Week 47: November 15, 2020 -- November 21, 2020

A fair number of stories suggesting some good economic news:

• Copper surged to new two-year high.
• Home sales surging. At 14-year high.
• Morgan Stanley raises EPS guidance for equities in 2021.
• Equity markets hit all-time highs before dropping back.
  

Trends:

• Migration from NYC, San Francisco continues. And, here.
• NFL ratings way down.
• Natural gas surging in popularity (except perhaps in San Francisco).
• Gasoline demand seems to have leveled out.
• OPEC basket pricing a train wreck.
• Now that election is over, not much being written about re: BLM.
  

Top story of the week:

• At least two vaccines suggesting 95% efficacy. Moderna is one. Pfizer is the other one.
• Sempra's new LNG export terminal on west coast of Baja California.
• Tiger Woods shots a ten on a par-3 hold; sports media pretty much ignores it.

Top international non-energy story:

• Aramco's strong stock is a mirage. Old, old story but finally The WSJ is printing it.
• Saudi Arabia to offer US-dollar-denominated bonds.
  

Top international energy story:

• Sempra's new LNG export terminal on west coast of Baja California.
  

Top national non-energy story:

• The new Apple chip, the  new Apple computers.
• Millions of college students return home this weekend; won't return to school. None, except athletes, will return.
• AirBNB to go public.

Top national energy story:

Top North Dakota non-energy story:

• North Dakota pushes on. Flu surge continues.
  

Top North Dakota energy story:

• Oil production per well per day increases.
• North Dakota oil production increases month-over-month.

Geoff Simon's North Dakota top energy stories:

• September oil output tops 1.2 million bopd; production has maxed out; expect decline from here on out;
• Drone demo kicks off beyond-visual-line-of-sight (BVLOS) network for drone technology in the nation;
• Davis Refinery / Meridian Energy Group: stalled by pandemic; link here;
• Gulf of Mexico sees largest decrease in oil production since 2008;
• overall, very depressing list of headlines compared to headlines over the past several years;

Operators:

• BR continues strong pace. Twenty wells in one 2560-acre unit.
• CLR close behind: six new permits.
• Hess: section line wells -- leaving no bbl of oil behind.
• Hess: remarkable operator in the Bakken in 2020.
  

Operations:

• Huge jump in production -- EOG short lateral; helped by Enerplus.
• Twenty-four permits renewed.
• Hess reports a huge Sorenson well.
• XTO Fettig well with nice jump in production.
• WPX reports nice Wolverine wells.

Fracking:

• Low-water fracks;
• Hess' completion strategy in Tioga oil field.

DUCs:

• Disconnect between reports and data.

Seven DUCs Reported As Completed; Four Permits Renewed; Petro-Hunt With One New Permit -- November 20, 2020

Active rigs (see below):

$42.17	11/20/2020	11/20/2019	11/20/2018	11/20/2017	11/20/2016
Active Rigs	14	55	62	56	39

It appears the rig we "lost" was one operated by Hess. I assume that will be back up by the end of the month.

One new permit, #37987:

• Operator: Petro-Hunt,
• Field: Little Knife (McKenzie)
• Comments:
• Petro-Hunt has a permit for a Zabolotny well in Little Knife, to be sited 250' FSL and 270' FEL; SESE 36-145-98
• Zabolotny 144-98-4A-9-1H,
  

Seven producing wells (DUCs) reported as completed:

• 37272, drl/A, Newfield, Newman 150-97-21-16-7H, Siverston, no production data,
  
• 33886, SI/A, Petro-Hunt, USA 153-95-8A-31-3H, Charlson, no production data, four sections, zig-zag; fracked 9/6/20 - 9/25/20; 23.7 million gallons of water; 92.7% water by mass;
  
• 37216, drl/A, Newfield, Orvis 150-99-21-16-7H, South Tobacco Garden, no production data,
• 37273, drl/A, Newfield, Newman 150-97-21-16-3H, Siverston, no production data,
• 37276, drl/A, Newfield, Newman 150-97-21-16-5H, Siverston, no production data,
• 37091, drl/A, Whiting, Ness 44-21-2H, Sanish, no production data, 33-061-04624; fracked 3/19/20 - 3/26/20; 7.5 million gallons of water; 88% water by mass;
  
• 37092, drl/A, Whiting, Ness 44-21HU, Sanish, four sections, 2x2; 33-061-04625; fracked 3/18/20 - 3/26/20; 7.9 million gallons of water; 88% water by mass;
  

Four permits renewed:

• North Range Resources (2): two Placid permits in McKenzie County;
• Rimrock Oil & Gas: one Two Shields Butte permit in Dunn County;
• BR: one Scottvale permit in Dunn County;

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Active Rigs

Rig	Operator	Well Name and Number	Current Location	County	File No	API	Start Date	** Next Location
CYCLONE 38	CONTINENTAL RESOURCES, INC.	CARSON PEAK 10-35H1	SWNE 26-147N-96W	DUN	35084	33025035200000	11/10/2020	Undetermined
H & P 492	MARATHON OIL COMPANY	Leon USA 33-14TFH	NWSE 14-147N-93W	DUN	37741	33025040600000	11/13/2020	Undetermined
H & P 454	CONTINENTAL RESOURCES, INC.	Carson Peak 13-35H	SESE 26-147N-96W	DUN	37794	33025040690000	11/10/2020	Undetermined
H & P 515	PETRO-HUNT, L.L.C.	USA 153-95-2B-11 1H	LOT2 2-153N-95W	MCK	37150	33053092730000	11/1/2020	Undetermined
NABORS B27	WPX ENERGY WILLISTON, LLC	PATRICIA KELLY 2-1HA	SWNE 3-150N-94W	MCK	37232	33053093060000	11/7/2020	Undetermined
NABORS B6	BURLINGTON RESOURCES OIL & GAS COMPANY LP	FAYE 3B MBH	NENE 14-151N-97W	MCK	37540	33053094090000	11/11/2020	Undetermined
NABORS x10	MARATHON OIL COMPANY	Archer USA 13-35TFH	SWNE 34-152N-94W	MCK	37611	33053094400000	11/13/2020	Undetermined
NABORS B21	BURLINGTON RESOURCES OIL & GAS COMPANY LP	CHERRY PIE 1R TFH ULW	SESE 23-149N-97W	MCK	37634	33053094560000	11/11/2020	Undetermined
AKITA 520	Midwest AgEnergy Group, LLC	MAG 1	LOT1 18-145N-82W	MCL	37833	33055001960000	10/11/2020	Undetermined
WY CSG DRLG 1	SLAWSON EXPLORATION COMPANY, INC.	STALLION 7-1-12H	LOT3 1-151N-93W	MTL	36123	33061044200000	11/14/2020	Undetermined
UNIT 414	SLAWSON EXPLORATION COMPANY, INC.	Stallion 4-1-12TFH	LOT3 1-151N-93W	MTL	36126	33061044230000	11/17/2020	Undetermined
H & P 259	MARATHON OIL COMPANY	Medicine Crow USA 21-5H	LOT2 5-150N-93W	MTL	37657	33061047570000	11/11/2020	Undetermined
NOBLE 1	HESS WATER SERVICES LLC	EN-Debing 55-93 SWD1	NENE 33-155N-93W	MTL	37930	33061048340000	11/17/2020	Undetermined
NABORS B13	OASIS PETROLEUM NORTH AMERICA LLC	Fraser Federal 5300 11-35 4BR	NWNW 35-153N-100W	WIL	37915	33105055640000	11/16/2020	Undetermined

Natural Gas Fill Rate -- November 20, 2020

Investigations sometimes take a long time. Before we get to the natural gas fill rate, an update regarding the South Dakota attorney general who killed a man thinking he had hit a deer, calling "911" the following day. Turns out he was "distracted." Toxicology and a few other tests still pending. The mishap occurred on/about September 12, 2020, more than two months ago. Investigation continues. Link here. 

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Natural Gas Fill Rate

Link here.

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Exciting

Economy -- Rambling -- November 20, 2020

I find the current economy incredibly fascinating. See this article over at Yahoo!Finance: the munchkin might be right -- the end of federal emergency lending programs may no longer be needed. 

Hours after U.S. Treasury Secretary Steven Mnuchin called for emergency lending programs to be allowed to expire, corporate bond investors continued to flood Carnival Corp.’s bankers with more than $11 billion in orders for debt that comes with no collateral protection.

For some, it was a sign that credit markets aren’t so fragile after all. After roughly $2 trillion of borrowing helped U.S. companies bolster their balance sheets with cash to weather the pandemic, investors have grown increasingly confident -- perhaps even complacent -- that the widespread corporate failures predicted by many earlier this year have largely been avoided. Granted, the Fed helped fuel nearly all of that debt issuance, and the investor demand supporting it.

And even if the immediate lifeline of $580 billion in backstop money is returned by the Federal Reserve to the Treasury, traders are betting that markets will fare just fine, anticipating that the government will step in again if new signs of stress emerge.

“The reality is that if things start getting crazy and spreads start widening, the Treasury Secretary can re-authorize the Fed to open the facility again,” said Patrick Leary, chief market strategist at Incapital. “It’s more of a confidence thing for the market, given it may not be the best time with virus surges and shutdowns, but it’s not like these facilities are being used to support market functioning any more.”

Meanwhile, JPMorgan is betting on a one-percent contraction 1Q21. But then after that:

JPMorgan economists said Friday that they expect the economy to contract slightly in the first quarter of next year. 

While most economists have been projecting growth throughout the year in 2021, JPMorgan economists now expect a one percent decline in the first quarter. The economy will then pick up steam, expanding at a 4.5 percent annualized rate in the second quarter, 6.5 percent in the third quarter, and 3.8 in the fourth quarter, the economists forecast. For the full year, they project robust growth of 3.4 percent.

The "conference board" forecast a week ago:

Our base case forecast yields 4Q20 real GDP growth of 2.2 percent* (annualized rate), an annual contraction of 3.6 percent for 2020, and an annual expansion of 3.4 percent for 2021. ... In this scenario US monthly economic output returns to pre-pandemic levels in October 2021.

When you get right down to it, "same ol', same ol', with the exception of wild 2Q20 and 3Q20. 

But I digress. What startles me is that Breitbart-linked article with folks standing in line to buy Carnival Corp.'s bonds.

And, then, of course, same thing for Saudi Aramco's bonds. Oversubscribed, I believe. There seems to be a lot of cash floating around out there looking for a home. 

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CU

Link here. 

Link here to Bloomberg. 

The Zillenials And That Bank Of America Study -- November 20, 2020

Re-posting:

That BofA study on "Zillenials" reported on ZeroHedge never re-appeared. It's not often I catch a story posted on ZeroHedge that gets pulled almost immediately after being posted. BofA must not have been happy with their study being posted to a wider audience.  

I had hoped it would reappear. The BofA contained a huge flaw. It was not a BofA flaw but it needed to be addressed. See this PewSocialTrends link. 

The generally-accepted (?) date for Generation Z: born after 1996. 

In 2020:

• 2014: 6 years old
• 2006: 14 years old
• 2003: 17 years old
• 1996: 24 years old

There's no way I put Sophia, six years of age, in the same "generation" as her old sisters, age 14 and 17, and I definitely don't put Olivia, age 14, in the same generation at those now 24 years of age. I'm not sure the two other sisters, age 14 and 17, are even in the same generation. Most likely they are, but I'm not sure.

When Arianna is 24 years old, seven years from now, Sophia will still be at home, in middle school. One might be starting a family, certainly starting a career. The other? looking forward to another great summer boating on Flathead Lake. 

What happened to the iGeneration? The iGeneration, apparently, is the ill-named zGeneration. Link here.

More on this later. Sophia is coming over for school.

Fast And Furious -- ZeroHedge -- November 20, 2020

That BofA study on "Zillenials" reported on ZeroHedge never re-appeared. It's not often I catch a story posted on ZeroHedge that gets pulled almost immediately after being posted. BofA must not have been happy with their study being posted to a wider audience. 

I had hoped it would reappear. The BofA contained a huge flaw. It was not a BofA flaw but it needed to be addressed. See this PewSocialTrends link.  More on this later; perhaps in a stand-alone post, if I don't forget.

Vaccines announced? Why are the equity markets not soaring? The markets are not soaring due to a) the current rift between the Fed and the Treasury (Munchkin now trying to walk back the rift); b) no stimulus expected until March, 2021, at the earliest. Possibly February.

Other headlines over at ZeroHedge over the past couple of days:

• Did Mnuchin shoot Powell in the back?
• Cushing crude stocks soar at record pace; storage hub nears capacity (fortunately we have WTI Midland); twitter link here; Bloomberg link here;
  
• Up to 20% of Covid-19 infections are asymptomatic; far less likely to transmit virus; study;
• Walking it back: "There's plenty of firepower left" -- Mnuchin defends decision to end Fed's emergency lending programs (this rift will be forgotten by next week)
• Tesla wrecks in Oregon; projectiles hit nearby homes; fires started
• NFL primetime ratings continue their collapse, ten weeks into the season
• South Australia revokes draconian lockdown after revelation that one person lied to contact-tracers; are you kidding me?
• Pfizer asks FDA to approve Covid-19 vaccine for emergency use
• China has already jabbed a million citizens under "emergency-use" designation
• Rising up -- anti-lockdown protests spread across Europe
• CDC director: all schools should remain open. De Blasio: I know better. 

Elsewhere:

• NYC: indoor dining and gyms likely to close in next week or two
• NYC: private schools won't be forced to close

Oil Giant Aramco's Strong Stock Is A Mirage -- The WSJ -- November 20, 2020

There is no new news here. But it supports one of the main themes of this blog for almost a decade. That's why it gets a stand-alone post. Along with the fact that the story is in The WSJ. "Heard On The Street" is always one of my favorite columns in The WSJ. 

Headline: oil giant Aramco's strong stock is a mirage. This week's bond sale shows that global investors remain less enthusiastic about the stock than patriotic local shareholders.

Patriotic.

Or coerced.

Notes From All Over -- November 20, 2020

Reality sucks: stocks not soaring despite likelihood that at least two vaccines will soon be approved for emergency use. See reader's poll at sidebar at the right. Half of readers responding suggest we won't see universal access to vaccine before March of next year (2021) -- four months from now.

Home sales: 14-year high in October, 2020. Said to be due to low interest rates, desire for pricier houses. No: desire to get out of NYC and San Francisco. 

Schools closed in NYC: parents "scurrying" for backup. I don't know what's going on in NYC but I can say with "authority" that some school districts in north Texas were well prepared going into the possibility of a second wave. It's really quite remarkable. Their program keeps improving and it's scalable, here in GCISD. If it's accurate that the closure of NY schools left parents in a bind it suggests the school districts let the students down.

Free internet: schools hand out free iPads for remote learners (and even for students in the classroom). The school districts (i.e., the taxpayers) also need to ensure that every student issued an iPad has home access to the internet. Technology is such that "free" internet could be throttled for speed necessary for schoolwork but not for gaming; available only during school hours. Homework? No one wants homework anyway.

NYC: will the mayor finally kill off Macy's? From The WSJ. Tea leaves: Macy's will likely join Sears, K-Mart, JC Penney, others. We will need new sponsor for annual parade.

Does anyone even read Consumer Reports any more? Ranking reliability of cars. 

Weather: we've had an incredibly nice autumn. Sophia and I have really enjoyed biking in the local park the last two days. An aside: this park was closed due to Covid last spring. Now, with the second wave much worse than the first here in north Texas, the park is wide open, and full of folks. The park has increased "services," including working drinking fountains which had been turned off during the first wave last March.

Mild November weather stings natural-gas prices. From The WSJ. Forecasts signal warmer temperatures in many states over the next two weeks; bearish development for natural gas. 

Austria: progressive paid-leave and child-care policies failed to close the gender pay gap -- close reading of the article suggests the policies made the gender pay gap wider. But it felt good. From MarcketWatch. My hunch: the "test" needs to be continued for at least another decade or so. 

WSJ: one has to remember the target audience for The WSJ -- millionaires and billionaires. From the newspaper yesterday: second homes are driving the US's Covid-19 housing boom. Demand for vacation properties is growing twice as fast as demand for primary homes, as affluent Americans look for more space to ride out the pandemic. "Affluent" = millionaires with at least a million in disposable cash. Again, I would need to see that statistics. As said earlier, the 2020 housing boom is being driven by folks fleeing NYC and San Francisco, not buying second homes in Wyoming. 

NFL last night. Another point after touchdown missed by team competing for #1 in its conference. Are you kidding me? Fight on field probably resulted in the win after the penalty assessed. Another penalty and another two points. These are among the top teams in the NFL?

Pop quiz. See if you can spot the error in this table ranking turkey producers. From WorldAtlas.

More recent stats almost everywhere, including this site.

Good, Bad, Or Indifferent -- North Dakota Pushes On -- November 20, 2020

From social media yesterday, from The Williston Herald:

Right now, it looks like the Dakotas, Florida, and Texas are pushing on. California and New York are pulling back.  

From The WSJ this morning: is it allergies or Covid? 

Fever, cough and shortness of breath are also regularly discussed for a reason, as is diarrhea, he said. But that doesn’t mean that the rest can be ruled out. “The reality is that in the ER, in a clinic, we cannot tell them apart, and that’s why you have to test people.”

At this point, he added, coronavirus case numbers in the U.S. are so high that it’s reasonable to consider Covid as likely an explanation for most symptoms as anything else. 

And reimbursements for a Covid-19 diagnosis are huge compared to reimbursements for an allergy. A health insurance policy is unlikely to cover an emergency room visit for allergies; it will cover an emergency room visit for Covid-19. 

Whiting Reports One Well Today -- November 20, 2020

Active rigs:

$41.65	11/20/2020	11/20/2019	11/20/2018	11/20/2017	11/20/2016
Active Rigs	15	55	62	56	39

One well coming off the confidential list today -- Friday, November 20, 2020: 23 for the month; 47 for the quarter, 712 for the year

• 35711, drl/A, Whiting, Renbarger 24-34-1H, Grinnell, t--; cum 38K 34 days; fracked, 3/27/20 - 4/7/20; 5.98 million gallons of water; 87% water by mass;
  

RBN Energy: proposed rail line could transport oil sands crude to Alaska and beyond.

For most of the past few years, crude oil producers in Alberta have dealt with pipeline constraints that often forced them to sell their crude at steep discounts. While the constraints eased somewhat earlier this year as producers reduced their output due to cratering oil demand and oil prices, production more recently has been rebounding, resulting in the return of takeaway concerns. The big hope is that long-planned pipeline projects like the Trans Mountain Expansion (TMX) and Keystone XL will finally be built and commissioned, but they still face legal and regulatory hurdles before being completed. Lately, a different option has gained momentum focusing on a proposed rail line linking Alaska to the immense oil sands region of northern Alberta, potentially creating another corridor for the export of oil sands crude. Today, we describe recent developments in a bold plan to build a rail line from Alberta, across northern Canada, and into Alaska.

Living in Alaska or northern Canada may offer the advantage of being closer to Santa Claus, but it has the clear disadvantage of being remote and isolated. Rugged terrain and bitter cold conditions for a good portion of the year make the transportation of goods even more challenging in such regions (unless you have flying reindeer and a sleigh). For these reasons, an intercontinental railway connecting Canada to Alaska has been kicked around since the late 1960s as a means to foster economic development by transporting the mineral and energy resources Western Canada and the north have to offer.

Huge Jump In Production; Short Lateral -- EOG -- Clarks Creek Well -- November 20, 2020

This well was shut in from 1/19 to 9/19 due to fracking of adjacent well by an operator other than EOG! These were three Enerplus wells on the Lizard pad to the east, and a fair distance away from this EOG well. Enerplus' Crocodile well, completed 1/19, was another huge well.

The well (note the spacing):

• 20307, 1,328, EOG, Clarks Creek 103-17H, Antelope, a Sanish Pool well; 320-acre spacing; t11/11; cum 186K 9/20; jump in production, 3/17; remains off line 5/19; back on line 9/19; but then off line 1/20; back on line 7/20; huge jump in production, 7/20; recent production; new production exceeds initial production almost ten years ago;:
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
SANISH	9-2020	30	10274	10026	9460	15006	14190	413
SANISH	8-2020	31	10339	11057	9968	11828	9387	2019
SANISH	7-2020	14	4776	3531	7576	7074	5697	1192
SANISH	6-2020	0	0	0	0	0	0	0
SANISH	5-2020	0	0	0	0	0	0	0
SANISH	4-2020	0	0	43	0	0	0	0
SANISH	3-2020	1	140	156	12	2	0	0
SANISH	2-2020	15	524	534	201	414	217	0
SANISH	1-2020	0	0	0	0	0	0	0
SANISH	12-2019	24	1113	1097	632	1508	593	598
SANISH	11-2019	30	1770	1797	990	2422	1545	469
SANISH	10-2019	31	2266	2264	1542	3685	1504	1761
SANISH	9-2019	30	1654	1648	1735	2327	787	1132
SANISH	8-2019	4	6	0	405	71	23	0
SANISH	7-2019	0	0	0	0	0	0	0
SANISH	6-2019	0	0	0	0	0	0	0
SANISH	5-2019	0	0	0	0	0	0	0
SANISH	4-2019	0	0	0	0	0	0	0
SANISH	3-2019	0	0	0	0	0	0	0
SANISH	2-2019	0	0	0	0	0	0	0
SANISH	1-2019	23	665	611	320	1331	344	674
SANISH	12-2018	31	916	953	359	1920	894	604
SANISH	11-2018	30	942	962	421	1794	778	608

 Note: original production:

SANISH	6-2012	30	3877	3999	1256	5003	0	4855
SANISH	5-2012	30	4835	4489	1540	10644	0	10501
SANISH	4-2012	29	7506	7429	2479	10477	0	10337
SANISH	3-2012	13	1163	1454	221	1470	0	1405
SANISH	2-2012	29	5491	5813	1359	5107	0	4962
SANISH	1-2012	30	7499	7179	2006	7166	0	7018
SANISH	12-2011	29	9871	9963	2842	9398	0	9255
SANISH	11-2011	14	8461	7562	2810	7336	0	7266