Thursday, September 30, 2021

Traveling Today -- Blogging Limited -- September 30, 2021

Government shut-down; debt limit; budget: you know, if every social security recipient and every military active duty and retiree would simply forego their October check, and possibly their November check, the budget crisis would be resolved at least through the middle of next year.  

It looks like the US Congress finally found another revenue source. Look for "fees" on all those Amazon boxes shipped to your home. Let's say, an average of $1.50 / box?

The most anticipated NFL game this season ... Sunday Night Football. Tom Brady returns to Foxborough. 

Dow year-end: record high. That's the buzz on CNBC.

World-Wide Energy Production By Source, 1860 - 2019

Nice graphic. Link here.

Two Wells Coming Off The Confidential List -- September 30, 2021

Call it "Trumpicillin": need to fact-check. When do the trials begin?

Never forget! "Polarized" cap? What the heck is that?


CDC
: announces study on gun violence and how it affects Americans health. Does this tell me all I need to know about how serious the Center takes Covid? Until results are in, Dr Fauci recommends --

  • wearing a mask when using a gun to commit a crime;
  • put a mask over the gun when taken inside a bank;
  • double-mask AR-15's

Vaccinating: apparently the push to vaccinate kids didn't pan out. CDC now has huge push to vaccinate pregnant women. 

  • with 3.75 million women giving birth each year, that works out to about 1% of the US population. Anything to scare folks. Keep the narrative going.

Merck: to buy Acceleron for $180 / share in cash. Rare drug research. $12 billion deal.

Bed, Bath, And Beyond: down 28% pre-market. Warnings. Company and analysts blame problems on:

  • supply chain woes;
  • Covid;
  • rates headed higher;
  • worker shortage; 
  • cost of raw materials;
  • surging oil prices;
  • Evergrande; 
  • China;
  • Vietnam;
  • Afghanistan;
  • daylight savings time will end
  • but, apparently not management

Carmax: down 8%, pre-market. 

S&P, NASDAQ: higher for 3Q21

  • could post 6th quarterly gain

Jobs (yawn):

  • up 11,000 to 362,000 vs 330,000 expected
  • GDP, revised, 2Q: 6.7% vs prior 6.6%
  • 2Q21: pce price index: core inflation, 2Q: 6.1% vs prior estimate, 6.1%
  • ten year treasury: 1.538%

California bacon:

  • across the state, newspapers are reporting skyrocketing prices for bacon; none mention the new California law, Proposition 12, that will come into effect January 1, 2022; one link here;
  • pork producers appeal to US Supreme Court; link here;
  • how severe is the bill?
    • Prop. 12 requires each sow whose piglets are raised for uncooked cuts of pork sold in California – about 9% of North American sows – to have a minimum of 24 square feet of space. Because Prop. 12 applies only to sows, not to their offspring who are raised for meat, it will apply to well less than 1% of the 90 million North American hogs.

Hit and run: South Dakota attorney general reaches confidential settlement with widow. Link here.

  • deer wearing glasses; carrying flashlight;
  • hooves in passenger seat

European energy:

  • Sweden recently shut down two nuclear reactors, giving in to faux environmentalist;
  • country now firing up oil power plant to provide electricity: one bbl/hour; link here;
  • this is going on around the globe; helps explain the surge in price of oil;

Mu? all that hand-wringing earlier this year about the "mu variant"? Eradicated

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.

Investors, shale, link here, the usual suspects:

  • XOM, CVX
  • COP
  • EOG
  • PXD
  • OXY
  • CLR

Starbucks: increases dividend by about 10%; from 45 cents to 49 cents/share.

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.

Chamath: I happened to see this interview live;

  • CNBC anchor dumbfounded;
  • "February, 2021: the Whale, Chamath went on CNBC to urge people to never bet against Tesla, or sell t their shares." HODL.
  • In the interview yesterday, he admitted he sold off his entire position in Tesla. 
  • said he needed the cash to buy something better
  • creep.

Word for the day: forecourt. That's what they call them in Britain.

Poster for the day: link here. NSFW.

Costs: the other day a reader asked why we were not seeing more drilling in the Bakken.
one of many reasons: link here; but I don't think this is the big reason for the Bakken

Covid-19: vaccinations provide stronger protection than natural immunity. Hmmm. Link here

China: further restricts power use amid widening energy crisis. Link to Tsvetana Paraskova

Asian LNG: spot price rises to $200+ boe. Countries will now start burning oil at 1/3rd the cost. Transitory. This, too, shall pass. 

Peak demand? LOL:

Remember the name: Port of Fujairah. Link to Simon Watkins

Dividends: paying dividend today. 

  • UNP: $1.07
  • DVN: 38 cents
  • Hess: 25 cents
  • Ovintiv: 14 cents

Stagflation: link here, back to the "70's Show." 

  • read the comments, give me a break: interest rates, today: 0%; interest rates in the 70s: 14%;

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

Active rigs, updated data at COB:

$74.06
9/29/202109/29/202009/29/201909/29/201809/29/2017
Active Rigs2511576758

Two wells coming off confidential list:

Thursday, September 30, 2021: 33 for the month, 44 for the quarter, 224 for the year:

  • 37027, conf, Enerplus, Cello 149-94-02C-01H-TF, Mandaree, scout ticket not updated; huge well;
  • 30202, conf, Whiting, Klose Federal 21-27-1H, Glass Bluff, scout ticket not updated; nice well;

RBN Energy: renewable diesel buildout driven by low carbon fuels standards

With the UN’s Climate Change Conference (COP 26) in Glasgow just over a month away, it’s natural to reflect on the progress achieved since the Paris Agreement (signed at COP 21), which is approaching its sixth anniversary. In the past half decade, the world has taken tremendous strides toward decarbonization – not only in rhetoric, but in real and substantial investment. 
Green hydrogen and carbon capture are among the notable solutions many are pursuing to that end. But perhaps no green business has been in the spotlight as much recently as renewable diesel. Low-carbon fuel standards have spurred a lucrative renewable diesel market that refiners are lining up to access, with units being built and planned across North America. The nationwide buildout is being underwritten by the states that have enacted policies to induce low-carbon solutions, and while the Golden State is paramount among them, Californians are not alone. 
The largess being generated by those policies is so substantial that it will have an impact on and may incubate other low-carbon technologies that can be paired with renewable diesel to create even lower-carbon fuel sources and capture more of the credits that are ultimately driving the economics of the energy transition. In today’s RBN blog, we identify key manufacturing centers for low-carbon fuel supply growth, the at-times lengthy route the fuels may take to LCFS markets, and the economic incentive structure that justifies all those costs.

Wednesday, September 29, 2021

ISO NE -- What's Going On? -- September 29, 2021

10:44 p.m. EDT -- posts / screen shots. The actual data lags about one hour.

Electricity rates just spiked on the east coast.

Link to ISO NE.

In the past hour or so, real-time rates have moved from $70/MWh to over $105 / MWh.

For newbies:

  • $20 / MWh: when demand is low; renewable energy supplying max available
  • $30 / MWh: pretty normal expectation
  • $70 / MWh: very high rates
  • $100 / MWh: expect to see this with high a/c demand; high heating demand
  • $200 / MWh: rarely seen

Fuel mix chart:

  • for some reason percent of demand met by natural gas has dropped way off and expensive Canadian hydroelectricity is surging:
  • natural gas: 53%
  • nuclear: 29%
  • 11% hydro
  • renewables: 6%

Holy mackerel: a refresh shows real-time costs have spiked to over $200/MWh. 10:51 p.m. EDT. This is autumn; not hot summer weather and not cold winter weather, and yet coming on midnight, electric rates are surging.

Folks think charging EVs overnight will not be that big a deal.

Graphics:


 
 
Note: the screenshots were taken at the time indicated but the actual / real-time data was one hour earlier, at 9:50 p.m. EDT. 

The original graph below had to be redrawn to more than double the "y" axis to capture the $200+ spike in MWh price.

Later: rates quickly dropped to $100 / MWh after the above screenshot. A reader follows this much more closely than I do and probably has a good explanation. The thing I'm trying to point out is the overnight charging of EVs is going to be a bigger deal than most folks realize. EV penetration in New England is negligible.

MRO Taking Nice Wells Off Line In Antelope-Sanish -- September 29, 2021

MRO has taken several wells on the MRO Chauncey-Winona pad off line. These wells are tracked here

Interestingly, several MRO wells on another pad south of these wells have also come off line. For example:

  • 18471, 380, MRO, Hunts Along USA 12-1H, Antelope-Sanish, t1/11; cum 255K 7/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH7-2021116446153711215112530
SANISH6-20213017401700132026422702194
SANISH5-20213117321719142128122414180
SANISH4-20213016831722196425961851562
SANISH3-202131113010701743118688219

There's a lot of activity in this area -- existing, producing wells -- but I don't see any "new" activity on the GIS map. Unfortunately, NDIC is not updating scout tickets or the map in a timely matter, so hard to find additional information.

******************************
Halloween, 2021

Grandson planning to go out as a "Trump Supporter" on Halloween.

Covid-19: For The Archives -- September 29, 2021

 






MRO: Damn The Torpedoes! Full Speed Ahead! Five More Permits In The Prolific Bailey -- September 29, 2021

NFL

  • ratings: link here.
    • huge ratings: the best start for the league since 2016, which analysts attribute in part to the easing of the pandemic and other factors.
  • Brady: he really, really made the right decision to come back "one more" season
    • Brady's statistics: insane; link here;
    • Brady to return to "his" arena; this Sunday; can't-miss TV; link here;

Enbridge: to start new Line 3 over the weekend. Link to Charles Kennedy.

Gasoline demand, link here. In the US, continues to fall.

Market: I'm not watching CNBC very much this week; not watching the market in the big scheme of things. Having said that, some ticker symbols today;

  • ENB: up a penny; $39.82; had been as high as $40.16 today; pays 6.7%;
  • DVN: up 1.76%; up 62 cents; closed at $35.75; as high as $36.04 intra-day; pays 1.23%;
  • EPD: up 0.46%; up 10 cents; closed at its high, $21.88; pays 8.23%;
  • MNRL: in the red; closed down 8 cents; closed at $19.52; pays 2.87%;

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

Active rigs:

$74.83
9/29/202109/29/202009/29/201909/29/201809/29/2017
Active Rigs2511576758

Six new permits, #38589 - #38594, inclusive:

  • Operators: MRO (5); Summit Carbon Solutions, LLC
  • Fields: Bailey (Dunn); Wildcat (Mercer County)
  • Comments:
    • first time I've seen Summit Carbon Solutions; Milton Flemmer 1, NWNE 35-141-88;
    • MRO with permits for five more wells in the prolific Bailey oil field; NENE 18-146-93; 563 FNL and between 336 FEL and 496 FEL; Amos, Cheryl, Stone, Killion, Weekes,
      • existing wells in that drilling unit:
        • 16923, 279, MRO, Appledoorn 14-19H, Bailey, t5/08; cum 360K 7/21;
        • 19408, 813, MRO, Trinka 41-18H, Bailey, t3/11; cum 194K 7/21;
        • 24219, 1,327, MRO, Appledoorn 34-19H, Bailey, t6/13; cum 252K 7/21;

Seven permits renewed:

  • EOG (3): three Austin permits in Mountrail County
  • QEP (2): two MHA permits in Dunn County
  • BR (2): two permits in Dunn County; a Manchester permit and a Concord permit;

One permit canceled:

  • EOG: #34118, Burke 94-1821H, Mountrail County

Name changes of interest:

  • CLR changes the name of three "LCU Ralph Federal" wells to LCU Ralph wells, dropping the "Federal."

The Dead Cow Keeps Growing -- September 29, 2021

Link to Rystad Energy.

I never saw this coming.

Dead Cow.

Vaca Muerta. 

The Vaca Muerta is tracked here.

The world's fastest growing shale play keeps breaking records. 

So, let's run the numbers.

  • Permian: 5 million bopd.
  • Bakken: 1 million bopd
    • 24 rigs.
  • Vaca Muerta:
    • prior to December, 2020, never exceeded 120,000 bopd
    • oil rigs: 50
    • July, 2021: 160,000 bopd for the first time ever
    • August, 2021: 161,000 bopd
    • forecast: 200,000 by year end, 2021
    • Argentina's total production:
    • forecast to hit 560,00 bopd by December, 2021
    • a benchmark not seen since October, 2012;

So, the Bakken:

  • four times as much oil with half the number of rigs.

More at the link.

Notes From All Over -- Part 1 -- For The Archives -- Nothing About The Bakken -- September 29, 2021

UK: another three UK electricity and gas retailers go bust (Igloo, Symbio, and Enstroga). In total, almost 1.75 million households have seen their energy retailer collapse in less than two months. Ten companies have failed so far. No sympathy. Folks tried buying into a deal that seemed too good to be true. It was.

SRE: huge volatility past two days. Up 3.06% today; up $3.87 today; this $124-stock is trading at $127.47, paying 3.45%.

Two-buck chuck: soon to become "three-buck chuck" but it will only be transitory.

Dollar Tree Store: soon to re-market itself as "Five Dollar Bush And Rising."

Walmart: to hire 150,000 seasonal workers. 

Delta surge: dropping precipitously. Everywhere. Including Vietnam. Israel. India. US. Coincides with packed college football stadiums.

What Puts Me In A Great Mood Today -- September 29, 2021

What puts  me in a good mood today:

  • United Airlines: bookings back to previous peak in June, 2021.
  • Ford: four new "greenfield" factories; 11,000 new jobs; Tennessee / Kentucky.
  • Apple: held.
  • Housing sales in August: up 8.1% vs 1.2% expectations.
  • My favorite graph.
  • WTI: $20 over "sweet spot."
  • UK: gasoline shortage in UK already improving.

And, of course, summer is not over yet! This, from yesterday:

Weekly EIA Petroleum Report -- Pending -- September 29, 2021

Pending home sales, August, 2021: up 8.1% vs 1.2% expectations. These are SIGNED contracts. Huge jump in SIGNED contracts. 

First things first: how did we miss this? Today is National Coffee Day. Many coffee shops offering free coffee. 

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

Erdoes: over at JPMorgan, Ms Erdoes has it exactly right in her statement (either today or yesterday; probably yesterday). Mary Callahan at wiki. Paraphrasing:

  • investing is a long-term prospect; today, money is a non-earning asset;
  • "everyone is talking like Evergrande is a county. It is not; it is a company. It is a big company. But this is not a Lehman Bros moment.

Bernstein Research: recommends Boeing. "The bottom is in." We'll see. Boeing leads the Dow today.

Lucid: market value soaring. Announced that it will release its first luxury sedan by end of October, 2021. Said to have greater range than the Tesla. Factory in Arizona.

Geographic shifts: has anyone noticed? Automobile manufacturing is moving from the Rust Belt and west coast to just south of the Mason-Dixon line, to the Deep South, and to the Southwest.

ISO NE: link here. The wind wasn't blowing early this morning. A lot of expensive Canadian hydroelectricity was required. Spot prices surges to $100/MWh. Things looking better now; wind must be blowing. At rush hour (into work), spot prices down to $45 / MWh. 

Solar: the dirty little secret in the solar PV industry is that the industry relies on a lot of Chinese coal. When Beijing shuts down industries because of a coal shortage, silicon metal prices to through the roof (>150% this month), which in turn will hit polysilicon, and then solar panels. Link here

China: will expand coal procurement at "any price to ensure heating and power generation this winter." Why is China saying this now? China doesn't have enough coal for the upcoming winter. Rumor: Greta is being treated for paroxysmal atrial tachycardia.

Weekly EIA petroleum report, link here.

  • US crude oil inventories jumped by 4.6 million bbls from last week. Surprise, surprise.
  • US crude oil inventories now stand at 418.5 million bbls, 7% below the five-year average.
  • US crude oil imports averaged 6.6 million bopd; up by 87,000 bpd from the previous week; over the past four weeks, crude oil imports averaged 6.1 million bpd; 18.7% more than same four-week period last week.
  • refiners are operating at 88.1% of their operable capacity.
  • distillate fuel inventories increased -- first break in months -- by 0.4 million bbls last week but still 12% below the five-year average.
  • total products supplied averaged 20.4 million bbls per day, up an astounding 13.7% from same period last year; need to see comparisons to 2019
  • jet fuel supplied was up 64% compared with same four-week period last year. Ditto.

Random Update Of A Few Bakken Wells -- September 29, 2021

CLR inventory: due to lack of updates by the NDIC, it's really hard to figure out what's going on. But I did note that CLR has taken the parent well in the Dennis drilling unit off line. The Dennis / Flint Chips drilling unit is tracked here. Look at all those permitted sites. Wow. There are very few reasons to take a well off line.

The one existing well in the1280-acre drilling unit in that area:

  • 16605, 418, CLR, Dennis 44-8H, Cedar Coulee, t7/07; cum 89K 12/20;  

BR Shenandoah wells are tracked here. This well has just returned to production:

  • 28074, 1,643, BR, Shanandoah 14-36MBH ULW, Keene, 4 sections, t1/15; cum 274K 1/21; off line 1/20;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN/THREE FORKS7-2021312102208872712690126130
BAKKEN/THREE FORKS6-20213021332253988792178470
BAKKEN/THREE FORKS5-202113301261261240
BAKKEN/THREE FORKS4-20210000000
BAKKEN/THREE FORKS3-20210000000
BAKKEN/THREE FORKS2-20210000000
BAKKEN/THREE FORKS1-202150021200
BAKKEN/THREE FORKS12-20203111501170263689968220
BAKKEN/THREE FORKS11-20203011791100245706569910

BR: likewise this well in the same drilling unit has also been returned to production -- the well:

  • 28414, 2,204, BR, Shenandoah 44-36MBH ULW, 4 sections, t3/15; cum 557K 1/21; cum 566K 7/21, 7/21 extrapolates to over 6,000 bbls over 30 days;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN/THREE FORKS7-2021183747377576310528104830
BAKKEN/THREE FORKS6-20212226172597753750074450
BAKKEN/THREE FORKS5-20210000000
BAKKEN/THREE FORKS4-20210000000
BAKKEN/THREE FORKS3-20210000000
BAKKEN/THREE FORKS2-20212116541503376893088780
BAKKEN/THREE FORKS1-20213143654376104222868227910

Whiting Sovig in Arnegard oil field: the last time I looked at this well, it was "inactive" and not producing. It has been returned to production:

  • 27474, 2,321, Whiting, Sovig 24-22-4H, Arnegard, t9/14; cum 191KK 11/19; cum 209K 7/21; production unremarkable:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-202131809763120914911235256
BAKKEN6-2021308219041048129312930
BAKKEN5-2021311043106212312079204831
BAKKEN4-202130112110671194210921036
BAKKEN3-2021319169861771236523030
BAKKEN2-2021281090102910921533140770
BAKKEN1-20213110299571123112810651
BAKKEN12-2020101762194013142940
BAKKEN11-2020306166211010135512941

The Kraken wells in Epping oil field have been updated.

ISO NE: link here. Apparently the wind wasn't blowing early this morning. A lot of expensive Canadian hydroelectricity was required. Spot prices surges to $100/MWh. Things looking better now; wind must be blowing. At rush hour (into work), spot prices down to $45 / MWh. 

Weekly EIA petroleum report: pending later this morning. Link here.

No Wells Coming Off The Confidential List -- China Could Be In Real Trouble This Winter -- Transit Times For Fuel -- September 29, 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.  

Investors: investors should be dancing in the street. Let me re-state that: certain investors should be dancing in the street. One can divide investors into multiple groups. For now, two binary groups:

  • "retired" investors who need the income from their investments to live on vs those who don't (horizon: one month vs thirty years)
  • investors who have a significant income stream and those who do not 

For investors who have a 30-year horizon and who have a significant income stream should be dancing in the street right now.

  • we don't often get stock market pull-backs like the ones we are seeing;
  • nothing suggests the market is in free-fall to zero; huge drops followed by recovery (so far) seems to be the norm (for now);
  • huge, huge, amount of money on the side lines (see my favorite graph; posted numerous times);
  • those with lots of money "off the table" have nowhere else to go; rising rates will provide another option, but at the end of the day Treasuries and money market funds are only good  for "parking" money for short periods of time;
  • the gap between investors and those not investing is widening, and not by just a little bit;
  • it's a stock-pickers market right now;
  • value investors with a huge dividend stream will love this market, will stay on this horse: unlikely many companies will cut dividends in this environment;
  • growth investors are seeing opportunities that don't often arise

Shares:

A number of months ago, it wasn't that long ago -- here it is, November 17, 2019 -- I wrote about this very subject: the number of shares Buffett owns. 
I thought the concept was ridiculous. Again, as usual, I was wrong. 
During this pullback, I am accumulating shares in myriad companies as fast as I can -- mostly due to a limited income stream -- and I don't care what I'm paying. I'm simply buying on the pullback. I'm only buying "good" companies, nothing speculative. 
Why don't I care what I'm paying? Don't take that out of context, of course I care, but I'm not waiting for lower lows. It's impossible to time the market. 
I will never "see" my portfolio. It will all go to the grandchildren. The bottom line value of the portfolio will be important, of course, but for me, something else is going to be much more important? The number of shares in the portfolio. I think that was the point the writer of that article at the linked post was trying to make.
If the day our portfolio passes to the grandchildren and we're in a severe recession, the portfolio might not look so good. But in a bull market, which will ultimately return, the number of shares will be what the grandchildren will thank me for. LOL. 

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

Covid -19 and United Airlines:

  • has a mandate
  • considering applications for exemptions; will decide within "weeks"
  • 97% compliance (this really, really caught me by surprise)
  • 2,000 seeking exemptions
  • 503 fired to date over issue

Japan: will end an extended Covid state of emergency in all areas as of tomorrow, September 30, 2021, in response to a steady fall in the number of infections.

Vietnam: remember Nike! Well, that has spread to Apple. Holy mackerel: a most interesting graphic. Maybe a good time to check out Nigeria with "ivermectin" on one's mind. Not a good picture, especially with rate of deaths.

OPEC+: unwilling and unable to stop oil price rally. Link to Irina Slav. Wow, I wrote about this years ago when there was a similar spike in oil prices. One of the reasons I write so much about non-Bakken topics: it helps put the Bakken in perspective and it helps me understand why the Bakken is doing what it's doing. If that makes sense. 

For example, a reader asks why aren't operators drilling all out in the Bakken with prices so high? I'll post the comment in a moment. The answer is obvious from all that I've written over the years. I may or may not answer the reader's comment but I'll probably reply.

China: how bad could it be for China this winter? See RBN Energy today (scroll down). But if China is already running out of coal and natural gas, and winter is not here yet, think about this:

A round-trip voyage between any of the Gulf Coast LNG terminals and Japan, China or South Korea — the Far East destinations where the bulk of LNG demand is concentrated — via the Panama Canal takes around 60 days, including port loading/unloading and transit time. Of course, delays at the Panama Canal, like those seen last winter, can add additional days to the voyage. If a vessel wants or needs to avoid the Panama Canal, the most common alternative would be to go around the Cape of Good Hope (CGH) in South Africa, which takes about 75 days for a round trip, 25% longer than the Panamanian route. The cost-saving from not having canal fees is more than negated by the additional voyage time. In the past year, according to our cost model, on average it is about $0.30/MMBtu more expensive to go around the CGH than via the Panama Canal.
***************************************
Back to the Bakken

Active rigs -- 25 -- from the daily activity report at the end of day.

$74.86
9/28/202109/28/202009/28/201909/28/201809/28/2017
Active Rigs2511576658

No wells coming off confidential list
.

RBN Energy: red-hot natural gas markets help push North American LNG to Asia. Archived.

With multiple energy markets around the world facing natural gas shortages, buyers are clamoring for more LNG. Pre-winter panic-buying has sent global gas prices to record highs yet again in the past couple of days, and even hauled Henry Hub gas futures up to new post-2008 records above $6/MMBtu in after-hours and intraday trading. With the incredible run in global gas prices, U.S. export economics have looked extremely attractive for nearly a year now, and you would think that buyers would be lining up for new liquefaction capacity in the U.S. Well, it has certainly drawn prospective offtakers back to the table. But they are wary of rising export costs and committing to projects long-term given the questionable future for hydrocarbon markets. Additionally, Europe’s rising piped gas imports from Russia and overall declining demand in the region have put long-term prospects for European LNG imports, in particular, on shaky ground. So, access to Asia is more important than ever for new LNG development, a key selling point for projects on North America’s Pacific Coast, both because of proximity to Asian markets and the absence of canal fees or constraints versus the Gulf Coast. There are no LNG export terminals on the Pacific Coast currently, but two projects — LNG Canada in British Columbia and Sempra Energy’s EnergĂ­a Costa Azul (ECA) LNG in Baja California, Mexico — are under construction and due online mid-decade. Those projects are unlikely to be the last, given the more than $1/MMBtu in cost savings due to shorter voyage times and canal-free access to Asia. In today’s RBN blog, we begin a series looking at the state of LNG development on the North American Pacific Coast.

Back-to-back LNG blogs? We normally like to mix it up when it comes to blog topics. However, the past two days have been anything but normal in the gas markets. Global gas prices were already in the midst of the most epic bull run in modern times, if not ever, with gas prices abroad pushing to new highs all summer and into fall. This has been underpinned by strong global gas demand and a gas shortage in Europe, but now a coal shortage in China has sent the market into another upward spiral as the entire world weighs the impacts of multiple countries facing energy shortages and winter reliability fears. This has sent Asia’s Japan Korea Marker (JKM), Europe’s Dutch Title Transfer Facility (TTF) and the UK National Balancing Point (NBP) to all-time highs yet again this week. The U.S. gas market is tight as well, but it’s not facing the same kind of shortages. Even so, gas prices here have been unable to escape the upward pull. The October Henry Hub gas futures surged nearly 60 cents (11%) on Monday — the biggest single-day gain in nearly three years — to record a new post-2008 high of $5.706/MMBtu, despite little change in domestic fundamentals. Then, in after-hours trading Monday night, the prompt contract blasted past the $6/MMBtu mark and again topped $6/MMBtu in early trading Tuesday before expiring at about $5.84/MMBtu. This, as JKM reached a high-water mark just under $30/MMBtu. The linchpin for these dramatic price moves is of course LNG. Yesterday, we looked at the near-term impacts of rising LNG export capacity on U.S. gas demand, with commissioning for both Sabine Pass Train 6 expansion and the new Calcasieu Pass facility well underway and first LNG exports expected this winter. Next, we shift our focus longer-term to another aspect of the all-important LNG supply picture: the economics of North America’s Pacific Coast vs. Gulf Coast export projects.

Tuesday, September 28, 2021

The Movie Page -- September 28, 2021

 From wiki:

Firebird 2015 AD is a 1981 Canadian science fiction film directed by David M. Robertson and starring Darren McGavin and Doug McClure

In the year 2015, the US government outlaws the distribution of gasoline to the public, reserving it only for the politicians, the Military and law enforcement. [Need we say more? Again, this movie was released in 1981.]

While it is implied this is due to a fuel shortage, later dialogue rebuffs this stating that gasoline is in abundance. Civilians are also banned from owning or using any form of motor vehicle, and those that do are referred to as Burners, and it is shown that this is a form of rebellion. Burners are monitored and dealt with harshly by the DVC; The Department of Vehicle Control

And with that, I'm off the net until tomorrow. 

Notes From All Over -- Whoo-Hoo -- NDIC Back To Reporting Active Rigs -- Nice To See -- September 28, 2021

Afghanistan: Reading excerpts of General Milley's testimony and what the press is reporting about the White House response, close reading suggests that both are telling the truth. Of the two, General Milley seemed quite disingenuous with regard to his testimony. He did not call Resident Biden a liar, but some may interpret his testimony to have done just that. 

Traders, investors: Robinhood traders / investors must be jumping out of windows today. ARKK fell almost five percent, along with almost everything else. Others of interest:

  • TSLA: actually did quite well
  • F: actually rose a bit
  • DVN: increased a bit despite shares in many oil companies actually falling today
  • SRE: my favorite stock to follow had an incredibly awful day

Buying opportunity.

Covid-19 vaccine breakthrough cases: there's a video out there that purports to explain why (the only folks experiencing breakthrough cases); I haven't seen it; I don't like to get my news via video. Something to google, perhaps. The CDC addresses breakthrough "cases." The explanation, which I believe has been posted before. I won't post it now; it's commonsense (in fact, it's almost ridiculous to even be discussing it) and I don't want to insult anyone. LOL. Has to do with Statistics 101 and a lot of journalists  ... speaking of which ... here is an example of which we are dealing:

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

Active rigs -- 25 -- from the daily activity report at the end of day.

$74.34
9/28/202109/28/202009/28/201909/28/201809/28/2017
Active Rigs2511576658

Active permits:

  • CLR (8): Flint Chips FIU; Bice FIU; Pletan; Rolf Federal; Charolais South Federal; LCU Ralph, LCU Reckitt Federal, Clear Creek Federal;
  • Hess (4): most interesting -- up to four this quickly; BL-S Ramberg; An-Norby; CA-E Burdick; BL-Olson;
  • MRO (2): Woodrow; Delores USA;
  • Oasis (2):  Swenson Federal; Soto;
  • Petroshale: Crockett Federal;
  • Whiting: Fred TTT;
  • Hunt: Halliday;
  • Kraken: Jenna Le;
  • Slawson: Lightning Federal;
  • Ovintiv: Bernice;
  • Enerplus: FB Leviathan;
  • Crescent Point: Reed
  • Denbury: CHSU 11-35NHR 15;

Two new permits, #38587 - #38588, inclusive:

  • Operators: MRO, Enerplus
  • Fields: Bailey (Dunn); Antelope (McKenzie)
  • Comments:
    • MRO has another permit in the prolific Bailey, in lot 1 section 18-146-93; 433 FNL and 571 FWL;
    • Enerplus has a permit for a Queen well in NWNW 28-152-94; and 330 FNL and 1313 FWL

Eight permits renewed:

  • Enerplus (7): all in section 28-152-94; Shoal, Flatiron Hogback, Fjord, Cirque, Barchan, Arroyo;
  • XTO: an Edwards Trust Federal well in section 19-149-97;

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 Resources (CLR). If you go to the 8/4 /21 daily report there was a single Jack well permitted. Not sure why it is a single well there. 

Coordinates: 47.387619,-102.805378, or lat/long: 47°23'15.4"N 102°48'19.4" W.

From the August 4, 2021, daily activity report, a new permit, no scout ticket, and not yet on the GIS map:

  • 38450, conf, CLR, Jack 9-9HSL, Chamney Butte, SESE 8-145-95; 320' FSL and 576' FEL. This is a section unit line well, at least 2560-acre spacing.

**********************************
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;
    • see John's comment below
    • natural gas and nuclear: 87%
    • nothing else matters
    • had to rely on expensive Canadian hydroelectricity

BP:

  • it won't be hard to remember the CEO's name: Bernard Looney
  • link here.

Unhinged:

  • 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.

Beats:

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

NFL:

  • 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

PGA:

  • 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. 

Re-posting:

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 Back -- 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:

$76.17
9/28/202109/28/202009/28/201909/28/201809/28/2017
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.