Thursday, January 14, 2021

A Closer Look At The North Range Permits For Two Vertical Duperow Wells -- January 14, 2021

The two new permits today, #38080 - #38081, inclusive:

  • North Range has a permit for an Eagle 2-1V well in NESE 2-145-100, 2207 FSL and 200' FEL
  • North Range has a permit for an Eagle 10-1V well in SENW 10-145-100, 2376 FNL and 1903 FWL

For all intents and purposes, these are wildcats, although they may not make the legal definition as such.

According to the file report, for Eagle 2-1V, #38080; GrassyButte:

  • the Grassy Butte-Duperow pool: the interval below the base of the Birdbear formation to above the top of the Souris River formation
  • geologic tops, TVD:
    • Lodgepole: 10142
    • Bakken: 10985
    • Three Forks: 11027
    • Birdbear: 11267
    • Duperow: 11358
    • Souris River: 11727
  • spacing: 160 acres -- SE 1/4 section 2-145-100;
  • will not be fracked

According to the file report, for Eagle 10-1V, #38081, Rough Rider:

  • the Rough Rider-Duperow pool: the interval below the base of the Birdbear formation
  • geologic tops, TVD:
    • Lodgepole: 9976
    • Bakken: 10796
    • Three Forks: 10838
    • Birdbear: 11057
    • Duperow: 11139
    • Souris River: 11495
  • spacing: 160 acres -- NW 1/4 section 10-145-100;
  • will not be fracked

Record Winds Possible In Southwestern North Dakota Tonight -- January 14, 2021

Link here

Apple Shipped So Many Computers This Past Year, They Literally Shut Down Automobile Production -- January 14, 2021

Previously posted

January 14, 2021: did anyone else catch this? Bloomberg: missing chips snarl car production at factories worldwide:

After first wiping out auto demand, the virus is now hindering parts supply: chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc.

Follow this story here

Could This Become A Bigger Story Than It Already Is? It Literally Feels Like A Race Against Time To Prevent A Disaster -- January 14, 2021

This story is being followed here

From twitter today:

************************************
School Is In Session


Note: Sophia is making up the story that she is "reading" to her students. The "page" on the iPad from which she is reading is a blank page except for a single line from her Duolingo Spanish lesson.

Notes From All Over -- "We're Mad As Hell, And We're Not Gonna Take It Any Longer" Edition -- January 14, 2021

UK: Boris Johnson given bombshell warning -- lift the lock down or face leadership threat. Enough is enough. His days are numbered unless ... link here -- from MP who ousted Theresa May. 

Panama Canal congestion: link here

Chips: semiconductors in short supply -- The WSJ. When I first decided to add "chips" to the list of those things that I wanted to track in 2021, I had no idea this is where we would end up: a huge shortage. I was mostly interested in the Apple M1 chip. But now, the big "chip" story is the global shortage. Toyota has already shut down production in China due to the shortage and now says the shortages could continue through the spring. Look at this: Taiwan Semiconductor Manufacturing Co -- TSMC -- wow -- 

Semiconductor companies are asking their customers for patience as the industry works through a sharp increase in demand from makers of everything from cars to consumer electronics.

The chip shortage has caused prices to rise for certain semiconductors, delays in filling orders and auto makers to idle factories. If the problems persist, consumers may see delays in getting new cars and some electronic devices, and possibly higher prices.

There is no quick fix to the situation, either. Adding new chip-making machinery can be expensive and slow, and some of the deepest supply problems are taking place with older production lines that are less lucrative for manufacturers.

“In the whole semiconductor industry there is very little [spare] capacity right now—everything is doing well,” said Risto Puhakka, president of VLSIresearch, an industry-analysis firm. “We’re coming off a record investment year, and the demand continues to grow.”

The shortages add to the upheaval currently affecting the semiconductor industry. Intel Corp. this week outsted its chief executive, Bob Swan, after product delays, and mobile-phone chip giant Qualcomm Inc. added to a deal-making frenzy.

Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, said Thursday it was working with the car industry to address critical shortages. Chief Executive C.C. Wei also said TSMC’s customers are likely to boost chip inventory to protect against future bottlenecks. The manufacturer said it was boosting capital investments by at least 47% this year from 2020 amid surging demand.

Suppliers as diverse as graphics chip maker Nvidia Corp., America’s largest semiconductor company by value, and NXP Semiconductors NV, a Dutch supplier of automotive, industrial and communications chips, are being affected by supply crunches.

Demand for laptops has skyrocketed, and remote work during the Covid-19 era has increased appetite for cloud-computing services and the data centers behind them. On top of that, a surge in demand for chips that go into new 5G phones has put a squeeze on manufacturing capacity, chip companies say. And U.S. restrictions on Chinese telecom giant Huawei Technologies Co. led competitors to try to steal market share.

Much more at the link.

 Bloomberg: missing chips snarl car production at factories worldwide.

After first wiping out auto demand, the virus is now hindering parts supply: chips used in vehicles are harder to come by because semiconductor manufacturers allocated more capacity to meet soaring demand from consumer-electronics makers such as Apple Inc.

And while the newest cars require more chips, so do the latest consumer gadgets. Smartphones using so-called 5G connectivity require 40% more semiconductors than older 4G versions. Chip foundry Taiwan Semiconductor Manufacturing Co. reported record fourth-quarter revenue last week, with new 5G iPhones taking up a large chunk of capacity.

The auto-chip shortage stems from overly conservative demand estimates made early last year as car plants closed to cope with the onset of the pandemic, De Vos said. Once the plants re-opened, vehicle sales rebounded more strongly than anticipated after governments unleashed stimulus packages and commuters avoided public transport.

Toyota, the world’s No. 2 automaker, said the impacted lines were at its factory in Guangzhou, in China’s south. The suspension could result in a cut in January’s output of as much as 30% depending on how long it drags on, the Nikkei reported earlier Tuesday, without attribution. Toyota jointly operates the site with Guangzhou Automobile Group Co. Toyota is additionally lowering output of a pickup made in Texas.

Honda, which had to scale back output at its U.K. plant last week, said it will reduce manufacturing of the Accord, Civic and Insight sedans, as well as the Odyssey minivan and Acura RDX, a crossover sports-utility vehicle. The Japanese automaker is also reducing output by about 4,000 cars at a domestic factory, while Nissan Motor Co. is adjusting production of its Note hatchback.

VW said last month it would have to change manufacturing plans. Fiat Chrysler Automobiles NV is temporarily closing a Canadian plant and delaying the restart of output at a Mexican Jeep factory until the end of January.

In North America, Ford is idling a SUV factory in Kentucky.

Semiconductor-based components are set to account for more than 50% of a car’s manufacturing cost by 2030, up from about 35% now, according to a report by China EV 100 and Roland Berger.

Much more at the link. 

Five Permits Renewed; Two New Permits -- January 14, 2021

Electric fracks: Halliburton

NGL processing plant ready to go on line, data points from The Bismarck Tribune:

  • west of Williston
  • Outrigger Energy II's Bill Sanderson Gas Processing Plant
  • 250 million cubic feet of natural gas/day
  • a cryogenic plant: it can go further than some of the other processing plants in the state by cooling the gas enough to separate out ethane and propane from methane, the main ingredient of raw natural gas
  • pipeline connecting to that facility: an 80-mile pipeline starting in southeastern Williams County
  • anchor customer: XTO, a subsidiary of ExxonMobil
  • this plant brings capacity capacity statewide to 3.6 billion cubic feet per day
  • the state produced nearly 2.9 billion cubic feet of gas per day
  • also connected to two other pipelines:
    • Northern Border pipeline
    • Oneok 

Natural gas processing plants in North Dakota, tag: link here

Natural gas processing plants in North Dakota tracked here

Bismarck Tribune photo archived.

**************************************
Back to the Daily Report

Active rigs:

  • data again sequestered by NDIC
  • WTI: $53.76

Two new permits, #38080 - #38081, inclusive:

  • Operator: North Range Resources
  • Field: Grassy Butte (McKenzie); Rough Rider (McKenzie)
  • Comments:
    • North Range has a permit for an Eagle 2-1V well in NESE 2-145-100, 2207 FSL and 200' FEL:
    • North Range has a permit for an Eagle 10-1V well in SENW 10-145-100, 2376 FNL and 1903 FWL
  • see more at this post;

Five permits renewed:

  • Kraken (4): four Bigfoot permits in Mountrail County;
  • Liberty Resources: a Tucson permit in Mountrail County;

Crypto-mining -- Reality Sucks -- January 14, 2021

Oil prices: a perfect storm (in this case, a good storm)? Did Saudi get it right time? Third time's a charm:

  • weak dollar
  • cut in production
  • risk-on trade (Covid-19; global economy expected to expand)

The Fed: from a conservative financial advisor / analyst at a major financial institution earlier today -- based on Jay Powell's comments today --

  • Powell said they want to see inflation rate at 2% for quite some time -- which means at least for one to two years after inflation hits 2%;
  • Fed with two mandates: inflation and jobs; no comment regarding which one the Fed was paying attention to right now;
  • the Fed would be happy with 10-year Treasury at an average of 2% -- if that's an average going back several years, it would take several years to average 2%; he thinks the Fed would be willing to let the 10-year Treasury go to 5% to get an average of 2% over several years;
  • I may have the specifics wrong, but that was the general conversation
  • bottom line: the Fed is not worried about the 10-year Treasury at all
  • 10-year Treasury today: after dropping below 1.1% is now back above 1.1%;

Crypto-mining: link at Aljazeera; also at Bloomberg, elsewhere: Iran's smog, blackouts made worse by power-sapping crypto-mining. Is this why Iran needs that nuclear energy?

  • Three big locations for cryptomining: Iceland, Iran, and China. Probably also Russia (Siberia). 

NYC rentals surge; up 94% in December. I assume this is month-over-month. Rental rates have come down significantly. CNBC. But the vacancy remains at a record. 

Airlines: enough is enough. 

First, the end of the "comfort animal" scam. Now the FAA steps in and tells the airlines: zero tolerance when it comes to "unruly behavior." Zero tolerance, masks, $35,000 fines, jail time on the table. All fallout from the storming of the Capitol last week.

Also, no longer can folks "check" firearms when traveling to Washington, DC.

These are temporary measures to expire March 30, 2021, but my hunch: "everyone" wants to seem them extended indefinitely. Why shouldn't there be zero tolerance for unruly passengers on airlines? This FAA directive also gives airlines "cover" from successive liability suits.

United is adding folks to their list of "banned from the airline forever."

Energy stocks: on fire. Every time I look up at the CNBC crawler I see familiar energy ticker symbols surging and I'm not using the word loosely. It is truly incredible. For example, I just noticed PSX, up 4% and pays almost 5%.

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. 

Natural gas fill rate. Link here.  

Gasoline demand. Link here.

Ethane Power Plant "Slated" For Williston Area -- Sources -- January 14, 2021

Updates

January 15, 2021: press release, dated January 12, 2021, from Bismarck, ND, and Westlake Village, CA, data points:
  • Bakken Midstream Natural Gas, LLC
  • has signed its first ethane supply term sheet to support the power plant previously announced
  • will be the largest power plant to utilize advances in combustion turbine technology that enables ethane as its primary fuel source;
  • The Energy Center: to be located in the Mountrail-Williams Electric Cooperative near Williston, ND
  • October, 2020: announced it had secured nearly $25 million from two separate capital raises
    • funding rounds led by the Family Office of Founder and executive chairman, Steven E Lebow
    • Lebo was joined by ND business leaders including Gene Nicholas, Ron D. Offutt, and Stephen L. Stenehjem
  • Lebow, previously: 
    • founded and co-led Donaldson, Lufkin & Jenrette's (DLJ) Los Angeles office and created and led GRP Partners, a US and European venture capital firm;
    • from day one, he was the primary fanancier for companies including Costco Wholesale, PetSmart, Dick's Sporting Goods, Envestnet, Bill Me Later (sold to PayPal) and ULTA Beauty;
  • three years of preparation and work to get to this point
  • Bakken Midstream: 
    • CEO Mike Hopkins
    • Lebow, and co-founders Curt Launer and Shane Goettle
  • Hopkins:
    • has successfully developed 54 power projects around the world, totaling over twelve gigawatts
    • was extensively involved in the build out of the value-added industry in Alberta, Canada
  • Launer:
    • number-one ranked natural gas industry analyst on Wall Street for twelve years
    • in the Institutional Investor Magazine Hall of Fame
  • Goettle:
    • life-long North Dakota businessman and attorney with more than 25 years of state and federal level experience;
    • former head of the North Dakota Department of Commerce
    • former chair of EmPower North Dakota

Original Post

Link here

Bismarck Tribune link here

Williston Herald link here.

From The Bismarck Tribune, data points:

  • west of Williston
  • Bakken Midstream Natural Gas
  • $400-million facility
  • construction: to begin in 2022
  • to take two years
  • CEO: Mike Hopkins
  • Bakken Midsream
  • formed in 2018
  • mission: to develop "such" projects
  • received a $200,000 investment from ND Department of Commerce
  • confidentiality precludes more specific information

Hope springs eternal. The big question: where was MDU all these years? Why does it take an upstart to get this going? Why not Hess? Why not NDREC. By 2010 "everyone" was aware of the flaring issue. So, now, some fourteen years later, maybe a new power plant. 

Questions unanswered that would seen not to be confidentiality issues:

  • what is meant by "large"? in terms of households, how "large"?
  • CO2 offsets;
  • wholesale price of energy produced?
  • what permits yet required? any Federal permits required?
  • co-owned by a "utility partner"?
  • what is meant by "significant amount of construction jobs"
  • any other public grants other than the $200,000 mentioned? 
  • what percent of produced ethane will actually be processed by this plant?  
  • are there any other such plants in the US that might provide readers some comparison? Pennsylvania Power Plant said to be the first to tap ethane for electricity -- March 27, 2020 -- NGI, link here; proposed as long ago as 2015 by GE, link here;

EIA: costs for new energy plants, 2018, link here

  • average construction costs, combined cycle: $900 / kW = $900,000 / mW or about a million dollars for a new combined cycle plant;
  • average new capacity for a new natural gas plant: 500 MW
  • so, 500 megawatts x one million dollars = $500 million 

Hess natural gas processing plant: $150 million, link here

Hess Vantage pipeline: link here.

Idle Chatter -- January 14, 2021

Updates

Later, midnight,  January 14, 2021
: before President Biden spoke, laying out his $1.9 trillion program to save the country, Dow future were down a bit; after he spoke, futures fell further, faster. It must have been the minimum-wage stuff.

Original Post

Ludicrous: CNBC keeps talking about "value" and "growth" stocks. They need to re-vamp this discussion. Two categories: legacy industries; millennial industries:

  • legacy industries:
    • value (JNJ)
    • growth (QDEL)
  • millennial industries:
    • hyper-growth (AMZN)
    • ludicrous (TSLA)
    • beyond ludicrous (Bitcoin)

The major indices, for the archives:

  • Dow 30: +136, at 31,196
  • S&P 500: +12, at 3,822
  • NASDAQ: +70, at 13,200
  • Russel 2000: +35, at 2,147

Selected stocks:

  • MAXR: up 28% up $11; trading at $50
  • AAPL: down a bit; trading at $130
  • CVX: up 2%, trading at $95
  • EPD: up about 3/4th percent; trading at $23; pays 8%
  • TSLA: up a bit; trading at $860
  • GOEV (Canoo): down a bit; trading at $18
  • JNJ: up 1.65%; trading at $160

Most under-reported energy story: electricity demand generated by Bitcoin mining. 

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. 

Vaccine: I get a kick out of the "news" yesterday that JNJ is falling behind in its ability to quickly get product to market. LOL. That's not the long pole in the tent: anecdotal reports from many states suggest that much of vaccine is sitting in refrigerators/freezers/warehouses and not getting into arms. A twitter note overnight said that in New York vaccination centers were open 24/7 but they see very few people showing up after midnight. If accurate, speaks volumes. 

Syria: CNBC has a video-report that Jordan has begun vaccinating in Syrian refugee camps. Again, no numbers. Just a video and some superficial reporting, as if the photo-journalist had never seen vaccinations given before.

Unemployment numbers: another day where the unemployment numbers are reported and no one seems to care. Much like the Fed's minutes reported by Steve Liesman. At best there's an immediate reaction on Wall Street to these reports, and one hour later, the report is forgotten.

Biden
: prime-time address tonight -- watch for:

  • $2 trillion Covid-19 stimulus program
  • $2,000 checks -- but more focused than in the past
  • college debt: change, delay, waive repayment
  • payroll withholding: extend the program initiated by Trump
  • focus on minority communities (reparations)
  • state aid on loss tax revenue (New York big winner)
  • increase in unemployment aid 
  • another round of financial support for small business

Dow Just A New All-Time Record -- January 14, 2021

Updates

Later, 12:00 noon: Fed chairman Jay Powell just said:

  • no rate hikes any time soon;
  • we need 2% inflation

Original Post

Dow: I forgot where I posted it but either in an e-mail last night to a reader or somewhere on the blog, I mentioned that the Dow came within a hundred points or so of hitting an all-time record yesterday. 

Question: why is CNBC still quoting McConnell as the guy making US Senate decisions with regard to the calendar and the impeachment trial? Isn't Schumer now in charge?

Irony: CNBC is reporting that President Trump has a list of executive orders and a longer list of pardons ... but crickets from the White House. Banned from twitter and every other social media outlet, we have no idea what Trump is thinking. For the life of me, why can't twitter, et al, simply moderate all comments from certain parties that "might" be of concern? I do that on the blog. Makes a huge difference. Outlets that don't moderate comments are asking for trouble. This is not rocket science. Hey ... remember newspapers? Remember "letters to the editor"? Newspapers did not print every letter they got; they selected which ones they want to print. Same with The New Yorker: magazines print selected letters. 

Fireside chats: likewise I am amazed that Trump is not having "fireside chats." He would have any number of radio / television outlets eager to air his "conversations." 

Unemployment numbers: no longer mean anything on a week-to-week basis. May expand on this later.

****************************************
Back To The Bakken

Director's Cut scheduled to be released tomorrow, Friday, January 15, 2021, afternoon: link here

Active rigs:

$52.80
1/14/202101/14/202001/14/201901/14/201801/14/2017
Active Rigs1151675536

One new oil & gas well reporting  -- Thursday, January 14, 2021: 18 for the month, 18 for the quarter, 18 for the year.

  • 37061, drl/A, Hess, EN-Labar-154-94-1003H-4, Alkali Creek, first production, 7/20; t--; cum 131K 11/20;

RBN Energy: FERC's decision on the oil pipeline rate index is a win for midstreamers

Just before the holidays, the Federal Regulatory Commission issued its final decision on the oil pipeline index rate for the next five years. The what?? Well, once rates for interstate oil pipelines are set and accepted by FERC, the rates can move around to match the market, but any increases are capped by an annual index announced by the FERC each year. The index is equal to the current year’s inflation rate, plus an “adder” that is calculated by the FERC every five years based on an examination of the industry’s results from the previous five years. In today’s blog, we explain how a few tweaks in the way FERC calculates the cost-of-service-based adder will significantly affect how much liquids pipeline rates can rise through the first half of the 2020s.