The Market, Energy, And Political Page, T+20 -- Monday, November 26, 2018 -- Chicago "Winter" Storm -- Worse Since The Ice Age?

Apparently there's a huge storm hitting Chicago and heading toward the northeast. I'm not following it very closely and ESPN hasn't said a thing about it. But from the Drudge Report:

Sounds like the worse "winter" storm since the Ice Age, and it's not even winter yet.

"1975" doesn't even make the top 10. From The Chicago Tribune:

1975: less than 11 inches. Somewhere between 9.8 inches and 11 inches.

Random Graphs And Why I'm Not Worried About Conventional Oil Exploration And CAPEX -- November 26, 2018

Some day when I'm the mood I might opine why I'm not worried about the IEA trope that not enough money is being spent on conventional oil exploration.

For now, re-posting graphs that have previously been posted on the blog.

How Good Are The "New" Bakken Wells? An Old Graphic Is Fairly Staggering -- November 26, 2018

Re-posting from November 21, 2018.

I wasn't sure if I would ever see this: a reversal in the downward trend of the average amount of oil being produced by North Dakota wells.

After a peak in the early days of the boom, the daily production per well in North Dakota began to fall, hitting an all-time (recent) low of 72 bbls/well/day. I was curious if/when it would level out and if it did level out, at what amount would it plateau?

Well, lookeee here --- after several years of steady decline, the average amount of oil being produced per each North Dakota well increased in the most recent reporting period.

While looking for something else, I ran across this graphic from 2017:

Visually, the graph below is much more impressive than the spreadsheet above.

Note that in the graph below, "91," the current average daily well production is almost off the chart.

A number of observations could be made regarding the graph. The most obvious one: shale operators can respond very quickly to changes in WTI pricing. Note how the operators cut back on initial production during the Saudi Surge.

Eleven New Permits -- November 26, 2018 -- US Oil Output Rising At Its Fastest Pace In 98 Years

For the archives, from Investor's Business Daily, "how fracking turned OPEC into the walking dead."

The river of oil now hitting the market from U.S. fracking has stunned global energy markets. The U.S. has already leapfrogged both Russia and Saudi Arabia as the No. 1 producer. Will U.S. oil lead to OPEC's demise?

For the first time since World War II, the U.S. is on the verge of being a net oil exporter — something that, just five years ago, would have been considered impossible.

As Javier Blas of Bloomberg notes, U.S. oil output is rising at its fastest pace in 98 years. Meanwhile, both Russia and the Saudis are also pumping at record levels. The U.S. is tipping the scale. Since 2010 in the West Texas Permian Oil Basin alone, some 114,000 new wells have been drilled, bringing millions of barrels of new oil to the market. Other parts of the U.S. are undergoing the same transformation.

That's bad for OPEC.

"The U.S. energy surge presents OPEC with one of the biggest challenges of its 60-year history," wrote Blas. "If Saudi Arabia and its allies cut production ... higher prices would allow shale to steal market share. But because the Saudis need higher crude prices to make money than U.S. producers, OPEC can't afford to let prices fall." This, of course, has caught the 28-nation Organization of Petroleum Exporting Countries by surprise. Even just a few years ago, the consensus was that fracking and its related technologies would add a decent amount of oil to the market, but nothing like what's happening now.

For the archives, previously posted, but quick reminder. For month of November, 2018:

• Saudi Arabia produce record volume, 11.1 - 11.3 million bopd some days; not yet known if a record will be set for the entire month
• Russia: post-Soviet high, 11.41 million bopd in October, up from 11.36 million bopd in September
• US: similar

Making American great -- it just doesn't quit. Rigzone is reporting that one-half of the $360 million required to widen/deepen the Corpus Christi Ship Channel has now been secured. It's easy to become "numb" reporting/hearing these numbers. They never seem to end. $360 million for just one project in Corpus Christi. I don't think Amazon HQ2 comes close to that kind of money. $360 million -- that's close to half a billion dollars. It's probably no big story, just another oil and gas story but I think it's a pretty big deal. And just think, every ten years or so, after every "hurricane of the century," they can clean it up, dredge it, and make is usable again. Just tongue-in-cheek. Don't take me seriously. My wife doesn't. According to the linked article:

President Trump and the US House will shoulder $230 million of the estimated $360 million to complete CIP and the port will cover the remaining $130 million.

*************************************  
Back to the Bakken

Active rigs:

$51.63	11/26/2018	11/26/2017	11/26/2016	11/26/2015	11/26/2014
Active Rigs	62	53	37	65	183

Eleven new permits:

• Operator: CLR (6); Hess (5 -- one of the Hess permits was from a day earlier)
• Fields: Epping (Williams); Baskin (Mountrail)
• Comments: CLR has permits for a six-well Sodbuster pad in Lot 3, section 6-155-99; Hess has permits for a 5-well EN-Farhart pad in lot 1, section 4-156-93;

Six permits renewed:

• Crescent Point Energ (4): two CPEUSC Holmes and two CPEUSC Ruby permits, all in Williams County
• Petro-Hunt (2): two Noonan Federal permits, both in McKenzie County

Four producing wells (DUCs) reported as completed:

• 33940, 3,655, MRO, Axell USA 34-19TFH, Reunion Bay, t10/18; cum --
• 33481, 1,748, Whiting, Wold Federal 42-1-1H, Sand Creek, t9/18; cum 20K after 25 days; the Wold wells in Sand Creek are tracked here;
• 34703, 1,707, Whiting, Stettner 11-24-2H, Robinson Lake, t9/18; cum 6K after 29 days;
• 34702, 592, Whiting, Stettner 11-24TFH, Robinson Lake, t9/18; cum 6K after 29 days;

Temporarily abandoned:

• starting to see some "recent" permitted wells go to TA status including --
• 30079, TA, Nine Point Energy, Arnegard 150-100-23-14-10TFH
• six Lime Rock Resources wells, four in Dunn County (five Sharon Rainey and one William Sadowsky); two in Billings County (State Gresz wells)

The Market, Energy, And Political Page, T+20 -- Monday, November 26, 2018

Happy? Real happy? Not so happy? I guess it depends on the definition of "surges."

********************************** 
Chevrolet Volt Short-Circuited

GM will shut down production of Chevrolet Cruz (small car); the Volt (EV); and, several others. Stories everywhere; one link here. It appears four plants in the US will be closed, and one in Ottawa, Canada. But the number of employees -- it appears 3,300 blue collar workers at the one plant in Canada; and 2,600 employees spread across four factories in the US.

US EV sales are tracked here.

I watched ABC report this story; I don't watch evening news but I made an exception tonight to watch the Mars landing story. After listening to the ABC story I went to the internet story regarding GM. What ABC said was accurate. What ABC left out was huge. 14,000 jobs lost; about 5,900 in North America meaning that the vast majority of employees are overseas (perhaps China?). Of the 5,900 in North America, as noted above, 3,300 in one factory in Ottawa, whereas 2,600 employees spread across four plants in the US. From the ABC I had the distinct impression 14,000 GM employees in the US were being cut just before Christmas. Not even close. This is a huge GM story. It's a huge business story. It's not a huge American job story -- GM may in fact hire 2,600 new employees for their US plants. The Bolt was unveiled in January, 2016. The Volt is a hybrid, first commercial production in 2010. The Volt was showing its age and absolutely not competitive against the Toyota Prius.

Wow, the GM story, as I said earlier: his is a huge GM story. It's a huge business story. It's not a huge American job story.

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

Two Throwaways For The Archives

In default? Tick, tick, tick: apparently Venezuela is in default to both China and Russia. Russia strongmen have gone to Venezuela to break some kneecaps.

White elephant? The billion-dollar pipeline Canadians own but can't build. Trudeau seems confused.