The Million Dollar Way (The Bakken Oil Blog): 06/04/21

The markets had another huge day on Wall Street again, and, apparently the energy sector did the best. I don't know if that's accurate or not but that was reported at least once today.

Speaking of which, how did MNRL do? Wow. Okay.

And now I'm done for the week.

Poolside, listening and watching to Bryan Ferry Let's Stick Together, on YouTube on a fully charged MacBook Air. I'm reclining on one of those beach lounge chairs that is actually sitting/resting in the pool from which I can dunk my legs to cool off. I was not prepared for this; I did not bring anything to drink except bottled water. LOL. While listening to Bryan Ferry, I can read The WSJ on the same laptop. What a great country.

Marianne Eaves's favorite things about whiskey. Link here.

Favorite whiskey pairing.
“The pairing for me would completely depend on the profile of the whiskey, but whiskey can be paired with every course, and used in dishes at every course as well.

Some of my favorite all-time pairings are a bourbon sorghum vinaigrette on a salad (a specialty of Chef Ouita Michel in Lexington, KY), and dark chocolate paired with a sweeter, rye-based bourbon. Creamy, fatty things have a way of smoothing out and changing the experience of bourbon in the most luxurious ways.”

I have a reader who I think will comment on this.

7:47 p.m. CT. I have the pool to myself. A few folks on their balconies overlooking the pool. And this is only June. I have three or four more months of this. Maybe four or five.

Re-reading Bettany Hughes' Helen of Troy.

Crawfish Season; Oil Plummeted Last Year Due To EV Demand -- Cathie Wood -- June 4, 2021

I thought crawfish season was pretty much over, but apparently not in some parts of the country. And apparently a lot of folks don't know how to eat crawfish, much less boil them. Link to The WSJ.

***********************************
EVs and The Price of Oil

I can't recall if I ever posted this.

It's one of the funniest things I ever read, so I'm posting it now in case it has not been previously posted.

Remember when crude oil actually went negative -- a negative $37/bbl -- hedge fund head says it was due to "EV demand." Wow, how dumb can one be ... or how gullible does she think the American investor is ... oh never mind.....

Memo to self: file under "Fifteen minutes of fame."

***********************************
Cheaper Than Toilet Paper

I have enough "points" to buy 1,000 copies of this book -- if I just had a place to store them all.

Great Christmas gifts to all my ultra-liberal friends. And a gag gift for my conservative friends.

The Unemployment Numbers -- Breitbart News Service -- June 4, 2021

Job growth fell short of expectations for the second month running in May. Forecasters had predicted the economy would gin up 671,000 jobs following the disappointing 266,000 in April. Instead, job growth came in at just 559,000. Even the slightly better than expected downtick in the unemployment rate to 5.8 percent, versus the 5.9 percent expected, was disappointing because it was rooted in a contraction of the labor force.

Prior to the release of the May figures, hopes were running high that perhaps last month's reading was wrong. The economy has been shifting violently for over a year, and it seemed plausible that there might have been some miscounting or undercounting. Can the Department of Labor accurately count businesses that are suddenly permitted to go from 25 percent capacity to 100 percent? But those hopes were largely dashed when the revision added just 12,000 jobs for April, and most of those were actually government jobs. Weirdly, the government quite frequently undercounts how many new government workers are hired in any given month.

Beyond the headline numbers on job growth and unemployment, Friday's data provided further evidence that the economy is afflicted not by a lack of demand for workers but a constraint on supply. Labor force participation shrank in May, ticking down from 61.7 percent to 61.6 percent. And it has been stuck near those levels since June of 2020, despite the reopening that should have been drawing workers back into jobs. Average hourly wages are rising at a swift rate, as are average work week hours. So businesses are paying more per hour and asking workers to work longer. In May, the average work week was 34.9 hours, close to the record of 35 hours set in January

Our favorite measure of supply constraint, however, is teenage unemployment.

This hit the lowest level since 1953, as the Wall Street Journal's Real Time Economics newsletter pointed out. (Eddie Cochran's hit Summertime Blues was released five years later, when teenage unemployment had climbed to 16 percent).

The share of teenagers working rose to 33.2 percent, the highest since 2008. That's great news if you are a teenager looking for work, but it also indicates an extreme tightness in the labor market. So why are so many employers turning to youngsters to fill jobs? Enhanced unemployment benefits. Teenagers are not being paid an extra $300 a week in unemployment benefits, so they are actually available to hire.

The good news is that over 20 states have decided to end the $300 bonus in the coming weeks. That should restore supply to the labor market over the summer, which could lead to some very big upside surprises in the employment reports in July and August.

– Alex Marlow & John Carney
Breitbart News Network

************************
Duolingo

Sophia and I are taking Spanish lessons together on Duolingo. I'm pretty sure I make more errors than she does; she often corrects me.

I am quite amazed how mjuch we learn in so little time.

We have not missed one day of instruction in 245 days -- no more than ten minutes / day.

Today, surfing through the news, I came across this headline and I would have passed right be it ... except "abuela" was one of the first words Sophia and I learned.

For the life of me, two things I don't understand:

why elementary schools don't "require" Duolingo Spanish fifteen minutes each day. No testing, no exams, no "nothing"; simply letting the class "run" through two or three Duolingo lessons (fifteen minutes max) each day; and,
why anybody, without a medical contraindication, would not get a Covid-19 vaccination.

I "refused" to get the vaccine until it was as easy as getting vaccinated while in the military. All that signing up on the internet for an appointment; then waiting two or three weeks for the appointment; then driving fifteen miles to the vaccination site; and, then waiting in line for half an hour. Made no sense.

Last week, I walked into our local grocery store, walked over to the pharmacy, no appointment, no waiting, and got my first of two shots. In three weeks, I'll get the second and that will be that. If the data is correct, after 100s of million of doses suggesting this thing is trending toward 95% effective, it will be one of the most effective vaccines ever.

It took four years for Spanish flu to burn itself out; no vaccine ever developed. Covid-19 -- in countries where the vaccine is readily available, Covid-19 is "history" within a year.

Enerplus: The Tennis Pad

Updates

January 9, 2023: it appears the pad has been completed; early production is now being reported.

Original Production

Production:

38340, 2,046, Enerplus, Backhand 149-92-31C-30H, Heart Butte, no production data provided; IP released in daily activity report dated September 21, 2022.

Updates

New permits:

38693, loc, Enerplus, Lob 149-92-31D-30H-LL, Heart Butte,

Nine new permits, #38339 - #38347, inclusive:

Operator: Enerplus
Field: Heart Butte (Dunn County)
Comments:

Enerplus has nine new permits to be placed on the new Tennis pad;
the parent well, from the north:
22240, 603, Enerplus, Net 149-92-30B-31H, Heart Butte, t7/12; cum 354K 4/21; was off line 7/21 to 9/21; back on line 9/21;, cum 356K 9/21;
the new Tennis pad will be in SWSE 31-149-92;

38347, conf: Match, 1000 FSL 2047 FEL;
38346, conf: Court, 966 FSL 2054 FEL;
38345, conf: Serve, 931 FSL 2061 FEL;
38344, conf: Volley, 897 FSL 2069 FEL;
38343, conf: Ace, 863 FSL 2076 FEL;
38342, conf: Grip, 794 FSL 2091 FEL;
38341, conf: Dropshot, 760 FSL 2099 FEL;
38340, conf: Backhand, 726 FSL 2106 FEL; IP announced September 21, 2022 -- see above.
38339, conf: Topspin, section line well, 692 FSL 2113 FEL;

Observations:

the nine Tennis pad wells will be sited in a single line, running NW to SE in SWSE section 31
the nine wells will be 1280-acre spacing, two sections, running north, ending in section 30 to the north
they will parallel the parent well, #22240, the Net well
yet to be published, there will be a "mirror" pad, the Baseball Pitch pad sited in either section 7 or section 18-142-92; these wells will run south, and parallel the parent well, #22238, the Knuckle well

The graphics:

Enerplus With Nine Tennis Pad Permits -- June 4, 2021

Wouldn't it be ironic if there is a perfect storm brewing? The Dems' worst nightmare.

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

Active rigs:

$69.62	6/4/2021	06/04/2020	06/04/2019	06/04/2018	06/04/2017
Active Rigs	21	12	64	61	51

Operators with active rigs (note the one SWD rig):

CLR (7): Gordon Federal, Gale, Jensen 11, Jensen 10, Pasadena, Harrisburg, LCU Truman Federal, [Harold Hamm: "remain disciplined"]
MRO (2): Edyth USA, Loraas,
Hess (2) : EN-Johnson, GO-Soine,
Slawson (2): Mauser, Muskrat Federal,
Enerplus: Ermine
Rimrock: FBIR Guyblackhawk,
Iron Oil Operating: Antelope,
Ovintiv: Olson,
Whiting: Cvancara,
Petro-Hunt: Blikre,
Oasis: Fraser Federal,
Iron Hand: Jore SWD,

Nine new permits, #38339 - #38347, inclusive:

Operator: Enerplus
Field: Heart Butte (Dunn County)
Comments:

Enerplus has nine new permits to be placed on the new Tennis pad;
the parent well, from the north:
22240, 603, Enerplus, Net 149-92-30B-31H, Heart Butte, t7/12; cum 354K 4/21;
the new Tennis pad will be in SWSE 31-149-92;

38347: Match, 1000 FSL 2047 FEL;
38346: Court, 966 FSL 2054 FEL;
38345: Serve, 931 FSL 2061 FEL;
38344: Volley, 897 FSL 2069 FEL;
38343: Ace, 863 FSL 2076 FEL;
38342: Grip, 794 FSL 2091 FEL;
38341: Dropshot, 760 FSL 2099 FEL;
38340: Backhand, 726 FSL 2106 FEL;
38339: Topspin, section line well, 692 FSL 2113 FEL;

Eight permits renewed:

Abraxas (6): three Jore Fed permits; two Jore Maddy Fed permits; and, one Sten Rav permit, all in McKenzie County;
Lime Rock Resources (2): twoHarland Rebsom permits in Dunn County;

Covid-19 Update; Last-Mile Delivery; And, Solar Power Hits A Snag In The Southwest -- June 4, 2021

Covid-19 deaths fall to lowest point since March 2020: link here. That's from today's WSJ. ZeroHedge was reporting this over a month ago, May 15, 2021. Link here: Covid deaths plummet as excess mortality falls to pre-pandemic levels.

CDC data: link here.

After a couple days with a significant drop in the number of vaccinations, we're back to 1.3 million vaccinations given in the past 24 hours.

Regeneron; Covid-19 antibody now cleared by the FDA for simply injection, intramuscularly, a "jab," or a "shot." Much more convenient than intravenous infusion. Works better than Clorox. Link to The Wall Street Journal. This "Covid-thing" will lead to so many incredible spin-off developments that some years from now, folks may agree that this pandemic was a huge positive, on so many levels.

**************************
Solar Power's Land Grab Hits A Snag

Link at Reuters via Yahoo!Finance:

Walmart and Target are testing their own home package delivery services in the United States - stealing a page from Amazon's play book - as e-commerce demand strains traditional carriers like United Parcel Service, FedEx and the U.S. Postal Service.
The move is just the latest example of how Walmart Inc and Target Corp are working to close the gap with Amazon.com Inc, the No. 1 online retailer. Amazon has recruited armies of small businesses to provide delivery services from vans emblazoned with the company's logo - an effort that has helped it control customer wait times and costs.
UPS, FedEx Corp and the USPS have been inundated with packages since the coronavirus pandemic hit U.S. shores last year - forcing retailers to seek new ways to get goods into the hands of customers while containing soaring delivery costs.
Walmart - a key FedEx delivery customer - has been trialing its first company-branded "last-mile" delivery vans, John Furner, Walmart's U.S. chief executive, said on the company's earnings call on Tuesday.
Since January, a small, electric van fleet has made package deliveries in the Bentonville and Rogers areas near Walmart's Arkansas headquarters, company spokeswoman Camille Dunn said. The drivers work for Walmart, which also employs its semi-truck drivers.

Retailers are dealing with a trucker shortage that threatens their ability to stock their stores. However, van drivers in theory should be easier to find because they don't require professional licenses like big-rig drivers do.

**************************
Solar Power's Land Grab Hits A Snag

Link at The WSJ.

This windswept desert community is full of clean energy supporters including Suzanne Rebich, an airline pilot who recently topped her house with 36 solar panels. About 200 homes generate their own solar energy and a quarter of the local electricity supply comes from hydroelectric power.
All the same, many here are dead set against a planned solar plant atop the Mormon Mesa, which overlooks this valley 50 miles northeast of Las Vegas. Slated to be the biggest solar plant in the U.S., the Battle Born Solar Project by California-based Arevia Power would carpet 14 square miles—the equivalent of 7,000 football fields—with more than a million solar panels 10 to 20 feet tall. At 850 megawatts, it would generate nearly one-tenth of Nevada’s current electric capacity.

“It will destroy this land forever,” Ms. Rebich, 33, said after riding her bicycle on the 600-foot high mesa.

Across the U.S., more than 800 utility-scale solar projects are under contract to generate nearly 70,000 megawatts of new capacity, enough to power more than 11 million homes, equivalent to Texas and then some. More than half this capacity is being planned for the American Southwest, with its abundance of sunshine and open land.

We Have A Turkey! June 4, 2021

Updates

June 5, 2021: exactly why was this being filmed? And by whom? Link here with incredible video.

Original Post

We have a turkey! Three strikes!

Trifecta. Hat trick.

Next: a golden sombrero. Or a grand slam.

Link here.

First, Iran's largest warship sinks after a suspicious fire. Then, the country's largest refinery burns, and now, an Iranian petrochemical company.

Notes From All Over -- TGIF -- The Mid-Morning Edition -- June 4, 2021

Jobs report: it couldn't have been better.

CNBC's Rick Santelli nailed it;
for investors: it was the "Goldilocks" numbers

believable; no one doubted the accuracy of the report;
too small for the Fed to react negatively; turned pre-market Dow from red to green;
big enough to confirm the economy is still opening up;

for Joe Biden: bragging rights

in less than four months, his administration has put more Americans back to work than any other administration; threading the mask/de-masked needle;
unemployment rate actually dropped; remains nicely below 6%;

some economists consider 6% and less, full employment;

Jobs report: Yahoo!Finance calls today's job report "disappointing." The comments at the article suggest the report was worse than "disappointing." Me? I thought the report was outstanding. What more do folks want? We've been through an incredible year. "Real-life" folks can't turn on a dime, emotionally. It will take them awhile to get back to "normal." A measured return to work is just fine with me. The market appears to agree with me.

Road to New England: or should we say, pipeline to New England. There is only one coal-burning power plant now remaining in New England. Link here.

It’s official: Bow has the last coal-burning power plant in New England.
On Tuesday, Unit 3 of Bridgeport Harbor Station in Connecticut shut down, as has long been planned. The 400 MW unit had produced electricity by burning coal for 53 years but its owner, PSEG Power, is replacing it with a 485 MW plant that burns natural gas.

That leaves the 459 MW Merrimack Station in Bow as the last power plant in the six-state region that burns coal.

Its owners, Granite Shore Power, have no plans to shut it down even though it seldom runs, partly because it makes tens of millions of dollars in capacity payments in return for guaranteeing electricity production at peak times.
By the way, that's exactly what energy providers were doing in Texas during the Texas Freeze that generated such high utility bills -- the cost of guaranteeing power at peak times.

ISO New England. Today: no coal-generated electricity. We used to see coal almost every day, but now, no more, except at peak times. Natural gas is supplying over 60% of energy needed to generate electricity in New England; nuclear power, 26%.

For Sophia's portfolio: railroads. If railroads are attractive now, imagine what they will look like when the economy is fully open and max number of automobiles are being shipped, once the semiconductor chip bottleneck is resolved.

WMT: to give half its workers free Samsung phones. That's 740,000 free phones.

FCF: if an oil company was making a penny on "$55-oil," imagine what that company is making on "$70-oil." Especially if that oil company is unhedged. WTI could very well hit $70 today. WTI at $69.23. Let's say an E&P company sells 100,000 bopd x $15 = $1.5 million in free cash flow (?) each day. Although I don't update this page as often as I used to, I follow CLR here.

end 2020: 177,000 bopd and 1 billion cubic feet per day = 339,240 boepd
1Q20 (a year ago): 360,000 boepd

**************************
Holy Mackerel: The Need For Speed

Schwab: Until moments ago, every time I traded on Schwab, the executions went through immediately and the information was immediately available on my mobile device (the iPhone). The e-mail confirmation from Schwab generally took one to two days. Moments ago, for the first time ever for me. the Schwab e-mail alert arrived immediately after I placed the trade. Others may be able to do as well, but it's impossible to do better until we get to Minority Report.

I'm not into MEME trading yet, but Schwab has certainly made it easier.

*****************************
Streaming: It's All About Content, Cost, and Ease of Use

Content, cost and east of use: but of the three, only content really matters. Ease of use is pretty much a non-issue any more, and, same with cost.

Hulu: until recently I did not understand Roku. Last night I spent a bit of time reading about Roku (a hardware business) and streaming businesses, like Hulu, Amazon, etc. I'm about the last person one wants to listen to when it comes to technology but, wow, I can see where the world is headed.

Facetime: about a year ago I bought Apple's largest desktop iMac. Our dining area is configured in such a way that the iMac sits perfectly for Facetime calls with family. In addition, it is absolutely perfectly placed for watching television. I use the word "television" loosely because, yes, it's "television" as most of us understand it, but it's not my dad's "television." It's all streaming. I will have to ask our high school granddaughters if they and their peers watch "television" any more, or if they watch Hulu, Roku, Disney+, etc.

Apple TV+: I've talked about Apple TV+ many, many times. It's a huge disappointment. So, what's better, Hulu or Roku? You can't ask that question: the former is a software / streaming / content entity; the latter is a hardware company that streams "things" like Hulu. So, what's better, Hulu or something else? Quick, name a direct competitor with Hulu.

Google: what is best streaming tv service hulu roku. Link here for a CNET answer to that question that was posted just two days ago: best live TV streaming service for cord-cutters. Only five make the cut: AT&T TV, FuboTV, Hulu Plus Live TV, Sling TV, and YouTube TV.

What's missing: Disney+, Apple TV+, Netflix. HBO Max. Pluto TV, Amazon. Yes, I know many of these are a bit like comparing apples and oranges, but unlike Roku none of these are hardware companies (except possibly Apple to some extent, and maybe even Amazon, to a very small extent, if you want to be a purist.)

The five: AT&T TV, FuboTV, Hulu Plus Live TV, Sling TV, and YouTube TV. How did CNET rate them. It appears the panel did not want to upset any of the companies. Depending on which metric was being compared, each of the five won out in one category or another.

I was not surprised to see YouTube TV come out on top overall. I don't subscribe to YouTube TV but I've always had a hunch that You Tube TV would be the best.
Hulu, which I do use, is either as good as YouTube TV or a close second; long term, Hulu will have a huge challenge fending off YouTube TV
FuboTV? I bet it's gone or absorbed by another streaming company within five years
AT&T TV: I have no idea. CNET says AT&T TV is best for channel flippers and sports fans. It also also allows up to 20 devices to stream simultaneously where the others allow only three (or two in come cases) devices to stream simultaneously on one account; think about that -- on one account, twenty devices can be used simultaneously.
Sling TV: it will have to change drastically (and when it does, it will have to double its subscription price) to survive.

By category:

Hardware: Roku was a bridge between legacy television sets and the new smart TVs. I do not see Roku surviving another ten years. You buy Roku hardware and then subscribe to "add-on" streaming services. Roku will morph into a streaming service. I'm not sure it has the capital to take on YouTube, AT&T, Amazon, Disney+, etc.
Streaming à la carte: YouTube TV, Hulu, AT&T, others
Proprietary but heavy content: Amazon
Proprietary: Disney+; Warner Bros Discovery
Add-ons: HBO Max, Netflix

My comments over at SeekingAlpha this morning:

Anyone paying attention will see that Amazon is quietly moving into Apple's space. AMZN is to streaming video what AAPL was years ago with streaming audio (iTunes) but AAPL has completely missed the streaming video train which left the station some years ago. Ten years from now, the streaming companies will all be doing very, very well, but these three will be the leaders: AMZN, YouTube TV, and AAPL TV+.
AMZN has more money than God.

YouTube, owned by Google, has almost as much money, and already a much bigger streaming presence.

AAPL: has completely missed this space. Exhibit A: Apple TV+. It's still being given away for free; has no content; and is running out of options. AMZN bought the last free-standing catalogue out there (MGM).

Where streaming needs to go: I assume some streaming companies are already there, but this is the next frontier: interactive. Almost all streaming is still passive -- sitting passively and watching content. Interactive:

remote learning apps: example, Duolingo. Duolingo is free, ad-supported, or "plus" (annual subscription). I can imagine the "plus" edition being available through Hulu et al before it's all over;
simulators: flight;
gaming: poker

Rick Santelli -- Wow, Wow, Wow -- Got It Exactly Right -- June 4, 2021

PTI: reminder -- National Doughnut Day -- if you are unable to find a free doughnut anywhere, you are not trying hard enough.

Santelli: Nailed employment numbers and unemployment rate.

I'm really impressed.
Really beat Steve.Liesman.
Santelli:
550,000 estimate vs 559,000.
unemployment number: 5.8% vs 5.8%
Market futures right after the number released: unchanged.
Market futures ten minutes after the number released: Dow reverses from "red" to "green."

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

Brent: $71.67

Active rigs:

$69.25	6/4/2021	06/04/2020	06/04/2019	06/04/2018	06/04/2017
Active Rigs	20	12	64	61	51

One well coming off confidential list.

Friday, June 4, 2021: 41 for the month, 62 for the quarter, 143 for the year:

36549, 248, Oasis, Thelen 5297 11-6 5T, Banks, t12/20; cum 72K 3/21;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2021	26	6650	6668	11094	29810	29142	519
BAKKEN	3-2021	31	13177	13151	19219	47574	45372	2024
BAKKEN	2-2021	28	17599	17602	22391	65167	64272	735
BAKKEN	1-2021	31	22085	22093	29785	66013	65064	771
BAKKEN	12-2020	26	12782	12759	23394	37055	36171	752

RBN Energy: how Covid-19 reshaped the future of North American LNG projects, part 2. Archived.

Global gas prices are in the midst of the longest and strongest bull run since 2018 and fundamentals appear supportive of sustaining the rally through at least the upcoming winter. The higher international prices relative to Henry Hub have buoyed demand for U.S. LNG exports.

Existing terminals are operating at or near full capacity, and their combined feedgas demand has been steady, averaging more than 6 Bcf/d higher than this time last year when economic cargo cancellations from COVID-19 were heading towards their summer peak. The improved economics for delivering U.S. LNG to international destinations have also renewed interest in offtake agreements for a handful of the second wave of North American LNG projects that had been sidelined because of the pandemic (many others still are). These projects are taking advantage of the less crowded market, which gives them a realistic path forward to reach a final investment decision (FID). In today’s blog, we continue the series on the status of the second wave of LNG projects.

Pages

Friday, June 4, 2021