Wednesday, November 11, 2020

Notes From All Over -- Late Night Edition -- November 11, 2020

November "ag" report. Link here

Stick a fork in it, it's dead. Link here:

And college football is in even deeper trouble
. Tea leaves: college football will figure out how to make it look like a season, but anyone following the story knows the season is already over. If there was any doubt that the season was over when Notre Dame beat Clemson, that doubt was erased with the cancellation of the Ohio game this weekend.

NFL: five days on the injured reserve list for Covid-19. College? Twenty-one days. It varies, depending on the circumstances, but that's about how I see it. 

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. 

Alibaba: plunging.

One Last Note Before I Call It An Evening -- But I'll Be Back Later Tonight -- November 11, 2020

The college football season is falling apart. It is quickly becoming a joke. 

Veterans Day

PSA: Bank Of America Changes Terms Of Credit Card Agreement -- November 11, 2020

See this link. The San Francisco Chronicle had this story and background three days ago, but it's behind a paywall. When you read the article at the link, one gets the feeling that auto rental companies found a new revenue stream, and credit card companies / banks didn't like what they were seeing. 

Think about it: if you used your own private auto insurance, you had a deductible. As far as I know, credit card companies don't have a deductible for this benefit.

But why now, one might ask. The numerator is growing; the denominator is declining.

WTI, Bakken, And Now Murban -- November 11, 2020

Flipped: OPEC basket closed the day trading at $41.72, while WTI closed at $41.15. Link to Charles Kennedy:

Chevron, Occidental, and oil trading giant Trafigura have agreed to explore the idea to price the light U.S. crude they export to Asia off the upcoming ICE Murban Futures contract for light sweet crude
The Murban futures contract will be an alternative pricing benchmark to the benchmark Oman/Dubai average, which is currently the most used benchmark in the Middle East and off which the oil exporters from the Middle East price their oil going to Asia. 
The Murban futures contract for light crude could spare Asian buyers the use of Brent Crude futures for hedging, according to Reuters. 
Trafigura and U.S. oil majors Chevron and Occidental are the largest exporters of U.S. crude oil, and using the new futures contract – to be launched in March next year – to price their oil to Asia shows the growing importance of U.S. crude oil exports on the international oil markets.

At oilprice, the Murban price has a one-day delay. Currently Murban is priced at $42.89, up $2.11, right in line WTI yesterday. See Murban at wiki. Almost identical to WTI, but not as light as Bakken.

  • Bakken: 36° to 44° (link here)
  • Murban: 40.2°
  • WTI: 39.6°
  • Brent blend: 38.3°
  • Light Louisiana Sweet: 35.6°
  • Saudi Arabia light: 34°

Back to the Bakken

Active rigs:

Active Rigs1555665238

No daily activity report today.

Schumer: US Senate Majority Leader If Senate Is Split 50-50 -- November 11, 2020

Link here.  

I think the Trump-Biden presidential election will lead to huge civics lesson(s) for all Americans. I find this absolutely exciting. 

Not worried a bit. 

First question: if there is a 50-50 split, who becomes US Senate majority leader. That one is easy. See link.

Second question: if there is a 50-50 split, could a moderate Democrat change party affiliation in exchange for some great perks? Or is it more likely that a liberal Republican might change party affiliation when he/she looks at the electorate?

Third question: who decides how many justices there will be on the US Supreme Court? That one is also easy: Congress. And in this case, Schumer and Pelosi will decide.

Fourth question: see, second question. 

Fifth question: will we see an additional two US Supreme court justices by the end of 2024? Although there have been as many as ten, an even number seems untenable. Tea leaves: yes.

Sixth question: of those in the US Senate, who is the leading GOP spokesman now? Among those in the US Senate, who is most likely to get GOP presidential nomination in 2024? 

Seventh question: how big will the stimulus package be when it is passed in February, 2021?

Eighth question: When will North Korea launch its next missile?

Ninth question: when, how, and why will President Biden step down? As long as he's "useful," he will remain president.

Search Engines -- November 11, 2020

I was again curious about "Duck Duck Go" vs "Google." The former does no tracking of my previous searches, my interests, my surfing through the internet; the latter attempts to do its best to help me find what I'm looking for and tracks me whenever it can.

There is no comparison. If you want a bunch of random hits with little utility, go with "Duck Duck Go."

If you want to find what you are looking for, go with Google. 

Period. Dot. End of story.

As noted, I was curious, so I went to Duck Duck Go and typed in "million dollar way" and the top hits had to do with traveling beautiful highways in the US. and eight ways to invest a million dollars in 2020. Good grief, Charlie Brown. Duck Duck Go had no idea what I was looking for.

Doing the same with Google and a link to my blog is the first thing that shows up and then, this, the second hit. Wow:

This was back in 2009 and an op-ed piece begins with a quote from my blog. Wow, I am blown away. I had not seen that before.

Google knew what I was looking for, and for this to be the second hit for a pretty generic search (million dollar way) this tells me this Grand Forks Herald article had a lot of views, a lot of hits. Whoo-hoo!

By the way, here's the Duck Duck Go screenshot:

Here's the Google screenshot:

For folks who like to surf the net with no goal in mind, Duck Duck Go is perfect. Talk about a waste of time, however, for those who are actually trying to find something useful, Google beats everyone out there.

Wow, eight ways to invest a million dollars in 2020. And it's a real estate site. Good grief, Charlie Brown.

Closer Look At New Well Reported By Hess -- November 11, 2020

For newbies: in the good old days, early in the boom, a Bakken well that produced 100,000 bbls in two years with a EUR of 300,000 bbls and drilled over 60 days was considered a good well. 

The well:

  • 365091, loc/A, Hess, SC-5WX-152-99-0310H-5, API: 33-053-09077; Banks, SC-5WX wells are tracked here; t--; cum 118K 9/20; 118K over four months; production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

From the well file:
  • frack data not yet posted at the NDIC website;
  • spud: February 9, 2020
  • cease drilling February 18, 2020
  • middle Bakken; TD = 22,610' MD
  • logging services began February 12, 2020, at 7:12 a.m. CT
  • vertical: drilled in two runs, with a planned bit trip at 8,741' MD
  • curve: began on February 13 at 5:40 a.m.; completed on February 13 at 8:45 a.m. If I am reading that correctly, they completed the curve in three hours; generally, I've seen curve completions taking slightly less than 12 hours (as the standard):
  • lateral:
    • began on February 15, 7:52 a.m.
    • 15' target centered 22.5' below the top of the middle Bakken
    • total gas ranged from 17 to 2,519 units
    • ceased at a depth of 22,610' MD on February 18, 2020, at 11:03 p.m. If I'm reading this correctly, they drilled the lateral in 3.5 days; generally I've seen laterals completed in six days (as the standard);
So, a day to drill the vertical; less than six hours to drill the curve; and less than four days to drill the lateral.

  • 4/6/20 - 4/19/20
  • small to moderate frack: 6.6 million gallons of water
  • water: 87.3% water by mass; on the low side but within "usual" parameters;

Notes From All Over -- Part 2 -- November 11, 2020

The market: I haven't watched the market or the news for the last couple of months. It's only been NASCAR and old movies, mostly on TCM. But, wow, it looks like it's time to go back and look at the market. Wow. But, no, I'm not watching the news, yet. 

Market: all three major indices are up today. Most remarkable, even after that recent surge in the Dow (was that Monday, two days ago?) Dow futures are up yet another 162 points and Goldman Sachs says there is still room to run.

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.

JC Penney: US bankruptcy court approves sale of JC Penney. I have no dog in this fight; this is for the archives.

Politics: I would have voted "yes" on this one. San Francisco voters approve CEO tax. And here. In fact, I would  have advocated for a much bigger tax. The headline says the "new" tax is a "first-in-the-nation." I though Portland, OR, did the same thing some time ago. Must be wrong. By the way, there are many ways for CEOs to get around this as long as it's a "salary tax" and not a "wealth tax."

COP: third or fourth favorite company of mine. It's been in the news a lot lately. Two stories from SeekingAlpha today:

Market: dividend strategy

Sports: the number one sports event I'm not interested in? The Tiger Woods Invitational. I'll end up following it and reporting it but 90% of the "memorable" coverage will be on one guy. Plus all the ads. 

So, now that the market has opened:

  • Dow 30: up 40 points
  • NASDAQ: up 164 points -- whoo-hoo!
  • S&P 500: up 20 points.

Apple's third event: introduction of the M1 chip. Unfortunately for the masses -- a real sleeper. Apple is now 99% function, 1% form, if that makes sense.

Notes From All Over -- Part 1 -- November 11, 2020

Only one item: tectonic changes in the oil and gas industry will be the story of 2021.

  • it is beginning now with consolidation / changes in the oil refining sector;
  • will spread to mergers among independents (and possibly majors) in the exploration business;
  • by the end of 2021, we will see huge "break" in natural gas, maybe crude oil, pipeline sector between the "haves" and the "have-nots";
  • federal vs non-federal leasing will make huge impact; can you spell New Mexico?
  • And where will is all end? Consumers in some states will be paying hugely for natural gas, and the gasoline price at the pump will trend toward that last seen in the Obama era. 

Shell to shut down Louisiana refinery. Link here

Royal Dutch Shell will shut down its Convent refinery in Louisiana after failing to find a buyer for the facility. 
The move, due to be completed before the end of the month, is in line with Shell’s plans to reduce the number of refineries it operates from 14 to 6 over the next four years. The plans, in turn, are part of its strategy to shift away from its core business and into alternative energy.
The supermajor will “invest in a core set of uniquely integrated manufacturing sites that are also strategically positioned for the transition to a low-carbon future,” Shell said in the statement. 
“A key advantage of these core sites will also come from further integration with Shell trading hubs, and from producing more chemicals and other products that are resilient in a low-carbon future.” 
Last year, Shell sold its Martinez refinery to PBF Holding Company for $1 billion, but last year oil was trading a lot higher than it is trading now, and demand for oil and oil products was not devastated by a coronavirus pandemic that has infected more than 47 million people so far.

Pfizer's Covid Vaccine Announcement -- Hmmm......November 11, 2020

Commentary: I heard the news on my drive back from Tucson, Arizona, to Dallas, on Sunday, November 8, 2020, on the radio, while searching for a station airing the championship NASCAR race. Despite all my efforts to avoid the news, I happened to catch the "press release" disguised as a news report. As I said on the blog Monday, "I'm not buying it." 

I'm not buying the story. 

[A digression: it was nice to this these statistics, something I've said numerous times; nice to see someone else saying it: vaccine effectiveness  -- 90% vs 44%. Link here.]

And now this over at twitter, link here

And then this:

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.

By the way, speaking of the Chinese flu, this is an interesting graphic, provided by The WSJ. For the past several weeks the dark brown area has been "confined" to the northern tier counties in Montana and North Dakota along the US-Canadian border with some intermittent brown spreading into South Dakota. 

But look at how far the "brown" has spread -- pretty much covering all of "fly-over" country. Huge difference in just the past few days. 

By the way, North Dakota has broken into the "top ten" with number of deaths/capita. North Dakota now ranks #9. At the link, set your filter to "yesterday," and hit the "deaths/one million population" column. Technically North Dakota is #8, but the District of Columbia is included in the the list of 57 states. South Dakota, home of the infamous Sturgis Rally is ranked #23. 

And, oh, by the way, "weekly new cases/100,000": North Dakota is by far and away at the top of the list, with over 1200 new cases/100,000 on a rolling 7-day average compared to #2, South Dakota, at 956. 

For the record, I wear my mask almost religiously.

WTI Up Another 2%; OPEC Basket At $2 Discount To WTI; Five Wells Coming Off Confidential List -- November 11, 2020

US Senate

Weekly EIA petroleum report, link here. Because of the holiday, this report won't be released until tomorrow, Thursday, November 12:

  • US crude oil in storage ....
  • US crude oil in storage now stands at .....
  • refiners operating at ..... of their operable capacity;
  • distillate fuel inventories ....
  • US crude oil imports averaged .....
  • jet fuel supplied ....

OPEC basket, link here: trading at just under $40, up almost 2%). WTI up 2%, also, and trading at $42.22.

Back to the Bakken

Active rigs:

Active Rigs1555665238

Five wells coming off the confidential list today -- Wednesday, November 11, 2020:

RBN Energy: the multi-billion-dollar merger of Canadian giants Cenovus and Husky. Posted a link to the Cenovus-Husky story earlier. Scroll down at the link. Archived.

On October 25, a major consolidation of two Canadian oil and gas companies was announced with the planned merger of Cenovus Energy and Husky Energy.

The prospective consolidation will offer the opportunity for corporate-level synergies and, over the longer term, for the physical integration of some of the companies’ operations, especially in Alberta’s oil sands. In today’s blog, we discuss some of the more nuanced elements of the consolidation, including potential improvement in crude oil market access and the larger presence of the combined company in PADD 2 refining, a sector that has taken a major hit during the pandemic.

This blog also introduces a new weekly refinery report from RBN. See link for details.

Cenovus Energy is an integrated oil and natural gas company headquartered in Calgary, AB. 
It was formed when Encana Corp. (now known as Ovintiv) spun-off its oil-based assets into a separate corporation in 2009, allowing Encana to — at the time — focus on its natural gas assets. 
Cenovus produces oil in Canada and has refining interests in the U.S. The production assets include oil sands facilities at Christina Lake and Foster Creek and conventional operations at Marten Hills and Deep Basin. Notably, Cenovus announced this week that they have entered into an agreement to sell their Marten Hills oil assets to Headwater Exploration. In the U.S., Cenovus has a 50-50 partnership with Phillips 66 in WRB Refining, which has refineries in Borger, TX, and Wood River, IL.

A reminder for those who have forgotten where PADD 2 is: