This Has To Be A First Since Prohibition -- State Limits Sales Due To Shortages -- Septmber 17, 2021

NASCAR this weekend:

• tonight, Xfinity, junior varsity: 6:30 p.m., Bristol, NBCS
• tomorrow, Cup Series, varsity: 6:30 p.m., Bristol, NBCS

NFL: the Dallas Cowboys can make it 0 -2 for the season when they go against the LA Chargers on Sunday; the second time slot on Sunday.

Booze: this is a great example of how not to do things: declare a shortage announcing it to the world. LOL. The word would have eventually gotten out, but a simple sign suggesting the customers should limit themselves to two bottles would have been a better way to wade into this.

Pennsylvania: state-run liquor system will begin rationing sales of a few dozen products on Friday (today, September 17, 2021) in response to what it describes as supply shortages beyond its control:

• "a few dozen products" -- exactly how many line items?
  
• two-bottle limit at state stores, bars, restaurants, other license holders
• will remain in place indefinitely
• products: champagne, bourbon, tequila, cognac, whiskey
• this is a huge boondoggle for the state-run system
• whenever I visit a liquor store, I pick up non-alcohol products also
• if I need four bottles of something, I will stop at two different stores, same day, or same store, two successive days, and I will pick up supplies of non-alcoholic beverages
• social media comments: https://www.foxbusiness.com/markets/pennsylvania-liquor-stores-2-bottle-limit-alcohol
• not a problem in Texas but then again the stores are not run by the government
• links everywhere; here's one; according to US News it's 43 line items; 
• writers say this is a small array of items that the state liquor system sells; LOL -- I guess they're thinking of the 2,300 different brands of beer
• a shortage of semiconductor chips was one thing, but booze; how in the world did this happen, and is it only happening in states where the liquor stores are state-owned?
• Alabama, Idaho, New Hampshire, North Carolina, Pennsylvania, Utah, and Virginia
• North Caroline apparently has similar problem
• memo to self: stop by Total Wines and More when I get back home;
• it was not clear whether it was a 43 x 3 (or 86-bottle limit per visit) or a two-bottle limit of any combination;
• will bourbon, Scotch, whiskey be differentiated?
• since most Scotch comes from Scotland, Japan, and other countries outside of the US, this suggests a global shortage; I have not seen that (yet); something sounds fishy;

***************************************
Crib Climbing

If I could that loop that back flip ...

Week 37: September 12, 2021 -- September 18, 2021

Top story of the week:

• Joe Biden is still president.

Top international non-energy story:

• Pentagon admits only civilians were killed in Afghanistan drone strike; drone strike in  response to commander's intent;
• Saudi Arabia foreign exchange reserves drop again;
• Ivermectin for Covid-19
  

Top international energy story:

• Surging natural gas prices in the UK and Europe;
• Global crude oil inventories plummeting

Top national non-energy story:

• General Milley botches Afghanistan evacuation; drone kills innocent family of ten, including seven children;
  

Top national energy story:

• Resident Biden calls for investigation: why is the price of gasoline not falling? 
• Top four storage -- crude oil, gasoline, distillate, jet fuel-- now below 2018 inventories; 
• C is for Chevron, also for cynicism;
• US crude oil inventories dropping;
  

Top North Dakota non-energy story:

• NDIC website remains compromised for the second straight month;

Top North Dakota energy story:

• North Dakota production drops in July, but so do number of producing wells;

Geoff Simon's top North Dakota energy stories:

• Quick connects.

Operators:

• NOG looking to buy a stake in Comstock Resources in the Bakken;
  

Operations:

• Random observation: Whiting's southern Bakken play;
• Five rigs in one screenshot;

Wells:

• Two WXP wells in South Fork oil field each go over 500K bbls crude oil cumulative;
• A Cobra/Enduro monster well updated;
• Equinor Skarston wells surprise on the up side;
• Two Petrogulf wells go over 500K bbls crude oil cumulative;
• MRO reports five monster wells; near a re-fracked well;
• Random update of two monster EOG wells;

Pipelines:

Fracking:

Bakken economy:

• ND's Basin Electric Power Co-Op to expand carbon capture;

Commentary;

• State of US shale;
• Shocking OPEC report;

NOG News; PXD News -- Related? September 17, 2021

Booze: only one non-energy business story worth posting today -- out of Pennsuylvania. State puts two-bottle limit on some booze: champagne, bourbon, tequila, cognac, whiskey. But look at the reason: shortages. Stand-alone post coming.

PXD: Pioneer Natural launches land sale -- Reuters.

• PXD: assets in Delaware Basin to be sold; seeks $2 billion
• would leave PXD focused on Midland, its traditional base
• more at the link: reading between the lines, it's not good news coming from PXD but that's just my take
• US equity markets were down today; PXD held; actually up two cents at the close; trading at $157.05;
• social media here; worth reading; related to NOG / Comstock news?
  

US airlines: traffic climbed to 18-month high in July, 2021 -- let's see -- that goes back to pre-pandemic, doesn't it?

Curious minds want to know: why is the price of gasoline not falling. A must-read thread over at twitter. 

• Eric Nuttall: we are about to hit a production all setting up for all-time high oil prices -- Financial Post.
• US shale: "the marginal swing producer of the past decade" [wow, wow, wow -- I made that case years ago, well before others were saying it;
• today, shale investors demand tepid production growth rates (if at all) to maximize free cash flow and for at least fifty percent of that free cash flow to be returned to them in the form of dividends and share buybacks
• the result? the end of US shale hypergrowth a watershed event for the industry
• can anyone say "windfall taxes"?
• we've had zero oil inflation since 2007
• deserves a stand-alone post;
  

Things can't be that bad: Freddy's Frozen Custard and Steakburgers plans to open a restaurant in Bismarck.

Crude oil: more and more comparisons to 2017 being made. Fifty-six rigs operating in North Dakota on this date in 2017; then sixty-six rigs one year later (2018). 

Christmas backlog: a record number of cargo ships now waiting to unload at US port complex in San Pedro, CA -- sixty ships waiting to unload at ports of Los Angeles and Long Beach.

• tell me again the US economy is doing poorly;
• chicken or the egg?
• how much is being off-loaded daily? compared with 2019 (pre-pandemic?)
  
• is anyone doing analysis of reason for backlog?
• FedEx, USPS, UPS, Amazon Prime are each averaging one to two trips through our apartment complex each day

Sinopec: says Chinese demand for oil will peak in five years; projections needed to meet climate-related emissions goals. 

UK on the brink: US natural gas prices force key industrial sites to close. 

China: natural gas consumption growth potential is stunning. Link to Julianne Geiger. 

US: crude oil and fuel stocks fall below 2018 levels -- previously reported. Link to Tsvetana Paraskova. HFI Research graphic posted; same one posted earlier. It's quite stunning.

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

Bakken economy: Grand Forks AFB has been selected for a military satellite mission. Sources.

NOG: front-runner to buy a stake in Comstock Resources Bakken assets in North Dakota, three sources familiar with the matter, told Reuters.  SeekingAlpha.

• 427 active wells (producing)
• bid: $170 million for a non-operated working interest
• six-month net average production of 6,400 boe/day
• for interest in existing wellbores; does not include acreage, new drilling -- according to a reader
  
• analysts: NOG is capable of generating more than $200 million in positive cash flow in 2022 at current strip prices -- source at link;

Active rigs:

$71.96	9/17/2021	09/17/2020	09/17/2019	09/17/2018	09/17/2017
Active Rigs	24	11	62	66	56

Active rig data not provided. 

No new permits.

One well released from confidential status:

• 38156, conf, CLR, Kukla 10-16HSL1, Chimney Butte, data not updated on scout ticket.
  

Seven permits renewed:

• Slawson: all in Mountrail County, but different sections -- Vixen Federal; Genesis, Genekat Federal (2); Loon Federal (3)

Six permits canceled:

• Grayson Mill: all in Williams County; four in section 15-154-100; two in section 26-154-103; Larsen (2), Lucy Hanson (2), Reiten (2)

Notes From All Over -- September 17, 2021

Updates

September 18, 2021: people seem surprised that more than one dose of Covid-19 vaccine is required. In fact, that's sort of the norm for vaccine, and has anyone ever wondered why the "tetanus" vaccine seems to last as long as ten years? A lot of folks seem to forget that this was a Trump initiative -- Operation Warp Speed, and it was the Biden folks that wanted to slow down the process and warn folks not to take the vaccine.

September 18, 2021: third weekend of college football, and packed stadiums. To the best of my knowledge, no reports of new outbreaks or surges in Covid-19 cases due to these packed stadiums. Of the three states of most interest:

• Texas: is still getting hit hard; third wave has still not show much sign of slowing;
• Florida: very, very clear that Florida has turned the corner in the most recent surge;
• California: had a fairly mild stage and seems to be receding;

September 18, 2021: relative to cases, the death rate from Covid-19 is slightly more than double that in Sweden compared to Israel:

• Sweden: deaths / cases = 14,734 / 1,144,982 = 0.013
• Israel: deaths / cases = 7,494 / 1,211,443 = 0.006 

Population (pretty much the same):

• Sweden: 10 million
• Israel: 9 million

Cases / million:

• Sweden: 112,523
• Israel: 129,900

Deaths / million:

• US: 2,072
  
• Sweden: 1,448
• Israel: 804

September 18, 2021: White House says US postal workers will follow OSHA vaccine guidance. It was a reporter who first reported, in a tweet, that US postal workers were exempt. OSHA guidelines do not yet mandate vaccines, updated June 10, 2021, which was before the executive order recently signed by Resident Biden.

Original Post

At Seattle airport (SEA) for 90-minute layover, en route back to Dallas. It is impossible for me to articulate how incredibly busy the airport is. Standing room only in food courts. Standing room only at many (most?) Alaska Airlines gates. 

This is off-season and "they" say the US economy is in dire straits. "They" haven't been to the Seattle airport lately, apparently.

If one doesn't get Covid-19 going through this airport ...

Masks:

• 99+% folks wearing masks when not drinking / eating
• 99+% folks drinking / eating
• the folks wearing their masks when not drinking / eating, wear their masks around their chins, or partly over mouth with nose uncovered

Restaurants: incredible array. Me? I haven't had a McDonald's in ages -- five kiosks from which to order, lines in front of each; I walked up to cash register -- no one in line (probably something millennials don't recognize) and order lunch; moved on. 

Human behavior: the replies to this tweet tell me all I need to know how long we will be wearing masks. Most of these folks replying are also likely afraid of getting vaccinated. Link here. Read the comments.

Director's Cut, July, 2021, data posted.

• monthly production down about 4.9%, month/month;
• wells off line for operational reasons, down about 3.3%, month/month -- operators managing their assets
• revenue forecast:
• 1.0 million bbls
• $50-Bakken oil
• Bakken oil currently at $64

Bakken technology:

• not too long ago I mentioned the synergy between farmers and drones (if I run across the link, I'll provide it)
• a reader sent me this link; note the cover;
• ND farmers will do more positive things for the environment that Resident Biden will do all year
  

Director's Cut -- July, 2021, Data

Link here.

Comments: it should be noted that in --

• June, 2021, there were 2,519 wells off line for operational reasons; and, in --
• July, 2021, (most recent month for which there is preliminary data, there were 2,603 wells off line for operational reasons
• delta: - 84 wells
• delta: - 3.3%
• analysis: YouTube;
  

Crude oil production:

• July, 2021: 1,077,789 bopd
• June, 2021: 1,133,498 bopd
• delta, bopd: - 55,709 bopd
• delta, percent: - 4.9%
• revised revenue forecast: 1.2 million --> 1.1 million --> 1.0 million bopd

Crude price:

• today: $65.50
• July, 2021: $64.80
• June, 2021: $63.62
• revised revenue forecast: $50

Natural gas production:

• July, 2021: 2,874,922 mcf/day; capture, 90%
• June, 2021: 2,987,829 mcf/day; capture, 92%

Rig count:

• today: 27 (includes two SWD rigs)
• August, 2021: 28 (ditto)
• July, 2021: 23 (ditto)
• June, 2021: 20 (maybe one SWD rig)

Wells:

• August, 2021:
• permitted: 79
• completed: --
• inactive: --
• DUCs: --
• July, 2021:
• permitted: 40
• completed: 47 (revised)
• inactive: 2,082
• DUCs: 521
• producing: 16,881
• June, 2021:
• permitted: 75
• completed: 41 (final)
• inactive: 1,839
• DUCs: 680
• producing: 16,844 (all-time high)

DUCs and inactive wells are tracked here.

WTI Dropping; Holds Above $71 -- September 17, 2021

Are you kidding me? EU lawmakers press for an investigation of Gazprom's role in natural-gas-price jump. Nordstrom likely to be delayed another six weeks. That will take us into winter. Wow. What are they thinking?

Economy: I understand macro-economics not at all. But retail sales surged last month -- up 0.8% vs an expectation of a small decline month-over-month. We have to be careful here, but if retail sales are tracked in dollars, which they are, then the cost of gasoline certainly accounts for some of that increase, although, to be honest, not much. Gasoline prices have been at this level for quite some time now, and peak driving season is now over. 

I was going to write a long note regarding this issue but quickly got bored. Bottom line: I'm not a bit concerned.

General Milley: I haven't read the book but I've seen the headline which is more than I can say for 78 percent of the general population that haven't even heard of the story -- of General Milley calling "China" near the end of Trump's term. That came from a new Woodward book - I assume the book is 300+ pages long, and the publisher needed a hook to make sales. And that was the hook: General Milley called "China." Sounds bad. Big deal.

Pretty funny. My understanding is that General Milley called "his counterpart" in China. Wouldn't that be part of his job description? Now, let's suppose General Milley was getting intel that "China" was misinterpreting Trump's rants, raves, and ridiculous tweets. Let's say General Milley was getting intel that China was about to go nuclear if Xi saw one more B-52 launched from Okinawa. Let's say Trump didn't believe the intel. Now, wouldn't you want General Milley to let his counterpart know that things were fine, stay calm and have another Peking Cocktail or Beijing Suan Nai? But to hear the uproar, it sounds like folks would have preferred a nuclear war rather than a phone call to calm things down. People are nuts.

Flu season: could this be the best "flu season" ever? Covid-19 eradicated "seasonal flu" in less than a year, and now all indications are Covid-19 is burning itself out. But to be safe, I'm sitting at an Alaskan Airways gate that is completely empty -- arrived at 7:00 a.m. for a 9:30 a.m. flight and, of course, no one is here. I need binoculars to see folks sitting at next gate. But, I'm wearing my mask in between sips of Starbucks coffee. The virus, apparently, does not spread while drinking or eating.

Why no one is seriously worried about losing the Arctic -- theUinta Basin: The Green River Formation is found in the Uinta Basin. There are official estimates of 3 trillion bbls of original oil in place (OOIP) in this formation. Seventy-five (75%) of the Green River formation is under federal (BLM) control.

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

July production, link here:

• 1.077789 million bopd;
• down about 56,000 bpd
• down about 5% m/m

Active rigs* -- updated at COB: 

$71.43	9/17/2021	09/17/2020	09/17/2019	09/17/2018	09/17/2017
Active Rigs	24*	11	62	66	56

No wells coming off confidential list.

RBN Energy: will waxy-crude-by-rail support Uinta Basin production? I track the Uinta Basin here. Archived.

There’s a lot to like about the unusual, waxy crude oil produced in the Uinta Basin in northeastern Utah. 

Low production costs, minimal sulfur content, next-to-no contaminants, and favorable medium-to-high API numbers. 

Oh, and there’s plenty of the stuff — huge reserves. The catch is that waxy crude has a shoe-polish-like consistency at room temperature, and has to be heated into a liquid state for storage and transportation. As you’d expect, refineries in nearby Salt Lake City are regular buyers; they receive waxy crude via insulated tanker trucks. They can only use so much though. Lately, a couple of Gulf Coast refineries have been railing in occasional shipments of waxy crude, but getting it onto heated rail cars involves a white-knuckle tanker-truck drive across a 9,100-foot-high mountain pass to a transloading facility. Now, finally, crude-by-rail access from the heart of the Uinta is poised to become a reality, offering the potential for much easier access to distant markets and, possibly, a big boost in Uinta production. In today’s blog, we provide an update on waxy crude and its prospects.