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Monday, March 22, 2021

Getting Ready To Frack? XTO HBU Bjarne Taken Off Line; Four Wells On Pad On Confidential List -- March 22, 2021

The wells on this five-well pad:

  • 18078, 834, XTO, HBU Bjarne 34X-13, Hofflund, t2/10; cum 293K 11/20; taken off line 12/20; remains off line 1/21;
  • 37766, conf, XTO, Bjarne Federal 34X-13HXE, Alkali Creek,
  • 37767, conf, XTO, HBU Bjarne Federal 34X-13D, Hofflund,
  • 37768, conf, XTO, HBU Bjarne Federal 34X-13H2, Hofflund,
  • 37769, conf, XTO, HBU Bjarne Federal 34X-13C, Hofflund,
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The Hess EN-Thompson Trust Wells In Alkali Creek

The wells:

  • 21288, 1,903, Hess, EN-Thompson Trust-154-94-1930H-1, 33-061-01837, Alkali Creek, t4/12; cum 426K 1/21; this well was off line from 11/19 to 9/20; around one full year;
  • 33014, 3,426, Hess, EN-Thompson Trust-154-94-1930H-7, 33-061-03978, Alkali Creek, t12/18; cum 401K 1/21;
  • 33015, 3,581, Hess, EN-Thompson Trust-154-94-1930H-8, 33-061-03979, Alkali Creek, t12/18; cum 387K 1/21;
  • 33016, 3,031, Hess, EN-Thompson Trust-154-94-1930H-9, 33-061-03980, Alkali Creek, t12/18; cum 310K 1/21;
  • 33017, 3,844, Hess, EN-Thompson Trust-154-94-1930H-10, 33-061-03981, Alkali Creek, t12/18; cum 406K 1/21;
  • 33018, 4,180, Hess, EN-Thompson Trust-154-94-1930H-11, 33-061-03982, Alkali Creek, t12/18; cum 423K 1/21;
  • 36351, F/A, Hess, EN-Thompson Trust-154-94-1930H-6, 33-061-04463, Alkali Creek, first production, 3/20; t--; cum 179K 1/21;
  • 36350, F/A, Hess, EN-Thompson Trust-154-94-1930H-5, 33-061-04464, Alkali Creek, first production, 3/20; t--; cum 211K 1/21;
  • 36349, F/A, Hess, EN-Thompson Trust-154-94-1930H-4, 33-061-04463, Alkali Creek, first production, 3/20; t--; cum 224K 1/21;
  • 36348, F/NC, Hess, EN-Thompson Trust-154-94-1930H-3, 33-061-04462, Alkali Creek, first production, 2/20; t--; cum 222K 1/21;
  • 36347, F/NC, Hess, EN-Thompson Trust-154-94-1930H-2, 33-061-04461, Alkali Creek, first production, 2/20; t--; cum 235K 1/21;


Other neighboring wells of interest:

  • 21288, 1903, Hess, EN-Thompson Trust-154-94-1930H-1, Alkali Creek, t4/12; cum 426K 1/21; this well was off line from 11/19 to 10/20;
  • 34941, 3,333, Hess, EN-Kulczyk-154-94-2029H-2, Alkali Creek, t8/19; cum 225K 1/21;



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Plug Power, FuelCell -- Warning Signs -- Bloomberg -- March 22, 2021

Link here. 

Banks don't like losing money.

Once shale operators started showing severe debt issues, lending became an issue. That is an oft-repeated story. 

That was also true of the battery industry a decade ago. 

Now, hydrogen and the clean energy industry could be facing the same problem. 

Good, bad, or indifferent, we all have our own worldviews. 

But it's hard to to ignore this:

Valuations are extended, with FuelCell’s enterprise value-to-sales ratio sitting at 58 for the current fiscal year. That compares with 5.9 for Apple Inc. and 13 for Tesla Inc., according to data compiled by Bloomberg. They are fairly subdued however, when compared with the 113 EV-to-sales ratio FuelCell hit in 2000 or the 187 Ballard Power Systems Inc. reached the same year, amid an early version of today’s fuel-cell exuberance.

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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Then There Were Six -- Apple Update -- March 27, 2021

LG appears to be getting out of the smartphone business.

From a June 27, 2020, posting:

From the linked article:
In January, LG announced that it was considering options for an exit from the smartphone industry, "including sale, withdrawal and downsizing." 
Though LG was once the world's third-largest smartphone maker and a sizeable competitor to Apple in the industry, the company's smartphone business has seen declining shipments and accrued losses of $4.5 billion over the past five years, leading to the need for an urgent re-evaluation of the division.

LG reportedly entered talks with Vietnam's Vingroup and automaker Volkswagen about purchasing the company's smartphone business, but negotiations did not lead to an agreement. 
Although the decision has yet to be confirmed, industry insiders report that LG is now likely to shut down its smartphone business instead of selling it.
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BR Has A New Permit In North Fork -- March 22, 2021

Active rigs:

$61.55
3/22/202103/22/202003/22/201903/22/201803/22/2017
Active Rigs1551686048

One new permit:

  • Operator: BR
  • Field: North Fork (McKenzie)
  • Comments: 
    • BR has a new Lone Beaver permit in Lone Fork oil field, in section 8-149-96, 
    • 1486' FSL and 1878' FEL

Pipeline conversion proposal, from The Williston Herald:

The corridor for a 27-mile gathering line that Bridger Pipeline Company wants to convert to a 29.4-mile transmission line lies inside an area where North Dakota Geological Survey data who 17 landslides have previously occurred. The company answered numerous questions about the potential for landslides in the area, as well as changes it has made to its spill prevention program in light of the company’s spill history. 

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Gasoline Demand -- March 22, 2021

Bottom line: at the end of the day, one can talk about gasoline demand until the cows come home, as they say. The bottom line is this: if we don't see a significant jump in gasoline demand (or, fossil fuel demand), Saudi Arabia is in deep trouble. 

Where did WTI finish today? Up slightly. Trading at $61.55. For US shale, in the sweet spot. For Saudi Arabia, not good at all. Saudi Arabia will have to double its free cash flow year-over-year in 2021 to cover it's $75-billion annual dividend. 

I can't find it now, it will show up later, but "everyone" is betting on more robust gasoline demand than ever before. Whoo-hoo! Ah, here it is. Link to Tsvetana Paraskova. 

Cyril Widdershoven has a piece on the takeaway(s) from Saudi Aramco's 2020 earnings report. That report is tracked here. Let's see if Cyril agrees: that, at the end of the day, if we don't see a significant jump in gasoline demand (or, fossil fuel demand), Saudi Arabia is in deep trouble.

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Idle Thoughts On Today's Existing Home Sales Report -- March 22, 2021

Economists and historians will sort this out twenty-five years from now. 

For now, this is what a google search provided:


 
Most recent existing home sales: there will be many explanations "why." Those explanations concern me not.

What interests me is anticipating the rest of 2021. Looking forward to 2022 is (probably) too far in the future.

Some observations with regard to the most recent existing home sales data:

  • the most recent data suggests pent-up demand, low interest rates, a ton of saved money over the past year, a highly rewarding year for investors, YOLO, FOMO
  • the rebound in existing home sales in 2009 - 2010 looked impressive at the time, but in hindsight, was quite anemic and did not last long;
  • after a second drop in late 2010 - 2011, existing home sales climbed slowly and plateaued at levels seen in 2000;
  • in other words, a pretty dismal two decades, from 2000 - 2020, interrupted by an anomalous 2004 - 2005;
  • most interesting observation in today's report: "we" failed to set a new record, that record was set in 2005 - 2006; and not only did "we" miss, we missed by a lot;

The big question:

  • although sales may continue to slump month-over-month going forward, will existing home sales drop all the way back to pre-pandemic levels?

In attempting to answer that big question:

  • are the following still in play? pent-up demand; low interest rates; a ton of saved money over the past year; a highly rewarding year of investing, YOLO, FOMO?
  • what is different, if anything, between "then" and "now"?

Answers:

  • I think so: I think pent-up demand, low interest rates and all that other stuff are still in play.

But the other question is much more important: what is different, if anything?

To answer that question, ask this question: when does an existing home sell?

  • Answer: when someone buys it.

Who buys existing homes:

  • renters moving into owned homes;
  • current home owners moving from one home, buying a "new" home -- some of those "new" homes will be existing homes: and,
  • that's pretty much it (minor: college graduates; immigrants; REITs; etc)

So, are current home owners moving from one home to another "new" home?

  • big story this year: folks fleeing California, other high-tax states to Florida, Texas, Idaho, Utha
  • big story this year: folks fleeing undesirable locations (high crime, poor schools, etc) to more desirable locations (even if staying within same state NYC to NY state; or, same region, NY state to Connecticut)

Cut to the chase: all things being equal, annualized existing home sales should continue to rise if only to reflect folks fleeing high tax states and/or fleeing undesirable locations.

Obviously it's a net zero-sum game: equal number of existing homes being sold, equal number of existing homes being bought, but the overall number of sales increasing. 

The problem, as noted in the linked article: lack of inventory. 

Whatever happens, it will be interesting to follow (it was not interesting to follow between 2004 - 2020 (at least in hindsight).

What doesn't matter is month-over-month comparisons. 

What does matter: annualized sales as reported on a monthly basis compared to the pre-pandemic level of 5.5 million or the pre-2002 level of 5.0 million.

Today's annualized numbers lower than last month (doesn't matter), much higher than pre-pandemic numbers (does matter).

The Covid-10 / Chines flu pandemic is absolutely fascinating on so many levels.

Now that we have that as background, the CNBC report:

  • closed sales of existing homes in February dropped a larger-than-expected 6.6% compared with January, according to the National Association of Realtors.
  • that put them at a seasonally adjusted, annualized rate of 6.22 million units, which was 9.1% higher compared with February 2020
  • the supply of homes for sale fell 29.5% year over year, the largest annual decline ever, to 1.03 million homes.

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Completion Strategies, 2021, Bakken 4.0

Background: we entered "Bakken 4.0" in March, 2020. At that time it was my hunch that fracking / completion strategies would change, so I started following completion strategies in 2020 and comparing them to 2018. 

Going forward: I assume the completion strategies won't change a lot from 2020 to 2021, but one never knows. A lot of operators did not drill / frack in the Bakken in 2020, so maybe we will see some changes among those that start fracking again in 2021.

********************************
Group 1
very large fracks
>11 million gallons of water
>16 million lbs of proppant


37395, Wallentinson, MRO,


***********************************
Group 1a
large fracks
large percentage water
but smaller amount of fresh water; larger amount of produced water

 


***********************************
Group 1b
large fracks
large percentage of water
no report of using produced water; only fresh water

 

 

***********************************
Group 2
moderate fracks

 

 

***********************************
Group 3
small - medium fracks

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MRO WIth Huge Frack Delivers Huge Well; Daughter Wells Not As Good As Parent Wells? Oh, Give Me A Break! -- March 22, 2021

We've talked about this well before; now it's official:

Sunday, March 21, 2021: 21 for the month, 77 for the quarter, 77 for the year.

  • 37395, AL/A/4,798, MRO, Wallentinson USA 44-8H, Reunion Bay, first production, 9/20; t9/20; cum 204K 1/21; fracked 8/27/20 - 9/10/20; big frack, 11.3 million gallons of water; 74.8% water; produced brine water, 9.9%; 16,237,613 pounds of proppant; 52 stages; we will look at halo effect later. 
  • timeline
    • surface hole 1 reached: 3/1/20, no time given
    • vertical and curve 1 reached: 3/17/20, no time given
    • lateral 1, reached, TD: 3/24/20, no time given
    • perforated 9/10/20; bottom MD, 23,480 feet
Production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213134831350441986576226739751916
BAKKEN12-20203147561476752859881463784770
BAKKEN11-20202044750444482956059480567020
BAKKEN10-20201949493508513886756516511052480
BAKKEN9-20201027585258382162232614297221069

Wells of interest:

  • 18692, Jasper USA, remains off line as of 1/21;
  • 18693, Betty Shobe, recently discussed; subtle halo effect;
  • 21630, Waltom, back on line, 5K over one month; originally drilled back in 2012; cum 430K 1/21;
  • 21631, Waljen, back on line, 4K over one month; originally drilled back in 2012; cum 472K 1/21:

Wells on three pads now producing for first time:
33945, Walcel USA ... MB,

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213146172460742424087791848672539
BAKKEN12-20203131741318682405542290403530
BAKKEN11-20202233192331792706543556414980
BAKKEN10-20202863483630355281079947730243133
BAKKEN9-20203812761112610280983

33946, Ranum USA ... MB,

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213130081300382782544427425801654
BAKKEN12-20203122387225192781028912275500
BAKKEN11-20203026173260543828133264316470
BAKKEN10-20202836216363356071339208357401330
BAKKEN9-202036379597515657892070341463

33947, Prior USA ... TFH,

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213131545317832743044844429151735
BAKKEN12-20203146834467204212864999621290
BAKKEN11-20202029395294563050839884380540
BAKKEN10-20202765439649347716871581645073211
BAKKEN9-202021591499425170508

37395, see above,

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213134831350441986576226739751916
BAKKEN12-20203147561476752859881463784770
BAKKEN11-20202044750444482956059480567020
BAKKEN10-20201949493508513886756516511052480
BAKKEN9-20201027585258382162232614297221069

Wells on three pads still confidential:

37403, Standfest USA .. MB,

DateOil RunsMCF Sold
1-20213774145726
12-20203018934745
11-20202517330871
10-20205950163257

36921, Vickall USA .. MB,

DateOil RunsMCF Sold
1-20216406099574
12-20202961839272
11-20204561556518

36922, Lang USA ... TFH,

DateOil RunsMCF Sold
1-20212648439050
12-20205548670260
11-20202653928983
10-20206360744020

37323, Oscar Thorson USA .. MB,

DateOil RunsMCF Sold
1-20214573267215
12-20205796173471
11-20206760
10-20204919443525

36919, Klemstead USA ..TFH,

DateOil RunsMCF Sold
1-20212688538136
12-20202829636816
11-20203949851019

36918, Kolbo USA .. MB,

DateOil RunsMCF Sold
1-20216571887636
12-20204387354626
11-20205410264625
10-20201694914901

37515, Pelarske USA ... MB,

DateOil RunsMCF Sold
1-20212812539890
12-20203454843312
11-20204716355128
10-20202855332402

36920, Adonijah USA... TFH,

DateOil RunsMCF Sold
1-20214775265107
12-20206632082551
11-20205958361263
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That Deer Was Wearing Glasses -- No Wonder He Called 911 -- Four Wells Coming Off Confidential List -- March 22, 2021

Existing home sales, February, 2021, link here. 

Quickly:

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

Active rigs:

$61.84
3/22/202103/22/202003/22/201903/22/201803/22/2017
Active Rigs1551686048

Four wells coming off the confidential list --

Monday, March 22, 2021: 22 for the month, 78 for the quarter, 78 for the year.

  • 36544, F/A, Zavanna, Blue Heeler 20-16 4H, Stony Creek, first production, 12/20, t--; cum 57K 1/21;

Sunday, March 21, 2021: 21 for the month, 77 for the quarter, 77 for the year.

  • 37395, AL/A, MRO, Wallentinson USA 44-8H, Reunion Bay, first production, 9/20; t--; cum 204K 1/21;
Saturday, March 20, 2021: 20 for the month, 76 for the quarter, 76 for the year.
  • 37034, F/A, Zavanna, Leopard 20-17 2TFH, Stony Creek, first production, 9/20; t--; cum 82K 1/21;
  • 34653, drl/A, Petro-Hunt, USA 153-95-3D-10-5H, Charlson, first production, 1/21, t--; cum 6K over 12 days;

RBN Energy: two or three days of really cold weather; Texas shuts down for maybe a week; and ethylene shortages from plants crippled by that unfavorable event roil petchem markets. Tell me again, we don't need fossil fuel.

It’s been over a month since the Deep Freeze swept across Texas, shutting down the power grid, curtailing natural gas supplies, and generally wreaking havoc on the state’s population and infrastructure. The petrochemical industry was hit particularly hard, with every ethylene-producing steam cracker in the state and many in nearby Louisiana forced into hard shutdowns — that is, production coming to a screeching halt with little or no preparation. The result was unit damage well beyond what typically happens with other weather-related events like hurricanes, where there is usually some ability to manage an orderly shutdown. Consequently, at least half of the industry’s capacity to produce ethylene and its by-products remains offline, a development that is ricocheting through supply chains across the economy. Today, we examine the magnitude of the damage, consider what is happening in ethylene markets — the epicenter of the turmoil — and contemplate the longer-term implications of the outages. 



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