Week 19: May 9, 2021 -- May 15, 2021

Because of high school and college graduations, as well as out-of-town guests, I may not get "top stories of the week" completed this weekend. And blogging in general may be less than usual. 

Top story of the week:

• Joe Biden is still president.
• Colonial Pipeline shutdown by hackers;
• ADM to build North Dakota's first-ever dedicated soybean crushing plant and refinery;

Top international non-energy story:

• Israel and Hamas go at it again, on Israel's 73rd birthday.

Top international energy story:

• Pemex racking up millions of dollars in late payments to oil companies;

Top national non-energy story:

Top national energy story:

• Colonial Pipeline shut down;
• Merger: Bonanza Creek Energy / Extraction Oil & Gas;

Top North Dakota non-energy story:
ADM to build North Dakota's first-ever dedicated soybean crushing plant and refinery;

Top North Dakota energy story:

• North Dakota crude oil production back over 1.1 million bopd;
• month-over-month: crude oil production up about 2.3%;
• rig count up 20% year-over-year;
  

Geoff Simon's top North Dakota energy stories:

• Quick connects;

Operators:

• Hess with permits for two more Manitou oil field permits;
• Hess: one of the few operators reporting "actual" IPs on time; and, here;

Operations:

• The MRO Wolf-Fox pad wells appear to have been drilled to depth, not completed;
• Is Zavanna bringing the Stony Creek Shepard wells back on line?
• The MRO Got pad in Bailey oil field updated;
• A closer look at three CLR Simmental Federal DUCs reported last week;

Wells:

• A CLR Sakakawea Federal well goes over 500K bbls crude oil in two years;
• A closer look at the monster well Petro-Hunt is bringing back on line;
• A decade-old Petro-Hunt well in the Charlson taken off line; was trending toward 1.75 million bbls crude oil;

Fracking:

• Innovations in the oil patch;

Proppants:

• Nanoproppants;

Pipelines:

Natural gas: 

Bakken economy:

• Waltons buy 2,000-acre ranch in southwestern North Dakota;

Hess With Two new Manitou Oil Field Permits; Nine Permits Renewed; Two Permits Canceled -- May 14, 2021

Active rigs:

$655.37	5/14/2021	05/14/2020	05/14/2019	05/14/2018	05/14/2017
Active Rigs	18	15	65	60	51

Two new permits, #38309 - #38310, inclusive:

• Operator: Hess
• Field: Manitou (Mountrail)
• Comments:
• Hess has permits for two more wells in Manitou oil field (more on this later):
• both sited in SWSW 33-156-94;
• 38309, EN-Hegland-156-94-3229-H-3, 1300' FSL and 435' FWL;
• 38310, EN-Zunich-156-94-3328-H-9, 1300' FSL and 468' FWL;

Two permits canceled:

• EOG: a Clarks Creek permit in McKenzie County;
• MRO: a Little Swallow permit in Dunn County;

Nine permits renewed:

• BR (4): four Gladstone permits, in McKenzie County
• Petro-Hunt (3):  aJorgenson permit and two Johnson permits, all in Mountrail County;
• Rimrock Oil & Gas (2): two Skunk Creek permits in Dunn County;

Director's Cut -- March, 2021, Data -- Posted

Updates

Later, 11:04 p.m. CT: from Geoff Simon's top ND energy stories -- 

Following what was mainly a winter-related drop in February, North Dakota oil production climbed back over 1.1 million barrels a day in March.

Lynn Helms, director of the Department of Mineral Resources, said March production increased an average of about 25,000 barrels a day, coming in at 1,108,441 bbl/day. Helms said completion activity was buoyed by much-improved oil prices, which he said are currently averaging about 12 percent above the legislature's revenue forecast.

Original Post

Director's Cut: posted, link here. The Director's Cuts are tracked here.

The usual disclaimer applies: in a long note like this, done quickly, there will be content and typographical errors. If this is important to you, go to the source.  

March, 2021, data. This is all preliminary data for March, 2021. When the final number is tallied (next month), it will reveal a slight increase in production month-over-month):

Crude price (ND light sweet):

• today: $57.00
• April, 2021: $55.35
  
• March, 2021: $54.38
  
• February, 2021: $49.13
  
• January, 2021: $41.77
• December, 2020: $37.70
• November, 2020: 33.22

Crude oil production:

• March, 2021: 1,108,441 (preliminary)
  
• February, 2021: 1,083,554 bopd (final)
  
• January, 2021: 1,147,374 (preliminary); 1,147,377 (final)
  
• December: 1,192,145 (preliminary); 1,191,429 bopd (final)
  
• November: 1,224,540 (preliminary); 1,227,138 bopd (final)
  
• October: 1,222,871 bopd (preliminary); 1,231,048 bopd (final)
  
• delta: +24,887 bopd
  
• delta:+2.3%

Natural gas production:

• March, 2021: 2,878,598, (preliminary)
  
• February, 2021: 2,703,948 MCF (preliminary); 2,704,840 MCF / day (final)
  
• January, 2021: 2,847,719 MCF (preliminary); 2,849,283 MCF / day (final)
  
• December: 2,892,908 (preliminary); 2,888,626 MCF / day (final)
  
• November: 2,887,402 (preliminary); 2,890,376 MCF/day (final)
  
• October: 2,873,654 MCF/day (preliminary); 2,881,717 (final)
• delta: -145,335 MCF / day (-24,218 boepd)
  
• delta: -5.1%
  

Natural gas capture:

• March, 2021:  94%
  
• February, 2021: 92%
  
• January, 2021: 94%
• December, 94%
• November, 93%
• October, 93%

Rig count:

• today: 18 (no SWD or CS rigs)
• April, 2021: 17
  
• March, 2021: 15
  
• February, 2021: 15 (but may include CS and SWD)
• January: 12 (but may include CS and SWD)
• December: 14 (but may include CS and SWD)
• October: 14 (ditto)

Wells

April:

• drilling: 15
• completed: 31 (preliminary)

March:

• drilling: 55
• completed: 43 (revised)
• inactive: 2,351
• DUCs: 628
• total off line for operational reasons: 2,979
• producing: 16,207 (preliminary)

February:

• drilling: 72
• completed: 32 (final)
• inactive: 2,568
• DUCs: 662
• total off line for operational reasons: 3,230
  
• producing: 15,778

January:

• permitted: 66
• completed: 59 (revised)
• inactive: 2,597
• DUCs: 661
• total off line for operational reasons: 3,258
• producing: 15,861 (revised)
  

December, 2020:

• permitted: 66
• completed: 44 (final)
  
• inactive: 2,687
• DUCs: 668
  
• total off line for operational reasons: 3,355
  
• producing: 15,798 (preliminary)

November, 2020:

• permitted: 52
• completed: 44 (preliminary
• inactive: 2,870
• DUCs: 710
• total off line for operational reasons: 3,580 
• producing: 15,601 (preliminary)

October, 2020:

• permitted: 74
• completed: 59 (preliminary); 74 (revised)
  
• inactive: 2,934
• DUCs: 724
• total off line for operational reasons: 3,658
• producing: 15,512 (preliminary); 15,524 (final)

**************************************
Wells
Inactive Wells and DUCs Tracked Here

a

Director's Cut -- March, 2021, Data Posted

Director's Cut: posted, link here. The Director's Cuts are tracked here.

The usual disclaimer applies: in a long note like this, done quickly, there will be content and typographical errors. If this is important to you, go to the source.  

March, 2021, data. This is all preliminary data for January, 2021. When the final number is tallied (next month), it will reveal a slight increase in production month-over-month):

Crude price (ND light sweet):

• today: $57.00
• April, 2021: $55.35
  
• March, 2021: $54.38
  
• February, 2021: $49.13
  
• January, 2021: $41.77
• December, 2020: $37.70
• November, 2020: 33.22

Crude oil production:

• March, 2021: 1,108,441 (preliminary)
  
• February, 2021: 1,083,554 bopd (final)
  
• January, 2021: 1,147,374 (preliminary); 1,147,377 (final)
  
• December: 1,192,145 (preliminary); 1,191,429 bopd (final)
  
• November: 1,224,540 (preliminary); 1,227,138 bopd (final)
  
• October: 1,222,871 bopd (preliminary); 1,231,048 bopd (final)
  
• delta: 
• delta:

Natural gas production:

• March, 2021: 2,878,598, (preliminary)
  
• February, 2021: 2,703,948 MCF (preliminary); 2,704,840 MCF / day (final)
  
• January, 2021: 2,847,719 MCF (preliminary); 2,849,283 MCF / day (final)
  
• December: 2,892,908 (preliminary); 2,888,626 MCF / day (final)
  
• November: 2,887,402 (preliminary); 2,890,376 MCF/day (final)
  
• October: 2,873,654 MCF/day (preliminary); 2,881,717 (final)
• delta: -145,335 MCF / day (-24,218 boepd)
  
• delta: -5.1%
  

Natural gas capture:

• March, 2021:  94%
  
• February, 2021: 92%
  
• January, 2021: 94%
• December, 94%
• November, 93%
• October, 93%

Rig count:

• today: 18 (no SWD or CS rigs)
• April, 2021: 17
  
• March, 2021: 15
  
• February, 2021: 15 (but may include CS and SWD)
• January: 12 (but may include CS and SWD)
• December: 14 (but may include CS and SWD)
• October: 14 (ditto)

Wells

April:

• drilling: 15
• completed: 31 (preliminary)

March:

• drilling: 55
• completed: 43 (revised)
• inactive: 2,351
• DUCs: 628
•  total off line for operational reasons: 2,979
• producing: 16,207 (preliminary)

February:

• drilling: 72
• completed: 32 (final)
• inactive: 2,568
• DUCs: 662
• total off line for operational reasons: 3,230
  
• producing: 15,778

January:

• permitted: 66
• completed: 59 (revised)
• inactive: 2,597
• DUCs: 661
• total off line for operational reasons: 3,258
• producing: 15,861 (revised)
  

December, 2020:

• permitted: 66
• completed: 44 (final)
  
• inactive: 2,687
• DUCs: 668
  
• total off line for operational reasons: 3,355
  
• producing: 15,798 (preliminary)

November, 2020:

• permitted: 52
• completed: 44 (preliminary
• inactive: 2,870
• DUCs: 710
• total off line for operational reasons: 3,580 
• producing: 15,601 (preliminary)

October, 2020:

• permitted: 74
• completed: 59 (preliminary); 74 (revised)
  
• inactive: 2,934
• DUCs: 724
• total off line for operational reasons: 3,658
• producing: 15,512 (preliminary); 15,524 (final)

**************************************
Wells
Inactive Wells and DUCs Tracked Here

a

"Vaccine Hesitancy" -- Today's Data Lowest Friday Count In Ten Weeks -- May 14, 2021

CDC data here. 

Today's "Friday vaccine" report: 1.842 million doses administered.

We have to go all the way back to February 19, 2021, to see such a "low" count, over ten weeks ago.

Note that the capacity for vaccine administration trends toward 4.0 million doses on a "Friday" but today's number, 1.842 million is 53% of the maximum seen on April 16. 

It was April 13 that the government took th JNJ vaccine off the market for safety issues and then four days later deemed it safe enough to go back on the market but waited until April 23, 2021, at close of business on a Friday to make the announcement that the JNJ vaccine was safe "enough"to be brought back to the market. 

One would think that human nature being what it is, now that the CDC has given the "all clear" sign, folks may not seen the need for vaccination, misinterpreting the CDC decision. However, as colleges (and maybe public schools) require vaccinations before students return to school, the numbers will increase. It will be fascinating to watch. If it's the latter, we might not see the "school-mandate effect" until later this summer.

		Doses of vaccine distributed to health facilities	Change from day before	Vaccinations given	Change from day before	Percent of distributed vaccine that is actually administered
Friday	May 14, 2021	341,865,945	2,700,500	268,438,666	1,842,180	78.52%
Friday	May 7, 2021	327,124,625	2,514,440	254,779,333	2,805,581	77.88%
Friday	April 30, 2021	308,774,155	3,295,660	240,159,677	2,799,184	77.78%
Friday	April 23, 2021	286,095,185	3,911,270	222,322,230	3,374,587	77.71%
Friday	April 16, 2021	258,502,815	3,102,150	202,282,293	3,965,253	78.25%
Friady	April 9, 2021	233,591,955	4,193,270	178,837,781	3,958,065	76.56%
Friday	March 26, 2021	177,501,775	3,976,440	136,684,688	3,379,393	77.00%
Friday	March 19, 2021	154,199,235	3,090,790	118,313,818	2,583,810	76.73%
Friday	March 12, 2021	133,337,525	2,206,055	101,128,005	2,924,112	75.84%
Friday	March 5, 2021	114,133,115	4,227,585	85,008,094	2,435,246	74.48%
Friday	February 19, 2021	78,152,495	2,864,685	59,585,043	1,651,608	76.24%
Friday	February 12, 2021	69,014,725	729,150	48,410,558	2,020,288	70.15%

Apparently Hamas Is Simply Celebrating A Birthday -- May 14, 2021

On May 14, 1948, 73 years ago, Israel became an independent nation. They were immediately attacked, and they are still fighting today.

We've been through this before:

After Israel declared its independence on May 14, 1948, the fighting intensified with other Arab forces joining the Palestinian Arabs in attacking territory in the former Palestinian mandate. On the eve of May 14, the Arabs launched an air attack on Tel Aviv, which the Israelis resisted.

****************************
Neanderthal Thinking

Completely missed this. 

Yesterday: "It's Neanderthal thinking to unmask." -- Joe Biden

Today: "Pipelines are the best way to transport oil." -- Joe Biden

Where am I? 

A reader reminds me, Joe Biden also said, "Poor kids just as smart as white kids."

I have no idea what he meant by that.

CEO Pay -- A Case Study -- May 14, 2021

Years ago I went through this exercise. 

With all the stories (again) on CEO pay vs pay for employees, yada, yada, yada.

I get it. I understand. I understand the frustration. I understand the anger. 

XOM's CEO:

• salary: only $1.5 million last year (pretty paltry in the big scheme of things)
  
• total compensation: $16 million last year

XOM has 4.23 billion shares outstanding.

$16 million / 4.23 billion shares = 0.38 cents share 

That's not 38 cents, that's 0.38 cents.

$16 million / $256.235 billion (market cap) = 0.00006 or 0.006%

$256,235,000,000 market cap + $16 million = $256,251,000,000

$256,235,000,000  / 4.23 billion = $60.575650118 / share

$256,251,000,000 / 4.23 billion =  $60.579432624 / share

Delta: 

$60.575650118 - $60.579432624 = $0.0037825 / share or 0.4 cents / share

That's not 40 cents, that's 0.4 cents.

My daughter is being paid $3.48 / share to hold XOM. 

Number of XOM employees: 70,000.

$16 million / 70,000 = $230 / year or $20 / month, and after taxes, SS, medicare, union dues, etc, about $15 / month. 

Bottom line:

I don't know if the CEO is "worth it." I don't know if he is a great CEO or a mediocre CEO. I doubt if anyone really knows. 

But pay him absolutely nothing in compensation -- zero, nada, zilch -- and all things being equal, the company would be "worth" 0.4 cents/share less. 

Jealousy is a sad way to live one's life. Being jealous about someone else's pay is a sad way to live one's life. 

Biden, AOC and the like will cost Americans a lot more than $20 / month. 

Quick: how much did it cost you to fill up your SUV this week?

Meanwhile, investing in XOM seems like it would be so much more productive.  

By the way:

• 2017: 69,600 employees
• 2019: 74,900 employees

Delta: this CEO added 5,300 new employees between 2017 and 2019. 

5,300 is almost 8% growth. And most of these jobs were high-paying jobs with great benefits.

OKE -- Update -- May 14, 2021

From my perspective -- right, wrong, indifferent -- OKE was a first mover in North Dakota with the shale revolution. 

On/about January 4, 2021, OKE was trading for $37 or thereabout.

The company is paying 93.5 cents / share. That has not changed since 1/24/20 and will be the amount paid today, 93.5 cents / share.

On January 4, 2021, 93.5 cents / share on a $37-stock is an annualized 10.1%. 

Since then, OKE has appreciated to $54. Dividend now has a 7.12% annual rate.

Link here.

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 processing plants in North Dakota are tracked here.

ONEOK post July 25, 2019. 

There have been hundreds of posts on the blog mentioning ONEOK. This was the first time ONEOK was mentioned: October 25, 2009.

US Ethanol Exports -- May 14, 2021

Link here.

US ethanol exports fell for the second year in a row. I could understand the decrease in ethanol exports last year -- the global economy was shut down -- but the decline actually began one full year earlier, 2019.

It looks like Canadian imports of US ethanol accounted for almost the entire decline. Canadian ethanol imports from the US fell back to levels less than in 2016.

EIA link here.

Active Rig Count 20% Higher Today Than This Date One Year Ago In North Dakota; Twelve Operators Drilling; MRO Reporting A Nice Bailey Field -- May 14, 2021

Director's Cut: scheduled to be released later today. Link here.

Dividends matter: all of a sudden dividends matter. CNBC, 7:47 a.m. CT, May 14, 2021. Something we've been reporting since Apple failed to adequately reward shareholders after their first calendar 2021 blowout earnings.

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.

Never let a crisis go to waste: the value of line space on the Colonial Pipeline rose May 13, 2021, to its highest since February 7, 2020 -- more than a year earlier. Argus Media. 

Vaccine hesitancy: this meme began shortly after April 13, 2021, the day the CDC and Dr Fauci pulled the JNJ vaccine off the market over safety concerns. Interestingly, since then, there have been no reports of "new" blood-clotting cases due to the vaccine. Just like that, the story died. Yesterday, the CDC reported the worse "Thursday data" in ten weeks. Today, Bloomberg's headline story: vaccine hesitancy rose in EU after pause in AstraZeneca shots.

• Eurofound survey finds 34% hesitance after March suspension;
• findings reflect a communication failure, researcher says
• more than a third of adults in the EU indicate they are unlikely to get immunized from Covid-19
• prior to the pause, 25% said they were "rather unlikely" or "very unlikely" to get the vaccine
• Norwasy permanently removed AstraZeneca from the market -- May 12, 2021; sort of takes the wind out of that "communication failure" note

Breakthrough cases: despite being vaccinated; posted previously; the numbers will be significantly worse than what the CDC reports; previously posted;

Apple; 100% green. Whoa, Nelly. Not so fast. The company admits its data centers consume standard blend of coal gas, nuclear, hydro with small amounts of wind and solar mixed in --Forbes. Link here. 

Retail sales: all things being equal, retail sales should "improve" throughout the year unless adjusted for gasoline sales. Monthly retail sales are measured in dollars and cents; gasoline prices rising; we've seen this before; previously posted. Gasoline sales up 2.9% month-over-month, April-over-March. Dow futures reversed direction after today's numbers released

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

Active rigs:

$64.59	5/14/2021	05/14/2020	05/14/2019	05/14/2018	05/14/2017
Active Rigs	18	15	65	60	51

Operators with active rigs:

• CLR (5): Gordon Federal, Bang, Candee, Harrisburg, Harms Federal,
• Hess (2): EN-Johnson, GO-Braaten
• MRO (2): Armstrong, Morgan USA
• Rimrock: FBIR Guyblackhawk
• Whiting: Lacey
• Slawson: Mauser Federal
• Enerplus: Marten,
• Iron Oil Operating: Antelope
• Ovintiv: Olson
• Petro-Hunt: Blikre
• Oasis: Cliff Federal
• Crescent Point Energy: CPEUSC Sylven

Two wells coming off the confidential list -- Friday, May 14, 2021: 27 for the month, 48 for the quarter, 129 for the year:

• 37095, 3,194, MRO, Wiest 24-33H, Bailey, t11/20; cum 98K 3/21;
• 36123, drl/NC, Slawson, Stallion 7-1-12H, Big Bend, no production data,

RBN Energy: WaHa natural gas market is going premium, but it may be short-lived.

A lot of people know that Permian natural gas prices have spent many days in negative territory over the last few years, only to skyrocket over $100/MMBtu during the Deep Freeze in February. Those events were mostly viewed as transitory, driven by a chronic lack of pipeline capacity in the former case and a crazy round of arctic weather in the latter. 

It may come as a surprise to hear that forward basis prices for natural gas in the Permian are trading at a premium to Henry Hub for at least some months over the next year or so. How could it be that gas from a supply basin way out in West Texas, where gas is considered a byproduct, trades at a premium? The answer lies in the key infrastructure changes expected in the weeks ahead and a premium in forward basis for the Houston Ship Channel gas market. How long the Texas premiums will last depends on Permian gas production, which is starting to take off again. Today, we aim to explain the latest developments in Permian and Texas natural gas markets.