Monday, February 1, 2021

Shell With Biggest One-Day Buying Spree By A Single Company In The North Sea Market In Ten Years -- Source -- February 1, 2021

Link here

WTI Just Broke Through $54 -- February 1, 2021

At 10:59 p.m.CT, WTI is up about 1%; up about 51 cents, and now trading at $54.06.

What Was The Best Performing Oil Major In 2020? -- Rystad Energy -- February 1, 2021

Link here. Archived.

Despite the devastating downturn of 2020, most global majors held up quite well during the market turmoil, a Rystad Energy comparative analysis reveals after measuring key upstream performance metrics. Total outshined all other peers, as the French company not only exceled in financial and operational performance, but also was the only major to replace all of the year’s produced resources. Total has been able to keep its operating cost per barrel of oil equivalent (boe) consistently below $5 in the past five years. Although it is not the leader among majors in this metric (BP is), Total is the major that achieved the strongest year-on-year cost reduction per boe in 2020 among peers whose costs were already in the below-$5 range. Rystad Energy estimates Total’s operating cost reduction at around 8.5%.

The company has also enjoyed good cash flow in the past couple of years, and together with Chevron, Total stands out for bringing down its investment ratio by more than 60% in 2020 compared to 2015. Both companies had 2020 investment ratios calculated to around 49%, a remarkable cash conservation improvement compared to the past.

Last but not least, in a year of poor overall exploration success for majors, Total pocketed close to 1 billion boe of newfound volumes last year, with 70% of these within Suriname’s Block 58 where the company acquired a 50% stake from Apache in December 2019. Total took over as operator of the block earlier this month after the fourth exploration well was completed – with yet another discovery at the Keskesi East-1 prospect.

Aramco’s New Stock Offering Looks Doomed From The Start -- Simon Watkins -- February 1, 2021

Link here. Archived.

More shares in flagship oil and gas company, Saudi Aramco (Aramco), may be released for sale to the public if conditions are right, said the Governor of Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF) last week. 
This idea was later confirmed by Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman (MbS). Given how badly the first initial public offering (IPO) was received by international investors in the run-up to its eventual listing on 11 December 2019 and the draconian lengths that Saudi Arabia’s various authorities had to go to sell even the 1.5 per cent stake (cut down from the initially mooted minimum 5 per cent stake) finally offered, it might reasonably be conjectured that the conditions will not be right for a very long time. 
If the views of new U.S. President, Joe Biden, were factored into the conditions equation then the offering would probably never occur. Taking into account the tenuous grasp on reality that apparently exists at the centre of the Saudi Arabian regime, though, such an offering may well take place this year.

347 Wells Change Hands In The Bakken -- February 1, 2021

In today's Daily Activity Report, a change of operator for 347 wells was noted.

From: Newfield Production Company
To: Ovintiv Production Company

Permits, numbered as low as 11181 and as recent as 37277.

Scanning the list it appears that about 95% were in McKenzie County, the rest in Dunn County. 

From "Bakken operators":

Ovintiv Production, Inc:

Ovintiv Inc. will update investors Wednesday on its progress for the shale oil assets in Oklahoma it amassed after the $5.5 billion acquisition of Newfield Exploration Co. in 2018. The Stack and Scoop fields in the Anadarko Basin have faced investor scrutiny and operational challenges that sent a handful of small explorers into bankruptcy. -- January 30, 2020

So, mostly a paperwork exercise following the "strategic combination" of the two companies. From a press release dated November 1, 2018:

Encana Corporation and Newfield Exploration Company today announced that they have entered into a definitive agreement whereby Encana will acquire all of the outstanding shares of common stock of Newfield in an all-stock transaction valued at approximately $5.5 billion. In addition, Encana will assume $2.2 billion of Newfield net debt. The strategic combination will create a leading multi-basin company and has been unanimously approved by the Boards of Directors of both companies. Subject to receipt of regulatory and shareholder approvals by both companies, the transaction is expected to close in the first quarter of 2019.

From a Rigzone/Bloomberg article of the same date:

After years of slimming down its oil and gas holdings, Canada’s Encana Corp. is reversing course with a $5.5 billion acquisition of a U.S. shale producer in what will be the company’s biggest-ever deal.

Encana agreed to purchase Newfield Exploration Inc., which will give it positions in the Stack and Scoop shale fields in Oklahoma, the Bakken region of North Dakota and the Uinta play in Utah. The all-stock deal also will create North America’s second-largest shale explorer, the companies said in a statement on Thursday. Encana’s stock plunged the most on record.

The acquisition signals a sea-change for North American oil producers that spent the last few years building so-called pure-play drillers focused on a single shale region such as the Permian Basin on West Texas and New Mexico. For its part, Encana had spent years whittling its holdings to a core group of fields: the Permian, Eagle Ford, Montney and Duvernay.

Since its 2009 spinoff of oil producer Cenovus Energy Inc., Encana has sought to reduce its reliance on gas, and the Newfield acquisition represents the biggest step so far in that direction.

Note: the count may be off by a few. The "347" is what I counted but it could be off by ten or so in either direction. If this is important to you, go to the source.

Notes From All Over, Early Evening Edition; YUM Increases Its Dividend -- February 1, 2021

Peak oil: We live in very, very interesting times. 

On the one hand we have the Financial Times telling us "shale is dead." We have the new administration telling us that wind and solar energy will provide all the energy we need. Then we have Guyana-Suriname. Link here. Archived.

Peak bonds: Apple sells $14 billion of bonds as share buybacks seen rising. Link here. Archived. That amounts to about 100 million AAPL shares.

The company issued debt in six parts. The longest portion of the offering, a 40-year security, will yield 95 basis points above Treasuries, after initially discussing between 115 and 120 basis points, according to a person with knowledge of the matter, who asked not to be identified as the details are private.

Until 2020, Apple hadn’t borrowed in the U.S. investment-grade market more than once in a calendar year since 2017. But rock-bottom interest rates proved too tempting for the world’s most valuable company to pass up as it pursues aggressive share buybacks and dividends.

Apple’s outstanding 40-year bonds, the 2.55% securities due 2060, widened more than 5 basis points Monday to trade around 89 basis points over Treasuries.

Bondholders typically sell out of their positions to make room for the new notes, which often come with a heftier yield to entice investors.

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. 

Yum: YUM increased its quarterly dividend from 47 cents to 50 cents; record date, 2/12/20 and pay date, 3/12/20. Covid-19 pandemic? Long live the pandemic:

Yum! operates the brands KFC, Pizza Hut, Taco Bell, The Habit Burger Grill, and WingStreet worldwide, except in China, where the brands are operated by a separate company, Yum China.

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The Movie Page Quiz

Can you name the worst "B" movie ever with this superb cast (hint: the answer is in the question):

  • Michael Caine -- yes, Michael Caine!Katharine Ross!
  • Richard Widmark! -- stars as a major general in the USAF
  • Richard Chamberlain -- yes, that Richard Chamberlain
  • Olivia de Havilland -- are you kidding me!
  • Ben Johnson -- one of the most famous Western stuntmen ever
  • Lee Grant -- yes, that Lee Grant
  • José Ferrer
  • Patty Duke!!!! are you kidding me
  • Slim Pickens -- yes, even Slim Pickens
  • Fred MacMurray-- of My Three Sons and so much more
  • Henry Fonda

Closer Look At Completion Strategies For DUCs Reported As Completed Today -- February 1, 2021

These DUCs were reported as completed today. 

The wells and frack data from FracFocus. Frack data has not yet been reported by NDIC.

Eight producing wells (DUCs) reported as completed, data to be posted later:

  • 30539, SI/A, Slawson, Badger 1 SLH, 33-061-03543, Big Bend, fracked 9/18/20 - 9/30/20; 13.6 million gallons of water; 92% water by mass; no production data,
  • 28113, drl/A, Slawson, Sniper Federal 6-6-7TFH, 33-061-03069, Big Bend, fracked 10/3/20 - 10/16/20; 14.7 million gallons of water; 92.2% water by mass;
  • 28114, dlr/A, Slawson, Sniper Federal 7-6-7TFH, 33-061-03070, Big Bend, fracked 10/3/20 - 10/16/20; 14.8 million gallons of water; 92.3% water by mass;
  • 36548, drl/A, Oasis,Thelen 5297 11-6 4B, 33-053-09085, Banks, first production, 7/20; t--; cum 77K 12/20; fracked 3/2/20 - 3/20/20; 14.8 million gallons of water; 92.8% water by mass;
  • 36486, SI/A, CLR, Sefolosha 4-23H, 33-105-05194, Epping, fracked 2/8/20- 2/22/20; 8.7 million gallons of water; 86.6% water by mass;
  • 36224, drl/A, MRO, Valerie USA 21-2H, 33-053-08985, Antelope-Sanish, 35K over 12 days extrapolates to 88K bbls over 30 days; fracked 11/21/20 - 12/8/20; 6.6 million gallons of water; 39.5% fresh water by mass; 46.9% produced water by mass;

Completion strategies are tracked here

Revenue Stream -- Mineral Rights -- February 1, 2021

Revenue stream and WTI: let's assume, that between February, 2020 and November, 2020, you had a one-dollar per bbl revenue stream on mineral rights:

  • February, 2020: $45
  • April, 2020: $19
  • November, 2020: $45

Now, fast forward, to January, 2021, WTI is at $52

You can do the math.

Link here

Fourteen Active Rigs; Eight DUCs Reported As Completed; 347 Wells Change Hands -- February 1, 2021

Whoo-hoo! WTI is up almost 3%, up $1.44; now trading at $53.64. 

The US dollar index (common knowledge for most folks). Quick:

  • how many major world currencies make up the US dollar index?
  • name five of those countries.

Link here

Quick look hereOne year here

Silver: LOL -- silver finished lower today; closed at $28.73, down 2.34%; down 69 cents. Link here

Ten-year Treasury: at 1.081%, flat.

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Back to the Bakken

Active rigs:

$53.64
2/1/202102/01/202002/01/201902/01/201802/01/2017
Active Rigs1454645840

Rigs by operator:

  • MRO: 4
  • CLR: 2
  • WPX: 1
  • Slawson: 1
  • Whiting: 1
  • Petro-Hunt: 1
  • Oasis: 1
  • Hess: 1
  • Ovintiv: 1
  • BR: 1

Something new: eight salt water disposal permits renewed.

In case you missed it: Hess reported a very, very nice well -- see more here:

  • 37066, conf-->loc/A, Hess, EN-Labar-154-94-1003H-9, 33-061-04618, Alkali Creek, first production, 8/20; t--; cum 143K 12/20; fracked 5/28/20 - 6/5/20: 6.5 million gallons of water; 83.8% water by mass;

Eight producing wells (DUCs) reported as completed, data to be posted later:

  • 30539, SI/A, Slawson, Badger 1 SLH, 33-061-03543, Big Bend, fracked 9/18/20 - 9/30/20; 13.6 million gallons of water; 92% water by mass; no production data,
  • 28113, drl/A, Slawson, Sniper Federal 6-6-7TFH, 33-061-03069, Big Bend, fracked 10/3/20 - 10/16/20; 14.7 million gallons of water; 92.2% water by mass;
  • 28114, dlr/A, Slawson, Sniper Federal 7-6-7TFH, 33-061-03070, Big Bend, fracked 10/3/20 - 10/16/20; 14.8 million gallons ofwater; 92.3% water by mass;
  • 36548, drl/A, Oasis,Thelen 5297 11-6 4B, 33-053-09085, Banks, first production, 7/20; t--; cum 77K 12/20; fracked 3/2/20 - 3/20/20; 14.8 million gallons of water; 92.8% water by mass;
  • 33761, drl/A, Crescent Point Energy, CPEUSC Jean 7-9-4-157N-99W TFH, 33-105-04488, Lone Tree Lake, no frack data,
  • 33762, drl/A, Crescent Point Energy, CPEUSC Jean 7-9-4-157N-99W MBH, 33-105-04489, Lone Tree Lake, no frack data,
  • 36486, SI/A, CLR, Sefolosha 4-23H, 33-105-05194, Epping, fracked 2/8/20- 2/22/20; 8.7 million gallons of water; 86.6% water by mass;
  • 36224, drl/A, MRO, Valerie USA 21-2H, 33-053-08985, Antelope-Sanish, 35K over 12 days extrapolates to 88K bbls over 30 days; fracked 11/21/20 - 12/8/20; 6.6 million gallons of water; 39.5% fresh water by mass; 46.9% produced water by mass;

Change of operator: six pages, from Newfield Production Company to Ovintive Production, Inc.
I count 347 wells in that list. See this post.

For A Reader -- Questions About Shipping A Privately Owned Vehicle -- February 1, 2021

From a reader who requested more information with regard to shipping our 2005 Chrysler minivan from south Los Angeles (San Pedro), CA, to Portland in mid-January, 2021.

I made the decision to do this just before Christmas, 2020.

I went on-line and made my request known. 

I was immediately (and I mean, "immediately") -- within seconds -- inundated with text messages with quotes from brokers and trucking companies. 

Interestingly enough, one broker e-mailed me directly. I knew nothing about him or his company. Absolutely completely random. It was a short ten-word e-mail with a quote.

His name was Dan and he worked for Coast to Coast Logistics, LLC, which he said was the #1 transporter in the US. That was it.

I had already looked at quotes for a POV shipment from Los Angeles to Portland. The quotes ranged from $600 to $1200.

Dan's quote was $950. Final price. No hidden fees, no additional taxes. It included insurance on my vehicle. So I called him instead of replying by e-mail.

He spoke very good English, but had a tinge of what sounded like Hispanic. My wife is Mexican-Japanese so I prefer going that route when possible. Yes, I know I shouldn't do that. 

We made the agreement over the phone and I completed the request on-line at the company's website. By the way, the website gave me a really, really warm fuzzy about Coast to Coast Logistics -- a really, really professional website. There was a glitch in the on-line form but Dan was able to fix it at his end.

When filling out the form on line: the most important information is two really, really good contact phone numbers you can give the company.  The second most important thing is to have the pick-up address and the delivery address exactly correct.

I never heard from Dan after that. 

Until four days before the scheduled pick up, January 18, 2021.

Dan told me that the truck to pick up our van would arrive on January 18, 2021, a holiday, despite the draconian lock down in California when the governor banned all travel more than 120 miles from home, beginning January18, 2021, coincidentally. LOL.

The broker, Dan, had contracted with a company called I-5 Transporter, LLC. Dan gave me the dispatcher's phone number for I-5 Transporter, LLC.

Three days before the scheduled pick up, the I-5 Transporter, LLC, dispatcher called to confirm the pickup time. The dispatcher, Tanya, sounded like a sixth-grade girl who had a lot of telephone calls to make. I barely understood her and when she called, I thought it was a "wrong number" call. I can't recall, but I think I hung up on her. Whatever. If I did, she called back immediately. The conversation lasted less than ten seconds.

I made no further phone calls. 

On the day of the scheduled pick up, after waiting from 7:00 a.m. until 2:00 p.m. local time, I called the dispatcher. The dispatcher gave me the cell phone number of the truck driver ... long story short -- he would pick up the minivan on Tuesday, the day after the original pick up date. The confusion rested somewhere between Dan, the broker; the dispatcher; and the truck driver. Didn't bother me a bit. Things happen. [My hunch: the confusion began with the dispatcher. See above.]

On the day of the pick up, the trucker arrived a few hours later than expected, but again, that was fine. He was friendly and knowledgeable. He got a very nice cash tip. Very nice. He said it was too much, but we insisted. He took it.

We didn't hear a thing for several days. Then, six days later, we got a phone call asking if we would be home (in Portland) to receive the van.

The van was delivered the next day. Seven full days between pick up and delivery, including two weekend days. What a great country.

That driver was also given a very nice tip.

We continued to receive text messages and an occasional e-mail from brokers/truckers for one week but then they quit. 

Cost and payment:

  • the broker took his cut: $150 by credit card. I had to give him my credit card number and security code at the time of booking. Again, I had no previous relationship with Dan or this company;
  • the $150 was not taken from the credit card until the day of pick up;
  • no payment was due at the time of payment; none, nada, zip.
  • at the other end, payment in full.

Dan did not know the form of payment that I-5 Transporter would take, but he said most truckers take cash, a certified bank check, or some kind of trucker's digital pay of which I was unfamiliar. 

We kept copies of the e-mail in case we had to "prove" the original agreement. We paid the full amount, $800 in twenty-dollar bills.

It's very possible one could arrange transportation directly with I-5 Transporter if shipping anywhere along the west coast from Seattle to San Diego. It appears they operate out of Salem, Oregon, based on a cursory internet search. 

I'm sure I could have gotten a much better deal had I shopped around, but I often live by the adage "you get what you pay for." The cost of me flying to Los Angeles, meeting up with my wife, two to three days on the road in an older minivan, would have approached a few hundred dollars, making the $950 we paid, reasonable. My hunch is that the $600 quote -- which I did not take -- did not include everything. 

Had the van broken down somewhere near "Hearst Castle" the towing cost and costs to repair the van would have been astronomical as well as the lodging costs waiting for the van to be repaired.

Comments: the whole experience was absolutely new to me but having moved twenty times or so with the USAF I had a pretty good feeling how these things worked. 

Most important, be flexible with pick up dates and delivery dates. Very flexible. Keep copies of all correspondence; it will generally be e-mail. Text messages work for a few updates, but e-mails are most important. Tip the truck drivers at both ends. I can almost guarantee a nice tip at pick up will be more than worth it nine times out of ten. Obviously no tip at the other end is required but I like to "pay it forward" for the next customer.

The broker, Dan, realizing I was new to all this, explained the general way brokers work on deals like this (after we had made the deal). 

He said that he, and a gazillion other brokers, read the request and then in a split second offer a quote. The quotes, as noted, in my case ranged from $600 to $1200. Dan said the quote is based on experience; and what they think they can get out of the owner of the car (me) and how much they can get the price down with the trucker. The latter is pretty much known by all brokers -- based on season, location, etc. 

What is most interesting is estimating what the owner of the vehicle is likely to pay. Someone shipping a Porsche would have likely been offered a range of quotes much higher than for shipping a old minivan. It appeared, I bet to Dan, that I was new at this and had no clue what to pay. He could have quoted $600 but thought I was naive enough to accept the $950 quote. He didn't say that outright but I understood. He rightly guessed I wasn't going to pay $1200. LOL.

Would I work with these guys again? I sure would but every shipment will be different for many reasons.

Notes From All Over, Part 2 -- February 1, 2021

EOG: interesting story. A bit old. I missed it when it was first reported a few weeks ago. Oil drillers are taking their money and expertise off-shore and overseas now that the new CEO/CIC has banned new leasing on federal lands/waters in the US. EOG moving focus to Oman. Appears to be a pretty big story based on the coverage of this story. Apparently the new administration prefers to put Omanis to work and let our union workers draw unemployment and play the GME and silver markets. 

The road to France: for the archives. Something for Sophia to read in 2035. The numbers simply don't add up. There is not enough land or water to add all the renewable energy that would required to replace this many nuclear plants. From Tatiana Serova, one of my favorite columnists:

On Wednesday January 27th, the International Energy Agency released a long-awaited report called “Conditions and requirements for the technical feasibility of a power system with a high share of renewables in France towards 2050”. Yet, that document was given a cold welcome by the French nuclear industry, as behind this somewhat complex title hides a key message : a scenario of 100% renewable energy is “technically possible” in 2060 in France. This implies that the country would potentially no longer need nuclear energy to meet its domestic demand.

The nuclear sector accounts for around 70% of today’s French electricity mix, and over 40% of final energy demand. Back in the 1970’s, France decided to take the nuclear path, aspiring to move away from oil and achieving energy independence. Since then, not only did the country guarantee its own security of electricity supply, but it could also export it towards neighboring EU countries. Killing two birds with one stone, France boasted some of the cheapest electricity in Europe and was proud to have an almost fossil fuels free electricity generation system.

In 2020, the priority has shifted from nuclear power towards complying with the Paris-agreement goal of being net-zero carbon by 2050. In its pluriannual plan of energy, France gave itself the objective to reduce the share of nuclear power in the energy mix to 50% by 2035. In 2020, the government announced the upcoming closure of 14 nuclear plants to fulfill this objective. The closure of the Fessenheim plant, in June 2020 left a 1,7 GW capacity gap to be compensated for with other sources of power generation.

Thank you, Dr Fauci: three weeks to "flatten the curve." One year later and not much curve flattening but certainly a lot of waves. Mostly "waves goodbye" to a lot of service jobs. Link here

Notes From All Over, Part 1 -- February 1, 2021

So out of touch. The school year is coming to an end by April. But I love the attempts to change the narrative. If we're still wearing masks in August, 2022 -- which is very, very likely [I think Dr Fauci said wearing masks is the near normal] -- the midterm elections will be a debacle for the incumbents, of either party.

Robbin' the hood, lol:

Reality sucks; what happened to wind, solar?


Silver, going higher, regardless: link here. Price of silver, real time, here. But LOL -- silver accounts for less than 5% of the cost of a panel. Talk about clickbait. Biden's anti-business stance will raise costs across the board for a lot more than solar panels. The latter will actually come down in price with Biden incentives. Silver, solar panels? At worst, it's a wash. At best, it's a non-story.

The surging price of silver threatens to boost costs for solar-panel producers, which account for about 10% of global demand for the metal.

Silver prices have surged to an eight-year high since Wednesday. Exactly what kinds of investors are behind the run-up is unclear, but it began with threads on Reddit that were responsible for propelling shares of GameStop Corp. to stratospheric heights.

That’s going to add to costs for solar manufacturers, which use a silver paste for electrical contacts on photovoltaic panels. At current prices, the metal accounts for about 4.7% of the cost of a panel. It doesn’t help that Chinese manufacturers are trying to boost inventory now ahead of the Lunar New Year holiday that starts next week.

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The Science Page

The Privileged Planet: How Our Place in the Cosmos is Designed for Discovery, Guillermo Gonzalez and Jay W. Richards, c. 2004

Guillermo Gonzalez describing the fourth total solar eclipse visible from India in the twentieth century, p. 3:

I was surprised at the Indians' interest in this eclipse [1995]. National television covered the event, with crews set up at three or four locations spread across the eclipse path. One of them shared our site. 

Prior to departing India, I received a videotaped copy of the TV coverage from a colleague. 

A number of scholars were interviewed on the scientific aspects of solar eclipses; others discussed Indian eclipse mythology and superstitions. 

The TV producers, it seemed, were trying to show the world that India had finally discarded religious superstition and entered the era of scientific enlightenment. But the widespread superstitious practices in evidence during this eclipse, such as people -- especially pregnant women remaining indoors, suggest they were not quite successful. 

Sort of reminded me of highly educated Americans wearing masks on their solitary walks through parks devoid of other humans, or worse, those driving their automobiles with no passengers.

Closer Look At Another Incredible Hess Labar Well -- Look How Fast They Drilled This Well -- February 1, 2021

The well:

  • 37066, conf-->loc/A, Hess, EN-Labar-154-94-1003H-9, 33-061-04618, Alkali Creek, first production, 8/20; t--; cum 143K 12/20; fracked 5/28/20 - 6/5/20: 6.5 million gallons of water; 83.8% water by mass;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20203119633197569187000
BAKKEN11-2020302557225487910138279369681311
BAKKEN10-2020312637426456104374203141469562
BAKKEN9-20203030026300171193247067446852382
BAKKEN8-202024415854138436422541273412819999

Look at this from the file report:

  • spud date: March 1, 2020; serious drilling did not begin until 8:00 a.m., March 3, 2020
  • cease drilling: March 8, 2020
  • target: middle Bakken
  • reached KOP: 10:15 p.m. March 3, 2020 -- 14 hours to drill the vertical
  • KOP:
    • build began at 9:00 a.m., March 4, 2020
    • landed in the middle Bakken; and completed the curve at 5:30 p.m. CT, March 4, 2020; same day
  • lateral:
    • began at 4:15 a.m., March 6 -- so there was no drilling for a full day (March 5 -- no drilling)
    • the center of the ideal geological target area: 30' vertical depth inside the middle Bakken formation;
    • overall drilling window had a thickness of 20' with the top of the target window located 20 vertical feet inside the middle Bakken and the base ending at 40' total vertical feet;
    • the entire lateral drilled within the target geological area except 270' that was drilled within one foot of the base target location
    • as noted, drilled ceased on March 8, 8:10 p.m. CT -- two and a half days to drill the lateral;
  • max gas appeared to be 4,024 units;
  • TVD: 10,515.86'
  • MD: 21,070'

Notes From All Over -- February 1, 2021

Updates

Later, 10:19 a.m.: that silver trade? Losing steam, now below $29.

Original Post

Silver: last night before going to bed, I said the number to watch overnight / today was $30. The number to watch by the end of the week: $35. Well, we hit $30 overnight. Silver up over 10%; up almost $3; trading at $29.805. Link here. From SeekingAlpha:

Bigger picture: This squeeze here is aimed at banks by forcing physical delivery of silver into vaults. The Silver Trust ETF is backed by physical silver, meaning the precious metal needs to be purchased when new investments are received.

However, retail traders may find it harder to influence silver prices, compared to a single stock, given the large off-exchange market for the precious metal in which banks trade on behalf of clients.

Flashback: In 1979-80, the Hunt brothers attempted to corner the silver market by buying up one-third of the entire world supply (other than that held by governments). Within a year, the price for silver jumped 713% to a record high of $49.45 per troy ounce, but later collapsed in an event called "Silver Thursday." COMEX adopted "Silver Rule 7," which placed leverage restrictions on the purchase of commodities on margin, and the Hunt brothers had borrowed heavily to finance their purchases.

Unemployment: rates, year-over-year. Link here.  Rankings, best to worst:

  • South Dakota: #1 -- best numbers, year-over-year
  • Minnesota: #10
  • North Dakota: #20
  • Texas: #41 -- missed the top ten for worst-performing states by one one state; throw out outliers like Hawaii and Nevada, and Texas would have been at the bottom;
  • California: #48

Pigeon-holing states: one wonders if states could be divided along the following lines --

  • rural vs urban
  • red vs blue
  • tech vs non-tech
  • farming vs non-farming
  • manufacturing vs service industry

And, if so, which of the divisions is most important when tracking the health of the economy. I don't know, but it seems "manufacturing vs service industry" is a huge discriminator. California, at number 48th in the list of unemployment changes year-over-year, certainly suggests the service industry is a big, big deal. Which immediately brings us to Nevada, which is 100% service (if one includes entertainment as a service industry, and I do). Nevada ranked #49th. 

Melvin Capital lost 53% in January on GameStop and bad positions.

Hess To Report Two Wells Today Including Another Huge Labar Well -- February 1, 2021

Updates

Later, 8:48 a.m. CT: silver just went over $30. Whoo-hoo. Up almost 12%. Up $3.10/ounce. Trading at $30.015. It's amazing. Folks can take their silver bars and silver coins to the local coin shop, sell everything, and pay no capital gains. No records are ever kept. By the way, gold? Spot price: $1,867.

Original Post

Humor for the day: turned on television early this morning to catch the Monday morning sports shows. First thing: Lions quarterback -- quick, name the quarterback -- is traded to the Los Angeles Rams -- this is the biggest story of the day outside of the "manufactured" Patrick Reed story. Host asks if this means the res to the QB trades are about to begin. Analyst: no. This is not the beginning of QB trades. This was the easiest, the most obvious. LOL. I watching these sames shows all last week, every morning from 8:00 a.m. to 11:00, every morning last week, and not once do I recall anyone mentioning this guy's name, much less a trade from the Lions to the Rams. Another bit of common knowledge known by everyone -- after the fact. Quick: name the "former" Lions quarterback traded to the Rams.

PGA; Nick Faldo showed his true colors over the weekend. He now becomes the PGA story for the rest of the year. 

First note in my e-mail this morning: the party is over in the Bakken. Link to the Financial Times. LOL. The article began with Chesapeake Oil and moved on to Occidental, the poster children for debacles of unprecedented (?) proportions. It was a very, very long article but as soon as I saw the first thirty paragraphs on Chesapeake, and then Occidental I knew it was a re-hash of everything we've read about the shale revolution for the past five years. Or at least since Chesapeake crashed and Occidental blew up. You will hit a paywall, but easy to get around.

More: the oil industry is well known for its history of boom and bust. This is no different. 

More: by the way, except for the investors, "everybody" made money in shale -- and many made huge amounts of money in shale. Except for the investors. So, what's new?

Headlines: scanning the headlines -- wow, a very, very slow day. Oh, that's right. The huge winter storm Orlena in the east. LOL. I just switched over to the weather channel. Talk about another storm that is/was over-hyped. Headline story from the infobabes: slippery sidewalks. Yes, that was the major concern that was breathlessly reported. Today was supposed to be the "big day." Not. Not the "big day" will be Tuesday. There is so little snowfall, most of video is back in the studio with the CGI-generated videos. Slippery sidewalks. 

ISO New England / ISO New York: ISO New England. ISO NY.   

  • ISO New England: 5$ coal but otherwise unremarkable. Price spiked to $90/MWh, now leveled off at $75.
  • ISONY: OAC's constituents still in the "brown." Paying upwards of $110 for their electricity.

Silver: last night before going to bed, I said the number to watch overnight / today was $30. The number to watch by the end of the week: $35. Well, we hit $30 overnight. Silver up over 10%; up almost $3; trading at $29.805. Link here

Millennials laughing at baby boomers. GME.  

Millennials still living in their parents' basements. As for me, I love my 1,140-square foot two-bedroom apartment. I keep forgetting it's over 1,000 square feet. 

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Back to the Bakken

Active rigs:

$53.11
2/1/202102/01/202002/01/201902/01/201802/01/2017
Active Rigs1354645840

Two wells coming off the confidential list today -- Monday, February 1, 2021: 2 for the month, 35 for the quarter, 35 for the year.

  • 37066, conf-->loc/A, Hess, EN-Labar-154-94-1003H-9, Alkali Creek, first production, 8/20; t--; cum 143K 12/20;
  • 36243, conf-->loc/NC, BR, Stortroen 1D MBH, Dimmick Lake, no production data,

The new Labar well: see this post.

RBN Energy: the northeast gas market's slow march toward more takeaway constraints, part 2

Despite Northeast natural gas producers battling stiff headwinds last year — the lower rig count, sub-$1.50/MMBtu spot prices, lower demand, and price-responsive shut-ins in the shoulder periods — Northeast gas production volumes still managed to hit record highs in 2020, both for daily output as well as on an annual average basis. Regional production flows averaged 32 Bcf/d in 2020, up from 31.3 Bcf/d in 2019, and daily pipeline flow data shows volumes sustained year-on-year gains through January 2021. Today, we continue our series on the Northeast gas market fundamentals, this time with a sharper focus on production trends.