Notes From All Over, The Midnight Edition -- May 19, 2020

LPGA: why is the CEO of the LPGA a male? I don't know anything about women's golf but a male as the CEO of the LPGA just strikes me as really, really wrong.

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That southern wall. Another $1.28 billion project. When Nancy Pelosi, et al, are putting together $2 trillion, $3 trillion, and who knows what else, spending bills, all of a sudden, $1.28 billion seems pretty picayune, for lack of a better word. Heck, even that $100 billion California bullet train seems like a bargain.

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Stories That Fascinate Me Right Now

Observations:

• Tesla moving hook, line, and sinker to Texas; leaving California (Governor Newsom morphing into Occasional Cortex)
• Amazon looking to buy JC Penney
• Occidental / Berkshire Hathaway
• the Mideast, particularly Iran: it's way too quiet
• North Korea: crickets

Led Zeppelin

The Bakken Can Be Absolutely Mind-Boggling -- May 19, 2020

From an older note:

• June 5, 2019
• 31278, 4,862, Slawson, Torpedo Federal 10H, Big Bend, t12/18; cum 178K in 41 days; TD: 25,490 feet;139,068 bbls in 29 cays, 4/19: see this post;

So, how is that well doing?

Updated:

• May 19, 2020:
• 31278, 4,862, Slawson, Torpedo Federal 10H, Big Bend, t12/18; cum 575K 3/20; TD: 25,490 feet;139,068 bbls in 29 cays, 4/19: see this post;

This well was drilled/completed back in late 2018, tested at the very end of December, 2018. Let's see: December, 2019 -- one year. Then Jan - Feb - Mar, 2020 -- three months -- so it's produced less than fifteen months, and has produced almost 600,000 bbls of crude oil.

But when one looks at the production profile, note:

• item:
• 8 days in December, 2018
• off line for two full months in early 2019
• four days of production in March, 2019
• less than a full month in June, 2019; November, 2019; and the first two months in 2020, and then one day in the most recent reporting month.
• bottom line: maybe twelve full months of production; over 600,000 boe
• production
• crude oil: 574,999 bo
• natural gas: 352,406 MCF =  58,725 boe
• total boe in less than fifteen months: 633,724 bbls

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	1	10747	10747	0	0	0	0
BAKKEN	2-2020	19	28825	29272	14088	15653	13652	0
BAKKEN	1-2020	23	42342	42612	26643	30402	26607	97
BAKKEN	12-2019	31	44938	44849	32296	31462	26857	0
BAKKEN	11-2019	21	41356	42007	23710	18080	15089	0
BAKKEN	10-2019	28	40000	39411	33352	27215	22994	0
BAKKEN	9-2019	30	37453	37939	33956	25316	21298	20
BAKKEN	8-2019	29	53320	52834	39184	27544	22884	0
BAKKEN	7-2019	31	33921	34045	1098	23126	19317	141
BAKKEN	6-2019	22	29585	30475	29452	16579	12787	471
BAKKEN	5-2019	30	36801	37642	26249	22557	17513	935
BAKKEN	4-2019	29	136924	135272	93535	98300	79805	3959
BAKKEN	3-2019	4	15385	15626	7510	6506	0	4747
BAKKEN	2-2019	0	0	0	0	0	0	0
BAKKEN	1-2019	0	0	0	0	0	0	0
BAKKEN	12-2018	8	23402	21672	26046	9666	0	7115

Interim Update Of The MRO G-H-M-S-V Pad In Reunion Bay; Wells Not Yet Reporting An IP -- May 19, 2020

The wells:

• 34598, drl/drl, MRO, Hanlon USA 11-28TFH, Reunion Bay, t--; cum --;
• 34599, drl/drl, MRO, McRoberts USA 14-21TFH, Reunion Bay, t--; cum --;
• 34600, drl/drl, MRO, Verne USA 24-21TFH, Reunion Bay, t--; cum --;
• 34601, drl/drl, MRO, Salveson USA 24-21H, Reunion Bay, t--; cum --;
• 34602, conf, MRO, Gerhardt USA 14-21H, Reunion Bay, t--; cum --;

Early production: pending.

34598:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	30	28344	27754	46190	29948	21838	5948
BAKKEN	2-2020	8	9403	8921	14095	8639	1642	6336

34599, 20,764 bbls in eleven days extrapolates to 56,629 bbls over a 30-day month:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	30	31166	31187	67558	32670	0	30568
BAKKEN	2-2020	11	20764	20514	53716	17258	0	15881

34600, 35,219 bbls in sixteen days extrapolates to 84,786 bbls over a 30-day month:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	29	34302	34593	45240	37114	0	34797
BAKKEN	2-2020	16	45219	44676	58995	45660	0	42648

34601, 33,998 bbls in eleven days extrapolates to 67,996 bbls over a 30-day month:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	29	46754	46820	44990	52652	0	49489
BAKKEN	2-2020	15	33998	33589	65974	40499	0	38217

34602:

Date	Oil Runs	MCF Sold
3-2020	55549	0
2-2020	8929	0

Interim Report On WPX Mandaree Warrior Wells, Not Yet Reporting An IP - May 19, 2020

The wells:

• 36261, drl/A, WPX, Mandaree Warrior 14-11HA, Squaw Creek, t--; cum 21K in 40 days;
• 36260, drl/A, WPX, Mandaree Warrior 14-11HX, Squaw Creek, t--; cum --;
• 36463, drl/A, WPX, Mandaree Warrior 14-11HUL, Mandaree, t--; cum --;
• 36259, drl/drl, WPX, Mandaree Warrior 14-11HS, Squaw Creek, t--; cum --;

Early production:

36259, 20497 bbls extrapolates to 36,954 bbls over 30 days:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	14	17245	17422	17301	19280	7826	9438
BAKKEN	2-2020	28	808	523	48	86	0	0

36463, 20497 bbls extrapolates to 63,630 bbls over 30 days:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	15	31815	31571	11290	35569	0	32165
BAKKEN	2-2020	0	0	0	0	0	0	0

36260, 24,388 bbls extrapolates to 66,513 bbls over 30 days:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	11	24388	24235	17840	27265	11000	13656
BAKKEN	2-2020	0	0	0	0	0	0	0

36261, 20,497 bbls extrapolates to 51,243 bbls over 30 days:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	12	20497	20654	11550	22916	10853	9706
BAKKEN	2-2020	28	808	523	48	86	0	0

The Bakken Rocks -- May 19, 2020

OPEC basket: $28.21.

API: reports draw. We'll see what EIA data is tomorrow.

Headline: Permian Basin leads decline in US shale.

• Fact-checked here.

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Back to the Bakken

Active rigs:

$32.36	5/19/2020	05/19/2019	05/19/2018	05/19/2017	05/19/2016
Active Rigs	14	66	61	51	26

Four new permits, #37583 - #37586, inclusive --update, June 11, 2020: Enerplus changes the target from the Three Forks to the middle Bakken --

• Operator: Enerplus
• Field: Moccasin Creek (Dunn)
• Comments:
• Enerplus has four permits for its first "Lithophile Element" pad in section 16-147-93, Moccasin Creek oil field; all 9' FNL; all about 700' FEL
• this is already a very, very busy drilling unit with eight wells currently in production, to the west of where these new horizontals will run; 
• see graphic below

Two producing wells (DUCs) reported as completed:

• 35143, SI/A, CLR, Durant 2-12HSL, East Fork, t--; cum --;
• 36589, drl/A, Rimrock, Skunk Creek 8-2-3-4H3, t--; cum 14K over 31 days;

Graphic for the four new Enerplus permits:

See this post for additional information regarding this area.

EIA Forecast For May, 2020, Crude Oil / Natural Gas Production -- May 19, 2020

Updates

Later, 11:02 a.m. CT: see comments --

Everyone misses the important part of that report: completions. The completion data is buried in the Excel file titled "DUC data (aggregated by region)" on the sidebar.

In sum, 705 wells were completed and brought into production in April, a decrease of 365 well completions from the 1,070 completions seen in March, and down from the 1,281 completions seen in April last year.

Completions: from the Director's Cut, Bakken completions going back to last year:

• March, 2020, preliminary: a whopping 120 wells were completed in March, 2020
• February, 2020, final: 57
• January, 2020, final: 70 (revised)
• December, 2019, final: 88 (revised)
• revenue forecast: 90
• November, 2019, final: 92
• October, 2019, final: 102
• September, 2019, final: 117 (revised up from 94) (revised a second time, up from 112)
• August, 2019, final: 102
• July, 2019, final: 137
• June, 2019, 102 (revised, last month's report); revised again, now, 123
• May, 2019, 113 (final)

Original Post

Headline: "Permian Basin leads decline in US shale." -- Link here.

Fact check. Link. Graphic:

The problem with the headline and the graphic: no percentages -- just raw data.

With percentages for the three main US shale crude oil plays:

Play: May / June / Change / Percent m-o-m:

• Bakken: 1,135  / 1,114 / 21 / 1.85% decrease
• Eagle Ford: 1,210 / 1,174 / 36 / 2.98% decrease
• Permian: 4,377 / 4,290 / 87 / 1.99% decrease

On a percentage basis, the Eagle Ford is predicted to have the biggest decline m-o-m in crude oil production. The Permian is forecast to come in second, and the Bakken, on a percentage basis, is projected to have the smallest decline.

Natural gas, decline on a month-over-month basis:

• Eagle Ford:  1.94%
  Permian: 1.3%
• Bakken: 0.94% (best in show; LOL)

HIts And Misses: Coming Out Of The Lock Down -- May 19, 2020

I'm not sure yet what to call this new series. I have a post in draft form which I will probably never post, but the bottom line is this: the investor class is going to do very, very well over the next couple of years. A lot of thriving companies are going to widen the gap with their competitors because of the pandemic crisis, and some simply due to coincidence or serendipity.

Walmart. I put the story that Walmart will jettison Jet.com in the second category. It had nothing to do with the Wuhan flu.

Amazon - JC Penney. I put the Amazon - JC Penney story in the first category. JC Penney might have declared bankruptcy regardless, but with the lock down, it hastened the decision. And now Amazon could get a twofer: a company with a strong logistics legacy as well as some really, really good real estate, with some "okay" real property. Will close 154 stores in 2020. To close 242 stores, 29% of entire inventory in all.

Cramer, June 4, 2020:

• The coronavirus pandemic has produced “one of the greatest wealth transfers in history,” CNBC’s Jim Cramer said.
• “The bigger the business, the more it moves the major averages, and that matters because this is the first recession where big business … is coming through virtually unscathed,” the “Mad Money” host said.
• “I think we’re looking at a V-shaped recovery in the stock market, and that has almost nothing to do with a V-shaped recovery in the economy,” he said.

Jet.com -- To Crash And Burn At Walmart -- May 19, 2020

Jet crash: Walmart to discontinue Jet; acquired in 2016 for $3 billion. From August 17, 2017:

This is a clear signal of how Walmart.com and Jet.com will diverge. While Walmart is a mass-market retailer that appeals to every demographic, Jet will be geared toward the urban millennial customer.

The difference in strategies is starkly illustrated by viewing the homepages for the two e-commerce websites. [I assume this home page will disappear, but I don't know. The article did not make that clear.]

Back on August 3, 2018:

At businessinsider: Walmart proved in 2017 it was still the king of retail.

The retailer launched more online initiatives than can be quickly summarized. It partnered with Google on voice shopping, opened its thousandth grocery pickup location, took advantage of its huge footprint of stores for easy online returns, introduced free two-day shipping with every $35 order, and even launched a pilot program to deliver fresh groceries right into customers' refrigerators.

Recent acquisitions, like the 2016 purchase of Jet.com for $3.3 billion, started to pay off as it became more clear how they would fit into Walmart's strategy. These initiatives were good for 40 to 50% e-commerce growth by the end of the year — a staggering percentage for a retailer of Walmart's size, though it does not break out individual numbers for online sales.

From today's linked story:

So much for Walmart's big and expensive effort to take on Amazon with a digitally-native brand. Amid the coronavirus crisis and its impact on the retail industry, today the retail giant quietly announced in its quarterly report that it would be discontinuing Jet.com, the online-only marketplace that it acquired when it was just over one year old for $3 billion (plus $300 million in earn-outs over time), as it struggles to bring its e-commerce operations into that black after reportedly seeing a loss of $2 billion in the division in 2019 and shifting how to deliver its e-commerce strategy: by betting on giant stores, rather than online warehouses, as the hubs of its online delivery model.

Jet.com ... saw growth of less than 10% in Walmort's core US market ... Walmart said that it would be withdrawing guidance for fiscal 2021. ["Core US market"? Did the goalposts move? Jet.com was aimed at a different demographic than the "core Walmart" demographic.]

The news of Jet.com's discontinuation is in equal parts a surprise if probably expected by those who have been watching its progress. Surprise, because the continued impact of COVID-19 has led to a surge of people shopping online -- Walmart itself notes that e-commerce sales were up 74% in the quarter, including store pickup and delivery, ship to home, ship from store and marketplace channels -- and so it would seem that Walmart might have wanted to double down on its own online efforts.
Expected, because in reality Jet.com hasn't shaped up to be the jewel in the crown that Walmart had hoped it would become, going through a number of restructuring attempts over the years as e-commerce overall continued to bleed red.

Again, most interesting are the social media comments at the linked story. My takeaway: it's hard to beat Amazon at its own game. 

By the way, Amazon bought Whole Foods in 2017.

"Happy Talk" -- May 19, 2020

I haven't looked at Yahoo!Finance for about three months now, I suppose. I am unable to "handle" a market sell-off to this extent. But yesterday, I took a couple of screenshots with the huge rally, and finally, today, I am dipping my toes back into internet-based financial news. I won't watch network or cable news. I will unlikely ever go back to television except TCM, the Andy Griffith show, and occasionally -- very occasionally -- sports.

NASCAR this past Sunday was great, and we have another Darlington, NC, NASCAR race tomorrow evening. But I digress.

The story that caught my eye was the Yahoo!Finance story in response to Trump's announcement, that like many front line health professionals and first responders he is taking hydroxychloroquine and zinc. The story was written by Yahoo!Finance's senor reporter, Anjalee Khemiani, who is most likely a noted expert in medicine and molecular biology, along with St Greta of Sweden.

Her premise: apparently some folks don't like "happy talk." As for me, I prefer to start with "happy talk" and then explore the pros and cons, rather than see things as a curmudgeon, and then perhaps look at the pros and cons from a curmudgeon's point of view.

Chloroquine and hydroxyhloroquine have been around forever and the World Health Organization seems to assert it is one of the safest medications ever to be developed, sort of like aspirin or acetaminophen. I don't known but my own personal experience -- which, along with 69 cents will buy you a "senior" cup of McDonald's coffee -- thirty years in the US military -- is that hydroxychloroquine is incredibly safe, and incredibly inexpensive.

But maybe things have changed. I don't know.

But I do know I prefer "happy talk" to its opposite.

By the way, I remain incredibly optimistic. More "happy talk." LOL. 

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Corky Practicing For Her Recital

EIA Dashboards For May, 2020

EIA dashboards for May, 2020, have posted:

• EIA pdf, Bakken: https://www.eia.gov/petroleum/drilling/pdf/bakken.pdf
• EIA, pdf, Permian: https://www.eia.gov/petroleum/drilling/pdf/permian.pdf
• EIA, pdf, Eagle Ford: https://www.eia.gov/petroleum/drilling/pdf/eagleford.pdf

The Eagle Ford is a monster. Wow, it is truly amazing.

Two Wells Coming Off Confidential List Today -- May 19, 2020

Twitter scroll: "everyone" seems relieved that WTI is back above $30. If $30 - $40 is the new normal, Saudi is in deep trouble. I still think the Mideast is way too quiet. And North Korea: crickets. Speaking of which, it appears Taiwan is supplying North Korea with oil.

OPEC Basket: $26.64. Link here.

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Back to the Bakken

Active rigs:

$32.39	5/19/2020	05/19/2019	05/19/2018	05/19/2017	05/19/2016
Active Rigs	14	66	61	51	26

Two wells coming off confidential list today -- Tuesday, May 19, 2020: 57 for the month; 107 for the quarter, 334 for the year:

• 35932, drl, XTO, Hovet Federal 41X-29G, Haystack Butte, no production data,
• 34728, drl, Hess, BB-Federal B-151-95-2122H-4, Blue Buttes, no production data,

RBN Energy: the impacts of US LNG cargo cancellations, part 2.

Cancellations of U.S. LNG cargoes are starting to take a toll on Lower-48 natural gas demand. Feedgas flows to U.S. terminals last week fell to as low as 5.76 Bcf/d, down from the daily peaks above 9 Bcf/d seen as recently as April and the lowest since October 2019. While some of the slowdown may be attributable to domestic outages or maintenance on feeder pipes — or short-lived marine channel weather conditions — the bulk of it is a precursor to the first big round of cancellations by offtakers for June delivery.

This, as COVID-related demand destruction and the resulting supply glut in the past month have collapsed what already were weak economics for exporting U.S. LNG to Europe and Asia, wiping out offtakers’ margins for delivery into those markets. Nevertheless, many cargoes will continue to move. What drives offtakers’ decision of whether to lift or cancel cargoes? Today, we wrap up a short series looking at the market and logistical dynamics forcing cancellations, as well as some of the mitigating factors that could prop up cargo liftings more than you’d expect in the current environment.