Several Wells Coming Off Confidential List -- November 8, 2021

Tesla / Elon Musk: has changed his twitter hand to "Lorde Edge," an anagram for "Elder Doge."

Elon Musk: will have to sell Tesla shares to pay massive California tax bill. the options expire in August, 2022, he needs to exercise before then. His gain will be $28 billion and will be taxed at ordinary income, 54% -- creating a California tax bill of $15 billion. He could sell 12 million shares; pay his tax bill; and retain 10  million more shares. 

Pay raise: American Airlines increases pay for flight attendants in response to scheduling meltdown. Haven't heard if Southwest Airlines is doing anything.

Skimpflation: new term, I had not seen. Picked up by a reader. This is a huge opportunity for CEOs who understand this. Amazon is a great example. I don't think I've ever had a problem with Amazon.

Ten-year Treasury: 1.478% (and that's a slight increase). Did anyone see this coming? I thought we were told that the TYT was headed toward 3% with a quick rush through 2%. And this is one business day following the $1.5 trillion spending bill. It also appears, the price of gasoline has plateaued. WTI is in a trading range.

WTI: up slightly today; Saudi raised their official selling price over the weekend.

US equity markets, pre-market: up nicely. Goldlilocks Monday for investors. Oil up very slightly; US opens up international travel; huge infrastructure bill passed that is not seen to be inflationary by many. One example: CAT jumps 4% in pre-market trading on back of infrastructure bill.

Morph: Former Michigan governor Jennifer Granholm is quickly becoming "the Dr Fauci" of US energy policy. Tone-deaf. Unlike Dr Fauci, she has no clue, no expertise in the field in which she is the nation's spokesperson. Fauci worked to thread the needle between politics and science. Granholm: knitting with two-by-fours.

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Back to the Bakken

Active rigs:

$81.66	11/8/2021	11/08/2020	11/08/2019	11/08/2018	11/08/2017
Active Rigs	32	15	54	66	53

Wells coming off the confidential list:

Monday, November 8, 2021: 10 for the month, 13 for the quarter, 264 for the year:
36071, conf, Enerplus, Andesite 147-93-09C-04H,

Sunday, November 7, 2021: 9 for the month, 12 for the quarter, 263 for the year:
37979, conf, Hess, EN-Joyce-LE-156-94-1721H-6,
35486, conf, Oasis, Nikolai Federal 5397 42-33 2B,

Saturday, November 6, 2021: 7 for the month, 10 for the quarter, 261 for the year:
38194, conf, CLR, TRex SWD,
36070, conf, Enerplus, Granite 147-93-09C-04H,  

Friday, November 5, 2021: 6 for the month, 9 for the quarter, 260 for the year:
37365, conf, Whiting, Sorenson 21-6-3H,
36773, conf, Hess, CA-Russell Smith-155-96-2425H-8,

RBN Energy: midstream conundrum threatens gas production growth long term, part 2. 

Market signals are suggesting that we’re on the cusp of another midstream revival. Higher crude oil and natural gas prices are prompting producers to ramp up output, and higher production will lead to increasing midstream constraints and cratering supply prices. We’ve seen this reel before and in past cycles, midstreamers would swoop in right about now with plans for a host of pipeline expansions to relieve bottlenecks and balance the market again. The problem is that for capacity to get built, you need producers to sign up with long-term commitments, and that’s the catch. Wall Street has drawn a hard line when it comes to capital and environmental discipline in the energy industry, and regulatory support for hydrocarbon newbuilds has waned. This is especially a problem for two major basins — the Permian and Marcellus/Utica — but is liable to affect producer behavior across the Lower 48. In today’s RBN blog, we take a closer look at how this will play out at the basin level, starting with the Permian.

Previously, we discussed the relationship between midstream infrastructure and production growth as a key driver of the Shale Revolution. The bottom line was that without the rapid buildout of pipeline and other midstream infrastructure over the past decade or so, Lower 48 gas production volumes would be nowhere near where they are today.

We also considered the challenges in today’s environment for getting midstream expansions across the finish line. U.S. natural gas supply is primed for growth, with the Lower 48 supply-demand balance the most bullish it has been in years. On top of that, exports are very strong and poised for growth, with international prices setting records. Henry Hub gas futures are also near their highest level in over a decade. It would seem that if elevated prices incentivize incremental production and constraints create regional imbalances, infrastructure expansions would again play a critical role in debottlenecking and balancing markets and facilitating production growth. However, the focus on energy transition and capital discipline — and the overall bias against hydrocarbons — have changed the game, making it harder to get the long-term capacity commitments and financial and regulatory support to get midstream projects done. Producers, who were always reluctant to commit to new capacity, are now even more wary of backing these projects for fear of getting slapped down by Wall Street.

Note: 

Two major Permian producers, ConocoPhillips and Diamondback Energy, are among those that have recently emphasized the need for continued capital discipline. ConocoPhillips CEO Ryan Lance called on investors to keep U.S. shale producers on a “short leash” to preserve returns and capital access, although he said it’s possible the sector’s top tier can deliver “modest growth” at market-competitive returns as demand continues to recover. Diamondback CEO Travis Stice said the company is committed to holding its Permian oil production flat in 2022 and implored investors to continue holding companies to their capital discipline pledges.