Tuesday, September 28, 2021

Wowza -- September 28, 2021

Back to the Bakken

With the NDIC not updating the GIS map, the scout tickets, or the active rig list it becomes increasingly difficult to keep track of what's going on. Thank goodness for reports from the field from readers. Most recent update, from a reader:

About a mile west of the COP Bartlett wells and the Continental Jack wells, there's a Nabors B rig MIRU on what appears to be a single-well pad with three oil tanks and a production water tank. New construction pad. Just big enough for a rig. I'll try to get a picture next time I drive by. Interesting.

My reply:

If you do get that close, take a picture of the "sign" at the entrance to the pad. I see two pads west of CLR Jack and COP (BR) Bartlett with at least one well confidential but the NDIC map is no longer current. Both of these pads are about the same distance from Jack / Bartlett, but about four miles west, not just a mile west. The CLR pad is to the north; COP (BR) pad is the same distance but to the south.

  • Rimrock has a Nabors b rig in Dunn County.
  • other operators have a Nabors b rig but not in Dunn County the last time we had NDIC information
  • CLR is definitely operating in Dunn County
  • I'm not aware that COP (BR) has started drilling again in the Bakken

Later, from another reader, see comments:

The rig west of Killdeer is B1 for Continental. If you go to the 8/4 daily report there was a single Jack well permitted. Not sure why it is a single well there.  

Screenshot of map pending.

Back to Non-Bakken News and Comments

Link here.

  • natural gas prices surging around the world;
  • Dutch TTF jumped as much as 12 percent to above $100 / MWh, a record high, after a drop in Russian supply;
  • US Henry Hub just topped $6 / mmbtu for the first time since 2014
  • JKM is above $30 / mmbtu, a seasonal high
  • ISO NE: at $70 / MWh; spike to $80;
    • natural gas and nuclear: 87%
    • nothing else matters
    • had to rely on expensive Canadian hydroelectricity
  • former governor Cuomo: "Some folks thought I was nuts."
  • new governor Kathy Hochul: "Here, hold my beer."
  • Link here.
  • In case the link breaks or the tweet disappears, a graphic is pending.

TV ratings:

  • the NFL is back ... and in a big way. Something Breitbart won't be reporting.
  • Tony Awards? Not so much. America is so over Hollywood, Broadway.


  • Apple increases price of Beats Flex headphones
  • form $50 to $70;
  • I had not seen these before; something to consider; great price at $70


  • how 'bout them Cowboys;
  • Philadelphia Eagles imploded; Stephen A. Smith will go nuts
  • what happened to the Seahawks? LOL. The Vikings are back!
  • and Tom Brady's Buccaneers -- are you kidding me?
  • and, Mahomes and the Chiefs
  • the season is getting interesting and it's only the third week


  • Jackson, MS, this week?
  • expect a lot of folks to be resting after the Ryder Cup

Great Barrier Reef Is Dead! Long Live The Great Barrier Reef -- September 28, 2021

It's now being reported that and read this carefully ...  for those with heart problems ... please sit down ... the Great Barrier Reef is back!! The Great Barrier Reef is experiencing "RECORD HIGH" levels of coral coverage. Link here.  Or go direct to SkyNews - Austrialia.

Former JCU Marine Physicist Peter Ridd says the Great Barrier Reef is now experiencing “record high coral cover”.

“This is data that’s been accumulated over a little while now and it shows … it’s actually at record high coral cover,” he told Sky News Australia.

“We’ve got more coral on the Great Barrier Reef now than we did when records began in 1985.

“We’ve got twice as much coral as we had after huge cyclones went through the reef in about 2011 and 2012, and this record-high coral cover is despite supposedly having three catastrophic unprecedented bleaching events in just the last five years. 

"So you've just go to wonder: were those bleaching events maybe as catastrophic as these experts supposedly claimed."

Note: it appears that the coral is accreting around plastic straws. Greta is flying to Australia, as we speak, with a shipment of straws. Greta is now concerned there may be a shortage of plastic straws with the supply chain bottlenecks. Do your part. Visit McDonald's.

Pfizer Announces Pfizermectin, Generic To Be Branded "Secretariat" -- Rumors -- September 28, 2021

Consider the source, but ...

Another piece US anti-Ivermectin puzzle may have emerged. On Monday, Pfizer announced that it's launching an accelerated Phase 2/3 trial for a COVID prophylactic pill designed to ward off COVID in those may have come in contact with the disease.

Coincidentally (or not), Pfizer's drug shares at least one mechanism of action as Ivermectin - an anti-parasitic used in humans for decades, which functions as a protease inhibitor against Covid-19, which researchers speculate "could be the biophysical basis behind its antiviral efficiency."

Lo and behold, Pfizer's new drug - which some have jokingly dubbed "Pfizermectin," is described by the pharmaceutical giant as a "potent protease inhibitor." 

Raise your hand if you didn't see this coming.

The Bakken Is Back -- The Core Is Expanding -- September 28, 2021

The advances in the Bakken came even before recent increase in crude oil prices. Now, the price surge. Wow. 


The Bakken is back: this should be nothing new to those who have been following the Bakken --

The Bakken has its own mineral tracker, Joel Brown, who was among the first graduates of North Dakota’s Petroleum Engineering program in 2013. Brown founded Mineral Tracker to help royalty owners, a service that has since been wrapped into First international Bank and Trust in Watford City.

Since creating Mineral Tracker, Brown often hears is that the Bakken is close to being drilled out. But that’s not at all what Brown is seeing in the data.

The real story is much more complex, but it’s by and large story about innovation, and it’s a story about how the Bakken’s producers are defying the odds against them, despite OPEC-induced downturns that might have crushed them.

The core of the Bakken is expanding, Brown said. He sees it most clearly in the estimated ultimate recovery figures for Bakken wells. From 2014 to 2018, estimated ultimate recoveries for Bakken wells have increased nearly 70 percent.

A well drilled in 2013 averaged an EUR of around 240,000 barrels of oil. That had been the average for the 10 years prior, too.

But in 2020, Brown has been seeing much higher EURs. The new average for the state is more like 580,000 barrels. That, in turn, has changed break-evens from what used to be a $70 average to more like $37 per barrel.

In the Ross region, for example, just north of Parshall field, which was one of the first areas in North Dakota that saw prolific Bakken production.

But travel just north of there, and wells typically have not been so productive. That appears to be changing. In 2020, three clearwater wells were drilled and completed with better hydraulic fracturing techniques. Those wells are now projected to have EURs of 750,000 barrels of oil — much higher than the 2020 state average of 580,000.

Assuming costs of completion at $7.5 million, that puts breakevens at $29 per barrel.

Brown sees a similar trend in the Alexandria region in central Divide County.

“It is traditionally one of the poorer performing areas of the Bakken and Three Forks development in the Williston Basin,” Brown said.

But recently, 2019, Hunt Oil did a large-scale completion job with 13 million pounds of sand and 40 to 50 stages for completion. That well’s EUR is projected at 590,000 barrels per day.

“So once again, above our average for the state of North Dakota being drilled in this area where we had written it off to $100 oil,” Brown said. “That 590,000 barrel EUR would correlate to a $36 per barrel breakeven oil price.”

Near the Montana border, Brown highlighted two Gibbons wells that have average EUR of 625,000 barrels of oil, drilled in 2019, and six Missouri wells drilled in 2019 and 2020 with an average EUR of 560,000 barrels. That works out to a breakeven oil price of $36 per barrel.

In the Haystack Butte area, 12 Palmer wells in 2019 were drilled with an EUR of 590,000 barrels, and, in the Dunn County area, there’s even a well that is projected to have 1.6 million barrels of oil over its productive life.

Much more at the link. 


The Bakken Is Bakken -- Breakevens In Some Areas: $29 -- September 28, 2021

WTI: continues to melt up. CNBC says rise is due to hurricane "that swept the gulf disrupted energy supplies across the US." Say what? Nothing said about what was going on in Europe / UK.

The numbers:

  • WTI: $76+
  • TYT: 1.5%

The Fed:

  • wow, look at this -- the two Fed heads leaving are among the most hawkish
  • heard on the street: more dovish heads will be appointed
  • Steve Liesman appears to blow off the "more dovish" signal but it's pretty obvious
  • as long as we brought up the Fed, Jay Powell now says inflation will (likely?) last longer than expected

Automakers: automakers temporarily shut down more facilities. Link here.

  • Stellantis: four of its plants will close the week of September 27, 2021 (that would be this week);
  • Detroit; Illinois; Brampton, Ontario; and, Saltillo, Mexico
  • Ford: will cut production at its SUV plant in Oakville, Ontario this week (week of September 27, 2021)

Ford: that deal looks pretty good. Link here. Will add an electric F-150 plant; add three battery factories.

Tea leaves: Administration increasingly nervous that the courts have not yet struck down his executive order mandating the vaccine. 

Back to the Bakken

The Bakken is back: this should be nothing new to those who have been following the Bakken --

The Bakken has its own mineral tracker, Joel Brown, who was among the first graduates of North Dakota’s Petroleum Engineering program in 2013. Brown founded Mineral Tracker to help royalty owners, a service that has since been wrapped into First international Bank and Trust in Watford City.

Since creating Mineral Tracker, Brown often hears is that the Bakken is close to being drilled out. But that’s not at all what Brown is seeing in the data.

The real story is much more complex, but it’s by and large story about innovation, and it’s a story about how the Bakken’s producers are defying the odds against them, despite OPEC-induced downturns that might have crushed them.

The core of the Bakken is expanding, Brown said. He sees it most clearly in the estimated ultimate recovery figures for Bakken wells. From 2014 to 2018, estimated ultimate recoveries for Bakken wells have increased nearly 70 percent.

A well drilled in 2013 averaged an EUR of around 240,000 barrels of oil. That had been the average for the 10 years prior, too.

But in 2020, Brown has been seeing much higher EURs. The new average for the state is more like 580,000 barrels. That, in turn, has changed break-evens from what used to be a $70 average to more like $37 per barrel.

Grayson Mill:

  • first rig scheduled for November, 2021; link here;
  • a real company. LOL. Has 150 employees; Eighty-five work in the field

Active rigs, best guess*, NDIC no longer reports this information:

Active Rigs26*11576658

No wells coming off confidential list according to the NDIC which has quit updating scout tickets, production.

RBN Energy: rising LNG exports hitch US gas to soaring TTF, JKM prices, part 2. Archived.

The U.S. natural gas market’s exposure to global gas and LNG markets has come into sharp focus in recent days. A gas supply crunch in Europe and scant LNG cargoes have roiled the international markets and kicked competition into overdrive. European natural gas and Asian LNG prices are at record highs and locked in a race to the top. The U.S. gas market has been relatively buffered from the full extent of the panic-driven premiums enveloping European and Asian markets, constrained primarily by its limited ability to help meet international demand. In other words, the U.S.’s LNG export capacity ceiling is likely the only thing reining in Henry Hub prices from following European and Asian gas/LNG prices to the moon. As explosive as Henry Hub futures are these days, if not for the capacity constraint, they would be much higher. That ceiling is about to get a little higher, however, as two liquefaction projects — Cheniere Energy’s Sabine Pass Train 6 and Venture Global’s Calcasieu Pass — get ready to export LNG from U.S. shores this winter, amid what’s already the most bullish Lower 48 gas market in years. In today’s RBN blog, we detail the timing and demand implications of these two projects.

Monday, September 27, 2021

Notes From All Over -- Part 5 -- The Surging Price Of Oil -- September 27, 2021

$76.12. After the close, WTI traded up almost another one percent, almost another 70 cents. This evening, WTI is trading at over $76. 

Price of WTI: I posted Cathie Wood's tweet when she first tweeted it. The tweet being re-tweeted at this link. What a doofus. I said so at the time. I can't remember my exact words, but surely my sentiments. Here's the post, back on June 4, 2021.

I remember Jim Cramer also suggesting the price of oil had peaked. It's interesting. I suggested in a post that the price of oil can take wild swings.  I posted a screenshot of the historical price of oil to prove my point. I've long forgotten but I think I thought there was a chance that the price of WTI could surge. Whatever.

But what in the world drove WTI from $50 to $75 in such a short time this time around?

Notes From All Over -- The Ford EV Edition -- Part 4 -- September 27, 2021

Tennessee, Kentucky: EV valley? See below. Right-to-work states? Lower taxes? Nicer weather?

Roth IRA: Yahoo!Finance. Spousal Roth IRA

So what is it? String instruments or stringed instruments? And then we also have chordophones.

Ford: to build $11.4 billion mega campuses for EVs. Also, WSJ.

  • Ford's portion: $7 billion
    • partner: SK Innovation (South Korean)
    • 11,000 new jobs
  • Kentucky, Tennessee; not Detroit
  • Tennessee: battery factory alongside a new truck factory
    • Blue Oval City 
    • the truck site
    • 6,000 jobs
    • to begin producing electric F-series pickups by 2025
  • Kentucky: two battery factories
    • BlueOvalSk Battery Park
    • the battery site 
    • 5,000 jobs
    • opening date: 2025
  • largest manufacturing investment in the company's 118-year-old history
  • few new automobile plants have been opened in the US in the last few decades
  • Volvo: South Carolina
  • Detroit: Jeep

Ford, statistics from Yahoo!Finance, numbers rounded:

  • mega-EV project: $7 billion
  • market cap: $50 billion
  • enterprise value: $160 billion
  • revenue (ttm): $140 billion
  • gross profit (ttm): $6 billion
  • total cash: $25 billion
  • total debt: $150 billion

Comments: many numbers rounded; back-of-envelope figures

  • all this talk about auto manufacturers with supply chain problems? Ford is looking past them
  • $7 billion / $150 billion or $7 billion / $160 billion = 4 to 6 percent spread out over several years
  • $7 billion / $140 billion = 5 percent spread out over several years no dividend since January, 2020; had been 15 cents = 60 cents/share annually
  • outstanding shares: 4 billion shares * 60 cents = $2.4 billion / year
  • $7 billion / $2.4 billion = three years
  • 12,000 employees x $60K / year = $1 billion / year

Disclaimer: I know absolutely nothing about these kinds of things. This is simply my own figuring. If this is important to you, go to the source, and your get your own used envelope.


  • GM: Nashville, a $2.3 billion battery factory to support a nearby assembly plant which itself is getting a $2 billion makeover to make EVs
  • Volkswagen AG: Chattanooga, $800 million to expand its EV production


  • Harvard University / MBA business school
  • smartest guys on earth
  • but, in addition, access to smartest epidemiologists and virologists in the world
  • MBA students: 100% vaccinated
  • apparently some type of Covid outbreak on the Harvard School of Business campus (separate from the main Harvard campus)
  • whatever the outbreak was, Harvard School of Business elected to move all MBA classes online:
  • does Harvard know something the CDC doesn't -- like, perhaps the effectiveness of the vaccine?

Random Update Of An Enerplus "Stringed Instrument" Well -- September 27, 2021

This post won't be updated

The "string instrument" pad is tracked here. In addition, early production is reported here.

The well came off confidential list today:

  • 37029, conf, Enerplus, Fiddle 149-94-02C-01H-TF, McKenzie County, Mandaree, incredibly good well; scout ticket not updated;
DateOil RunsMCF Sold

Over 200,000 bbls crude oil sold in less than five months.

Bbls oil sold

Gas MCF sold













First Day Of The Last Week Of The Third Quarter -- September 27, 2021

The Fed: Jay Powell says the labor market continues to improve. This includes the two new jobs that just opened up at the fed. [For the archives: two Fed governors resign over personal investing practices.]

Apple, Tesla: have suspended some production in China. Everything is being impacted; not limited to technology. Think NIKE. Not good. 

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.

SRE: takes a $1.1 billion charge related to Aliso Canyon. 

Natural gas: prices in Europe hit an all-time high. Both UK NBP and Dutch TFF natural gas benchmarks have closed the day at their highest-ever settlement, up eleven percent on the day, to a closing price equal to more than $26 per mBtu. 

$75: to put things in perspective, a lot of energy stocks have only returned to pre-Covid. The market is not valuing these stocks at $65 / bbl WTI let alone $75. -- HFI Research

One reader will like this, from twitter: PBT started drilling in March, 2020, right when everything shut down. My favorite stock, a royalty trust, that's spending $86 million to create 91 new wells and 24 recompletions budgeted for 2021 on top of 1400 wells. Cash distribution in 1Q22 is gonna be wild after suppressed due to spend. -- a social media comment from the linked thread above.

Back to the Bakken

Active rigs, best guess*: NDIC is no longer reporting active rigs --

Active Rigs26*11576557

Three new permits, #38584 - #38586, inclusive:

  • Operator: Rimrock Oil & Gas
  • Field: Moccasin Creek (Dunn County)
  • Comments:
    • Rimrock has permits for three more wells to be sited in SWSE 33-148-93; 
    • between 691 FSL and 706 FSL and between 2531 FEL and 2484 FEL;

Four wells released from confidential list:

  • 37245, conf, MRO, Armstrong 14-34H, Dunn County, Bailey, no data provided; scout ticket not updated;
  • 38181, conf, Petro-Hunt, Hurinenko 144-98-2B-11-1HS, Billings County, Little Knife; early, minimal production, scout ticket not updated;
  • 37028, conf, Enerplus, Mandolin 149-94-02C-01H, McKenzie County, Mandaree, early, nice production, scout ticket not updated;
  • 37029, conf, Enerplus, Fiddle 149-94-02C-01H-TF, McKenzie County, Mandaree, incredibly good well; scout ticket not updated;

Notes From All Over -- Part 3 -- September 27, 2021

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

Goldman Sachs: their advice. Make a lot of money.

Hess: massive underinvestment in new production is a major wildcard for oil. Link to Tsvetana Paraskova. Let's look at some energy companies:

  • HES: up 5%; up $3.70; trading at $79; pays 1.33%;
  • CLR: up 7%; up $3.06; trading at $47.28; pays 1.35%;
  • DVN: up 6%; up $1.90; trading at $35; pays1.33%;
  • EOG: up 5%; up $3.76; trading at $81.85; pays 2.11%;
  • CVX: up 2.4%; up $2.40; trading at $103; pays 5.33% -- whoo-hoo!
  • EPD: up 2%; up 45 cents; trading at $21.90; pays 8.4%;

Russia: wow, wow, wow. Exactly what I said earlier today or yesterday.

US: Covid-19 is so behind us.

  • from twitter: according to Pay with GasBuddy data, weekly US gasoline demand last week (Sunday through Saturday) rose 1.1%, ending the five-week streak of falling demand. Weekly demand was the highest since the week of 8/29
  • I mentioned yesterday, on my bike ride, I had never seen such heavy automobile and pick-up traffic as OI saw yesterday;
  • and if there is any question of whether Covid-19 is behind us, one is not tuning into Saturday college football and Sunday NFL; stadiums of 100s of thousands of unmasked folks; drinking beer, yelling, coughing; 

Another pipeline killed:

  • from twitter: PennEast pipeline axed ... good job greenies .. have fun paying sky-high energy prices and freezing your butts off this winter ... and winters to follow ...
  • the burggraben widens: $500 million+ went into the development of this project ... to date ..

A Triple Whammy For Apple? -- September 27, 2021

Reason #4 why I love to blog: connecting the dots. 

Three readers sent me different links this morning; individually they were "just more of the same," but putting them together, the dots painted an interesting picture. 

The story.

Earlier today I suggested there was sector rotation. I suggested folks were selling small amounts of AAPL to buy positions in energy.

On a day when the Dow surged at mid-morning, some energy plays were up as much as five percent, even after a big run last week. 

But, on a day when the Dow surged, AAPL was down, and not just a bit, but significantly.

I erroneously attributed it to sector rotation because I was considering doing exactly that: sell a bit of AAPL and buy a lot more energy. But I held off. Went for a bicycle ride.

And then it hit me. 

The readers explained it to me.

Apple, Inc., is in trouble. Possibly deep trouble. Apple's biggest quarter is this quarter, October - December.

If Apple, Inc., misses on either the top line or the bottom line, or heaven forbid, both lines, in its best quarter, AAPL will crater. 

And it's very possible AAPL could miss. 

Tim Cook can manage logistics, and he has a steady supply of chips out of Taiwan, but Tim Cook can't manage China's energy policy.

And China has run out of energy. Literally.

China is shutting down factories because they don't have the electricity.

The irony is that Apple is known for two things:

  • renewable energy; and,
  • going it alone, being self-sufficient.

It looks like Apple (and all manufacturers in China) could have huge problems exactly for those reasons.


On a day the market surges, and early reports that Apple's new product line was doing well, why would AAPL be slumping today? It cannot possibly be sector rotation. I was wrong on that one. 

It's all about energy. 

Now for the links to support the thesis:

  • top Apple, Tesla supplies suspend production amid China power crunch. ZeroHedge.  China wouldn't shut these factories down if they still had coal heading into another very cold winter. 
  • from twitter: Europe, China, and India seem to me rather short of energy. The biggest shortage in China and India is coal. They are really, really short. In Europe, it's natural gas (and wind and emissiosn rights, but that's another matter.

Bottom line: this could very well be the "I told you so winter," for energy bulls to the faux environmentalists. There's every indication that while "they" spent the last ten years on wind and solar energy and "green" policy, they should have been paying attention to the facts of life. 

For Apple, this is almost a triple whammy:

  • going green; not paying attention to what was going on in the real world;
  • relied too much on China, not seeing the energy crisis coming; and, of course,
  • sector rotation, from technology to energy.

Notes From All Over -- Part 2 -- The September Swoon -- That Was It? September 27, 2021

September, 2021, is, of course, not over.

But if the trend continues, it looks like all that hand-wringing by Jim Cramer and the entire CNBC crew was just that -- hand-wringing. 

That incredible drop in the Dow -- yes, that 1% drop coming after a thirty-percent jump in the Dow over the past year, or whatever it's been -- was a whole week ago, and is now completely forgotten. That story disappeared as fast the US Army left Afghanistan. 

By the end of last week, the markets returned to the pre-Monday sell-off. 

Nothing more than a September swoon. 

Today the market opens mixed, and now, even before mid-morning, the Dow is up an incredible 240 points. Who wudda thought?

One gets the feeling investors don't like to put new money into:

  • bonds;
  • money market accounts;
  • cash.

Last Monday: a buying opportunity. Period. Dot. 

The numbers:

  • WTI: $75.40
  • DXY: $93.32. Flat.
  • Ten year Treasury: 1.475%

 Hurricane Ida: was that this year?

Notes From All Over -- Part 1 -- The Pre-Market Edition -- Quiet -- Nothing About The Bakken -- September 27, 2021

Covid is so over: everything suggests "we" came out of the Delta variant much more quickly than anticipated.

  • energy demand;
  • supply chain shortages continue;
  • choke points at ports, especially the west coast ports, getting worse, not better
  • US equity markets: re-opening trade all the buzz

Covid is so not over: I thought I had posted this, but maybe I haven't. I'm not worried about shortages but I do have to admit -- now that I have a bit of storage space that I never had before, I'm starting to stock up with non-perishable items: paper products, bottled water, etc. I've noticed the shelves in Target looking a bit empty in some areas; a reader said he's noticed that bottled water always seems to be low in Walmart; and, of course, everyone knows about the Costco policy on restricting sales of some items. 

Oil: Goldman Sachs -- we moving from a cyclical to a structural bull market in oil.

Crisis: Tea leaves suggest the JoBid administration is behind the eight ball on the impending global energy "crisis. As some folks call it. If it is a crisis, it was:

  • predicted; and,
  • preventable.

Wow, wow, wow. WTI; up almost 2%; up $1.42; blasts through $75. To infinity and beyond. And this is well beyond the driving season. Natural gas pulling crude oil forward.

Ten year Treasury: surges. Now over 1.510%. Banks are loving it.

Intel: bringing it on home. Intel starts construction of two Arizona computer chip factories. Part of a $20-billion project. This gets exciting quickly. Silicon Valley; Austin; Arizona -- the US really has depth when it comes to almost any sector. 

Re-posting: McDonald's, COP, Lockheed Martin, Accenture, JPMorgan Chase -- all reported dividend increases last week. Previously posted. Link at Barron's. 

Durable goods sales for August: just released. Much, much better than expected. Market was trending toward zero, red -- will be interesting if this provides "reassurance" for the market.

  • Yup, there it is. Dow jumps. Implied open: 65 points in the green. Maybe 75 points.
  • Nasdaq futures: down 117 points.
  • S&P 500: down a bit.

Amazing maps: the most oddly named town in each US state. Guess the town in North Dakota. Link here

Landfills: it will be interesting to see if we see any stories where GM plans to bury all those Chevy Bolt batteries. My hunch? They will be recycled and will show up in Africa in some form or another. 

Transition: Warren Buffett's point man on energy passed away over the weekend at the age of 90.

About to go global: link to Irina Slav. The European energy crisis is about to go global. 

Enerplus "Stringed Instrument" Pad Will Be Huge -- Monday, September 27, 2021

WTI: will it hit $75 today; pre-market up 1.3%; up almost a dollar; trading just below $75 at $74.93.

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

A quick look at the news this morning suggests:

  • ten year treasury: moving higher and really, really helping the market (especially the banks)
  • re-opening trade -- WTI flirting with $75; oil and oil services surging; Goldman Sachs has lifted substantially its Brent crude forecasts to $90/bbl by year-end; will continue into 2022, 2023 and what it calls the mid-cycle price; link here.
  • some mainstream media starting to link renewable energy policies with current energy crisis
  • one respected pundit calls for a "natural gas reserve" for Europe, the UK
    • hush: isn't this a bit late?
    • hush: they had one until faux environmentalists shut it down; it was called Groningen
  • the UK gasoline crisis is not getting better;
  • China's sudden thirst for energy seems to have surprised analysts; link here or direct link to a Bloomberg paywall
  • the Chinese winter has not started yet, but China's thirst for more energy right now is a big, big deal; all of this in context with the Winter Olympics in China in February 2022; link here;
  • Equinor has quietly increased significant amounts of oil to Asia; link here;
  • India: may need additional two-million bpd refining capacity by 2030; link here to Reuters;
  • many years of underinvestment; discussed often on the blog; I never bought into them; looks like it may happen: Hess sees tight oil market in near term; underinvestment risk ahead; link to Reuters; reminder: Reuters is London-based; has great world view, but at same time, sees things through European socialist spectacles. [The Economist is so much worse; explains why it never shows up on my twitter feed];
  • one begins to wonder what might happen if gasoline prices spike here in the US, from current average of around $3.10 / gallon to $5.00 / gallon
    • indications some folks are again hoarding basic non-perishables
    • Costco in some regions limiting volume purchases of some paper items
  • in the US equity markets; there appears to be a sector rotation; folks are selling small amounts of AAPL to buy moderately into oil sector
  • overnight futures starting to drop back; those who thought the market might close "green" today may be surprised; watch for day's lows to occur at 10:30 a.m. CT

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

Asymptomatic Covid: is it just me or are we seeing an increasing number of television presenters with a hacking cough; JoBid had a hacking cough there for awhile; folks commented on it; seems to have resolved; hosts on The View were said to have been coughing at the time two tested positive for Covid-19;

CNBC: because I generally don't watch the network at dawn but wait until later, I had not noticed but isn't Becky Quick looking a bit older; Joe seems not to have aged; Andrew Ross Sorkin's hair looks incredibly black -- incredibly black, but most noticeable, not one grey hair along the temples where one would expect it; I watch the screen; no volume or captions; way too political and nonsensical; video now airing highlights of the Ryder Cup (numbers to recall, all in yards: 345 71 47). I did turn on the volume for that; well-worth hearing the conversation; these guys knew what they were talking about;

Back to the Bakken

Enerplus: the Enerplus "String Instrument" pad is going to be huge. See below. Tracked here

Active rigs: no one knows. My best guess*:

Active Rigs24*11576557

Wells coming off confidential list today; ditto, but NDIC says these will report today:

Monday, September 27, 2021: 31 for the month, 42 for the quarter, 222 for the year:

  • 37029, conf, Enerplus, Fiddle 149-94-02C-01H-TF,
  • 37028, conf, Enerplus, Mandolin 149-94-02-01H,

Sunday, September 26, 2021: 29 for the month, 40 for the quarter, 220 for the year:

  • 38181, conf, Petro-Hutnt, Hurinenko 144-98-2B-11-1HS,
  • 37245, conf, MRO, Armstrong 14-34H,

Saturday, September 25, 2021: 27 for the month, 38 for the quarter, 218 for the year:

  • None.

RBN Energy: OPEC's giants claiming ground despite uncertain crude oil market.

Producers of crude oil face historic insecurity about their market. Not only is there still uncertainty stemming from COVID, oil demand is also under pressure as governments and international organizations push to replace fossil fuels with energy forms free of hydrocarbons. Members of the Organization of the Petroleum Exporting Countries (OPEC) face special challenges from measures taking shape to discourage oil use. Their economies, more than most others, depend on oil sales and many members of the exporters’ group have limited sources of replacement income. Yet OPEC producers do not lack leverage in a market expected to grow at diminishing rates and eventually shrink. Many of them can produce crude oil much less expensively than counterparts elsewhere and some of them plan to profit from that advantage by increasing output, even as the market flattens, and are investing to raise production capacity to ‘get while the getting is good.’ In today’s RBN blog, we look at capacity-boosting plans within OPEC, explain why most members cannot take part in the effort, and describe how this developing priority might intensify market competition.

A bit of "Oil-101":

In fact, analysis of undeveloped reserves suggests that six OPEC members face trouble clearing even the geologic hurdle, the one we’ll examine most closely. To assess this requirement for raising production capacity, we look at reserves-to-production (R/P) ratios. Because dividing reserves by annual production yields a quotient measured in years, R/P ratios are sometimes called reserves lives indexes and are taken to mean time remaining before resource exhaustion. But that can be misleading because oil fields don’t follow formulas. Reserves estimates change as knowledge grows about productive reservoirs and production doesn’t decline in a straight line as oil-bearing rock — the reservoir — depletes. Typically, a field peaks relatively soon after production starts then falls rapidly before flattening later in its life and beginning a slow decline that can last for a long time. Also, output can jump during a field’s life in response to techniques such as water or gas injection and enhanced recovery. For these and other reasons, a mature oil field — or a long-producing country with many such fields — can have an R/P ratio of 9-10 for much longer than 9-10 years. Regardless, an R/P ratio in that low range usually indicates that there has already been extensive field development and so there is limited potential to increase capacity by drilling more or installing surface equipment. Conversely, much higher R/P ratios imply room for further development of existing reserves and, therefore, potential for net capacity hikes to the extent that new production offsets declines from existing wells.

In Figure 1, we calculate R/P ratios for all 13 OPEC members with reserves and production data from the 2021 BP Statistical Review of Energy published in July. We use data for 2019 instead of 2020 because last year’s production suffered from oil-demand losses related to the coronavirus pandemic, making the prior year more reflective of long-term trends. The table shows reserves estimates (A) divided by the product of daily production (B) multiplied by 365 which yields annual production (C) to derive R/P ratios. The R/P ratio range among OPEC members is huge, from Angola’s and Equatorial Guinea’s 15 (blue ovals) to Venezuela’s whopping 925. We should point out that Venezuela’s R/P ratio is distorted by production suppressed by the economically beleaguered country’s inability to invest in its oil fields and by inclusion in its reserves number of heavy oil in the mostly undeveloped Orinoco Belt. Subtracting Orinoco reserves of 262,000 MMbbl leaves conventional reserves of 41,800 MMbbl and lowers Venezuela’s R/P ratio to a still high 127. That happens also to be the R/P ratio of Iran, another country with high reserves and suppressed production — in Iran’s case by international sanctions limiting exports and oilfield investment. Venezuela and Iran are the two countries mentioned earlier that, because of investment restrictions, are unlikely to raise production capacity soon despite their high R/P ratios. For countries with low R/P ratios, raising capacity is not impossible, but the resulting production increments probably would not be large. An alternative, not practicable on a large scale for many of the low-R/P countries, is to find new fields or extend existing fields through costly and risky exploration and development.

OPEC Reserves, Production, and R/P Ratios in 2019

Figure 1. OPEC Reserves, Production, and R/P Ratios in 2019. Source: BP

 Much, much more at the link. 

Sunday, September 26, 2021

Notes From All Over -- Sunday Night -- September 26, 2021

Companies paying dividends tomorrow, September 27, 2021:

  • WMB
  • SCHB
  • SCHD
  • SCHG

Paying dividends, September 30, 2021:

  • Hess
  • Devon Energy: regular plus variable
  • Union Pacific
  • Ovintiv

And a gazillion more.

Could be another big day on Wall Street tomorrow. Or not.

But right now, things are looking good. Best of luck to all. 

The Bazhenov

First Mention: Beetaloo Basin -- Meanwhile, Revisiting The Bazenhov -- Nothing Like Two New "Plays" To Make My Day -- September 26, 2021

Wow, I'm glad I started this blog. To paraphrase Dr Seuss: the things I learn from readers.


There are some really smart people out there when it comes to oil and natural gas and crude oil, and at the same time, are keeping track of what's going on.

 This is reason #3 why I love to blog.

A reader writes:

Completely unrelated, but of possible interest, development of the Beetaloo Basin shale gas is proceeding briskly.
Three separate outfits are in the process of drilling/frac'ing a half dozen wells relying upon American expertise.
Amount of gas resource is significant. Minimal oil.

Australia will join the US, Canada, Argentina and Russia in having productive unconventional hydrocarbon output.

The grossly under reported Russian efforts are targeting the Bazenhov with present output of 20,000 barrels oil per day and rapidly growing. Technological sanctions are inhibiting the pace of development.
The Bazenhov will ultimately dwarf the Permian.
I do believe this is the first reference to:
  • the Beetaloo Basin; and,
  • the Bazhenov

Not true. I have blogged about the Bazhenov before and have a link to where I follow it.

More on these later but for the date / time stamp, here they are. 

The Beetaloo:

The Beetaloo

The Beetaloo:

UK, Europe -- Energy Crisis -- 2021 - 2022 -- IN PROGRESS

Big things are happening in Europe, UK in response to the crisis. 

Two issues, and they appear completely separate.

Natural gas.


They are related but we can dispense with the UK gasoline crisis for the moment. This was how it played out:

  • natural gas prices were surging
  • talk of natural gas prices pulling gasoline prices forward
  • among the well-read, folks started keeping their automobiles full of gasoline; their trucks full of diesel
  • that exacerbated the situation and rumors worsened
  • even the less-well-read were now hearing rumors of fuel shortages
  • shortage fed on itself
  • then, accurate or not accurate, there were reports of a shortage of truck drivers ...
  • but what's the possibility that as service stations (or garages as the Brits called them) anticipated growing demand, started ordering more and in some cases were simply being told, there's plenty of fuel, but there is now a "relative" shortage of drivers (same number of drivers, just more demand); the Brits famously do not like to work overtime;
  • and, the rest is history as petrol stations started to run out of fuel
  • mostly due to panic buying
  • but this is what is not being said: the Brits, regardless of what the politicians have said, had moved on; they had enough with Covid; they were getting back to normal; demand for fuel exceeded prognostications when the Delta virus hit
  • could this happen in the US? Nope.

Okay, now natural gas. This is a bigger problem for the Brits and even with a warm winter, the UK could be in big, big trouble. One would hope BoJo is coordinating with JoBid to get LNG shipments prioritized to the UK, not Asia. [There are reports saying that will not happen.]

This is not a story about Russia. Wow, that gets tiresome. 

This started with the "Angela Merkels" years ago when faux environmentalists started shutting down coal plants (2000) and nuclear reactors (Fukishima, 2011). It's ironic how it happened. Shutting down coal plants would not have been a disaster had there been no problem with nuclear plants, but that all changed, for Germany, with Fukishima. For Germany, coal was their Plan A. Nuclear plants, their Plan B.

The UK had no Plan B. One could say the same thing for the UK, except instead of shutting down nuclear reactors in response to Fukishima they simply increased reliance on wind.

And it was the "wind issue" that brought the UK to its knees most recently.

Well, to some extent. I don't believe it was simply the wind. 

A gedankenexperiment:

Imagine what would happen in the US if for whatever reason, Resident Biden shut down the Permian. Just shut it down. Things were reversed in the US. Plan A was oil from Canada via the Keystone XL. There was no Plan B because no Plan B was needed. Oil was more than plentiful in Canada and no one in their right mind ever thought any US president would shut down a simple pipeline.

Fortunately for America, Mark Papa (EOG) and Harold Hamm (CLR) came up with a Plan B before it was even needed; pure serendipity. In fact, Plan B, light oil was not what the refiners along the Gulf coast needed. They were optimized for heavy oil. 

So, with the loss of the Keystone X, Plan A: not a big deal but unpleasant for the oil industry, especially the refiners, and ultimately those who buy gasoline for their automobiles, like you and me.

So, now with the loss of the Keystone XL, imagine Resident Biden shutting down the Permian.

That's exactly what happened in Europe with regard to natural gas. And no one is talking about it. Until today, interestingly enough, and I will provide the link later. Actually there are two links but I can't find one of them now. Not to worry. By the end of the week, there will be many links, many stories.

The US did not shut down the Permian. But the Dutch shut down "the" Groningen, the largest natural gas field in Europe. Made the decision based on risk of earthquakes. Europe's Plan B: like Keystone XL from Canade, Europe's Plan B was Nord Stream 2 from Russia. 

The problem: Americans like Trump did not like Nord Stream 2. I have no idea what drove that: knee-jerk politics, or well-founded national security issues.  

So, whereas Americans did not have a Plan B if the Keystone XL did not materialize, Mark Papa and Harold Hamm pre-empted any serious problems for the US. 

But not the Europeans. It was just the reverse. They closed the Groningen (Plan A) knowing Nord Stream 2 (Plan B) was coming down the pike.

While editing this, a reader wrote to remind that there even more to the story. The reader reminded me that at the time the Groningen decision was being made there is/was another copious energy supply that was stillborn ... the project to frac the Bowland Basin shale.

A company named Cuadrilla not only drilled a horizontal well 3 years ago, they were able to frac about 5 stages.
The preposterous restrictions placed upon the company included not exceeding a .5 (point 5) reading on the Richter scale during the fracturing process. (For context, rambunctious football fans regulary produce Richter readings of 2 when stomping their feet. As the Richter scale is algorithmic, that 2 is something like 30/40 times more prominent than the acceptable .5).

Combining both the known Bowland and Weald Basin shale gas resources, the UK possesses about a 80 to 100 year supply of natgas beneath their feet. 
For Cuadrilla, this was just what the DAPL operators experienced: experiencing harassment at the very time recognizing how acute the need for natural gas.
So, in fact, there was a Plan C -- all that natural gas in Great Britain until faux environmentalists shut that project down, also.

But, as usual, there's even more. 

Folks are blaming the Russians

Nope, nothing could be farther from the truth.

First, the timing and the geopolitics. Why would Russia risk being exposed to "cheating" at the very time they are trying to get this thing approved by Europe and by the US?

Second, there are many, many indications that Russia itself is reaching the limits of its production. That has been addressed at the blog on number occasions over the past ten years. Russia is facing a very, very cold winter (again, nothing new). 

Link here, but this article appeared after I drafted the above. Cyril Widdershoven is one of my favorite contributors over at Oilprice.com.

Covid-19: Rambling Thoughts -- Not Ready For Prime Time -- September 26, 2021

It does without saying, no one "trusts," no one "believes" the Covid data the CDC is reporting. Likewise, no one "trusts" or "believes" official spokespeople, the politicians, the drug companies. No one has a clue. Everyone of us has our own worldview / myth of Covid-19.

I have flip-flopped on the issue numerous times, as have many folks.

Vaccines: I remember Trump supporters wanted to be first in line for the vaccine. Democratic leadership was clearly "against" Trump's "Operation Warpspeed."

A digression: not to be outdone, Resident Biden had his own "Operation Warpspeed." Does anyone remember the operation? The name of the Biden's operation warpspeed?


  • phase one lasted one month, compared to Operation Overlord, WWII, just four days short of three months
  • phase two: not required in Operation Overlord, WWII; Biden's operation warpspeed: another fifteen days, but apparently, through back channels,  is still going on.

Sorry for the digression.

Oh, that's right. The name of Biden's Operation Warpspeed? Google it.

But I digress.

Where was I?

Oh, yes, Covid-19.


THEN: Trump supporters wanted to be first in line for the vaccine. Democratic leadership was clearly "against" vaccines coming out of "Operation Warpspeed." 

NOW: Trump supporters have become anti-vaxxers. Meanwhile, President Biden practically seems to be shedding alligator tears imploring Americans to become vaccinated. He seems more upset about the vaccination story than the number of American military killed during the ill-executed (pun intended, sadly) evacuation.

I just went to the CDC site to check up on the percentage of folks vaccinated at the county level. Good, bad, indifferent, I am absolutely amazed at how few folks are being vaccinated in the rural counties of America and how many folks are being vaccinated in cities on the east and west coasts. 

Ivermectin: I have not dog in this fight; don't care one way or the other, but I do find the story fascinating. Let's say it's a draw regarding Ivermectin. Let's say there's a scientific committee (modeled after the Fed, with twelve "governors and a "head" -- thirteen altogether) that makes ivermectin recommendations to the president. Behind closed doors, the vote is six to six and the "head" abstains, taking the "draw" recommendation to the president. Why would the president say "no" to ivermectin. Hint: it has nothing to do with money or whether it works or not. And, to some extent, I think he may have made the right decision. Having said that, with regard to ivermectin, Resident Biden has not been able to thread the needle.

Sweden: whether accurate of not, the meme is that Sweden ignored the pandemic and Swedes went on with live as if nothing was happening. Of course, that's not true, but that's the meme.

Norway: whatever the populace thought about the pandemic, as of yesterday, September 25, 2021, Norway has said "enough is enough" and has scrapped all precautions, saying the country needs to "live with the virus."


  • sports fans, sports teams, sports announcers have moved on:
    • fans: 100s of thousands in stands, unmasked
    • coaches no longer masked
    • announcers: no longer mentioned
  • entertainment industry: virtual signaling; wear masks for photo ops, but not while participating
    • Hollywood: best example of virtual signaling; 
      • only slightly less hypocritical than the folks in DC if that's possible;
    • DC: finally, Resident Biden is seen not wearing a mask

Do the vaccines work?

  • yes,
  • but everyone seems surprised that boosters are needed;
  • folks seem to forget that boosters are the norm for vaccines

Will Big Pharma make money on vaccines?

  • historically, vaccines are not a huge money maker for the large, well-established drug companies
  • that's why shares in Pfizer, JNJ did not surge with the announcement of vaccines
  • they won't take a loss but they won't make the type of money some folks think they will, but it's a good talking point
  • if mom-and-pop investors are investing in Pfizer, JNJ based on the vaccine story, they will be sorely disappointed; even if they do well, there were much better alternatives for investing

Most perplexing issues, more than one

  • I don't consider ivermectin a perplexing issue;
  • I don't consider the efficacy of the vaccine a perplexing issue.
  • I don't consider the administration's focus on the pandemic perplexing.
  • I don't consider the "Israeli experience" perplexing.
  • I don't consider the reason Dr Fauci is still in charge perplexing.
  • no one should consider the politics of the pandemic perplexing.

If issues are not perplexing, right, wrong, indifferent, it generally means I'm no longer interested in discussing those issues any more. I'm minimally interested in reading about those issues to tweak my "model" but I'm not interesting in discussing them, or even reading that much about them.

But back to that issues that remain perplexing:

  • if the disease is that terrible, why are so many health care providers -- physicians and nurses on the front lines -- publicly arguing against vaccination and willing to lose those jobs by not being vaccinated? This tells me the disease is nowhere near as bad as Resident Biden and others are making it out to be. If this disease was that terrible -- think Ebola, typhoid, pneumonic plague, or leprosy -- there wouldn't be a nurse in the world not clamoring for a vaccine.
  • if the original plan was to flatten the curve to give the health care sector a chance to prepare, why is the health care sector still said to be in so much trouble when they've had more than a year to prepare? The overall numbers are lower than the initial surge; we know so much more; the processes should be improved; why is the media reporting that hospitals are still doing so badly.
  • the eradication of "seasonal flu" -- much could be written. Something doesn't add up. 

And note, it's the media reporting that. I don't believe it. 

This is what one outlet is reporting, two days ago: Alberta's overwhelmed ICUs are near capacity, military support is being deployed. The first question: "they" have had a year to prepare and they can follow the stats as well as anyone. Why were they caught up guard?

And yet, here, at another media outlet, Albert ER doctor says hospital capacity crisis was "created"; has nothing to do with Covid-19. The problem has been going on for six years, the physician said. 

For some reason I believe the ER physician. 

Oh, one last note, there is one bit of irony. If, in fact, Americans were 100% vaccinated, and eagerly accepted a booster for all every four months, and there were still outbreaks, the ivermectin issue would be off the table. 

The Sports Page -- September 26, 2021


Later, 2:50 p.m. CT: the US will win the Ryder Cup going away. They may, in fact, set a new record.

  • only two things left to watch:
    • the final score; and,
    • which American gets the winning point
  • the US needs 14 and a half points, so
    • the fourteenth point will be huge (who will get it?), but
    • the next US player getting a tie or a win, will score the winning point, sort of like the "first man on the moon" phenomenon
  • final matches
    • match 1: McIlroy, Europe: gets first point, 11 - 6
    • match 2: Cantlay, US: gets first US point, 12 - 6
    • match 3: Scheffler vs Rahm, huge, US: gets second US point, 13 - 6
    • match 4: DeChambeau vs Garcia, also huge, US: gets the fourteenth point; not the win but one tie away; this thing is all but over. Morikawa will get the honors
    • match 5: Morikawa vs Hovland, US: Morikawa is guaranteed a tie after walking off the 17th hole; he should either get the 14 1/2 point -- the win -- or the 15th point. This is really amazing; if Morikawa doesn't get this done, he will lose the "clinching" shot as they are now calling it. 3:51 p.m. here it is .. Morikawa ... needs the putt for a full point ... misses .... ties, get the half point and it's all over. At 3:52 p.m., the fifth "match," the fifth team; it's over. Morikawa goes down as the one with the "clinching shot
    • match 6: Dustin Johnson vs Casey: interestingly, simply because how it plays out, Dustin Johnson may be the "win"; on the 17th ... long, long putt .. if he makes it ... nope, not to be ... back to Morikawa ...Johnson guaranteed a half point but by the time he gets the half point or the full point on the 18th, Morikawa will be the "winner" with either a half point or a full point; doesn't matter. [I'm surprised: the Cup continues; I guess I should have known that based on folks "looking to set a record." Morikawa said it best: Americans have won; it was dominant, but we won't know how dominant until the final score.
    • match 7: Koepka vs Wiesberger: almost got the "clinching" shot ... just in the order of things could have beat out Morikawa but didn't the putt.
    • match 8: Finau vs Poulter, my favorite match:
    • match 9: Justin Thomas vs Hatton:
    • match 10: English vs Westwood:
    • match 11: Spieth vs Fleetwood, incredibly important for Spieth who played in the Ryder Cup about six times but has never, never, never won 
    • match 12: Berger vs Fitzpatrick, both are new to me, but I should know Berger; he's had some impressive wins:
  • the US needed three and a half points
  • Captain Striker, with order of players
    • was looking to give the "win" to Dustin Johnson, Koepka, or Finau
  • there was always the possibility that DeChambeau could get the "win"; more likely, DeChambeau would not get the "win" but would get the 14th point
  • with Spieth's record of appearing to "choke" -- having never won the Ryder despite multiple changes, he placed Spieth in line well after the Cup would have been decided; taking the pressure off Spieth and maybe giving Spieth his first win

Original Post

College football yesterday: a lot of upsets. Great football. And all those stadiums filled with unmasked fans.

NFL today: I'm not following (yet) so don't what to watch, but apparently the evening game will be the one to watch. At least that's what NBC says. 

The Ryder Cup:
Lake Michigan in the background looks like an ocean; cannot help but remind folks how incredibly "rich" our nation is; I never had any idea it was that big; and, environmentalists, appropriately, working hard to keep it a "clean" lake.

The depth of the American team is incredible. 

The American team: the old guard has passed the baton -- or the golf club, I guess -- the new guard. The American team is composed of "young" men who will be representing the PGA a long, long time.

Most exciting golfer to watch: no argument on this one. It's so obvious I won't say who it is. 

Hint: he has hit the green on a par 4 hole fifteen times in his professional career. Today, after hitting the green from the tee on a par 4 hole, and with a very, very long putt, he holed it on the second shot, an eagle on a part 4- hole. 

Who's not there: Tiger Woods. How many times was his name mentioned? More than the names of some of the members on the European team.

Who's there: Mickelson. What a mentor! What a cheerleader!

Perfect weather today, it appears. No one has mentioned the wind yet, but the flags are waving briskly.

This is a nice way to play head-to-head: one wins, loses, or ties a hole. The stroke count is not accumulated. One really bad hole does not ruin the round.

NASCAR: tonight. Las Vegas.

ConConchCOP: This Story Has Legs -- September 26, 2021

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

Link here to SeekingAlpha. Archived.

The acquisition was brilliant.

Break-even price: $13 / bbl WTI.

  • ConocoPhillips' acquisition of Royal Dutch Shell's Permian assets is an impressive acquisition decision that provides the company with billions in additional FCF.
  • The headline price of $47,500 / barrel will cost $13 / barrel over the next decade.
  • Going forward, we expect the company to use its FCF to generate substantial shareholder rewards making it a valuable long-term investment.

Other posts on the blog regarding this acquisition:

If this turns out to be as good as the tea leaves suggest, Warren Buffett can add this to  his short list of worst mistakes: selling his huge position in COP some years ago. 

These are some of the "things" that people forget to mention -- and some things they do -- about the Concho acquisition and the RDShell acquisition:

  • proven basins; COP knows exactly what they've got; no guesswork here;
  • assets are not in a foreign country, thousands of miles away
  • assets are in a free market, capitalistic politically-stable country, not the Mideast, Venezuela, Mexico
  • assets are not subject to physical terrorist attacks
  • assets are not landlocked; the pipeline infrastructure is already in place
  • assets are in an oil-friendly state: Texas -- the metonym for US oil industry
  • assets were bought when others were fearful
  • near-term, assets were bought when oil and natural gas prices were surging
  • long-term, the global shortage of oil / natural gas will make folks re-think fossil fuel and climate change
  • with a break-even price of $45 this would have been a great acquisition; but this is a $13-WTI breakeven buy
  • the acquisition, apparently, will be "immediately" accretive

For investors:

  • does COP have a cash-flow problem with these acquisitions? COP announced it is increasing its dividend, and not be an insignificant amount.

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.

Enerplus Now Reporting All "String Instrument" Wells In The Mandaree Oil Field -- September 26, 2021

Enerplus' "String Instruments" wells, aka "the string wells, are tracked here

"They" say the "daughter" wells are "never" as good as the "parent" wells. In this case, it appears that the daughter wells are either "as good as" or "incredibly much better" than the parent wells based on the first few months of production.

The wells:

  • 37024, conf, Enerplus, Ukulele 149-94-02C-01H, Mandaree, nice early production:
DateOil RunsMCF Sold

  • 37025, conf, Enerplus, Harp 149-94-02C-01H-TF, Mandaree, nice production:
DateOil RunsMCF Sold
  • 37026, conf, Enerplus, Guitar 149-94-02C-01H, Mandare, nice early production:
DateOil RunsMCF Sold
  • 37027, conf, Enerplus, Cello 149-94-02C-01H-TF, Mandaree, nice production:
DateOil RunsMCF Sold
  • 37029, conf, Enerplus, Fiddle 149-94-02C-01H-TF, Mandaree, a huge well;
DateOil RunsMCF Sold
  • 37028, conf, Enerplus, Mandolin 149-94-02-01H, Mandaree, some nice early production:
DateOil RunsMCF Sold

Two wells that parallel these new wells and already producing
  • 24962, 1,957, Enerplus, Grassy Knoll 2-11H, Mandaree, t11/15; cum 437K 7/21; went off line 12/20; returned to production, 5/21; first ten months of production:
  • 24963, 1,936, Enerplus, Banjo 149-94-02B-01H TF, Mandaree, t11/15; cum 434K 7/21; went off line 2/21; returned to production, 5/21; first ten months of production:

The graphics: