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Tuesday, August 18, 2020

I'm Off The Net For The Rest Of The Night -- Good Luck To All -- August 18, 2020

Of the ten years of blogging this has been one of the busiest, most interesting days. And so much yet to do.

Selling these ... 

... at the USPS one at a time for exact change only would solve two problems immediately:

  • the national coin shortage; and,
  • the risk of USPS becoming insolvent.

Just saying. 

Permit #37792 Does Not Exist -- August 18, 2020

Just noting that permit / file number #37792 does not exist over among the scout tickets. For the archives.

Battery Energy Storage Is Not The Answer To ISO California's Electricity Problem -- Reader -- August 18, 2020

Updates

Later, 12:09 a.m., August 19, 2020: for additional computations see the first comment which I've brought up here:

I looked up the cost of the battery plant Tesla is building at Moss Landing (on the site of an existing power plant to use the tranmission infrastructure) and the cost per MWH works out to $110K (80million/730MWH). 
That's 4 hours @ 182MW. 
Tesla has the lowest battery costs of basically anyone. So ... if California needs 4000MW x 4 hours = 16000 MWH of capacity that would be $1.8Bn. @JoeBiden would write them that check...

And Elon Musk would love to endorse it.

Original Post

From an earlier post either last night or early this morning:

ISO California:

  • yesterday, demand for today forecast to be 50,485 MW;
  • historic peak: 50,270 MW, July 24, 2006;
  • today, demand has increased from 50,485 MW to 50,553 MW; link here;
  • capacity expected to be: 46,619 MW
  • forecast deficit: =3,914, which will be close to a record deficit this year, if not a record deficit; I think I recall governor of California citing a 4,000-MW deficit earlier;

A reader has done the math. With a little editing:

Well, there is one little problem. Below you see the math for 1000 MW storage. Just multiple by 4 = $28.8 billion.  
Even the most optimistic (lying through their green teeth) battery storage promoters shouldn’t be taken seriously when projecting Battery Energy Storage Systems (BESS) at less than $200/KWh. 
$200,000/MWh, $200 Million/1000 MWh. 
Getting through the 3 PM – 9 PM peak requires $200 million X 6 hrs for every 1,000 MW of demand = $1.2 billion. (I have no idea what current real world prices are for storage, but my hunch is that it’s about $600/KWh. = $7.2 billion for 6 hours of 1,000 MW demand….give it up). 

If there are errors in the editing, blame me but the point is well taken.

CLR With Three New Permits In Area WIth Host of Monster Wells -- August 18, 2020

Record IPs in the Bakken, FAQ #9. Until tonight before the MRO wells were added, #25272 (below) was the most recent Bakken well to be added as perhaps one of the "record IP" wells in the Bakken:

  • July 18, 2020:
    • 35272, 3,376, CLR, Carson Peak 4-35HSL, middle Bakken, 40 stages; 16 million lbs (huge), Oakdale, t6/19; cum 485K 5/20; off line 6/20; see this note; located in SESW 26-147-96.

So, what now? Well, look at this. In today's daily activity report, CLR hs three new permits. 


And .. drum roll ... located in the same section, SESE 26-147-96:

The CLR Carson Peak / Morris wells are tracked here.

Slow Down, Take Some Deep Breaths -- August 18, 2020

I have to pause to take a breath; slow down. This is becoming overwhelming. 

First: I've solved the mystery of the EIA natural gas fill rate. No one may agree with me, but I know I'm correct. We all have our worldviews, and I have mine. Focus on Fracking probably solved the problem weeks ago. LOL. As noted years ago, I've never understood natural gas, but I think I'm getting a bit closer. I might come back to that graph later. The graph is quite educational. 

Second: A reader sent me a huge spreadsheet with the number of wells drilled, completed, and drilled/completed (DUCs) since 2013 in the shale basins across the earlier this evening. I posted a smaller version of that spreadsheet and will come back to it later. It's the first time I've had that much data for something I've talked about for quite some time but based on anecdotal data. I need to come back and re-iterate some points I've been making for years, but I won't get back to it for a few days.

Third: the S&P 500 hit an all-time closing record today. Of the three major indices, the S&P is #1 among equals. I don't care how the analysts spin it, that was a big, big deal. And futures suggest there is more room to run. 

I better put in the disclaimer now. 

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.

Fourth: in today's NDIC daily activity report MRO reported four huge completed DUCs, and when one looked a bit more closely, there was actually a fifth monster well. See this post. It's now the featured post, linked at the sidebar at the right.

All I can say now is "thank goodness" for YouTube. I began with one of my favorite songs and now, non-stop, YouTube is playing a playlist that could be "my greatest hits" playlist. LOL. 

Slow down, take a breath. This is only Tuesday.

First:

Summertime Sadness, Lana Del Rey

Second:

Shadows In A Mirror, Chris Isaak
 

Third:
Dance Me To The End Of Love, Leonard Cohen

The Bakken Never Ceases To Amaze Me -- A Closer Look At Five MRO Monster Wells -- One With 100K In One Month -- August 18, 2020

So many story lines, but I've run out of superlatives for the Bakken.

  • 96941 bbls of crude oil over  28 days extrapolates to 103,865 bbls over 30 days. Put that in your dolomite pipe and smoke it.

Four producing wells (DUCs) reported as completed by MRO, August 18, 2020:

  • 36659, drl/A, MRO, Sunwall USA 41-17H, Reunion Bay, t--; cum 177K 4.5 months; a 60K month;
  • 36660, drl/A, MRO, Shortall USA 14-9H, Reunion Bay,  t--; cum 241K 4.5 months; two 60K months;
  • 36798, drl/A, MRO, Walsh USA 11-16TFH, Reunion Bay, t--; cum 141K 4 months; one 45K month;
  • 36859, drl/A, MRO, Rock Woman USA 41-4TFH, Sanish-Antelope, t--; cum 209K over three months; a whopping 97K month;

****************************************
A Closer Look

36659, drl/A, MRO, Sunwall USA 41-17H, API: 33-061-04518, Reunion Bay, SESE 8-151-93, t--; cum 177K 4.5 months; a 60K month; fracked 1/21/20 - 1/31/20; 7.7 million gallons of water (moderate frack); 89% water by mass;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-202029206832076211700412711601523941
BAKKEN5-202031345883496319299600962048837477
BAKKEN4-202030572885683434183829791761161958
BAKKEN3-20202936275366474276839796695430678
BAKKEN2-20201128387277284178826100181022596

36660, drl/A, MRO, Shortall USA 14-9H, API: 33-061-04519, Reunion Bay. SESE 8-151-93,  t--; cum 241K 4.5 months; two 60K months; fracked 1/21/20 - 1/31/20; 7.1 million gallons of water (moderate frack); 88.6% water by mass;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-202029295802953714273525302826322458
BAKKEN5-202031413784140820976645152679235252
BAKKEN4-202030631436343628331792581753458061
BAKKEN3-202030615076138241139765041336659572
BAKKEN2-20201444942443302759452692321146936

36798, drl/A, MRO, Walsh USA 11-16TFH, API: 33-061-04550, Reunion Bay, SESE 8-51-93, t--; cum 141K 4 months; one 45K month; fracked 1/21/20 - 1/31/20; 7.8 million gallons of water (moderate frack); 89.1% water by mass;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-202029246582465419837438741691925411
BAKKEN5-202031319123198224359432261460926699
BAKKEN4-20203031562315133324940452822930366
BAKKEN3-20202945277450975156953036878641546
BAKKEN2-20204769575169747789307470

 Graphics for the above three wells:



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

36859, drl/A, MRO, Rock Woman USA 41-4TFH, API: 33-053-09177, Sanish-Antelope, t--; cum 209K over three months; a whopping 97K month; fracked 2/24/20 - 3/6/20; 8.0 million gallons of water (moderate frack); proppant composition not provided;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH6-2020295438754355191761050967366628239
SANISH5-202024577485750722053940677493815730
SANISH4-20202896941967814728360659055094
SANISH3-20202318046194701930

Graphics for this well:




What about the sister well to #36859?

  • 36860, drl/NC, MRO, Papa George USA 41-4H, Antelope-Sanish, t--; cum 176K three months; an 87K month followed by two 40K+ months: fracked, 2/24/20 - 3/6/20; 8.1 million gallons of water (moderate frack); percent of water by mass not provided;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH6-202030468834675817360960726797925330
SANISH5-202023419784188815805708655697911408
SANISH4-20203087489870573742919230014261
SANISH3-202070010272620262

So, what about that neighboring well, #19473?
  • 19473, 1,060, MRO, Crow Flies high USA 31-4H, Antelope-Sanish, t5/11; cum 577K 6/20; off line while daughter wells were being fracked; small jump in production but does not appear to have lasted, fracked/stimulated 5/11; 20 stages; 2.7 million lbls of proppant; an incredibly small frack done years ago and still producing very, very nice; appears amenable to re-fracks and neighboring fracks; currently approaching 600K bbls crude oil cum:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH6-202030338834185916574438111736
SANISH5-202027617160944993673049661410
SANISH4-20200000000
SANISH3-20200000000
SANISH2-20200000000
SANISH1-20200000000
SANISH12-20190000000
SANISH11-20190000000
SANISH10-20190000000
SANISH9-20192331843285979575805444
SANISH8-20191919852520668363103408
SANISH7-201931305027958435574255190
SANISH6-20193030323112653592616423928
SANISH5-20193130963021665609925063251
SANISH4-20193035983816897728232493649

MRO Reports Four Monster DUCs; WPX Has A Nice Completed DUC; CLR WIth Three New Permits -- August 18, 2020

 Active rigs:

$42.60
8/18/202008/18/201908/18/201808/18/201708/18/2016
Active Rigs1261595333

Three new oil and gas permits: #37793 - #37795, inclusive --

  • Operator: CLR
  • Fields: Corral Creek (Dunn County); Oakdale (Dunn County)
  • Comments:
    • CLR has permits for three more permits on the Morris / Carson Peak pad in SESE 26-147-96, two running into Corral Creek; and, one running in Oakdale oil field

Five permits renewed:

  • BR (4): three Omlid permits in McKenzie County; and one Lincoln Hill permit in Dunn County;
  • Oasis: one Pederson permit in McKenzie County;

Five producing wells (DUCs) reported as completed:

  • 36659, drl/A, MRO, Sunwall USA 41-17H, Reunion Bay, t--; cum 177K 4.5 months; a 60K month;
  • 36660, drl/A, MRO, Shortall USA 14-9H, Reunion Bay,  t--; cum 241K 4.5 months; two 60K months;
  • 35011, SI/A, WPX, Spotted Horn 27-34HD, Squaw Creek, t--; cum 197K 5.3 months; two 30K months;
  • 36798, drl/A, MRO, Walsh USA 11-16TFH, Reunion Bay, t--; cum 141K 4 months; one 45K month;
  • 36859, drl/A, MRO, Rock Woman USA 41-4TFH, Sanish-Antelope, t--; cum 209K over three months; a whopping 97K month;

The MRO wells in more detail.

July, 2020: New Record Low For Well Completions And Wells Drilled In Selected Shale Basins -- Reader

A reader sent me a spreadsheet of the number of wells drilled, completed, and drilled/not completed (DUCs) on a monthly basis from December, 2013, through July, 2020, and including six oil and gas shale basins and one region in the continental US.

His analysis:

  • July, 2020 saw a new low for completions and wells drilled.

It was not feasible to post the entire spreadsheet of all six basins and one region on the blog, but I have produced the data for the two basins that interest me the most: the Bakken and the Permian. Note: in the spreadsheet below, the gap between the end of 2014 and the beginning of 2017. As usual, there may be typographical and/or content errors. If I find them, I will correct them later:


Permian

Permian

Permian

Bakken

Bakken

Bakken


Drilled

Completed

DUCs

Drilled 

Completed

DUCs

Dec 13



659



570

Jan 14

581

590

650

178

143

605

July 14

613

601

813

250

243

709

Dec 14

634

577

1042

226

207

728

Jan 17

352

259

1299

63

52

811

July 17

414

313

1711

96

103

765

Dec 17

474

382

2037

79

65

774

Jan 18

489

403

2123

107

72

809

Jul 18

568

512

2468

135

155

781

Dec 18

538

416

2951

109

70

793

Jan 19

585

469

3067

121

71

843

Jul 19

546

515

3500

117

124

869

Dec 19

449

453

3351

95

86

866

Jan 20

449

438

3362

100

86

880

July 20

138

98

3520

19

13

902


*******************************
Comments

There are so many story lines here.

It is quite interesting, the timing of this report, the spreadsheet above, that it arrived just as I completed a reply to a comment concerning this data.

See comment and my long reply at this post

I'll come back to this later tonight, but right now I'm spending time with Sophia.

Top Economic Story So Far This Week -- And It's Only Tuesday -- August 18, 2020

Re-posting:

Homebuilder sentiment: jumps to record high. Highest in 35-year history; matches record set in 1998. 

Builder confidence in the newly built, single-family home market jumped 6 points to 78 in August on the National Association of Home Builders/Wells Fargo Housing Market Index. Anything above 50 is considered positive sentiment.

The index is now at the highest level in the 35-year history of the monthly series and matches the record set in December 1998. Builder sentiment plunged to 30 in April, when the coronavirus pandemic shut down the U.S. economy, but it recovered quickly as consumers suddenly sought more space in less urban areas.

******************************
Miscellaneous

Air travel: in June, 70% said flying was somewhat or very unsafe.

Escape from NYC: snowball turning into a boulder -- Fox's Charles Payne (a "snowball" analogy in the middle of a heat wave less than clever) 

Gin sale: Ryan Reynolds' Aviation gin sells to Diageo for $610 million. Aviation gin known for sharing profits with military. Diageo also bought George Clooney's tequila brand Casamigos in 2017. I've long since followed Diageo but it's a giant, owning spirits like Johnnie Walker and Smirnoff.

Gin's global renaissance has taken off in the states in recent years. I went though my martini phase a couple of years ago, and Aviation gin was one I favored, for various reasons. For the record, I no longer drink martinis.

Coronavirus: Chicago's "$66-million coronavirus hospital" treated only 38 patients. 

Cornavius vaccine: will be available long after Covid-19 is a thing. Expect to see widespread availability of the vaccine no sooner than late 2021. Barron's.  

Calpers: California state panel to investigate complaints of investment conflict. Well, duh. The WSJ.

 ********************************
Best Time Of The Year For Me

Kids back in school. Sort of "back to school" this year. But they are not at the swimming pool during the day. I generally have the entire pool to myself when I go out there at 10:00 a.m. I try to get in three two-hour sessions every day. I'm not in the pool actually swimming all that times, but enjoy reading poolside when not swimming.  10:00 to noon, for sure. 4:00 to 6:00 (often with Sophia). 8:00 to 10:00. Generally I only get in three hours total but the goal is six.  Some days I only get two sessions. The season will end soon. 

I can't blog at the pool or do much surfing on the net. The manager's business office, which has free wi-fi, barely reaches to the far side of the pool where I like to hang out, and is very, very, very slow.

I'll finish Out of Africa this week. Not sure what I'll go to next.

Whiting Bankruptcy Plan Okay'd; Only One Well Coming Off Confidential List; Home Depot, Walmart Post Records; ISO CA Could Face 4,000-MW Deficit Today -- August 18, 2020

First things first: bankruptcy court approves Whiting's reorganization plans, The Williston Herald.

Under the plan approved by the Southern District of Texas Bankruptcy Court, Whiting will shed $2.4 billion of its debts, in a $3.4 billion bankruptcy reorganization that will leave 97 percent of its ownership in the hands of private equity firms and investors and 3 percent with existing stockholders. 
  • revolving fund's credit limit will be $1.5 billion
  • target date: September 1; until then, changes possible

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. 

Homebuilder sentiment: jumps to record high.

Builder confidence in the newly built, single-family home market jumped 6 points to 78 in August on the National Association of Home Builders/Wells Fargo Housing Market Index. Anything above 50 is considered positive sentiment.

The index is now at the highest level in the 35-year history of the monthly series and matches the record set in December 1998. Builder sentiment plunged to 30 in April, when the coronavirus pandemic shut down the U.S. economy, but it recovered quickly as consumers suddenly sought more space in less urban areas.

Home depot: smashes 2Q20 earnings forecasts.

  • posts record sales;
  • biggest rise in quarterly same-store sales in at least two decades;
  • EPS: $4.02, up 26.8% from same period last year
  • forecast EPS: $3.71
  • net income rose 24.5% to $4.33 billion;

Walmart: earnings soar, led by nearly 100% surge in e-commerce;

  • adjusted EPS: $1.56 vs $1.24 forecast
  • revenue: $137.7 billion vs $135.6 billion forecast
  • pre-market: shares jumped 6%

ISO California (and later, see this note):

  • yesterday, demand for today forecast to be 50,485 MW;
  • historic peak: 50,270 MW, July 24, 2006;
  • today, demand has increased from 50,485 MW to 50,553 MW; link here;
  • capacity expected to be: 46,619 MW
  • forecast deficit: =3,914, which will be close to a record deficit this year, if not a record deficit; I think I recall governor of California citing a 4,000-MW deficit earlier;

Record demand, record prices: Permian supply concerns push Southern California winter gas prices toward record highs. Link here

  • winter strip averaging $4.58 / MMBtu
  • Permian production down 200 MMcf/d vs July average
  • midstream growth to boost competition for Permian gas

OPEC basket, link here: $44.94.

******************************
Back to the Bakken

Active rigs:

$42.68
8/18/202008/18/201908/18/201808/18/201708/18/2016
Active Rigs1261595333

Only one well coming off confidential list --Tuesday, August 18, 2020: 55 for the month; 126 for the quarter, 572 for the year:

  • 36464, SI/A, Whiting, Michael John 12-13XH, Sanish, t--; cum 54K 2 months; a 25K month;

RBN Energy: is New England's on-and-off-embrace of gas-fired power headed for a fall?

The U.S. power sector’s shift to natural gas over the past few years has been a boon to gas producers across the Lower 48, especially in the Northeast. Scores of new gas-fired power plants have been built there during the Shale Era, and a number of coal-fired, oil-fired, and nuclear plants have been taken offline. New England is a case in point; gas-fired power now accounts for about half of the installed generating capacity in the six-state region (Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine) — three times what it was 20 years ago. But New Englanders have a love-hate relationship with natural gas, and with renewables and energy storage on the rise, gas’s role in the land of the Red Sox, hard-to-understand accents, and lobsta’ rolls may well have peaked. Today, we discuss recent developments on the natural gas and power generation fronts in the northeastern corner of the U.S.