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Monday, July 12, 2021

Update: CLR's LCU -- July 12, 2021

CLR's Long Creek Unit is tracked here.  

Note previous recent updates:

Wow, wow, wow, I did not expect this. More CLR wells in the Long Creek Unit are starting to report production. 

When I last updated this, in April, 2020, CLR had reported three or four wells; now another half dozen or so. They are moving along very, very quickly in this unit.

Previous entry:

  • 36942, loc-->conf, LCU Jessie 2-24H1, drl status noted 4/4/20;

We now have production data; the entry will be updated:

  • 36942, loc-->conf, LCU Jessie 2-24H1, drl status noted 4/4/20; drl/A noted 7/12/21: cum 84K 5/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20213146192462193405274005726221277
BAKKEN4-20212737916377432799260308586431575
BAKKEN3-202111511510000

***************

Previous entry:

  • 36943, loc-->conf, LCU Jessie 3-24H, drl status noted 4/4/20;

We now have production data; the entry will be updated:

  • 36943, loc-->conf, LCU Jessie 3-24H, drl status noted 4/4/20; drl/A noted 7/12/21, cum 77K 5/21:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20213143111431284372070821694931222
BAKKEN4-20212633529333763385953557520711399
BAKKEN3-202111781780000

 *******************

Previous entry:

  • 36944, loc-->conf, LCU Jessie 4-24H1, drl status noted 4/4/20;

We now have production data; the entry will be updated:

  • 36944, loc-->conf, LCU Jessie 4-24H1, drl status noted 4/4/20; drl/A noted 7/12/21, cum 71K 5/21:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20213141347413484046566153649061141
BAKKEN4-20212429031288993098745546442751189
BAKKEN3-202114754750000

 ***********************

Previous entry:

  • 36764, drl, LCU Jessie 9-24H1, drl status noted 9/13/19;

We now have production data; the entry will be updated:

  • 36764, drl/A, LCU Jessie 9-24H1, drl status noted 9/13/19; drl/A noted 7/12/21, cum 45K 5/21:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-2021312894828928571774627845374798
BAKKEN4-2021251565515584533332221421550579
BAKKEN3-2021000000

*****************************

Previous entry:

  • 36944, loc-->conf, LCU Jessie 4-24H1, drl status noted 4/4/20;

We now have production data; the entry will be updated:

  • 36944, loc-->conf, LCU Jessie 4-24H1, drl status noted 4/4/20; drl/A noted 7/12/21, cum 71K 5/21:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20213141347413484046566153649061141
BAKKEN4-20212429031288993098745546442751189
BAKKEN3-202114754750000

Several more, but I've run out of time. Will update later.


Update: CLR's Long Creek Unit -- July 12, 2021

CLR's Long Creek Unit (LCU) is tracked here. This is what the area looks like today:

Breaking: Warren Buffett Cancels Pipeline Purchase -- Antitrust Concerns -- July 2, 2021

We'll find a better link tomorrow. It will be all over the business news outlets tomorrow. [Later: link at Bloomberg via Yahoo!Finance.]

Link here for now

Key words/phrases:

  • Dominion Energy (D)
  • Questar Pipelines, a subsidiary of Dominion Energy
  • the sale was completed in November, 2020
  • cancel
  • I wonder how that works. LOL. 
    • we'll see many examples over the next four years
  • Questar: mainly in Utah, Wyoming, Colorado
  • Buffett's subsidiary PacifiCorp: owns Rocky Mountain Power, serves Utah, Wyoming, Idaho; seems to be a bit of overlap; LOL.
  • decision / announcement came days after President Biden said he would do this if Buffett didn't;
  • Greg Abel, the current chairman of Berkshire Hathaway Energy and the vice chairman for Berkshire's non-insurance operations, has been picked by Buffett to eventually take over as Berkshire CEO once the 90-year-old Buffett either retires or passes away
  • market: BRK-B is having an incredibly six months: 
    • $235, January, 2021
    • $280, July, 2021

**************************
New Party Game

Take any CNN article.

Down an ounce of Scotch every time you come across a typographical error.

Did Saudi Just Report An All-Time Low In Modern History? July 12, 2021

 Saudi Arabia foreign change reserves, link here. I think this is an all-time low in modern history.



EIA Dashboards -- July, 2021

I'm going swimming. I will post the graphics later, but for who want to see them now, the EIA dashboards have been posted. This will be the fourth time I got into the pool today. Each visit was thirty minutes to one hour. One of the four visits was with Sophia. I try to get into the pool at least three times daily.

EIA dashboards:

********************************
BLM Finals

Ratings for game 2, at Milwaukee: down 32 percent from "same game," 2019. 

But get this, as bad as those numbers were, game 2 was the most-watched BLM game of the year

Game 2 also out-drew four of last year's MLB World Series games. (One word: wow!) 

Viewers:

  • game 2, 2019: 13.89 million
  • game 2, 2021: 9.38 million

The next question: what were the ratings for game 2 in 2019?

It's "fun" to fact-check this. All the sports networks -- apologists for the BLM conference -- only compare this year's television ratings with the most dismal ratings ever, last year, during the height of the pandemic. It takes a bit of sleuthing to get 2019 television ratings with which to compare.  

In a way, it's too bad. Milwaukee has the "Greek Freak" and it's truly a sad commentary when so few Americans know his story. Previously posted.

High Dividend Cripples World's Largest Oil Company -- Simon Watkins -- July 12, 2021

Updates

Later, 10:05 p.m. CT: Saudi Arabia foreign change reserves, link here. I think this is an all-time low in modern history.



Original Post 

Regular readers (and almost all others interested in oil and gas) are aware of this story, but it's always enjoyable to re-live a bit of schadenfreude. Simon Watkins, always very good, may add some new details

The transformation of Saudi Arabia’s flagship asset, Aramco, from perpetual cash-generation machine into a debt-laden giant is set to pick up pace in the coming weeks with a series of schemes aimed at raising much-needed funding for the now-beleaguered oil and gas company.  

It has not been forgotten by many senior Saudis that the reason for this terrible transformation of the former jewel in the crown of Saudi Arabia’s business sector - and the cornerstone of any power that the Kingdom might have had on the world stage – into a crippled corporate money pit is that Crown Prince Mohammed bin Salman (MbS) did not want to lose face in the initial public offering (IPO) for Aramco upon which he had staked his personal political reputation. 

Having opened up the books of Aramco to the scrutiny of the international investment community in the run-up to the December 2019 IPO, so toxic a proposition was Aramco considered to be by then that a range of increasingly desperate measures were taken to sell even a small proportion of the originally intended stake. The most desperate of these was the pledge to guarantee a dividend payment to shareholders in Aramco of US$18.75 billion every single quarter of every single year – a total of US$75 billion every single year.

In other words, each and every year, Aramco has to pay out around three times the entire amount that it received for the entire IPO. Just like the individual who cannot afford the interest repayments on their maxed-out credit card anymore so decides to take on a second credit card debt to pay the interest on the debt of the first – a deadly debt trap from which there is no exit – Saudi Arabia now has no alternative but to continue to sell off assets (the equivalent of selling the family silver, and this can only be done once), sell more bonds (taking on more debt and the interest on this form of Saudi debt is going up with every such sale), and cancel projects (which are crucial to the long-term success of Aramco). 

Much more at the link. But four more paragraphs because I want to showcase a "new" word.

The entire list of money-raising schemes reads like a business school text book of how a company can destroy itself in less than five years. In this case, the start date was 11 December 2019 when the IPO of Aramco was forced through by MbS, despite all sound business logic dictating that it should be put on ice indefinitely due to the lack of broad-based interest from any serious international institutional investors, especially in the West. Since then there have been multiple bond offerings from Saudi Arabia aimed at plugging the ongoing deficit created by the gargantuan US$75 billion per year guaranteed dividend payment to Aramco shareholders.

 The problem with this strategy is that the global investment market has a limit to how much Saudi debt it wants to hold at any one time or, to put it another way, in the matrix of their global asset portfolios, international institutional investors have a certain percentage of the total allocated to holding Saudi debt, at which level the risk/reward balance is considered acceptable. After that point, the appetite of international institutional investors drops off a proverbial cliff and the only way to entice them into buying into further debt offerings is to pay them more compensation to take it, in the form of the coupon rate on the bonds. Exactly the same risk/reward analysis, albeit across a broader spectrum of a country’s and corporate’s financial assets, is undertaken by revolving credit facilities offered by banks or similar rating debt-raising mechanism, such as syndicated loans. Just like the aforementioned credit card victim that has reached bottom, there comes a point when the options to refinance the ever-growing debt and its ballooning interest payments just run out.

A sign that this is precisely what is already happening to Saudi Arabia was that the most recent bond sale – in June – was confined to a shariah-compliant bond (sukuk) offering and not a conventional international bond offering as had been the two previous bond offerings by the company (a debut US$12 billion sale in 2019 and an US$8 billion offering in November last year). The market for bonds governed by shariah principles – forbidding investing in activities that can be deemed speculative, involve uncertainty, entail the payment of interest, are fundamentally unjust to participants, or are involved in prohibited businesses (such as gambling, alcohol, and the sale of certain foodstuffs) – is a captive one, often characterised by a lack of suitable supply compared to a steady weight of demand.

The ‘suitability factor’ narrowed the sukuk availability list down further after 2008 when a wide-ranging audit by the global shariah finance watchdog - the Accounting Auditing Organisation for Islamic Financial Institutions (AAOIFI), in Bahrain – revealed that the repurchase undertakings found in around 85 percent of apparently shariah-compliant bond- and equity- fund structures that were based on ‘mudaraba’ and ‘musharaka’ actually violated the Islamic duty to share risk. Given this market structure, even the ‘junk-rated’ Oman was able to draw in more than US$11.5 billion in orders for its US$1.75 billion sukuk offering in June. Saudi Aramco’s US$6 billion tri-maturity sukuk offering did only marginally better, attracting just over US$60 billion in total bids for the paper.

Archived.

Sukuk: if one reads the definition of "sukuk" closely, it sounds like "sukuk" is more like an equity share, not a bond.

Memo to self: add a new tag at the bottom of the blog -- schadenfreude.

Housekeeping -- The Blog -- July 12, 2021

Google blogger is the platform for "The Million Dollar Way" blog. 

Recently Google blogger sent all "tenants" this message:

I don't know whether this affects any readers but it may explain "glitches" / changes that show up in August.

Chart Of The Day -- July 12, 2021

A reader sent me this graphic. I do not have the link/URL. 

Wait until some Pulitzer-seeking reporter decides to look into the debacle. 

From the CDC, vaccinations are down to 500,000 / day on average:



A

B

C

D

F





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

Doses received in past week, current Monday from previous Tuesday

Average number of doses given / day in past seven days

Monday

July 12, 2021

387,006,120

0

334,600,770

449,122

86.46%

3,937,380

521,064

Sunday

July 11, 2021

387,006,120

474,025

334,151,648

592,620

86.34%



Saturday

July 10, 2021

386,532,095

474,025

333,559,029

592,620

86.30%



Friday

July 9, 2021

386,058,070

562,280

332,966,409

620,612

86.25%



Thursday

July 8, 2021

385,495,790

2,427,050

332,345,797

694,333

86.21%



Wednesday

July 7, 2021

383,068,740

0

331,651,464

349,070

86.58%



Tuesday

July 6, 2021

383,068,740

0

331,302,394

349,071

86.49%



Monday

July 5, 2021

383,068,740

0

330,953,323

349,070

86.40%

1,786,020

934,136

Sunday

July 4, 2021

383,068,740

1,180

330,604,253

633,702

86.30%



Saturday

July 3, 2021

383,067,560

431,040

329,970,551

1,161,081

86.14%



Friday

July 2, 2021

382,636,520

352,530

328,809,470

657,166

85.93%



Thursday

July 1, 2021

382,283,990

0

328,152,304

1,499,728

85.84%



Wednesday

June 30, 2021

382,283,990

452,160

326,652,576

1,499,729

85.45%



Tuesday

June 29, 2021

381,831,830

549,110

325,152,847

738,476

85.16%



Monday

June 28, 2021

381,282,720

-1,000

324,414,371

1,087,043

85.08%

2,279,310

833,990