Saturday, January 16, 2021

Notes From A Different Planet -- The Portland, OR, Edition -- January 16, 2021

Portland, OR: actually I don't have any local news from Portland. I'm visiting, it's my second visit in less than thirty days to see the 10-month-old grandsons. 

Stimulus checks: my daughter tells me they just received their $600 stimulus checks -- one each for her and Tim. They will get the checks for their boys when she and Tim file their income taxes later this spring, this round of checks plus checks from the initial round, which seems so long ago. And they will get another $1,400 each later this spring, and again, something for the boys. 

Amazon Prime: my wife told me she doesn't watch Amazon Prime videos because she doesn't want to "take advantage of Amazon." Say what? We pay an annual subscription for Amazon Prime which includes a number of perks including a pretty extensive library of movie and television programs. My wife, Mayumi, thinks she is taking advantage of the "system" if she logs on to our account when she is in Portland, OR, and I am logged in while in Grapevine, TX. LOL. I told Mayumi that Jeff Bezos is the second richest man in the world. She should not be worried about taking advantage of the "system." 

PSA: during that conversation I earned from our daughter/son-in-law, that not only is my wife, Mayumi, NOT taking advantage of Amazon but Amazon actually encourages all family members to log onto their Amazon Prime account. They now allow two adults and two children (or something like that) to set up individual sub-accounts on the main Amazon Prime account. Separate billing accounts are  set up and no one can see what the others are doing. So, Mayumi can use our Amazon Prime account to shop for things for me (or others) without me knowing what she is buying. She also pays for those things with her own credit card so I'm not hit for unforeseen credit card charges. I can watch R-rated movies on Amazon Prime without Mayumi knowing what I'm watching. Maybe Amazon has done this all along and I simply did not know. But I find it amazing that we can have several sub-accounts -- completely separate and "secret" -- under the one Amazon Prime account. I assume the way Amazon controls this is requiring identical billing addresses on the various credit cards. 

**************************************
The Book Page

A reader sent me this item from The [Minneapolis] StarTribune: Dakota Attitude: Interviews from Every Town in North Dakota, Jim Puppe. The tag: a North Dakota man traveled 113,000 miles in 14 years to gather stories from elders in every town in the state. The author, Jim Puppe, recorded 617 stories, every town in North Dakota, from Abercrombie to Zeeland, from the Red River to the Badlands. 

My favorite story from the StarTribune article: the story of WWII POW Maurice Bonemeyer. 

And on the day he was freed, Bonemeyer said, "Here comes this Sherman tank. That was the greatest sight I ever say."

*****************************
The Book Page

Over the past week or so I've been re-reading The Los Alamos Primer: The First Lectures on How to Build an Atomic Bomb, Robert Serber, c. 1992.

This was a real find for me. I bought it at a small museum in Los Alamos when we visited last winter while on a ski vacation. It's a thin little book, only 63 pages, not including end notes, an appendix, index, etc. I think I've talked about it before on the blog; I don't remember.

As the title says, it is a transcript, along with explanatory notes, of the first five lectures given to every scientist arriving at Los Alamos in 1943 working on development of the "gadget."

It's amazing how little these scientists actually knew when they began this process and how fast and how far they advanced. The physicists who were there, who were involved is simply mind-boggling.

For anyone with a high degree of interest in this story, who already have three or four biographies of the men and women involved and another two or three books on the Manhattan Project, this book is must-have. It was very, very expensive at the museum; I assume it can found for much less on line.

The Daily Activity Report From Yesterday, Friday, January 15, 2021

Active rigs:

$52.04
1/16/202101/16/202001/16/201901/16/201801/16/2017
Active Rigs1256685736

Marathon still at three, and CLR is back up to two -- both CLR rigs drilling Gale wells in Dunn County.

No new permits.

Nine permits renewed:

  • CLR (5): two Thronson permits and a Sorenson permit, all in Mountrail County; a Tanager and a Nuthatch permit, both in Divide County;
  • Lime Rock Resources (4): a State, Kary, Emil Veverka, and Schneider permit, all four in Dunn County:

Two producing wells completed:

  • 37459, loc/A, Petro-Hunt, USA 153-95-13D-12-5H, 33-053-09361, Phelps Bay, Three Forks, no production data, fracked 11/15/20 - 12/1/20; 8.7 million gallons of water; 89.9% water by mass; 960-acre; section 13 and SW/2 of section 12; (shouldn't this be "S/2 of section 12?)
  • 37460, loc/A, Petro-Hunt, USA 153-95-13C-12-4H, 33-053-09362, Phelps Bay, middle Bakken; no production data, fracked 11/15/20 - 12/1/20; ; 12.6 million gallons of water; 91.8% water by mass; 960-acre; section 13 and SW/2 of section 12; (shouldn't this be "S/2 of section 12?)

Comments:

  • there are five wells on that pad; the other three: #37461, #37458, and #37457; these wells have been fracked but no production data;

However, look at this: the nearest well to the west of these wells:

  • 33817, 683, Petro-Hut, USA 153-95-23D-14-1HS (a line section well), Charlson, t7/18; cum 563K 11/20; note that this well was taken off line when the wells to the east were fracked; note the jump in production after the well was brought back on line; see full production profile here:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-202022114521146031984141841106160
BAKKEN10-202031181561830455885424653891139
BAKKEN9-20203022999232185097452214520219
BAKKEN8-2020317601029889844
BAKKEN7-202011170143433421
BAKKEN6-2020111406132730819
BAKKEN5-20200000000
BAKKEN4-20202810893110392162440164375962
BAKKEN3-202031143081458834345728957092113
BAKKEN2-202029151461496840125539954863536
BAKKEN1-2020311739417648395560077581571732
BAKKEN12-201931184051825441286438764049192

Notes From All Over -- The Saturday Edition -- January 16, 2021

ICYMI: top stories of the week have been posted

Awards

*********************
EPD

Mostly I'm posting this out of boredom. Not much going on. 

Over at SeekingAlpha. Nice map at the site.  On average, from oil well to end user, America's natural gas, oil, and petrochemicals traverse six – six! – of Enterprise's mission-critical services. 

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.

North Dakota Budget Talk -- 2021 - 2023 Biennium

I normally don't pay much attention to North Dakota legislative activity, but a four-hour flight from Grapevine, TX, to Seattle, WA, gave me an opportunity to spend some time doing just that. 

I was surprised how interesting this all was.

Some data points from Geoff Simon's top ND energy news for the week:

  • ND legislative appropriations committee adopted an interim revenue forecast for the 2021 - 2023 biennium;
    • income forecast:
      • $40 / bbl through the biennium
      • production to decline to 1.1 million bpd (2021-2022)
      • production to decline to 1.0 million bopd (2022-2023)
      • this would add just under $3 billion in oil tax collections over the coming biennium;
      • compares to $3.5 billion expected in the current biennium (2019 - 2021)
    • expenditures:
      • $434 million to western North Dakota (formulaic)
      • that would be down about 16% from the $518 million in the current biennium
  • Legacy Fund: would realize $780 million in deposits
    • from that $780 million:
      • Common Schools Trust Fund: $127 million
      • Foundation Aid Stabilization Fund: $127 million
      • Three Affiliated Tribes: $373 million
  • other income:
    • sales tax revenue: $1.74 billion
    • personal income tax: $816 million
    • corporate income tax: $260 million
    • motor vehicle excise tax: $260 million

Director's comments with release of Director's Cut:

  • monthly crude oil production held steady due in part of 74 new well completions in November
  • look at this: in December, 44 wells were completed, most of which were credited to the state's CARES Act frack incentive -- Helms said the number of completed wells in December would have likely dropped to zero without that incentive
  • unlikely to see an increase in drilling activity unless prices stabilize above $55/bbl
  • the industry continues to meet the natural gas capture target, 93%
  • slightly slower on the reservation due to difficulty obtaining right-of-way for construction of gating pipelines (flaring will become less of a problem on federal land if the DAPL is shut down)
  • mentioned the completion of Outrigger Energ's Sanderson NGL processing plant 15 miles west of Williston; capacity: 250 million cubic feet of gas per day (42,000 BOEPD?)

DOT:

  • proposed budget: $1.8 billion for new biennium
    • about $400 million more than current biennium
    • that $400 increase possible if bonding (Legacy Fund) proposal accepted
  • widening US Highway 85 from Watford City to I-94
    • 2021 - 2023 budget includes $50 million to widen US Highway 85 from Watford City south to Long X Bridge
    • requires US Congressional support
    • phase 2: US Highway 85 from Long X Bridge to state highway 200
    • phase 3: US Highway 85 from state highway 200 to I-94

Friday, January 15, 2021

North Dakota Governor Gives The "All Clear" Sign -- January 15, 2021

All clear! Governor of North Dakota, Doug Burgum will lift the state's mask mandate and business capacity limits effective January 18 2021. Stories everywhere. 

Military parade: This is pretty funny: due to Covid-19 and the excitement Sleepy Joe arouses, the president's inauguration team was concerned no one would show up for President Biden's inauguration. Even President Trump had said he would not attend. So, what to do? This is easy: mandate the US military to show up in force. Remember the military parade Trump always wanted and never go. Biden will get his military parade the day he's sworn into office. National guardspeople from every state will show up for the inauguration. North Dakota is sending 130 national guardspeople. LOL. We did this all the time when I was on active duty. When someone "of importance" was scheduled to visit the base and the commander was concerned no one would show up, the commander mandated (ordered) all personnel to attend. And there were often parades. I can't make this stuff up.

Maybe it won't be so bad. The Bismarck Tribune is now reporting that crude oil production is expected to drop "a little this winter, then stabilize upon spring's arrival and possibly inch upward toward the end of 2021." Weren't we told just a week ago or so, that the state was in deep trouble with crude oil production due to the change in the administration?

Hunting for oil. Holy mackerel! Now "Japan is hunting for oil" to meet "robust" power demand amid faltering LNG stocks. Reported by Platts. This is just like New England in the US. I always thought Japan was better prepared, more pragmatic when it came to energy. Oh, that's right: Kyoto. Or spelled backwards: Tokyo.

Fuel oil. In Japan, low sulfur fuel oil commands strong premium.

Okay, well this was huge. This is pretty funny: an estimated 1,000 fast-food workers across the United States went on strike Friday over low wages, staging protests in honor of Martin Luther King, Jr. President Biden will fix that: the minimum wage will be raised but fast food restaurants will cut staff to pay for the increased wages. I was just checking my old history book: I was unaware that Martin Luther King, Jr., was so focused on the wages of fast food restaurant workers, but there it is.  Maybe the players will kneel before kick-off this weekend in support of the minimum wage, the protest du jour.

The Bismarck Tribune. To see the names of the twenty people in your state who protested yesterday, see page 3.

1,000. By the way, think about that: 1,000. That's what The Bismarck Tribune reported: "An estimated 1,000 fast-foot workers across the United States ...." Do you know what 1,000 people spread across the United States looks like. Fifty seven states -- less than twenty people from each state. Give me a break. "An estimated 1,000 people...." Either that's a huge typo or it was a  really, really slow news day.


The Suez is back! Sea-going tankers now clearly prefer transit from the US to Asia via the Suez Canal, and not, the Cape of Good Hope. Quick! Pop quiz: where's the Cape of Good Hope?

  • 
tip of South America
  • 
tip of South Africa
  • 
tip of Bob Hope's nose
  • 
tip of Tip O'Neill's nose

  • wherever that US naval hospital is anchored (by the way, has that hospital ship been re-deployed to California where it seems to be desperately needed?

Transfer of wealth. The city's first Ferrari dealership soon to open in Caracas, Venezuela. Hopefully these will be EVs.

Week 2: January 10, 2021 -- January 16, 2021

NOTE: most of this is complete. I still have to add Geoff Simon's top ND energy stories and a few other things, but this is pretty close to finished. 

Most under-reported story this week:

Most interesting energy story this week:

Top story of the week:

Records:

Top international non-energy story:

Top international energy story:

  • Volatility of the price of oil; strong surge at beginning of week, only to plummet at end of week

Top national energy story:

Top North Dakota non-energy story:

Top North Dakota energy story:

Geoff Simon's top ND energy stories:

Most egregious ND energy story:

Operators:

Operations:

Fracking:

Pipelines:

Wells of note:

Bakken economy:

Commentary:

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.

Shell's Ethane Cracker In Pennsylvania -- RBN Energy -- January 15, 2021

Wow! What a great coincidence: yesterday the "big" Bakken story was the announcement that an ethane power plant was being considered for a site west of Williston. Someone mentioned that Pennsylvania ethane complex, but not much more was said. 

Now today, an RBN Energy blog on the ethane steam cracker in Pennsylvania.

RBN Energy: Shell's new ethane-consuming steam cracker in the home stretch.

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.

Notes From All Over -- The Late Night Edition -- The Asian - US LNG Paradox -- January 15, 2021

Updates

Later, 2:54 a.m. CT, January 15, 2021: bitter cold brings chaos as global energy systems show strain; power and gas prices spike to records across global markets; more cold weather from the Arctic possible from end of January -- Bloomberg. Wow, perfect storm in a good sense; all bullish for oil companies:

  • weakening dollar;
  • OPEC+ agrees to maintain/cut; Saudi surprises by cutting more than expected;
  • global freeze;
  • global economy recovering from Covid (maybe)

Later, 2:22 a.m. CT, January 15, 2021: see if anyone mentions the Groningen? Nope. Groningen on the blog.

Later, 01:50 a.m. CT: literally one minute after posting the note below the following popped up on twitter. Link to Financial Times here. LNG rally heralds more volatile gas prices to come: spike in demand in Asia triggers scramble for supplies.

When restaurants in Japan open their windows to help combat the spread of Covid-19, you might not think it would have much effect 6,000 miles away in lockdown Britain.

But the shivering diners of Tokyo and Kyoto, where restaurants are still allowed to admit customers for limited hours, are not just an illustration of the differing emphases put by governments on the dangers of the aerosol spread of the virus. They also tell a story of interconnected energy markets and increasingly how what happens in Asia can have a large knock-on effect for the UK and Europe — from what consumers pay to heat their homes to the ability of national grid systems to comfortably keep the lights on.

As a brutal cold snap has hit Japan and much of north-east Asia in recent weeks, Japanese utilities have had to scramble to source fuel supplies. Power prices in Japan have soared to record highs and the government has asked citizens to limit energy consumption by turning off lights and appliances, even while urging them to keep the heating on and the windows open.

But the biggest pinch point for Japan has been the country’s reliance on liquefied natural gas, a once relatively niche commodity that has grown in global importance over the past decade. Japan has long been one of the biggest importers of LNG, which is natural gas that has been super-chilled and compressed so it can be delivered by ship. The country lacks pipeline access to gas or its own reserves of a fuel that it needs for heating, electricity generation and manufacturing.

But as the LNG market has grown, Japan has had to increasingly compete with other countries looking to substitute highly polluting coal. Energy consultancy Wood Mackenzie estimates LNG has risen from 11 per cent of global gas supplies in 2010 to 15 per cent today (and it forecasts it will reach more than 20 per cent by 2040).

Prices for LNG cargoes in the Asian spot market have soared to record levels this week as the cold snap hit, up almost 20 fold from just a few months ago when the market was seen as oversupplied. Energy traders have diverted every LNG cargo they can towards the Asian market, with China and South Korea also scrambling to buy.

But they have been hamstrung by a number of problems, from a lack of available tankers and delays at the Panama Canal, to outages at various projects. Goldman Sachs described the situation this week as a gas market that had “shifted from a bearish perfect storm last year to a bullish perfect storm now”.

Much more at the link. Will be archived.  

Original Post

LNG pricing: Asia vs US. A few days ago a reader asked why Asian LNG could be priced more than 10x higher than US LNG. A reader who knows the subject very, very well replies:

Addressing one of your reader's curiosity as to why US gas prices are not rising despite torrid Asian (and now European) demand:

US LNG plants are operating near 100% capacity: about 11 Bcfd. They are simply maxed out and the feedgas supplies are tied into Henry Hub. 

Somewhat counter-intuitively, US prices may drop mid-February as a shortage of available ships may cause a drop in US LNG exports. Slightly longer term (balance of 2021 out to October or so), HH pricing should stay firm (around $2.80?) as the demand to replenish depleted storage supplies should be very strong.

Taking a slightly broader view, the jarring discrepancies between contractual arrangements versus spot market is/has been HUGE!

That is to say, customers with firm, long term contracts are doing okay. Those needing both LNG and ships on a spot basis ... not so much.

This should greatly incentivize customers such as Japanese, Turkish, and Indian utilities to enter into firm purchasing agreements.

The ripple effect should make for a much more favorable climate for pending US LNG projects to obtain financing which has been the main stumbling block this past year.

Fast and furious:

  • Switzerland: public transportation shut down in Zurich; heavy snowfall;
  • China blinks: may allow imports of Australian coal;
  • Venezuela: one step closer -- to losing Citgo;
  • Norway: to increase production to more than 2 million bpd from 1.7 million bpd now; mostly from the giant Johan Sverdrup field (global warming? EVs?)

Electronic land posting: link here.

Locking It In -- US Shale Producers Making Deals -- January 15, 2021

From Reuters:

U.S. shale producers are taking advantage of the oil market’s rally to levels not seen in nearly a year by locking in prices for future sales.

U.S. crude futures this month jumped above $50 a barrel to the highest since February, 2020. The rally has sparked optimism among shale companies, but after a bracing year of pandemic-induced demand destruction, they are not ready to ramp up production. Instead, they are using futures markets to lock in higher sale prices.

U.S. oil production peaked at nearly 13 million barrels per day in late 2019, but is now around 11 million bpd after the coronavirus lockdowns crushed fuel demand and oil prices. Output is not expected to rise much in 2021, but those that hedged now are guaranteed sales of barrels at more than $50 even if prices drop again.

“Producers locked in a certain amount of wells at a certain price and hedging at $50 makes you look like a rockstar. This year will be about free cash flow,” one executive at a U.S. shale producer said.

Producers that are hedging are likely locking in about 15% to 20% of production at a time, said Tom Petrie, chairman at energy investment bank Petrie Partners.

Fascinating to watch. The consensus, it seems, oil is yet to rise quite a bit more -- and that's refiners are willing to lock in at current prices. What a game!

Another Texas Company Returns To Its Roots -- January 15, 2021

Another one to add to the list

From a press release:

Digital Realty (NYSE: DLR), a leading global provider of data center, colocation and interconnection solutions, announced today (January 14, 2021) it will relocate its corporate headquarters from San Francisco, California to Austin, Texas, strengthening its existing presence in Texas and strategically positioning the company to better serve its increasingly global customer base.  

Digital Realty will maintain a significant presence in the San Francisco Bay Area as one of the world's leading technology hubs, while the relocation of the corporate headquarters to Austin reflect the company's established track record of success and growth in Texas, along with its extensive investment in the state in terms of capital as well as talent. 

Digital Realty has deep roots in the state of Texas, dating back to early 2002 when its predecessor acquired 2323 Bryan Street, a major regional connectivity hub in downtown Dallas.

For the better part of two decades, Digital Realty has been at the forefront of data center innovation, enabling global service providers, multinational enterprises and small businesses alike to achieve various iterations of digital transformation. 

Today, Digital Realty owns more than 30 data centers across the state of Texas, encompassing more than four million square feet and over 100 megawatts of customer capacity.  In addition, nearly 20% of the company's North American employee base is located in Texas

New MacBook Pro Models: Back To The Future -- January 15, 2021

For Apple aficionados this is huge: there are rumors that the next generation MacBook Pro will address the top three irritants of the current (and recent) versions of the MacBook Pro.

First, the MagSafe is back. This is huge. College students loved the MagSafe. The MagSafe was a quick-release power cord attachment. At Starbucks, if someone got up and "tripped" on your power cord, no problem. The power cord simply separated from the computer and nothing happened. With the current USB-C power cord, if one trips on your power cord at Starbucks, the computer is pulled off the table, coffee is spilled, and a huge commotion ensues. Everyone wanted the MagSafe back but no one thought it possible.

So, there, the MagSafe is rumored to be back.

Second, the TouchBar is gone. I don't know anyone on social media that liked the Touch Bar. It has the feeling of something that Microsoft would have come up with. Stubbornly, Tim Cook seemed to stick with the Touch Bar. But now, apparently, someone got to Tim Cook. 

So, there, the Touch Bar is rumored to be gone. And the physical function buttons are restored.

Third, more ports. Wow, that has been a sore spot for new MacBook owners -- so few ports (and the "wrong" kind of ports) that everyone needed to purchase "dongles" or adapters to connect to their peripherals, like printers or external storage devices. Of course, the Apple goal: everything would be connected wirelessly but apparently that was a bridge too far. 

So, there, more ports, and no more dongles if the rumors are true. 

This story was just posted an hour or so ago over at MacRumors. When I saw the article there were only four comments; by tomorrow morning there will be over a hundred. Right now, forty-three minutes after the first comment, there are now seventy-two comments. And I bet all seventy-two comments will be surprised, thrilled, ecstatic. We'll see.

Thursday, January 14, 2021

A Closer Look At The North Range Permits For Two Vertical Duperow Wells -- January 14, 2021

The two new permits today, #38080 - #38081, inclusive:

  • North Range has a permit for an Eagle 2-1V well in NESE 2-145-100, 2207 FSL and 200' FEL
  • North Range has a permit for an Eagle 10-1V well in SENW 10-145-100, 2376 FNL and 1903 FWL

For all intents and purposes, these are wildcats, although they may not make the legal definition as such.

According to the file report, for Eagle 2-1V, #38080; GrassyButte:

  • the Grassy Butte-Duperow pool: the interval below the base of the Birdbear formation to above the top of the Souris River formation
  • geologic tops, TVD:
    • Lodgepole: 10142
    • Bakken: 10985
    • Three Forks: 11027
    • Birdbear: 11267
    • Duperow: 11358
    • Souris River: 11727
  • spacing: 160 acres -- SE 1/4 section 2-145-100;
  • will not be fracked

According to the file report, for Eagle 10-1V, #38081, Rough Rider:

  • the Rough Rider-Duperow pool: the interval below the base of the Birdbear formation
  • geologic tops, TVD:
    • Lodgepole: 9976
    • Bakken: 10796
    • Three Forks: 10838
    • Birdbear: 11057
    • Duperow: 11139
    • Souris River: 11495
  • spacing: 160 acres -- NW 1/4 section 10-145-100;
  • will not be fracked

Record Winds Possible In Southwestern North Dakota Tonight -- January 14, 2021

Link here

Apple Shipped So Many Computers This Past Year, They Literally Shut Down Automobile Production -- January 14, 2021

Previously posted

January 14, 2021: did anyone else catch this? Bloomberg: missing chips snarl car production at factories worldwide:

After first wiping out auto demand, the virus is now hindering parts supply: chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc.

Follow this story here

Could This Become A Bigger Story Than It Already Is? It Literally Feels Like A Race Against Time To Prevent A Disaster -- January 14, 2021

This story is being followed here

From twitter today:

************************************
School Is In Session


Note: Sophia is making up the story that she is "reading" to her students. The "page" on the iPad from which she is reading is a blank page except for a single line from her Duolingo Spanish lesson.

Notes From All Over -- "We're Mad As Hell, And We're Not Gonna Take It Any Longer" Edition -- January 14, 2021

UK: Boris Johnson given bombshell warning -- lift the lock down or face leadership threat. Enough is enough. His days are numbered unless ... link here -- from MP who ousted Theresa May. 

Panama Canal congestion: link here

Chips: semiconductors in short supply -- The WSJ. When I first decided to add "chips" to the list of those things that I wanted to track in 2021, I had no idea this is where we would end up: a huge shortage. I was mostly interested in the Apple M1 chip. But now, the big "chip" story is the global shortage. Toyota has already shut down production in China due to the shortage and now says the shortages could continue through the spring. Look at this: Taiwan Semiconductor Manufacturing Co -- TSMC -- wow -- 

Semiconductor companies are asking their customers for patience as the industry works through a sharp increase in demand from makers of everything from cars to consumer electronics.

The chip shortage has caused prices to rise for certain semiconductors, delays in filling orders and auto makers to idle factories. If the problems persist, consumers may see delays in getting new cars and some electronic devices, and possibly higher prices.

There is no quick fix to the situation, either. Adding new chip-making machinery can be expensive and slow, and some of the deepest supply problems are taking place with older production lines that are less lucrative for manufacturers.

“In the whole semiconductor industry there is very little [spare] capacity right now—everything is doing well,” said Risto Puhakka, president of VLSIresearch, an industry-analysis firm. “We’re coming off a record investment year, and the demand continues to grow.”

The shortages add to the upheaval currently affecting the semiconductor industry. Intel Corp. this week outsted its chief executive, Bob Swan, after product delays, and mobile-phone chip giant Qualcomm Inc. added to a deal-making frenzy.

Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, said Thursday it was working with the car industry to address critical shortages. Chief Executive C.C. Wei also said TSMC’s customers are likely to boost chip inventory to protect against future bottlenecks. The manufacturer said it was boosting capital investments by at least 47% this year from 2020 amid surging demand.

Suppliers as diverse as graphics chip maker Nvidia Corp., America’s largest semiconductor company by value, and NXP Semiconductors NV, a Dutch supplier of automotive, industrial and communications chips, are being affected by supply crunches.

Demand for laptops has skyrocketed, and remote work during the Covid-19 era has increased appetite for cloud-computing services and the data centers behind them. On top of that, a surge in demand for chips that go into new 5G phones has put a squeeze on manufacturing capacity, chip companies say. And U.S. restrictions on Chinese telecom giant Huawei Technologies Co. led competitors to try to steal market share.

Much more at the link.

 Bloomberg: missing chips snarl car production at factories worldwide.

After first wiping out auto demand, the virus is now hindering parts supply: chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc.

And while the newest cars require more chips, so do the latest consumer gadgets. Smartphones using so-called 5G connectivity require 40% more semiconductors than older 4G versions. Chip foundry Taiwan Semiconductor Manufacturing Co. reported record fourth-quarter revenue last week, with new 5G iPhones taking up a large chunk of capacity.

The auto-chip shortage stems from overly conservative demand estimates made early last year as car plants closed to cope with the onset of the pandemic, De Vos said. Once the plants re-opened, vehicle sales rebounded more strongly than anticipated after governments unleashed stimulus packages and commuters avoided public transport.

Toyota, the world’s No. 2 automaker, said the impacted lines were at its factory in Guangzhou, in China’s south. The suspension could result in a cut in January’s output of as much as 30% depending on how long it drags on, the Nikkei reported earlier Tuesday, without attribution. Toyota jointly operates the site with Guangzhou Automobile Group Co. Toyota is additionally lowering output of a pickup made in Texas.

Honda, which had to scale back output at its U.K. plant last week, said it will reduce manufacturing of the Accord, Civic and Insight sedans, as well as the Odyssey minivan and Acura RDX, a crossover sports-utility vehicle. The Japanese automaker is also reducing output by about 4,000 cars at a domestic factory, while Nissan Motor Co. is adjusting production of its Note hatchback.

VW said last month it would have to change manufacturing plans. Fiat Chrysler Automobiles NV is temporarily closing a Canadian plant and delaying the restart of output at a Mexican Jeep factory until the end of January.

In North America, Ford is idling a SUV factory in Kentucky.

Semiconductor-based components are set to account for more than 50% of a car’s manufacturing cost by 2030, up from about 35% now, according to a report by China EV 100 and Roland Berger.

Much more at the link. 

Five Permits Renewed; Two New Permits -- January 14, 2021

Electric fracks: Halliburton

NGL processing plant ready to go on line, data points from The Bismarck Tribune:

  • west of Williston
  • Outrigger Energy II's Bill Sanderson Gas Processing Plant
  • 250 million cubic feet of natural gas/day
  • a cryogenic plant: it can go further than some of the other processing plants in the state by cooling the gas enough to separate out ethane and propane from methane, the main ingredient of raw natural gas
  • pipeline connecting to that facility: an 80-mile pipeline starting in southeastern Williams County
  • anchor customer: XTO, a subsidiary of ExxonMobil
  • this plant brings capacity capacity statewide to 3.6 billion cubic feet per day
  • the state produced nearly 2.9 billion cubic feet of gas per day
  • also connected to two other pipelines:
    • Northern Border pipeline
    • Oneok 

Natural gas processing plants in North Dakota, tag: link here

Natural gas processing plants in North Dakota tracked here

Bismarck Tribune photo archived.

**************************************
Back to the Daily Report

Active rigs:

  • data again sequestered by NDIC
  • WTI: $53.76

Two new permits, #38080 - #38081, inclusive:

  • Operator: North Range Resources
  • Field: Grassy Butte (McKenzie); Rough Rider (McKenzie)
  • Comments:
    • North Range has a permit for an Eagle 2-1V well in NESE 2-145-100, 2207 FSL and 200' FEL:
    • North Range has a permit for an Eagle 10-1V well in SENW 10-145-100, 2376 FNL and 1903 FWL
  • see more at this post;

Five permits renewed:

  • Kraken (4): four Bigfoot permits in Mountrail County;
  • Liberty Resources: a Tucson permit in Mountrail County;

Crypto-mining -- Reality Sucks -- January 14, 2021

Oil prices: a perfect storm (in this case, a good storm)? Did Saudi get it right time? Third time's a charm:

  • weak dollar
  • cut in production
  • risk-on trade (Covid-19; global economy expected to expand)

The Fed: from a conservative financial advisor / analyst at a major financial institution earlier today -- based on Jay Powell's comments today --

  • Powell said they want to see inflation rate at 2% for quite some time -- which means at least for one to two years after inflation hits 2%;
  • Fed with two mandates: inflation and jobs; no comment regarding which one the Fed was paying attention to right now;
  • the Fed would be happy with 10-year Treasury at an average of 2% -- if that's an average going back several years, it would take several years to average 2%; he thinks the Fed would be willing to let the 10-year Treasury go to 5% to get an average of 2% over several years;
  • I may have the specifics wrong, but that was the general conversation
  • bottom line: the Fed is not worried about the 10-year Treasury at all
  • 10-year Treasury today: after dropping below 1.1% is now back above 1.1%;

Crypto-mining: link at Aljazeera; also at Bloomberg, elsewhere: Iran's smog, blackouts made worse by power-sapping crypto-mining. Is this why Iran needs that nuclear energy?

  • Three big locations for cryptomining: Iceland, Iran, and China. Probably also Russia. 

NYC rentals surge; up 94% in December. I assume this is month-over-month. Rental rates have come down significantly. CNBC. But the vacancy remains at a record. 

Airlines: enough is enough. 

First, the end of the "comfort animal" scam. Now the FAA steps in and tells the airlines: zero tolerance when it comes to "unruly behavior." Zero tolerance, masks, $35,000 fines, jail time on the table. All fallout from the storming of the Capitol last week.

Also, no longer can folks "check" firearms when traveling to Washington, DC.

These are temporary measures to expire March 30, 2021, but my hunch: "everyone" wants to seem them extended indefinitely. Why shouldn't there be zero tolerance for unruly passengers on airlines? This FAA directive also gives airlines "cover" from successive liability suits.

United is adding folks to their list of "banned from the airline forever."

Energy stocks: on fire. Every time I look up at the CNBC crawler I see familiar energy ticker symbols surging and I'm not using the word loosely. It is truly incredible. For example, I just noticed PSX, up 4% and pays almost 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. 

Natural gas fill rate. Link here.  

Gasoline demand. Link here.