Futures Don't Mean A Thing, Of Course -- But Right Now ... It Looks Like Today's Records Will Be Broken [Again] Tomorrow -- December 8, 2020

Screenshot from CNN Business: 

Elon Musk confirms earlier stories:

It took him long enough. 

Later: The WSJ weighs in. Link here. From the linked article:

Gov. Gavin Newsom told CNBC he was “not worried about Elon leaving any time soon” and the state was committed to the car maker’s success. “We may not be the cheapest place to do business but we are the best place to do business,” Mr. Newsom, a Democrat, said. Silicon Valley remains home to some of the hottest companies— AirBNB and food delivery company DoorDash Inc. are poised for multibillion-dollar public listings this month and are both based in San Francisco. 

The writer failed to mention that Schwab has also recently departed San Francisco, headed for Texas.  

Also from Yahoo!Finance. Reports that Elon Musk "compares himself to a war general."

A Request For Help From Readers -- Unitization -- December 8, 2020

Updates

December 9, 2020: sent to me by a reader last night shortly after the original note was posted --

I received my first royalty payment from XTO for the GBU on 06/25/19. XTO pays royalties on the 25th and 30th of each month, the check dated the 30th is usually for the GBU.

By the way, one can find the unit boundaries at the NDIC GIS map server, example:

Original Post

A few fields have been unitized in the Bakken. 

A reader asked a question about unitization. 

I don't have a dog in that fight; I don't have personal experience.  I did not have an answer. I am curious if any mineral owner has experience that could shed light on this -- more for the reader's benefit than mine.

We will use GBU as the example (because that was the specific unit the reader asked about).

GBU = Grinnell Bakken Unit.

See this post where GBU Janice was noted. 

Two permits renewed:

• EOG: a Clarks Creek permit in McKenzie County;
• XTO: a GBU Janice permit in Williams County;

For other XTO GBU wells, see this post. 

The reader asked "when would royalties start to reflect unitization of this field?"

I assume royalties would be affected effective the date the field was unitized. 

Going though a few of the "GBU" wells suggest this occurred on/about May, 2019. [Wow, was I on target or not -- see updates above. Wow!]

This, of course, raises many more questions but instead of running through a litany of questions and showing my ignorance, I will simply ask for any input from any mineral owner, land man, or armchair oil and gas lawyer that might shed light on this phenomenon.  

For those interested, one can google "oil field unitization." I did not spend a lot of time on this but this site (page 13 of the download / page 437 of the source -- both the same page) seems to provide a fair amount of useful information which suggested to me that the date the regulating authority granted unitization of a field is when mineral royalties would reflect that change. 

***********************************
For The Archives

I first spotted Miranda on late night British comedies on local PBS station. I was impressed.

Now this.

Petroshale With Three New Permits In Bear Den -- December 8, 2020

Active rigs:

$45.60	12/8/2020	12/08/2019	12/08/2018	12/08/2017	12/08/2016
Active Rigs	16	55	64	53	40

Three new permits, #38013 - #38015, inclusive:

• Operator: Petroshale
• Field: Bear Bear
• Comments:
• Petroshale has permits for three new wells in Bear Den, in NWNW 30-149-95; all 560 FNL and between 560 and 620 FNL; see diagram below how active this area already is;
  
• 38013, Petroshale, Thompson Federal 4TFH, Bear Den, NWNW 30-149-95, 620 FNL 560 FWL;
• 38014, Petroshale, La Verendrye Federal 4MBH, Bear Den, NWNW 30-149-95, 590 FNL 560 FWL;
• 38015, Petroshale, Sacagawea Federal 1TF2H, Bear Den, NWNW 30-149-95, 560 FNL 560 FWL;

One permit reinstated:

• 34236, Oasis, Borden Federal 5300 34-36 8T,

Two permits renewed:

• EOG: a Clarks Creek permit in McKenzie County;
• XTO: a GBU Janice permit in Williams County;

Petroshale resurveyed five locations in NWNW 30-149-95;

************************************
Petroshale: Locations For Future Wells
In NWNW 30-149-95

Five wells in immediate area:

• 36903, drl/NC, Petroshale, Hickok Federal 1MBH, Bear Den,
• 16446, PA/97, SM Energy, Bear Den Federal 4-30H, Bear Den, t3/07; cum 124K 6/16;
• 36904, loc/NC, Petroshale, Bridger Federal 1TFH, Bear Den,

• 17662, 903, Petroshale, Bear Den Federal 4Y-30H, Bear Den, t1/10; cum 325K 10/20;
• 18248, 644, Petroshale, Bear Den Federal 4Z-30H, Bear Den, t1/10; cum 230K 7/20; remains off line 10/20;

Farther to the east, these older wells:

• 19049, 1,099, Petroshale, Jorgenson Federal 1X-30H, Bear Den, t1/11; cum 446K 10/20;
• 18579, 2,006, Petroshale, Jorgenson Federal 1-30H, Bear Den, t12/10; cum 587K 7/20; remains off line 10/20; has had modest jumps in production over the years suggesting the Bear Den may work for the halo effect;

All Three Major Indices Hit All-Time Intra-Day Highs -- December 8, 2020

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. 

• The indices:
  
• NASDAQ: closed at 12,583. Intraday high at 12,594.54 hit an all-time record.
• S&P 500: clsed at 3,702. Intraday high at 3,708.45 hit an all-time record.
• Dow: closed at 30,174. Intraday high at 30,246.22 hit an all-time record.

Tesla: watching the tea leaves suggests this stock is way undervalued. Connecting the dots: what is the number one business sector one sees advertised on commercial television? It's not automobiles and it's not computers, at least based on anecdotal observation. Tesla is skating toward where the puck will be. Up $16/share today.

T: for a stodgy old stock, T has a great day, up almost 4%; pays over 7%.

CureVac: of the thousands of sticker symbols I could have chosen, back on August 14, 2020, I chose CureVac (CVAC) trading up 250% on its first day of trading; closed at $56. Today, I see CVAC is up another $15, up almost 14% today; and closed at $130. Moderna had a great day. This is clearly not rocket science. PFE. JNJ.

For investors, on August 14, 2020, I wrote:

Covid-19 pandemic:

• counterintuitively, the pandemic accelerated US (global?) 2030 into 2020;
• was the market's worse "black swan" in decades actually a soaring eagle in disguise?

Secure Act 2: will lay the groundwork for legislation next year (2021) if the package doesn't progress in the post-election lame-duck session. Link here. 

Coal In New England Survives Thanks To Environmentalists Stance On NG Pipelines -- December 8, 2020

ISO-New England.

It looks like New England is burning coal to meet demand.

Renewables: all of 6% contribution.

Why coal stays online in New England. March 26, 2020. 

The largest remaining coal-fueled power plant in New England, New Hampshire’s 482-megawatt Merrimack Station, will remain in operation through at least May 2024.

Granite Shore Power, Merrimack’s owner, won ISO New England’s auction to provide supplementary power during periods of peak demand. The company will receive $676,000 per month from June 2023 through May 2024, a total of $8.1 million, in return for being prepared to generate power at any time the need arises.

Granite Shore’s 155 Mw Schiller Station power plant, with separate power generating units capable of burning biomass and coal or oil, failed to win a contract in ISO New England’s most recent capacity auction.

New England faces potential power shortfalls that would have been worse without Merrimack’s continued operation, because environmental groups have persuaded state governments and local federal legislators to prevent the expansion of natural gas pipelines and power plants in the region.

For instance, in 2016 Kinder Morgan, one of the largest energy infrastructure companies in North America, cancelled a proposed $3.3 billion Northeast Energy Direct pipeline to provide natural gas to utilities and power generators in three New England states, in the face of strong opposition from environmental groups, including ongoing regulatory battles and legal challenges. With some cities in the region announcing they would no longer allow new natural gas hookups, and Sen. Edward Markey (D-MA) and presidential aspirant Sen. Bernie Sanders (I-VT) cosponsoring the Green New Deal, which would make it nearly impossible for natural gas power plants to operate, utility companies in the region were unwilling to commit to purchasing natural gas from the pipeline. Lacking committed customers for its natural gas, Kinder Morgan jettisoned its pipeline plans.

With no new coal or natural gas capacity, and with ever-increasing renewable power mandates, New England today has the highest electricity prices of any region in the “Lower 48” states, averaging 20.8 cents per kilowatt-hour (kwh) in January 2020, compared with the national average of 13.4 cents per kwh.

Bitcoin mining, server farms, technology companies in general require large amounts of dependable electricity. It appears New England -- which includes Boston -- is purposely pricing themselves out of the 21st century.  

Electric power monthly -- EIA: link here. 

Commercial cost of electricity, kWH:

• New England: 16 cents (BOSTON) -- twice that of TEXAS
• Middle Atlantic: 13 cents (NEW YORK)
• East North Central: 11 cents
• West North Central: 10 cents (MINNEAPOLIS)
• South Atlantic: 9 cents
• East South Central: 11 cents
• West South Central: 8 cents (TEXAS)
• Mountain: 10 cents:
• Pacific, lower 48: 18 cents (LA, SAN FRANCISCO, SEATTLE) -- more than 2x TEXAS
• Pacific, HI/AK: 24 cents

LNG Bottleneck At The Panama Canal -- December 8, 2020

From RBN Energy today:

On the 8th of October, the LNG carrier Golar Penguin loaded a cargo for RWE at the Freeport LNG terminal in Texas. Five days later, on October 13, the vessel was sitting just north of Panama. But then, the ship abruptly changed direction on the 14th and headed towards the Cape of Good Hope to deliver to the Far East. The reason for the diversion was that the vessel did not have a passage booked in the new locks of the Panama Canal and would have had to wait approximately nine days for its turn to transit, before heading across the Pacific Ocean to Asia. Since then, as queues of LNGCs for Panama Canal transits, both northbound (ballast) and southbound (laden) have developed, more ships have opted for the longer route. In today’s blog, we look at the delays that have developed surrounding the Panama Canal and the implications that its operations hold for global LNG trade.

The 2016 expansion of the Panama Canal to accommodate larger vessels with larger beams and greater drafts was a big deal for LNG shippers looking to lower the per-unit costs of delivering to Asia (more on the economics in a bit). But as increasing shipments seek to traverse the canal, wait times have increased and led to a bottleneck that not only affects existing traffic but presents a challenge for future projects hoping to minimize costs in a highly competitive global LNG market. The delays currently being experienced for voyages to Asia via the Panama Canal route were much less of a problem over the summer when shut-ins of U.S. LNG production reduced the waiting time for LNG carriers wishing to pass in either direction. However, all first-wave LNG production facilities, with the exception of Corpus Christi Train 3, are now operational, resulting in nameplate production capacity of over 60 MMtpa from the Lower 48 states, or roughly a sixth of the current world production capacity. In November, the U.S. sent out a record number of cargoes — and that number will likely be surpassed this month. Given the determination of project sponsors aiming to develop a second wave of U.S. Gulf Coast LNG export schemes, what constraints and costs will the Panama Canal impose on these projects, and just as importantly, what advantage might the projects under development on the west coast of North America enjoy over their rivals? We’ll get to answering that shortly, but first some historical background on the Canal usage and scheduling.

Earlier, over at ZeroHedge:

Back on June 24, 2016, the NY Times dissed the Panamanians over their widening of the canal. Link here.

Update here. 

This is one of the reasons I find SRE so exciting. They saw this coming and made the decision to build a huge LNG export terminal on the west coast of California. Baja California, that is. Previously posted. 

The story is tracked here.  

*************************************
SRE: Coasta Azul

Sempra's Baja California LNG export terminal -- biggest LNG story of the year? 

Link here.

Californa: Top US Net Importer Of Electricity -- 2019

California is the top US net importer of electricity: link to one of my favorite writers -- Charles Kennedy. 

California's imports were the largest in the United States last year when 25 percent of California's total electricity supply was imported, the Energy Information Administration (EIA) said on Monday.

From the linked article:

Last year, California's net electricity imports were the largest in the country at 70.8 million megawatt-hours (MWh), followed by Ohio, Massachusetts, Virginia, and Tennessee, EIA data showed. 

In California's case, the state's utilities partly own and import power from several power plants in Arizona and Utah. California's electricity imports also include hydroelectric power from the Pacific Northwest, mostly across high-voltage transmission lines from Oregon to the Los Angeles area.According to 2019 data from the California Energy Commission, the state imported 30.68 percent of its renewables-generated electricity supply and 69.32 percent of non-renewables supply.

From the linked EIA article:

No Wells Coming Off The Confidential List Today -- December 8, 2020

California is the top US net importer of electricity: link to one of my favorite writers -- Charles Kennedy.  More here.

California's imports were the largest in the United States last year when 25 percent of California's total electricity supply was imported, the Energy Information Administration (EIA) said on Monday.

Active rigs:

$45.86	12/8/2020	12/08/2019	12/08/2018	12/08/2017	12/08/2016
Active Rigs	16	55	64	53	40

No wells coming off confidential list -- indeed, no wells are coming off the confidential list until Thursday, December 10, 2020.

RBN Energy: traffic at the Panama Canal and its impacts on LNG economics. Archived.

On the 8th of October, the LNG carrier Golar Penguin loaded a cargo for RWE at the Freeport LNG terminal in Texas. Five days later, on October 13, the vessel was sitting just north of Panama. But then, the ship abruptly changed direction on the 14th and headed towards the Cape of Good Hope to deliver to the Far East. The reason for the diversion was that the vessel did not have a passage booked in the new locks of the Panama Canal and would have had to wait approximately nine days for its turn to transit, before heading across the Pacific Ocean to Asia. Since then, as queues of LNGCs for Panama Canal transits, both northbound (ballast) and southbound (laden) have developed, more ships have opted for the longer route. In today’s blog, we look at the delays that have developed surrounding the Panama Canal and the implications that its operations hold for global LNG trade.

The 2016 expansion of the Panama Canal to accommodate larger vessels with larger beams and greater drafts was a big deal for LNG shippers looking to lower the per-unit costs of delivering to Asia (more on the economics in a bit). But as increasing shipments seek to traverse the canal, wait times have increased and led to a bottleneck that not only affects existing traffic but presents a challenge for future projects hoping to minimize costs in a highly competitive global LNG market. The delays currently being experienced for voyages to Asia via the Panama Canal route were much less of a problem over the summer when shut-ins of U.S. LNG production reduced the waiting time for LNG carriers wishing to pass in either direction. However, all first-wave LNG production facilities, with the exception of Corpus Christi Train 3, are now operational, resulting in nameplate production capacity of over 60 MMtpa from the Lower 48 states, or roughly a sixth of the current world production capacity. In November, the U.S. sent out a record number of cargoes — and that number will likely be surpassed this month. Given the determination of project sponsors aiming to develop a second wave of U.S. Gulf Coast LNG export schemes, what constraints and costs will the Panama Canal impose on these projects, and just as importantly, what advantage might the projects under development on the west coast of North America enjoy over their rivals? We’ll get to answering that shortly, but first some historical background on the Canal usage and scheduling.