Headlines -- September 13, 2021

Thank you, Mr Biden, for killing the Keystone XL: US gasoline prices hit seven-year high. Link to Julianne Geiger.  Too bad no ones wants to buy a GM Bolt without a $12,500 credit. Credit, not deduction.

Headlines: Seldom do I see two or three headlines at the same time over at oilprice.com that catch my eye. Tonight, six headlines. Think about these:

• Europe: Nord Stream 2 in limbo as Germany prepares to decide on key license;
• Mideast: Saudi Arabia on edge as the US withdraws from the Middle East;
• Russia: how much oil is Russia really pumping?
• Is oil really doomed? See below.
• Natural gas: prices can still double from here.
• Chipmaker and EV stocks are set to soar this year.

We'll come back to these later. 

Here are the links:

• Nord Stream: link to Tsvetaan Paraskova.
• Doomed: link to Irina Slav.
• Russia: link to Tsvetana Paraskova.
• EVs: link to safehaven.com.
• Natural gas: link to Alex Kimani.
• Saudi Arabia: link to Cyril Widdershoven.

I'll be traveling the rest of this week. Blogging will be intermittent but lots of time for blogging.  

The next six months will be quite interesting.

There are a lot of stories that hit the tabloids first but when they appear in the WSJ, it speaks volumes. Some examples:

• Shell in the GofM after Hurricane Ida; worse than first thought?
• Energy prices in Europe hit record after winds quit blowing. Link here.
• "Texas Freeze" resulted in sky-high prices for 24 - 72 hours; in Europe, this is much worse and it's going to on for months; imagine that.
  
• Covid-19 delta variant hitting young unvaccinated folks. Link here.
• SpaceX / Elon Musk: will send four civilians to space this week. Link here. 

Wow, wow, wow. Did anyone else catch this? Fox acquires TMZ. Amazing. Link here. Spun off from AT&t's Warner Media. 

Not reported anywhere: US Congressmen/women and their staffers exempt from Resident Biden's executive order on mandatory Covid-19 vaccinations.

Amazon launches its own TVs. Will cement itself in living rooms. Link here. 

FAANG just gets bigger and bigger.

The Market -- September 13, 2021

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. 

Jim Cramer likes CVX, DVN, and PXD. OXY is too oil-focused at a time when natural gas is surging in demand and price.

I was curious about the following (numbers rounded):

• DVN:
• market cap: $20 billion
• P/E: 56
• dividend: 1.57%
• comment: market cap and P/E certainly appear to be obstacles to being acquired
  
• PXD:
• market cap: $40 billion
• P/E: 114
• dividend: 2.11%
• comment: I don't see PXD as a takeover candidate based on history of company; P/E; and, market cap;
  
• APA:
• market cap: $7 billion
• P/E: 10
• dividend: 0.54%
• comment: I see APA as a takeover candidate
  

Intuit: will acquire Mailchimp for $12 billion.

Comment: I only saw the first fifteen minutes of Jim Cramer this evening. I did not like his lead-in. His theme this morning was carried over to tonight: September will be a tough month for investors; lots of volatility; likely to see a big pullback. Some air was taken out of that sail when the Dow finished up 260 points today. He suggested it was sector rotation; the NASDAQ was a bit -- but barely -- down for the day. Cramer said the only thing "working" right now was energy. All four major US equity indices, futures are in the green right now, 7:03 p.m. CT.

No New Permits; Four DUCs Reported As Completed; Seven Permits Renewed -- September 13, 2021

"Monday the 13th": was not an unlucky day for oil investors.

Active rigs*: from daily activity report -- 

$70.45	9/13/2021	09/13/2020	09/13/2019	09/13/2018	09/13/2017
Active Rigs	25	12	64	65	55

Active rigs:

• 25 active oil and gas rigs
• CLR: 9
• Hess: 3
• Marathon Oil: 2
• Denbury: 1

No new permits.

Two wells released from confidential. Reported this morning.

Seven permits renewed:

• Slawson (5): three Vixen permits; one Phoenix permit, and one Phatkat permit, all in Mountrail County;
• Grayson Mill (2): two Martin permits in Williams County; assets previously Equinor;

Four producing wells (DUCs) reported as completed:

• 37267, 1,223, CLR, Rodney 4-20HSL1,
• 37268, 1,787, CLR, Kate 15-19HSL,
• 37448, 444, Koda Resources, Porter 2614-2BH,
• 37447, 444, Koda Resources, Porter 2614-1BH, 

The CLR Kate / Rodney wells are tracked here.

ND's Basin Electric Power Co-Op To Expand Carbon Capture -- September 13, 2021

Link to Amy R. Sisk at Bismarck Tribune via Billings Gazette:

BEULAH, N.D. — Basin Electric Power Cooperative plans to expand the carbon capture system at its Great Plains Synfuels Plant near Beulah to contain as much as 70% of the carbon dioxide the facility generates.

The co-op has secured a state permit to build a short pipeline slated to carry some of the carbon dioxide from the plant to a site nearby where it will be injected underground. Work on the line, which will extend north to Coteau Properties Co. land, is expected to begin next month. Coteau operates the mine that feeds coal to the synfuels plant.

Basin subsidiary Dakota Gasification Co. runs the plant and already captures about 2 million metric tons of carbon dioxide each year from the facility, which produces synthetic natural gas from coal along with a host of other products. The gas is compressed into a liquid form and piped north into Canada where it’s sent underground into old oil fields to boost their production.

With the expansion, carbon capture will trend toward 3 million metric tons a year. 

Let's put this in perspective (link here):

• California's transportation emissions declined 3.5 million metric tons between 2018 and 2019. Total, statewide 2019 GHG emissions were 418.2 million metric tons.

Oil Prices Climb On Shocking OPEC Report -- Sources -- September 13, 2021

Link here to Tsvetana Paraskova.

This article is exactly in line with what the "tea leaves" are telling me. 

This is huge.

One can argue "it's just talk," but for those following global events the past two years, this article seems to fall right in line.

From the linked article;

The surge of the Delta variant around the globe is set to partially delay oil demand recovery into the next year when robust economic growth and stronger recovery in fuel consumption will see global oil demand averaging 100.8 million barrels per day and exceeding pre-COVID levels, OPEC said on Monday [September 13, 2021], raising its 2022 demand forecast by a shocking 900,000 bpd.

Next year, oil demand worldwide is now expected to jump by around 4.2 million bpd compared to 2021, an upward revision of 900,000 bpd compared to last month’s assessment, OPEC said in its closely-watched Monthly Oil Market Report (MOMR) today.

This year, total global oil demand remains unchanged at 96.7 million bpd for the whole of 2021. But the fourth-quarter demand was revised slightly down, by 110,000 bpd from the August estimate of 99.82 million bpd to 99.7 million bpd now, OPEC said in its September report.

“Oil demand in 3Q21 has proved to be resilient, supported by rising mobility and traveling activities, particularly in the OECD. At the same time, the increased risk of COVID-19 cases primarily fuelled by the Delta variant is clouding oil demand prospects going into the final quarter of the year, resulting in downward adjustments to 4Q21 estimates,” the cartel noted. Demand for 2022 was revised up by 300,000 bpd for OECD and by 600,000 bpd for non-OECD countries compared to last month’s outlook.

Last week, reports emerged that OPEC could cut its 2022 demand forecast, but the organization now says it believes that the Q4 2021 weakness in demand would only delay the recovery to next year.

900,000 bbls/day is very, very close to a cool one-million bbls. 

Random Observation Regarding Whiting's Southern Bakken Play, From A Reader -- September 13, 2021

A reader sent this note after a sidebar conversation regarding Whiting's southern Bakken play:

• These are some of the first drilled, not so-hot producers, hopefully someday re-frack, if that would take care of it?? However, as you say, I think they just turn the spigot down on these. I have seen times where they produce a good amount per month, and then back down a lot.

• PRONGHORN FEDERAL  41-15PH SWSE10140100   #24161
• PRONGHORN FEDERAL 11-15PH NENW15140100   #24158
• PRONGHORN FEDERAL 21-15PH NENW15140100   #24157

• These are the better ones, even though some are older, again, maybe a re-frack someday. Also, as you have mentioned to me in the past, if the price is right, maybe some more drilled over here someday in the future.
  

• SMITH FEDERAL 41-13PH SESE12140100   #28055
• PRONGHORN FEDERAL 11-13PH  NENW13140100   #27691
• PRONGHORN FEDERAL  21-13TFH  NENW13140100    #20504
• PRONGHORN FEDERAL  21-13-2PH  SESW12140100     #31779
• PRONGHORN FEDERAL  31-13PH   SESW12140100       #31780
• PRONGHORN FEDERAL  41-14PHU    SWSW12140100      #32301

• This one sits in Bell. Literally just over the fence line from Park to Bell, which is also from Billings County to Start County.

• HECKER  11-18PHU    LOT1 1814099    STK   #31882

The reader: notice all the different handles, PH, TFH, PHU.

My reply:

The "handle" designations:

• TFH: Three Forks, around 11,036 top in one well.PH: Pronghorn member of the Three Forks, about 10,917 top in one well.
• PHU: any "handle" with the "U" designation simply means a "unit" well, or a well with four-section (2560-acre) spacing. Unless otherwise designated, most Bakken drilling units are now two-section (1280-acre) spacing.
  

I'm not sure how much difference there is between the "TFH" and the "PH." It's possible this is some extent due to change in nomenclature over the years. Maybe a reader knows. It seems I've discussed this before -- a long, long time ago. 

Abbreviated post. I may add to this later. But I wanted to get it posted in "real time."

And yes, the Bakken operators manage their assets closely, opening and tightening the spigots on individual wells, as you have noticed.

Later, see comments regarding nomenclature, or naming the wells. Example:

• PRONGHORN FEDERAL  31-13PH   SESW12140100       #31780
• Pronghorn Federal: family name or alpha-portion of the name of the well; all wells have some type of such designation;
• 31: this must be the chronologic number; if not, Whiting does not provide a chronologic number which makes no sense; the first digits of the two-digit number may reference the subformation;
• 13: this is the first section in which the horizontal takes oil; section 13 in this case; the bottom hole is in section 24 but is not so designated in the name of the well; many oil companies designate both sections;
• PH: the "H" is horizontal," obviously and the "P" is Pronghorn. For other wells, "TF" is Three Forks. 
• I am not convinced there is a designation for both an upper Pronghorn and a lower Pronghorn, as suggested by the reader (see comments) but it's possible. "P" by itself would be the "upper" Pronghorn, and the "2P" would be the lower Pronghorn (or vice versa).
• The 2PU well: a Three Forks Pronghorn well according to the geologist's narrative; no mention of upper or lower Pron horn, but  it is interesting that unlike other reports where it is either Pronghorn or Three Forks, this is a "Three Forks Pronghorn" with no comma;
• the narrative breaks out the "Pronghorn," the top at 10,638' TVD/10,867' MD; whereas the Three Forks Pronhorn lateral top was "10,936 - 21,014' MD. 
• unfortunately we are not given the TVD in the narrative for the Three Forks Pronghorn lateral 
• however, we do get those "sample tops" numbers in a spreadsheet:
• upper Bakken: 10,619
• middle Bakken: 10,633
• lower Bakken: 10,635
• Three Forks Pronghorn: 10,638
• TF Pronghorn target: 10,650
• The "U" in the Hecker well: clearly means a section line well, a 4-section (2560-acre) spaced well. Both wells above with the "PHU" designation are 4-section (2560-acre) spaced wells. All the rest are 1280-acre wells. Going forward, my hunch is that larger spacing (6-section spacing or 8-section spacing, for example, will also carry the "U" designation.

This post has been tagged with the "Nomenclature" tag so the ost can easily be found again later, if more information becomes available. For me, only three things concern me right now:

• the formation, either Pronghorn or Three Forks and if they are considered different formations; and the thickness of each;
• the size of the drilling unit; and,
• the chronological number.

19255

This page won't be updated. These wells are tracked here. 

The NDIC is reporting that this well, #19255, drilled back in 2011, is still flowing without a pump. 

The well:

• 19255, IA/718, Slawson, Muskrat Federal 1-28-33H, Van Hook, F, t1/11; cum 614K 4/21; went off line 5/21; recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2021	0	0	0	0	0	0	0
BAKKEN	6-2021	0	0	0	0	0	0	0
BAKKEN	5-2021	3	116	962	69	166	149	0
BAKKEN	4-2021	30	5066	5163	2438	2988	2774	66
BAKKEN	3-2021	31	5792	6655	2759	3453	3116	182
BAKKEN	2-2021	28	5673	5727	2812	3103	2858	105
BAKKEN	1-2021	30	6421	6945	3100	3636	3180	307
BAKKEN	12-2020	31	6544	5145	3634	3732	2841	736

Graphics (pending):

Wells in the graphics:

Pad to the west, most of these wells were off line most of calendar year 2020:

• 35699, AL/A, Slawson, Mole 6-20TFH, Big Bend, first production, 1/20; t--; cum 131K 7/21; 
• 30179, AL/A, Slawson, Challenger Federal 7-29-32TFH, Big Bend, first production, 1/20; t--; cum 146K 7/21; 
• 35698, 1,435, Slawson, Mole 7-20TFH, Big Bend, F, first production, t4/20; cum 79K 7/21; 
• 36524, AL/A, Slawson, Challenger Federal 9-29-32H, Big Bend, first production, 12/19; t--; cum 209K 7/21; 
• 30178, 2,236, Slawson, Diamondback 1 SLH, Big Bend, F, first production, t1/20; cum 114K 7/21; 
• 30177, F/A, Slawson, Muskrat Federal 5 SLTFH, Big Bend, first production, 1/10; t--; cum 169K 7/21;

Current pad of interest:

• 38049, conf, Slawson, Muskrat Federal 8-28-33H, Big Bend, no production data, 
• 38048, ros, Slawson, Muskrat Federal 4-28-33TFH, Big Bend, no production data, 
• 19255, above,
• 38047, conf, Slawson, Muskrat Federal 5-28-33TFH, Big Bend, no production data, 
• 38046, conf, Slawson, Muskrat Federal 3-28-33H, Big Bend, no production data,

Pad to the east,

• 20267, 737, Slawson, Muskrat Federal 2-28-33H, Van Hook, t9/11; cum 489K 7/21;
• 38075, conf, Slawson, Muskrat Federal 6-28-33TFH, Big Bend, no production data,
• 38076, conf, Slawson, Muskrat Federal 7-28-33TFH, Big Bend, no production data,
• 38077, conf, Slawson, Vagabond Federal 1 SLH, Big Bend, no production data,

WTI Goes Above $70; Two Wells Coming Off Confidential List -- September 13, 2021

Milestone: this is the 38,001th post on this website. First post on this site was in 2009. The original MDW first posted in 2007. 

The early numbers:

• DXY: $92.80, up 22 cents;
• WTI: up about 3/4th of a percent; trading at $70.27; very transitory;
  
• TYT: 1.335%; down ever so slightly;
• Dow futures: up 215 points
• S&P 500: up 25 points
• NASDAQ: up 83 points

Sports: burrito defense didn't work. And this was in The WSJ. Without question, the four-year ban is excessive. Four months, maybe. 

FAANG: "Never anything but screaming bargains." Lu Wang at Bloomberg. Most irritating thing about the article: the writer never credit to the individual who coined the acronym "FANG" which then morphed into "FAANG." And then, for some, "FAANG-T."

Another wrap (and not a burrito, this time): Christo to wrap L'Arc de Triomphe. Again, at The WSJ. 

Congestion: record number of ships anchored off US ports.  

Streaming wars: Viacom announced it will re-vamp Paramount+. That suggests others are doing better. I think Paramount+ staked its streaming on Star Trek. I might have to look that up.

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

Active rigs*: updated data will bereported by the NDIC at COB today. 

$70.27	9/13/2021	09/13/2020	09/13/2019	09/13/2018	09/13/2017
Active Rigs	26*	12	64	65	55

Wells coming off the confidential list:

Monday, September 13, 2021: 24 for the month, 35 for the quarter, 215 for the year:

• None.

Sunday, September 12, 2021: 24 for the month, 35 for the quarter, 215 for the year:

• 37887, conf, Crescent Point Energy, CPEUSC Sylven 2-14-23-158N-100W-MBH, Winner,

Saturday, September 11, 2021: 23 for the month, 34 for the quarter, 214 for the year:

• 37886, conf, Crescent Point Energy, CPEUSC Sylven 2-11-2-158N-100W-MBH, Winner,

RBN Energy: the latest on Gulf Coast crude export capacity expansions. Archived.

When fully loaded, a Very Large Crude Carrier (VLCC) sits so low in the water that it almost resembles an alligator swimming along the surface of a lagoon. Bearing the weight of 2 MMbbl of crude oil, plus ballast, fuel, crew, and provisions — not to mention the ship itself — two-thirds of an oil-laden VLCC is literally out of sight. You could say the same about the development of crude export terminal projects along the Gulf Coast: not much to see, maybe, especially during the disturbingly enduring COVID-19 era, but a lot is happening under the surface. 

In today’s blog, we discuss the status of onshore and offshore projects aimed at streamlining the shipment of U.S. crude oil to overseas buyers.