Thursday, October 15, 2020

No New Permits; Four Permits Renewed; Two DUCs Reported As Completed -- October 15, 2020

Active rigs:

Active Rigs1660685931

No new permits.

Two producing wells (DUCs) reported as completed:

  • 35441, drl/A, Hess, GO-Elvin Garfield-156-97-1918H-9, Dollar Joe, t--; cum --;
  • 35903, SI/A,  Slawson, Orca Federal 1 SLH, Big Bend, t--; cum --;

Four permits renewed:

  • Slawson (2): a Rebel Federal permit and an Armada Federal permit, both in Mountrail County
  • EOG: an Austin permit in Mountrail County,
  • Equinor: a Tufto permit in Williams County,


Gasoline Demand -- October 15, 2020

Link here

Tea leaves: at best, gasoline demand has re-set and will track one-half million bbls per day less than last year for the next two years. At worst, gasoline demand tends to trend down starting next spring.

Conoco - Concho -- Fitzsimmons -- SeekingAlpha -- October 15, 2020

For those investors unhappy that "their" company is not returning wealth in the form of dividends, note this article from Mike Fitzsimmons over at SeekingAlpha.

  • Rumor has it that Conoco Phillips intends to purchase Concho Resources. The combination would make COP a major force in the Permian Basin.
  • I've been worried about a big acquisition because Conoco was holding so much cash and not returning it to shareholders in the form of dividends.
  • I estimate it would take at least $13 billion+ to take out Concho - that would be ~$13+/boe based on Concho's proved reserves.
  • Certainly Concho is cheaper than it was pre-Covid, but that doesn't mean it is worth it for COP to double-down on more O&G assets in an age of energy abundance.

If I had to name one contributor I feel "most safe" with over at SeekingAlpha, it is Mike Fitzsimmons. Long story. Trust me.



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.

Stay Tuned -- Fracking Teaser -- October 15, 2020

The entrepreneurial opportunities in this country are absolutely incredible. 

I was in the process of trying to find an old friend, and using the internet for help.

I knew he was involved with software security with regard to "quantum computing" and the "internet of things."

After a career in the US Air Force working on strategic solutions of the same nature, he went on to pursue his ideas after he retired. "Strategic" in the USAF means looking at least twenty years out. 

I honestly don't know if he was looking to build a company or if he was simply interested in pursuing some unique software security solutions. 

Well, one thing led to another thing and another thing led to another thing and I see he is now the "Chief Science Office" for a large international company. I have no idea, but connecting the dots, my hunch is that he grew his company bigger than I would have ever imagined, and then was "bought out" by a group of investors who installed a new CEO, finance officer, etc., and hired my friend as the chief science office.

By the way, one of my friend's strengths was to realize when he lacked the expertise, time, or skill set to run an international company. He realized his strength was the science. He had no problem with getting "bought out" -- in fact, he told me years ago he hoped he would get "bought out."

In the short term, the new company was 100% dependent on my friend and his patents. The company continued to grow and is now acquiring other companies. I don't know if his company is yet a Fortune 500 company, or if it ever will be, or if it will be acquired by a Fortune 500 company. 

But that matters not to me. 

What interests me is the fact that an individual -- seriously, a single individual -- can build a potential Fortune 500 company in this country in less then ten years. Obviously everyone knows that and examples abound everywhere, but what makes the story interesting is that this little company (one person) began in a basement in Williston, moved on to "HQ 2" in San Diego, and is now headquartered in another state (purposely not mentioned in this post). 

I was in his basement early on, years ago, as he was developing his security system and, he was literally using twine and electrical tape to hold things together. I never, never grasped what he was doing. 

I prefaced all that to say this. Later today or tomorrow at the latest I will post the names of two "unknown" companies, a third company that should be known to readers; and a fourth company that is known to everyone who knows anything about oil. These were sent to me by a reader in a note regarding new fracking technology. [Update: that post has now been posted. Link here.]

I find it absolutely fascinating. The reader's final line is tectonic: "Strides in fracture technology in the last few years developed in the Bakken will make fracking solutions used by 'legacy' companies obsolete 'overnight.'"

I would do it today, but I am with Sophia all afternoon and don't have the time to do this "right" until later this evening.

How To Scramble Eggs

Reader Had A Question About A Well In The Bakken -- October 15, 2020

A reader did not understand why she was receiving royalties from a well that was located nowhere near the minerals she owned.

We've gone through this a gazillion times, so I am surprised that folks still have questions. But if this person has questions, I am sure others have questions.

As my dad would say, "do I have to draw you a picture?"

Notes From All Over -- October 15, 2020

LeBron vs Michael Jordan

This was the topic on "sports talk" television today:

Over time, folks will gradually forget Michael Jordan but comparing apples to apples, comparing their respective arcs (their upward trajectories; their peaks; and their downward slopes), to paraphrase a political line, LeBron James will never be a Michael Jordan.

LeBron's biggest error: morphing into a political figure.

After that it doesn't really matter but if you want to consider other reasons why LeBron James will never be another Michael Jordan, compare:

  • thuggish? LeBron James or Michael Jordan
  • businessman? LeBron James or Michael Jordan
  • threepeats? LeBron James or Michael Jordon? This is interesting; unless LeBron has three threepeats, LeBron James will never beat out Micheal Jordan on this data point alone; the best LeBron will do is tie Michael Jordan in this category and no one is considered the greatest if they only "tie" the former GOAT; by the way, which basketball figure has three threepeats? There's only one. In other words, two threepeats? It’s already been done, LeBron.
  • transitioned the NBA into the BLM? LeBron James or Michael Jordan
  • good-looking, handsome, charismatic, sex appeal? LeBron James or Michael Jordan
  • your spouse would rather date? LeBron James or Michael Jordan 
  • mythic? LeBron James or Michael Jordan
  • articulates his frustration that he does not get the respect he feels he deserves?  LeBron James or Michael Jordan

The fact this question is even being asked tells me that LeBron James will never be a Michael Jordan.

Re-posting: I am re-posting this -- I find it simply amazing on so many levels. I expected ratings to be huge --

  • two huge markets: Miami, and Los Angeles
  • huge star, actually two huge stars
  • not much sports to watch; certainly the "random" Sunday night NFL was a non-issue; does anyone even remember who played that night (NFL)?
  • but let's say one anticipated a decline in viewers; would anyone have predicted the decline to be 10%, 20%?
  • in this case, a whopping 70% drop in viewers year-over-year

BLM: finals finale crashed nearly 70%; beaten by a random Sunday night football game. Link here. Mainstream media sports sites elsewhere try to explain the it away but their arguments fall flat.

Senate Confirmation Hearings

McConnell says he has the votes for confirmation; will hold vote on October 23, 2020 -- that's next week, isn't it? [Update: it’s now being reported the vote will be October 22, 2020.]

I haven't been watching much news, and haven't seen a second of the confirmation hearings. I have not even heard her voice. I have no idea what she sounds like. The only information I have regarding the hearings is what I see on twitter and my twitter feed is very narrow, and very good. The tea leaves suggest the hearings have been incredibly anti-climactic. If so, it suggests to me that folks are fatigued after the previous hearings, and even more so, female nominees are hard to "defeat" in this environment. 

So, we'll see if the tea leaves are correct. 

By the way, for the next president to "pack" the US Supreme Court, he/she would have to place an even number of more judges on the bench. That means at least two, and four seems like a bridge too far. A panel of eleven sounds about right.


Unemployment: jumps to 7.9%. On a macro-level, I don't think movers and shakers are really concerned. They remember numbers just as bad under the previous administration when there was no pandemic. Goldman Sachs actually said that economy really has not done that badly as a whole. The transportation (airlines) sector, dining out, tourism, etc., has taken the brunt, but other sectors have picked up the slack. Again, the "Disney pivot" was a huge story this past week. 

Chinese flu: I sound like a broken record, but I don't think folks understand this pandemic at all. 

Again, in the US, breathless reporters are aghast that there have been in excess of eight million Covid-cases in the US but don't report that 8/330 = 2.4%. Anyone who says we will all be immune by this time next year hasn't thought this through. And even if that were accurate, that we would all be immune by this time next year, that's still a year away. If the vaccine is only intramuscular (not nasal, not oral) it will be poorly accepted by the vast majority of Americans who really think about these things. 

Restaurants, shopping: even if restaurants are open and even if retail stores are "back to normal" I don't go out much any more. I haven't eaten in a restaurant since March; I haven't visited a (professional) barber shop since March (maybe February); my only shopping is on Amazon with minor grocery store exceptions and occasional Walmart / Target for small items that make no sense ordering on line. 

I don't even go to the bank any more which I used to do once a month. It feels ridiculous to go anywhere wearing a mask, and humans, being social animals, like to see smiles on folks. See-through masks, ironically, are creepy. And, of course, those mask configurations used by welders seem a bit .... bizarre ... for lack of a better word. 

Virtue signaling at its best:

  • a mask-wearing candidate on a stage more than sixty feet away from anyone;
  • a mask-wearing football coach on the sideline, surrounded by 120 players, support staff, television crews, press reporters, etc., 99% of whom are not wearing masks;
  • by the way: unless a television commercial is addressing the pandemic, I'm not seeing any masks in commercials
  • weekly TV sitcoms continue to be produced -- no one wearing masks on stage; exactly how does that work out?


I don't think folks understand how incredible the Apple camera is. Certainly I did not. It must drive Tim Cook, et al, nuts that folks don't get it. LOL.

Look at this, taken by Sophia's mother on an iPhone 11, I suppose. 

This photo was taken in "portrait" mode with "stage lighting" -- our daughter's favorite settings for such photos. 

Combine this with professional processing, development, framing and wow!


EIA's Weekly Petroleum Report -- Big Story? The Decline In Distillate Inventories -- October 15, 2020


October 16, 2020: see first link. A reader provides the answer to my question (see below) regarding the huge decline in US distillate fuel inventories:

US distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 307,000 barrels per day to 4,175,000 barrels per day, and because our exports of distillates rose by 258,000 barrels per day to 1,289,000 barrels per day, and because our imports of distillates fell by 70,000 barrels per day to 160,000 barrels per day ... 
... but even after this week's big inventory decrease, US distillate supplies at the end of the week were still 33.2% above the 123,501,000 barrels of distillates that we had in storage on October 11th, 2019.

Production was at a 3-year-low; largest draw since February 2003.

Original Post

Wow: maybe I'm misreading this, but if I'm reading this correctly, the big story this week in the EIA weekly petroleum report is the huge decline in distillate fuel inventories. 

I can only imagine this was the result of increased exports, but I don't know. Without an increase in exports, it's hard for me to believe that "production" plus "demand" was enough to drop inventories by that much. Normally we seen a range of +3 million to -3 million with a more narrow range of + 1.0 million bbls being the norm (?). In this report, week-over-week, the decline was a whopping 7.2 million bbls. Harvesting season? [Update: see first comment.]

EIA weekly petroleum report, link here:

  • US crude oil in storage: at 489.1 million bbls, about 11% above an already-fat five-year average;
  • US crude oil in storage decreased: decreased by 3.8 million bbls from the previous week
  • refiners operating at 75.1% of their operable capacity
  • imports: are averaging 15% less than the same four-week period last year



Date of Report=


Million Bbls Storage

Over/under 5-year average

Week 0

November 21, 2018



Week 1

November 28, 2018



Week 2

December 6, 2018



Week 3

December 12, 2018



Week 4

December 19, 2018



Week 5

December 28, 2018



Week 84

July 15, 2020




Week 85

July 22, 2020




Week 86

July 29, 2020




Week 87

August 5, 2020




Week 93

September 16, 2020




Week 94

September 23, 2020




Week 95

September 30, 2020




Week 96

October 7, 2020




Week 97

October 15, 2020




Distillate fuel:

Distillate Fuel Inventories


Date of Report

Change in Millions

Relative to 5-Yr Avg

Week 1

August 26, 2020



Week 2

September 2, 2020



Week 3

September 10, 2020



Week 4

September 16, 2020



Week 5

September 23, 2020



Week 6

September 30, 2020



Week 7

October 7, 2020



Week 8

October 15, 2020



Crude oil imports:

Crude Oil Imports

Week (week-over-week)

Date of Report

Raw Data, millions of bbls

Change (millions of bbls)

Four-week period comparison

Week 0

March 11, 2029



Week 1

March 18, 2020



Week 2

March 25, 2020



Week 13

June 10, 2020




Week 22

August 12, 2020




Week 23

August 19, 2020




Week 24

August 26, 2020




Week 25

September 2, 2020




Week 26

September 10, 2020




Week 27

September 16, 2020




Week 28

September 23, 2020




Week 29

September 30, 2020




Week 30

October 7, 2020




Week 31

October 15, 2020




Jet fuel delivered:

Jet Fuel Delivered, Change, Four-Week/Four-Week


Date of Report


Week 0



Week 1



Week 2



Week 3



Week 4



Week 5



Week 6



Week 7



Week 8



Week 9



Week 10



Week 11

May 22, 2020


Week 20

July 29, 2020


Week 21

August 5, 2020


Week 22

August 12, 2020


Week 23

August 19, 2020


Week 24

August 26, 2020


Week 29

September 30, 2020


Week 30

October 7, 2020


Week 31

October 15, 2020