Friday, August 20, 2021

Update: The Lower Three Forks -- August 20, 2021

January, 2021: the lower Three Forks formation (third bench), Bakken-Three Forks petroleum system, overview of development history and future potential; Timothy O. Nehsheim, GeoNews, DMR, North Dakota, link to source article

It appears there is some movement toward 1st bench / 2nd bench morphing into upper Three Forks, and 3rd bench morphing into lower Three Forks.

Future potential:

  • sub-60% water-cut areas:
    • 710,000 acres
    • 550 "standard" 1280-acre drilling units
    • three horizontal wells per spacing unit = over 1,600 horizontal lower Three Forks wells (~ 3rd bench wells)
  • sub-70% water-cut area
    • 1,600,000 acres
    • more than double that of just the sub-60% water-cut areas
    • potential: several thousand wells

Atmospheric CO2 -- July, 2021, Data

Link here

Global economy plummets; fossil fuel demand plummets. And, still, atmospheric CO2 rises. Speaks volumes.   

Rises 2.58 parts per million, month/month. 

2.58 / 1.000,000 = 0.000258%. I don't think that's repeatable, much less significant.

How Long Have "We" Been Working On Battery Technology? -- August 20, 2021

How many years have "we" been working on batteries?/

According to wiki, this dates back to 1748 when Benjamin Franklin described multiple Leyden jars by analogy to a battery of cannon. 

So, that was 1748.

Alessandro Volta, the voltaic pile, 1800.

Michael Faraday, 1834.

Fast forward to 2001,  when A123 Systems, LLC, a developer and manufacturer of lithium ion phosphate batteries, was founded.

Along with A123, Sony, Toyota, Apple and myriad others were working on a "better" battery. 

Lots of investments, lots of research, but in 2012, A123 filed for bankruptcy protection. 

Tesla was incorporated on July 1, 2013, and if one has not heard of Tesla, .... one must have been living under the Geico Rock.

Chevy Volt: December, 2010 - February, 2019.

Chevy Bolt, model years 2017 to the present (2022).

So, since 1748 .... then apparently at the beginning of the 21st century we got serious ... 

... and now we're still having fires in these batteries. 

Today, 4:30 p.m. CT or thereabouts, GM after the market closes, announces a full recall of its Chevy Bolt. This is the third recall for this model. After the first recall some months ago, the cars were returned "fixed" to their owners, but about a month ago, a second recall of about 63,000 cars, or something like that. While still under recall, the third recall which extended to all Chevy Bolts

GM says this recall will cost an addition $1 billion for 73,000 cars which works out to $14,000 / car. 

I guess we now know the price of the battery pack for the Chevy Bolt.

GM drops 2.5% in after-hours.

One would think that after twenty years of serious effort, engineers would have the "fire thing" sorted out.

Back to square one, as they say, or in this case, back to the stables:

Notes From All Over -- TGIF -- August 20, 2021

News alert on Pfizer: the FDA is aiming to give full approval to PFE vaccine Monday.

Covid-19: second day in a row that the number of vaccinations given in the daily report was over one million. Folks are getting religion.

Dollar: surging. Closed at 93.456. Link here.

GM: waits until after the market closes to announce full recall of its Chevy Bolt. GM drops 2.5% in after-hours. 

Fast Money on CNBC: not one word about Afghanistan or the president's speech. 

Again, "deflation," not "inflation," getting some attention

Gasoline: last night, our neighborhood station -- generally runs a bit high -- was below $2.80 / gallon. Everything suggests the price of gasoline will be going down in price going into September. 

Canadian Producers -- Apparently They Did Not Get The Memo

From S&P Global:

  • Canadian oil and gas operators plan to grow production, spending:
  • Canadian companies are taking advantage of higher prices;
  • while US operators are priortizing capital discipline.

GM Announces A Third EV Recall -- August 20, 2021

Buffett recently sold a bit of his GM. 

This is the third recall for GM on the Chevy Bolt.

Will cost an additional $1 billion on top of the previous $800 million.

Will involve 73,000 Bolts, 2019 through 2022.

Let's see:

$1 billion / 73,000 Bolts = $14,000 / Bolt. 

The recall will now cover all Bolts. Links everywhere. Here's one.

DETROIT – General Motors on Friday said it is expanding its recent recall of Chevrolet Bolt EVs to newer models of the electric car due to potential fire risks. The recall expansion is expected to cost the automaker an additional $1 billion, bringing the recall’s total to $1.8 billion to replace potentially defective battery modules in the vehicles. 

About 73,000 vehicles in the U.S. and Canada are being added to the recall from the 2019-2022 model years, including a recently launched larger version of the car called the Bolt EUV. 

The former recall involved about 69,000 of the cars globally, including nearly 51,000 in the U.S.

Again, an addition $1 billion / 73,000 additional vehicles ... let me check the calculator again...

$1,000,000,000 / 73,000 =  $14,000 / Bolt. 

And a reminder, until this is resolved, don't park your Bolt in hour garage.

Week 33: August 15, 2021 -- August 21, 2021

Top story of the week:

  • Joe Biden is still president.
  • Largest one-day arms deal in US history.

Top international non-energy story:

Top international energy story:

  • Price of oil crashes.

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:






Bakken 101:

Bakken economy:


Afghanistan -- FWIW -- August 20, 2021

The scuttlebutt coming out of the White House is that Joe Biden says he's having difficulty sleeping in the White House, saying he will sleep better in his own home in Delaware. I have no idea if that's true but it explains why he decided to "vacation" in his own home just when he was making the biggest decision, to date, in his early presidency. But if that's accurate, that's all the hallmarks of ... 

... on another note, I remember the early stories of early-onset Alzheimer resulting in afflicted folks being confused by new surroundings. 

I'm reminded of all that, now that I see a headline saying the president has no plans to return to his home in Delaware while the crisis accelerates / worsens. I can only assume that was a decision made by his handlers. It really doesn't matter, does it, where the president sleeps at night, or for that matter, with whom he sleeps. 

An image of JFK just flashed in front of me.

But getting back to the story at hand, if the president is admitting to having trouble sleeping at night, and there's no corroborating sources suggesting that, but if accurate that makes a very, very interesting observation.

The Biden Press Conference

Short and sweet.

Took four (?) questions. Pretty much softball questions.

The president seemed in command of his faculties, his answers short, direct, and not interested in a "back and forth" with the press. 

One wonders if previous presidents would have benefited from a similar style when dealing with an unruly mob?

Past presidents who tried that format seemed "defensive" and "supercilious." Biden seemed to pull it off. That "c'mon' man" seems to work for him. Wouldn't work for Trump, younger Bush. Obama's "chill" worked. 

US Supreme Court Justice ACB

Continues to pleasantly surprise me. Dismisses the lawsuit to stop President Obama from building his library in Chicago. She seems not to have a lot of patience with what most of us see as nuisance suits.

One Way to Learn Spanish

California Grid -- Plan B -- August 20, 2021

From SeekingAlpha:

  • California, the most aggressive state in attempting to wean its power grid from fossil fuels, will seek to add several natural gas-fired plants in an effort to keep the lights on this summer, according to a Bloomberg report.
  • The California Department of Water Resources says it is in the process of procuring five temporary gas-fueled generators that have individual capacities of 30 MW, which will be installed at existing power plants and operating by the middle of September.
  • Earlier this year, California regulators decided not to order utilities to add new gas-fired generation after receiving criticism from environmental groups.
  • Potentially relevant tickers include PCG, EIX, SRE
  • Meanwhile, a California Public Utilities Commission administrative law judge issued a ruling this week recommending the state adopt a preferred electricity resource portfolio that would limit the sector's annual greenhouse gas emissions to 38M metric tons by 2030.
  • Earlier this year, the CPUC voted to approve a 46M mt GHG emissions target for the electric sector for 2030.
  • The CPUC recently said California faces potential energy shortfalls of up to 3,500 MW in the coming weeks and as much as 5,000 MW next summer.

Whatever happened to Elon Musk's super-duper-giga batteries that could all that extra wind / solar energy when it was not needed? 

Let's see:

  • the CPUC estimates energy shortfalls of up to 3,500 MW in the coming weeks and as much as 5,000 WM next summer;
  • 5 x 30 = 150 MW
  • 150 / 3500 = 4%
  • that's a start
  • but think about that: buying five temporary gas-fueled generators that would add 150 MW capacity is a headline story, and it only represents 4% of the estimated shortfall. Maybe my math is wrong. 

EV penetration: 1%? 2%? 5%?  

What am I missing? Oh, that's right. EVs charge at night. 

That Big Park, North Los Angeles, Years Ago

The Cargo Congestion Los Angeles / Long Beach -- California -- August 20, 2021

I think this is one of the bigger stories in business news this week, re-posting:

Cargo ships again idling off jammed southern California ports: again, WSJ

If that's a bit dry, one can get a more interesting read at ZeroHedge: California congestion nears high, east coast gridlock worsens:

It’s only mid-August - the early days of peak shipping season - but the record for container ships anchored off California is already on the verge of being broken. Port congestion is simultaneously building along the East Coast, with anchorage numbers off Georgia well into the double digits and, for the first time this year, a growing queue offshore of the Port of New York and New Jersey.

California congestion previously peaked in the first quarter. On Feb. 1, the Marine Exchange of Southern California reported an all-time-high 40 container ships at anchor in San Pedro Bay, awaiting berths in Los Angeles or Long Beach. The highest number of container ships in the entire port complex, including those at anchor and at berth — 67 — was set on January 28, 2021.

On Friday (last week, August 13, 2021), there were 125 ships of all types (including tankers and cruise ships) either at berth or anchor in Los Angeles/Long Beach. That’s a new record. The Q1 high was 113. 

On Saturday (August 14, 2021), there were 68 ships of all types at anchor, yet another record. There were 66 container ships either at berth or waiting offshore, just one short of the all-time high. And there were 37 container ships waiting offshore, three short of the February peak.

All regular and emergency anchorages were full, forcing the overflow to drift in designated areas. As of Sunday, five container ships were drifting off Santa Catalina Island.

But look at this and think about this:

A key variable for the weeks ahead involves the COVID-induced terminal closure in Ningbo, China. As of Monday, the affected terminal had been closed for six days. When COVID curtailed throughput in Yantian, China, in June, it gave Los Angeles/Long Beach a brief reprieve from inbound volume, reducing congestion temporarily, then subsequently increasing congestion as delayed Yantian cargo belatedly arrived.

Legacy Fund Deposits -- August, 2021

Link here.

August, 2021, deposit: $51,142,438.08.

Saudi Watch -- August 20, 2021

Link here. Saudi domestic crude use was at 586K bopd day in June, vs 452K bopd in May, 2021. Yawn. It's right in Saudi's mid-range. A tweet but not a story. 

Link here. Saudi crude oil exports at 5.965 million in June, vs 5.649 million bopd in May, 2021. Yawn. Pretty much unchanged, but compared to past years, current exports are hitting five year lows. Saudi's "normal" export range is 7.0 to 8.0 million bopd. Right now: running around 6 million bopd.

Saudi Watches The Bakken


  • I did this quickly.
  • There will be typographical and content errors.
  • I often mis-read things.
  • I am quick to defend the Bakken.
  • I am inappropriately exuberant about the Bakken (not as an investment opportunity but as an oil play, if that makes sense).
  • I enjoy trying to connect dots and trying to match data points with human behavior.
Saudi's 2019 Bakken Assessment (a pdf will download) (linked at the sidebar at the right)

This was the summary but there was much, much more information in the study:

According to our records, more than 90% of the [horizontal Bakken] wells completed after 2017 are located in the core areas only. 
Operators have learned to drill only the best parts of the Williston Basin and avoid the less mature noncore areas. 
However, after calculating the infill potentials of all areas, we predict that by 2021 there will be no well locations left for future drilling in the core areas
Assuming a constant current drilling rate of 120 wells per month, the total field oil rate in the Bakken will reach record level of about 1.6 million bbl/d in 2021. [Montana + North Dakota].
Without further drilling, production will decline by one-half within a year. 
Later, operators will be forced to drill in the less productive, high watercut noncore areas along the edges of the Williston Basin. Our findings suggest that policy-makers should beware of assuming that the shale oil boom in the Bakken will last for several decades longer. We recommend that operators not focus only on increasing the initial oil rate. Maintaining reservoir pressure above the bubble point by preventing over-drilling is key to increasing ultimate oil recovery.

The writers are correct: the shale boom in the Bakken is over.  The Bakken is in the "manufacturing stage" and has been in the "manufacturing stage" since about 2016, perhaps even earlier. In my mind, the Bakken boom in North Dakota ran from 2007 to about 2012. This has been addressed often. 

Let's see, this study was based on, according to the authors, an existing 14,678 Bakken wells as of sometime in 2019.

Let's assume, 14,678, as of December 31, 2018.

From 1 January, 2019, to 31 December 2021:

  • at a rate of 120 new wells/month =
  • 120 x 12 x 3 = 4,320 more wells

The authors of that Saudi study said their study was based on 14,678 Bakken horizontal wells. Their paper was published in 2019. Their study included Montana. The delta between the NDIC numbers below and the Saudi numbers must have been due to the Bakken wells in Montana. There may have been a few Bakken wells in Canada but the maps in the published study did not show any that I could see.

The NDIC data shows the number of "Bakken" wells:

  • December 31, 2018: 12,817
  • June 30, 2021: 14.521
  • 14521 - 12817 = 1,704 wells
  • 1704 / 30 months = 60 wells / month


  • January 1, 2019: Bakken wells in North Dakota: 13,485
  • the Saudi study: 14,678 Bakken wells
  • delta = Montana Bakken wells in January, 2019: 1,193 wells

On another note, from the Saudi study:

In order to calculate infill potentials, one should first determine well density. 
However, the publicly available data rarely provide information about the bottom hole locations of the wells. Instead, only surface locations are reported as latitude-longitude coordinates.

In fact, that is absolutely incorrect. The NDIC posts the exact location of every bottom hole in every well drilled in North Dakota. 

In addition, NDIC reports surface locations, not only as lat-long coordinates but also number of feet from each section line.

But even without that data, based on surface hole location, the name of the well, the drilling units, etc., etc, one can "guess" the bottom hole location 95% (?) of the time.

Be that as it may, the Saudis in this study estimated that at the drilling rate in 2019, there would be no more drilling locations in the Bakken by the end of 2021. 

In July, 2019, the price of WTI was trading in the low $60's and crashed to $22 by March, 2020. Link here.  

One wonders what policy makers in Saudi Arabia were thinking in early 2020. They would have been very aware of the Bakken study.

Spiritwood, ND (Jamestown) -- Back In The News -- August 20, 2021

Huge "thank you" to the reader who sent me this link. 

This story was reported many, many months ago by the Grand Forks Herald, which I must have missed. I'm glad that a read caught this one. 

Spiritwood, ND, is about ten miles from Jamestown, ND, and about 100,000 miles from the Bakken. At least when you drive it, it seems that far away. Only Nebraska is more desolate.

Link here.

Marathon Petroleum Corp and Archer-Daniels-Midland Co announced on Thursday a joint venture to produce soybean oil that will be exclusively sold to Marathon as a renewable diesel feedstock.

Refiners are on the hunt for secure access to feedstocks for renewable fuels amid supply constraints and soaring prices for fats, greases and oils.

The JV soybean processing complex in Spiritwood, North Dakota, is expected to produce about 600 million pounds of refined soybean oil annually, enough feedstock for about 75 million gallons of renewable diesel per year when complete in 2023, the companies said.

That is approximately 40% of the feedstock needed to supply Marathon's nearby Dickinson, North Dakota, plant, which can process about 180 million gallons of renewable diesel annually.

More at the link.  

Tag: ADM.

75 million gallons / year = 1.8 million bbls / year = 5,000 bbls/day. 

Small step for mankind; big step for Spiritwood.  

From The Grand Forks Herald.

The plans include redeveloping the former Cargill Malt plant for use in processing soybeans. ADM confirmed that the plant would produce soybean meal and vegetable oil for food, feed, industrial and fuel customers, including producers of renewable diesel.

"It is really a good day for Stutsman County, North Dakota," said Jamestown Mayor Dwaine Heinrich. "There are so many good things to say about ADM coming to the area."

The initial announcement did not include a construction start date but said completion was anticipated in 2023.

"This is absolutely awesome," said Connie Ova, CEO of the Jamestown/Stutsman Development Corp. "This is a decade-changing facility."

The Jamestown/Stutsman Development Corp. approved $2.5 million in forgivable loans and grants Monday as a local incentive for the project. The funding includes a $1 million grant at the time ADM signs a lease with the Spiritwood Energy Park Association, $500,000 at the completion of construction if it is within 24 months of the lease agreement and $500,000 upon proof that ADM has 25 people on the payroll at jobs paying more $20 per hour.

Comstock Resources Looking To Sell Bakken Assets? -- Source -- August 20, 2021


Later, 2:57 p.m. CT: see comments. Reader has comment/query regarding CLR's "East Region," hoping a reader might have some update.

Original Post 

For background to the next story, see this post first

A huge "thank you" to the reader who sent me this link. 

From hellenicshippingnews:

Dallas Cowboys owner Jerry Jones’ Comstock Resources oil company is offering to sell properties in North Dakota’s Bakken oilfield, a marketing document seen by Reuters shows, as rising energy prices lift buying and selling in the sector.

Crude oil prices are up about 38% year-to-date as economies bounce back and fuel demand recovers from travel restrictions to curb the pandemic. U.S. shale oil companies also are seeking larger scale to drive returns and operational efficiency.

The properties on offer include a non-operated working interest in 436 wellbores. The holdings are valued at about $200 million based on futures pricing, according to the document.

The 427 actively producing wells in the portfolio most recently had a six-month average net production of 6,400 barrels of oil equivalent per day, the teaser said.

Comstock’s decision to offload its Bakken assets comes as deal activity is rising in the Haynesville shale in Louisiana, where it produces most of its energy. Louisiana rivals Southwestern Energy recently bought Indigo Natural Resources and Chesapeake Energy’s acquired Vine Energy. 

“High oil prices and a resurgence in Bakken M&A activity may have led to the company’s decision to market its non-operated interests to help fund participation in Haynesville consolidation,” said Andrew Dittmar, a senior M&A analyst with data provider Enverus.

Another story suggesting that Harold Hamm's decision to drill in Louisiana may have been quite prescient. 

More at the link. 

Notes From All Over -- August 20, 2021


Later, 12:04 p.m. CT: this market is the best market I've seen in decades. There is just enough volatility to allow folks like me to buy on the dips, but the dips are not so bad to scare the heck out of me. The market provided two buying opportunities this week, Wednesday and Thursday, August 18 - August 19, 2021. Did anyone really think the Dow / S&P 500 would be down three days in a row?

And then the easy money (ten-year treasury bills paying 1.26%); the Fed talking about tapering (just talking); and then this, my favorite graphic:

Something no one talking about: Baby Boomers taking social security. Perhaps 70%, perhaps 75% of those baby boomers need that social security to survive, but a lot do not. Of those that do not, many are putting that $3,000 / month back into the market. And folks forget that spouses get to collect up to 50 percent of their spouses social security. 

Lana Del Rey, tired of singing the blues:

Original Post

The next big thing: Netflix -- one of my favorite subjects on the blog -- called this years ago; Netflix surges; up $22 yesterday; up 4% yesterday; trading at $544. 

From Tomi Kilgore: Netflix stock shoots up toward biggest gain in seven months

From Benzinga:

Streaming giants Disney Co, Netflix Inc and Roku Inc

are in constant competition to dominate the screens of viewers worldwide. Traders and investors may prefer the companies for different reasons: Netflix as a pure streaming play; Roku hosts a variety of different streaming services including Netflix on its set-top box; or Disney, which offers diversity through its streaming, cruises, amusement parks and retail footprints.

All three stocks have settled into patterns that could give both bulls and bears a way to play.

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

Deere: quarterly profit surges

  • third-quarter profit more than doubled, as higher agricultural income on the back of strong crop prices boosted demand for farm and construction equipment.
  • net income attributable to the company rose to $1.67 billion, or $5.32 per share, in the quarter ended Aug. 2, from $811 million, or $2.57 per share, a year earlier. 

Toyota, VW: we talked about this earlier. Semiconductor shortages put world's largest automakers at risk. Link here

Sabbath Mode: self-help. Link to The WSJ. If link breaks or one encounters a paywall, google sabbath mode overn.

Cargo ships again idling off jammed southern California ports: again, WSJ.

Apple: patents "removable key" to double as a micro-mouse. Link here.

Credit cards: more businesses are assessing fees on purchases made with credit cards. This story interests me not one bit, but I'm posting it because this practice was pretty much the standard among local, mom-and-pop shops in Kalispell, MT, when I was there this past summer. 

I don't frequent such retail establishments if they add additional fees, unless there are not options. There are seldom any situations when there is no option. Wouldn't it be better to simply quietly raise the price of merchandise by 3% and off a three-percent discount on items purchased with cash? Or better yet, no discount at all. But don't add a fee to my credit card purchase that is so obvious. 
My hunch: shoplifting (by customers and staff) is a bigger problem than the credit card fee charged by the issuing company. As long as I'm on this rant, one week where credit card customers don't pay for anything with a credit card, and this craze will go away overnight. Processing checks (and especially the checks that bounce) cost a whole lot more than credit card transactions.

Covid-19 Update -- August 20, 2021

Israel: out of control? All that talk about being first out of the gate to get its citizens vaccinated? Wasn't Israel the poster-child for getting its citizens vaccinated?


  • cases surging; this fourth wave is 3 - 4 times greater than previous 2nd and 3rd wave;
  • as a reminder:
    • the most recent Japanese began before the Olympics official starting date, but there would have been a lot of international traffic in/out preparing for the Olympics;
    • Tokyo Olympics, last wee of July, first week of August, 2021

Pretty much corroborates everything "we" knew from the beginning.

WTI Drops Well Below $63 -- One Well Coming Off Confidential List -- August 20, 2021

Deflation: talking heads on CNBC now talking about deflation, not about inflation. At "best," inflation concerns for the market (for investors) has now moved to 2022. Investors are still looking for the global economy to open, and now that the delta virus is pushing that opening to the right, the Fed will remain wary. I still maintain this market is the absolute best ever. 

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.

Renewables: Big Oil's foray into renewables has changed everything. Link to Irina Slav. This is another story that interests me not but it may be important for the archives:

Shell, BP, and TotalEnergies, on the other hand, can afford to pay millions upon millions to beat competitors for new renewable energy projects. They are highly motivated, with shareholders, governments, and environmentalists looking over their shoulders at how they are tackling their carbon footprints. And however blasphemous it may sound to the ideologically inclined, they are partnering with renewables companies.

The thing about business is that it is not driven by ideology. Business is driven by the need to turn in a profit. Orsed, Vestas, and Siemens Gamesa know this, as do BP, Shell, and TotalEnergies. The influx of competitors in the wind and solar space is bound to sooner or later result in partnerships of mutual benefit. This would help Big Oil morph into Big Energy. Like it or not, it would be the natural way.

"Skimming Stones": link to Alex Kimani. Forecasting oil prices is a fool's errand.

Back to the Bakken

Liberty Resources: I'm being told by a reader to watch Liberty Resources drill two wells north of Tioga in the near future. 

Active rigs:

Active Rigs24*12635853

*Active rigs: current list posted COB daily.

One well coming off confidential list: 

Friday, August 20, 2021: 11 for the month, 22 for the quarter, 202 for the year:

  • 37989, conf, CLR, Harms Federal 17-33H1, Antelope, first production, 6/21; t--; cum 30K 6/21;

RBN Energy: the surprising simplicity of many rocket fuels.  

The high-tech space programs of Elon Musk, Jeff Bezos, and Sir Richard Branson may seem far removed from the down-to-earth business of producing and processing hydrocarbons. In fact, however, the multibillion-dollar efforts by SpaceX, Blue Origin, and Virgin Galactic to normalize space travel — and maybe even put the first men and women on Mars! — depend at least in part on some pretty basic oil and gas products, including regular jet fuel, highly refined kerosene, and LNG. Oh, and hydrogen too — or, more specifically, the liquid form of the fuel that has recently caught the attention of a number of old-school energy companies. In today’s blog, we look at what’s propelling the latest generation of space vehicles.