Connecting Some Compelling Dots -- April 5, 2021

Awesome national championship game tonight -- listened to it on the radio, old school.

But there was a much bigger story here. 

Baylor was only the second Texas team in men's college basketball history to win the national championship.

Pop quiz: what Texas team was the first to win a men's national basketball championship? Hint: the 1965 - 1966 season. The losing opponent, the Kentucky Wildcats, ranked #1 in the nation.

Read this incredible story here. 

After you read that story, then read this story, happened during the same 12-month period

All of this sort of puts Covid-19 into perspective.  

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A Year Earlier

This is so good on so many levels. Link here.

Cilla Black

Notes From All Over -- Monday Afternoon Edition -- WTI Plummets -- April 5, 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. 

China coal: not sure if this ever got posted. If so, re-posting:

A lot of interesting data points. Link to the article here.

China generated 53% of the world's total coal-fired power during 2020, the only G20 nation to see a major increase in its coal-fired generation. 

The Chinese Problem: Despite China's installation of 71.7 gigawatts (GW) of wind power and 48.2 GW of solar energy last year, coupled with the Chinese government's pledge to reduce its coal dependency, the country nonetheless saw its coal-fired generation increase by 77 terawatt-hours (TWh) from its 2015 level of (sic) 44%, according to a report from the London-based energy and climate research organization Ember.

Did Phil mean to say that China's coal-fired generation has increased by almost half since 2015? If so, wow.

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Back to Oil

Oil:

• WTI: now, a 5-handle commodity; trading at $58.65; dropped almost 5%:
• Brent: down four percent today; trading at $62.28;
• how long have we been at $60; Saudi can't make it on $60;
  
• driving the market
  
• fear vs greed
• fundamentals vs emotion
• what it comes down to: Memorial Day weekend, 2021, gasoline demand, will "tell the story" 
• if the tea leaves suggest robust driving season, "Katie, bar the doors."
  

Markets: may or may not have hit new all-time records, but some great moves --

• Dow: up 1.13%; up 374 points; yes, CNBC says it's an all-time high;
  
• S&P 500: up 1.44%; up 58 points; solidly above 4,000 at 4,078;
• NASDAQ: up 1.67%; up 225 points; at 13,706

Quick look:

• UNP: up 1.48%; up $3.26; trading at $223;
• BRK-B: up 1.74%; up $4.46; trading at $263
• AAPL: up 2.36% -- who wudda thought -- up $2.90; trading at $126
• FB: despite Motley Fool saying "no" to Facebook, it hit an all-time record today;
• four major pipeline companies "held" despite drop in WTI;
• MNRL: dropped during the day; but up slightly after the market closed
• WMT: up almost 3%; up $3.81; looking forward to all that stimulus money being spent on tennis shoes;
  

Futures: after-hours, still green. FOMO, YOLO, YASNY.

Headlines: US economy unbeatable -- Texas may be even better --

• GMC Hummer EV SUV Edition 1 reservations sold out in ten minutes
• TSLA's "green tidal wave" could send stock to $1,000
• Elon Musk calls for "urgent" need to build more housing in Austin, TX

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Back to the Bakken

Pipeline, link here. This news comes even as the DAPL remains in limbo. Big headline; another little story.

From the linked article:

Bakken natural gas flows onto Northern Border Pipeline are starting to show slight declines, signaling a reverse of the ever-growing gains seen over the last few years, allowing for the possibility of more exports from Western Canada into the US Midwest this summer.

A slight dip in Bakken production opened space for Western Canada gas exports along Northern Border, but more space is expected to come in the months ahead.

Bakken Shale production began declining marginally April 1, 2021,  to 2 Bcf/d from 2.1 Bcf/d the seven days prior, according to S&P Global Platts Analytics.

Sample data for the Williston in North Dakota shows nearly identical swings, to 2.1 Bcf/d from 2.2 Bcf/d.

As a result, the basin sent less gas on Northern Border. Bakken flows on Northern Border fell to just 1.7 Bcf/d April 1 through April 4, the lowest it has been since February 19, 2020, when extreme cold caused production curtailments.

Northern Border transports gas from Western Canada and the Bakken to markets in the US Upper Midwest.

Active rigs:

$58.65	4/5/2021	04/05/2020	04/05/2019	04/05/2018	04/05/2017
Active Rigs	12	44	62	58	49

No new permits.

Three oil and gas permits renewed:

• NP Resources: three Gracie State permits, all in Billings County.

Notes From All Over -- Mid-Morning Edition -- Easter Monday -- Part 2 -- Clearing Out The In-Box -- April 5, 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. 

The cube: somewhere along the line I missed this "concept." I guess it's a "thing" in the Permian. We've been doing this for quite some time in the Bakken, perhaps for the past ten years. The "cube" popped up on twitter yesterday as if it were something new. It isn't:

• from WoodMackenzie, Permian operators cash in ... by thinking inside the box; August 21, 2019:
• from Oil & Gas Journal, Permian basin operators improve cube development well planning, October 7, 2019;
• from Energy in Depth, WSJ misses the mark in Permian "cube" analysis, July 4, 2019;
• from Hart Energy, will cube development square with producers? October 1, 2019;
• from EneryHQ: is cube development the future of shale production? undated, but appears to have been posted in August, 2018;
• for more, google; cube Permian oil

Warren Buffett, link here;

• 71% of Warren Buffett's portfolio is in five stocks:
• pop quiz: which is the fifth; here are four:
• Bank of America, $40 billion
• American Express, $22 billion
• Coca-Cola, $21 billion
• Kraft Heinz, $13 billion
• the fifth: $110 billion, fill in the blank ________________
• by the way, this "portfolio" analysis is a bit of a factoid:
• Buffett outright owns companies that have market value much in excess of the value of the portfolio holdings noted above
• in other words, he is much more diversified than this analysis would suggest;
  

Quick look:

• QCOM: up 1.6%; up over $2/share; trading at $140, well below its 52-week high;
• XLNX: flat, slightly red; profit-taking after huge day last Friday;
• AMGN: up1%; up over $2.50/share; trading at $251, well below its 52-week high;
• JNJ: up about 3/4th of a percent; up $1.50/share; trading at $164, well below its 52-week high;
• UNP:up 1.4$; up over $3/share; trading at $223.27, slightly below its 52-week high;

FAANG, link here:

• one to buy: Netflix
• one to avoid: Facebook

Pending, any day now: atmospheric CO2 data for March, 2021.

Sempra Energy, link here:

• offloads non-controlling interest in Sempra Infrastructure Partners to KKR
• summary:

• Sempra Energy entered into a definitive agreement to sell a non-controlling, 20% interest in Sempra Energy's new business platform, Sempra Infrastructure Partners, to KKR for $3.37B in cash.
• This transaction, expected to close in mid-2021, values Sempra Infrastructure Partners at ~$25.2B, including expected asset-related debt at closing of $8.37B.
• "Over the next decade, we expect the energy markets in North America to continue to grow and become increasingly integrated. Combining our resources with KKR improves our ability to capture new investment opportunities in cleaner forms of energy and the critical infrastructure that stores and transports it," SRE chairman and CEO Jeffrey W. Martin commented.
• As per agreement terms, KKR will be acquiring its indirect interest in IEnova at $4.13/share; KKR will have certain minority rights with respect to Sempra Infrastructure Partners correlated with investment size.

Update, from a reader, April 6, 2021:

A reader who follows this a lot more closely than I do provided this "head's up" regarding Sempra Energy (SRE):

I want to pass on to you an analyst's take on the recent KKR-Sempra deal involving the $3 +  bilion that KKR is giving to Sempra for partial ownership of Sempra's LNG infrastructure.

Sempra is poised to announce - supposedly by the end of June  - an expansion of its Cameron facility from 12 to 25 million tonnes per year. (That is a lot). 

The funds to help in the buildout will partially come from KKR.

Any of the brownfield/expansion projects from existing US LNG plants are apt to be exceptionally profitable as so much of the existing infrastructure is already in place. This includes shipping berths, feed pipelines, onsite power plants, storage tanks, etc.

From a more macro view, the production costs of natgas  from US shale plays - whether associated like in the Bakken, Permian, at al, or dry gas plays like the Marcellus and Haynesville - have become so low as to continue to crowd out potential global competitors.

(Argentina, despite having amongst the largest shale gas resources on the planet, is embarking upon its second round of bidding to IMPORT more LNG this winter ... much of which will come from the US).

Notes From All Over -- Mid-Morning -- Easter Monday -- April 5, 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. 

Twelve active rigs in the Bakken today:

The operators:

• MRO: Denny, Saxvik, Bowman USA,
• CLR: Gordon Federal, Gale, Carus,
• WPX: Charles Blackhawk,
• Hess: EN-Rice, BL-Frisinger
• Whiting: Lacey
• Petro-Hunt: Hurinenko
• Crescent Point Energy: CPEUSC Burgess

COP: from SeekingAlpha (remember, most contributions are available without subscription when first released but then require a subscription later on to access). COP with new focus on shareholder returns.

Blackrock and ESG: interview with former company's sustainability chief, Forbes. Recipe for failures.

CEO pay cuts: as fossil energy companies pivot to renewable energy -- Rigzone --

• Total CEO: pay dropped by 36.4%:
• lowest figure in his tenure as CEO
• Royal Dutch Shell CEO: pay dropped by almost 50% -- that would be half -- last year
• went from $12 million to $7 million. Crocodile tears.
• Dak Prescott: $160 million over four years

Apple news:

• LG calls it quits on smartphones, WSJ, previously posted but now a headline story in the WSJ;
• tea leaves -- AAPL to announce dividend raise of 5 to 7% later this month
• Auto sales blowout quarter, ZeroHedge; previously posted but another look;
• pent-up demand;
• shortage of available models due to semiconductor shortage

Flashback: Saudi's ill-timed surge in oil exports one year ago --

• WorldOil, March 31, 2020; clear sign that the price war was in full swing;
• KSA had loaded several of the supertankers it leased earlier that month to boost its ability to increase exports;
• KSA has been shuttling large amounts of crude oil into storage in Egypt, a stepping stone to the European market;
• goal: supply a record 12.3 million bbls/day, up from 9.7 million b/d in February, 2020
• decision made after Russia failed to sign on to additional cuts in production;
• decision made in early days of lockdown, suggesting Riyadh mis-calculated extent of global impact of Covid-19
• from PeakOilBarrel: graphic pending

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A Very, Very Small Rack of Lamb

We are still settling into our new apartment -- whoo-hoo -- I've never done a rack of lamb, for a variety of reasons, always lamb chops, but eager to try to something new -- and turned out "perfect." Even though it was a very, very small rack, we had one rib left over. I think a rack of lamb is easier than lamb chops and much more delicious, although that could be due to less trimming of the fat on the rack than I do on the lamb chops. Photos (ignore the messy kitchen; as noted, we are still moving in):

Meanwhile a reader sent photos of an incredible leg of lamb done on his Weber, for party of 14 people or so:

About an hour later.

Indirect.

Direct.

How to butterfly and prepare a leg of lamb. Butterflying the leg of lamb is critical to an even thickness of the meat and uniform grilling.

My understanding is that this reader has a fairly impressive outdoor kitchen / grilling set-up, but both of us enjoy seeing how absolutely versatile a simple Weber is.

Happy Birthday To The Williston Oil Basin -- April 5, 2021

Happy birthday to the Williston Basin. Seventy years old today. 

Link here. The Williston Herald looks back at 70 years of oil in North Dakota.

In April 1951, the North Dakota landscape changed forever with the discovery of oil. We look back at the discovery through the Herald archive and other sources.

From The Herald, seventy years ago. I would be born some four months later, in a North Dakota city other than Williston, but then moved to Williston two years later.

Three Wells Coming Off Confidential List But No Production Data; Equity Markets Surging -- April 5, 2020

Markets: surging.

Oil: down

• WTI: could drop below $60 today; trading at $60.03
• OPEC basket: $63.07, link here; Saudi can't "make it" on 6-handle oil;

Quick look:

• OKE: down almost 1% at $51
• ENB: down about half a percent, at $36.68
• EPD: down slightly; at $22.25

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Back to the Bakken

Active rigs:

$60.03	4/5/2021	04/05/2020	04/05/2019	04/05/2018	04/05/2017
Active Rigs	12	44	62	58	49

Three wells coming off confidential list:

Monday, April 5, 2021: 2 for the month, 2 for the quarter, 83 for the year:

• None.
  

Sunday, April 4, 2021: 2 for the month, 2 for the quarter, 83 for the year:

• 37591, drl/NC, Slawson, Loon Federal 2-24-25H, Big Bend, no production data,

Saturday, April 3, 2021: 1 for the month, 1 for the quarter, 82 for the year:

• 37592, drl/NC, Slawson, Loon Federal 5-24-25TFH, Big Bend, no production data,
• 36247, drl/NC, BR, Stortroen 2C TFH, Dimmick Lake, no production data,

RBN Energy: US LNG feedgas demand surges as export capacity additions continue. 

If there’s one word that sums up the U.S. LNG export market over the past year, it’s resilience. After taking a pummeling last year, feedgas demand and exports have roared back, reaching new heights in recent weeks, and are headed still higher in the coming months as new liquefaction capacity is commissioned at a faster pace than expected. Train 3 at Cheniere Energy’s Corpus Christi LNG facility came online on March 26, increasing U.S. LNG export capacity to 75 MMtpa (~9.9 Bcf/d), which equates to a total feedgas demand of nearly 11 Bcf/d. Two more export projects — 18 modular trains at Venture Global’s new Calcasieu Pass facility and the sixth train at Cheniere’s existing Sabine Pass — are on track to ship their first commissioning cargoes later this year, ahead of their originally proposed construction schedules, and will be fully operational in 2022. This is quite a different picture from last year, when nothing but uncertainty loomed on the horizon in a COVID-hit world and progress for just about every project was in jeopardy. Today, we start a short series providing an update on the status of operational and under-construction export capacity and where LNG feedgas demand is headed this year.