 500 Mb/d in April 2015. With the 2014-15 oil price crash,
though, drilling activity in the D-J Basin and PRB declined and Niobrara
crude production sagged — much like it did just about everywhere else
in the U.S. (except the Permian). By January 2017, the play’s oil output
was down 19% from its apex, at just above 400 Mb/d. Since then, though,
it’s been on a tear — up to 620 Mb/d as of October (a 54% gain since
the beginning of last year.
*********************************
Moon River
Wow, I'm haunted by "Moon River." Have been for several days now; not sure how it started. Can't get it out of my mind.
I'm trying to figure it out. Like the narrator in Zen and the Art of Motorcycle Maintenance trying to re-discover/understand Phaedrus.
The song was originally performed by Audrey Hepburn in 1961. I would have been ten years old. I know I would not have seen the movie; I'm sure I never heard her version until later in life. Until early adulthood I only associated "Moon River" with Andy Williams, 1962 - 1963. I'm happy to see Audry's version has 14 million hits on YouTube; Andy Williams with 12 million hits. I've always considered "covers" karaoke. Rarely are "covers" better than the original. The same is true with this one.
We had a "hi-fi" stereo in our home on 17th Street in Williston. It was hidden in a nice wooden console. It would have been an expensive purchase for my parents. To the best of my memory, it was never played -- or very, very seldom played. I don't recall any albums, but I suppose there were some. The living room was pretty much off-limits to the family. We spent out family time in the family room, an addition to the original house. It was a beautiful room, and an incredibly functional room. Mom insisted on a sink in the corner just next to the entrance into the kitchen. With six children she needed extra sinks where they could wash their hands before coming to dinner. Has that ritual disappeared?
Back to the "hi-fi." Rarely I recall Mom would turn on its radio -- but maybe I'm just recalling something that never happened. I do vaguely recall a small radio in the kitchen.
I've never read Breakfast at Tiffaney's. I can't imagine reading it now, but ...
