Friday, July 10, 2020

The Covid Economy -- July 10, 2020

The Covid Economy:
At times of revolutionary transformation, people realize only gradually that the whole world around them is changing.
From chapter 6, page 247, "From Devastation to Democracy: 479 BC - 461 BC," Athens: A Portrait of the City in Its Golden Age, Christian Meier, c. 1993.


Gap: the gap between the investor class and the non-investor class will continue to widen.



Gap: will widen between the investor class and the non-investor class.


Fake story line: these bankruptcies had less to do with Covid-19 and more to do with the companies themselves.



Gap: the gap between the investor class and the non-investor class will continue to widen. The oil sector is the worst sector to be in right now and yet COP maintains its dividend.


Note: Toyota Motors is not shown in the graphic above. Market value of TM is $175 billion, about 70% that of Tesla. The graph above says as much about the "craziness" of Tesla valuation as the sad state of affairs for the legacy automobile industry. Did GM not see this coming? Did Mercedes not see this coming?

My favorite graphic:




Some people are drawing parallels between the present economic situation and the "Crash of 1929." Possibly, but I don't think so.

Notes From All Over -- Nothing About The Bakken -- The Friday Night Edition -- July 10, 2020

NASCAR XFINITY Kentucky race: Austin Cindric, 21 years old, just tied a Richard Petty record set back in 1971.

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Manhattan rental market implodes: median rent plunges most ever as vacancies hit record high. Too bad Amazon didn't move to Long Island.

It's going to be a mess: twenty-five percent of NYC renters have not paid since March. Link here.  It's one big snowball rolling downhill.
  • large number of New Yorkers out-of-work due to lockdown
  • direct payments to Americans now make up 25% of all personal income
  • that assistance runs out in July -- that's this month -- unless US Congress acts now
  • on top of that, last month New York state passed the Tenant Safe Harbor Act which makes it even harder for landlords to evict
  • and, even if landlords are able to evict, demand for rentals has plunged
  • plus people are fleeing cities due to virus pandemic and social unrest
  • if colleges don't re-open (and I don't think they will) that will further exacerbate the rental market;
  • a Redhead (that's her last name) said 40% of the tenants in her 50+ unit building skipped out on rent payments in June
  • one thing I learned from my dad who rented a few apartments back in the day:
    • whether apartments are rented or not, property taxes are due
    • property taxes are based on appraisals, and appraisals are a year old when the market starts to crash
  • if you don't live in NYC and don't think you won't be affected, think again: if you have a pension program, a pension investment, any kind of investment, 1,000-to-1 odds that investment has holdings in US banks -- they are in deep trouble.
The good news: NYC should have more than enough natural gas even without new pipelines. Thank goodness Amazon did not locate there. 

No wonder Tesla looks like such a better alternative. 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.

That Redhead? Reminds me of a story:
A blonde is walking down the street and a car pulled up next to her. The man in the car says to her, ''What do you have in the bag?'' The blonde replies: ''I have chickens!''
The man thinks for a moment and says, ''If I can guess how many chickens you have in the bag, can I have one?''
The blonde thinks that it sounds fair and replies, ''Okay, but I'll make the bet even better! If you can guess exactly how many chickens I have in the bag I will give you BOTH of them!" 
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A Charming Woman

MalagueƱa Salerosa, Once Upon A Time In Mexico

And, of course, from Mexico to Paris:

The Phantom of the Opera

It's hard to believe, but I think I've seen the stage play not less than three times in London. Okay, maybe only twice. I forget. While stationed with the USAF near London for three years, we saw a lot of London plays.

One Hundred Eighteen Permits Renewed In The ND Bakken This Past Week -- July 10, 2020

Updates

Permits renewed in week of July 13, 2020:

Twenty-four permits renewed -- the eighth consecutive day that 20+ permits have been renewed in the ND Bakken:
  • Bruin (10): ten Forth Berthold permits, all in section 19-148-94, Dunn County;
  • CLR (5): two Olympia permits; two Charleston permits, and a Juneau permit all in Williams County;
  • Lime Rock (5): three Mariner permits in Burke County and two Reuben Schneider permits in Dunn County; 
  • XTO (3): one Harley Federal permit in McKenzie County
  • Whiting: one USA Federal permit in McKenzie County
Twenty-three permits renewed (the seven consecutive business day in which 20 or more permits were renewed):
  • BR (7): one Sanmuri permit,  four Muri permits, two Remington permits, all in McKenzie County;
  • EOG (7): seven Burke permits in Mountrail County;
  • Equinor (6): three Larsen permits and three Lucy Hanson permits, all in Williams County
  • Enerplus (3): one Ridley, one Loggerhead, and one Aldabra permit, all in McKenzie County;
Twenty permits renewed, July 13, 2020:

  • Hess (9): three EN-Kiesel permits in Mountrail County; six SC-JW Hamilton permits in Williams County;
  • CLR (5): three Morris permits and two Carson Peak permits, all in McKenzie County; the scout tickets show these permits at PNC, so it's nice to see them renewed; the CLR Carson Peak/Morris wells are tracked here;
  • XTO (4): four Twin State Federal permits in McKenzie County
  • Petro-Hunt (2): one USA permit and one Louis Tully Federal, both in McKenzie County
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Later, 8:51 p.m. CDT: a reader noted that North Dakota is waiving the $100-fee to renew permits. Link here
Commissioners also heard a report on the Bakken Restart Task Force’s work, which is looking at ways to speed recovery for the North Dakota oil and gas sector.
Helms said a comprehensive review of regulations affecting the oil and gas industry is under way, to see if any need to be lifted.
Some things have already been implemented. Among these, a $100 fee for renewing a drilling permit has been waived beginning July 1 through Dec. 31.
“What we want is if somebody is looking at renewing a permit in Texas versus renewing a permit in North Dakota, we want to have the competitive advantage,” Helms said.
“That this is the one they renew and this is the one that gets a rig first.” 
Much, much more at the link.

A Bakken well costs in the neighborhood of $6 million plus or minus a couple of million. To renew a permit for one year: $100.

My hunch: if there's a direct correlation between permit renewals and waiving the $100-renewal fee, let's see what happens when the state cuts the production and/or extraction taxes. LOL.

 Original Post

One comment: lots of work left to be done in the Bakken.

This is really quite unprecedented. Over the past five days a total of 118 permits were renewed in the ND Bakken.

The NDIC averages about six new permits each day. In fact, this week, the NDIC reported only nineteen new permits. In comparison, there were more than twenty permits renewed each day this week.

I do not ever recall seeing this happen before.

Much could be said about this. Look at the operators below.

July 10, 2020: twenty-one permits renewed:
  • Oasis (10): five Slagle permits in McKenzie County; five Domalakes permits in Burke County;
  • Hess (9): two RS-State permits in Mountrail County; six S Ramberg permits in Williams County; one Beauty Valley permit in Williams County
  • Slawson (2): two Nightmaker permits in Mountrail County
July 9, 2020: twenty-two permits renewed:
  • Rimrock Oil & Gas (8): seven Skunk Creek permits and one Moccasin Creek permit, all in Dunn County 
  • SHD (7): one permit each, all in McLean County: Epsilon, Delta, Demeter, Cheetah, Narcissus, Poseidon, and Zeta;
  • Whiting (4): one Pronghorn Federal and two USA Federal permits, all in McKenzie County; a Kessel Federal permit in Williams County;
  • Slawson: a Gunslinger Federal in McKenzie County;
  • Liberty Resources: a Sundhagen C permit in Williams County
  • Newfield: a Moberg Federal permit in McKenzie County
July 8, 2020: twenty-six permits renewed:
  • BR (12): three Lillibridge permits in McKenzieCounty; two Patton permits in Dunn County; two Sandie permits in McKenzie County; two Shafer permits in McKenzie County; and, three West Kellogg permits in McKenzie County
  • Rimrock Oil & Gas (6): six Skunk Creek permits in Dunn County;
  • Hess (4): four BB-State A permits in McKenzie County;
  • CLR (4): four Pasadena Federal permits in McKenzie County;
July 7, 2020: twenty-three permits renewed:
  • CLR (10): two of each of the following: Dennis, Flint Chips (all four in Dunn County); Berlain (both in McKenzie); Charleston and Olympia (all four in Williams County);
  • CPEUSC (8): four CPEUSC Narcisse permits; four CPEUSC Austin permits5, Williams County
  • Lime Rock (3): three Harlson Rebsom permits in Dunn County
  • EOG (2): two Austin permits in Mountrail County (spelled incorrectly on the DAR)
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The Nature Page

While kayaking with Sophia on Grapevine Lake, north Texas:


Hess EN-Johnson Wells

From today's daily activity report -- seven new permits, #37706 - #37712, inclusive:
  • Operator: Hess
  • Field: Alkali Creek (Mountrail); Manitou (Mountrail)
  • Comments:
    • Hess has permits for a 7-well EN-Johnson pad in SESW 20-155-94, Alkali Creek/Manitou; 
    • the wells will be 264' FSL and centered around 2450' FWL
    • see graphics below
Twenty-one permits renewed:
  • Oasis (10): five Slagle permits in McKenzie County; five Domalakes permits in Burke County;
  • Hess (9): two RS-State permits in Mountrail County; six S Ramberg permits in Williams County; one Beauty Valley permit in Williams County
  • Slawson (2): two Nightmaker permits in Mountrail County
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The Proposed Hess 7-Well EN-Johnson Pad

One comment: lots of work left to be done in the Bakken. 

If I have this correct, this will be another 18-well super-pad like the 18-well EN-Jeffrey super-pad to the east.



The 18-well Hess EN-Jeffrey super-pad is tracked here.

Hess With Seven New Permits; Another 18-Well Super-Pad; Twenty-One Permits Renewed -- July 10, 2020

Active rigs:


$40.557/10/202007/10/201907/10/201807/10/201707/10/2016
Active Rigs1158665729

Seven new permits, #37706 - #37712, inclusive:
  • Operator: Hess
  • Field: Alkali Creek (Mountrail); Manitou (Mountrail)
  • Comments:
    • Hess has permits for a 7-well EN-Johnson pad in SESW 20-155-94, Alkali Creek/Manitou; 
    • the wells will be 264' FSL and centered around 2450' FWL
    • see graphics below
Twenty-one permits renewed:
  • Oasis (10): five Slagle permits in McKenzie County; five Domalakes permits in Burke County;
  • Hess (9): two RS-State permits in Mountrail County; six S Ramberg permits in Williams County; one Beauty Valley permit in Williams County
  • Slawson (2): two Nightmaker permits in Mountrail County
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The Proposed Hess 7-Well EN-Johnson Pad

If I have this correct, this will be another 18-well super-pad like the 18-well EN-Jeffrey super-pad to the east.



Notes From All Over -- "Are You Kidding Me" Edition -- July 10, 2020

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.

The only thing we have to fear, is fear itself. I wasn't going to look at the market today. Futures and headlines suggested a "bad" day on the market. Then, while closing windows left open from yesterday, I saw AMZN. Are you kidding me?
  • AMZN: up another $10 for the day and that's only 0.3%; trading close to $3200; market cap just under $1.7 trillion; closes at $3,200, up another $2 after hours;
  • AAPL: choppy; a bit of profit taking, but not much; trading down about 0.3%; down about $1.20; trading around $382; closes at $384
  • IMUX: down 4%; trading at $12.20; closes at $12.27 but up 1.6% after hours;
  • MSFT: down 0.4%; down about 86 cents; trading around $213; closes down a bit, at $214;
  • TSLA: up a whopping 11%; up over $150/share; now trading near $1,545/share;
At the close:
  • NASDAQ hits an all-time high; fourth record close this week;
  • S&P 500: up 33 points
  • Dow: up 370 points
Surge: said to be related to Gilead's news that they may have oral anti-viral


PGA: looks like Jordan Spieth will miss the cut line; needs a birdie at the final hole to get to one under which looks like the cut line; he did not do that; par at the 18th;

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Just For Fun

Timeless:



Blue Oyster Cult: "Hey guys, let's get a jump on writing the theme song for 2020."

June, 2020, Dashboards Posted

The link is here.

The EIA dashboard links:
I can't recall if these have been previously reported. Look closely at the numbers: the Eagle Ford is a monster.




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Coming Back On Line


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New Jacket 

Heat index in north Texas, 110°.

A/c is turned on so high at Tutor Time, Sophia needs to wear a light jacket during the day.

Old Navy -- without question --  has the nicest light jacket selection for this age group, and prices are stunningly low with huge discounts. Retailers need to move winter, spring, summer inventory -- affected by C-19 -- for fall arrivals.

One Well Coming Off Confidential List -- July 10, 2020

Top story: another unfortunate event reported. Major explosion rocks Iran -- third time in three weeks. Link here. Officials deny reports. Some suggest Israeli target practice.

Running out of dinero? Robert De Niro. Cuts estranged wife's monthly credit card limit from $100K to $50 (per month); she says she can't make it on that. Link here.

Schadenfreude: word of the day.

Manhattan rental market implodes: median rent plunges most ever as vacancies hit record high. Too bad Amazon didn't move to Long Island. 

Saudi US imports: looks like fourth-lowest month in history, April, 2020. Link here.

OPEC basket, link here: flat at $43.31. Saudi can't make it on that.
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Back to the Bakken

Active rigs:


$39.067/10/202007/10/201907/10/201807/10/201707/10/2016
Active Rigs1158665729

One well coming off confidential list -- Friday, July 10, 2020: 35 for the month; 35 for the quarter, 481 for the year:
  • 29628, drl/NC, Hess, TI-Beauty Valley-158-95-1423H-1, no production data, look how old this permit is, a 29XXX series. The most recent permit: #37705.
RBN Energy: US LNG export demand unravels.
U.S. LNG exports in recent months have gone from providing a consistent and growing source of demand to balance the U.S. natural gas market to now being a drag on demand growth and the gas market balance. Rising storage surpluses and record low prices in Europe and Asia, along with relative strength in the U.S. national benchmark prices at Henry Hub, have turned the economics upside down for U.S. exports and led to widespread cancellations of contracted cargoes. Feedgas deliveries and cargo liftings at Lower-48 terminals both have plummeted to the lowest levels since early 2019, despite domestic liquefaction capacity climbing by more than 4 Bcf/d since then. Moreover, the dynamics that led to the current predicament are likely to persist at least through injection season and potentially even beyond that to a certain extent. Today, we provide an update on how cargo cancellations have affected U.S. gas demand for exports, overall and at individual terminals.