WTI Drops Below $60 -- March 31, 2021

Again, due to severe time constraints this week, there will be minimal blogging.

For the archives:

S&P 500 reaches record high; traders eye Biden's $2 trillion infrastructure proposal; if $2 trillion excites the market to record highs, why not $4 trillion or even a $100 trillion? Paul Krugman says deficits / debt (one or the other, maybe both) don't matter. There will be a slight drag on the GDP, paying the interest, and a few "feel-good" taxes on the rich, but for that we get 100's of millions of new jobs, mild inflation of 2% to 5% (good for the life insurance industry) and a carbon-free country. The market says, "go for it." Link here. Seriously, what stands between $2 trillion and $100 trillion in new stimulus, infrastructure, and recurring monthly payments to those in need (universal basic income), and while we are at, finally get the reparations issue(s) resolved. 

Gasoline demand: link here. 

WTI: drops 2.3%; drops below $60. Trading at $59.16.

OPEC basket (a day delay): $63.37. Saudi Arabia can't meet it's projected budget with $60-oil.

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Back to the Bakken

Active rigs:

$59.16	3/31/2021	03/31/2020	03/31/2019	03/31/2018	03/31/2017
Active Rigs	14	43	66	60	49

Five new permits: see this post for the MRO and Kraken permits, #38231 - #38235, inclusive. 

Ten permits renewed:

• Enerplus: one Elephant permit, one Warthog permit, one Zebra permit, one Gazelle permit, one Fossa permit, one Aardwolf permit, one Meerkat permit, one Salmon permit, one Sturgeon permit, and on Lemur permit, all in Dunn County.

Saudi's Foreign Exchange Reserves Drop Again -- And In A 31-Day Month -- 28-Day Month To Follow -- March 31, 2021

Wow, how many times have it been said: Saudi Arabia can't "make it' on $60 oil. More corroboration / more validation:

Link here

Foreign Foreign Exchange Reserves in Saudi Arabia decreased to 1687980 SAR Million in January from 1701209 SAR Million in December of 2020.

It doesn't matter how Saudi Arabia spins this story, this is really, really bad news. Remember: January is a 31-day month; February, at least here in the USA, is a 28-day month.

All things being equal, February, 2021, should be significantly worse. 

Weekly EIA Petroleum Report -- March 31, 2021

From a reader:

The 914 is out.

https://www.eia.gov/petroleum/production/

Still hanging above 11 MM bopd, but down a small amount. Typical ND seasonal drop. NM up a bit and nipping on ND's heels. GOM and TX up a bit also.

FEB will be down hard because of freezes, I expect. MAR and APR should be strong though.

Weekly EIA petroleum report: link here.

• US crude oil in storage decreased by 0.9 million bbls from the previous week (again, the EIA data and the API data living in two different universes; I'm not even sure those two universes are parallel)
• US crude oil in storage is 501.8 million bbls; still 6% above the five-year average;
• imports averaged 6.1 million bbls/day; increased by 0.5 million b/d; four-week average -- a whopping 9.4% less than the same four-week period last year; wow!
• refiners are operating at 83.9% operating capacity;
• distillate fuel inventories increased by 2.5 million bbls; 4% above the five-year average:
• jet fuel supplied as down 30.2% compared with same four-week period last year;

Gasoline demand:

WTI Barely Holding Above $60; Active Rig Count At 14 -- March 31, 2021

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Back to the Bakken

Active rigs:

$60.46	3/31/2021	03/31/2020	03/31/2019	03/31/2018	03/31/2017
Active Rigs	14	43	66	60	49

No wells coming off confidential list today. 

RBN Energy: the ins and outs of crude storage at the Permian's Crane hub -- Part 2. Archived.

Midland may be the king of crude oil hubs in the Permian, with its immense storage capacity and robust trading activity, but the hub in Crane, TX, is at least a prince — and a particularly interesting one at that. In addition to its 7 MMbbl of tankage for storing, staging, and blending crude (and another 1 MMbbl on the way), Crane offers a slew of inbound pipelines from both the Delaware and Midland basin, plus links to and from the Midland hub and a number of outbound pipelines to both the Corpus Christi and Houston markets. Just as important to know about, are the various intra-hub connections among Crane’s 10 terminals, because they reveal how you can get crude to pretty much wherever you need it to be. Today, we continue a series on crude storage in West Texas and southeastern New Mexico.

Storage and distribution hubs play important and often underappreciated roles, both in helping to choreograph the transport of crude oil from the lease to end-users and in enabling traders and others to take advantage of commercial opportunities. This is especially true in the Permian, the U.S.’s leading oil-producing region, where multiple hubs have developed over the past few years to keep pace with production growth and pipeline build-outs. We also questioned the widely held view that the sudden fall-off in Permian production last year and the current expectation for only modest production growth in 2021 and beyond has left the region overbuilt from a midstream infrastructure perspective. In fact, while the Permian generally has sufficient takeaway capacity, there has been recent evidence of tightness in the Permian storage market. To understand why and where such issues may develop, today, we begin our hub-by-hub review, starting with the one in Crane, TX.

RimRock With Three New Permts -- March 30, 2021

Amazing: I'm too exhausted to do anything but post the links to these two sites that a reader sent me, noting that regardless of whether Amazon employees union, it will all be moot sooner than later.

• first, the robot;
• then, the patent holder.

 WTI: holding above $60; up a bit despite the API reporting another inventory build;

 Futures, major indices: up a bit.

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Back to the Bakken

Active rigs:

$60.87	3/30/2021	03/30/2020	03/30/2019	03/30/2018	03/30/2017
Active Rigs	14	44	66	60	49

Three new permits, #38228 - #38230, inclusive:

• Operator: RimRock Oil & Gas
• Field: Heart Butte (Dunn)
• Comments;
• RimRock has perits for three Two Shields Butte wells in SWSW 22-149-92;
• the wells will be sited 275' FSL and between 386' and 236' FWL

Six oil and gas permits were renewed:

• CLR: six Gibb wells in Williams County

The NDIC's daily activity report has a "correction" to daily activity report dated 3/19/2020. 

In fact that "correction" is also wrong. Permits #36XXX were back in 2019, not 2020.

No Wells Coming Off Confidential List -- Due To Time Constraints, Blogging Will Be Severely Limited This Week -- March 30, 2021

China: first, they gave us a worldwide pandemic caused by a manufactured Wuhan flu; now, that same country shows they have no regard to global warming. Not that I care; I don't. Not about global warming. But it seems everyone else does. Except China. Are they part of the UN? Did they sign the Kyoto Protocol? Oh, that's right. China and India were given a pass -- emerging nations. Meanwhile, Kenya was the ninth signatory. LOL. For the archives. I've long lost my interest in the global warming story but it will be interesting to see where "we're" at twenty years from now. My hunch: things will be about the same the same. See the story at this link for some great data points.

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Back to the Bakken

Daily activity report from yesterday, March 29, 2021:

• no wells came off confidential list today yesterdau. First new well coming off confidential list this week is on Thursday, April 1, 2021.
  
• no new permits. 
• XTO renewed permits for six Bud wells in Williams County, section 20-158-95.

Today:

Active rigs:

$60.48	3/30/2021	03/30/2020	03/30/2019	03/30/2018	03/30/2017
Active Rigs	14	44	66	60	49

No wells coming off confidential list.

RBN Energy: Canada's natural gas producers face increasing pressure to merge.

Corporate mergers and asset acquisitions are the normal course of business in almost any industry, but the pace of this kind of activity has recently picked up among Canada’s natural gas producers. Battered by several years of low prices, market share loss, and declining production, the position for many already-struggling gas producers only got worse when COVID hit last year. As you might expect, better placed and stronger gas producers are looking at struggling companies that have attractive assets to see if they might make accretive asset purchases or outright corporate takeovers. Today, we examine some of the most prominent natural-gas-related transactions and the motivations behind them.

Texas Is Open For Business; Keeping Texas Great -- For The Archives -- March 29, 2021

Remember, these are the same guys that can predict a two-degree increase in global temperature in 2100 and completely missed anticipating the record setting economic surge month-over-month. From the report:

Manufacturing activity in Texas rocketed in March as the state ended its pandemic restrictions, according to business executives responding to the Dallas Fed’s Texas Manufacturing Outlook Survey.

The Dallas Fed said manufacturing expanded at “a markedly faster pace.” The survey’s production index, a key measure of state manufacturing conditions, jumped 28 points to 48.0, the highest reading in its 17-year history.

The general activity index jumped from 17.2 in February to 28.9. The company outlook index rose 15 points to 25.8, its highest reading since mid-2018.

The outlook uncertainty index ticked down to 5.5, a sign of improving conditions.The market: prior to this report, the Dow was lackluster and the NASDAQ was down significantly. After the report, the Dow surged 170 points and the NASDAQ recovered some of its losses. 

In addition, the Suez Canal is apparently opened up again.

Oil:

• WTI: up nicely; up about 1%. Trading at $61.52.
• Brent: up about half a percent, trading at $64.96.

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Back to the Bakken

Active rigs:

$61.53	3/29/2021	03/29/2020	03/29/2019	03/29/2018	03/29/2017
Active Rigs	13	45	67	60	49

No new permits:

RBN Energy: low carbon fuel polices and how they're changing the transportation sector.

As part of the Paris Agreement and other regional sustainability goals, countries across the globe are formulating strategies to reduce greenhouse gas emissions. The resultant policies target numerous different areas such as stationary emissions, electricity production, and transportation fuel sourcing. Within the transportation sector, one aspect that has spurred quite a bit of investment relates to reducing the carbon intensity of transportation fuels. The “low carbon fuel” policies that are in place today, coupled with those that are being evaluated for the future, have the potential to displace a sizeable portion of the petroleum-based fuels in the regions where they are adopted. In today’s blog, we begin a series on low carbon fuel policies, the mechanisms being evaluated to meet increasingly stringent regulations, and the impact these regulations could have on refined-products markets.

Given the global focus on reducing emissions of carbon dioxide (CO₂) and other greenhouse gases (GHGs), it’s only natural that folks in the business of producing, transporting, processing, and refining hydrocarbons need to stay abreast of what’s going on. We’ve been helping out in that regard by writing a number of blogs on GHG-related topics, including series on ESG and hydrogen. There’s so much more to discuss, though, especially on the increasing number of laws and regulations being implemented in the U.S., Canada, and elsewhere that are aimed at decarbonizing the transportation sector. With that in mind, we thought it would make sense to undertake a blog series that delves into these efforts in detail — after all, they already are changing how refiners do business and will have only greater effects going forward.

Initial Production Data For Wells Coming Off The Confidential List This Next Week -- March 28, 2021

The wells:

• 37591, conf, Slawson, Loon Federal 2-24-25H, Big Bend, no production data,
• 37592, conf, Slawson, Loon Federal 5-24-25TFH, Big Bend, no production data,
• 36247, conf, BR, Stortroen 2C TFH, Dimmick Lake, no production data,
• 37403, conf, MRO, Standfest USA 42-8H, Reunion Bay,

Date	Oil Runs	MCF Sold
1-2021	37741	45726
12-2020	30189	34745
11-2020	25173	30871
10-2020	59501	63257

Note Regarding The Blog This Week -- March 29, 2021

I'm under huge time constraints this week, so there will be minimal blogging. 

A lot of interesting data points. Link to the article here.

China generated 53% of the world's total coal-fired power during 2020, the only G20 nation to see a major increase in its coal-fired generation. 

The Chinese Problem: Despite China's installation of 71.7 gigawatts (GW) of wind power and 48.2 GW of solar energy last year, coupled with the Chinese government's pledge to reduce its coal dependency, the country nonetheless saw its coal-fired generation increase by 77 terawatt-hours (TWh) from its 2015 level of (sic) 44%, according to a report from the London-based energy and climate research organization Ember.

Did Phil mean to say that China's coal-fired generation has increased by almost half since 2015? If so, wow.

MRO's Standfest USA Well -- March 28, 2021

The page will not be updated. The MRO P-R-S-4W pad is tracked here. 

This post was done quickly; there will be content and typographical errors. If this is important to you, go to the source.

This well is coming off confidential list this week:

• 37403, A/AL, MRO, Standfest USA 42-8H, Reunion Bay, first production, t--; cum 190K 2/21;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2021	28	37394	37356	18144	67384	65089	2057
BAKKEN	1-2021	31	37512	37486	19975	47976	45692	2077
BAKKEN	12-2020	21	30168	30189	17736	36569	34745	0
BAKKEN	11-2020	11	25088	25173	19693	32424	30871	0
BAKKEN	10-2020	20	59973	59501	49539	71840	63257	5026

Three pads of interest, sited in that section:

• 37403, see above,
• 37395, n/d, MRO,Wallentinson USA 44-8H, Reunion Bay, first production, 9/20; t--; cum 204K 1/21;
• 33947, n/d, MRO, Prior USA 42-8TFH-2B, Reunion Bay, first production, 10/20; t--; cum 173K 1/21;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2021	31	31545	31783	27430	44844	42915	1735
BAKKEN	12-2020	31	46834	46720	42128	64999	62129	0
BAKKEN	11-2020	20	29395	29456	30508	39884	38054	0
BAKKEN	10-2020	27	65439	64934	77168	71581	64507	3211
BAKKEN	9-2020	2	159	149	942	517	0	508

• 33946, n/d, MRO, Ranum USA 44-8TFH-2B, Reunion Bay, first production, 10/20; t--; cum 121K 1/21; 
• 33945, n/d, MRO, Walcel USA 42-8H, Reunion Bay, first production, 10/20; t--; cum 175K 1/21; 
• 21631, 1,463, MRO, Waljen USA 43-8H, Reunion Bay, t9/12; cum 472K 1/21; 
• 21630, 1,378, MRO, Waltom  USA 43-8TFH, Reunion Bay, Reunion Bay, t9/12; cum 430K 1/21;
  

• 36921, conf, MRO, Vickall USA 34-5H, Reunion Bay,

Date	Oil Runs	MCF Sold
1-2021	64060	99574
12-2020	29618	39272
11-2020	45615	56518

• 36922, conf, MRO, Lang USA 41-8TFH, Reunion Bay,
  

Date	Oil Runs	MCF Sold
1-2021	26484	39050
12-2020	55486	70260
11-2020	26539	28983
10-2020	63607	44020

• 36923, conf, Thorson USA 41-8H, Reunion Bay,

Date	Oil Runs	MCF Sold
1-2021	33770	48418
12-2020	61982	74423
11-2020	47558	59299
10-2020	21282	18886

• 37323, conf, Oscar Thorson USA 41-8TFH-2B, Reunion Bay,

Date	Oil Runs	MCF Sold
1-2021	45732	67215
12-2020	57961	73471
11-2020	676	0
10-2020	49194	43525

• 36919, conf, Klemstead USA 44-5TFH, Reunion Bay,
  

Date	Oil Runs	MCF Sold
1-2021	26885	38136
12-2020	28296	36816
11-2020	39498	51019

• 36918, conf, Kolbo USA 34-5H, Reunion Bay,
  

Date	Oil Runs	MCF Sold
1-2021	65718	87636
12-2020	43873	54626
11-2020	54102	64625
10-2020	16949	14901

• 37515, conf, Pelarske USA 44-5TFH, Reunion Bay,
  

Date	Oil Runs	MCF Sold
1-2021	28125	39890
12-2020	34548	43312
11-2020	47163	55128
10-2020	28553	32402

• 18692, IA/781, MRO, Jasper L USA 34-5H, Reunon Bay, t11/10; cum 368K 3/20; remains off line 1/21;
• 36920, conf, Adonijah USA 44-5TFH-2B, Reunion Bay,
  

Date	Oil Runs	MCF Sold
1-2021	47752	65107
12-2020	66320	82551
11-2020	59583	61263

• 18693, 560, MRO, Betty Shobe USA 41-8H, Reunion Bay, t9/10; cum 346K 1/21; 
  

Very Few Wells Coming Off The Confidential List This Next Week -- March 28, 2021

Monday, April 5, 2021: 2 for the month, 2 for the quarter, 83 for the year:

• None.
  

Sunday, April 4, 2021: 2 for the month, 2 for the quarter, 83 for the year:

• 37591, conf, Slawson, Loon Federal 2-24-25H,

Saturday, April 3, 2021: 1 for the month, 1 for the quarter, 82 for the year:

• 37592, conf, Slawson, Loon Federal 5-24-25TFH,
• 36247, conf, BR, Stortroen 2C TFH,

Friday, April 2, 2021: 1 for the month, 1 for the quarter, 82 for the year:

• None.

Thursday, April 1, 2021: 1 for the month, 1 for the quarter, 82 for the year:

• 37403, conf, MRO, Standfest USA 42-8H,

Wednesday, March 31, 2021: 25 for the month, 81 for the quarter, 81 for the year:

• None.

Tuesday, March 30, 2021: 25 for the month, 81 for the quarter, 81 for the year:

• None.

Monday, March 29, 20211: 25 for the month, 81 for the quarter, 81 for the year:

• None.
  

Sunday, March 28, 20211: 25 for the month, 81 for the quarter, 81 for the year.

• None.

Saturday, March 27, 20211: 25 for the month, 81 for the quarter, 81 for the year.

• None.

Fast And Furious -- Early Sunday Morning Edition -- March 28, 2021

The ViacomCBS / Discovery debacle Friday:

• what would Jesus do, my ass;
• forced liquidation of Archegos (arch - egos) Capital;

Suez canal update:

• still stuck:
• two more tugs en-route
• moral support is always welcome; more horn-honking;
• Syria begins to ration fuel;

Climate change:

• the US needs the equivalent land area of Rhode Island for solar farms to meet 2050 goals;
• climate anxiety is an overwhelmingly white phenomenon;
• I quit subscribing to Scientific American years ago when the editors lost their way and bought into the scam;
• the more apt name: Unscientific American

March Madness -- hockey edition:

• Duluth defeats UND in longest NCAA college hockey tournament game ever:
• started at :32 p.m. Saturday night and ended at 12:42 a.m. Sunday morning;
• five over-time "periods":
• final score: 3 - 2

Devon: Announces Industry-First Variable Cash Dividend -- March 27, 2021

Incredible! All that SPAC talk but this really caught my attention -- Devon Energy announces industry-first variable cash dividend for common stockholders. Yeah, so there it is. I'm just a "common" stockholder. LOL. Common. Link here. Pretty cool.

• Board declares $0.19 per share variable cash dividend based on fourth-quarter results

• Variable dividend is in addition to previously declared fixed quarterly dividend of $0.11 per share

• Both fixed and variable dividends are payable on Mar. 31, 2021

  The company’s “fixed plus variable” dividend framework was implemented following closing of the merger with WPX Energy on Jan. 7, 2021. This cash-return strategy is designed to pay a sustainable fixed dividend and evaluate a variable dividend on a quarterly basis. After the fixed dividend is funded, up to 50 percent of the remaining excess free cash flow in each quarter may be distributed to shareholders through a variable dividend.

Hoping to see other oil companies do the same. 

Notes From All Over -- March 27, 2021

Top stories for the week have been posted: link here. My heart wasn't in it, as they say, but at least it's done. I can always go back and "clean” it up.

Apple: on its way to becoming a bigger play in India -- Motley Fool.

Buffett and renewable energy: why doesn't Buffett own any renewable energy stocks? Motley Fool.

Shell: shift to green energy speeds up Shell's big natural-gas bet is at risk, The WSJ. 

Latest: still stuck. So much for getting it unstuck by Saturday night. Inshallah!

Chip shortage: Stellantis will halt production at five North American plans next week because of the global microchip shortage. Link here. Stellantis: Fiat Chrysler and French company Groupe PSA. Think Peugeot, Ram Trucks, and Fiat. What a motley crew. I just can't picture Jeep and Peugeot being run by the same company. But then that's just me.

U.S. Thirst for Russian Oil Hits Record High Despite Tough Talk -- Bloomberg -- March 27, 2021

Link here. Archived.

The oil tankers docking at the refinery in Baytown, Texas, look exactly like many others plying the waters of the Houston Ship Channel. But stashed inside their capacious holds is an unusual cargo: Russian petroleum. The sprawling complex, which belongs to Exxon Mobil Corp., isn’t the only U.S. refinery that’s been receiving shipments of Russian oil. Chevron Corp.’s plant in Mobile, Ala., and Valero Energy Corp.’s facility in St. Charles, La., are also customers.

Deprived of access to Venezuelan crude by U.S. sanctions on the regime of Nicolás Maduro, and facing reduced shipments from OPEC nations since the cartel cut output, U.S. refiners turned to Russian oil in 2020 to fill the gap. The buying spree, combined with sharply lower Saudi shipments, catapulted Russia into the position of third-largest oil supplier to the U.S. last year. The feat for the Kremlin has been the talk of the oil market, but surprisingly it hasn’t been discussed much in diplomatic circles. “Russia’s move into third place has not attracted any attention in Washington,” says Bob McNally, a former senior White House policy adviser who now runs Rapidan Energy Group, a consulting firm in Washington.

America’s increasing reliance on Russian oil is at odds with U.S. energy diplomacy. For the last two years, lawmakers in Washington have been lobbying European countries to abandon Nord Stream 2, a multibillion-dollar pipeline to transport Siberian gas to Germany, fearing it will give the Kremlin further leverage over U.S. allies. (Russian gas accounted for about 45% of Europe’s natural gas imports in 2019.) Congress went as far last year as to authorize the use of sanctions against companies involved in the project. The Biden administration hasn’t indicated whether it’s considering exercising that option.

More important, perhaps, the quiet surge in Russian oil imports shows that the mantra of energy independence championed by former U.S. President Trump is hollow, says Mark Finley, a former oil analyst at the CIA who’s now a fellow at Rice University’s Baker Institute in Houston. Campaigning last year in Texas, Trump boasted that the U.S. was the “No. 1 energy superpower” and the country would never again have to depend on “hostile” foreign suppliers. “So much for energy dominance,” Finley says.

In February of last year, the Trump administration blacklisted a trading subsidiary of state-run Rosneft, the largest Russian oil company, saying it provided a financial lifeline to Maduro’s government. But no other Russian entities were targeted, meaning U.S. companies could carry on buying Russian crude and refined products.

The path for Russia to become a key oil supplier to the U.S. was paved with market savvy, luck, and the Kremlin’s proven ability to turn Washington’s policies to its favor. After years of accounting for less than 0.5% of annual U.S. imports of oil and refined products, Russia steadily increased its share over the last decade, reaching an all-time high of 7% last year, according to Bloomberg News calculations. U.S. imports from Russia averaged 538,000 barrels a day in 2020—more than the 522,000-barrel-a-day average from Saudi Arabia.

More at the linked article.

Idle Rambling -- Mid-Day Edition -- Saturday -- March 27, 2021

Crude oil exports / imports: the metric is fairly moot for most of us. At least it is for me.

• global oil is no long controlled by a cartel;
• the cartel still has a huge influence on the price, but it's no longer the only game in town
• with the US shale revolution, oil became a true commodity;
• interestingly enough, compared to most products traded internationally, I'm not sure to what extent tariffs play with regard to oil;
• if push came to shove, as they say, the US could manage on its own
• that cannot be said for Europe, Africa, Asia or Antarctica; not sure about South America
• refined products becoming a more important issue than imports/exports 
• very similar to raw cotton / cotton products during the British Empire
  

US crude oil imports:

• to Texas, Louisiana, Gulf coast: Canada, Mexico
• to one refinery on Gulf coast: Saudi Arabia
• to New England and northeast: Russia
• to cokers along US Gulf: Russia Mazut 100
  
• to California: Alaska, and Mideast oil

Link here. And, here.

***********************************
Suez Canal
11: 49 a.m. Central Time, Saturday, March 27, 2021

Cairo: local time -- 6:49 p.m. Saturday evening, March 27, 2021; Egyptian authorities said earlier in the week the ship would be freed by Saturday night, March 27, 2021. Inshallah.

• no sign, as of one hour ago, that the ship had been freed up
• rudder is free and moving; apparently not damaged
• bow and stern resting on sand;
• middle of the hull is sagging; divers seen no breach in the hull or any other damage;
  
• the canal is a V-shaped canal;
• sand pouring into the base of the "V" could disrupt normal traffic, or change the best route through
• the canal -- all that sand that is being "hoovered" up has to go somewhere, and I assume it's being dumped into the middle of the canal;

Whiting's Wold And Wold Federal Wells In Banks Oil Field -- Update -- March 27, 2021

Whiting's Wold and Wold Federal wells are tracked here. After all these years, these are still some great wells. Recently, a couple of the wells were off line and have come back on line. A couple remain off line. Most likely Whiting is simply managing their assets or some "minor" work. The production data at the linked site has been updated.

Notes From All Over -- Early Saturday Morning Edition -- March 27, 2021

Humor: Power Line in pictures vs the Suez chip memes.

• Power Line here.
• the memes here.
• with one or two exceptions, the memes won this week. 

A reader replied: How one boat with one job in body of water can bugger up the entire shipping industry, boggles the mind. The memes are great though. 

 ********************************************
In Other News

The markets, Friday: wow, go back through the individual holdings, and yesterday, Friday, March 26, 2021, was an incredible day. And then there was ViacomCBS (VIAC) and Discovery.

Poorest timing ever? Contributor recommends buying UNP on pullbacks one day before UNP hits all-time high, surging over 3 percent, up almost $7.00 / share. 

MDU: dividend aristocrat.

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.

Jobless claims: reported a day earlier, March 25, 2021, US jobless claims reached the lowest level of the pandemic; claims fell to 684,000 last week, adding to evidence the economy is ramping up. Link here.

Beverly Cleary, Klickitat Street, Portland, OR, dead at age 104. Covid-19  apparently not the cause of death. 

Insurers: the Suez ship. This article said almost exactly nothing. Over at Bloomberg. 

Speaking of which: it is now being reported that a crane will be brought in to start off loading some of those containers. 

Tesla: "breach of contract" talk. 

Misery index: link here. I suspect less than 1 percent of the US population follows the misery index, but 99 percent of Americans know the price of gasoline.

"Damn The Torpedoes, Full Speed Ahead" -- March 26, 2021

 Two cases from the April, 2021, NDIC hearing dockets, link here:

• 28758, CLR, Elm Tree-Bakken, eleven wells on an existing 1280-acre unit, sections 29/32-153-93; McKenzie, Mountrail counties;
• 28759, CLR, Chimney Butte,-Bakken, sixteen wells on an existing 2560-acre unit, sections 29/32-146-95 and section 5/8-145-95; Dunn County;

Case 28758: CLR, Elm Tree-Bakken, eleven wells on an existing 1280-acre unit, sections 29/32-153-93; McKenzie, Mountrail counties; existing wells, locations in this drilling unit:

• 22817, 439, CLR, Harms 2-32H, Elm Tree, t8/13; cum 425K 1/21;
• 22818, 706, CLR, Harms 1-32H, Elm Tree, t12/13; cum 373K 1/21;
• 37989, conf, CLR, Harms Federal 17-33H1, Antelope oil field;
• 37988, conf, CLR, Harms Federal 18-33H, Antelope oil field;

Case 28759: CLR, Chimney Butte,-Bakken, sixteen wells on an existing 2560-acre unit, sections 29/32-146-95 and section 5/8-145-95; Dunn County; existing wells in this drilling unit:

• 17884, 147, CLR, Bice 2-29H, Chimney Butte, t1/10; cum 440K 1/21;
• 16943, 516, CLR, Bice 1-29H, Chimney Butte, t5/08; cum 200K 1/21;
• 31511, 439, CLR, Dolezal 5-5H, Chimney Butte, t1/18; cum 182K 1/21;
• 31512, 307, CLR, Dolezal 6-5H1, Chimney Butte, t1/18; cum 147K 1/21;
• 24835, 1,473, CLR, Bice Federal 3-32H, Chimney Butte, t12/13; cum 292K 1/21;
• 24836, 416, CLR, Bice Federal 4-32H1, Chimney Butte, t12/13; cum 210K 1/21;
• 24839, 758, CLR, Dolezal 3-5H, Chimney Butte, t2/14; cum 286K 1/21;
• 24841, 954, CLR, Dolezal 4-5H1, Chimney Butte, t2/14; cum 280K 1/21;
• 19728, 549, CLR, Dolezal 2-5H, Chimney Butte, t5/11; cum 297K 1/21;
• 17372, IA/426, CLR, Dolezal 1-5H, Chimney Butte, t9/09; cum 202K 1/20;
• 31510, 760, CLR, Bice 5-32H, Chimney Butte, t8/16; cum 219K 1/21;
• 31509, 306, CLR, Bice 6-32H1, Chimney Butte, t8/16; cum 110K 1/21;

Week 12: March 21, 2021 -- March 27, 2021

Top story of the week:

Top international non-energy story:

• Coming out of the pandemic, global economy surging;
• Huge container ship runs aground; completely blocks the Suez Canal;

Top international energy story:

• WTI plunges as European nations extend lockdowns;
• Record: Russian crude oil imported into US;
• Don't underestimate the Bakken; same link: OPEC's biggest fear is becoming a reality;
• Saudi Aramco reports full year results;

Top national non-energy story:

• CBR on steroids -- the Canadian Pacific acquires Kansas City Southern;

Top national energy story:

• Fossil fuel is dead; long live fossil fuel;
• Huge jump in gasoline demand; and, here; and, here;

Top North Dakota non-energy story:

Top North Dakota energy story:

• Legacy Fund deposits: fourth straight month of increasing deposits;

Geoff Simon's Top North Dakota energy stories:

• Quick connect
• ND Senate soundly defeats plan to raise gasoline tax by three cents

Operators:

• CLR with big cases for April, 2021, NDIC hearing dockets;
• CLR with permits for seven Plano FIU wells;
• MRO with record IPs;

Operations:

• A spectacular MRO Three Forks second bench well;

Wells:

• The Betty Shobe well -- showing some life;
• A Whiting Scanlan well with 10-fold jump in production;

Fracking:

Pipelines:

Bakken economy:

Commentary:

• Daughter wells not as good as parent wells? Oh, give me a break!

Geoff Simon's Factoid Of The Week -- March 26, 2021

The Dakota Access Pipeline has not impacted groundwater in any of the four states where it is located since going into service in June 2017. It crosses under the Missouri River at a minimum depth of 95 feet below the riverbed. The disputed area between Morton and Emmons County that could potentially shut down the entire length of the 1,172 mile pipeline is just over 1,000 feet of the path, and is controlled by the U.S. Army Corps of Engineers.

MRO With Three New Permits; XTO Renews Five Permits; And Two DUCs Reported As Completed -- March 26, 2021

Active rigs:

$60.97	3/26/2021	03/26/2020	03/26/2019	03/26/2018	03/26/2017
Active Rigs	14	48	68	59	49

Three new permits, #38225 - #38227, inclusive:

• Operator: MRO
• Field: Four Bears (McKenzie)
• Comments: 
• MRO has permits for three wells, the Foolish Bear USA, the Coleman USA, and the Herzig USA, which will be sited in SENW 17-152-93;
• they will be sited between 1441' and 1484' FNL and between 1910' and 1843' FWL

Five permits renewed:

• XTO: four Kenneth permits in Williams County, and one Johnsrud permit in McKenzie County;

Two producing wells (DUCs) reported as completed:

• 37512, DUC/NC, Hess, EN-Vachal LLLP-LE-154-94-2028H-1, Alkali Creek, produced 11K over 8 days;
• 37509, DUC/NC, Hess, EN-Vachal LLLP-154-94-2028H-4, Alkali Creek, no production data;

It Doesn't Take Much To Move The Price Of Oil -- March 26, 2021

Link here.

WTI:

• trading up 3.8%
• trading up $2.21
• trading at $60.77

Brent: $64.41; UK says it is considering a re-look at drilling in the North Sea after first suggesting they were done with that.

OPEC basket: $61.63. Saudi Arabia can't "make it" on $60-oil. 

Egypt: Suez ship will be "freed" over the weekend, according to "Egypt." Link here. So, we have NASCAR, March Madness, PGA (golf), and now, the "ship." Time to run over to Tom Thumb (neighborhood grocer) to buy a 12-package box of movie butter popcorn.  

Global economy -- imagine when "everything" opens up. World trade volumes surged in January, 2021, up by almost 6% compared with the same month one year earlier, erasing losses during the pandemic and surpassing the previous peak in October, 2018, before the intensification of the US / China trade war.

Market today: Dow surged in last thirty minutes on a Friday afternoon. YOLO. But more: FOMO. Even AAPL, negative all day, turned positive at end of day, in the last half hour. Whoo-hoo.

Some initial thoughts:

• NASDAQ trading 8% below all-time high. We talked about this earlier.
• AAPL, for example, needs to gain 25 points to get back to its all-time high. From 120 (today) to 145, that would require a 21% jump from 120.

• The ViacomCBS/Discovery debacle today was a wake-up call for companies like Apple, Inc.
• NIO: will suspend production due to chip shortage; shares trade down 5%.
• UNP: hit a new all-time high; up 3.25%; up $7/share; and trading at $223. 
• QCOM: up 4.49%; up almost $6 / share; trading at $133.
  

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. 

You can retire on dividends. Link here. You may be able to get past the paywall via google.

April, 2021, NDIC Hearing Dockets Have Posted

Link here. 

The NDIC hearing dockets are tracked here.  

The usual disclaimer applies. As usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source.

Wednesday, April 21, 2021
Four Pages

These are cases, not permits:

• 28733, Petro-Hunt, Phelps Bay-Bakken, flaring, McKenzie;
• 28734, CLR, revoke a Hess AN-Norby-LE permit, file # 38176, McKenzie County:
• 28735, Petro-Hunt, pooling, Little Knife-Bakken, Billings County;
• 28736, Hess, commingling;
• 28737, Hess, commingling;
• 28738, Hess, commingling;
• 28739, Hess, commingling;

Tuesday, April 22, 2021
Eight Pages

These are cases not permits:

• 28740, Enerplus, Antelope-Sanish, establish an overlapping 2560-acre unit; one well; McKenzie County;
• 28741, Enerplus, Spotted Horn-Bakken, establish two overlapping 2560-acre units; one well in each; McKenzie County;
• 28742, RimRock Oil & Gas, Heart Butte-Bakken, i) establish an overlapping 1280-acre unit; eight wells; ii) establish an overlapping 2560-acre unit; one well; Mountrail, Dunn counties;
• 28743, EOG, Kittleson Slough-Bakken; i) establish an overlapping 2560-acre unit; multiple wells; ii) establish an overlapping 5120-acre unit; twowells; Mountrail County;
• 28744, EOG, Ross-Bakken, establish an overlapping 2560-acre unit, multiple wells; Mountrail County;
• 28745, CLR, Corral Crrek and/or Jim Creek-Bakken, establish two overlapping 2560-acre units; one well on each unit; Dunn County;
• 28746, CLR, Jim Creek and/or Chimney Butte-Bakken; i) establish an overlapping 2560-acre unit; two wells; ii) establish an overlapping 2560-acre unit; one well; Dunn County;
• 28747, CLR, Elm Tree-Bakken and/or Antelope-Sanish; i) establish an overlapping 1280-acre unit; two wells; ii) establish an overlapping 2560-acre unit, two wells; McKenzie, Mountrail counties;
• 28748, Cobra Oil & Gas, Flat Top Butte Field, transfer the confiscated Beicegel Creek 27-42 well, file # 8468, back to Cobra as operator so the well may be recompleted in the Flat Top Butte-Bakken, the Flat Top Butte-Birdbear Formation, McKenzie County;
• 28749, Resonance Exploration, West Roth-Madison, establish a 640-acre unit, to drill a multi-lateral horizontal well not less than 330 feet to the boundary of each spacing unit; Bottineau County
• 28750, Resonance Exploration, South Westhope-Spearfish / Charles pool, establish a 400-acre unit, drill a multi-lateral horizontal wells not less than 330 feet to the boundary of the spacing unit; Bottineau County
• 28751, CLR, pooling;
• 28752, CLR, pooling;
• 28753, CLR, pooling;
• 28754, CLR, pooling;
• 28755, CLR, pooling;
• 28756, CLR, pooling;
• 28757, CLR, pooling;
• 28758, CLR, Elm Tree-Bakken, eleven wells on an existing 1280-acre unit, sections 29/32-153-93; McKenzie, Mountrail counties;
• 28759, CLR, Chimney Butte,-Bakken, sixteen wells on an existing 2560-acre unit, sections 29/32-146-95 and section 5/8-145-95; Dunn County;
• 28760, CLR, commingling;
• 28761, Ovintiv Production Inc, Westberg-Bakken, two wells, McKenzie County;
• 28762, North Range Resources, SWD well;

Off The Net For Awhile -- March 26, 2021

Memo to self: when I get back, this link first. And here it is.

The Market -- Idle Rambling -- March 26, 2021

Note: I am inappropriately exuberant about the US. 

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. 

Earlier I posted:

Meme: Wall Street not keeping up with the global economy or the US economy:

• the US market's three major indices keep hitting new highs; and, yet,
• many blue chip, widely held stocks are still 5 - 20% below their 104-week highs; in other words,
• there is a lot of room for some of these stocks to move (on the upside);

mom-and-pop players at home are seeing better gains in their professionally-managed accounts than in their personally-managed accounts -- this is based on a survey of two -- me vs my wife.

• world trade volumes surged in January, 2021; graphic pending --
  
• what I find most remarkable:
• it's a stock-picker's market; the professionals are in the driver's seat;

Let's see some examples. Ticker symbol:  52-week high / trading today / percent yet to run to reach 52-week high (numbers may be rounded):

• BRK-B: 268 / 253 / 6%;
  
• BA: 278 / 247 / 13%;
  
• V: 228 / 208 / 10%;
  
• UNP: 221 / 212 / 4%;
  
• CVX: 113 / 105 / 8%;
  
• T: 33 / 30 / 10%;
  
• DFS: 104 / 96 / 8%;
  
• BAC: 40 / 38 / 5%;
  
• AAPL: 145 / 120 / 21%

AAPL: tea leaves -- AAPL will announce a sizeable dividend increase before the end of May, 2021.

Idle Chatter On Friday Morning -- March 26, 2021

It's a slow Friday. 

Two things. 

First, just a reminder.

When I refer to the "Bakken" or the "Bakken revolution" as a metonym, it refers to the tight oil / unconventional drilling / shale drilling in the United States.

The "Bakken," based on context, generally refers to any one of the three:

• the footprint and geology of the Bakken play in the Williston Basin;
• the science and technology in exploring and producing in the Bakken; and,
• the interplay of operators, mineral owners, and surface owners in North Dakota.
  

But in a very broad sense, to repeat, the "Bakken" or the "Bakken revolution" as a metonym, it refers to the tight oil / unconventional drilling / shale drilling in the United States.

That's the "Bakken" I am thinking of when I wrote posted this earlier:

Don't underestimate the Bakken: link here.

• so much for that promise to focus on free cash; slow production growth;
• from the linked site:

U.S. oil drillers are no longer sitting in the trenches, waiting for the pandemic storm to pass. They are once again in growth mode, according to the first-quarter energy survey by the Dallas Federal Reserve. As oil prices rebound, activity in the oil patch is expanding, respondents to the Dallas Fed Energy Survey said. And it is expanding strongly: from a reading of just 18.5 for the fourth quarter of 2020, the business activity index of the survey soared as high as 53.6 over the first quarter of this year. 

The data supports evidence from other agencies: the number of active drilling rigs is steadily rising. So is production: according to the latest weekly report by the Energy Information Administration, oil production last week averaged 11 million bpd. That’s still 2 million bpd below the average for this time last year, but above the average for a week earlier and the four-week average for the period ending on March 19. 

The signs seem to point to what OPEC feared the most: U.S. shale is returning. Capital spending is returning, the Dallas Fed reported in its survey. From an index of 12.5 for the fourth quarter of 2020, it has now gone up to 31. What’s more, the industry is upbeat about the future, too, planning to boost spending further next year.

I am not referring simply to North Dakota. I am referring to the entire unconventional oil and gas industry in the United States. 

Second.

The stories coming out of the Permian are absolutely mind-boggling. That also goes for the Appalachian. The most recent reminder: Warren Buffett's plan for new natural gas plants in Texas. A few days before that, the stories on the new LNG export terminals along the Texas / Louisiana coast. I get the feeling that Americans, in general, have no idea what an energy powerhouse the US is. 

I am absolutely convinced Saudi oil exports could go to zero and the US could fill the void. That's a bit of hyperbole but I don't think I'm far off. Look at the numbers reported by Reuters for Saudi export data in December, 2020. In fact, let me re-phrase that. I am absolutely convinced Saudi oil exports could go to zero and North America could fill the void. 

The fact that the Biden administration is already backtracking on plans to shut down the US oil and gas industry is a reminder how important that sector is to the US. It is pretty funny: one of the many big stories that came out of the Texas Deep Freeze this past February: a huge national shortage of plastic. LOL. Texas oil fields shut down for one week; refiners shut down for one month; and the plastics industry is severely affected.

No Wells Coming Off Confidential List; WTI In Trading Range -- March 26, 2021

Meme: Wall Street not keeping up with the global economy or the US economy:

• world trade volumes surged in January, 2021; graphic pending --
  
• what I find most remarkable:
• the US market's three major indices keep hitting new highs; and, yet,
• many blue chip, widely held stocks are still 30% below their 104-week highs; in other words,
• there is a lot of room for some of these stocks to move (on the upside);
• it's a stock-picker's market; the professionals are in the driver's seat;
• mom-and-pop players at home are seeing better gains in their professionally-managed accounts than in their personally-managed accounts -- this is based on a survey of two -- me vs my wife.
  

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. 

Don't underestimate the Bakken: link here.

• so much for that promise to focus on free cash; slow production growth;
• from the linked site:

U.S. oil drillers are no longer sitting in the trenches, waiting for the pandemic storm to pass. They are once again in growth mode, according to the first-quarter energy survey by the Dallas Federal Reserve. As oil prices rebound, activity in the oil patch is expanding, respondents to the Dallas Fed Energy Survey said. And it is expanding strongly: from a reading of just 18.5 for the fourth quarter of 2020, the business activity index of the survey soared as high as 53.6 over the first quarter of this year. 

The data supports evidence from other agencies: the number of active drilling rigs is steadily rising. So is production: according to the latest weekly report by the Energy Information Administration, oil production last week averaged 11 million bpd. That’s still 2 million bpd below the average for this time last year, but above the average for a week earlier and the four-week average for the period ending on March 19. 

The signs seem to point to what OPEC feared the most: U.S. shale is returning. Capital spending is returning, the Dallas Fed reported in its survey. From an index of 12.5 for the fourth quarter of 2020, it has now gone up to 31. What’s more, the industry is upbeat about the future, too, planning to boost spending further next year.

*********************************
Back to the Bakken

Active rigs:

$60.54	3/26/2021	03/26/2020	03/26/2019	03/26/2018	03/26/2017
Active Rigs	14	48	68	59	49

No wells coming off the confidential list this next week. 

RBN Energy: will northeast gas outflows to the Gulf/southeast max out capacity this spring? Part 4.

Natural gas pipeline takeaway constraints out of the Northeast worsened in 2020 despite producer cutbacks in the region as high storage levels and weaker demand led to record volumes of Appalachian gas supplies needing to find outlets in other regions last fall. This year, storage levels are lower and could absorb more of the surpluses during injection season. However, Appalachian gas production so far in 2021 has been averaging higher than last year; and, gas prices are higher year-on-year, reducing prospects for the kinds of producer curtailments we saw last year. As for the “pull” from downstream demand, LNG exports along the Gulf Coast aren’t expected to experience the slump from cargo cancellations seen last summer. In other words, Appalachia’s outbound flows are likely to be robust, setting the stage for takeaway constraints and weak prices, particularly during the spring and fall shoulder seasons. How much outbound capacity currently exists and how much room is there for growth? Today, we continue our series on the Northeast gas market with an update on Appalachia’s southbound takeaway capacity and outflows, starting with a detailed look at the gas moving to the Southeast and to the Gulf Coast.

This is Part 4 of the blog series, aimed at breaking down the fundamentals trends in the constantly evolving Appalachian gas market. In Part 1, we looked at the Northeast gas supply-demand trends that contributed to increased takeaway constraints and weaker Appalachia basis differentials in 2020, namely milder winter demand in early 2020 that led to record high storage levels, despite low rig counts and producer cutbacks in the spring and fall. Then, in Part 2, we delved deeper into Appalachian production and the disparate patterns emerging in each of the sub-regions. We shifted our focus to regional outflows and takeaway capacity utilization in Part 3, starting with a look at the record outflows during Winter Storm Uri last month. Now spring is around the corner and Northeast demand will take a big step back as heating demand fades, leaving the region swimming in surplus gas. How much exit capacity is there for that surplus gas? To understand that, we first need to take stock of existing capacity and flows.