A Reminder That I Track DUCs And Inactive Wells In The Bakken -- December 11, 2019

Over at oilprice, "they've" gotten into a discussion regarding DUCs.

For those interested in DUCs and inactive wells in the Bakken, they are tracked here. 

Almost One Year To The Day -- Keeping The Bakken Great -- ONEOK -- December 11, 2019

Do you remember this from December 21, 2018? One year ago, almost to the day:

Wow, keeping North Dakota great! From The Bismarck Tribune: natural gas liquids (NGLs) pipeline proposed for northwest North Dakota -- in other words, the heart of the Bakken. Wow! From the linked article:

• ONEOK: seeking permit to built regional pipeline to connect with its Elk Creek Pipeline -- natural gas liquids pipeline --
• Demicks Lake Pipeline Project
• 77-mile-long pipeline
• at $1 million/mile = $77 million estimate
• the company says: $125 million
• seventy-five miles inside state of ND
• includes nine miles under the Little Missouri National Grassland with existing infrastructure
• from a processing plant under construction in McKenzie County
• Demicks Lake I and Demicks Lake II: both under construction northeast of Watford City
• would add a total processing capacity of 400 million cfpd
• Demicks Lake I should be completed by 4Q19
• 40,000 bbls of NGLs/day from Watford City area to Richland County, MT
• Elk Creek Pipeline will be constructed in Richland County (would that be Sidney, MT?)
• Elk Creek pipeline under construction, from Sidney, MT, to Bushton, Kansas: capacity - 240,000 bpd
• seventy-five miles inside state of ND
• both pipelines would transport Y-grade natural gas liquids; transported together, separated later; see this RBN Energy on Y-grade NGLs;
• there are no reservations along the planned route
• there was no mention of sage grouse
• "existing infrastructure" always has a nice ring to it

The Bismarck Tribune link here.

The Elk Creek pipeline:

The $125 million project will connect with the Elk Creek Pipeline, a 900-mile pipeline under construction to transport natural gas liquids from Sidney, Montana, to Bushton, Kansas.

Well, ONEOK says the 900-mile pipeline has been completed. Wow.

FWIW -- Atmospheric CO2 -- November, 2019, Data

Link here.

 

November, 2018, data here. It was 408.02.

410.27 / 1,000,000
- 408.02 / 1,000,000
= 2.25 / 1,000,000
= 0.00000225
= 0.000225%

My math is wrong, and has been questioned. See first comment. 

Posted the other day:

They say global warming could increase global temperatures by as much as three degrees. Okay. I'm kind of hoping for an increase of seven to ten degrees. Just saying.  

Notes From All Over, Part 1 -- December 11, 2019

Gasoline demand. Link here.

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Other Stuff

Two big observations regarding the news today. Like him or hate him, again Trump is proven right again.

First: Trump was right about James Comey. He had every right to fire him. Should have been done sooner.

Second: Trump was right about "the Fed." The chairman as much during the press conference Q&A  when he said he/they made a mistake by raising rates earlier; not cutting them soon enough. That's exactly what Trump had said all along. 

Pretty remarkable. I doubt mainstream media will pick up on these two observations.

In addition, three comments on this story, why one investor is not concerned about Warren Buffett sitting one $130 billion in cash.  One observation regarding the story; and two observations regarding the comments. Fifty comments so far.

• malarkey: that he's sitting on $130 billion in cash to cushion a possible implosion of the stock the day it's announced he or Charlie Munger is in the hospital
• foolish: if that $130 billion is only earning money market rates, he is an incredible foolish investor; he always says he "bets" on America and there are plenty of great American companies paying much more than money market rates
• idiots: I can't believe all the folks commenting about preparing for the recession that's right around the corner. A recession can't possibly happen any earlier than 2H20, and does anyone really think Trump will let the economy contract during his re-election campaign? Trump controls the timing of the Chinese tariffs and that's the third pillar of the three-legged stool driving this market

Liquidity, the banks, and the Fed: what sector needs more cash than ever? And what sector is least likely to get more cash from banks. Hint: same sector in both cases. 

On another note, I've never had so much fun as now, after Schwab lowered commission fees .... to $0.

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

Futures me squat, but right now they are green.

Take My Breath Away, Berlin

Only One New Permit Today; Rigs Down To 53 -- December 11, 2019

Active rigs:

$58.76	12/11/2019	12/11/2018	12/11/2017	12/11/2016	12/11/2015
Active Rigs	53	65	52	40	65

One new permit today, #37260:

• Operator: BR
• Field: Corral Creek (Dunn County)
• Comment: 
• BR has one permit for a CCU Pacific Express well in section 19-147-94, Corral Creek;

Four confidential Hess wells have been placed on the "plugged or producing list:

• four RS-Harstad wells in Mountrail County

Two permits renewed:

• Petro Harvester: one FLX4 permit, Burke County
• XTO: one BGU Janice permit in Williams County

Did AAPL Hit An All-Time Intraday High? -- December 11, 2019

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

AAPL: today's range -- $268.53 - $271.07. I believe the previous intra-day high was $271.04, or thereabouts. But AAPL did hit $271 intra-day last week. Currently trading at 269.93 (12:26 p.m. CT, December 11, 2019).

The Fed:

• rates unchanged
• inflation less than 2%
• "the Fed" will "accept" an unemployment rate "this low" -- well, that's nice

What Is Red Trail Energy Up To In Stark County? Drilling A CO2 Injection Well So Their Ethanol Meets California Fuel Standards -- December 11, 2019

Recently I noted a "new" operator in the Bakken. Not quite correct. If as a new operator, one means drilling injection wells, then it's sort of correct (it's not in the Bakken either). Here's the story, also posted elsewhere:

December 11, 2019: what is Red Trail up to? From April 20, 2019, US News, a carbon capture project. Data points:

• this is being done to meet West Coast fuel standards
• the company recently completed a geophysical survey of eight square miles around the plant
• company's goal is to produce ethanol that will meet the low carbon fuel standards of California and/or the Pacific Northwest
• the company and the EERC are targeting the Broom Creek formation, about 6,400 feet below ground that area
• proposal: to inject about 160,000 metric tons of CO2 per year into the well
• leaks? can anyone say Aliso Canyon gas leak?

US Dominance In Oil, Natural Gas -- Forbes -- December 11, 2019

Now that I've had time to look at the Forbes story that a reader sent me, time for a stand-alone post regarding same. This was the original post.

From the Forbes link, the lede:

The American fracking for oil and natural gas boom will continue on through the 2020s. And why not? Since fracking took off in 2008, we have more than doubled our proven oil reserves to ~65 billion barrels. Natural gas reserves have surged over 80% to ~430 trillion cubic feet. Already the largest oil and gas producer, the U.S. is set to increase its share of ~17% of global oil production and ~23% of gas. In the 2020s, the U.S. is set to supply over 60% of new oil and gas -- see figure at link. 

Natural gas? Staggering:

For natural gas, although the associated gas supply coming from the Permian will help keep U.S. prices low, another 10% rise in U.S. shale gas output to above 100 Bcf/d is to be expected over the next two years. This means that we will soon be producing 50% more gas than Russia, just having passed it in 2009.  

For investors and policy makers:

Ultimately, 1) oil having no significant substitute, 2) gas rising toward being 50% of all U.S. power capacity, and 3) a surging export complex to export both fuels ensure that our massive resource base will be developed. Simply put, those pushing divestment should realize that it obviously cannot work: divestment does nothing to reduce demand. 

Collusion:

Vladimir Putin knows that U.S. shale production and surging associated exports are throwing a big wrench into his grand strategy of energy domination. Russia’s position as the largest oil and gas exporter rakes in over $300 billion each year. No wonder then that Putin has been funding NGOs whose job is to persuade governments to stop shale development. “Without Fracking For Natural Gas, The U.S. Loses And Putin Wins,” making anti-shale positions the real “Russian collusion” story. 

The next revolution?

As for the “end of shale,” be....very careful with that. You should know that not even the industry itself ever saw the revolution coming in the first place. I really do think, however, that the next energy revolution could be CO2-EOR, for which we have literally hundreds of billions of barrels of oil in mature fields primed for development, while also storing CO2 safely in the ground to cut emissions. Now yielding ~450,000 b/d, the industry itself does not promote CO2-EOR nearly enough. But to its credit, the Natural Resources Defense Council calls CO2-EOR a win-win-win for our environment, energy, and economy. 

Graphics:

From a previous post:

EIA's Weekly Petroleum Report -- December 11, 2019

Link here.

• US crude oil in storage: 447.9 million bbls
• US crude oil in storage, week-over-week change: a meager increase of only 0.8 million bbls
• refiners operating at 90.6% capacity which is really low, and yet there was only a build of 0.8 million bbls; let's look at imports --
• imports: hmmm, interesting. Imports averaged almost 7 million bbls per day last week which is up by almost a million bbls per day from the previous week; but still, the four-week average is almost 20% less than this time last year. So, it is what it is. My hunch, a reader will help explain all this.
• Jet fuel production was up almost 3% compared with same four-week period last year
• despite the meager increase, WTI was down $1.03 after the report; but still above $58; one wonders if the Chevron's news brought WTI down; oilprice said the drop in WTI price was due to the "build," but, of course, that's ridiculous -- unless, of course, it's because analysts had expected a draw of 3 million bbls -- whatever --

Re-balancing: majority of weeks hidden to make graphic manageable:

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 43	September 18, 2019	1.1	417.1
Week 44	September 26, 2019	2.4	419.5
Week 45	October 2, 2019	3.1	422.6
Week 46	October 9, 2019	2.9	425.6
Week 47	October 17, 2019	9.3	434.9
Week 48	October 23, 2019	-1.7	433.2
Week 49	October 30, 2019	5.7	438.9
Week 50	November 6, 2019	7.9	446.8
Week 51	November 14, 2019	2.2	449.0
Week 52	November 20, 2019	1.4	450.4
Week 53	November 27, 2019	1.6	452.0
Week 54	December 4, 2019	-4.9	447.1
Week 55	December 11, 2019	0.8	447.9

Could The Number Of Active Rigs Drop To Less Than 50 During The Winter; Wet Spring? -- December 11, 2019

EVs: EV sales in China slump. 

SUVs: bigger than ever. St Greta doesn't have a driver's license yet, but when she does, her vehicle of choice will be the new Chevrolet Tahoe. Black. With Tesla's shatter-proof windows.

But big mistake? GM doubles down on big SUVs to pay for tomorrow's electric cars. 

Truck sales? All I hear is "bad news" from the trucking industry -- but then this -- truck maker Paccar issues a special $2.30-per-share dividend to those holding the stock on December 20, 2019 -- a week from this Friday. Good luck to all. The special dividend is in addition to its regularly quarterly dividend, paying $1.28 per annum (1.58%). The stock is trading at about $81/share today.

Global warming? What global warming? Brazil ignores climate concerns. Full speed ahead. 

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

Chevron writes down $10 billion in assets/reserves. Shares off a whopping 0.7%. Tomorrow this news will be forgotten. See disclaimer.

In the money: Enbridge sees higher 2020 core earnings.  ENB up 0.41% today in a quiet market; trending toward $40/share. 52-week high, $39. Pays 6.32%. What's not to like? Canadian taxes. LOL. See disclaimer.

As long as we've gone this far, let's look at AAPL: up $1.50, had pretty much returned to its all-time high of $271.

Trucks: CAFE standards don't apply. Bigger SUVs on a truck platform? Enquiring minds want to know.

******************************

Back to the Bakken

Denbury, from a reader earlier today:

On December 9, 2019, Denbury Resources Inc finalized the offering of a voluntary separation program to certain eligible employees as part of the Company’s ongoing efforts to reduce costs.

One hundred company employees (approximately 12% of its workforce) voluntarily chose to participate in the VSP, comprised of employees both in the company’s corporate headquarters and in the field, with most of the impacted employees scheduled to terminate employment by the end of January 2020.

The company estimates that the aggregate cost of the VSP will be approximately $17 million for one-time cash payments for severance and related costs, which is expected to result in a pre-tax charge to earnings in the fourth quarter of 2019, with most of the cash paid out during the first quarter of 2020.

The company currently expects ongoing annual savings associated with the reduction in force to be approximately $21 million, with such savings allocated across general and administrative expense (approximately 45%), lease operating expense (approximately 35%) and capitalized costs (approximately 20%).

My reply, not ready for prime time:

All oil companies are in the process of cutting costs.

I forget when it was but I saw the thing back in the 80s (?) in North Dakota when oil was in the doldrums.

My dad had an office building in which he rented out the back to an oil company. When times were flush, he said, oil companies spent money "like crazy" (actually something about "sailors") but when times got tight, they could really, really cut back. Same thing now.

With regard to oil, I think investors are looking out to 2022. What, I think, will be most amazing, ND production will still do well -- maybe even set more production records -- despite cut in spending, fewer rigs, etc.

Active rigs:

$58.98	12/11/2019	12/11/2018	12/11/2017	12/11/2016	12/11/2015
Active Rigs	53	65	52	40	65

Wells coming off the confidential list -- Wednesday, December 11, 2019: 35 for the month; 240 for the quarter:

• 36501, 526,  Koda Resources, Stout 2932-2TH, Fertile Valley, t9/19; cum 18K over 29 days;
• 36182, drl, XTO, Olaf 42X-11C, Capa, no production data,

RBN Energy: announcement -- RBN School of Energy + International Now Online.