Friday, January 15, 2021

Notes From All Over -- The Afternoon Before A Three-Day Weekend Edition -- January 15, 2021

All this week on CNBC, all this hand-wringing over the surging 10-year Treasury, jumping from below 1% to 1.13%. 

Some folks on CNBC talked as if the world was coming to an end. 

Today I see the 10-year Treasury dropped four basis points, back to 1.087%. The dollar was stronger despite President-elect Biden's $1.9 trillion stimulus plan, and the price of oil showed the biggest decline in weeks. Guy Adami was practically apoplectic on Fast Money yesterday with regard to the surging 10-year Treasury and the falling dollar and the $1.9 trillion stimulus plan. Tea leaves suggest the US economy is "not yet out of the woods" by any stretch of the imagination. From Rigzone below "... and weak US economic data stoked concerns..."


I didn't watch CNBC all day so I have no idea what their talking points were but when I get back to blogging anything of note regarding the Bakken, we will have a new president. 

It's a three-day weekend, and then a day before the inauguration. I suppose there could be some Bakken news Tuesday but that's about it. Then President Biden takes over. Who would have ever guessed?

EIA's January, 2021, Short-Term Energy Outlook

Link here.



This should be an interesting read, 2021: in the US, total production of fossil fuels to remain flat as increased coal production offsets declines in natural gas production.

Re-Posting: Ethane Power Plant West Of Williston -- January 15, 2021

Updates

January 15, 2021: press release, dated January 12, 2021, from Bismarck, ND, and Westlake Village, CA, data points:
  • Bakken Midstream Natural Gas, LLC
  • has signed its first ethane supply term sheet to support the power plant previously announced
  • will be the largest power plant to utilize advances in combustion turbine technology that enables ethane as its primary fuel source;
  • The Energy Center: to be located in the Mountrail-Williams Electric Cooperative near Williston, ND
  • October, 2020: announced it had secured nearly $25 million from two separate capital raises
    • funding rounds led by the Family Office of Founder and executive chairman, Steven E Lebow
    • Lebo was joined by ND business leaders including Gene Nicholas, Ron D. Offutt, and Stephen L. Stenehjem
  • Lebow, previously: 
    • founded and co-led Donaldson, Lufkin & Jenrette's (DLJ) Los Angeles office and created and led GRP Partners, a US and European venture capital firm;
    • from day one, he was the primary fanancier for companies including Costco Wholesale, PetSmart, Dick's Sporting Goods, Envestnet, Bill Me Later (sold to PayPal) and ULTA Beauty;
  • three years of preparation and work to get to this point
  • Bakken Midstream: 
    • CEO Mike Hopkins
    • Lebow, and co-founders Curt Launer and Shane Goettle
  • Hopkins:
    • has successfully developed 54 power projects around the world, totaling over twelve gigawatts
    • was extensively involved in the build out of the value-added industry in Alberta, Canada
  • Launer:
    • number-one ranked natural gas industry analyst on Wall Street for twelve years
    • in the Institutional Investor Magazine Hall of Fame
  • Goettle:
    • life-long North Dakota businessman and attorney with more than 25 years of state and federal level experience;
    • former head of the North Dakota Department of Commerce
    • former chair of EmPower North Dakota

Original Post

Link here

Bismarck Tribune link here

Williston Herald link here.

From The Bismarck Tribune, data points:

  • west of Williston
  • Bakken Midstream Natural Gas
  • $400-million facility
  • construction: to begin in 2022
  • to take two years
  • CEO: Mike Hopkins
  • Bakken Midsream
  • formed in 2018
  • mission: to develop "such" projects
  • received a $200,000 investment from ND Department of Commerce
  • confidentiality precludes more specific information
Are there any other such plants in the US that might provide readers some comparison?
  • Pennsylvania Power Plant said to be the first to tap ethane for electricity -- March 27, 2020 -- NGI, link here; proposed as long ago as 2015 by GE, link here;

EIA: costs for new energy plants, 2018, link here

  • average construction costs, combined cycle: $900 / kW = $900,000 / mW or about a million dollars for a new combined cycle plant;
  • average new capacity for a new natural gas plant: 500 MW
  • so, 500 megawatts x one million dollars = $500 million 

Hess natural gas processing plant: $150 million, link here

Hess Vantage pipeline: link here

RBN Energy: Shell's new ethane-consuming steam cracker in the home stretch. See this post also. Archived.

After several years of development, Shell’s $6 billion Pennsylvania Petrochemicals Complex — the first of its kind in the Marcellus/Utica shale play — is really taking shape about 30 miles northwest of Pittsburgh. The facility, which will consist of a 3.3-billion-lb/year ethylene plant and three polyethylene units, is in its final stages of construction, as is a pipeline that will supply regionally sourced ethane to the steam cracker. When the Falcon Pipeline and the PPC comes online, possibly as soon as 2022, they will provide a new and important outlet for the vast amounts of ethane that is now either “rejected” into natural gas for its Btu value or piped to Canada, the Gulf Coast, or the Marcus Hook export terminal near Philadelphia. Today, we discuss progress on the Marcellus/Utica’s first world-class petrochemical complex and what it will mean for the play’s NGL market.

And Again, The Dakotas Lead The Nation -- Chinese Flu Watch -- January 15, 2021

Vaccinations: state rankings by rate of vaccination, per 100 people, link here:

  • West Virginia: 7.06
  • North Dakota: 6.42
  • South Dakota: 6.14 doses;
  • National average: 3.5 doses per thousand
  • Minnesota: far behind with less than 3 doses per hundred
  • California: 2.5 doses -- about half that of South Dakota

Percent of allocated vaccine already administered:

  • North Dakota: 71%
  • South Dakota: 61%
  • California: 28%

In storage:

  • 2.5 million vaccine doses in storage
  • NYC: 34%; 500,000 doses waiting in storage;

Other data points:

  • In addition to these strong figures, ND and SD lead the nation in natural "penetration" rate: penetration rate of natural "cases" + vaccination --> herd immunity
  • South Dakota: used electronic health records to identify individuals who qualified for the vaccine to avoid unnecessary storage;

Tracking at Bloomberg. Nice interactive graphic.

Why They Mine Bitcoin In The Arctic, In Iceland, And In The Mountains Of Iran -- January 15, 2021

Bloomberg photo-essay.

The Siberian city of Norilsk is best known as the home of mining giant MMC Norilsk Nickel PJSC. 
With a population of 180,000, it’s one of the biggest human settlements beyond the Polar Circle and only reachable by plane or boat. 
The city may soon be famous for a different type of mining though — it now hosts the Arctic’s first crypto farm for producing new Bitcoins
BitCluster, the facility’s Russian owner, is already planning an expansion after starting operations late last year. 
The city of Norilsk has temperatures as low as -40 degrees Celsius (-40 Fahrenheit), making it one of the coldest places on the planet. It is so remote that the locals call the rest of Russia “the mainland.” The temperatures are a big part of the appeal for bitcoin mining, as the two biggest running costs for the process are cooling and electricity. 
BitCluster clients only pay 2.75 rubles ($0.04) per kilowatt hour, among the cheapest rates globally. Norilsk Nickel's power unit mostly uses gas or hydropower to produce electricity.

Might the Bakken be good for mining Bitcoin: cold, and lots of energy.  

When you look at those mining rigs, what do I see? Apple mini-Macs. Just saying. They're already being used for the cloud by AWS.

A Closer Look At The Huge Hess EN-Enger Well In Big Butte -- January 15, 2021

The well:

  • 36379, drl/A, Hess, EN-Enger-156-94-1423H-4, 33-061-04468, Big Butte, first production, 7/20; t--; cum 122K 11/20; fracked 5/23/20 - 5/29/20 -- a 6-day frack; 7.6 million gallons of water; 86% water by mass;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-2020301871118673114032370723392315
BAKKEN10-2020261640716506120951930519097208
BAKKEN9-20203025804257981825036132348111321
BAKKEN8-202031325493244120632506243339217232
BAKKEN7-202029286992859214966442041191332291


The nearest well to the west is off line:
  • 20772, 1,181, Hess, EN-Enger-156-94-1423H-1, Big Butte, t12/11; cum 289K 5/20; remains off line 11/20;

The nearest well to the east is:

  • 19227, 723, Hess, EN-Wefald-156-94-1324H-3, Big Butte, t6/11; cum 348K 11/20; was off line for only a few months, 5/20 -7/20; on line now but producing only 600 bbls/month;

Director's Cut Has Been Posted -- November, 2021, Data

Director's Cut: posted, link here.

The usual disclaimer applies: in a long note like this, done quickly, there will be content and typographical errors. If this is important to you, go to the source.  

October, 2020, data. This is all preliminary data for October. When the final number is tallied (next month), it will reveal a slight increase in production month-over-month):

Crude oil production:

  • November: 1,224,540 (preliminary
  • October: 1,222,871 bopd (preliminary); 1,231,048 bopd (final)
  • delta: - 6,508 bopd
  • delta: - 0.53%

Natural gas production:

  • November: 2,887,402 (preliminary)
  • October: 2,873,654 MCF/day (preliminary); 2,881,717 (final)

Natural gas capture:

  • November, 93%
  • October, 93%

Rig count:

  • today: 11 (no SWD or CS rigs)
  • December: 14 (but may include CS and SWD)
  • October: 14 (ditto)

Wells

  • December:
    • permitted: 66
  • November: 
    • permitted: 52
    • completed: 44 (preliminary
    • inactive: 2,870
    • DUCs: 710
    • total off line for operational reasons: 3,580 
    • producing: 15,601 (preliminary)
  • October:
    • permitted: 74
    • completed: 59 (preliminary); 74 (revised)
    • inactive: 2,934
    • DUCs: 724
    • total off line for operational reasons: 3,658
    • producing: 15,512 (preliminary); 15,524 (final)

**********************************
Wells

Wells, permitted:

  • December: 66
  • November: 52
  • October: 74
  • September: 51

Wells, completed:

  • November: 44 (preliminary)
  • October: 59 (preliminary); 74 (revised)
  • September: 76 (revised); 54 (final)
  • August: 66 (final)

Wells, inactive:

  • November: 2,870
  • October: 2,934
  • September: 3,749

Wells, waiting on completion (DUCs):

  • November: 710
  • October: 724
  • September: 793

Wells, producing

  • November: 15,601 (preliminary)
  • October: 15,512 (preliminary); 15,524 (revised)
  • September: 15,389

Fracking: the number of well completions has been very volatile since March (2020) as the number of active completion crews decreased from 25 to 1 and now 7 with the CARES incentive.

DUCs and wells off-line for operational reasons are tracked here.

My Hunch: Most Of JPMorgan's Employees Already Earn $15/Hour -- January 15, 2021

To the extent that I care (and I don't care much), earnings are tracked at the sidebar at the right

JP Morgan, link here

"Delivered results that blew away analysts' expectations even as the Covid-19 pandemic continued to exert significant headwinds on the global economy. Look at these numbers:

  • EPS: $3.79 vs $2.62 -- amazing -- are you kidding me!
  • revenue: $29.2 billion vs $28.65 billion expected
  • net income: $12.1 billion or $3.79 per share
  • up 42% from a year ago
  • this included a $2.9 credit reserve releases: resulted in a 72-cent increase in earnings per share; a net benefit of $1.89 billion in credit reserves
  • the bank maintains a reserve topping $30 billion

Note: I understand maybe three of the six bullets above (LOL);

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

China's Economy Is Booming: The US? Not So Much -- January 15, 2021

China set to topple US as biggest economy: this has been predicted for quite some time, but it will happen sooner due to Covid-19. The US lock down began less than a year ago: today China's share of global output, trade, and investment, is up. The US? Not so much. Companies are seeking closer trade and investment ties. Link here to Bloomberg.

China’s economic ascent is accelerating barely a year after its first coronavirus lockdowns, as its success in controlling Covid-19 allows it to boost its share of global trade and investment.

The world’s second-largest economy is set on Monday to report gross domestic product increased 2.1% in 2020, the only major economy to have avoided a contraction.

That should ensure its share of the world economy rose at the fastest pace this century. Global output fell 4.2% last year, according to the World Bank, pushing China’s share of it to 14.5% at 2010 dollar prices -- two years earlier than expected.

And it’s not just a blip that’ll reverse once other large economies begin to recover as vaccines are rolled out. Economists expect China’s GDP will expand 8.2% this year, continuing to outpace global peers including the U.S.

China is now on course to pass the U.S. as the biggest economy in 2028, said Homi Kharas, deputy director for the global economy and development program at the Brookings Institution, two years faster than he previously estimated.

After withstanding President Donald Trump's trade war, China is deepening economic ties within Asia and Europe and looking to domestic consumption to power its next phase of growth. President Xi Jinping said this week that “time and the situation” were on the country’s side in a new year marked by domestic turmoil in the U.S.


 

One Well Coming Off Confidential List; Director's Cut To Be Released Today -- January 15, 2021

Director's Cut: scheduled to be released later today, link here.

COP closes on Concho

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

Active rigs:

$52.80
1/15/202101/15/202001/15/201901/15/201801/15/2017
Active Rigs1152685536

 

RigOperatorWell Name and NumberCurrent LocationCountyFile NoAPIStart Date** Next Location
H & P 515PETRO-HUNT, L.L.C.HAGEN 144-98-12D-1- 2HNENW 13-144N-98WBIL35807330070191400001/12/2021Undetermined
H & P 454CONTINENTAL RESOURCES, INC.Gale 5-32HNENW 32-147N-96WDUN37373330250399200001/6/2021Undetermined
CYCLONE 38CONTINENTAL RESOURCES, INC.Gale 11-32HNWNE 32-147N-96WDUN37402330250401100001/10/2021Undetermined
NABORS B27WPX ENERGY WILLISTON, LLCDakota 1-36HYSWSE 1-149N-93WDUN37832330250408300001/7/2021Undetermined
NABORS B6BURLINGTON RESOURCES OIL & GAS COMPANY LPF JORGENSON 1D MBHSESW 11-151N-97WMCK37480330530937200001/9/2021Undetermined
NABORS x10MARATHON OIL COMPANYBlack USA 11-35HSWNE 34-152N-94WMCK37610330530943900001/8/2021Bullseye
UNIT 414SLAWSON EXPLORATION COMPANY, INC.STALLION 7-1-12HLOT3 1-151N-93WMTL36123330610442000001/13/2021Undetermined
H & P 492MARATHON OIL COMPANYEtherington USA 34-31TFHSWSE 31-151N-93WMTL37675330610476500001/8/2021Undetermined
H & P 259MARATHON OIL COMPANYWatterberg USA 41-5TFHLOT4 4-150N-93WMTL37787330610479800001/5/2021Undetermined
NABORS X28HESS BAKKEN INVESTMENTS II, LLCBL-A IVERSON- 155-96-1312H-8NWNE 24-155N-96WWIL367703310505278000012/26/2020Undetermined
NABORS B13OASIS PETROLEUM NORTH AMERICA LLCCliff Federal 5300 43-35 5BSWSE 35-153N-100WWIL37266331050539600001/6/2021Undetermined

Only one well coming off confidential list -- Friday, January 15, 2021: 19 for the month, 19 for the quarter, 19 for the year.

  • 36379, drl/A, Hess, EN-Enger-156-94-1423H-4, 33-061-04468, Big Butte, first production, 7/20; t--; cum 122K 11/20; fracked 5/23/20 - 5/29/20 -- a 6-day frack;

RBN Energy: Shell's new ethane-consuming steam cracker in the home stretch. See this post also. Archived.

After several years of development, Shell’s $6 billion Pennsylvania Petrochemicals Complex — the first of its kind in the Marcellus/Utica shale play — is really taking shape about 30 miles northwest of Pittsburgh. The facility, which will consist of a 3.3-billion-lb/year ethylene plant and three polyethylene units, is in its final stages of construction, as is a pipeline that will supply regionally sourced ethane to the steam cracker. When the Falcon Pipeline and the PPC comes online, possibly as soon as 2022, they will provide a new and important outlet for the vast amounts of ethane that is now either “rejected” into natural gas for its Btu value or piped to Canada, the Gulf Coast, or the Marcus Hook export terminal near Philadelphia. Today, we discuss progress on the Marcellus/Utica’s first world-class petrochemical complex and what it will mean for the play’s NGL market.