Tuesday, February 18, 2020

Notes From All Over, Part 1 -- February 18, 2020

Boardings in the Bakken, January, 2020, passenger boardings commercial airports, across the entire state of North Dakota, up 12% over January, 2019:
  • every commercial airport saw an increase in boardings except Grand Forks;
  • Dickinson: up 13.5 percent
  • Bismarck: up 12 percent
  • Minot: up 9 percent
  • Williston: up 5.4 percent
  • the other three cities were not mentioned: Fargo, Jamestown, Devils Lake?
  • anecdotally business activity is about the same year-over-year; 
  • my hunch: some NoDaks are seeing huge increases in their net worth due to oil sector and are spending some of that money on winter trips to Hawaii and Phoenix;
Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

The market: the Dow is not the market but it certainly seems ... we've discussed this before. Let's move on. The Dow was down about 300 points at its worst today but finished down about 160 points. Pretty amazing, considering.

Coronavirus statistics for February 18, 2020. I haven't seen them yet; let's look together, at the same time. Coronoavirus statistics.
We've leveled off at 6 to 7% worldwide, change in total, day-to-day, but change in daily was incredibly bad news. The change in daily, day-over-day, was a whopping 39%.
The biomedical statisticians should have fun with this.

One wonders if the Chinese going back to work has something to do with this. I would still like to see some analysis of the health status of the folks who died before they were infected with SARS-CoV-2.
NASCAR: still no "real" news regarding Ryan Newman, Daytona 500. NASCAR will look at this closely -- the events leading up to the accident, and the event that caused the accident -- but I'm not hopeful that any changes will be made. I might come back to this later.

Costs of renewable energy: back to Australia. The article is too complicated to review here. Elon Musk is salivating. He knows that Americans won't be able to figure this out -- but he will end up selling them a lot of batteries.

Cash-back: this credit card cash-back stuff is quite incredible. I just received my "cash-back distribution" from Costco today. And the annual distribution from USAA almost pays for car insurance for six months; in fact, I think it does and then some. Best of all: Amazon, of course. On top of that there are some incredible deals on Amazon. The other day I saw a hard-cover coffee-table book that was the cat's meow, as they say. At the local bookstore (not Barnes and Noble) it was selling for $50 and no discount. At Amazon, for some inexplicable reason, it was selling for $5.91. And it was being sold by Amazon, not a third party seller. It arrived yesterday (one-day free shipping), and brand-new, still in its shrink-wrap. 

Bernard Kerik: one of those folks that President Trump pardoned / commuted today. Interesting, interesting story for the crime he was serving.

Zero Hedge: one of the first -- if not the first -- to report the possibility of a Chinese lab "producing" the coronavirus. After that revelation, Zero Hedge was banned from twitter. More and more stories now coming from other sources suggesting that it was entirely possible that a Wuhan lab was responsible. Tonight, it is being reported that US Senator Tom Cotton (R-Arkansas) is suggesting that that story should be seriously entertained.

Barr: now we got the Democrats defending Barr.

"Because they're crap!"

Vincent, Freddie Starr

The Brits are simply brilliant.

I assume that, subconsciously, Sophia painting on the iPad brought me here tonight.

Doomsday Chronicles -- Illinois Re-Visited -- February 18, 2020

It's laughable to see former President Obama arguing with President Trump about (the) origins of the incredibly good economy we now have. Three observations:
  • Democrat nominee Hillary Clinton never ran on the great Obama economy;
  • the Obama recovery was the worst in the nation's history (if it was a recovery at all);
  • the $800 billion stimulus did not contribute to the recovery (it was a recovery at all) -- had it been a recovery, Hillary would have ran on that;
Things were so bad during the Obama administration, I had a whole section of the blog dedicated to "the doomsday chronicles," where state/city finances and city bankruptcies were discussed and linked."Doomsday chronicles" for the states were linked here.

Then, all of a sudden, those stories disappeared in 2017. Completely gone.

Well, not completely.

Over at ZeroHedge, we are reminded of Illinois.

At that link, look at two charts. 

The authors say Illinois' unfunded pension liability is $241 billion, FY 2018.
Two charts: 

This is very interesting.

In 2015 (http://themilliondollarway.blogspot.com/2015/02/illinois-americas-greece-eonomist.html) the unfunded pension liability was said to be $111 billion.

If those numbers are accurate and measuring the same thing, Illinois more than doubled their unfunded pension liability in less than three years, from $111 billion in 2015 (perhaps 2014) and $241 billion in FY 2018.

One-fourth of the Illinois budget is required to fund annual pension costs. The graph that is missing, is this percentage over time. Are things getting worse, or are things getting better? 

Another way to look at this: 75% of Illinois revenue funds the state (outside of the pensions). What is the per capita tax collection by state? Link here.
  • DC: $11,000 
  • New York: $9,000 (second highest in the nation)
  • ND: $6,600
  • MN: $6,000
  • CA: $6,000
  • TX: $4,000
  • FL: $3,500
So, what is it for Illinois? $5,654. Within the ballpark for other other "high-tax" states, but a long way from NYC and DC.

75% of Illinois' $5,654 = $4,240 -- in the same ballpark as that of a lot of other states. And still significantly more than Florida, New Mexico, Arizona, South Carolina or Alabama.

One could argue that Illinois has two problems:
  • underfunded pensions; and,
  • mismanagement of the taxes they do collect.
By the way, look at the two states at the far right in the two graphs.

Eight New Permits Reported -- February 18, 2020

Active rigs:

Active Rigs5664564038

Eight new permits, #37385 - #373892, inclusive:
  • Operators: Hess (4); Whiting (2); MRO (2) (Whiting, MRO from last week)
  • Fields: Jim Creek (Dunn); Sanish (Mountrail); Killdeer (Dunn)
  • Comments: 
  • Hess has permits for a 4-well LK-Olson pad in SESW section 29-145-96; Jim Creek oil field;
  • (from last week) Whiting  has permits for a 2-well Roggenbuck/Roggenbuck Federal pad in NENE section 24-153-93, Sanish oil field;
  • (from last week) MRO has permits for a 2-well Hausauer / Saxvik pad in SWSW section 22-145-94 , Killdeer oilfield;
Released from confidential status:
  • 18036, PNC, Texakota, H. Borstad...
  • 18037, PNC, Texakota, Hemsing ...
  • 18154, PNC, Texakota, H. Borstad...
  • 18155, PNC, Texakota, H. Borstad...
  • 18174, PNC, Texakota, H. Borstad...
  • 18179, PNC, Texakota, H. Borstad...
  • 18185, PNC, Texakota, H. Borstad...
  • 18186, PNC, Texakota, H. Borstad...
  • 18202, PNC, Texakota, Hemsing ...
  • 36285, 1,116, Nine Point Energy, Hovde E 150-100-6-7-5H, middle Bakken; 60 stages; 10.2 million lbs; Spring Creek, t9/19; cum 143K 12/19;
  • 35882, 606, Liberty Resources, Three Forks, 27 stages; 10.8 million lbs; Kaitlyn 158-93-30-31-4TFH, East Tioga, t8/19; cum 64K 12/19;
    Seventeen permits renewed:
    • Petro-Hunt (11): multiple permits in Divide County -- Hagen, Hurinenko, Hartman, Laura, Bob, Kelly, Kade, Jeffrey, Maria, Marlyn, and Macey;
    • Oasis (4): four Foley Federal permits in McKenzie County; 
    • Whiting: an Armas permit in Mountrail County;
    • Slawson: one Wolverine Federal permit in McKenzie County;
    Nine permits canceled:
    • Texakota: seven Borstad permits and two Hemsing permits, all in Williams County;
    No producing wells (DUCs) reported as completed:

    10-Well Marathon Oil Pad In Antelope Oil Field Updated -- February 18, 2020

    See this post.  Two of the wells on the 10-well  pad have each gone over 500K cumulative crude oil.

    North Dakota On Another Top-5 List

    Least populated states in the country.

    #5: South Dakota
    #4: North Dakota
    #3: Alaska
    #2: Vermont
    #1: Wyoming 

    For The Record

    I see that I was sourced for a note in a biography of Wyndham Lewis.

    The book is available at Amazon for $102.40, hardocover.  

    My review of the Paul O'Keeffe biography of Wyndham Lewis can be found here.  

    A Closer Look At A Nine Point Energy Hovde Well In Spring Creek Oil Field; Almost 150K In Four Months -- February 18, 2020

    Spring Creek oil field: here

    The well:
    • 36285, 1,116, Nine Point Energy, Hovde E 150-100-6-7-5H, middle Bakken; 60 stages; 10.2 million lbs; Spring Creek oil field, t9/19; cum 143K 12/19; 
    • spud date: June 27, 2019
    • depths:
      • TD date: July 8, 2019
      • total depth: 21,161' MD
      • 10,987.48' TVD
    • 10,113.09' VS (note the precise depth: 0.09 feet = 1.08 inch)
    • Cyclone 36
    • lateral:
      • lateral: 11,266' to 21,161' MD
      • average gas in lateral section: 2,236 units;
      • maximum gas in lateral section: 7,169 units;
    Production profile:
    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

    By the way, Nine Point Energy is also very active in Eightmile oil field, west of Williston.

    Top Story, North Dakota Energy, Last Week -- Geoff Simon -- Royalties -- February 18, 2020

    This is actually one court ruling that I can understand after reading it only once. 

    First, this:
    In a strongly worded letter to its members, the North Dakota Petroleum Council (NDPC) calls a decision by the state Land Board an "overreaction" to a recent court decision regarding royalty deductions associated with processing natural gas.
    The Land Board this week issued guidance to Land Commissioner Jodi Smith regarding a ND Supreme Court ruling in the case of Newfield Exploration v State of North Dakota.
    The bottom line of the court ruling was that "Gross proceeds from which royalty payments under leases are calculated may not be reduced by an amount that either directly or indirectly accounts for post-production costs incurred to make the gas marketable."
    In response, the Land Department sent a letter to producers notifying them that if they have been deducting post-production costs from royalty payments, they have been underpaying royalties. NDPC takes issue with the state's insistence on royalty payments going "as far back as 1979, long before the Newfield ruling was handed down."
    The Petroleum Council maintains that the law does not require a lookback beyond the Newfield case, which was initiated in 2017. 
    The Land Board included a flowchart with the letter that specifies how the gas royalties should be paid and would impose penalties and interest that NDPC says "will cost our industry tens of millions that would otherwise be invested in drilling new wells or gas capture infrastructure." The Petroleum Council's letter argues that the Land Board's action "violated the public trust by prioritizing what amounts to a quick cash grab over the health of the very industry that is sustaining the trust funds under the Land Board's control." NDPC urged its members concerned about the issue to contact Land Board members.
    Lynn Helms:
    North Dakota's top oil-regulator said he is concerned about potential consequences of the state Department of Trust Lands' action regarding collection of unpaid royalties on natural gas.
    Lynn Helms, director of the Department of Mineral Resources, said he cautioned the Land Board that being overly aggressive in their efforts would be a disincentive to reduce flaring "because the quickest and easiest way to reduce the royalty burden on gas is to flare it."
    With natural gas wellhead prices well below $2.00 per thousand cubic feet, it is not economic to capture and process the gas.
    It is only because of state's gas capture regulations that they are compelled to do so. The inability of producers to deduct expenses from royalty payments tends to discourage investment in gas capture infrastructure.
    Helms said he advised the Land Board to consider the implications of any decision to collect royalties on natural gas on the much larger pot of royalties paid on oil production.
    1979? Get out the popcorn.

    Long Ago, And Far Away

    An earlier life:

    It's hard to see, but it appears we (John Erickstad and I) were both majors in this photograph.
    "Field grade” officers are mid-level executives in the grades of major (O-4), lieutenant colonel (O-5) and colonel (O-6). Traditionally, [US army] companies were organized into regiments commanded by colonels and assisted by a lieutenant colonel (as the second-in-command) and a single major (serving as the senior regimental staff officer and performing essentially the same function as a modern-day battalion or regimental operations officer, or “S-3” officer).

    “Company grade” officers are junior executives in the grades of lieutenants (second and first) and captains (O-1 through O-3). Link here

    Update On The Bakken -- RBN Energy; Only Two Wells Coming Off Confidential List -- February 18, 2020

    US: still thinks efforts can stop Nord Stream 2 gas pipeline in the Baltic Sea

    Tehran goes dark: power outage in the middle of winter. Lights out; cold. Running short of natural gas.

    Back to the Bakken

    NOG: to report 4Q19 and year-end 2019 financial and operating results on Thursday, March 12, 2020,

    Active rigs:

    Active Rigs5664564038

    Wells coming off the confidential list:

    Tuesday, February 18, 2020: 43 for the month; 150 for the quarter, 150 for the year:
    • 36285, 1,116, Nine Point Energy, Hovde E 150-100-6-7-5H, middle Bakken; 60 stages; 10.2 million lbs; Spring Creek, t9/19; cum 143K 12/19;
    Monday, February 17, 2020: 42 for the month; 149 for the quarter, 149 for the year:

    Sunday, February 16, 2020: 42 for the month; 149 for the quarter, 149 for the year:
    • 35882, 606, Liberty Resources, Three Forks, 27 stages; 10.8 million lbs; Kaitlyn 158-93-30-31-4TFH, East Tioga, t8/19; cum 64K 12/19;
    Saturday, February 15, 2020: 41 for the month; 148 for the quarter, 148 for the year:
    • None.
    RBN Energy: Bakken crude oil production growth spurs gathering system developmentArchived.