Friday, May 21, 2021

Notes From All Over -- Friday Night Edition -- May 21, 2021

Diversified Oil & Gas. Wiki. In case this name comes up again some day. Robert Hutson bought his first natural gas well in 2001. He now has 60,000 wells across the Appalachian Basin. What a great country. I guess he could have bought a corner "7-11" or a Dairy Queen or a Waffle House but instead bought a natural gas well. Headquartered in Birmingham, AL, and listed on the London exchange, had revenues of $400 million in 2020 with a net income of ($24 million) in 2020.

Super-long laterals: US upstream industry relying on longer lateral drilling to boost cash flows. Link here

The article is all about the Permian. We went through this "debate" in the Bakken some years ago. For a number of reasons, the Bakken is ideally suited for 20,000-foot laterals but interestingly enough, the standard remains 10,000 feet. Maybe we will see the industry move to 20,000-foot wells in the Bakken somewhere down the road but after several years, it certainly seems the 10,000 lateral is the way to go in the Bakken. 

On the other hand, the technology might be there, but anyone watching the Permian understands why super-long laterals have not yet become the standard.

By the way: when it comes to cost, the long pole in the teepee is not the drilling -- it's the fracking. From my limited perspective, the focus needs to be on completion strategies, not drilling.

From the linked article:

According to Daryl Koo, head of oil asset intelligence for energy consultancy Enverus, in the core Delaware Basin Wolfcamp-A formation, the breakeven WTI price of a well decreases from $38/b to $34.50/b when going from 5,000 foot to 10,000 foot laterals.

"Though we didn't model a 15,000-foot case given it's still an emerging design, I'd expect the breakeven price to further decrease to around $31-$33/b, assuming no major issues with production or cost performance," Koo said.

Upstream operators during Q1 conference calls viewed the incremental economics favorably – especially at current WTI prices well above $60/b.

Break-even prices: regardless of the length of the lateral, did you see the break-even in the Permian? $40 / bbl and less. And WTI is over $60 right now. Put that in your pipe and smoke it. 

Scientific American: I haven't subscribed for decades. This is why.  

Only because I like maps of railroads:

Marathon To Run Refinery With Wind Energy -- May 21, 2021

From Geoff Simon:

Marathon Petroleum Corporation has announced plans to install five 2.3 megawatt wind turbines that will provide electricity to its renewable diesel facility near Dickinson.

MPC contracted with One Energy, which will own and operate the turbines. They are expected to generate more than 40 million kilowatt hours of energy each year, providing approximately 45% of the renewable diesel facility’s electricity needs. Marathon will pay a fixed price for the wind power delivered by One Energy for a period of 20 years. 

MPC Executive Vice President of Refining Ray Brooks said the project is a win for lower-carbon fuels and company performance.


“Lowering the carbon intensity of the renewable fuels we produce at our Dickinson facility helps us to capture additional value in the markets we serve and enhance the overall sustainability of our operations," Brooks said. 

Lowering the carbon intensity of renewable fuels produced at the Dickinson facility also aligns with MPC’s objective of reducing its companywide greenhouse gas emissions intensity by 30% below 2014 levels by 2030.

One Energy CEO Jereme Kent said the project will also contribute to MPC’s role as a good neighbor in Dickinson. He said his company intends to offer annual scholarship opportunities to students pursuing a technical career.


“For each turbine, One Energy will provide a $5,000 ‘Megawatt Scholarship’ to local high school graduates pursuing two- or four-year degrees in science, technology, engineering or math," Kent said. "That’s $25,000 for every year the turbines are operating.”

North Dakota PSC Approves Bridger Pipeline -- May 21, 2021

This is another one I thought would not get approved.

From Geoff Simon:

The ND Public Service Commission approved a crude oil pipeline conversion project this week that can serve as an alternative route for North Dakota oil producers to deliver Bakken crude to market.


The Bridger Pipeline project originates near Johnson’s Corner in McKenzie County, and runs 29.4 miles southwest to Bridger’s Wilson Station located seven miles south of Watford City where it interconnects with Bridger’s existing crude oil transmission network. The projects consists of 2.4 miles of new pipeline and the conversion of an existing 27-mile gathering line. The $21 million, 8-inch pipeline project will be capable of transporting up to 50,000 barrels of oil per day to a Wyoming hub, which interconnects with other pipelines that would move the crude to refineries in the Midwest or Gulf Coast.


PSC Chair Julie Fedorchak noted that the pipeline runs through some rough terrain prone to landslides, but said she is comfortable that the company is familiar with potential hazards and is prepared to deal with them.

From the archives, along with a map, March 12, 2021:

Bridger Pipeline, a subsidiary of True Companies, is seeking to place a new transmission line in McKenzie County, which the company says in its permit application could be a “vital part of an alternate route out of North Dakota in the event of a shutdown of other pipelines leaving the Williston Basin.”

The application does not mention any particular pipelines, but there will be a hearing on April 9 to discuss a potential shutdown of the Dakota Access pipeline, while further court-ordered environmental study of the pipeline is conducted.

Bridger’s proposed 29.4-mile, 8-inch crude oil transmission line would take crude from Eighty Eight Oil company’s existing Johnson’s Corner Terminal in North Dakota to Bridger’s existing Wilson station, about 7 miles south of Watford City. From there, the oil would travel to Wyoming, where it could access other markets and refineries in Utah and Colorado, as well as trading centers in Cushing, Oklahoma and Patoka, Illinois.
Note, on that date, this information:

A public hearing for the proposed transmission line is set for 8 a.m. CST March 22 at Teddy’s Residential Suites, 113 Ninth Avenue SE in Watford City.

So, on March 22, 2021, "we" have the public hearing and by May 22, 2021, we have the PSC decision. 

Imagine if this required federal approval. 



Week 20: May 16, 2021 -- May 22, 2021

Top story of the week:

Top international non-energy story:

Top international energy story:

  • Brent briefly touches $70;
  • US blinks: gives Putin a waiver for Nordstream 2; got nothing in return; great negotiators.
  • US blinks: removes sanctions on Iran; got nothing in return; great negotiators.
  • Arctic ice melt allows Russia to move in; Biden administration makes a speech;

Top national non-energy story:

Top national energy story:

Top North Dakota non-energy story:

Top North Dakota energy story:

Geoff Simon's top North Dakota energy stories:

Operators:

Operations:

Wells:

Fracking:

Pipelines:

Refineries;

Bakken economy:

A Win For The Oil Companies Operating In North Dakota -- May 21, 2021

Link here.


Bakken economy:

WTI Moved Up Nicely Today; Whiting With Two New Permits; Thirteen Permits Renewed -- May 21, 2021

Covid-19 vaccine update: as of 6:45 p.m. CT, the CDC has not updated its daily report. It is generally posted by 2:00 p.m. on weekdays, and generally early on Saturdays and Sundays.

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

Active rigs:

$63.58
5/21/202105/21/202005/21/201905/21/201805/21/2017
Active Rigs2014666151

Two new permits, #38321 - #38322, inclusive:

  • Operator: Whiting
  • Field: Parshall, Sanish (Mountrail County)
  • Comments:
    • Whiting has permits for two Braaflat wells in Mountrail County, to be sited in NWNW 11-153-91
      • #38321, Braaflat 11-11HU, 650' FNL and 501' FEL,
      • 38322, Braaflat 11-11-2H, 590' FNL and 501' FEL,

Thirteen permits renewed:

  • Sinclair (5): four Saetz Federal permits in McKenzie County; a Bighorn permit in Dunn County
  • Enerplus (3): one Beryllium permit, one Niobium permit, and one Yttrium permit, all in Dunn County;
  • BR (2): two Gladstone permits in MKenzie County;
  • KODA Resources: a Porter permit in Williams County;
  • XTO: one Jorgenson Federal permit in Dunn County;
  • Rimrock Oil: one Charging Eagle permit in Dunn County;

Legacy Fund Deposits, May, 2021

Link here.

DAPL Keeps Flowing -- Sources -- May 21, 2021

May 25, 2021: is the US Army Corps of Engineers' EIS even needed any more? Did the judge's decision make that issue moot?

May 22, 2021: updates today.

Later, 8:28 p.m. CT: From Geoff Simon:

A federal judge today issued an order rejecting the request of the Standing Rock Sioux Tribe for an injunction that would have shut down the Dakota Access Pipeline while an environmental review is conducted.

Judge James Boasberg, who had previously ruled the initial environmental analysis was inadequate thereby invalidating DAPL's easement to cross the Missouri River, issued a ruling today that the tribe had failed to demonstrate a likelihood of irreparable injury from the pipeline's continued operation. The judge's 31-page opinion expressed frustration with the Corps of Engineers' inaction, despite the fact that, as Boasberg put it, "the pipeline was ... an unlawful encroachment on federal land."

"Even though this Court vacated the easement for DAPL to cross beneath Lake Oahe, and even though the D.C. Circuit affirmed such vacatur, the pipeline has maintained operations as if none of these developments had occurred," Boasberg wrote. "Those seeking an explanation for the persistence of this surprising state of affairs over the past ten-odd months need look no further than the Defendant in this case: the Corps."

At a previous hearing on the tribe's request for the injunction, Boasberg was visibly annoyed by the Corps' reluctance to take a position on shutting down the pipeline. It's apparent from his ruling today the judge is still irked by the Corps' unwillingness to order that the flow of oil in the pipeline be stopped.

"Ever since this Court’s vacatur order in July 2020, and across two presidential administrations, the Corps has conspicuously declined to adopt a conclusive position regarding the pipeline’s continued operation, despite repeated prodding from this Court and the Court of Appeals to do so."

Boasberg's decision allows the pipeline to continue to operate because the tribe's arguments didn't pass the traditional four-factor test for a plaintiff: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

Senator Kevin Cramer praised the ruling, noting that “once again, reason prevails over political pressure."

*******************************
Original Post

Paywall. Will look to find another source also. 


This was critical for Oasis and many others. 
 
Link to SeekingAlpha here. I have not yet read the article.

I'm tempted to move to Bakken_5.0 but we will see where we are a few months from now. 

I wish I had the numbers just prior to the decision, but let's see where some Bakken operators finished:
  • Oasis: up an astounding 7.01%; up $5.61; closed at $85.61
  • CLR: up 1.76%, up 53 cents; closed at #30.58
  • WLL: up 2.43%;  up almost a buck; closed at $41.23
  • HES: flat; trading at $81.94
  • NOG: flat at $16.82; choppy all day
  • MNRL: down 0.35; down 5 cents; closed at $17.87; yields 7.16%;
  • BRK-B (CBR): up 0.4%; up $1.07; closed at $287.74
  • UNP (CBR): flat; closed at $221.52.

  • KMI: up 0.11%; up 2 cents; closed at $18.72; pays 5.77%
  • ENB: flat; closed at $38.61; pays 7.11%
  • EPD: down 0.4%; down 10 cents; closed at $23.71; pays 7.59%

Who owns/operates DAPL?

Energy Transfer (ET): up almost 2%; up 19 cents; closed at $10.19; pays almost 6%;

From SeekingAlpha, link above:

Energy Transfer (ET +1.7%) shares spike higher before calming down following a favorable court ruling for its Dakota Access Pipeline. 
The U.S. District Court for the District of Columbia rules the pipeline may remain in service even though it lacks a valid federal easement for a water crossing in North Dakota
The Army Corps of Engineers has said it expects to finish a court-ordered environmental impact statement for the project in spring 2022, and today's ruling appears to mean DAPL will not have to shut down while the analysis is conducted. 
Energy Transfer is "dramatically undervalued" over the longer term based on its continued free cash flow strength, The Value Portfolio writes in a bullish analysis newly posted on Seeking Alpha.

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

I lost a huge bet on this one. 

How in the world could the judge rule this way when the pipeline lacks a valid federal easement?

Will the US Supreme Court step in? 

The Colonial Pipeline fiasco is probably on everyone's mind.

On a completely different note, Oasis cut their losses quickly and share price surges; ATT dilly-dallied around for years; finally cut their losses (?) as well as its  dividend and share price plunges. 

And, still, farther afield, my earlier opinion regarding Saudi Arabia's PIF: selling Suncor and buying video game companies -- I've changed my mind. Saudi doing the right thing. Back to this later, perhaps.

Absolutely Amazing! PGA Championship -- Second Round -- Phil Mickelson Leads By One Stroke Late In The Day -- May 21, 2021

Updates

May 23, 2021: Phil Mickelson wins the PGA Tournament. At age 50 years of age, the oldest golfer to have won the PGA Tournament. His sixth major PGA tournament.

Original Post

Hard to believe. Who wudda guessed? Three bogeys on the back nine or he might have been four strokes ahead going into the clubhouse. 

Oosthuizen is now tied with Mickelson, -5, and playing a bogey-free round, as he goes to the twelfth hole. 

Later: and that's how today's round ends: Mickelson and Oosthuizen tied for first place, both at -5. Pretty amazing to see Mickelson at the top of the leader board. 

Some big names will miss the cut, but Jordan Spieth just made it, it appears, tied at 63, +4 after two rounds, and those at +6 (?) will miss the cut. 

When you see those who made the cut and those who did not, whether you like him or not, it really does highlight how incredible Tiger Woods was "back in the day."

A Review Of Recent Oasis Permits In The Bakken -- May 21, 2021

As of May 21, 2021, Oasis had no new permits in 2021.

In calendar year 2020, Oasis had only thirteen permits:

Something tells me, Oasis has a bit of catching up to do. 

The spreadsheets below have not been updated. 

The Oasis permits for 2020:

June 8, 2020

37623

L



Oasis

Nikolai Federal 529711-6 6B

MCK

Banks

June 8, 2020

37624

L



Oasis

Nikolai Federal 11-6 10BX

MCK

Banks

May 4, 2020

37549

L



Oasis

Weisz 5893 43-14B

MNT

Enget Lake

May 5, 2020

37558

L



Oasis

Grad 5893 24-23B

MNT

Enget Lake

January 15, 2020

37352

L

LOC/NC


Oasis

Wold 5397 44-34 12TX

MCK

Sand Creek

February 11, 2020

37381

C



Oasis

Wold 5397 43-34 4B

MCK

Sand Creek

February 28, 2020

37416

C



Oasis

Wold 5397 43-34 5B

MCK

Sand Creek

March 10, 2020

37439

C



Oasis

Wold 5397 43-34 6B

MCK

Sand Creek

March 10, 2020

37440

C



Oasis

Wold 5297 11-6 2B

MCK

Sand Creek

October 20, 2020

37914

L



Oasis

Fraser Federal 5300 11-35 3BR

WMS 

Willow Creek

October 20, 2020

37915

L



Oasis

Fraser Federal 5300 11-35 4BR

WMS

Willow Creek

October 20, 2020

37916

L 



Oasis

Fraser Federal 32-35BR

WMS

Willow Creek

December 4, 2020

38008

L 



Oasis

Cliff 5300 43-35 6B

WMS

Willow Creek


Meanwhile, back in calendar year, the year before the Covid-19 pandemic lockdown:

February 5, 2019

36047

SI/NC

C-P



Oasis

Lewis Federal 5300 11-31 4BR

MCK

Baker

February 6, 2019

36048

L




Oasis

Foley Federal 5301 12-13 3B

MCK

Baker

February 6, 2019

36049

L




Oasis

Foley Federal 5301 12-13 4B


MCK

Baker

February 6, 2019

36050

L




Oasis

Foley Federal 5301 12-13-5B

MCK

Baker

February 6, 2019

36051

L




Oasis

Foley Federal 5301 12-13 6B

MCK

Baker

August 29, 2019

36924

L




Oasis

Dahl 5301 43-11 6B

MCK

Baker

August 29, 2019

36925

L




Oasis

Dahl 5301 42-11 7B

MCK

Baker

August 29, 2019

36926

L




Oasis

Dahl 5301 43-11 8B

MCK

Baker

June 5, 2019

36547

L

DRL



Oasis

Thelen 5297 11-6 3TX

MCK

Banks

June 5, 2019

36548

L

DRL



Oasis

Thelen 5297 11-6 4B

MCK

Banks

June 5, 2019

36549

L

DRL



Oasis

Thelen 5297 11-6 5T

MCK

Banks

June 5, 2019

36551

L

DRL



Oasis

Thelen 5297 12-6 6T

MCK

Banks

June 5, 2019

36552

L

DRL



Oasis

Thelen 5297 12-6 7B

MCK

Banks

June 5, 2019

36553

L

DRL



Oasis

Thelen 5297 12-6 8T

MCK

Banks

June 5, 2019

36554

L

DRL



Oasis

Thelen 5297 12-6 9B

MCK

Banks

September 3, 2019

36934

L




Oasis

Thelen 5397 43-34 10T

MCK

Banks

September 3, 2019

36935

L




Oasis

Thelen 5397 43-34 11B

MCK

Banks

September 26, 2019

37018

L




Oasis

Thelen Federal 5397 44-34 14TX

MCK

Banks

December 16, 2019

37266

L




Oasis

Borden Federal 5300 43-35 6BX

WMS

Camp

August 21, 2019

36883

L




Oasis

Cliff Federal 5200 14-5 4B

WMS

Willow Creek

August 21, 2019

36884

L




Oasis

Cliff Federal 5200 14-5 5B

WMS

Willow Creek

August 21, 2019

36885

L




Oasis

Cliff Federal 5200 14-5 6B

WMS

Willow Creek

August 21, 2019

36886

L




Oasis

Cliff Federal 5200 14-5 7BX

WMS

Willow Creek