Enerplus In The News -- August 4, 2021

Enerplus is one of the more exciting Bakken operators to watch right now.

Enerplus is tracked here.

The Enerplus, July, 2021, corporate presentation, a pdf will download.

In the July, 2021, presentation, Enerplus said it brought four wells online in the "Weathers North" pad. Those four wells have been been updated.

Tomorrow, August 5, 2021, Enerplus reports 2Q21 earnings. 

The following Enerplus well on the "Precipitation" pad (note: these are my names for the pads; Enerplus has their own names for the pads) has now gone over 500K:

• 25736, 2,347, Enerplus, Snow 149-93-07A-12H, Mandaree, t6/15; cum 549K 3/20; off line 12/19; remains off line 2/21; back on line 4/21; cum 553K 5/21; was off line for over an year, no degradation;

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Ride

Someone else noticed it also, when Lana Del Rey's voice "breaks" at 1:30, "just ride." At that point she sounds exactly like the best 20th century female singer. Lana Del Rey, Ride:

 and then, Linda Ronstadt, Long, Long Time,

California Fires And CO2 -- FWIW -- August 4, 2021

When wood burns, doesn't it release CO2? Asking for a friend.

Those forest fires in Canada, Californa, are they releasing CO2? Asking for a friend.

Link here. This was from last year, September 18, 2020.

• This year’s (2020) fires in California have already burned through 1.4 million hectares (3.4 million acres) of land, and the fire season isn’t set to end for at least a couple of months.
• The fires have already generated more than 91 million metric tons of carbon dioxide, which is about 25% more than the California’s annual emissions from fossil fuels.
• Higher carbon emissions contribute to a multipart climate feedback, accelerating climate change which then sets the stage for more fires that will emit an increasing amount of carbon dioxide, experts say.

California is burning with a ferocity never seen before in the Golden State. So far this year, fires have burned through more than 1.4 million hectares (3.4 million acres) of land — about half the size of Belgium — according to the California Department of Forestry and Fire Protection. What’s more, it’s only mid-September, and the region’s normal fire season usually lasts until somewhere in November.

Along with the flames comes a rapid rise in carbon dioxide emissions, which, in turn, will accelerate climate change events that are fueling the current fires, experts say.

Ah, yes, the experts.

EOG -- 2Q21 Earnings; MDU -- 2Q21 Earnings

MDU.

Link here.

Second quarter earnings of $100.2 million, or 50 cents per share, compared to second quarter 2020 earnings of $99.7 million, or 50 cents per share. For the six months ended June 30, MDU Resources earned $152.3 million, or 76 cents per share, compared to $124.8 million, or 62 cents per share, in 2020.

EOG.

Link here.

Second Quarter 2021 Highlights

• Earned adjusted net income of $1.0 billion, or $1.73 per share
• Generated over $1.0 billion of free cash flow
• Capital expenditures below low end of guidance range driven by sustainable cost reductions
• Increased full-year well cost reduction target to 7% from 5%
• Oil production above high end of guidance range
• Total per-unit cash operating costs 3% below guidance midpoint
• Achieved strong ESG performance in 2020 driven by technology and innovation, positioning EOG ahead of pace to meet near-term ESG targets

Starting To See "Movement" In The Bakken? -- August 4, 2021

From today's NDIC daily activity report:

Change of operator, from Hess to Enerplus, about 600 wells were transferred from Hess to Enerplus:

• 12+ pages of wells
• 50+ wells on each page
• scrolling through the list, approximately:
• 60% in Dunn County
• 30% in McKenzie County
• 10% in Williams County

This asset transfer was announced back in April, 2021. Many links, this is one from Reuters.   

Canada’s Enerplus Corp said it would buy some assets in North Dakota’s Williston Basin from Hess Corp for $312 million, as improved oil price expectations have buoyed mergers and acquisitions in North America.

Canada’s oil and gas sector had a record start to 2021 in terms of mergers and acquisitions as the energy sector benefits from a rebound in oil prices from the pandemic-led crash last year, and as smaller companies bet on economies of scale.

Enerplus said it will buy 78,700 net acres in North Dakota, adjacent to its current core Bakken acreage, with about 6,000 barrels of oil equivalent per day (boepd) of working interest production from Hess.

On the blog, see this post. 

$312 million / 600 wells = $500,000 / well.

Covid-19 -- August 4, 2021

Cases and deaths, link here. 

Louisiana: link here -- deaths are starting to follow cases. Link here. 

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Covid-19 and a Family Reunion

I am currently enjoying a family reunion with 28 extended family members of which 20 are adults, three are teenagers, and the rest (5) between the ages of 18 months and twelve years.

Politically, they range from Pelosi-Democrats to Trump-QAnon acolytes.

When it comes around to Covid-19 the discussion immediately begins with "the vaccine."

Wrong place to begin a discussion among fifteen adults who exist across the entire political spectrum and have the same spread of science background.

We've pretty much come to "we agree to disagree."

I think a discussion that begins with "the vaccine" is the wrong place to begin on a subject that is more "religious" in nature than scientific.

If we "agree to disagree," we need to find out at "what level" we agree.

This is the way it works. We try to find the most "basic" question, start there and work forward. We do not move forward if we don't have 100% agreement.

Most basic question with that in mind:

Is there, in fact, an infectious disease out there, currently of US or global concern that is caused by a novel coronavirus? 

If we don't have 100% agreement on the answer to that question, we do not move on.

If we all agree there is such an infectious disease, the next question that requires one hundred percent agreement if we are to move on: 

Is the infectious disease serious enough that intelligent life forms in the US or globally need to address?

If even one person answers "no" to that question, then it is moot to move to the next question or ever get to the question of "the vaccine" -- again, we have agreed to disagree. So, at what point, do intelligent life forms disagree?

 

There are some in the group that argue that this infectious disease is not serious enough requiring intelligent life forms to address.

 

And, so the discussion ends. We now know that we disagree whether this infectious disease is even serious enough to address. 

 

That was easy. 

 

It is "fun" / interesting to move to the next question if all agree that, for the sake of argument, the disease is serious enough to address. The "serious enough to address" has not been defined. 

But we will leave that for another day.

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Word Of The Day 

Panjandrum.

Example: Dr Fauci.

Six New Permits; Thirteen Permits Renewed; Two Permits Canceled; Two DUCs Reported As Completed: 600 Wells Transferred From Hess To Enerplus -- August 4, 2021

Wow, wow, wow! I am impressed. The NDIC is now reporting new data in the daily activity report while they upgrade their information technology database, etc. I am very impressed and thrilled to say the least. See daily activity report below. 

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Other Stuff First

Covid-19 vaccinations, link here:

• delivered: 402,010,455
• administered: 348,102,478,
• at least one dose: 192,614,017,
• fully vaccinated: 165,334,987

Gasoline demand, link here:

• first look, disturbing; second look: hey, is something going on?
• the most interesting data point in the graphic below is circled
  
  
  

CEO compensation, link here:

• Elon Musk: $6.658 billion -- yes, with a "b."
• six others, then,
• Tim Cook, at #8: $133.7 million
• and why is this important to know? Not only is it unimportant to me, it doesn't even interest me.
  

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Back to the Bakken

Change of operator, from Hess to Enerplus, about 600 wells were transferred from Hess to Enerplus:

• 12+ pages of wells
• 50+ wells on each page
• scrolling through the list, approximately:
• 60% in Dunn County
• 30% in McKenzie County
• 10% in Williams County

Note: this is awesome. See above: wow, wow, wow! I am impressed. The NDIC is now reporting new data in the daily activity report while they upgrade their information technology database, etc. I am very impressed and thrilled to say the least. See daily activity report below.

Active rigs:

$68.09	8/4/2021	08/04/2020	08/04/2019	08/04/2018	08/04/2017
Active Rigs	19*	12	58	64	58

*Active rigs: from the daily activity report; interestingly enough, when you count the active rigs below it is 23, but this may be an older list.

• CLR (7): JDT Federal; Kukla, Jensen, Dvirnak, Harrisburg, Tallahassee FIU, LCU Truman,
• MRO (3): Katherine Schettler, Sebastian, Stein,
• Hess (2): BB-State, BL-Myrtrice;
• Petro-Hunt: Tomlinson
• Enerplus: Weasel,
• RimRock: FBIR Johnson,
• Ovintiv: Rolla,
• Rampart Energy: Coteau
• Whiting: Niemitalo,
• Kraken, Bigfoot,
• Slawson: Muskrat Federal,
• Oasis: Borden Federal,
• Koda Resources: Porter
• Resonance Exploration: Resonance Wilmont

The current active rig list on the daily activivity list (23+1); there are 24 rigs on the list below but four do not yet have a start date.

• CLR (7+1): Clear Creek Federal, Jensen, Kukla, Asgard SWD, LCU Truman, Tallahassee FIU, Bice FIU, Bice FIU,
• Hunt (2): Blue Ridge, Blue Ridge
• Hess (2): BB-State, EN-Zunich,
• MRO (2): Mastel, WR Connolly,
• Slawson: Muskrat
• Bruin: FB Leviathan,
• Kraken: Bigfoot LS,
• Crescent Point Energy: Reed
• Whiting: Lehr,
• Oasis: Borden Federal
• RimRock: FBIR Johnson,
• Petro-Hunt: Dahl,
• Ovintiv: Rolla,
• Eagle Operating: Ober

Six new permits, #38450 - #38455, inclusive:

• Operators: Slawson (5); CLR
• Fields: Big Bend (Mountrail): Chimney Butte (Dunn)
• Comments:
• Slawson has permits for two Lightning Federal, two Rainmaker Federal, and one Howitzer well, all on SESW 24-152-93;
• the Slawson wells will all be sited 330 FSL and between 2315 FWL and 2115 FWL
• CLR has a single permit for a Jack well in SESE 8-145-95; which will be sited 320 FSL and 576 FEL

Thirteen permits renewed:

• XTO (12): three HBU Bjarne Federal permits; one Bjarne Federal permit; three Michael State Federal permits; five Cindy Blikre permits; all in Williams County
• Resource Energy Can-Am: one Marshall permit in Divide County;

Two permits canceled:

• EOG: two Hawkeye permits in McKenzie County

Two producing wells (DUCs) reported as completed:

• 36903, drl/NC-->1,147, Petroshale, Hickok Federal 1MBH, Bear Den, McKenzie County
• 36077, drl/NC-->496, Petro-Hunt, Hagen 144-98-12C-1-1H, Little Knife, Billings County

Re-Posting With New Images -- August 4, 2021

This was perhaps the most interesting non-energy story last week. 

2018: Californians overwhelmingly vote to ban pork if it did not come from "humane" sources, with the law to go into effect in "early" 2022.

Fast forward, 2021: Iowa pork producers are starting the campaign to keep this from happening. 

Link to story here. Two readers sent me the link. 

The headline: bacon may disappear in California as pig rules take effect.

My not-ready-for-prime-time reply to one of the readers:

This is fascinating.

This is a "who-blinks -irst" story: Iowa producers or California voters.

My hunch: if the Iowa producers hold firm, the Iowa producers will win.

In the big scheme of things I find it a non-story.

Question: why bacon only (see headline -- this tells me this is an Iowa-pork-producer generated story). It will affect all pork products? Why bacon only?

1. If bacon/pork goes away tomorrow, I can live on beef and chicken for the rest of my life. Oh, I forget, and lamb.

2. The Iowa producers knew this was coming from as far back as 2018. It's a "who blinks first" story. Fun to watch but I have no sympathy for either producers or consumers. The latter voted for this; the former were betting that voters would change their minds by 2022.

3. One pig source said they have 300 pigs, but under new rules could only have 250 pigs. If everyone is in the same boat, I think those with 250 pigs will figure it out.

4. For breakfast, instead of three strips of bacon, two strips: healthier lifestyle.

5. Great headline story but somehow I think folks will work this out. Great headline but once I step back, I just can't too excited.

I wrote about this in 2016, two years before the California vote. 

More at Schwa Nation.

 

Holly Frontier To Buy Sinclair -- HF Frontier -- To Close Mid-2022 --- August 4, 2021

HollyFrontier: purchases Sinclair.

From earlier this week; simply did not get around to it until now.  Direct to the  Platts story here.

Summary:

• Sinclair's renewable diesel business key part of transaction;
• refining capacity will almost double
• will provide RIN generation through marketing

From the article:

HollyFrontier will buy fellow Rockies refiner Sinclair, a deal which will add two refineries, a renewable diesel plant and access to a branded marketing network, thus increasing RIN generation

Increased RINs generation -- both through increased RD production and through Sinclair's marketing business -- will lessen the onerous burden of the US Environmental Protection Agency's Renewable Fuel Standard on the combined company.

The new company will be known as HF Frontier and the deal is expected to close in the middle of 2022. Also included in the $1.8 billion all stock deal is Sinclair's crude pipelines and terminal assets, which will be acquired by HollyFrontier's master limited partnership, Holly Energy Partners.

This is really, really cool. Quick: where is the demand for renewable diesel?

Feel-Good Story Of The Week -- August 4, 2021

I would not have seen this story, and if I had, I would not have posted it, and I certainly would not have posted it as a stand-alone post, but here it is.

This high school is the high school where our oldest granddaughter played water polo for three years! Whoo-hoo!

The story: quarterback Quinn Ewers, #2 prospect in 2022, will skip his high school senior season to join Ohio State.

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Another Feel Good Story

We have extended family members who have recently moved into a new home. Some months ago they ordered new appliances but due to the chip shortage were told they would not see those appliances for quite some time. 

Earlier this week, they phoned to get an update: they were told that not to expect anything until late September -- maybe later -- at the earliest.

Last night we were talking about the various supply shortages -- it's not just chips; it's a lot of things -- I mentioned that once the supply chains start to open up, they will open up quickly -- it just seems to happen in a free market capitalist economy.

Today, the family was notified that all appliances on order have now shipped and will be ready for pick up on August 6, 2021 -- two days from now.

Notes From All Over -- The PXD Edition -- August 4, 2021

Best tweet all week: NKLA producing "dozens of cars this year. Couple of dozen at low end of guidance." Link here.

• NKLA: up 5% today when the market is otherwise crashing (due to oil)
• market cap: $4.251 billion
• are you kidding me? LOL. 

Someone is reading the blog: I've known this for years (decades?). Only recently started mentioning it on the blog (in reference to AAPL). But now PXD Sheffield is saying the same thing and puts his money where his mouth is; tripled his company's dividend. From Sheffield:

• investors favor dividends over buybacks; well, duh;
• raising the bar: "when was the last time you saw PXD up 8% after earnings?" Link here.
  
• comment: always kind of amazing how guys like Warren Buffett try to convince us otherwise, laughing all the way to the bank;

Post-Brexit, the UK is cashing in, link here:

• Chinese applications to UK universities now outstrip the total number of would-be students from the EU;
• highlights the impact of Brexit and the sector's growing reliance on China;
• link at that site will take you to Bloomberg;

Renewable diesel (whatever that is), link here:

• if all renewable diesel projects come online as intended, US renewable diesel production would be 5.1 billion gallons -- okay -- gilding the lily, using gallons -- let's convert that to 42-gallon bbls = 121 million bbls per year by the end of 2024:
• 121 million bbls / 365 days = 350,000 bpd
• in 2020, distillate fuel consumption by the US transportation sector, which is essentially diesel fuel, was about 44.61 billion gallons -- here we go again -- or 1.06 billion bbls, or an average of 122 million gallons or 3 million bpd
• so, assumking the math is all correct -- a huge assumption -- and rounding:
• 300,000 bpd renewable diesel / 3 million bpd demand = 10%

The Permian: Idle Thoughts -- Not Ready For Prime Time -- August 4, 2021

If anyone understands/knows the Permian, they know how big a deal this two-play basin is. It's huge.

I would never in a million years recommend anyone invest in energy but this is getting pretty exciting:

Energy investing:

• PXD: hikes dividend; new: $1.51; was 56 cents;
• Scott Sheffield: "we aren't looking at any more Midland Basin acquisitions; we bought the best two available;
• unsaid: "RDSA is in the Delaware." I'm not the first to have noticed that.
  
• OXY: swings to profit; impresses Wall Street;
• DVN: impresses Wall Street;
• Shell Permian's assets, link here:
• $10 billion
• Devon
• Conoco
• wow: what a great opportunity for a joint venture, then divvy up the acres where they fit best; this is not rocket science

That has all been previously posted, but this is new:

• Shell is trolling (in a good sense); getting the word out its Permian assets may be up for sale;
• Shell has opened a data room for its Permian assets, Reuters, from June 15, 2021;
  
• 260,000 acresa
• analysts have thrown out a marker: $10 billion
• $10 billion / 260,000 acres = $40,000 / acre
• we should start to see a bidding war develop before the end of the summer if not a whole lot sooner; 
• one thing is for sure: OXY won't get involved
  
• there's only one thing oilmen like better than drilling: making deals
• remember: PXD just tripled its dividend;
  

Sidebar at the right, although not updated in a long time:

• Permian Basin;
• Delaware Basin;
• Midland Basin;

The Permian, from a 2013 post, this is very, very old but it still might be relevant; I don't know:

For newbies: again, there are three oil plays currently boom in the US: west Texas/Permian (primarily the Spraberry and the Wolfcamp); south Texas/West Gulf (the Eagle Ford); and, North Dakota/Williston Basin (Bakken).

The links are to the Market Realist:

• Part I: The importance of the Permian
• Part II: Geography of the Permian
• Part III: Major Players: Concho Resources, Pioneer Natural Resources, Laredo Petroleum
• Part IV: Major Players: Devon Energy, EOG, Approach Resources
• Part V: link not found, major players continued
  
• Part VI: that's the link but it seems to be the wrong link but it is worthwhile keeping;
• this link: Part 6: Resource potential and oil vs. gas split is broken;
• Part VII: Recent Activity and Growth

Natural Gas Continues To Be The Surprise Story Of 2021 -- August 4, 2021

Link here. The only graph(s) not at the link:

• number of miles of pipeline stopped by faux environmentalists;
• number of coal plants shut down by same;
• number of nuclear plants shut down;

Notes From All Over -- Wednesday, August 4, 2021

Natural gas:

• an incredible story

Hedging: shale drillers that hedged are taking huge losses; link here -- paywall; Leave $12 billion the table. Yahoo!Finance, no paywall, has same story. Original link:

Energy investing:

• ET: earnings climb as natural gas revenues jump. Link here.  
• PXD: hikes dividend; new: $1.51; was 56 cents;
• Scott Sheffield: "we aren't looking at any more Midland Basin acquisitions; we bought the best two available;
• unsaid: "RDSA is in the Delaware." I'm not the first to have noticed that.
  
• OXY: swings to profit; impresses Wall Street;
• DVN: impresses Wall Street;
• Shell Permian's assets, link here:
• $10 billion
• Devon
• Conoco
• wow: what a great opportunity for a joint venture, then divvy up the acres where they fit best; this is not rocket science
  

Geopolitical:

• OPEC needs Russia: a superpower that can stand up to the European carbon tax on imports. Link hree.

Covid-19:

• in retrospect, the UK was lucky to have those life-saving lockdowns. Otherwise they would have ended up like the reckless Sweden. Link here. Great graphic at the link. 

Market:

• bonds are the suckers at the poker table right now: Twain's Mustache. Some financial advisors still recommending a 60-40 equity/bond split. And charging excessive fees for that advice.

Jobless reports:

• does anybody care?
• yes: Jay Powell does and it appears of his two mandates, he is more concerned about jobless than inflation;
• so, another bullish report for investors
• markets being held back, not by jobless report today, but by WTI dropping below $70

No Wells Coming Off Confidential List; Weekly EIA Petroleum Report Posted -- August 4, 2021

EIA's weekly petroleum report posted. Link here.

• US crude oil in storage increased by 3.6 million bbls from the previous week;
  
• US crude oil in storage now stands at 439.2 million bbls; 6% below five-year-average;
  
• US crude oil imports averaged 6.4 million bbls per day; decreased by 75,000 bpd; averaged about 6.6  million bopd; 15.8% more than same four-week period last year; see last bullet below;
  
• refiners are operating at 91.3% of their operable capacity;
  
• distillate fuel inventories increased by 0.8 million bbls; 6% below last week;
  
• jet fuel supplied was up 42.9% compared to same four-week period last  year;
  
• comment: we need to stop comparing this year's data with last year's date. We need to start comparing this year's data with same period in 2019. But that won't happen.

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Back to the Bakken

NDIC data: may or may not be accurate; may or may not be current. System has been "undergoing maintenance since July 14, 2021."

Active rigs:

$69.07	8/4/2021	08/04/2020	08/04/2019	08/04/2018	08/04/2017
Active Rigs	23	12	58	64	58

No wells coming off confidential list.

RBN Energy:who will be buying the heavy sour Canadian crude moving south on Capline, part 4.

For some time now, a handful of refineries in southeastern Louisiana, Mississippi, and Alabama have been able to receive steeply discounted, heavy sour crude from Western Canada by rail or barge — or, in rare cases, by pipeline from Cushing to Nederland, TX, to the St. James, LA, hub. Starting in a few months, though, this same crude also will be able to flow by pipe directly from Patoka, IL, to St. James on the soon-to-be-reversed Capline pipeline. Initially, the southbound volumes on Capline will be modest, but over time they could increase to several hundred thousand barrels a day. Will those barrels be loaded onto supertankers and shipped overseas, or will they be headed for refineries in Louisiana and its eastern neighbors? In today’s blog, we try to answer those questions.

We admit we’ve been a little obsessed about the impending Capline reversal — it’s not every day that one of the largest-diameter crude oil pipelines in the world changes its directional flow. We first mentioned the possibility of turning around the 632-mile, 40-inch-diameter pipeline in one of our earliest blogs, posted nine-and-a-half years ago, and Capline has been a semi-regular blog topic ever since. Today, we wrap up a four-part series on what’s involved in the reversal and what southbound flows on Capline will mean for Western Canadian producers, the St. James hub, exporters, and refiners.

One Of Three Well Fires On Same Pad Now Out -- Source -- August 4, 2021

The Bismarck Tribune is reporting that one of the three well fires is now out. Responders now working to extinguish the other two wells. Again, no injuries have been reported.

We'll sort this out in the a;m. but folks following the story know what this is about.

Interactive Platts Periodic Table Of Oil -- August 3, 2021

Link here. I've had this linked like "forever." Finally, I get to use it again. Awesome.

See this post. 

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The Olympics

Quick: who won the gold medal and silver medal in the fifth and last women's gymnastics event, the balance beam, at the 202One Tokyo Olympics? Answer here.

This Makes My Day -- The Light-Heavy Spread -- August 3, 2021

This is really cool. Yes, I know. I need to get a life. But periodically I make comments that not all oils are created equal. In fact, earlier today, I referenced that by noting that although WTI dipped below $70, something called Louisiana Light was solidly above $74. See subject line here. 

Well, here we go.

This is awesome. From S&P Global Platts today: Phillips 66 sees wider crude quality differentials going forward.

• Summary:
• light-sweet spreads widening;
• distillate demand to rise;
• more refinery shutdowns expected
• From the article:
• Phillips 66's record second-quarter chemical results were countered by poor refining segment results, due in part to high RINs costs, weak market capture and narrow light-heavy crude differentials, company executives said August 3, 2021.
• Phillips 66 ran its refineries at 88% of capacity in the second quarter, up from first quarter's 74%, but posted lower margin capture quarter on quarter on its distillate-focused refinery configuration.
• More:
• The increase in heavier crude supply, due in part to higher production quotas agreed by OPEC+ members, will benefit distillate-heavy Phillips 66. The company, which runs a lot of heavy crude, will benefit from the widening of light-heavy crude differentials.
• "For the second quarter, it was a gasoline-driven market without much differential on heavy crude," said Robert Herman, Phillips 66's head of refining. "We've seen those widen out here now in July to a much more respectable level."
• So far in the third quarter, US light sweet Gulf of Mexico benchmark Light Louisiana Sweet is holding a $2.59/b premium to US Gulf of Mexico medium-sour Mars, according to S&P Global Platts assessments.

At the linked article, a graphic: light-heavy crude spreads widening; the LLS - Mars spread:

• August, 2020: 50 cents;
• January, 2021: $1.50
• February/March, 2021: $2.80
• currently: $2.80

Mars?

• S&P Global Platts -- the "periodic table of oil." Third iteration here, December 10, 2020. May take a moment to download.

If you've read this far, this is what the Keystone XL was all about. Unfortunately this was a subject too difficult to understand by policy makers in Washington, DC.