Saturday, October 24, 2020

Friday Night Fugue -- October 24, 2020

Friday night. 

I'm taking a break from the Bakken. 

If you came here for the Bakken, scroll down or check out the sidebar at the right. 

But tonight, it's music night. 

I generally start about this time, Friday nights, 10:20 p.m. local time and then jump from song to song to song and see where I end up after midnight -- hoping somewhere along the line to get into a fugue state -- see YouTubue Fugue -- I'm sure "everyone" does this.

Six months on either side of 1969 -- about an 18-month period -- some of the best music ever.

There was an 18-month-period, from late 1968 through mid-1970 that clearly had some of the best music ever.  This was the year of Woodstock. The Beatles were still going strong, but touring less, and would soon stop completely.  
Led Zeppelin's first two albums, Zeppelin I and Zeppelin II, were released in 1969. Self-titled "Velvet Underground" was released in 1969. The era of "free love" and the uncertainties of the Vietnam War probably contributed to some of this really incredible music. 
Speaking of the Vietnam war, I turned 18 in 1969. My lottery draft was July 1, 1970; my lottery number was 103. The highest lottery number called for this group was 125; all men assigned that lottery number or any lower number, and who were classified as available for military service, were called to report for possible induction. I would have been deferred by virtue of being enrolled in college. I was worried that I would be called up before I graduated from college. I was convinced, but wrong, that the war would still be going on when I graduated from college.

I was updating that page -- a lot of videos had been taken down by Google -- needed to get those songs "up" again. LOL.

I'm not sure if this is my all-time favorite song but it's certainly among the top five and it had been "removed." Looking for a replacement, I came across this one.

Vehicle, Ides of March, Jim Peterik
 
And then this cover:
 
Vehicle, Leonid and Friends
A Russian Band

Loud:

I Was Made For Lovin' You, Kiss
 
I actually had the transparent Apple computer featured in this video:
 
Strong Enough, Cher
 
This is why it's impossible to really leave California. Be sure to read the comments while listening to the song, and make sure you are wearing headphones and playing this very, very loud. If this doesn't come up in your Zumba rotation, you need a new Zumba instructor. LOL:

Hey, Mickey, Toni Basil
 
And, then, of course, that leads me to this one. I think folks can connect the dots. This may simply be one of the best music videos ever. There's much more to the Julianne-Moore-Valkyrie-outfit story:

Gutterballs, The Big Lebowski
 
Do you hear the Beatles in this song? Maybe earlier, but certainly starting at 1:20 and going for quite some time:

You're No Good, Linda Ronstadt
 
Not in a million years would I have guessed this song was first released back in 1959. The best phrasing.... "I feel so good today; I  just touched down on an international runway..."

Back in the USA, Linda Ronstadt, Chuck Berry, and Keith Richards
 
I don't care for the video, but the music is great:

Bus Stop, MonaLisa Twins

Friday, October 23, 2020

Week 43: October 18, 2020 -- October 24, 2020

Top story of the week:

  • Dems fail to show up for US Senate judiciary committee work;

Top international non-energy story:

Top international energy story:

Top national non-energy story:

Top national energy story:

Top North Dakota non-energy story:

Top North Dakota energy story:

Geoff Simon's top North Dakota energy stories:

Operators:

Operations:

Fracking:

Advantaged oil:

600K:

500K:

Bakken economy:

NDIC To Incentivize DUC Completions -- October 23, 2020

NDIC  to incentivize DUC completions, from Geoff Simon's top ND energy stories today:
Members of the North Dakota Emergency Commission today approved a plan to repurpose $16 million in CARES Act dollars for a program that will encourage oil well completion.

The proposal was developed by the Bakken Restart Task Force to incentivize the completion of DUCs - drilled but uncompleted wells - in the Bakken. Lynn Helms, director of the Department of Mineral Resources, said the program would provide up to $200,000 to offset the cost of the water that is used in the hydraulic fracturing process to bring the wells into production. Helms said the task force focused on water because it is the primary component in fracking that benefits North Dakota-centric companies.

Helms said at the current rate, about 80 new wells would be completed by year's end. He said the incentive will produce 80 additional completions, and he expects there will be plenty of companies with DUCs that will claim the incentive.

There are not enough well completions occurring to maintain the state's current 1.2 million barrel per day production. But Helms said the 80 additional wells should stabilize production well into 2021.

Helms said each new well completion will generate an average of $1.6 million in production and extraction taxes, $150,000 in sales tax revenue, $1.1 million in salaries, and $2.4 million in royalties.

"I think it's probably pretty safe to say this has got the highest return on investment of any of the dollars we've spent out of the $1.25 billion (in CARES Act dollars) because this is money we get back and a lot more that will help us when we're trying to balance budgets in the biennium that's in front of us," said Governor Doug Burgum, who chairs the Emergency Commission.

Legacy Fund Deposits -- October, 2020

Link here

Third consecutive week of improving numbers. 

BR With Four New Permits -- October 23, 2020

Active rigs:

$39.85
10/23/202010/23/201910/23/201810/23/201710/23/2016
Active Rigs1456705434

Four new permits, #37921 - #37924, inclusive:

  • Operator: BR
  • Field: Pershing (McKenzie); North Fork (McKenzie);
  • Comments:
    • BR has one Parrish permit in lot 4, section 6-149-96, Pershing oil field, 416' FNL and 482' FWL;
    • BR has one Boxer permit in lot 4, section 6-149-96, Pershing oil field, 488' FNL and 596' FWL;
    • BR has two Boxstone permits in Lot 4, section 6-149-96, from 440' to 464' FNL and 520' to 558' FWL;

Five permits renewed:

  • Hess: five BL-Frisinger permits, all in Williams County;

PSA -- HP Printers -- October 23, 2020

I'll be off the net for an hour or so, maybe longer, before I get to the daily activity report, but before I begin the second half of my day with Sophia, a public service announcement. 

This is really weird. 

I've been using an HP inkjet printer for years, maybe six years, longer? I don't know. But it's been a long, long time. It's a "1510 series." The HP printer is a real workhorse. Ink is expensive but I don't print that much. The printer was working fine  yesterday.

But today, without warning, it quit printing. I did all the usual things including multiple re-boots of both the MacBook Air and the printer. Nothing worked.

I then tried the printer using a new MacBook Air that I keep as back-up in case my #1 MacBook Air quits working for any reason. The "new" MacBook Air didn't "drive" the printer either. That's when I noted a small dialogue box that casually stated that the software was compromised and it was simply best to re-install the driver. 

So, with almost no difficulty, I re-installed driver software for the HP 1510. The instructions and installation process suggested to me that the problem was not with my computer(s) or the software. It appears that HP has updated the software for their 1510 series. 

The re-installation worked perfectly and the printer is now working again, perfectly.

I re-installed the drive in my newer (the back-up) MacBook Air, and it, too, now works just fine. 

It's obvious that HP updated their drivers.

The Never-Ending Saga -- DAPL -- USACE -- October 23, 2020

 


Natural Gas Fill Rate -- Continuing To Build -- Looking Forward To A Long, Cold Winter -- October 23, 2020

Link here.

Comment from Platts.

Crescent Point Energy Eyes Eight Wells In A 640-Acre Drilling Unit Northeast Of Williston -- October 23, 2020

This is almost not worth posting, but there may be some readers who are interested. I was interested in looking at the case, but once I saw it, I would have moved on ... but with a blog comes great responsibilities.

I'm talking about this case from the November, 2020, NDIC hearing dockets. This is a case, not a permit:

  • The case 28613, Crescent Point Energy, Wheelock-Bakken, 8 wells on a 640-acre unit, section 36-156-98, Williams County;

What caught my eye: 8 wells in a 640-acre drilling unit. We don't see many 640-acre drilling units in the Bakken any more.

This is in a very, very non-descript, area of the Bakken, northeast of Williston. 

The only well in this drilling unit, and it's inactive:

  • 19209, IA/539, Crescent Point Energy, State 1-36H-156-98, Wheelock, t11/10; cum 80K; off line as of 4/20; remains off line 8/20;

Friday Morning -- Notes From All Over -- Part 1 -- October 23, 2020

Irony: the individual in our extended family most concerned about the media, the Russians, the Chinese, Google, Facebook, et al, influencing our behavior .... a lifetime conservative .... voted for Biden in early voting. Or at least said he did. LOL. But sad. The only reason this individual would have voted for Biden: he listened to the mainstream media and the only news magazine to which he subscribes: the ultra-liberal British business magazine, The Economist.

Quick: what are the two most fascinating data points about the EQT - CNX story reported yesterday? Link here

*******************************
Pop Quiz: Television Ratings

Quick: explain --

  • for whom "ratings" are more important?
  • for whom "share" is more important?

Background: there have been a lot of stories this year about the loss of viewership in the MLB (by the way, who won the World Series this year? Last time I checked in the LA Dodgers were ahead in the series and then it was over -- but I digress) .. where was I? Oh, yes, there have been a lot of stories this year about the loss of viewership in the MLB, NFL, and BLM. 

"They" keep talking about "ratings" and "share." Talk about confusing. I think I finally have it figured out. The irony: just when I figured it out, the numbers are no longer relevant. Nielson (or is it Nielsen?) relies on families agreeing to have a "box" monitor their television and a need for viewers to keep a diary. Streaming is not tracked. 

This is a great example of how to explain something. Using words to explain "ratings" and "share" is useless. Best way: use graphics.

Links:

I assume the folks who rely on the Nielsen ratings rationalize the data this way:

  • Nielsen is the "only" thing "out there"
    • actually, that's not true; I can guarantee you that Alphabet (Google) has incredibly better data)
  • the Nielsen data can be extrapolated to include streaming, etc
    • actually, that's not true, either, due to the way different demographics access different devices

So, back to the pop quiz:

  • for whom "ratings" are more important?
  • for whom "share" is more important?

Much could be written; time to move on.

*************************************
Miscellaneous

OilPrice: I don't know what's going on with Nick Cunningham. I haven't seen him over at oilprice in a long, long time. He was always good for a good laugh but it was, in the same breath, depressing to read his articles. But I haven't seen him in a long, long time. I could be wrong, but it's my impression that oilprice has a better stable of contributors. There is another good example today. See this link.

****************************
NFL

In between a lot of family activities last night, including a bit of driving, and a desire at all costs to avoid the presidential debate, I watched a bit of the "Carson Wentz Show." In a word, "bizarre." I've never seen such "bizarre" running and passing. There are only two explanations:

  • either, Carson Wentz has an incredibly lousy offensive line, receivers, 3-point kickers; or,
  • Carson Wentz can't shake his roots, seeing himself as a one-man team, the only player who can make plays.

This morning, a talking head on sports TV explained it perfectly. Carson Wentz is playing in the wrong sport. In the BLM, a single player can become the team when the other four supporting players implode. James LeBron, Shaq, Kobe, all proved it. Michael Jordan proved it but he was in a class by himself and was made better by incredibly gifted players around him. But Shaq, Kobe, LeBron, other franchise players in the BLM can literally take over all by themselves. The others simply fade into the background, so far into the background, one can't even remember their names (yes, there are exceptions -- but generally, at best, one other player on each team). 

But in the NFL the quarterback can't do it all by himself. We're seeing it with Tom Brady this year. We certainly saw it with the Cowboys when Dak was playing. And we're certainly seeing it with Carson Wentz. 

*********************************
Most Over-Rated, Over-Hyped Business?

The Dallas Cowboys.

One Well Coming Off Confidential List -- Oil Flirting WIth $40 (Yawn) -- October 23, 2020

Permian: another Permian operator may be forced to consolidate or die.  Link to David Messler.

One by one they are starting to fall. The long predicted consolidation wave in U.S. shale players, particularly those with assets in the Permian stacked play, is in high gear. Just in the last month or so, Chevron has taken out Noble Energy; Devon swallowed WPX Energy; ConocoPhillips snapped up Concho Resources; and, just last night, Pioneer Exploration, announced it would merge with Parsley Energy. 
Earlier this year in an OilPrice article, I wrote a detailed thesis for the future of shale that forecast the current wave of consolidation taking place. 
One key tenet that I postulated would come into play was “economy of scale,” meaning that larger, well-established companies would snap up smaller ones with assets that would easily “bolt-on” to their acreage inventory. 
That seems to be the dynamic currently in play. 
Which brings us to the question as to…who is next? 
We think the management at Diamondback Energy might be feeling the heat, right about now. As a combination of debt, liquidity, and assets someone could have them in their sights now.

OPEC basket, link here: $40.88.

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

Active rigs:

$40.58
10/23/202010/23/201910/23/201810/23/201710/23/2016
Active Rigs1456705434

One well coming off the confidential list today -- Friday, October 23, 2020: 19 for the month; 19 for the quarter, 684 for the year

  • 37427, loc/NC, Slawson, Orca Federal 4-23-26TFH, Big Bend, no production data;

RBN Energy: floating LNG prospects fizzle as operational issues emerge. Archived.

Over the past decade, floating LNG — for liquefying and shipping offshore natural gas supply — emerged as a promising technology that would enable development of smaller, more remote offshore gas fields around the world. But with a handful of projects now completed and in commercial operation, the challenges of financing, developing, and operating this relatively new technology are overshadowing its prospects. Of the more than 20 FLNG projects that have been proposed since 2007, only five have crossed the finish line and only two others have reached a favorable final investment decision (FID). Moreover, Shell’s Prelude FLNG offshore Northwest Australia — the largest of the existing FLNG facilities — has been dogged by issues since its commissioning in mid-2019, and the operator last week said the unit will not produce any more LNG cargoes this year, after being shut down since February for electrical problems. Today, we examine the headwinds facing FLNG projects.

Thursday, October 22, 2020

BR Looking To Have 30 Wells In A 2560-Acre Spacing Unit, Johnson Corner -- October 22, 2020

From the November, 2020, NDIC hearing dockets, this case, not a permit, but a case:

  • Case 28598, BR, Johnson Corner-Bakken, 2560-acre unit with 30 wells; sections 28/33-151-96 & 4/9-150-96, McKenzie;
  • there are currently 12 wells in that drilling unit;
    • 6 go south
    • 6 go north
  • proposed: 18 new wells
    • 9 go north
    • 9 go south
  • final:
    • 15 total go north;
    • 15 total go south;
  • equivalent: 15 wells/1280;

The graphic:

Wells along the 33/4 section line, all 2560-acre spacing; note: numbers following the cumulative production of oil: the four sections; amount of proppant in millions of lbs; and, the number of stages. In general, BR is using 3.5 million lbs of proppant in 30 stages in these long laterals:

  • 26962, 1,283, BR, Norman 11-4TFH ULW, Blue Buttes, t814; cum 269K 8/20; 4, 5, 8, 9; 3.5; 30;
  • 27072, 1,924, BR, Norman 11-4MBH, Johnson Corner, t9/14; cum 378K 8/20; 4, 9, 28, 33; 3.5; 30;
  • 27073, 1,042, BR, Denali 11-4TFH, Johnson Corner, t9/14; cum 206K 8/20; 4, 9, 28, 33; 3.5; 30;
  • 27137, 1,872, BR, Denali 21-4MBH, Johnson Corner, t7/14; cum 229K 8/20; 4, 9, 28, 33; 3.5; 30;
  • 27136, 1,200, BR, Denali 21-4TFH, Johnson Corner, t7/14; cum 215K 8/20; 4, 9, 28, 33; 3.5; 30;
  • 27135, 1,680, BR, Norman 21-4MBH, Johnson Corner, t7/14; cum 302K 8/20; 4, 9, 28, 33; 3.5; 30;
  • 27062, IA/2,112, BR, Norman 21-4TFH 3SH, Johnson Corner, t9/14; cum 327K 4/20; 4, 9, 28, 33; 6.2; 30;
  • 27061, 2,088, BR, Denali 21-4MBH 3NH, Johnson Corner, t9/14; cum 336K 8/20; 4, 9, 28, 33; 6.3; 30;
  • 27060, 1,872, BR, Norman 21-4MBH 2SH, Johnson Corner, t9/14; c274K 8/20; 4, 9, 28, 33; 3.5; 30;
  • 27059, 1,320, BR, Denali 21-4TFH 2NH, Johnson Corner, t9/14; cum 226K 8/20; 4, 9, 28, 33; 3.7; 32;
  • 27085, 1,560, BR, Norman 34-33TFH, Johnson Corner, t7/14; cum 245K 8/20; 4, 9, 28, 33; 3,5; 30;
  • 27084, 1,656, BR, Norman 44-33MBH, Johnson Corner, t7/14; cum 347K 8/20; 4, 9, 28, 33; 7.0; 30; 
  • 27083, 1,200, BR, Denali 44-33TFH, Johnson Corner, t7/14; cum 254K 8/20; 4, 9, 28, 33; 3.6; 31;
  • 29051, 2,064, BR, Deking 1-8-34MBH-ULW, Camel Butte, t6/15; cum 324K 8/20; 27, 28, 33, 34; 4.3; 37; 
  • 29050, 1,584, BR, Kings Canyon 2-8-34UTFH, Camel Butte, t7/15; cum 225K 8/20; 3, 4, 27, 34; 4.4; 37;
  • 29049, IA/1,560, BR, Tetonorman 1-1-3UTFH ULW, Johnson Corner, t6/15; cum 265K 4/20; 3, 4, 9, 10, 4,1; 35; 
  • 29048, 2,112, BR, Teton 2-1-3MTFH, Camel Butte, t7/15; cum 153K 8/20; 3, 10, 27, 34; 4.1; 35;

At the far south end, 1280-acre spacing:

  • 18225, IA/625, BR, Norman 1-9H, Johnson Corner, t1/10; cum 313K 7/19; huge jump in production, from 1500 bbls/month in 5/14 to 20,000 bbls/month in 9/14;

At the far north end, 1280-acre spacing:

  • 17680, IA/463, BR, Denali 31-28H, Johnson Corner, t2/09; cum 262K 5/20;

No New Permits; Nine Permits Renewed -- October 22, 2020

Active rigs:

$40.62
10/22/202010/22/201910/22/201810/22/201710/22/2016
Active Rigs1461715434

No new permits.

Nine permits renewed:

  • Bruin (5): five Wm Brown permits in Williams County;
  • Nine Point Energy (3): three Lee permits in McKenzie County;
  • EOG: a Burke permit in Mountrail County

EQT - CNX -- October 22, 2020

Updates

October 23, 2020: update;

EQT already is the largest supplier of U.S. gas, producing 44% more than its nearest competitor, Exxon Mobil Corp., according to figures compiled by the Natural Gas Supply Association. EQT pumped about 4 billion cubic feet a day as of the first quarter, while CNX produced 1.38 billion, the data show.

EQT Chief Executive Officer Toby Rice, 38, is pursuing what would be his first deal since he took the top job in July 2019. The Rice family had previously sold their Appalachian gas company, Rice Energy, to EQT in 2017. But they became disenchanted with EQT’s performance and mounted a nine-month proxy fight, vowing to slash costs amid growing investor pressure for cash generation and better returns.

October 23,, 2020: natural gas prices could jump; EQT could be one to benefit most;

Original Post

In Other News -- October 22, 2020

Remdesvir: approved by FDA. Wow, that was quick.

SpaceX: could top Lockheed, Boeing as most valuable aerospace / defense firm.

McAfee: "a broken deal." Fails to trade above its $20 IPO price.

ACB meme: https://www.kapwing.com/explore/amy-coney-barrett-acb-blank-notepad-meme-template.

NDIC November, 2020, Hearing Dockets Have Posted

Link here

The NDIC hearing dockets are tracked here.

The usual disclaimer applies. As usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source.

Highlights in bold.

Wednesday, November 18, 2020
Six Pages
 
Cases, not permits:
  • 28585, Hess, Baskin-Bakken, establish an overlapping 2560-acre unit; one well; 4/5/8/9-156-93; Mountrail;
  • 28586, Hess, Alkali Creek-Bakken and/or Manitou-Bakken; establish an overlapping 2560-acre unit; 14/15/22/23-155-94; Moutrail;
  • 28587, MRO, Bailey-Bakken, establish two overlapping 2560-acre units; two wells in each; 1/2/11/12-146-94; 29/30/31/32-146-93; Dunn County
  • 28588, MRO, Bailey-Bakken, establish two overlapping 2560-acre units; one well on each; 25/36-146-94 & 30/31-146-93; and 28/29/32/33-146-93; Dunn County;
  • 28589, MRO, Bailey-Bakken, setback changes; Dunn;
  • 28590, MRO, Bailey-Bakken, setback changes; Dunn;
  • 28591, MRO, Bailey-Bakken, setback changes; Dunn;
  • 28592, MRO, McGregory Buttes-Bakken; establish an overlapping 2560-acre unit; 3/4/9/10-147-94; Dunn County;
  • 28593, MRO, revoke an Enerplus Resources permits, #37586, Cesium well; Dunn County;
  • 28594, NP Resources, commingling;
  • 28595, BR, Hawkeye-Bakken, 1280-acre unit with 15 wells; sections 1/12-152-96, McKenzie;
  • 28596, BR, Hawkeye-Bakken, 1280-acre unit with 16 wells; sections 15/22-152-95, McKenzie;
  • 28597, BR, Camel Butte-Bakken, 2560-acre unit with 30 wells; sections 27/34-151-96 & sections 3/10-150-96; McKenzie;
  • 28598, BR, Johnson Corner-Bakken, 2560-acre unit with 30 wells; sections 28/33-151-96 & 4/9-150-96, McKenzie;
  • 28599, BR, pooling,
  • 28600, BR, pooling,
  • 28601, Hess, pooling,
  • 28602, Hess, pooling,
  • 28603, Hess, commingling,
  • 28604, Hess, commingling,
  • 28605, Hess, commingling,
  • 28606, Hess Water Services, SWD,
  • 28607, MRO, Bailey-Bakken, 1280-acre unit with 10 wells; sections 25/36-146-94; Dunn County;
  • 28608, MRO, Bailey-Bakken, 1280-acre unit with 9 wells; sections 5/8-146-93; Dunn County;
  • 28609, MRO, Bailey-Bakken, 8 wells on each of six 1280-acre units: sections 1/12; 13/24; and 14/23-146-94; sections 30/31; and 29/32-146-93; Dunn County -- 48 wells total;
  • 28610, MRO, Bailey-Bakken, two wells on a 2560-acre unit, sections 13/24-146-94 & 18/19-146-93; Dunn County;
  • 28611, MRO, McGregory Buttes-Bakken; a 1280-acre unit with 8 wells, sections 4/9-147-94; Dunn County;
Thursday, November 19, 2020
Four Pages
 
Cases, not permits:
  • 28612, NDIC,
  • 28613, Crescent Point Energy, Wheelock-Bakken, 8 wells on a 640-acre unit, section 36-156-98, Williams County;
  • 28614, WPC,
  • 28615, Medora Grazing Association,
  • 28616, Shane and Sheralee Dolezal,
  • 28617, Robert Dolezal,
  • 28618, EOG,
  • 28619, EOG,
  • 28620, WPX,
  • 28621, CLR,

For The Archives -- This Blows Me Away -- I Did Not See This Coming -- October 22, 2020

In sports this would be a forfeit -- the opposing team did not show up. LOL. You can't win if you don't play. Even first graders know that. LOL.

************************************
Speaking Of Not Seeing Things Coming

UNP plunges. Loses $12/share. Down more than 5%.

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. 


From The Street:

Union Pacific Corporation: shares dropped over 5% in trading Thursday after it reported its third-quarter 2020 results.

The company reported on Thursday a net income of $1.4 billion year-on-year (or $2.01 per diluted share) in its 2020 third-quarter, declining 12.5% from when it reported $1.6 billion in its 2019 third-quarter.

Union Pacific’s operating revenue was $4.92 billion, down 11% compared to the third quarter of 2019.

Estimated operating revenue of $4.94 billion was forecasted.

Business volumes, measured by total revenue carloads, declined 4% year-on-year to $2.04 million, compared to analysts forecast of $2.16 million

Additionally, the third quarter freight revenue declined 11% year-on-year compared to a 20% decline estimated by analysts.

The company’s operating ratio was 58.7% year-on-year, down from an estimate of 58.5%. [Say what?]

Two words: buying opportunity!

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. 

Gasoline Demand -- October 22, 2020

Link here

The data suggests "we" could break below 8.5 million bbls gasoline per day next week for the four-week average. If so, not a good omen.




Notes From All Over -- October 22, 2020

Why won't you see Charlie Brown specials this year? Link here to The LA Times. 

Apple: the other day I mentioned that Apple TV+ was signing the biggest icons in Hollywood:

  • more proof: Apple TV+ now owns Snoopy, Peanuts; link here;
  • exclusive on Apple TV+ for the holidays; folks won't be seeing the classic Peanuts movies at Halloween, Thanksgiving, or Christmas this year -- this is a big, big, big deal
  • I'll come back this later; how married men can play this;

Apple: another example -- Apple buys rights to "The Velvet Underground" documentary. Link here.

Haynes' documentary follows 1960's band "The Velvet Underground," which was headlined by Lou Reed and once managed by artist Andy Warhol. "The Velvet Underground" was known as the "house band" at the Factory, which was Warhol's studio that served as a hangout for artists and a venue for legendary parties.

"The Velvet Underground" will feature never before seen performances and recordings, Warhol films, experimental art, and in-depth interviews with key players of that time.

On twitter this morning, straight from the blog! Pretty cool. Graphic:

 

Jobless claims, link here

  • prior: 898K
  • revised:842K
  • consensus: 865K
  • actual: 787K

Market:

  • ATT tops 3Q20 forecasts, link here;
  • "all" numbers here; adjusted profit matched expectations but revenue beat;
  • earnings: 76 cents; down 19% from same period last year; matched consensus;
  • company estimated that earnings took a 21-cents-per-share hit due to Covid
  • revenue: fell 5.2% y-o-y to $42.3 billion but that beat analysts' estimates of $41.6 billion
  • in big scheme of things: pretty much in line with forecasts
  • now owns HBO Max streaming: with 38 million in the US, that puts it ahead of the company's 2020 target
  • wireless network added a much stronger-than-expected 645,000 new subscribers who pay a monthly bill
  • for the archives: this comes before the iPhone 12 rollout
  • forecast from the company:
  • free clash flow of $26 billion or higher
  • full-year dividend payout ratio in the high 50s%

Boom! Demand continues to boom for US consumers' two biggest ticket items -- new houses (in the suburbs, in the midwest, anywhere but in the big cities; and new cars (anything other than EVs); link here;

  • despite huge demand for new cars, manufacturers can't keep up
  • Tesla registrations plummet in California in 3Q20; Model S prices slashed two, maybe three times; hard to keep up with price cuts; still a $70,000 luxury car;

Investors:

  • wow, for retirees complaining about dismal opportunities in the market, is anyone paying attention? 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.
  • AT&T
    • T pays almost 8%; looks like that is guaranteed for the next year
    • T sold off this past week; up 5% today in early morning trading

Others:

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. 

Apple: I mentioned earlier that I've never seen so many positive reviews about Apple products as I'm seeing now. I could be biased, seeing things that aren't there, cherry picking, but here's yet another review: "new iPad Air reviews: 'the best table for most people' with new Pro-like design and features at a low price." Link here.

One Well Coming Off The Confidential List Today -- October 22, 2020

 OPEC basket, link here: trading at $41.04

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


Active rigs:

$40.47
10/22/202010/22/201910/22/201810/22/201710/22/2016
Active Rigs1461715434

One well coming off the confidential list today: 

Thursday, October 22, 2020: 18 for the month; 18 for the quarter, 683 for the year

  • 35970, drl/NC, Enerplus, Isle Royal 148-95-02A-11H-TF-LL, Eagle Nest, t--; cum 103K 8/20; total drilling hours, 115 hours = 4.8 days. frack data not posted;

RBN Energy: rising export demand will reduce US ethane rejection and goose prices, part 4

For the past few years, demand for U.S.-sourced ethane has been on the rise as petrochemical companies in the U.S. and abroad developed new, ethane-only steam crackers and retrofitted existing crackers to allow more ethane to be used as feedstock. U.S. NGL production was increasing too, of course, alongside growth in crude oil-focused plays like the Permian and “wet” gas plays like the Marcellus/Utica. But recently, drilling-and-completion activity has slowed to a crawl and NGL production has been leveling off, which means that less of the ethane that comes out of the ground with oil and gas will be “rejected” into natural gas and more will be separated out at fractionation plants. Today, we conclude a series on ethane exports with a look at U.S. NGL production, ethane supply and demand, ethane exports, and ethane prices.

Among the many extraordinary results of the Shale Revolution is that the U.S. has emerged as by far the leading exporter of liquefied petroleum gases (LPG; propane and normal butane) and pretty much the only exporter of ethane. (Norway exports small volumes.) In fact, the U.S. now exports ethane to steam crackers in eight other countries: Canada, India, the UK, China, Norway, Mexico, Brazil, and Sweden. 
The U.S. produced a record 2.2 MMb/d of ethane in July 2020, according to the Energy Information Administration (EIA), and we estimate that around a million additional barrels per day on average this year has been rejected into the natural gas stream at processing plants and sold (at the price of gas) for its Btu value. 
About 290 Mb/d, or 13% of total U.S. ethane production, is currently being sent to other countries, with about one-third of the exports being piped to Canada and the rest being shipped to other foreign lands. About 80% of the shipped volumes is being sent out of Enterprise Products Partner’s Morgan’s Point export terminal on the Houston Ship Channel and the balance sets sail from the Energy Transfer’s Marcus Hook facility near Philadelphia.

Wednesday, October 21, 2020

North Dakota Continues To Lead Nation In Honey Production -- October 21, 2020

Last week we mentioned that North Dakota was on track to regain the title as the nation's #1 soybean producer which it lost for one year,

Now honey. 

From AgriLife Today, yesterday:

Texas remained sixth in the nation for honey production in 2019, and is home to thousands of overwintering hives that contribute to the nation’s agricultural economy each growing season. Molly Keck, AgriLife Extension entomologist, Bexar County (San Antonio), said Texas beekeeping falls into three categories – hobbyists, sideliners and commercial.

Hobbyists are backyard beekeepers who keep bees, typically less than 10 hives, to meet Texas’ agriculture exemption for property taxes and/or to produce honey for their household, to share and/or sell locally. Sideliners typically have 50-250 hives but also maintain a full-time job.

“The plight of the honeybee and beekeeping to protect populations is a part of the increasing trend of hobbyist beekeepers,” Keck said. “But around 75% of the residents who participate in our Beekeeping 101 course are doing it to get that ag exemption with the bonus being honey for themselves and to share with family and friends and maybe sell at local farmers markets.”

Commercial beekeepers are those who keep 500 colonies or more. Their livelihood depends on bee husbandry and by moving large numbers of hives around the state and nation to pollinate crops and/or produce honey.

In Texas for instance, a commercial beekeeper may deliver hives in the Rio Grande Valley to pollinate watermelon fields and move those same hives to the Texas Plains to pollinate cotton later in the growing season. Then in the summer they may move their colonies to South Dakota or North Dakota for clover honey production.

The annual U.S. Department of Agriculture honey report in March 2019 showed 132,000 honey-producing colonies in Texas. By comparison, North Dakota, the No. 1 honey-producing state, reported 550,000 colonies
Texas colonies produced 7.4 million pounds of honey in 2019, according to the USDA report. Total U.S. honey production topped 154 million pounds.

Even though the top honey-producing states are North Dakota and South Dakota, California, Florida and Minnesota, Rangel said thousands of those hives are based, or at least overwinter, in Texas as the state offers a mild winter climate for bees.

*********************************
Diwali

For planning purposes, Diwali falls on Saturday, November 14, this year (2020). A five-day Hindi festival, the big celebration is generally on the third of the five days, which this year is Saturday, November 14.

The celebration of sisters occurs on the fifth day, November 16, 2020. Sophia considers herself Anika's sister. 

Anika lives in the apartment building two units down from our little hovel. 

************************************
Catcher In The Rye

First published in mid-July 1951 by Little, Brown and Company, Catcher in the Rye was simultaneously published as a Book-of-the-Month Club selection. By the end of July [two weeks after initial publication], Little, Brown and Company was reprinting the novel for the fifth time, and by August, Catcher had reached fourth place on the New York Times best-seller list.

-- Salinger, David Shields and Shane Salerno, c. 2013, p. 271

*****************************************
At One Time, Freddie Held The Record
Number of Appearances On American Bandstand

Palisades Park, Freddie Cannon

Elliott Management Corp, Follows Carl Icahn To Florida -- Says Sayonara To High-Tax State New Jersey -- October 21, 2020

From ZeroHedge:

Ever since David Tepper revealed that he was moving back to New Jersey after briefly seeking the greener pastures (and substantially lower tax rates) of the Sunshine State (Phil Murphy said he received a personal phone call from Tepper, informing him about the additional $100 million+ in tax revenue headed to NJ), smug liberals on CNBC have been smirking about how wealthy financiers want to be where the talent is/simply can't tolerate not having the opportunity to see three Andrew Llyod Weber musicals a week (though it's not like anybody's going to see a Broadway show right now).

While Manhattan remains the undisputed hedge fund capital, Florida, particularly South Florida and Miami, has seen a steady influx of capital and people over the past five years. Last fall, Carl Icahn announced plans to move his firm's headquarters to Florida, offering employees generous severance packages if they opted not to follow the firm to Florida.

Now, Bloomberg reports that Elliott Management Corp., the investment fund run by Paul Singer, is taking its $41 billion AUM and moving it to West Palm Beach, a community best known to Americans as the former hunting grounds of Jeffrey Epstein. 

And more:

As Bloomberg points out, Elliott isn't alone in expanding its presence in South Florida. Ken Griffin’s Citadel plans to open an office in Miami next year, and $8 billion Balyasny Asset Management, another Chicago-based firm, is also opening office space in Florida, and will have space for 30 employees by the end of the year.

It appears most of Elliott's employees are staying put, which suggests Paul Singer is simply trying to side-step the burgeoning trend of liberal states dabbling with 'wealth tax' plans to plug the gaping holes in their budget caused by COVID-19. For example, Griffin is leading a campaign against a wealth tax in Illinois. Jamie Dimon recently bashed a proposed wealth tax plan in NY being pushed by - who else? - AOC.

Just imagine: a one-time bartender, now first term US representative, living rent-free in Jamie Dimon's head. LOL.

*************************************
Preparing For Baking With Sophia

Yesterday Sophia and I made brownies but she took them home with her and left me none.

So, today I plan to bake a cake with Sophia. 

Everything is ready. All she has to do is crack the eggs, pour everything together, and then mix. 

Demand Destruction, Third Wave, and No US Stimulus: WTI Drops Below $40 --Slawson With Four New Permits; Five Permits Renewed; One DUC Reported As Completed -- October 21, 2020

Active rigs:

$39.81
10/21/202010/21/201910/21/201810/21/201710/21/2016
Active Rigs1462715434
Active rigs decreased by one today, but it means nothing. The Red Trail Energy rig is off the list. That was a carbon capture and storage well; irrelevant. There is no change in the number of active oil and gas wells  (14). 

Four new permits, #37917 - #37920, inclusive -- note there is a mistake on the daily activity report, the scout tickets are accurate -- the information below is from the daily activity report with [my] corrections. The scout tickets do not show the BR well / #37917; the scout tickets show permit #37917 to be the fourth Slawson permit today, Whirlcat Federal 4-31-30TFH. The daily activity report will probably be corrected tomorrow. I've never seen an error with scout tickets; recently I've seen many errors with the daily activity report.

In fact, the error on the daily activity report, BR's Sequoiafill 1D is permit #37617, not #37917 as shown on the daily activity report. Slawson has four new permits, #37917 -#37920, inclusive.

  • Operators: Slawson (3); BR -- that's an error -- should be four new Slawson permits, no new BR permits;
  • Fields: Big Bend (Mountrail); and, Hawkeye (McKenzie) -- that's an error; all new permits should be shown as in Big Bend (Mountrail); none in Hawkeye (McKenzie County) today;
  • Comments:
    • Slawson has permits for a 3-well Sniper Federal (2) / Whirlcat (1) pad in lot 3, section 6-151-92, from 279' to 288' FNL and from 1270' to 1570' FWL, Big Bend, which is wrong; there were four permits for Slawson for a 4-well Sniper Federal  (2) / Whirlcat pad (2); 
    • BR has a permit for a Sequoiafill well in section 36-153-95, 870' FSL and 2620' FEL; Hawkeye oil field; that's wrong; BR did not get any permits today
  • Comment: when I see Slawson active in the Bakken, that's a huge positive indication that things are improving; privately-held; this family-owned company is very conservative; it made my day to see Slawson active in the Bakken;

Five permits renewed:

  • EOG (4): four Burke permits in Mountrail County;
  • Hunt Oil: a Rulson permit in Mountrail County;

One producing well (a DUC) reported as completed:

  • 33686, SI/A, Crescent Point Energy, CPEUSC Berner 6-19-18-157N-99W, Lone Tree Lake, API 33-105-04463; t--; cum 104K 8/20;

Sidebar Discussion -- CLR, MRO In A "Consolidation Environment" -- October 21, 2020

A reader responded to thoughts about future of CLR in a "consolidation environment." [Of course, there's still Whiting, Oasis, and a host of others to consider.] But not to lose the comment, and to make it easier to access (browser search), I've brought a comment from another post to this page, as a stand-alone post:

Not sure if this is GMTA ("great minds think alike" or if my constant mentioning of the fit of MRO/CLR has actually percolated to analysts (or even the companies). But...I told you so. LOL.

"Of those companies left, there’s speculation that billionaire Harold Hamm’s Continental Resources Inc. may come to some agreement with Marathon Oil Corp., Paul Sankey, a New York-based analyst at Sankey Research said in a note."

https://www.worldoil.com/news/2020/10/21/us-shale-mergers-reshuffle-the-oil-production-landscape
.

Note that CLR and MRO are both below $5B market cap, so the combination leaves them still less than Scott Sheffield's magic $10B level.

And they're both "good companies" on some intrinsic level. But given their debt and given $40 WTI strip, you have to really look at it as more like two weak sisters teaming up.

Still wonder who would run it and what would happen to the different organizations. Have to imagine MRO would as the more sophisticated multi-basin player. But Harrold's stake would still be 40%+ of the combined company. Maybe he would take it over? Interesting, interesting.

My reply:

The "two-weak-sister" argument is an incredibly good argument. As things consolidate -- it's sort of like musical chairs -- all the "stronger" companies -- made stronger by mergers, acquisitions -- start to take seats away from the table for the other weaker players. To get a seat at the table, these weaker "sisters" may need to join forces. 
One could see MRO with a wholly-owned subsidiary (CLR) run by Harold Hamm, giving Harold Hamm a directorship on the Board of Directors of MRO ... or as the reader suggests, something even bigger. It also makes it easier to spin off CLR down the road if things improve to make it possible. So many opportunities.

So, let's look at that linked "worldoil" article. Oh, wow, this is getting scary. I actually had that link from overnight and was going to post it later today -- after Sophia and I were finished for the day -- that is amazing -- a gazillion articles that could have been linked by either the reader and/or I and that's the one.

I already had the graphic ready to go. It's at the worldoil link above (archived):

I'll have to check CLR production later, but I believe it is in the 350K+ range but I could be way wrong. If it is 350K boepd, CLR would exceed Chevron and maybe even ExxonMobil, depending whether we're comparing "bbls of oil" or "bbls of equivalent oil."

CLR is tracked here

Over at SeekingAlpha, an article addressing this very issue just popped up. 

  • "There's only going to be three or four independents that are investable by shareholders" among energy producers after the recent market rout, Pioneer Natural Resources CEO Scott Sheffield tells analysts after his company agreed to buy Parsley Energy for $4.5B in stock. 
  • "The best companies have been picked off in the past few weeks." Sheffield believes the "real survivors" will be Pioneer-Parsley, EOG Resources, ConocoPhillips, and "maybe" Hess over the long-term. 
  • Pioneer's purchase of Parsley will save ~$325M/year in debt repayments and cost reductions while also adding to free cash flow, but size also is key to the deal's success, Sheffield says. 
  • "When you're talking to most investors today, they are only looking at companies that are investable at a $10B market cap," and companies below that level will need to merge over time. 
  • Sheffield tells Bloomberg that his son, Parsley Chairman Bryan Sheffield, will not have a role in the combined company and will be a major investor, but Scotiabank analysts believe investors nevertheless may have concerns over the conflicts of interest between the two companies, which it sees as a buying opportunity. 
  • TD Securities upgrades Pioneer to Buy from Hold, citing earnings accretion from the deal, as well as added size and scale. 
  •  For Parsley investors, the premium may be a slight disappointment, according to analysts at Tudor Pickering Holt.

Weekly EIA Petroleum Report -- US Crude Oil Inventories Are 9% Higher Than November, 2018 -- It's Sure Taking A Long Time To "Re-Balance" -- October 21, 2020

EIA, weekly petroleum: Link here. API build reported yesterday did not materialize in EIA report.

  • weekly US crude oil inventories: decreased by 1.0 million bbls
  • weekly US crude oil inventories now stand at 488.1
  • weekly US crude oil inventories are about 10% above the ever-increasing five-year average
  • refineries operated at 72.9% capacity;
  • imports: down almost 14% from same four-week period last year
    • imports averaged 5.1 million bpd, down 167,000 bpd the previous week
  • propane/propylene inventories are about 11% above the five-year average
  • jet fuel product supplied was down 46% compared with same four-week period last year
  • gasoline demand will be reported later today

Re-balancing (US crude oil imports):

Week

Date of Report=

Change

Million Bbls Storage

Over/under 5-year average

Week 0

November 21, 2018

4.9

446.9


Week 1

November 28, 2018

3.6

450.5


Week 2

December 6, 2018

-7.3

443.2


Week 3

December 12, 2018

-1.2

442.0


Week 4

December 19, 2018

-0.5

441.5


Week 5

December 28, 2018

0.0

441.4


Week 84

July 15, 2020

-7.5

531.7

17%

Week 85

July 22, 2020

4.9

536.6

19%

Week 86

July 29, 2020

-10.6

526.0

17%

Week 87

August 5, 2020

-7.4

518.6

16%

Week 93

September 16, 2020

-4.4

496.0

14%

Week 94

September 23, 2020

-1.6

494.4

13%

Week 95

September 30, 2020

-2.0

492.4

 

Week 96

October 7, 2020

0.5

492.9

12%

Week 97

October 15, 2020

-3.8

489.1

11%

Week 98

October 21, 2020

-1.0

488.1

10%

Crude Oil imports:

Week (week-over-week)

Date of Report

Raw Data, millions of bbls

Change (millions of bbls)

Four-week period comparison

Week 0

March 11, 2029

6.4

0.174


Week 1

March 18, 2020

6.5

0.127


Week 2

March 25, 2020

6.1

-0.422


Week 13

June 10, 2020

6.4

0.000

-13.300%

Week 22

August 12, 2020

5.6

-0.389

-20.400%

Week 23

August 19, 2020

5.7

0.109

-21.700%

Week 24

August 26, 2020

5.9

0.185

-16.900%

Week 25

September 2, 2020

4.9

-1.000

-20.200%

Week 26

September 10, 2020

5.4

0.500

-17.900%

Week 27

September 16, 2020

5.0

-0.416

-20.100%

Week 28

September 23, 2020

5.2

0.160

-24.200%

Week 29

September 30, 2020

5.1

0.045

-21.600%

Week 30

October 7, 2020

5.7

0.600

-18.900%

Week 31

October 15, 2020

5.3

-0.447

-15.400%

Week 32

October 21, 2020

5.1

-0.167

-13.800%

 

Distillate fuel inventories:

Week

Date of Report

Change in Millions

Relative to 5-Yr Avg

Week 1

August 26, 2020

1.40

24.0%

Week 2

September 2, 2020

-1.70

23.0%

Week 3

September 10, 2020

-1.70

20.0%

Week 4

September 16, 2020

3.50

22.0%

Week 5

September 23, 2020

-3.40

21.0%

Week 6

September 30, 2020

-3.20

21.0%

Week 7

October 7, 2020

-1.00

23.0%

Week 8

October 15, 2020

-7.20

19.0%

Week 9

October 21, 2020

-3.80

19.0%

Jet fuel delivered:

Week

Date of Report

Change

Week 0

3/7/2020

-12.80%

Week 1

3/14/2020

-12.60%

Week 2

3/21/2020

-8.90%

Week 3

3/28/2020

-16.40%

Week 4

4/4/2020

-0.22%

Week 5

4/11/2020

-39.70%

Week 6

4/18/2020

-53.60%

Week 7

4/24/2020

-61.60%

Week 8

5/1/2020

-66.60%

Week 9

5/8/2020

-68.50%

Week 10

5/15/2020

-67.90%

Week 11

May 22, 2020

-66.60%

Week 20

July 29, 2020

-42.10%

Week 21

August 5, 2020

-40.90%

Week 22

August 12, 2020

-45.80%

Week 23

August 19, 2020

-47.60%

Week 24

August 26, 2020

-45.70%

Week 29

September 30, 2020

-46.10%

Week 30

October 7, 2020

-47.50%

Week 31

October 15, 2020

-41.80%

Week 32

October 21, 2020

-45.90%