Friday, August 21, 2020

North Dakota $38 Million Lawsuit Against US Army Corps Of Engineers Allowed To Proceed -- DAPL Protests -- 2018 -- August 21, 2020

From DRGNews:
U.S. District Court Judge Daniel Traynor denied the U.S Department of Justice’s motion to dismiss North Dakota’s lawsuit against the U.S. Army Corps of Engineers seeking recovery of damages relating to protests of the Dakota Access Pipeline in 2017 and 2018, allowing four out of five of the State’s claims to move forward. 
Stenehjem sued under the Federal Tort Claims Act, looking to recover $38 million in damages to State property and law enforcement costs because of the Corps’ actions that enabled the massive protests over the construction of the Dakota Access Pipeline. 
Stenehjem said the state presented the claims to the Corps in 2018 but that he “was very disappointed that no representative of our federal government ever contacted me to discuss our claims. As North Dakota’s chief law enforcement officer, my office had no choice but to bring this action because it is so consequential for the State of North Dakota and its citizens.” 
Judge Traynor decided that North Dakota’s case should proceed because the Corps “circumvented mandatory permit process requirements” when it invited and enabled the protests that went beyond peaceful protests and included violent criminal activities that endangered the public (including protesters) and the environment. Having negligently created the problem, the Corps then left it to North Dakota to spend tens of millions of dollars protecting public safety and cleaning up the dangerous mess left behind.

Much more at the link. 

Week 34: August 16, 2020 -- August 22, 2020

Top story of the week:
  • Judge clears path for state to recoup DAPL protest costs. Bismarck Tribune, paywall. Google for other links. No paywall here (another great example of ineffective paywall keeping eyeballs from seeing ads over at the Bismarck Tribune).

The other top story of the week:

Most important, under-reported economic story of the week:


Top international non-energy story:

Top international energy story:

Top national non-energy story:

Top national energy story:

Geoff Simon's top North Dakota energy stories:

  • judge clears path for state to recoup DAPL protest costs. Bismarck Tribune, paywall. Google for other links; link here (free);
  • relief funds produce more jobs than expected; Lynn Helms;
  • ND scientists exploring rare earth opportunity; DOE-funded research;
  • labor force remains near all-time high;
  • Keystone XL begins obtaining water crossing permits;
  • Minnesota governor continues fight against Enbridge's Line 3;
  • Dakota Gasification now selling and shipping beverage-grade CO2;
  • North Dakota coal county bans solar power; McLean County;

Top North Dakota non-energy story:

Top North Dakota energy story:



Advantaged oil:

Natural gas:


Bakken economy:


The Bakken Never Ceases To Amaze Me -- August 21, 2020

See the wells at this post. We'll come back to this later, but look at the completion strategies: stages and amount of proppant. Note that some wells are said to still be flowing, not yet on a pump.

YouTube Never Ceases To Amaze Me

This song -- a typical 3-minute song is remixed to last one hour, four minutes and one second:

Wicked Game,
Chris Issak, cover

This one-hour-looped song has 3.5 million views. I didn't realize it was a looped song -- I was listening to it in the background -- until 20 minutes into the loop. LOL.

BR Wants To Place Thirty Wells In One Drilling Unit -- August 21, 2020

From the September, 2020, NDIC hearing dockets:

Case No. 28553: Application of Burlington Resources Oil & Gas Co. LP for an order amending the applicable order for the Sand Creek-Bakken Pool to authorize up to thirty horizontal wells to be drilled on a 2560-acre spacing unit described as Sections 31, 32, 33 and 34, T.153N., R.96W., McKenzie County, ND, and granting such other and further relief as may be appropriate. 

The graphic:

The wells:

  • 30326, TFH, 2,652, t2/17; cum 425K 4/20; off line 5/20; remains off line 6/20; 29 stages; 7.4 million lbs;
  • 30325, TFH, IA/1,683, t12/16; cum 103K 8/17; F;  off line 9/17; remains off line, 6/20, almost three years; letter from NDIC to BR notifying this well needs to be plugged and abandoned, or placed back into service, dated April 15, 2020; 33 stages; 15.1 million lbs;
  • 30224, MBH, IA/2,544, t1/17; cum 339K 2/20; off line except for a few days each month starting 3/20; remains off line 6/20; 34 stages; 5.2 million lbs; 
  • 30225, MBH, 2,640, t10/16; cum 294K 4/20; F; half month, 5/20; off line, 6/20; 31 stages; 9.7 million lbs;
  • 30226, TFH, IA/1,560, t1/17; cum 378K 5/20; off ine 6/20; 24 stages; 7.8 million lbs; 
  • 30227, TFH, IA/792, t10/16; cum 428K 5/20; off line 6/20; 31 stages; 14.3 million lbs; 
  • 31639, MBH-R, IA/2,640; t2/17; cum 335K 4/20; half month,5/20; off line 6/20; 33 stages; 5 million lbs; permitted as MBH-R, so a revised plan before submitting to NDIC;
  • 30231, MBH, dry
  • 30232, MBH, IA/2,405, t11/15; cum 359K 5/20; off line 6/20; 27 stages; 4.3 million lbs; 
  • 30233, TFH, 1,363, t11/15; cum 140K 5/20; off line 12/19; returns to production 4/20; half-month, 5/20; 37 stages; 4.3 million lbs; 
  • 30234, TFH, IA/1,844, t11/15; cum 344K 5/20; off line 11/19; back on line 3/20; offline 5/20; remains off line 6/20; 37 stages; 4.3 million lbs;
  • 20336, H-R, IA/1,162; t9/11; cum 362K 4/20; F; off and on since 1/20; off line as of 5/20; original permit was "H-R", so this was a revised plan prior to submission to the NDIC; 32 stages; 4.2 million lbs;
  • 18662, H, IA/2,145, t5/10; cum 445K 5/20, F; off line 6/20; four separate fracks: 10 stages / 2 stages / 4 stages; 4 stages; 944K lbs / 236K lbs / 463K lbs / 479K lbs: total: 20 stages; less than 2 million lbs proppant;
  • 22914, TFH, IA/2,954, t5/13; cum 369K 5/20; off line 6/20; three separate fracks: 5 stages / 21 stages / 4 stages; 402K lbs / 2.4 million lbs / 480K lbs: total: 30 stages; less than 4 million lbs proppant;
  • 22912, TFH, IA/2,972, t5/13; cum 308K 5/20; off line 6/20; two separate fracks: 10 stages / 20 stages; 1.02 million lbs / 2.3 million lbs: total 30 stages; less than 4 million lbs proppant;


  • fifteen wells; 8 Three Forks; 7 middle Bakken; one dry (a middle Bakken)
  • most were small fracks; one huge frack;
  • some still said to be flowing (no pump)
  • most are now off line due to low price of oil
  • this drilling unit is only one mile wide; thirty horizontals across this one mile; fifteen in each formation, the middle Bakken and the first bench, Three Forks;
  • still not at max density infill in either formation;
  • deeper benches of the Three Forks yet to be drilled
  • BR looking for 30 wells in this drilling unit; 14 already there; sixteen more
  • note: technically only eight more in each 1280-acre unit (if that make sense)

Disclaimer: in a long note like this, there will be typographical and content errors; if this is important to you, go to the source.

August, 2020, Legacy Fund Deposit More Than Doubles Month-Over-Month

Link here.

CNBC Crawler -- Mid-Afternoon -- August 21, 2020

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. 

From the CNBC crawler for the next fifteen minutes, 1:44 p.m. to 1: 59 p.m. CDT:


  • Dow: up a whopping 192 points;
  • S&P 500: up another 10 points; another all-time record;
  • NASDAQ: up another 42 points
  • WTI: down 1.14% (Saudi in deep doo-doo)

Individual stocks:

  • MSFT: down $1.11
  • TGT: up $1.98
  • JNJ: up $1.91
  • AAPL: up $23.05; moving up very, very fast as we near the end of the trading day; up 5% today; came within 53 cents of hitting $500;
  • Home Depot: up $1.73
  • WMT: up $1.10
  • MCK: down $1.77 (that's strange)
  • TSLA: up $91
  • QCOM: up $2.25
  • Teledoc: up $5.25
  • EPD: down 14 cents
  • Boeing: down $1.90


  • OXY-WT: at an intraday low -- $2.84 which is an all-time low;

Breaking news:

  • Crowdstrike catapults higher: up 250% from March low
  • existing home sales jump; sales beat expectations; huge numbers; driving the market? yup; DHI, LEN hit new highs;

Non-CNBC news, the PGA leaderboard today:

  • two players ties for the lead at minus 13; many closely on their heels
  • Tiger Woods: at minus 3; dropped 21 places; tied at 51; with regard to Tiger, I'm starting to see a trend; more on that later;

Fast And Furious -- The Next Big Thing -- August 21, 2020

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 two most fascinating stories right now, 1:16 p.m. CDT, August 21, 2020:

  • general: how Covid-19 will change America:
  • a one-off: Uber/Lyft in California

Link to "how corona virus changes America" here. One thing that hasn't been mentioned yet (or if it has, understated): how the pandemic will affect pharmaceutical R&D, and the pace of new drugs coming to market. 

I don't think President Obama would have ever considered "Operation Warp Speed" and Joe Biden can't operate at normal driving conditions, much less at "warp speed." Anyone who disagrees with me on that lives in a different world than I do, but that's fine. President Obama was glacially slow; very, very reflective; said to be a very, very deep thinker; very smart; and went to Harvard. They say President Trump shoots from the hip; does not seem to be very reflective or thoughtful; thinks at warp speed but perhaps not deeply; played around in college; and went to Wharton (?). Fact check me on that. 

Millions of first graders across the nation now have the same teacher, spelled i-P-a-d. And most of those first graders are "doing that" on the WebEx platform. Sophia signs in at 0800 every morning (with assistance from an adult, usually her 16-year-old sister) and Sophia is then signed in for the day. Her teacher's avatar is the "whale" and Sophia has six icons to select from as she goes from class to class. 

The most fascinating story right now: Uber and Lyft in California. 

California gave them to the end of the month to convert all their individual contractors into employees. Lyft called the state's bluff and announced they were suspending Lyft services in California effective midnight, August 20, 2020 (last night). A California judge stepped into lift that ruling (for the time-being) before giving Uber a chance to respond.

My hunch: Uber was going to use the next nine days to a) steal market share from Lyft; and, more importantly, b) steal drivers from Lyft. Too bad the ruling was lifted. This would have been fascinating to watch. But the issue did not go away. I hope Uber and Lyft get the chance to suspend services in California. Wasn't there a movie, "A Day Without Mexicans"? Imagine a day without ride-sharing.

By the way, I am convinced there is much more to this story than meets the eye(s), and if it doesn't make sense, google it and/or follow the money. In this case: follow the money. How much do you want to bet, Soros (used as a metonym in this case) has bought up a million NYC yellow cab medallions for a really, really cheap price, betting that NYC will follow the lead of California.

Fast And Furious -- Fifteen Minutes -- Rigs Matter; Rig Counts Not So Much- August 21, 2020

Note: I am inappropriately exuberant about the Bakken.

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. 

Investing: I would never, never recommend anyone invest in energy companies, nor would I recommend anyone invest in anything. Everyone's situation is different. 

Rigs Matter; Rig Counts Not So Much

This has to do with production, not price of oil.

Of course rigs matter, but when any analyst or reader mentions the number of active rigs on any give day, my eyes glaze over (or roll). The "rig count" is a legacy metric held over from conventional and off-shore drilling. It has a diminished role in unconventional drilling or shale.

Unconventional drilling or shale? They can drill all the holes they want, but if they don't complete them, they don't mean squat. Except for a lot of wasted money, drilling the wells and not completing them.

Across the US shale basins, the important metric is the number of newly completed wells on any given day or any given week.

In the Bakken, specifically, much more important than the rig count, pretty much in this order:

  • price of oil;
  • cost of drilling/completing a well;
  • takeaway capacity;
  • form and cost of takeaway capacity;
  • rules and regulations; spills; flaring; siting; BLM;
  • number of frack spreads;
  • completions;
  • number of DUCs
  • halo effect;
  • weather;

After that, maybe the number of rigs. But probably not. I've probably forgotten something in that list of ten items.

The number of rigs are important in other respects, mostly in terms of measuring activity and providing jobs for roughnecks, geologists, and oil services companies. And that's incredibly important but that's not the issue here. And quit calling me Shirley.

In the Bakken, if all remaining twelve rigs were to quit drilling today and operators focused on completing all DUCs, and opening all shut-in wells, Bakken production would do just fine: link here

If the state banned fracking today, Bakken production would fall precipitously. 

This next February, watch the production, as fracking comes to a standstill.

Pre-Covid, there were about 2,500 wells off-line each month in the Bakken for operational reasons. That's more than twice the number of wells that will be drilled and completed this year.

In the past two months, the number of wells off-line in North Dakota:

  • June, 2020: 5,113
  • May, 2020: 7,070

Think about that, 7,070 wells off line in May, 2020. A terrible, terrible month. And yet, the state still saw a $10-million Legacy Fund deposit. How much money does the state really need?

What Is The Optimum Number Of Rigs In North Dakota?


That's it. Twenty-six. Twenty-six active rigs.  

In the early days of the boom, the number of days for a single rig to spud one well, drill to total depth, and then move to spud the next well was 60 days.

Now? Six days. 

Sure, a bit of hyperbole on both ends, but not much. Does anyone actually think there can be much improvement in the time it takes to drill a Bakken well:

  • the vertical section (two miles down): one day (24 hours);
  • the curve: twelve hours;
  • the lateral: two days;

Those are the best I've seen. Probably the expectation going in:

  • the vertical section (two miles down): three days (72 hours);
  • the curve: twelve hours;
  • the lateral: four days;

Quality Of The Wells


See the EIA's July, 2020, dashboard

Remember: some years ago, several operators opined that they would not drill a Bakken well if the crude oil EUR was not a million bbls. In the early days of the Bakken, the EURs averaged about 350,000 bbls crude oil.

The Bakken: An Oil Play

The Bakken is an oil play and yet its new wells are outproducing the Permian even with natural gas. Again, see the dashboards.

Parent-Daughter Well Argument

The daughter wells in the Bakken are doing exponentially better than the parent wells. I can't speak to the Permian because I do not follow the Permian. Or the Eagle Ford, for that matter. 

Finally: Proof in the Pudding

We've been at twelve active rigs for the past year (?) and production has gone from 1.5 million bbls to 800,000 bbls, and my hunch is that the number of active rigs will remain between 10 and 20 in the Bakken through the end of the year and production will gradually move up (unless Saudi Arabia floods the world with oil again and/or demand destruction worsens). But if the economy improves; oil demand improves; oil price improves, the number of active rigs in the Bakken will move very little, if any, and production will increase significantly.

So, we'll see.

Fast And Furious -- Fifteen Minutes -- Apple Vs AAPL --  -- August 21, 2020

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. 


P/Es (yes, I know these are trailing earnings and current pricing based on forward prospects):
  • AAL: N/A
  • GE: N/A
  • MRNA: N/A
  • F: N/A
  • TSLA: 1,077
  • AMZN: 126
  • NFLX: 83
  • AAPL: 37
  • MSFT: 37
  • FB: 32
  • TGT: 29
  • GM: 27
  • JNJ: 27
  • WMT
  • DE: 22
  • MDU: 12
  • INTC: 9 (are you kidding me?)

Since the split announcement:

  • Since the incredible run-up of AAPL, the P/E of AAPL has only risen from 35 to 37. 

Apple, Inc.

iPhone 12: this is simply incredible. If this is accurate, it will blow folks out of the water, as they say.

Fast Money, CNBC

One of the four talking heads said he sold his AAPL after the earnings announcement (and just before the price of AAPL surged -- AAPL gained $100/share since the earnings call). By the way, that earnings announcement was one of the most bullish earnings announcements I had ever heard. Why anyone would sell after conference call is beyond my imagination.

One of the talking heads said he preferred Microsoft because it was a better "enterprise" company. Whatever that means. Remember: Microsoft and CNBC are joined at the hips.

The most resonating comment came from Ms Finerman, saying what most mom-and-pop holders of AAPL are thinking, including me:

  • don't know what to do with their gains;
  • she expects a pullback so she would like to sell to take some profit, and then get back in, but
  • she doesn't expect the spread between selling now and buying later will be wide enough to offset the taxes she would owe, [and that's assuming there is a pullback], so,
  • she plans to hold.

The most ridiculous comments regarding AAPL: all are still obsessed with the split. Continuing to remind us that the split adds no "intrinsic" value. Again, the moderator never asked if investors prefer "reverse splits."

Almost as ridiculous was this comment from a guest who manages a mutual fund: she said they had been "cautiously" selling AAPL since Monday because they felt AAPL was getting a "bit pricey." She did not mention that the P/E from Monday to Friday, for AAPL, hardly moved, maybe from 35 to 37 at most. What in the world -- or better said -- how in the world are they valuing AAPL if they don't pay attention to the P/E and if they don't even mention the biggest thing yet coming down the pike, as they say: the iPhone 12? 

The iPhone 12 is going to be an incredible phone, the best phone ever, and it's going to fly off the shelves. Has anyone paid attention to the amount of money folks have in their savings and checking accounts? Previously posted: folks are not buying much gas; not buying (m)any airline tickets; not going out to eat (at all, in some cases). Think of all the money parents of college-bound students will save with no transportation costs to and from school and no room and board. What these college students will need/want: a new computer and a new phone. Made by the same company. With an  symbol.

Remember: 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.

Another reminder (too late now, I suppose): date of record for 4 - 1 split -- Monday, August 24, 2020, or at least that's what I'm being told. I have not fact checked that.

Disclaimer: in these "fast and furious" notes, there will be more typographical and content errors than in "normal" posting.

Fast And Furious -- Fifteen Minutes -- The Market And The Economy -- Wall Street Vs Main Street -- August 21, 2020

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. 

I am watching much more CNBC now that the granddaughters have gone back to school (remotely). I am still very "careful" about what I watch over at CNBC. I generally keep the television on in the background, on mute, switch between CNBC, the PGA, and TCM

We all have worldviews; we all have our own myths; we all have our own filters; we all have our "constant themes."

A constant over-riding theme of CNBC seems to be one of doom and gloom. There are three sub-themes of note:

  • the American economy is never doing well (except under the previous president)
  • the producers seem to do what they can to talk the market down (that might change if there's a change in Washington, DC)
  • the producers tend to have their newsreaders ask stupid questions, talking about valuation, but "never" providing such basic data as P/E

I have two pet peeves about CNBC and AAPL:

  • as noted, they continue to talk it down; explore the risks but not the potential; they talk about the price of AAPL but never the P/E in relationship to other high-flyers, like AMZN, TSLA, NFLX, FB, etc
  • they never talk about the potential of Apple, for example what the iPhone is likely to entail

It must be remembered that CNBC employees are all tied up in the GE, Microsoft, NBC world; that's a huge filter though which to view Apple.

A third pet peeve, but unlike the other two, this pet peeve will be temporary, a dead story, ending sometime in September, 2020. My third pet peeve: CNBC talking heads arguing about "splits." Anyone who says splits don't matter obviously see things way differently than I do. Quick! Raise your hand if you agree that you would like to see one of the companies in which you are invested (stocks) announce a "reverse stock split"?

I thought so.

Notes From All Over -- Pre-Market Edition -- August 21, 2020

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.

Fast and furious:

  • Definition of insanity::
  • Wuhan flu:  
    • NYC:I'm not following this story very closely any more, but the graph at this link is amazing; I knew it was bad in NYC, but I did not know it was that bad; link here for the graph;
    • Mass transit is dead: or at least nearly killed public transport; over at oilprice; they must be reading the blog;
  • Govenors:
    • Lied: I'm shocked! Shocked! California governor failed to take promised pay cut, after ordering state workers' pay to be cut 10%; google it;
    • Disappointed; well, actually he's disappointed in his state's utilities. Say what?
  • Tired: no matter how Goodyear spins it, I won't be buying Goodyear tires, never have, never will; Goodyear CEO calls Trump; says it was all a mistake; not his fault; google it;
  • The Magnificent Seven:
    • 777: if any of us are still afloat in this market, it's because seven stocks are doing very, very well; tech's magnificent seven are worth $7.7 trillion. Quick: name the seven. Hint: one of them is the name of a fruit; one is the parent company of the #1 website; one of them is an on-line retailer; one use to have a computer monopoly, then hired Steve Balmer; one knows more about ou than you know about yourself; one sells cars; and, one sells movies. To put their worth into perspective, let's go to Paul R. La Monica:
    • Russell 2000, America's smaller publicly traded companies: total market value -- $1.9 trillion (which by the way is less than $2 trillion which seems to be the new bar)
    • the tech's magnificent seven: $7.7 trillion
  • AAPL: I have a pet peeve with CNBC when it comes to AAPL; actually two; if I get caught up, I will talk about those two pet peeves;
    • must read article on iPhone 12 -- which has not yet been announced, much less brought to market, and yet AAPL continues to soar; if it's been announced, I haven't seen it; I could have missed it;
    • used iPhones will significantly expand Apple's share in emerging markets; two words I like to see in a headline: "Apple" and "expanding"; okay, and a third, "significantly." in almost any order: "Apple significantly expanding": expanding Apple, significantly"; significantly, Apple expanding;" you get the picture:

Only One Well Comig Off Confidential List -- Friday, August 21, 2020

 OPEC basket, link here: $45.19

Back to the Bakken

Active rigs:

Active Rigs1264615232

Only one well coming off the confidential list -- Friday, August 21, 2020: 60 for the month; 131 for the quarter, 577 for the year:

  • 36540, drl/NC, XTO, Marilyn 21X-23G, Capa, no production data;

RBN Energy: a propane molecule's journey to Mont Belvieu and beyond, part 2

When you talk about energy molecules, propane takes the prize for the most versatile. In addition to its well-known uses for BBQ grills, indoor cooking, and home heating, propane is used for drying crops, as a feedstock for petrochemicals, as an engine fuel for forklifts and fleet vehicles, and in recent years, as an export product in its own right. Propane moves to market on pipelines, railcars, ships, barges, trucks — just about any form of transportation you can imagine. But exactly how any particular molecule of propane makes the journey from the instant it comes out of a well to all those market destinations can be a mystery to all but a small cadre of propane market insiders. In another in our series of updates to RBN’s greatest hit blogs, we are delving into this mystery, one step at a time, today focusing on transportation from the producing basin to storage and fractionation at the Mont Belvieu hub, and the transformation of the generic commodity to a marketable fuel.