Three Wells Coming Off Confidential List -- November 16, 2021

Updates

Later, 8:30 p.m. CT: market opening -- wow, look at all that green. From the best business hour on television --

• there are signs that inflation may be more transitory than some think; it all depends on the timeline at which one is looking
• chips: the shortage has come to an end -- Morgan Stanley.
• oil rally: coming to an end.
• Peloton
• November 4, 2021: no need to raise cash; we're doing fine
• November 16, 2021: announces $1 billion of new Peloton shares to raise cash;
  
• Rivian: market cap is now bigger than that of Volkswagen; 
• trading at $160/share today Rivian is up another $16 today
  
• I believe VW is the biggest car company in the world in terms of number of vehicles sold; 
• did Apple miss this one?
  
• Home Depot: bigger market cap than Walmart today
  

Original Post

Not one headline so far regarding "the phone call" last night. Later: I've been watching CNBC for the past 2.5 hours, since 5:45 a.m. CT and not one mention of "the phone call." Wow. Amazing. Did it even occur?

Economic numbers announced today: Dow moves up. The US consumer is out and about and buying. 

From overnight:

• Canada's TransMountain pipeline -- Canada's only pipeline that carries both crude oil and refined products to the west coast -- is temporarily shut down due to storms, rain, and flooding. Nice photo of global warming at link.
  
• XOM calls it quits: says it will sall Barnett shale assets in Texas; I've seen $500 million figure; see this post. Pre-market: what is XOM doing? Nothing. In line with market in general; up ever so slightly. Traders / investors don't see this as a big deal at all.
  
• Russia's biggest move yet to take control of European natural gas market: link to Simon Watkins.
  
• Germany suspends Nord Stream 2 certification. Social media comments.
  
• two days ago, COP26 voted to suspend fossil fuel subsidies: overnight Japan announces fossil fuel subsidies to manage surge in prices; link here.
  
• keep an eye on Japan's power price rally: electricity rates for next-day delivery rose to a record for this time of year 
• high fuel costs (not news)
• cloudy weather cuts solar: weak available power supply vs last year
• the Bakken: huge headline story in the Financial Times (see below); behind a paywall; "The birthplace of America's oil boom a decade ago is struggling to recover from last year's market crash even as crude prices have surged back to $80 a barrel"
• not to worry: consider the source
• same ol' stuff
• article seems to be in response to CLR's entry into the Permian
• social media comments;
  
• the number of private jet flights has set a record in each of the past six months leading up to COP26;
  
• Platts feature on ISO NE; looks like a very, very good read; the blog has been following this story for years;
  
• Chinese's gambit in North Dakota: more than meets the eye

Pipeline: Permian's Double E pipeline enters service as West Texas gas output surges. Link here. 

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

Active rigs:

$81.43	11/16/2021	11/16/2020	11/16/2019	11/16/2018	11/16/2017
Active Rigs	23	14	57	63	55

Tuesday, November 16, 2021: 24 for the month, 27 for the quarter, 278 for the year:

• 37660, conf, CLR, Harrisburg 3-27H, Indian Hill, no production data,
• 37083, conf, Whiting, S-Bar 11-7HU, Sanish, no production data,
• 36225, conf, Enerplus, Horfels 147-93-08D-05H, Moccasin Creek, no production data,

RBN Energy: for Canadian producers, the most promising natural gas price outlook in years. 

As the new heating season in North America gets under way, the natural gas sector in Canada, the U.S., and even globally, is experiencing a surge in gas prices to levels unseen in many years. In Canada and the U.S., you would have to go way back to 2008-09 to find the most recent instance of $5/MMBtu-plus gas heading into a heating season. As for the rest of the world, it has never experienced prices at the levels reported in the past few months — north of $30/MMBtu in some places. The big question, as always, is: where do we go from here? In today’s RBN blog, we review our 2021 pricing outlook for Canadian gas and discuss our forecast for 2022.

It has been 11 months since we laid out our 2021 forecast for Canadian natural gas prices in RBN’s weekly NATGAS Billboard Canada report (January 19, 2021). At the time, our mid-scenario outlook — based on a Henry Hub price of $2.50/MMBtu, anticipated an average AECO price of $2.00/MMBtu, or C$2.43/GJ, for 2021. That looked very reasonable at the time, given that the two-buck forecast for AECO represented a gain of 20% over the 2020 average price ($1.67/MMBtu) and was within a dime of the average AECO forward prices for the remainder of the year as those stood in early January.

As we all know, 2021 did not turn out to be a normal year, especially on the energy front. The AECO price from January through October averaged $2.78/MMBtu (C$3.30/GJ; black bar in Figure 1), and cash prices as of Monday stood at $3.71/MMBtu (C$4.40/GJ). If the average price to date were to prevail for all of 2021, this would be the strongest average AECO price since the $4.05/MMBtu (C$4.24/GJ) average in 2014 (orange bar), though still well below the super-high price in 2008 (red bar). Further, if current cash prices held sway for the remainder of the year, the AECO price average would be closer to $2.96MMBtu (C$3.51/GJ). In both cases, this is well ahead of the $2.00/MMBtu (C$2.43/GJ) outlook we offered up at the start of the year, driven upward by very bullish fundamentals and global developments since then.