Sunday, July 25, 2021

Now, For The Damages -- July 25, 2021

This story was published some days ago, in The Williston Herald, but for some reason I never posted it.

Posted now.

Last year the North Dakota Supreme Court upheld a lower court decision in the Wilkinson’s disputed mineral rights case that the state no longer has any claim to any minerals under Lake Sakakawea that lie outside the historical Missouri River channel.

But it also sent the case back to the lower court in Williams County, to consider damages.

Judge Paul Jacobson did just that on Thursday and Friday, hearing testimony from Wilkinson family members about their struggle to regain minerals that official records show the family retained after Lake Sakakawea was flooded in 1958.

To catch up on the story, see the tag,  "high water mark" or "riparian," although the latter was seldom used.

I considered this story the most egregious story to have come out of the Bakken up to that time, and I'm not aware of any story that is more egregious to this day. This was a "land grab" by the state, pure and simple; fortunately the court agreed.

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Whistle Register

Something to share with the oldest granddaughter who knows so much about music. I don't know if she knows about this, the whistle register.

At wiki.

For Investors Only -- Nothing About The Bakken -- July 25, 2021

Global investors: $1 trillion invested in US funds in 1H21, a record amount. Link to The WSJ. Some numbers rounded. 

Investors world-wide have funneled more than $900 billion into U.S.-domiciled mutual and exchange-traded funds, on a net basis, during the first half of the year. 
That is a record in data going back to 1992 and is more than investors have put into funds elsewhere around the world combined during the first two quarters of 2021.

This is just "mutual funds and ETFs ." Doesn't include other equities. Much more at the link. When you look at the American indices and the German index, imagine you are a German investor and not an American. My hunch: American mom-and-pop retail investors are doing a lot better than professional Germany money managers.

Previously posted:

Amazing graphics:

Graphic above:

  • A: trajectory when folks thought we were coming out of the pandemic; extend line A and we're easily at 36,000 for the Dow;
  • B: trajectory when vaccinations slowed down; and delta variant emerged
  • C: trajectory not seen; when delta variant concerns dissipate, probably beginning in October, 2021;

The graphic that absolutely amazes me

Someone is reading the blog. From Bloomberg via Yahoo!Finance today:$17 trillion "on the sidelines.


In the stock market, the refusal of retail investors to back down from every macro threat has become the only story. When will it end? Judging by the size of all the pools of cash lying around, it could be a while.

Among all the economic stories of the pandemic, the one about money piling up in people’s accounts has been the most significant in the stock market, where the S&P 500 just notched its seventh gain in nine weeks. Money market accounts, viewed in some circles as a “dry powder” reserve for equity deployment, sit at just under $4.5 trillion. A more obscure balance, the Federal Reserve’s count of money on deposit with commercial banks, has risen 33% from 2019 to $17 trillion.

While none of the money is completely unencumbered and professionals tend to hate the concept of “cash on the sidelines,” something is arming the day-trader cadres who seem bent on letting no market selloff last more than 24 hours. Take Monday, for example, when fears the delta variant would upend progress sent the S&P 500 down as much as 2.2%. Dip buyers ran to the rescue then and the rest of the week, sending the S&P 500 higher by almost 2% through Friday, despite virus cases still spiking.

Whiting's S-Bar And Satterthwaite Wells In The Sanish

The wells:

  • 37083, conf/producing, Whiting, S-Bar 11-7HU, Sanish,
DateOil RunsMCF Sold
5-202143442510
  • 37082, conf/producing, Whiting, S-Bar 11-TFHU, Sanish,
DateOil RunsMCF Sold
5-202125491521
  • 24264, AB/1,253, Whiting, S-Bar 11-7H, Sanish, t3/13; cum 159K 12/19 
  • 24263 AB/503, Whiting, S-Bar 11-7-2TFH, Sanish, t3/13; cum 106K 12/19
  • 17964, 571, Whiting, Satterthwaite 11-7H, Sanish, t6/09; cum 190K 3/21;
  • 21252, 690, Whiting, S-Bar 11-7TFH, Sanish, t2/12; cum 113K 3/21;
  • 36862, conf/drilled/awaiting completion, Whiting, Satterthwaite 13-7-2H, Sanish, spud, December 16, 2019; TD, December 22, 2019;
  • 36863, conf/drilled/awaiting completion, Whiting, Satterthwaite 13-7XH, Sanish, spud, December 24, 2019; TD, December 30, 2019;
  • 18965, AB/1,264, Whiting, Satterthwaite 13-7H, Sanish, t9/10; cum 246K 12/19;
  • 21935, AB/812, Whiting, Satterthwaite 14-7TFX, Sanish, t5/12; cum 122K 2/20;
    21936, 1,443, WHiting, S-Bar 14-7XH, Sanish, t5/12; cum 188K 12/19; but back on line 5/21; for four days; 
  • 21937, AB/813, Whiting, S-Bar 14-7TFX, Sanish, t5/12; cum 112K 2/20;
  • 36895, conf/producing, Whiting, Satterthwaite 14-7HU, Sanish,
DateOil RunsMCF Sold
5-2021600
  • 36896, loc, Whiting, Satterthwaite 14-7TFHU, Sanish, 
  • 36897, conf/producing, Whiting, Satterthwaite 14-7XH, Sanish,
DateOil RunsMCF Sold
5-2021650

The Niemitalo Wells

The wells:

  • 18481, 2,672, Whiting, Niemitalo 12-35H, Sanish, t5/10; cum 637K 5/21;
  • 17575, 3,260, Whiting, Niemitalo 11-35H, Sanish, t3/09; cum 703K 5/21;
  • 19502, 2,720, Whiting, Niemitalo 31-15XH, Sanish, t2/11; cum 511K 5/21;
  • 32624, 891, Whiting, Niemitalo 11-35H-2H, Sanish, t11/19; cum 244K 5/21;
  • 22710, 615, Kraken, Niemitalo 24-13H, Sanish, t1/13; cum 421K 5/21;
  • 32124, loc, Kraken, Niemitalo 31-15-2XH, Sanish,
  • 32123 loc, Kraken, Niemitalo 31-15-3XH, Sanish,

Breaking On Twitter, Elsewhere -- July 25, 2021

Peak viewing hours, Sunday afternoon, 3:00 p.m. CT for the Olympics:

  • table tennis (ping pong); and,
  • men's basketball, France vs USA; we already know the outcome of this one; first Olympics basketball game since 2004 that the US has lost; 

Any question why viewership is down; a 33-year low.

Olympics:

  • US men's basketball: loses first game in Olympics since 2004; lost to France
  • tennis: world's #1 loses (and is out) to world's #48
  • US women's gymnasts: one point behind Russia in qualifying; team looks vulnerable; 
  • good for her: Naomi Osaka wins her opening match; moves on; earlier she had skipped the French Open and Wimbledon;

Schlumberger:

  • to drill thirteen exploratory wells of Libya; link here;

GasBuddy:

  • weekly US demand reaches new 2021 high; bests week ahead of July 4, 2021; link here;
  • weekly (Sunday - Saturday) US gasoline demand set a new 2021 record, rising 2.3% from the prior week and was up 3.1% vs the four-week average; weekly demand was 0.6% higher than the week ahead of July 4 (week of 6/27)

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The Grandsons -- Portland, OR

This is Judah. 

Local church music director.


Canadian Shale -- EIA -- 2015

Link here.

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Inflation? What Inflation?

Bananas at Target this morning: 49 cents/pound, and they have so many, they will have to be marked down unless they plan to throw out a lot.

I have four grocery stores to choose from, all within biking distance, the nearest two minutes away and the farthest ten minutes away.

Tom Thumb: local regional; low-rent; last choice for me of the four; only went when we lived at our previous apartment; would never go there again; expensive; shoddy; owned by Albertson's just down the street.

Albertson's: nationwide grocer. A bit more upscale. Somewhat competitive. Much better meat selection than any other in the area. Outstanding rotisserie chicken, and still priced at $6.99. It's the only place I can find the fruit and fresh vegetables that my wife wants.

Walmart: everyone knows Walmart. No need to discuss.

Target: wow, what can I say! This store is incredibly busy. Tom Thumb is generally devoid of customers; Albertson's doing better but parking lot is really quite empty, considering. Target: parking lot is always full. People arrive before the store opens and wait for doors to open. I can bike there in less than two minutes. No exaggeration. Probably slightly more expensive than Walmart but a better shopping experience. It seems about the right size. For just a handful of items, it's a real trek to go to Walmart. I don't think Target has hot rotisserie chicken but it does have "cold" rotisserie chicken in the deli section, or whatever it's called. The meat / fish selection does not compare at all to what we get at Albertson's. But wow, that store is incredibly busy. They seem to have the right mix of self-checkout and checkers. But sometimes the self-checkout line gets really long. 

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Playing In The Mud

In the photo below, Corky and Jilly Bean. Correct spelling.

Sophia was painting a picture of a fairy castle or some such thing.

Sophia's mom was about to move Corky and Jilly Bean closer so they could see the painting better. 

Sophia yelled out: "No! They're playing in the mud." 

Deals In The Oil Patch -- Reuters -- July 25, 2021

Link here to Reuters. Numbers rounded from original article.

Macro:

  • first five months of 2021: sales of land parcels worth $6.9 billion, almost eclpsing the $7 billion recorded in all of 2020;
  • 2020: last year was the worst for US acreage sales since at least 2006
  • more deals on the way: more than $12 billion either up for sale or being prepared to come to market in the US

Individual exhibits:

  • OXY:
    • marketing 250,000 net acres in Delaware portion of the Permian;
    • $550 million
    • the company has targeted more than $2 billion from divestments in the first hal fo f2021
  • Ovintiv:
    • completed in mid-May, $880 million sale of its Eagle Ford position
    • sold to Validus Energy
  • Laredo Petroleum:
    • will sell a 37.5% stake in two Texas counties
    • buyer: Sixth Street Partners
  • Exxon Mobil:
    • may divest parts of its shale gas business in North America
  • Pursuing acreage sales:
    • OXY
    • Chevron
    • Whiting
    • COP
    • Callon Petroleum
  • Advance Energy Partners, majority owned by EnCap
    • exploring a sale around $2 billion
  • NORTH DAKOTA RimRock Oil & Gas
    • private equity firm Warburg Pincus asked for indicative acquisition offers for a deal that could exceed $500 million
  • EnCap-backed Grayson Mill Energy:
    • bought the Bakken shale assets of Equinor for $900 million (previously posted)
  • Uinta (Utah), Denver-Julesburg (Colorado)
    • unattractive due to federal and state political issues

From the blog's "Bakken Operators":

RimRock Oil & Gas

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Warburg Pincus - RimRock Oil & Gas

Link here

A portfolio company is a company (public or private) that a venture capital firm, buyout firm, or holding company owns equity. In other words, companies that private equity firms hold an interest in are considered portfolio companies. Investing in a portfolio company aims to increase its value and earn a return on investment through a sale. Link here. And here (wiki).

$500 million / 120,000 acres = $5,000 / acre
$500 million / 30,000 acres = $17,000 / acre

Talking About The Bakken -- July 25, 2021

Note

  • I remain inappropriately exuberant about the Bakken.
  • This is not an investment site.  
  • I often misread things.
  • I often see things others do not.
  • I often make huge mistakes. I generally acknowledge huge mistakes unless they are opinion pieces, if that makes sense.
  • I have a hidden agenda: to promote the Bakken and the state of North Dakota. And Montana. And the United States.
  • I have three ads on each page because that's what the google app / google demands if one monetizes a blog; the only reason I monetized my blog was a challenge by one of my granddaughters to see if I knew how to do it. I have no control over the ads that are placed on the blog. Generally, I don't like the ads that show up. I would like to get rid of the ads, but it was such a complicated process, I don't want to go through it again if I change my mind.
  • I often make simple arithmetic errors.  
  • I regularly make typographical and content errors; I correct them when I find them. I appreciate readers not pointing them out unless they are really, really egregious.
  • "milliondollarway" is a reference to US Highway 2&85 north of Williston which was my metaphorical, figurative, and literal way of leaving Williston after high school; it has nothing to do with me personally.

The following: simply some random notes and links thrown together after seeing Whiting's recent Bakken announcement. 

Re-posting:

From Geoff Simon's top North Dakota energy stories this week:

Whiting Petroleum announced this week it has entered into an agreement with an undisclosed seller to acquire 8,752 net acres in Mountrail County for total cash consideration of $271 million.

 

The Bakken acreage includes 61 undrilled locations, five drilled but uncompleted (DUC) wells, and currently produces 4,200 BOE/day, of which 80% is oil. Company officials say there is significant upside from Whiting Petroleum’s existing operations in the Sanish field. 


Peterson said the company estimates that in a mid-$50s oil environment, it has more than six years of high-quality drilling inventory, assuming a two-rig drilling program.

 

$271 million / 8,752 net acres = $31,000 / acre. Figures rounded. 

 

8,752 acres / 640 acres = 14 sections.

 

8,752 acres / 1280-acre  units = 7 drilling units

61 undrilled locations / 7 drilling units = 9 additional wells in existing 1280-acre units; 

Graphics pending

This is what the Sanish looks like today. The first graphic, well sites only, horizontal legs removed. The second graphic, well sites with horizontal legs added back in. In the first graphic, the Sanish is outlined in a heavy red border.

 

The Sanish is about 5.5 townships in size, or about 36 sections/township x 5.5 townships = 198 sections, rounding to 200 sections, or about 100 1280-acre drilling units.

Note: two rigs in the Sanish:

  • 32123, drl/loc, Whiting, Niemitalo 31-15-3XH, Sanish,
  • 37344, drl/loc, Kraken/Kaiser-Francis/Fidelity (MDU), Bigfoot 23-11 6TFH, Sanish,

Projections: number of wells in each 1280-acre drilling unit (includes 2560-acre section line wells), in the Sanish:

  • currently: averaging about six wells were drilling unit, I suppose; range: two to twelve, or thereabouts;
  • for sure: "the norm" will eventually be twelve wells per drilling unit; this does not mean every drilling unit will have twelve wells but in general that's what I expect to see; there will be exceptions;
  • probably: there will eventually be an expectation of twenty-four wells per drilling unit; not all twenty-four wells will remain active more than ten years;

Wells per drilling unit:

  • the number of wells in a drilling unit is still an important metric, but as technology improves, the number of wells per drilling unit becomes less important
  • more important: the EUR (primary recovery) from a given drilling unit
  • starting in 2018 or thereabouts, it appeared EURs of one million bbls in the better Bakken were required to justify drilling; I will continue to use that number: one million bbls EUR per well in the better Bakken, which includes the Sanish
  • primary recovery: in the early days, it was assumed primary recovery was in the range of one- to three-percent of original oil in place (OOIP)
  • when the Bakken was reaching its stride, let's say about 2010, I saw reports that suggested primary recovery was in the eight percent range, and some suggested it was significantly higher;
  • I now assume primary recovery is in the range of twelve percent among the better locations by the better operators. 
  • [For comparison, I recently ran the numbers based on publicly available information, that the Saudis were getting about 30% recovery in their biggest field, where they are currently using waterflooding in conventional drilling.]

The numbers regarding OOIP in the Bakken do not add up.

  • the most recent USGS survey of the Bakken was released in 2013; that survey is linked at the sidebar at the right;
  • we were promised an update in 2020 -- never happened -- which was good, in hindsight -- 2020 was a very, very bad year to complete a new assessment; 2020 will be known as the year the Bakken stood still.

The weirdest thing:

  • according to Investopedia, oil reserves are the amount of crude oil a country or region has that can be reasonably extracted; but yet,
  • according to BP, global proved oil reserves were 1732 billion barrels at the end of 2020, down 2 billion barrels versus ‎‎2019. How did that happen?
  • Investopedia does not mention "price/cost" in its opening definition, but most agree -- in fact, I think all agree -- that price/cost of oil is a significant part of the discussion.
  • wiki probably says it best, first line at this link: oil reserves denote the amount of crude oil that can be technically recovered at a cost that is financially feasible at the present price of oil.
  • which leads us to situations like Venezuela; it seems in addition to technology and price of oil, a third component necessary is political will; if the US bans all oil production in the United States, would our reserves matter? Would our reserves zero out?

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Annual North Dakota Oil Production

Link here

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Crude Oil Reserves -- A Commentary

Link here.

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900 vs 300

Link here.


Initial Production Data For Wells Coming Off Confidential List This Next Week -- The Year The Bakken Stood Still -- July 25, 2021

The wells:

  • 37854, conf, CLR, Carus 14-28H1, Cedar Coulee, no production data,
  • 37888, conf, Petro-Hunt, State 158-91-16C--2H, Kittleson Slough, producing,
DateOil RunsMCF Sold
5-2021104330
4-202147340

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Summertime Sadness


Link here
, Summertime Sadness, Lana Del Rey:

Wells Coming Off The Confidential List This Next Week -- The Year The Bakken Stood Still -- July 25, 2021

Monday, August 2, 2021: 1 for the month, 12 for the quarter, 192 for the year:
37854, conf, CLR, Carus 14-28H1,

Sunday, August 1, 2021: 0 for the month, 11 for the quarter, 191 for the year:
None.

Saturday, July 31, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Friday, July 30, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Thursday, July 29, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Wednesday, July 28, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Tuesday, July 27, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Monday, July 26, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Sunday, July 25, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Saturday, July 24, 2021: 11 for the month, 11 for the quarter, 191 for the year:
37888, conf, Petro-Hunt, State 158-91-16C--2H, Kittleson Slough, producing,