Wednesday, September 23, 2020

Daily Surgis Rally Report -- South Dakota Looking Very, Very Good -- Double-Figure Number Of "New" Deaths In Both Minnesota And Iowa; Same Time Period: 0 For South Dakota -- September 23, 2020

Sturgis Rally Update

Link here.

Sturgis Rally: August 7 - August 16, 2020.

At link above, set "search" for "yesterday."

Number of cases means absolutely nothing.

Number of deaths associated with Covid-19 "means more" but numbers are incredibly questionable. Criteria for diagnosis varies across jurisdiction.

But be that as it may, new deaths in last 24 hours:

  • Iowa: 11 -- ouch! In comparison, New York only had two.
  • Minnesota: 10 -- ouch! In comparison, New York only had two.
  • Nebraska: 9 -- ouch! In comparison, New York only had two.
  • North Dakota: 3 -- I guess this is why the White House paints ND red 
  • Montana: 3 .
  • South Dakota: 0 -- compared to Minnesota, ND, Montana -- looking pretty good -- second day in a row with a goose egg;
  • Wyoming: 0 -- three days in a row with zero new deaths;

Deaths per million population, and (ranking among 50 states and DC):

  • Iowa: 408 (22) -- moves from 23 to 22 (bad)
  • Minnesota: 360 (27)  -- ranking unchanged
  • North Dakota: 257 (35) -- moved unchanged
  • Nebraska: 238 (39) -- ranking unchanged
  • South Dakota: 228 (40) -- ranking unchanged and no new deaths in time period
  • Montana: 153 (44) -- ranking unchanged
  • Wyoming: 85 (50) -- ranking unchanged -- only Alaska is lower with 62 deaths / one million

Two New Permits; Eight Permits Renewed; Four DUCs Reported As Completed -- September 23, 2020

California EVs: Governor Newsom says the state will ban the sale of ICE-automobiles in 2035. This announcement comes just after California had to have rolling blackouts a) to protect the grid; and, b) to protect the forests. Obviously the governor has not thought this through. 

Ouch! Bismarck City Commission passed the city's 2021 budget that includes over $4 million in property tax increases. Didn't see that coming.  

Back to the Bakken

Active rigs:

Active Rigs1159665733

Two new permits, #37854 - #37855, inclusive:

  • Operators: CLR, Whiting
  • Fields: Cedar Coulee (Dunn); Sanish (Mountrail)
  • Comments:
    • CLR has a permit for a Carus well in SESW 28-147-96, 418' FSL and 1498' FWL, Cedar Coulee;
    • Whiting has a permit for a Lacey well in NESE 2-152-92, 1805' FSL and 350' FEL;

Three permits canceled:

  • Enerplus (2): an Oxbow permit and a Plateau permit, both in McKenzie County
  • MRO: a  Pomeroy permit in Dunn County;

Eight permits renewed:

  • CLR: eight LCU wells -- four Ralph Federal permits; three Reckitt Federal permits; and, a Foster Federal permit; all in section 22-153-99; Williams County

Four producing wells (DUCs) reported as completed:

  • 35261, drl/A, CLR, Sefolosha Federal 11-23H, Epping, t--; cum --; off line since 3/20;
  • 36721, drl/A, CLR, Vardon 12-14H1, Siverson, t--; cum --; off line since 3/20;
  • 36450, SI/A, WPX, Badger 22-21HIL, Squaw Valley, t--; cum 160K 7/20; a 41K month;
  • 36259, drl/A, WPX, Mandaree Warrior 14-11HS, Squaw Creek, t--; cum 142K 7/20; a couple of 36K months;

Taking a closer look: in yesterday's daily activity report, it was reported that about 80 wells were transferred from Taqa USA to D90 Energy, LLC;

  • it appears most were in Burke County, but spread out across most oil-producing counties in western North Dakota;
  • most recent permit: 16697
  • most permits were of wells drilled decades ago
  • many (most?) of them are PA
  • nothing of immediate interest here;

Reason #374 Why I Love To Blog -- September 23, 2020

Exxon is in the process of exiting the North Sea. China and OPEC are looking to move in.

Link here.

How much oil are we talking?

Exxon is offering its stake in 15 fields, which are expected to produce 37,000 barrels of oil equivalent a day net to the company this year. Stakes in pipeline infrastructure as well as two exploration areas are also up for grabs.

Following the Bakken puts this in perspective. For XOM, 37,000 boepd does not move the needle, not even for the Bakken which is producing one million bopd. 

By the way, whenever I see "boe" I know someone is trying to pad the numbers, making it sound better than it really is. "BOE" includes natural gas which is practically being given away. In many cases, it's a real hassle for the oil company interested in only producing oil. 

Covid-19: A Santa Barbara, California, Clinic's Experience -- September 23, 2020

Disclaimer: in a long note like this there will be typographical and content errors. I often misread data from original sources. There's probably a bunch of other stuff that I could say, but that will suffice for now. This was done for my benefit. If this is important to you go to the original sources. Again, I often make simple arithmetic errors, and I often make typographical and content errors in long notes like this. 

Link here.

This is an incredible note from a clinic to its patients. I am more than impressed.

I scanned through it fairly quickly. As I said I am quite impressed. Impressed that a clinic would send out such a long note to its patients. Obviously, they have a very, very well-educated population.

But for such a long epistle I'm more surprised at what is not mentioned (again, these may have been mentioned and I simply missed them):

  • demographics (such as age, pre-existing medical conditions, living arrangements) for those that have died of Covid-19 verified by at least two positive tests; three would be better, based on number of false positives being reported
  • hospitalizations due to Covid-19 as the primary diagnosis
    • average length of stay in hospital with Covid-19 as primary diagnosis
    • percentage of all hospitalizations 
    • compared with seasonal flu
  • ICU admissions due to Covid-19 as the primary diagnosis
    • percentage of all ICU admissions
    • percent survival if admitted to ICU; average length of stay in ICU 
    • compared with seasonal flu
  • percent bed occupancy throughout calendar year, 2020
    • compared with seasonal flu
  • medical intervention strategies being used (hydroxychloroquine; steroids; anti-virals)
    • success rate of medical intervention
    • what's working; what's not
  • pet peeve: focus on number of cases -- irrelevant, inaccurate, and in-covfefe
  • pet peeve: no comparison of Covid-19 death rates with those of seasonal flu
  • pet peeve: no disclaimer that seasonal flu numbers are for a single season (i.e., about six months); whereas Covid-19 has now been going on perhaps as long as nine months and no end in sight;
  • reimbursement (dollar amount) from Medicare for Covid-19 diagnosis and whether that requires a confirmatory diagnostic test or simply based on a physician's impression/diagnosis
    • compared with seasonal flu

From the article, Covid-19 statistics:

  • death rate for seasonal flu, according to the CDC
    • 50,000 deaths / 50 million cases in the US = 0.001 or 0.1%
    • 50,000 deaths / 350 million US population = 0.000143 or 0.00143%
  • death rate for Covid-19 in the US according to Johns Hopkins:
    • 60 deaths / 100,000 cases = 0.0006 or 0.06%

Again, according to the CDC, regarding seasonal flu:

  • 50,000 deaths annually in a US population of 350 million = 0.000143 = 0.001%

From Johns Hopkins, regarding Covid-19:

  • 60 deaths so far for every 100,000 population = 600 deaths per million or 210,000

The time frames being used are different for Covid-19 and seasonal flu:

  • seasonal flu numbers are based on one season: six months
  • the US attempted to flatten the curve, and deaths will be spread out over a much longer time frame which makes it hard to compare seasonal flu with Covid-19

Having said that, Covid-19:

  • 210,000 deaths / 350 million = 0.0006 = 0.06%
  • using these numbers, Covid-19 has a death rate / 1 million population that is 60x that of seasonal flu

By the way, that "210,000" is uncannily close to actual number of deaths in the US reported as of yesterday, which was 205,471. Link here.

By the way, if these numbers are even remotely close, there was no question that the right strategy was to "flatten the curve." Seasonal flu with 50,000 deaths / 50 million cases despite a vaccine puts a huge stress on the US every year, and on the healthcare system specifically. Compressing the current 200,000 deaths  over nine months into three months which might have happened without attempts to "flatten the curve" would have been quite a challenge for the health care industry and the US population in general. 

One can argue, President Trump and the governors did not go far enough, but one can also argue that overall, "we've" done pretty well given all the conditions, least of which political in an election year.

Disclaimer: I often make simple arithmetic errors.

Battery Day -- The WSJ -- September 23, 2020

Tesla: EVs are still a luxury, Elon Musk. This is probably one of the best articles on status of EVs today. Link over at The WSJ. And, yes, it's still a battery issue. Battery Day for Elon Musk.

  • plans to be world's largest auto maker by .....
  • Volkswagen AG: here, hold my beer
  • if Elon Musk delivers 20 million vehicles annually that will be twice what Volkswagen AG sold last year (2019) (all vehicles)
  • this will be fun to watch
  • might get to a $25,000 vehicle in "three years or so"
  • operative phrase: "or so"
  • no precise timeline or budget figure provided
  • after the presentation, TSLA fell more than 6%, but then recovered a bit

The presentation, according to The WSJ:

It is the kind of shoot-for-the moon goal that has previously excited investors to make Tesla the world’s most-valuable car company despite selling just 367,500 vehicles last year.


Mr. Musk has a long history of making grandiose claims, some of which have been conveniently forgotten, including promises around robot vehicles and missed production goals. But he gained traction and credibility after opening a new factory in China and posting four consecutive quarters of profit after several years of struggle as he worked to deliver the Model 3. [Profitability mostly due to selling regulatory environmental credits.]

The compact car represented his long-pursued bet that the company could build and sell an electric car for $35,000 to usher in a new age of electric vehicles. But the Model 3 is still too expensive to be considered an everyman’s vehicle. It was briefly priced at $35,000, though on average sold for about $50,000 last year.

And here's the problem: “One of the things that troubles me the most is that we don’t yet have a truly affordable car, and that is something that we will make in the future,” Mr. Musk said Tuesday. “But in order to do that, we’ve got to get the cost of batteries down.” 

Actually that's only one of many, many problems.

But time to move on.

One helpful metric before we leave:

While Mr. Musk didn’t detail the exact cost per kilowatt-hour of battery cells, his projected savings of 56% to be fully realized in around three years would suggest a price far below the $100 per kWh threshold generally accepted for electric cars to reach price parity with gas-powered vehicles. Tesla’s cost of cells for the Model 3 are around $100 per kWh, according to estimates by Benchmark Mineral Intelligence.

More on batteries here, also from The WSJ

North Dakota's Natural Gas Production Increased 17% Month-Over-Month; State Still Hit Capture Target Guidelines; NDIC Tweaks Policy -- September 23, 2020

Big headline in Bismarck, but, wow, talk about trivial. The NDIC simply tweaked some rules and regulations after consulting with the oil companies. Link to Houston Chronicle:

North Dakota’s Industrial Commission on Tuesday approved a revised gas capture policy that aims to encourage investment in infrastructure but doesn’t change targets for burning excess natural gas at well heads.

State Mineral Resources Director Lynn Helms said the Oil and Gas Division has “relaxed the policy slightly in a few places and tightened it significantly in other places” after months of consultation with industry and environmental groups, The Bismarck Tribune reported.

Helms said future gas capture requires “a monumental effort” and billions of dollars in infrastructure such as natural gas processing plants and pipelines. North Dakota's gas production is projected to hit 5.3 billion cubic feet a day 18 years from now. The state produced a record of more than 3.1 billion cubic feet per day in November 2019.

Companies have met or exceeded gas capture goals in recent months, largely due to decreased production amid the coronavirus pandemic and several new processing facilities and expansions coming online in the last year, North Dakota Pipeline Authority Director Justin Kringstad said.

The policy includes several exceptions for companies that flare natural gas under certain circumstances, such as gas plant outages or delays securing a right-of-way for pipeline construction. Mineral Resources spokeswoman Katie Haarsager said the revised policy should clarify how the variances in the calculation are applied.

In fact, natural gas production increased by 17% month-over-month in most recent data and North Dakota still reached its natural gas capture target.  Link here.

Natural Gas As Low As 73 Cents/MMBtu In Appalachia; No Wells Coming Off Confidential List Today -- September 23, 2020

Chart of the day:

US traffic: sluggish recovery.

Tesla: EVs are still a luxury, Elon Musk. This is probably one of the best articles on status of EVs today. Link over at The WSJ. Stand-alone post later. And, yes, it's still a battery issue.

Batteries: running out of fingers and toes. Now we have yet another battery start-up, this one backed by Bill Gates. Data points:

  • QuantumScape
  • "a $4.3 billion EV battery startup based in .... where else ... but California
  • backed by Volkswagen AG
  • 10-year-old startup
  • NYSE ticker: QS after merging with shell company Kensington Capital Acquisition Corp
  • says it uses "pure lithium"
  • battery will charge in 15 minutes, cost less than most of today's conventional batteries, and allow mass-market EVs to travel about 90% further than contemporary EVs; and will solve world hunger

From the same article as above:

"The problem is that batteries are big and heavy," Gates wrote in a blog post. 
"Even with big breakthroughs in battery technology, electric vehicles will probably never be a practical solution for things like 18-wheelers, cargo ships and passenger jets. Electricity works when you need to cover short distances, but we need a different solution for heavy, long-haul vehicles."

But the best, saved for last, from that same article:

Word of the day: hustings. From American Thinker, "Biden stiffs the local media ... one of the principal benefits of a presidential campaign visit to the hustings is supposed to be the opportunity for the candidate to appear on local media, talking to locally prominent reporters and anchors who reach viewers ...

hustings: second definition -- "the proceeding or locale of an election campaign" .... but look at the "provenance" of the word -- an OLD NORSE connection.

The term traces to an Old Norse word meaning "house assembly," and 1000 years ago hustings were judicial assemblies where Anglo-Saxon kings and their followers held council and resolved civil disputes. Over time, "hustings" came to refer not only to the assembly but also to the platform where the leaders of such gatherings sat, and in due course the term was applied to the entire campaigning process as well. 
Nowadays, "on the hustings" is synonymous with "on the stump," and it can refer to any place along the campaign trail where a candidate makes a pitch for public office.
So, now you know.

OPEC basket, link here: down again, but not by much. OSP at $41.32.

Back to the Bakken

Active rigs:

Active Rigs1159665733

No wells coming off the confidential list

RBN Energy: seasonal demand declines, production curtailments hit Appalachian gas market, part 3

As U.S. natural gas spot and futures prices retreated in the past week, the price of gas at Appalachia’s Dominion South hub fell as low as $0.735/MMBtu, the lowest since fall 2017, before partially rebounding yesterday to about $1.10/MMBtu, according to the NGI daily gas price index. 
Moreover, the forwards market indicates sub-$1/MMBtu prices are in store for October as well. The regional supply hub didn’t weaken quite as much as prices at the national benchmark Henry Hub, which collapsed in recent days on demand losses — from cooler weather, storm-related power outages, and disruptions to LNG exports — and storage levels in the Gulf Coast region that are well above average and approaching peak capacity levels. 
The relative support for prices in the Northeast is in part due to a second round of production shut-ins by EQT Corp., which took effect September 1. But seasonal demand declines are underway; the Dominion Energy Cove Point LNG facility in Maryland just went offline for its annual fall maintenance, placing additional pressure on already-packed storage fields and takeaway pipelines; and pipeline maintenance events are reducing outflow capacity and curtailing production. Altogether, that signals more volatility ahead. Today, we provide an update on the fundamentals driving the Northeast gas market.

From Selling Hogs To Selling HOGs -- September 23, 2020

First we had a 50-year-old Farmer take over BNSF; now we have a hog-selling executive selling HOGs. LOL.

Link at The WSJ:

Motorcycle maker Harley-Davidson Inc. hired an industry outsider with transformation experience as its next finance chief, the first woman in that role. 
The Milwaukee-based company named Gina Goetter as its chief financial officer, effective Sept. 30. Ms. Goetter, who joins Harley-Davidson from meat producer Tyson Foods Inc., will take over from interim CFO Darrell Thomas. 
Mr. Thomas became interim finance chief in July when Harley-Davidson announced the departure of John Olin, who had served as finance head since 2009. 
Ms. Goetter is expected to be part of the restructuring of Harley-Davidson under its new Chief Executive Jochen Zeitz, formerly the head of German sportswear company Puma SE. The initiative, called the “Rewire,” is intended to reduce the number of models on offer and simplify the business that has seen its sales decline for several quarters in a row. 
Ms. Goetter will be taking over the finances of Harley-Davidson, which booked about $5.36 billion in consolidated revenue in 2019, after the motorcycle company was removed from the S&P 500 in June due to a more than 30% drop in its share price since the beginning of the year.

And so the day begins. By the way, on a more serious note, this a huge story in the sense that in both cases "we" have women moving to the top. I'm impressed.