Monday, September 28, 2020

A Shout-Out To Amazon -- September 28, 2020

A shout-out to Amazon. Amazon just does everything right.

I wanted to order another obscure item from Amazon that I had ordered sometime in the past three years but couldn't remember the specifics. I went back to Amazon (on-line). Amazon keeps track of everything one has ordered and makes it incredibly easy to scroll through the list. WhichI did, and I found the $7.84 item I was looking for.

And, that was it. 

Except just below it was another item that I had previously ordered -- a much more expensive item, at about $60 but an item that I needed to buy again. I had forgotten all about it, but there it was. So, there you have it. I was simply looking for a $7.84 item and ended up ordering about $70 worth of "stuff."

Absolutely amazing. And both items will be here this week. With Prime the items should be here tomorrow or Wednesday, but they won't get here until later in the week: this suggests to me they are simply overwhelmed with orders.

Wow, That Was Fast -- Running Out Of Fingers / Toes -- September 28, 2020

 Link to the Daily Mail.

GM Announces
Another $71 Million Investment In Ohio

Link to Detroit Free Press.

General Motors said Monday it will invest $71 million into two manufacturing plants in Ohio.

The investments, which GM said would help it retain 240 jobs, include $39 million at the company's Toledo transmission plant and $32 million at its Defiance casting plant, according to an announcement from the company.

"The Toledo investment will be used to upgrade and enhance the production of GM’s eight-speed rear-wheel-drive transmission and the Defiance investment will be used to prepare the facility for future engine casting components work," the company said.

The news comes on the same day the state tax agency in Ohio ordered GM to repay $28 million in tax incentives connected to its former Lordstown Assembly Plant, according to The Columbus Dispatch.

GM, which made its Cruze sedan at the plant until last year, sold the Lordstown plant to a company that plans to produce its electric Endurance pickup there. 
GM agreed as part of the Lordstown tax deal to invest $12 million in the area related to education and other programs. An unspecified amount of incentives were approved for a joint venture called Ultium Cells with South Korea's LG Chem to build a new battery cell plant in Lordstown. That $2.3 billion investment is supposed to generate more than 1,100 jobs.

California Recording Lowest Number Of ICU / Hospitalized Patients Since The Early Days Of The Pandemic -- September 28, 2020

From a reader, a big thank you --

Link here to Mercury News:

A lot has changed since the last time California had this few COVID-19 patients in its hospitals.

There were 2,869 patients hospitalized with the virus around the state Saturday, according to the latest update from the California Department of Public Health, hitting its lowest level since April 10; the number of patients in intensive care units also fell to 932, the lowest it has been since April 2, 2020.

At the time, the state was mere weeks into the nation’s first shelter-in-place order, while President Donald Trump and governors, like California’s Gavin Newsom, were volleying responsibility for reopening from the initial shutdowns. There was hope the virus would peak by the end of spring.

Six months later, most of California remains closed and virus deaths have soared. The total fatalities nationwide number nearly 200,000, with more than 14,000 in California alone. The case count in the Golden State was over 760,000 Sunday — 38 times more than it was when hospitalizations were last this low.

Lots of obfuscation. 

Bottom line: lowest number of hospitalized / ICU Covid-19 patients since this all began and California remains shut down. All the state has done is delay the inevitable: there are only two groups of folks in California: those who have not yet tested positive and those that have.  The only way the state can keep these numbers these low is keep the state locked down until a vaccine is universally available, most likely not earlier than a year from now. Possibly longer.

California has a death rate of 396 / one million population.  Can you imagine how low that rate is in the rural part of the state?

Compare (deaths / million population):

  • Iowa: 419
  • New York: 1,708
  • New Jersey: 1.827


The reader's "back-of-the-envelope" calculations:

  • population of California: 40 million
    • 4,000,000 = 10%
    • 40,000=1%
  • 4,000=0.1% of population hospitalized (actually about 0.075% see actual numbers in the linked article above)
  • 1,000 =0.025% of population in intensive care
  • I don't find anywhere a meaningful definition of "a pandemic", but I know that California  is no longer in a pandemic, and most likely never was....and it won't be after the election.

Sports Night -- For The Archives -- September 28, 2020

Wow, it's going to be an impossible night. I will be flipping / clicking back and forth among the following stations: 

  • 56: PBA: professional bowling in masks
    • wow: never expected this -- the "Highrollers" to defeat the "Hitmen" by such a huge margin
  • 36: Texas high-school football
  • 35: PGA -- re-airing of the final round of the weekend tournament -- boring;
  • 34: NFL/BLM: Monday Night Football -- Kansas City Chiefs vs Baltimore Ravens (any doubt on this one?) -- almost as boring as the re-airing of the golf tournament;
  • 33: MMA -- just kidding; no, I did not watch;
  • 31: Poker After Dark -- an loud-mouthed obnoxious player ruined the play
  • 5: Stanley Cup, game #6 -- not a surprise after the Lightning went 2 - 0 in the first period;
    • wow, I did not realize there were that many players dressed for a hokey game
    • it's actually pretty sad -- in front of an empty stadium -- pretty sad
    • Blake Coleman: Lightning star -- from Plano, TX -- just minutes down the road from where we live

Trump Nominated For Third Nobel Peace Prize
For Trump Doctrine

I follow the news fairly closely; never saw this one. It certainly was not tweeted by The Bismarck Tribune. Or anything else I follow.

A reader sent me to the link at the Independent Sentinel. I have not fact-checked it. I'm sure The New York Times and Snopes will do that for me. 

From the linked article:

President Trump will be nominated for a third Nobel Peace Prize by for his extraordinary peace doctrine. It was expounded upon last night by Secretary of State Mike Pompeo.

Apparently a British MP has also nominated Hidin' Biden for a Nobel Peace Prize, also. 

CLR With Eight New Permits; Hess Reports A Completed DUC -- September 28, 2020

Autos: interview with CEO of one of the UK's largest motor retailers, McKinsey & Company, September 28, 2020. 

I was very disappointed with this interview. The CEO is talking his book and ignoring Tesla. It's important to note that he was asked only to look ten years down the road. His thesis: humans are social animals; and, the next ten years of human existence won't change human behavior that has evolved over the last 3,000 to 30,000 years.

Tesla, in this context, is a metonym for EVs and autonomous vehicles in general.

What disappointed me most about this interview? A CEO of a £3 billion automotive retailer was only asked to look out ten years in the future.

What disappointed me most in his answers? The CEO did not address this question -- in a very competitive business, what will the successful auto dealerships do to distinguish themselves from the rest?

Unless I missed it, he suggested same ol', same ol', which coming from a Brit, is not surprising.

EVs: along that same note, there will be a lot written about Governor Knewlittle's announcement that California will ban the sale of gasoline automobiles in 2035. I will not link any of those articles, except by rare exception, one way or the other. Anyone who thinks this will happen has not thought this through. But wow, 2034 should be a great year for auto sales in California.

Back to the Bakken

Active rigs:

Active Rigs1157665832

Nine new permits, #37858 - #37866, inclusive:

  • Operators: CLR (8); Red Trail Energy, LLC
  • Fields: Westberg (McKenzie); Wildcat (Stark)
  • Comments:
    • CLR has permits for eight Clear Creek Federal wells in SESE 35-152-97; 300' FSL and between 813' and 1128' FEL; 
    • wow, there's nothing out there. Although on confidential, they will be running north; if they ran south, they would be Dimmick Lake wells, but these are Westberg wells which mean they will run north;
    • there is a well in the section to the north, a short lateral:
      • 17918, 2,166, CLR, Clear Creek Federal 1-26H, Westberg, t8/10; cum 151K 4/20; intermittent production since 5/20; 

One producing well (a DUC) reported as completed:

  • 29470, drl/A, Hess, TI-Beauty Valley-158-95-1423H-2, Tioga, t--; cum 47K over two months; the original application for permit dated 9/11/14; permit dated 9/22/14;

North Dakota: Hospitals Nearing Capacity Due To Covid-19 -- September 28, 2020

More populous state; no lock down; doubles down on Sturgis rally -- compare North Dakota and South Dakota:

  • most recent data,
    • North Dakota: four new Covid-19 associated deaths; South Dakota: 0
    • Covid-19 deaths per capita: North Dakota ranks 34th, worse than Washington State (epicenter for early Covid-19; Kentucky; Idaho, and Oklahoma; then at 39th, South Dakota

Meanwhile, hospitals in Bismarck are near capacity -- The Bismarck Tribune

Hospitalizations in North Dakota due to COVID-19 hit another high on Monday, and state health officials reported three more coronavirus-related deaths, including two in Burleigh County. 

Hospitalizations rose to 105, up nine from Sunday and one more than the previous high on Saturday, according to state Department of Health data. 

Hospitalizations in the past week have risen 21%. Employees of Sanford Health and CHI St. Alexius Health in Bismarck told the Burleigh-Morton COVID-19 Task Force on Friday that the facilities are nearing capacity due to the pandemic. 

Gov. Doug Burgum's office issued a statement late Sunday saying state officials had met with leaders of the two hospitals about the issue. Sanford Health Bismarck President Michael LeBeau and CHI St. Alexius President and CEO Kurt Schley both said in the statement that their facilities have taken steps to address the spike. Sanford later this week will announce a plan to increase bed capacity, according to LeBeau.

They need to re-do the color scheme. Look at how they break out "number of active cases":

  • 1 - 4 ;
  • 5 - 9;
  • 10 - 29;
  • 30 or more

The 39 active cases in Richland; 32 in Logan; 33 in Pembina; 33 in Rolette, etc., are grouped along with:

  • Burleigh: 719;
  • Cass: 528;
  • Stark: 416

In addition, look at the total number of deaths:

  • Cass (Fargo): 77:
  • Burleigh (Bismarck): 45
  • Morton (Mandan): 24

The rest of the North Dakota counties, total number of deaths, are not even in the same ballpark. I don't know who color-coded / designed the map, but it certainly looks as if the purpose was to obfuscate the issue -- hiding Cass (Fargo), Burleigh (Bismarck), and, Stark (Dickinson) among the other counties.


Six Wells Coming Off The Confidential List; Kuwait's Crude Oil Burn Rate Sets Record -- Spetember 28, 2020

Dallas is lucky it's not 0-3. It was a miracle that Dallas won last week. Had Dallas not scored that incredible last second touchdown last week, Dallas would be looking at a 0-3 beginning to the season. And I think everyone knows that. Last night, quarterback for Seattle Seahawks set an NFL TD record to defeat the Cowboys by a whopping 38 - 31. Yes, whopping. It should have been 45 - 24, but that's another story that won't be printed. But look at this:

Russell Wilson is performing at an incredible clip through three weeks -- historic, in fact. Wilson's five passing touchdowns in Sunday's 38-31 win over the Dallas Cowboys gave him 14 on the year, breaking Patrick Mahomes' record of 13 set in 2018. It also made Wilson the first player in NFL history to throw for four or more touchdowns in each of his team's first three games.

NASCAR: incredible race last night. Kurt Busch, with win, is in the final eight.

Stanley Cup: Tampa Bay Lightning should clinch the championship series tonight; leads 3-2. 

Americans and their pickup trucks, MarketWatch op-ed: Americans' love affair with pickup trucks might be derailing their retirement plans. Monthly payments trend toward $1,300. Link here.

Obviously written by a writer living in locked-down NYC; has never been west of the Mississippi; not even sure if he owns a car, much less ridden in a pickup truck. There's a reason 13 million new pickups were sold between 2013 and 2019. I'll bet a lot of them were "written off" in the first year of ownership by contractors, small business owners, especially roofing companies and landscaping companies in Texas.

Most under-reported energy story: the amount of natural being produced as "associated gas" from global oil fields. See below for yet another example. This has huge, unintended consequences.

Kuwait: crude oil burn hit record in July, 2020 -- ArgusMedia -- link here:

Kuwait burned a record amount of crude in its power and water plants in July, as surging summer electricity demand coincided with a drop in associated gas output resulting from the Opec+ production restraint deal.

The Mideast Gulf state burned just under 184,000 b/d in July, which was around nine times higher than a year earlier.

Kuwaiti summers are brutally hot, and many residents and citizens typically seek brief respite outside the region. But that was impossible this year because of Covid-19-related restrictions of closing the country's airspace. As temperatures hit 52°C, Kuwait's peak load reached a record 14.96GW, up by 4 percent on July 2019.

Like many of its Mideast Gulf neighbours, Kuwait relies largely on associated gas output for power generation and water desalination. It is normally enough in the cooler winter months, and is usually topped up in summer with LNG imported at a floating storage and regasification unit.

But OPEC+ crude output cuts have reduced the amount of associated gas available. Argus estimates that Kuwait produced 2.15mn b/d of crude in July, up by 100,000 b/d from 2.05mn b/d in June, but considerably lower than Kuwait's self-reported 2019 average of nearly 2.68mn b/d. This meant that Kuwait was only able to supply 1.32bn ft³/d of gas in July, compared with nearly 1.6bn ft³/d in July 2019. [It would have been helpful to report the natural gas in boe rather than cubic feet. I've never understood why anyone would report a "gas" in terms of cubic feet.]

BP: shares hit 25-year low as company announces it will pivot to low-margin renewable energy. Link here

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.

Devon saw the writing on the wall; took out an insurance policy. Could be the biggest story of 2021: New Mexico preps for a Biden presidency. By the way, this is one reason Devon bought WPX. Devon's portfolio overweight in federal land; worried about a federal ban on fracking. Link here:

With the U.S. oil industry reeling from the collapse in demand this year, the New Mexico shale patch has emerged as the go-to spot for drillers desperate to squeeze as much crude from the ground without bleeding cash. There’s just one problem: Joe Biden wants to ban new fracking there.

Just over the border with Texas, in a two-county stretch that forms the far western edge of the Permian shale basin, there are more rigs boring oil wells today than anywhere else in the nation. The rock here, once overlooked by wildcatters obsessed with the much-bigger Texas side, has quietly become the most profitable place to produce oil in America. That’s attracting cash-strapped fracking outfits after the pandemic pushed crude prices down to just $40 a barrel.

But there’s a different threat emerging for these drillers, one that won’t affect their counterparts across the state line. The Permian in New Mexico, unlike in Texas, lies largely on federal land. And Biden, the Democratic candidate for president, has promised to ban new fracking on federal land on “day one” if elected. That prospect has so unsettled oil executives that they’re rushing to build a war chest of federal permits to drill in the state. In the first nine months of the year, permit applications for the region — from companies like Devon Energy Corp. and Concho Resources Inc.

And more, from Bloomberg:

Devon Energy Corp. agreed to acquire WPX Energy Inc. in a $2.56 billion all-stock deal, creating one of the largest independent U.S. shale producers and answering investor calls for consolidation at a time of crisis for the sector.

The transaction, which includes a deal premium of about 2.6%, will see Devon shareholders own approximately 57 percent of the combined entity.

Shares of both Devon and WPX stock surged in pre-market trading, indicating shareholder enthusiasm for the deal.

The plunge in oil prices this year, which has left much of the shale industry unprofitable, has added to the impetus for mergers and acquisitions, particularly in the Permian, where scores of producers operate in close physical proximity.

U.S. shale investors are frustrated after years of poor returns and missed targets. Many have called for the sector to consolidate in order to slash costs, and some have advocated for low- to no-premium deals to get those deals across the finish line. Stock prices have been hammered, and companies with market values of less than $5 billion are losing relevance with public investors.

“The bar for investment is rising daily -- with most long-only clients we speak with now leaning towards a $10 billion minimum market cap for investment,” the analysts wrote in a note Monday.

“We believe the public markets would like to see the U.S. upstream sector drop down to 10-15 companies, most of which will likely consolidate through low premium stock-for-stock merger of equals.”

The combinnation of Devon and WPX will tie together two companies with sizable operations in the hottest part of the prolific Permian Basin, which straddles West Texas and southeastern New Mexico. [This, by the way, is the big story -- New Mexico.]

US cold wave to move natural gas prices? Hope springs eternal. We'll see. Consider the source. Link here

Peak oil, what peak oil: now it's the Breidablikk oilfield. Equinor, COP, and Eni to invest $2 billion to develop this Norwegian oil field. Link here Incredibly small field for this much press: 200 million bbls; production to begin 1H24.

It's official: Devon-WPX -- will be called Devon: and will become the biggest independent shale producer. Link here

The merger will see the enlarged company retain the Devon name. It will be led by Rick Muncrief, Tulsa-based WPX’s current chief executive officer. Oklahoma City-based Devon also plans to initiate a so-called fixed-plus variable dividend, which comprises quarterly payout of 11 cents a share and the distribution of up to 50% of the remaining free cash flow. The takeover is expected to close in the first quarter of next year.

OPEC basket, link here: $41.93

Back to the Bakken

Active rigs:

Active Rigs1157665832

Six wells coming off confidential list:

Monday, September 28, 2020: 145 for the month; 216 for the quarter, 662 for the year

  • 36671, drl/A,  Hess, TI-Ives-157-94-0601H-9, Tioga, t--; cum 91K over four months;
  • 34662, SI/A, Whiting, Wold Federal 44-1-2H, Sand Creek, t--; cum 79K over 3 months;

Sunday, September 27, 2020: 143 for the month; 214 for the quarter, 660 for the year

  • 36949, drl/A, Whiting, Arndt 11-24XH, Sanish,

Saturday, September 26, 2020: 142 for the month; 213 for the quarter, 659 for the year

  • 37016, drl/IA, Hess, TI-Blestrud-158-94-3130H-1, Tioga, t--; cum 24K over 27 days;
  • 36313, loc/ NC, BR, State Dodge 1B MBH, Dimmick Lake,
  • 34663, SI/A, Whiting, Wold Federal 44-1-2TFH, Sand Creek, t--; cum 86K over three months;

RBN Energy: Canadian natural gas production facing another year of decline

Canadian gas production in 2019 turned lower for the first time in half a dozen years as very weak benchmark Canadian gas prices led to a sharp reduction in drilling and wellhead shut-ins. This year, higher prices, more drilling, and greater pipeline egress capacity were supposed to set the stage for a return of supply growth. Instead, production volumes have slipped further due to reduced drilling activity and, more recently, a spate of maintenance work. And even if there is some improvement in the next few months, annual average production looks to be on track for a second consecutive decline in 2020. But what about next year? Today, we take a closer look at the recent supply trends and whether there are any signs pointing to a production rebound in 2021.

Like producers in the Alberta oil sands, the natural gas sector in Western Canada has faced its own share of problems in the past few years: insufficient pipeline egress capacity, crippling disconnects and discounts for the AECO price benchmark, and eroding market share for its gas in the U.S. The April-to-October injection seasons of 2018 and 2019 saw all of these problems reach a fever pitch, with AECO prices slipping to some of the lowest levels on record, including a few instances of negative pricing, driven by the complexities of gas supplies mismatched with the capacity of the pipeline system to deliver those supplies.

This year was supposed to be different — and better. We outlined the reasons why AECO prices and gas supplies were expected to be stronger in 2020 in a number of blogs earlier this year.