Thursday, July 16, 2020

Notes From All Over -- Nothing About The Bakken -- July 16, 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.

I normally don't link these kind of articles, but because of one of the nine stocks mentioned I thought it interesting for the archives. From US News & World Report, nine dividend stocks to buy and hold forever. The nine:
  • Novartis 
  • National Health Investors
  • PetMed Express
  • Amcor
  • Verizon Communications
  • Toronto-Dominion Bank
  • Duke Energy Corp.
  • Oneok
  • Chubb
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What's In A Name?

This is a very long vignette, for lack of a better word. It has nothing to do with the Bakken, and I'm only posting it for the archives.
First, a little bit from White Mischief, by James Fox.
Shortly after the murder of her lover, Josslyn Hay, Diana set off on a safari with her husband, Jock Broughton, who was charged with the murder of Joss. Diana was one of the best hunters, male or female, on African safaris, at the time.
From the book, pp. 90 - 91:
Then, later in February, less than three weeks after the murder, Broughton and Diana set off, incredibly, on a full-scale shooting safari, into the Southern Masai Reserve along the Mara river. They were accompanied by the famous white hunter, John Hunter, and Hugh Dickinson, whom they hadn't seen since the end of January.
The safari lasted eight days, and the party traveled by truck, open car, and on foot. It was already clear that Diana was deeply suspicious of her husband and their relations were severely strained.

It seems astonishing that such a trip should have been contemplated in the circumstances. Eight days in the bush can break the closest of friendships and Broughton, at the best of times, had been known to make terrible scenes on hunting trips with Vera (his first wife), on one occasion overturning all the tables in the camp, and then kicking Vera until her shins bled.
But as at Muthaiga (their club in Nairobi), where lunch could never be suspended merely for reasons of bad feeling (sic), so the ritual task of shooting lion and buffalo took precedence over personal crises, and provided its own therapeutic bloodletting.

Diana had recovered enough of her composure to shoot the first lion. She even took three photographs of her trophy before taking aim.  
So I had read that some weeks ago; in fact I had read that passage several times, and it stuck with me, long enough that I was able to find it again tonight.

So, hold that thought.

Today, I was continuing to read Christian Meier's "biography" of Athens. It seems that along with Zeus, perhaps one of the most important god/goddess for the Athenian Greeks was Artemis. The name of Artemis keeps popping up in the biography of Athens. Of course, Athene (Athena) had the top spot, but having said that, Artemis really shows up a lot in the book.

From pp. 116 - 117, Athens: A Portrait of the City in Its Golden Age:
In time, Greek thought seized upon the gods to exemplify basic principles.
The highest god, Zeus, for example, came to be associated with the demand for justice, and his name was linked to the concept of political order.
Interestingly enough, even Artemis, a goddess not claimed by any ethical authority, was said in one contemporary source to take pleasure not only in "bows, hunting, shade groves, stringed instruments, and dances" but in the existence of a "city of just [honest] men."
The fact that several gods worshipped by all Greeks were concerned about justice also contributed to the Greek sense of unity. Their shared understanding of what constituted law set them apart from the barbarians.
Reading that short passage on Artemis, I immediately thought back to Diana in Kenya two thousand years later.
From wiki, Artemis was the Greek goddess of the hunt, the wilderness, wild animals, the Moon, and chastity.
Of course, except for "chastity," this described Diana of Nairobi to a "t" as they say.

Artemis: the Greek name for this goddess.

The Roman name for this goddess of the hunt, the wilderness, wild animals? Diana.
One wonders if these safari hunters, around the campfires at night, ever talked about the Greek and Roman gods. 

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Tusk!

Tusk, Fleetwood Mac and My Alma Mater

No New Permits; Twenty-Three Permits Renewed -- July 16, 2020

Active rigs:

$40.717/16/202007/16/201907/16/201807/16/201707/16/2016
Active Rigs1156695829

No new permits.

Twenty-three permits renewed, ninth day of 20+ renewed permits:
  • XTO (9): four Ruby State Federal permits, four Prairie Federal permits, and one Edwards Trust Federal permit, all in McKenzie County;
  • Rimrock (5): two Citrine permits; one Sapphire permit, one Amethyst permit, and one Emerald permit, all in Dunn County
  • Hess (4): four K-Quilliam permits in Dunn County
  • BR (3): two George permits and one Bailey-George permit in McKenzie County
  • EOG (2): two Burke permits in Mountrail County
One producing well (DUC) reported as completed:
  • 35959, SI/A, Whiting, Arndt 14-5-2XH, Sanish, t--; cum 115K 5/20; first started producing, 12/19;

Natural Gas Fill Rate -- Approaching The 5-Year Max -- July 16. 2020

Before we get started, a reminder -- Vern Whitten's "virtual coffee table book" at this link.

Now, back to energy.

Link here:


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Study Suggests 10% Permanent Drop In US Miles Driven

Bloomberg via Rigzone.
Working from home and online shopping have become the new normal and that will reduce driving in the U.S. by up to 270 billion miles a year.
The research conducted by consultant KPMG International finds the cocoon culture Covid-19 has created is not going away -- even if a vaccine is made widely available -- and that will have potentially dire consequences for the auto industry.
For starters, the decline in commuting will remove 14 million cars from U.S. roads, KPMG forecasts.
Cocoon culture.

More:
The change in habits could result in roughly 1 million fewer sales of new cars and trucks annually. 
Americans have purchased more than 17 million cars, sport-utility vehicles and light trucks annually for the last five years. The National Automobile Dealers Association expects U.S. auto sales to plunge as low as 13 million this year due to the pandemic’s chill on the economy. 
As the industry works its way out of the hole created by the shutdown, the potential loss of 1 million sales a year will loom large.
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Grilling

From a reader:



My wife and I love artichokes, but we've "always" boiled them on the stove top. I've grilled them once or twice, cut in half, never thought about grilling them whole. 

I particularly enjoyed the words that accompanied the photo. After seeing the photos, I mentioned to the reader how impressed I am with such a simple "thing" as a Weber grill -- the versatility of a Weber.

The reader's reply:
The Weber does it all. Can you believe a “big green egg” does the exact same thing and is 10x the cost? The "egg" is a must have with everyone I know. That Weber kettle is so simple and so easy. It’s just amazing. 
I checked out the "big green egg" some months ago. I was blown away by the cost, but even more so, how incredibly heavy these monsters were. Very, very heavy lids. 

US Retail Sales Surge; Hardly Mentioned; Bland Headline -- Reuters Reports -- July 16, 2020

Wow, is anybody actually looking at the financial news today? Amazing.

Bland headline: US retail sales increase in June.

That's an incredibly bland headline. Look at the numbers. From Reuters via Yahoo!Finance:
U.S. retail sales increased more than expected in June, but the budding economic recovery is being threatened by a resurgence in new COVID-19 infections and high unemployment. 
The Commerce Department said on Thursday retail sales rose 7.5% last month. That was on top of the 18.2% jump in May, which was the biggest gain since the government started tracking the series in 1992. Economists polled by Reuters had forecast retail sales advancing 5% in June.
Again: 
  • forecast: 5% increase in retail sales
  • actual: 7.5% (50% greater than forecast)
  • and that comes on a whopping 18% jump the previous month (May, 2020) 
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Dak Prescott And The Cowboys

Updates

July 18, 2020: see also thelandryhat -- 
On top of all that, the ball thrower’s agent is none other than Todd France, who apparently loves the franchise tag and not signing long-term contracts. The super-agent has two other players also playing on the franchise tag this season, safety Justin Simmons of the Denver Broncos, and edge rusher Bud Dupree of the Pittsburgh Steelers according to Joel Corry at CBS Sports and Todd Archer at ESPN.

Rock, meet hard place. I just don’t see how a long-term deal gets signed, next year or ever maybe, given these circumstances. Do you? I just see a bunch of stubborn high-powered people not returning each other’s phone calls.
July 18, 2020: from bloggingtheboys --
Prescott hired [CAA's Todd] France as his agent back in 2018 in preparation for a big deal once his four-year rookie deal expired. France represents a number of players around the league, including Arizona Cardinals star receiver DeAndre Hopkins, and it has been known that he was looking to make Prescott the highest paid quarterback in the NFL.

That was to be expected, as Prescott has proven to be among the best quarterbacks in the league since his rookie season in 2016. Since France was hired by Prescott, we have seen Jared Goff, Carson Wentz, Russell Wilson, and Patrick Mahomes cash-in.
Although the deal did not come to fruition this offseason, Prescott will again be in contention for a big-money deal next offseason — although Dallas does have the option to place the tag on him for a second consecutive year.

France had three free agents up for new deals this offseason. In addition to Prescott, two AFC defenders were looking to sign extensions with their respective organizations — safety Justin Simmons of the Denver Broncos and EDGE Bud Dupree of the Pittsburgh Steelers — however, both will be playing on the tag in 2020 along with Prescott.

John Elway and the Denver Broncos reportedly offered Simmons a deal that would have “made him in the top-5 or top-6 highest-paid at his position”, while Dupree filed a grievance with the NFL regarding the position for which he was tagged.
Dallas, meanwhile, reportedly offered Prescott around $33-$35 million and $110 million in guaranteed money. Those numbers, though, are in dispute by the various principals involved.

It is an agent’s job to get his client the best deal, which typically involves the most money. For France, he saw a better opportunity for three of his clients to play on a prove-it season while on the franchise tag rather than inking in for a long-term deal. As a result, the talk around Dak and the Cowboys will rage on for at least another year.
Original Post 

Both the Cowboys and Dak Prescott were losers in this contract debacle.

Even in a vacuum, on its own, this story really puts Dak Prescott and the Cowboys in a bad light.

But compared to the Kansas City Chiefs and the Mahomes story, the Dak-Cowboys story feels much, much worse.

Though it was a debacle for both the Cowboys and Dak Prescott, on balance, Dak Prescott looks like the bigger loser.

Imagine a ten-year contract with the Cowboys: the accolade both sides would have gotten; the endorsements Dak would have gotten; ten years of no state income taxes; ten years of Dallas fan adulation.

Where does this go if there's no "meaningful" NFL 20-21 season? A lot of "what could have been."

My first thought yesterday: Mahomes comes off looking like someone who is really, really a Chief. Someone who is putting the team ahead of himself. Dak, on the other hand, looks like he is in this for himself, and has no real team loyalty. He has said it directly: he will go to the team who pays him the most. With a few exceptions, it appears the longevity of NFL quarterbacks is becoming shorter and shorter.

Now, today, that's the lead headline -- Dak is trying to put lipstick on a pig -- the headline -- telling us he's a Cowboy. Really? He's a Cowboy for one year. After that, he will take another look.

Mahomes? He's a career Chief. A team player. The franchise.

I can't imagine any quarterback being offered the opportunity to play for the Cowboys for a decade. Certainly, they could have written the contract in such a way that Dak would have signed for ten years, but with an "out" clause after four years. For example: an "out" clause if he takes the team to a Super Bowl, and a really huge "out" clause if he actually wins a Super Bowl.

Dak comes across simply as a year-by-year-let's-see-how-much-my-agent-can-get-for-me journeyman quarterback.


I love how Prescott's agent can spin this:
Prescott has not had a losing season since taking the reins from Tony Romo prior to the start of the 2016 season.
One could also argue, Prescott has not had a winning season:
During the 2019 season, Prescott threw for a career-best 4,902 yards with 30 touchdown passes and only 11 interceptions. However, the Cowboys sputtered during the season, finishing with an 8-8 record and missing out on an NFC East title.
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PGA

I don't know when Phil Mickelson started wearing aviator sunglasses but I think it was this season, just a few months ago.

With the aviator sunglasses, Phil looked very, very different, and very, very sophisticated. But he sure didn't look the "old" Phil. 

Again, today Phil began the tournament wearing the sunglasses. He played poorly the first few holes, and then I noted that he removed his sunglasses after the 5th hole. It's now near the end of the day and Phil is still without his sunglasses.

150K Bbls Crude Oil In Less Than Four Months -- CLR -- Wahpeton -- July 16, 2020

Note: in a long note like this, there will by content, format, and typographical errors. I remain inappropriately exuberant about the Bakken. I'm interesting in the Bakken as an oil basin, not as an investment opportunity. That has not changed since I began blogging on the Bakken over a decade ago.

Re-posting. This is a huge well. This page will not be updated. The CLR Wahpeton wells are tracked elsewhere.

Coming off confidential list today. Again, except for the updated production numbers reported today, this is a re-posting from an earlier note:
This is a huge "testament" to the skill of all involved. It sounds they had more than their share of difficulties on this well, and it still came in as a great well! 

The "original" Wahpeton wells came in less remarkable than I expected, but, all of a sudden, we have a great Wahpeton well.
The well:
  • 35913, F/A, CLR, Wahpeton 15-16HSL (2560 acres), Banks, fracked 12/19/2019 - 12/28/2019; 8.5 million gallons (small-to-moderate); 87.8% water by mass; friction reducer not remarkable; target: middle Bakken;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20203135697357972361563681636770
BAKKEN4-20203031263312282417547345473410
BAKKEN3-20203150720508433851375713757130
BAKKEN2-202071855718162137122338222896486
BAKKEN1-2020635735755085400540

Of note from the file report:
Salt water disposal wells in this vicinity have caused salt water gain issues in this vicinity when drilling through the disposal formation (Dakota supergroup). A single geologist was tasked with being on site during drilling of the Dakota to verify the top and the base of the Dakota sandstone members, after which the rig ran and cemented 9.625” casing. This well was the second in a line of four and represented an improvement from the problems of the first well. We still suffered losses in the uppermost of the Inyan Kara sands, but upon switching from heavier to lighter brine mud while holding back pressure on the choke, we were able to better control both losses in the uppermost sand and water intrusion from the water disposal layers. The biggest engineering problem came from casing locking in place at the top of the last sand. Cement was pumped into place with the hope that it would return to surface and fill the intervening hole and keep water intrusion from occurring. Both hopes were realized.
Also of note, from the file report:
Bakken shale collapse issues are of lesser, but still manifest, concern in this area, and angles of intercept and shale exposure footage remain important data. Continental engineers have determined that entering the shales should be done at angles no more than 65-68° of inclination. On this well, the Upper Bakken was intercepted at 67.05° and exited at 72.47°, with a total of 48’ of shale exposure. No shale collapse issues occurred.
From the file report:
  • big rig began drilling on the evening of June 7, 2019
  • vertical operations required an amazing six BHAs; generally it is only one, maybe two;
  • sounds like they had challenges landing the curve
  • drilled out of the shoe on the afternoon of July 25, 2019
  • lateral required only one BHA;
A single BHA sufficed to get us through the horizontal section to TD. Unfortunately, due to poor markers and use of the Jamestown 14-17 HSL1 for structural control, which ended up showing a 20’ difference to TD on this well, we ended up in the fog gamma (which locally has more character than generally expected in the basin), and struck the Lower Bakken Shale 256’ from TD. Continental management, rather than sidetracking, decided to call the well complete at that point.
completed on July 27, 2019;
Finally:
The Jamestown Federal 14-17HSL1, previously drilled on this pad, was used for lateral structure control.
Unfortunately, TF1 and Middle Bakken wells are sometimes poorly reconciled, even when close to each other, and the TD points of both wells, well controlled by gamma data, were 20’ different in TVD, which led to a Lower Bakken strike at the end of the well, as mentioned above.
This phenomenon was judged to be a break between Three Forks and Middle Bakken structure, as the same differential downward would occur on the Wahpeton 16-16H1, which had a structure very similar to the Jamestown 14-17HSL1.
How to explain this is unknown currently.

Notes From All Over -- The Market Fears A Biden Presidency -- Nothing About The Bakken -- July 16, 2020

Updates

Later, 3:49 p.m. CDT: mortgage rates -- headline from The WSJ earlier today --


Later, 3:43 p.m. CDT: watch out below! Netflix misses earnings; forecasts weaker growth; shares fall 10%.

Later, 12:26 p.m. CDT: Germany plunges into recession with biggest slump in decade.
With restrictions to contain the pandemic only slowly being lifted, the economy is set to suffer much more in the three months through June -- May 15, 2020. Link here
Later, 9:25 p.m. CDT: Dow cuts 500-point loss to a mere 64 points. Apparently they're reading the blog. LOL.

Original Post

US retail sales: increase more than expected in June -- Reuters;

Jobless claims: in line with forecasts despite headlines. Link here 
  • prior: 1.314 million
  • revised: 1.310 million
  • forecast: 1.288 million
  • actual: 1.300 million
Whiteness: I thought this was a joke -- I've been reading about it for several days, it seems, and it turns out that not only is it true, it was put out by the Smithsonian. Link here. Here is the webpage from the museum. Wow. Even The [London] Sun  -- England's #1 tabloid -- was shocked, or at least seemed shocked. LOL.
Update, July 16, 2020, one day later: apparently huge over-reach by the Smithsonian. The museum has removed the two charts from its web page. If you go to the link for the webpage, the webpage is still there, but not the charts. Here are the charts, easily found everywhere:



Hope springs eternal: "EVs got crushed in 2020, but next year could be their best." Link here

Tesla: Tesla vehicle registrations in California dropped by half in 2Q20. Link here.

Hi-Crush crushed: files for bankruptcy.

Oil and Covid-19: no oil company has reported a worse death toll than Pemex. Wow. Death toll, not just cases. 

Oil: California's top oil driller files for bankruptcy protection. Link here. This was a debacle from the beginning ... back in 2014. Simplistic to say it was due to debt.


Twitter scam: that bitcoin / twitter / hack / scam story didn't last long. It was the "Big" story yesterday afternoon, evening. Today, not only headline over at Yahoo!Finance on the story. Link here. Note whose name is not mentioned: Tim Cook. Apple, yes, but not Tim Cook.

Must-read on investing: investing legend Burton Malkiel on day-trading millennials, the end of the 60/40 portfolio and more. Link here. Unfortunately it's behind a paywall. I read the story. Headline says it all. These three things from the article:
  • day-trading: not investing, and most lose money; Malkiel is in the "buy and hold" camp;
  • 60/40 portfolio is dead (or at least he recommends getting rid of the 60/40 portfolio) -- that should have been obvious several years ago; and,
  • how does Burton Malkiel spend his time during Covid-19 lock down? watching TCM, specifically mentioning "Casablanca"

Fast and furious. I've just scanned the financial headlines, and the earnings reports are surprisingly good. Headlines without links are from Yahoo!Finance:
  • Morgan Stanley earnings crushes views, link here;
  • Morgan Stanley joins Wall Street's gold rush with record profit;
  • Bank of America, link here;
  • AstraZeneca stock jumps on report of positive data on Covid-19 vaccine trial;
  • Domino's US sales surge on pizza demand during pandemic;
  • Johnson & Johnson earnings top; Dow Jones giant raises full-year guidance; 
  • Abbot Labs' stock gains after profit, revenue and full-year outlook top expectations;
Comment: with those headlines on earnings, and the market is down today. If the market is lower today after these headlines, the market is down for two reasons:
  • profit-taking, which "no one" ever wants to admit; and,
  • polls showing Biden's lead over Trump widening; Biden's #1 promise: raise taxes;
Mortgage delinquencies:


One Permit Coming Off Confidential List Today -- July 16, 2020

Futures: futures were down as much as 500 points  overnight; then early this morning that was cut in half to 250 and currently the Dow is down 187 points in pre-market trading. The headlines said that the market would open lower due to "jobless" reports and coronavirus. LOL.
But here it is. The headline over at Yahoo!Finance: jobless claims worse than expected. I saw the jobless claims before the headline, and the jobless claims came in exactly in line with expectations. They are "troublingly" high, but they were not worse than expected.

So, no, if the market opens lower it has nothing to do with either "joblessness" or coronavirus. Not only was the "joblessness" headline fake news (and traders will see through that in a New York minute) but the coronavirus is an old story.

I've just run through the headlines on earnings reports and, wow, earnings are really, really good overall. It is quite amazing. We will go through those later.

If the market opens down, there are two reasons:
  • profit-taking which headline writers never, never, never seem to admit; and, 
  • polls showing Biden winning over Trump, and to confirm those polls, Trump sacked his campaign manager.
This is not rocket science.
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.

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Back to the Bakken

Active rigs:
 
$40.687/16/202007/16/201907/16/201807/16/201707/16/2016
Active Rigs1156695829

One permit coming off confidential list -- Thursday, July 16, 2020: 45 for the month; 45 for the quarter, 491 for the year:
  • 35913, F/A, CLR, Wahpeton 15-16HSL, Banks, t--; cum 137K in three months, see this note;
RBN Energy: first tanker set to arrive at south Texas Gateway crude export terminal.
For almost a year now, Corpus Christi-area marine terminals have been exporting more crude oil than their competitors in Houston, Beaumont, and Louisiana, largely thanks to the recent startup of new, large-diameter oil pipelines from the Permian to Corpus. Beginning today, with the expected arrival of the first supertanker at the spanking-new South Texas Gateway Terminal in Ingleside, the Corpus area will have the potential to widen its lead in export volumes. In addition to its connections to the EPIC Crude and Gray Oak pipelines from West Texas — and the new Harvest Pipeline and the older Flint Hills Resources system — the South Texas Gateway facility can partially load 2-MMbbl Very Large Crude Carriers. Today, we discuss the Gulf Coast’s newest marine terminal and the important economic edge it gains from handling VLCCs.