Hydrogen -- Carbon-Free, Incredibly Safe, And Almost Free -- Just The Cost Of Water -- February 4, 2021

A reader with a life-long career in energy writes:

Hydrogen that is reformed from natural gas is not a carbon-neutral system. The CO2 is released as the hydrogen is being produced. Using natural gas to fuel an engine is much more efficient. Most engines, diesel or gas can easily use natural gas for fuel. Just another illustration of industry taking the long , expensive way .  Hydrogen is the most reactive and dangerous gas. I guess they forgot about the Hindenburg. I would not park a hydrogen-fueled car in my garage. 

That reminded me of a recent essay by RBN Energy.

From RBN Energy, November 15, 2020:

Back to the key question we want to answer today: why does anyone care about hydrogen at all? Well, the primary answer to that question is pretty simple: the molecule is packed with energy. Another nice feature is that when you unlock that energy, and there are various ways to do just that, the principal by-product is water. Importantly, there is no carbon produced. 

There are clearly those that find this feature appealing — a growing list of countries has set ambitious carbon reduction goals over the next few decades. Also, hydrogen production methods abound, and for some of the greener processes the principal ingredients are just water and electricity. Others involve hydrocarbons, but we are getting ahead of ourselves. We were talking about hydrogen’s energy content.

A: apparently the wind farms and solar farms magically appear, requiring no manufacturing at the site or transport of the turbines and the solar panels. Apparently, manufacturers of solar panels have found a way to manufacture solar panels without the need for rare earth metals.

B: apparently the water just magically shows up at the site of electrolysis. No need to transport water thousands of miles through pipelines to where electrolysis occurs. It's just magical, as Steve Jobs would say. The water just shows up.

C: apparently the electricity, like the water, just magically shows up at the site of electrolysis. No need for unsightly transmission lines. 

D: why wouldn't it be smarter to just send all that electricity generated at "A" directly to where it's needed, location"D"? Why would one use all the electricity for electrolysis to generate hydrogen when that same electricity could simply be sent directly to those who need it? It seems like a lot of unnecessary work to put "hydrolysis" directly between the production of election and the reason the electricity is being produced in the first place, to be used by EVs, homes, industry.

There's a small risk of 110V and 220V electricity -- shorts, fires, electrocution -- but nothing compared to why hydrogen can do. Can you imagine a tank of hydrogen in your garage? LOL.Early on, no problem. Brand new, pristine tanks with brand new valves and pipes. But over time, folks have a tendency to let things get old and natural wear and tear and inadequate maintenance results in hydrogen being stored in substandard conditions.

One has to laugh. All those folks who were concerned about highly flammable Bakken oil have no problem with the most flammable molecule of all. LOL.

Semiconductor Chip Shortage -- Ford Forced To Curtail F-150 Production -- February 4, 2021

Link here. 

The semiconductor chip shortage is being tracked here. 

Today we have this:

State Jobs Losses / Created -- December, 2020 -- State-By-State Comparison -- December, 2020

Link here.  

Enerplus With Permits For Two More Wells On Its Whale Pad -- February 4, 2021

Just how slowly does the bureaucracy move: here we are in a pandemic; JNJ has filed for emergency authorization; a one-dose vaccine; but it takes the FDA advisory committee two weeks to schedule a meeting; okay. 

JNJ: moving after hours; up 2% after hours.

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. 

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Back to the Bakken

Active rigs:

$56.23	2/4/2021	02/04/2020	02/04/2019	02/04/2018	02/04/2017
Active Rigs	14	54	63	58	40

Two new permits, #38115 - #38116, inclusive:

• Operator: Enerplus
• Field: McGregory Buttes (Dunn County); Mandaree (Dunn County)
  
• Comments:
• Enerplus has permits for two more wells on their "whale" pad:
• 38115, loc, Enerplus, Fin 148-93-05A-06H-LL, Mandaree, in SENE 5-148-93; 2135 FNL 291 FEL; section 34, E/2 of section 33, W/2 section 35 - 149-93 and sections 5/6-148-93; 2560-acre spacing;
  
• 38116, loc, Enerplus, Right 148-93-05D-06H-LL, McGregory Buttes, in NESE 5-148-93; 2506 FSL 291 FEL; sections 5, 6, 7, & 8 -148-93; 2560-acre spacing;
  

The Enerplus "Whale" pad is tracked here. 

Operator change: based on well names and the confirmed in the sundry form, approx 19 wells were transferred from Crescent Point Energy to Resource Energy Can-Am. Ten wells transferred today were CPEUSC Aldag wells; they are now simply Aldag wells, located in West Ambrose oil field, Divide County, North Dakota.

Six permits renewed:

• Petro Harvester (5): four FLX permits and one PTL permit, all in Burke County;
• Equinor: a permit for an A Tufto well in Williams County;

The Enerplus Whale Pad

Permits for nine "Whale" pad wells.

Baleen:

• Fin
• Right
• Sei
• Omura (very similar to the Brydes)
• Brydes
• Blue

Toothed:

• Orca
• Narwhal

Two new permits, #38115 - #38116, inclusive (from February 4, 2021) --

• Operator: Enerplus
• Field: McGregory Buttes; Mandaree
• Comments:
• Enerplus has permits for two more wells on their "whale" pad:
• 38115, loc, Enerplus, Fin 148-93-05A-06H-LL, Mandaree, in SENE 5-148-93; 2135 FNL 291 FEL:
• 38116, loc, Enerplus, Right 148-93-05D-06H-LL, McGregory Buttes, in NESE 5-148-93; 2506 FSL 291 FEL:

Seven new permits, #38091 - #38097, inclusive (from January 27, 2021) --

• Operator: Enerplus
• Field: McGregory Buttes (on the reservation)
  
• Comments: Enerplus has for seven whale pad wells in SENE/NESE 5-148-93,
• 38091: Orca, SENE 5-148-93, 2170 FNL 291 FEL, Three Forks, B1;
  
• 38092: Baleen, SENE 5-148-93, 2205 FNL 291 FEL, middle Bakken,
  
• 38093: Sei, SENE 5-148-93, 2240 FNL 291 FEL, middle Bakken,
• 38094: Omura, SENE 5-148-93, 2275 FNL 291 FEL, Three Forks, B1;
• 38095: Blue, NESE 5-148-93, 2611 FSL 291 FEL, middle Bakken,
• 38096: Brydes, NESE 5-148-93, 2576 FSL 291 FEL, Three Forks, B1;
• 38097: Narwhal, NESE 5-148-93, 2541 FSL 291 FEL, middle Bakken,

All horizontals will be running from the east to the west, on 1280-acre spacing.

Note: in a long note like this there will be content and typographical errors. In addition, I often misread file reports. If this information is important to you go to the source.

If that is accurate, there are two wells of interest, both running west to east in the same drilling unit:

• 21751, 770, Enerplus, Humpback 148-93-06B-05-4H TF, McGregory Buttes, t8/12; cum 248K 12/20;
• 21752, 656, Enerplus, Beluga 148-93-06B-05-3H, McGregory Buttes, t2/13; cum 233K 12/20;

The graphic:

Notes From All Over -- Mid-Morning Edition -- February 4, 2021

A bit of housekeeping: I can't recall if I posted the note that the Devon-WPX merger was finalized January 7, 2021. If not, here it is. 

Is the economy back? Is the "risk-off" trade back? Of the nine companies announcing dividends today, five of them are raising their dividends. Link here. 

PGA: live on NBC Golf.  Leaderboard here. I was wrong. I thought Tiger Woods was playing. Nope. I was also wrong about Patrick Reed. Both Reed and Phil Mickelson skipped the Waste Management tournament to play in the Saudi International. Maybe I won't be watching as much of the Phoenix tournament as I had planned. 

Saudi International: leaderboard here. It must be an incredibly easy course. The leader at 61 strokes in first round, -9. Mickelson, -2, at 68. Patrick Reed, -1, at 69. Must be the jet lag.

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Sophia At Dental Office

Pediatric clinic, state of the art.

Plays Netflix children's movies on ceiling. Sophia watches the movies through her "blue light" glasses.

And look at those long, long, rock-climbing legs. 

ISO New England Burning Both Oil And Coal This Morning -- February 4, 2021

But within five years, it will be all renewable energy. LOL. 

Link here. 

Get Up! Love's Truck Stops (Noun, Not Verb) Adding EV Charging Stations -- February 4, 2021

See below: link here.

First things first: the "Michelob weekend" is here!

• PGA: first round of Waste Management begins today;
• it will be all about Tiger Woods, Rory McIlroy, and Patrick Reed
• Tiger Woods will get out to fast start, fade
• Super Bowl: one day closer

Covid-19 tracker here: Link at WSJ. Number of cases dropping like a rock now that Christmas surge is more than a month behind us. States leading the list for weekly new cases:

• Florida
• Texas, #2 -- it took a long time, but Texas is finally near the top of the list
• South Carolina
• Arizona
• New York
• Oklahoma

New York: for all the whining about how they're running out of vaccine, New York has used only 62% of their supply; North Dakota leads the nation at 85%. West Virginia ties North Dakota in today's report but lagged slightly behind ND yesterday.

Minimum wage:

• Long Beach, CA, mandated grocery stores with more than 300 employees pay their workers $4/hour additional pay as "heroes" during pandemic
• Kroger: closed two stores in Long Beach, CA; says they won't pay the additional $4/hour

Speaks volumes:  Shell posts 87% earnings drop but raises dividend

Royal Dutch Shell raised its dividend despite reporting a plunge in annual earnings to the lowest in at least 15 years, as the oil industry reels from the effects of the pandemic. The company’s 2020 net income adjusted for one-off factors and cost of supply — Shell’s preferred profit measure and the one tracked most closely by analysts — fell 71 per cent to $4.8bn, from $16.5bn in 2019. That is the lowest since the company’s creation in 2005 through the unification of Royal Dutch and Shell Transport. The Anglo-Dutch oil major reported an annual loss of $21.7bn, a number that reflected a hefty post-tax impairment figure as Shell reassessed long-term energy prices and asset values in light of the coronavirus crisis and its strategy for the energy transition. That was the company’s first-ever headline loss and one of the biggest in the UK’s recent corporate history.

Even though cash flow fell 40 per cent against a year earlier and net debt rose to $75.4bn from the prior three months, Shell decided to raise its dividend for a second time in recent months. A dramatic two-thirds cut to the payout last April to 16 cents, the first since the second world war, was met with shareholder ire and the company’s share price dropped to a multi-decade low later in the year. As Shell sought to woo back investors, it raised the payout to 16.65 cents in October and has said it will again raise the dividend by 4 per cent to 17.35 cents a share in the first quarter of 2021.

I was one of those shareholders. Sold my Shell as soon as the dividend was cut last April, 2020. Dividend still pales to what it was.

***************************************
EV Trucks

I just sent a note to a reader: once I start seeing truck stops put in charging stations for E-trucks I'll start to believe the story. 

First things first: Love's Truck Stops ARE ADDING EV charging stations. Love's Truck Stops are not stopping in their initiative to add charging stations!

I guess it's time to start believing the story.

Recent news: almost none.

• knowledge gaps seen as barrier to vehicle electrification, RTO Insider; January 27, 2021;
• New York Thruway: has 39 electric vehicle charging stations at 23 locations; goal: 100 fast-charging electric vehicle stations with an average of 30 miles between each location (this sounds like charging for cars, not trucks); 100 charging stations is a drop in the bucket for what will be needed
  

Other EV news: Porsche Taycan can't stop smashing records; CarBuzz --

Porsche is no stranger to setting new records with the Taycan. In 2019, the electric sports car was crowned the fastest four-door electric car at the Nurburgring with a time of seven minutes and 42 seconds. More recently, the Taycan performed the world's longest drift, sustaining a slide for 55 minutes. And now Porsche can add another 13 new records to its long list of achievements. 

Last December, Porsche brought a Taycan 4S and a Turbo S to the Brands Hatch racing circuit in the UK, setting 13 separate records. Behind the wheel of the electric sports cars were Le Mans legend Richard Attwood, former F1 and Porsche racer Jonathan Palmer, 2020 Porsche Carrera Cup GB champion Harry King and 2020 Cayman Islands Porsche Sprint Challenge GB champion James Dorlin. 

Hydrogen? Link here. 

WTI Breaks Through $56; One Well Coming Off Confidential List -- February 4, 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. 

Overnight:

• WTI: $56.02
  
• 10-Year Treasury: link here. 
• DXY: link here.
  
• Silver: link  here. 
• CBOE volatility index: link here.
• unemployment claims: drop unexpectedly
  

Enough energy? Yes. Enough renewable energy? No, not by a long shot.

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

Active rigs:

$56.02	2/4/2021	02/04/2020	02/04/2019	02/04/2018	02/04/2017
Active Rigs	14	54	63	58	40

One well coming off the confidential list -- Thursday, February 4, 2021: 4 for the month, 37 for the quarter, 37 for the year. After this, no more wells coming off confidential list until next Monday.

• 37200, A, Hess, TI-Bokn-158-94-1720H-1, Tioga, first production, 8/20; t--; cum 73K 12/20;

 RBN Energy: what a ban on federal lands could mean for the Permian. Archived.

It’s never easy in the commodity world, and despite oil prices comfortably above $50/bbl across the Permian, a new worry has come to the fore as we start the second month of 2021. No, it’s not a Reddit movement focused on the oil market, not even an OPEC+ action this time. The latest news that has wildcatters muttering through clenched teeth came from Washington D.C., where the Biden administration recently announced a pause on leasing federal lands for oil and gas development. While it’s far too early to discern what this decree — or future actions — will mean for the Permian, we get the sense that the headlines aren’t capturing the nuances of drilling activity in West Texas and southeastern New Mexico. In our view, at its worst, a long-term ban on drilling on federal lands would produce some clear winners and losers, while the near-term impact is potentially just a ripple in the ocean. Today, we examine what the latest drilling data from the Permian tell us about the possible outcomes of the new administration’s recent actions.

There is one thing we want to make clear before we get started today: this is not a blog about politics. That’s not what we do at RBN. However, we don’t stick our head in the sand either, when regulatory changes come along that may significantly impact the oil and gas sector. We get particularly interested when those changes might affect one of our core focus areas, namely the Permian Basin. So here are the facts as we know them regarding the recent orders. On January 27, President Biden signed an Executive Order (EO) that paused leasing of federal lands pending a review of oil and gas permitting and leasing practices. The EO followed a Secretarial Order (SO) issued by the Department of Interior (DOI) on January 20 that established a 60-day window during which some processes, including permitting, can no longer be delegated to lower-ranking officials for approval. As we see it, the SO is potentially more restrictive than the EO, though there is no outright ban on activity as leadership at DOI can still approve items previously delegated to their subordinates. In fact, it was reported last week that 70 permits had already hit a snag in the new process and will have to be resubmitted. That makes for a good headline, though the DOI reiterated last week that it was still approving permits. That said, it is really the potential impact here that gets some folks in the Permian worried.

What if the federal government makes these temporary orders more permanent? What would that mean for the Permian Basin? We give it our best shot at assessing the potential impact today, though many unknowns remain.

Notes From All Over -- The Midnight Edition -- February 4, 2021

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Super Bowl

This is purely cool ... or simply coincidental. Probably the latter, although my wife would humor me by telling me I'm always "in the know." LOL. 

About ten days ago I was in my Miley Cyrus phase. I never cared for her and never listened to her on purpose, but somehow the dots I was following ten days ago led me to Miley Cyrus. Oh, that's right, I was looking for Melanie and "Look What They've Done To My Song" and stumbled upon Miley. 

So, anyway, about ten days ago I was in my Miley Cyrus stage which lasted about 48 hours and I moved on. Tonight I see that CBS, hosting this Sunday's Super Bowl LV, is headlining ... Miley Cyrus. 

Are you kidding me? If we see the young and wild Miley Cyrus the show will be rated PG-13 or worse and half the audience will be hoping for a wardrobe malfunction (LOL). 

But maybe a more mature rock-and-roller will show up. 

*********************************
Orange Blossom Special
Not Sorry

James Last And His Orchestra

NOG In The News -- February 3, 2021

Four links:

• NOG announces pricing of senior notes: $550 million of new 8.125% senior notes due 2028;
  
• NOG announces "transformational" acquisition in the Marcellus shale:
• seller: Reliance Marcellus, LLC
• complements NOG's existing 183,000 Williston and Permian net acres with 64,000 net acres in Appalachia;
• purchase price of $175 million
• back-of-the-envelope: $175 million / 64,000 net acres = $2,700 / acre
• EQT: the largest and one of the lowest cost natural gas producers in the US will operate 95% of the assets after its recent acquisition of Chevron's Appalachian properties
• much more at the link
• NOG announces public offering of common stock:
• 12.5 million shares with option up to an additional 1.875 million shares
• prices them at $9.75 / share;  $120 million - $140 million;
  
• NOG announces proposed aggregate $500 million private offering of senior notes:
• offer in a private placement, $500 million in senior notes
• to use cash raised to fund a portion of the cash purchase of non-operatednatural gas assets in the Appalachian Basin from Reliance Marcellus LLC, and other borrowings;

Note: there will be content and typographical errors in this note, and items are greatly abbreviated for my interest only. If this is important to you, go to the source.

NOG is tracked here. 

Subject to change:

Earnings announcement (estimated/not yet announced) for NOG: Mar 11, 2021.

 

According to Zacks Investment Research, based on 5 analysts' forecasts, the consensus EPS forecast for the quarter is $0.64. The reported EPS for the same quarter last year was $0.5.

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.