Thursday, August 6, 2020

Marathon With Three New Permits -- August 6, 2020

  • AAPL is up $ 65 per share since the announcement to split 4 for 1
  • the tech-heavy NASDAQ clinched a new record high in early trading, and
  • closed above the 11,000-mark for the first time after initially climbing above it on Wednesday, August 5, 2020
Housing industry booming in North Dakota, link at KXNET;
The pandemic caused a major slow down for home construction and sales, but more recently, that’s not the case anymore.
The Commerce Department reported the construction of new homes across the US jumped by 17.3% in June. That increase is definitely showing right here in North Dakota– even though the start of his year didn’t look so good for those in the housing industry.
EOG results: link here.
  • generated positive net cash provided by operating activities and free cash flow
  • produced 7% more crude oil for 26% less capital expenditures than forecast 
  • per-unit cash operating costs below targets
  • discovered 500 Bcf net natural gas resource potential in Trinidad
  • increased 2020 well cost savings target to 12% from 8%, supporting improved outlook for capital efficiency
  • EOG Resources, reported a second quarter 2020 net loss of $909 million, or $1.57 per share, compared with second quarter 2019 net income of $848 million, or $1.46 per share. Adjusted non-GAAP net loss for the second quarter 2020 was $131 million, or $0.23 per share, compared with adjusted non-GAAP net income of $762 million, or $1.31 per share, for the same prior year period. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.
Back to the Bakken

Active rigs:

Active Rigs1260645834

Three new permits, #37776 - #37778:
  • Operator: MRO
  • Field: Antelope ; Reunion Bay :
  • Comments:
    • Ida USA: 1404' FNL 1795' FEL; SWNE 34-152-94, Antelope oil field;
    • Bulls Eye USA: 400' FSL 476' FWL; SWSW 32-151-93; Reunion Bay;
    • Norman USA: 400' FSL 521' FWL, SWSW 32-151-93; Reunion Bay;
One producing well (a DUC) reported as completed:
  • 34730, loc/A, Hess, BB-Federal B-151-95-2122H-2, Blue Buttes, t--; cum 85K 2.5 months; a 30K month;

Notes From All Over --- The Morning Edition -- August 6, 2020

Big story of the month:DAPL --
  • court ruling buys time for DAPL -- Bloomberg;
  • US Court of Appeals vacates order to shut down DAPL -- KXNET;
The market.

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Hopin' and dreamin', GE, link here.
  • some years ago, hedge fund investor makes huge bet on GE
  • buys in at $25/share
  • this week, sells half its holdings for $6/share
  • Sempra Energy says it is still working with the Mexican government to obtain a 20-year export permit for the first phase of its proposed EnergĂ­a Costa Azul liquefied natural gas export project in Mexico's Baja California.
  • the company, which made the statement in its Q2 earnings report, has said it plans to make a final investment decision before the end of 2020 to build the plant.
  • Sempra also says it expects full commercial operations at phase 1 of its Cameron LNG export facility in Louisiana to start in the coming days, after Train 3 reached "substantial completion" at the end of July.
  • lso, the company's board approves a $2B stock repurchase plan.
  • Sempra reported better than forecast Q2 earnings and a 13.5% Y/Y increase in revenues to $2.53B.
MDU, earnings, SeekingAlpha:
  • MDU Resources (NYSE:MDU) reported Q2 revenue increase of 4.6% Y/Y to $1.36B, and earnings of $99.7M, an increase of 61% Y/Y.
  • construction materials business revenues were $621.1M (+4.2% Y/Y) and backlog of work at June 30 was $875M; Construction services business revenue was $497.2M (+6.9% Y/Y) and backlog of work at June 30 was $1.31B.
  • the electric and natural gas utility earned $11.2M vs. $1.2M in 2Q19, benefiting from lower operating costs, higher investment returns and the absence of a write-down on a non-utility investment recorded, and pipeline business earned $9M (+26.7% Y/Y).
  • Q2 Operating margin expanded by 268 bps to 10.2%.
  • Q2 EBITDA from continuing operations was $219.8M (+35.8% Y/Y), and margin improved by 370 bps to 16.1%.
  • net cash provided by operating activities YTD was $261.4M, compared to cash used $22.9M a year ago.
  • FY20 Guidance, raised: EPS of $1.65 to $1.85 (prior $1.50 to $1.70) vs. $1.60 consensus. Construction services revenues in the range of $1.9B to $2.1B (prior $1.85B to $2.05B) with margins comparable to 2019 and construction materials revenues in the range of $2.2B to $2.4B (prior $2.1B to $2.3B) with margins slightly higher than 2019.

Flattening The Curve -- Gasoline Demand -- V-Shaped Recovery Ends -- August 6, 2020

  • four-week average flattens
  • but, worse, week-over-week, significant decrease

Three Wells Coming Off The Confidential List; RBN Energy On CO2-EOR -- August 6, 2020

Jobless claims, link here:
  • forecast: 1.442 million
  • actual: 1.186 million
MDU, link here:
  • requests rate increase; average increase $3.35/month per household;
  • also reaches agreement with PSC to retire two coal-fired power plants and build a new natural gas unit at Heskett Station north of Mandan
  • earnings transcript, Seeking Alpha;
OPEC basket, link here: $45.34 (nice spike).

Back to the Bakken

Active rigs:

Active Rigs1260645834

Wells coming off the confidential list -- Thursday, August 6, 2020: 14 for the month; 85 for the quarter, 531 for the year:
  • 36984, drl/RTAI, CLR, LCU Truman Federal 4-23H, Long Creek,
  • 36419, SI/A, Zavanna, Panther 16-21 4H, Stony Creek, t--; cum 108K 4 months; a 42K month; 
  • 36160, conf, Hess, GO-Hauge-156-97-2116H-4, cum 80k;  a 28K month;

The collapse in crude oil prices this year hit U.S. producers hard, and forced them to make big cuts in their capital budgets and drilling plans. But it also helped to prove their resilience. Throughout the Shale Era, and especially since the 2014-15 oil price crash, producers have been increasing their productivity and slashing their production costs, enabling most of them to survive even when prices slipped below $30 and $20/bbl for a while. Not all producers are alike, however — neither is all production. Even with oil prices rebounding to about $40/bbl in recent weeks, production based on enhanced oil recovery (EOR) through carbon-dioxide (CO2) “flooding” has become economically challenged, at least for some producers. Can EOR, with its high production costs, survive in a low-price environment? Today, we take a fresh look at EOR in an era of $40/bbl crude.

Our younger readers may not remember, but not long ago U.S. crude oil production was on the decline — a number of conventional oil plays in the U.S. were viewed as being pretty much tapped out, and the U.S. was becoming increasingly dependent on imported crude. What grabbed all the headlines, of course, was the combination of horizontal drilling and hydraulic fracturing, which in the past decade have freed amazing volumes of mostly light and super-light crude from shale and tight-oil plays like the Bakken, the Denver-Julesburg Basin, and — most important — the Permian. But even before the Shale Era started in earnest, there was a lot of hope that enhanced oil recovery would breathe new life into conventional production areas whose output had dwindled to a trickle.