Tuesday, September 21, 2021

Update On The Second Largest (?) Pipeline In The Bakken -- September 21, 2021

I track the Tesoro High Plains pipeline story here

I can't say for sure if this is the second largest pipeline in the Bakken but certainly the DAPL is number one. The Tesoro High Plains carries about a third of all Bakken oil which suggests it must be the second largest pipeline. But I could be wrong.  

I'm not following this case very closely; if it's important to you go to the source. The blog often has content and typographical errors.

I can't recall if I posted this update, from The Williston Herald, about six days ago, updated by the Herald on September 20:

The legal battle will continue for Andeavor’s Tesoro High Plains crude oil system for the foreseeable future, after the Eighth Circuit Court of Appeals reversed a lower court decision dismissing a class action suit filed by landowners over claims of trespass.

The High Plains system carries about one-third of the Bakken’s crude oil to a refinery in Mandan, and it has been embroiled in a legal quagmire since 2013, when negotiations to renew its right of way leases fell apart.

On Monday, the U.S. Court of Appeals reversed a lower court decision in the 2018 class action suit, which seeks both compensatory and punitive damages for ongoing trespass and injunctive relief requiring the pipeline to be dismantled.

The Eighth Circuit agreed that the outcome of the Bureau of Indian Affairs administrative process would be an important turning point for the case, but disagreed that it lacked jurisdiction until after that administrative process is completely exhausted, especially given the back and forth in the Bureau’s decisions with new administrations coming on board. Instead of a dismissal, they granted a stay, to give the BIA more time to finish its current administrative process under the Biden administration. It also remanded the case back to the lower court for further consideration in light of its ruling.

Individual landowners control 66 of the 90 acres in question for the pipeline’s right of way, and the MHA Nation controls 24. The individual landowners rejected their offers after learning that MHA Nation had been offered substantially more per acre than they had been. They filed suit to try and force the pipeline to pay them more per acre or sun down.

Marathon had partially shut the system down in 2020, after an order from the Bureau of Indian Affairs, amid claims that the pipeline has been trespassing on Native American land for seven years. Marathon was also fined $187 million in damages in connection with the BIA order under the Obama administration. The Trump administration later reduced that to $4 million.

More at the link. 

MRO With Four New Permits In The Prolific Bailey Oil Field -- Dunn County -- September 21, 2021

China coal: record Chinese coal burning to drive surge in carbon emissions. Link here. China announced on June 11, 2021, it would no longer grant subsidies for new solar power stations, onshore wind projects. Link here. Xi is truly looking out for all his Chinese.

UK utility bills: could soar to $750 without government intervention; it looks like "price caps" would need to rise to over $2,000 to cover the full costs of buying surging natural gas prices. Link here

No war: first time in twenty years, the US is not at war. 

GE: the blue chip stock I missed this past year.

JPM: raises its dividend more than 10%; raises it from 90 cents to an even buck; link here.

Peak oil: more and more indications both OPEC and OPEC+ struggling to lift production.

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

COP: will remain active in the Bakken even after recent acquisitions in the Permian. 

COP: Conoco's Permian purchase will overtake all but XOM in lower 48 US output, and Alaska is not amounting to much any more.

  • adding an estimated 200K boepd will put COP within striking distance of leader XOM which is expected to produce about 1 million boepd from the Lower 48 this year
  • COP's most recent deal will propel it past CVX, EQT, OXY, and EOG
  • in the Permian Basin, COP will vault from fourth place after its previous purchsse of Concho Resources to become the second largest producer, behind only Pioneer Natural Resources and passing Chevron and OXY
  • after waiting patiently on M&A opportunities through the land-rush years of the shale boom, COP has been able to pick up prime Permian real estate at what looks to be attractive price points -- analyst

US oil: we are quickly seeing the realignment of oil companies in the US. In addition, quickly seeing realignment of US states producing oil and/or natural gas. California will soon opt out; Alaska may not be that far behind. The one to watch: Utah. Maybe Wyoming.

Active rigs* -- NDIC no longer reporting active rigs; the number is my best estimate:

$70.56
9/21/202109/21/202009/21/201909/21/201809/21/2017
Active Rigs26*11586657

No new permits:

Four new permits, #38571 - #38574, inclusive:

  • Operator: MRO
  • Field: Bailey (Dunn); the Bailey oil field is tracked here but it must be updated; however, it has been discussed many times on the blog; it's a great field for re-fracks;
  • Comments:
    • MRO has permits for four new wells in the prolific Bailey oil field: Ermina, Ithamar, Austin, and Beau; 
    • the wells will be sited in lot 1 section 18-146-93;
    •  they will be sited between 451 FNL and 507 FNL and 429 FWL and 535 FWL

Four permits renewed:

  • NP Resources: four Trotter State permits in McKenzie County;

Notes From All Over -- Part 3 -- September 21, 2021

FedEx:

  • expectations weren't great; even so:
    • barely beats on the top line;
    • misses on the bottom line, $4.37 vs 4.91
  • shares
    • during trading hours before earnings were out, FDX was up 0.5%; $1.26 / share;
    • after earnings released, FDX down about 2% after hours; down $5.32 / share
  • during the day, CNBC talking heads were looking for a beat
  • stock is down 20% from just two months ago;
  • company says labor costs

Stitch Fix:

  • up 14% after hours
  • 19 cent profit vs 13-cent-loss expected;

Adobe beats on earnings and revenues, but drops almost 4% after hours

  • up 23% y/y

Ovintiv Kestrel / Sorenson Federal Wells Now Producing; One Well Goes Over 550K Bbls Crude Oil Cumulative -- September 21, 2021

The wells are tracked here.

With the exception of one well that is tracked at that site, all wells are now producing. 

I believe, of the wells, this is the "oldest":

  • 34330, 3,184, Ovintiv/Newfield, Sorenson Federal 153-96-4-9-2H, Sand Creek, 62 stages, 9.9 million lbs, t4/18; cum 133K 7/18; see below; cum 542K 7/21;

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-202123391239171208932581721153
BAKKEN6-20212962346277121314551129021649
BAKKEN5-202117306330878825894583658
BAKKEN4-202191600153371344464280166
BAKKEN3-2021316162625438081471014176534
BAKKEN2-2021284862486231951088010664216
BAKKEN1-20213135673438332875516902649
BAKKEN12-2020259631185147017981004794
BAKKEN11-20203019311634850509611153711
BAKKEN10-2020314796529721351668892547155
BAKKEN9-20203075777345380825716701318433

Initial production:

BAKKEN8-20193111933119316785813045260023138
BAKKEN7-201931140271392280331002614401954241
BAKKEN6-201930165531670268951061444839055500
BAKKEN5-20192917254172027187743214606825456
BAKKEN4-20193019769197177947814502853549533
BAKKEN3-2019312456024562833580638927069161
BAKKEN2-20192827205269648035782352013456749
BAKKEN1-20193128171282886758642622800334404
BAKKEN12-20183120368209794765447082420918770
BAKKEN11-20183020176197634716387491847919220
BAKKEN10-201831243922412357674926342445883
BAKKEN9-201830223912238260594204325239030
BAKKEN8-20183127669278817528596222927027301
BAKKEN7-201831406974102810165946845734933752
BAKKEN6-20182928298281047433592623245924349
BAKKEN5-2018315443554538171531173494027176803
BAKKEN4-20183922284704218191601019123

My Favorite Graphic -- September 21, 2021

Link here.

Just released.

This chart lags a bit. This is current as of August 31, 2021.

It's hard to see, but the money in US money market funds at the end of August, 2021, was slightly more than what they held at the end of July, 2021. 

This money sits idle.


Reality Sucks -- Is Anyone Paying Attention? September 21, 2021

From Robert Rapier talking about surging price of copper used extensively by renewable energy companies:

Norwegian oil and gas company Equinor (formerly Statoil)—now a major developer of wind farms— has begun lowering investor expectations on its renewable projects. The company recently dropped its guidance from 6-10% returns in 2020 to 4-8% this year. Denmark’s ├śrsted A/S (formerly DONG Energy), the world’s largest offshore wind farm developer, said returns on capital employed fell from 11% in the first quarter of 2020 to 7.5% a year later. Danish competitor Vestas Wind Systems saw returns fall from 17.4% to 12.2% over the same period. 

If this trend continues unchecked, many renewable projects might become financially unfeasible for all but the biggest companies with the deepest pockets.

How Did This Happen So Quickly? The UK / European Edition -- September 21, 2021

I asked the same question yesterday, but with regard to China. How did this happen so quickly? Seemingly overnight.

When UK and European politicians started blaming Russia for their "sudden" natural gas shortage, it was time to start looking for the truth. LOL. 

Google: 2017 UK closes largest natural gas storage site.

Wow, wow, wow -- things become much clearer. Hundreds of hits when you google that.

This is my favorite: UK closes its largest natural gas storage site in 2017.

The article is re-printed in full here, in case the above link breaks: https://wellsofinterest.blogspot.com/2021/09/rough-end-for-uks-largest-gas-storage.html.

I can't post it here in full because it exceeds Sophia's guidelines.

Bottom line: in 2017 UK closed its largest natural gas storage site which accounted for 70% of its total storage, and then had the chutzpah to say this:

On an annual basis, the UK can comfortably meet demand as there is enough production and import capacity

LOL.  

Parse that statement: "On an annual basis..." That's the problem. I'm not even going mansplain it -- if you don't understand it, you're reading the wrong blog. Go read Rachel Maddow. 

That was the UK.

Of course, for the EU: it was Groningen. 

I may need a new tag: reality sucks. 

By the way, who found that little gem? Will Kennedy reading Bloomberg

By the way, as bad as it already it, British Steel says that energy costs are spiraling out of control and warns that there may be a 50-fold increase in power prices. That's not a 50% increase in power prices; British Steel said a 50-fold increase. Google it; I'm tired of linking paywalls.

Notes From All Over -- Part 2 -- September 21, 2021

Starters:

  • SeekingAlpha News: link here. Take a look at QuantumScape.
  • DXY: $93.107, down slightly after a jump yesterday;
  • TYT: 1.307%; down very, very slightly;
  • WTI: $70.93, up about 1%;

Cracker Barrel Announces An Increase In Its Dividend -- September 21, 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

Cracker Barrel dividend history.

Today, announces a thirty percent increase in its dividend, from a dollar to a dollarthirty. Link here.  

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

Did I mention:

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.  

I have no relationship with Cracker Barrel. I've actually never cared much for Cracker Barrel in the big scheme of things. I think I've visited Cracker Barrel three times in my entire life. 

But this is why I find it interesting. I see Cracker Barrel as a leading indicator with regard to Covid. One wonders how many folks stop at Cracker Barrel on the way to those 100,000+ college football stadiums? A lot of those stadiums are in the southeast (SEC?). And it's my perception that Cracker Barrel is a southeast phenomenon (along with Waffle House).

Over At "Beautiful Badlands" -- Readers Pick Six Most Popular Badlands Road Trip Destinations -- September 21, 2021

Link here

Number six: Peaceful Valley Ranch.

Go to the link to see the top five.

Seasonal Flu Eradicated -- CDC Weekly Surveillance -- September 21, 2021

Link here, a dynamic link.

First, let's look at pediatric deaths due to seasonal flu. Seasonal flu, unlike Covid-19, is particularly dangerous for infants and children, aged 1 - 4 years of age. That was historical. Not so much any more. From the CDC. This should be the lead story over at the CDC site but one actually has to scroll to the very, very bottom of the weekly surveillance report (at the link) and it is easily missed. Of course, this is never reported by the mainsream media (yes, I know the season has just begun -- but look at same week for three past years):


And, "seasonal flu" seems to be eradicated. 


I forget the numbers, but generally, the US reports twenty to forty million cases of seasonal flu each year. Last year, the 2020 - 2021 seasonal flu season, the CDC, with a straight face, reported less than 10,000 cases of seasonal flu. Someone deserves the Nobel Prize in Medicine for that turnaround. Perhaps shared by Trump - Biden. It happened under Biden's watch but the "cure" appeared under Trump's watch.

But doesn't this appear to be incredibly meaningless. The population of the US is said to be 330 million (increasing at a nice rate due to the Haitian influx at the southern border) and yet, less than ten Americans tested positive for "seasonal flu" last week. 

And some of those would have been false positives.

This is just so incredibly ridiculous. I've lost all faith in the credibility of the CDC. But it's still fun to track and watch. Sort of like reading the Babylon Bee

Speaking of which, the Democrats call for more infrastructure spending to build more bridges for Haitian migrants to live under. Link here.

Notes From All Over -- Part 1 -- September 21, 2021

Mexico: private-sector gasoline imports have risen to all-time highs. Link here

Fuel customers prefer filling up at privately operated gas stations such as Oxxo, BP, Mobil and others because they offer better service than Pemex stations, the director said.

Customers say that employees are more attentive, facilities are cleaner and there is more security at private stations.

Quick: what's Oxxo? Answer: Mexico's "7-Eleven."

China: quick. What percent of electricity is provided by coal?

  • 20%
  • 40%
  • 60%
  • other?

The GM Chevy Bolt -- Even Jesus Is Upset, Never Thought It Would Happen To Him -- September 21, 2021

Bolts: GM will replace batteries in recalled Chevy Bolts. Link at WSJ. Think about that for a moment. What is the cost of the Bolt? 80% of the cost of the Bolt is the battery. GM is losing money on each Bolt they sell (that was before the recall) according to some sources previously reported -- and now, they're going to pull all the batteries from all the Bolts and replace them with ...... "new" batteries? 

Supposedly, dealerships will start doing this in mid-October. I assume this is akin to replacing an engine or a transmission in an ICE. Fact-check me on this. EVs:

  • the batteries
  • chips
  • software
  • not much else

From the linked article:

GM said Monday that it would start shipping new battery cells to dealerships as early as mid-October to begin replacing potentially faulty battery modules. GM and supplier LG Energy Solution have identified and fixed a manufacturing defect, and LG recently resumed production of cells at a factory in Michigan.

I wonder if GM and LG Energy Solution will share with the public via the mainstream media, the "manufacturing defect" that led to all this. 

GM's original band-aid fix did not work. Even that raises questions? Cutting corners?

Asking for a friend.

Even Jesus is upset (yes, I can't make this up). From the linked article:

Jesus Damian said he walked to the outside lot of his apartment complex in Sacramento last month to find his Bolt had been destroyed by fire. Two cars parked next to his—another Chevrolet and a Maserati—were seriously damaged. His Bolt had been below the charging level recommended by GM, but he said he was unaware of that advice at the time.

142,000 vehicles. Current recall (this is the figure given for the current recall; it does not include the cost for the first recall):

  • $1.8 billion / 142,000 = $13,000 per vehicle. 

Prices:

  • a 2017 Bolt, retail: $18,590 (this would be a Bolt without the new batteries, and under recall).
  • a 2019 Bolt, retail: $23,990 (ditto).
  • the new, re-designed 2022 Bolt starts at $31,000. As shown, $34,200. For $34,000, look how small that vehicle appears. Literally no rear trunk / storage space. It appears there's enough room up front for a spare tire. 
  • GM's Electric Cadillac, 2022: starting at $60,000

Re-Posting: China -- September 21, 2021

Re-posting:

China: it appears folks have forgotten, or never knew, that Xi is an ardent Mao follower. Most of us thought Mao's policies were dead.

Front page story over at The Wall Street Journal is a must read. What's really cool? One could easily substitute Joe Biden for Xi Jinping and one could easily substitute the US Democrat party for Chinese Party and the article would require almost no other editing. It would read the same. Try it. It works every time. 
In fact, it appears we've been mispronouncing Xi Jinping's name all this time --> Ji Binding --> Joe Biden. Remember, it took awhile for Americans to realize we had been mispronouncing Peking all those decades. Peking --> Be-King --> Beijing.

Two Best Energy Editorials To Read Before You Start Your Day -- September 21, 2021

The two best editorials to read this morning. 

Having scanned 3,456,218 sites overnight and using sophisticated AI tools these are the best of the best:

David Messler: the dangerous rally in natural gas prices. September 20, 2021, 7:00 p.m. CDT.
This is just a very, very small piece, Groningen: 

“The drastic drop in output from Groningen will redefine the European energy landscape. The field, which had a rebound in production at the start of this century, reaching 57 billion m3 in 2013, was for decades the central cog in northwest Europe’s gas system.”

“The phase-out of this giant field will force Europe to expand its gas imports at an even quicker pace. We can already see this drastic shift taking place in the Netherlands, which is in the midst of the transition from being a net gas exporter to a net importer,” says Carlos Torres-Diaz, head of gas markets research at Rystad Energy.”

Charles Kennedy: oil demand set to grown even after 2050. September 20, 2021, 1;00 p.m. CDT.  

 “The impact of climate change policies on oil demand are highly exaggerated – The impact is mostly on demand growth, not on demand itself,” Alhajji said during a keynote speech at the event focused on the impact of the energy transition on oil-dependent economies. 

First geopolitical "region" mentioned: Africa. Oh, give me a break.

“African countries can reduce their carbon footprint by focusing on energy efficiency and the low hanging fruits, save oil & gas for exports or value added industries and place solar and wind projects strategically.”

Another Incredibly Exciting Day -- And We're Just Getting Started -- September 21, 2021

Firster things firster:

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.

First things first: monthly Legacy Fund deposits should be reported this week. Link here.

The Fed: no rate hikes until late 2022, though tapering may begin soon. CNBC.

Huge disconnects: reporting vs reality vs what each individual is seeing

  • in energy;
  • in Covid;
  • in China;
  • in DC.

And when there are disconnects like this, one will see gaslighting: link here.

Energy: most important tweet all day, link here. And what he was tweeting about.

So, crude oil demand increases in the out-years while more and more oil companies are stepping back. Most recent example: Shell. It makes it very, very easy for investors interested in fossil fuel.

Covid-19: Americans may not want the vaccine, but, wow, the rest of the world still does. 

Ivermectin: ranchers running into shortages.

China: it appears folks have forgotten, or never knew, that Xi is an ardent Mao follower. Most of us thought Mao's policies were dead.

Front page story over at The Wall Street Journal is a must read. What's really cool? One could easily substitute Joe Biden for Xi Jinping and one could easily substitute the US Democrat party for Chinese Party and the article would require almost no other editing. It would read the same. Try it. It works every time. 
In fact, it appears we've been mispronouncing Xi Jinping's name all this time --> Ji Binding --> Joe Biden. Remember, it took awhile for Americans to realize we had been mispronouncing Peking all those decades. Peking --> Be-King --> Beijing.

Investing:

  • for those folks who took advantage of yesterday's sell-off, it looks like we ... and "we" is the correct pronoun .... we have another opportunity today.
  • what an incredible opportunity
  • this is not investment site, so I don't post what I buy and sell but here's a hint regarding yesterday:
  • OKE is in the natural gas business
  • natural gas seems to be the energy story for 2021
  • OKE sold off yesterday, along with the rest of the energy sector
    • closed down 4% yesterday; closed down $2.18/share; pre-market today, up 1.6%; up 85 cents.
    • still trading near its 52-week high 
  • OKE: pays over 7% at yesterday's price

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

CNBC: pre-market futures suggest "the markets are bouncing back, but not enough to recover from yesterday." In other words, as noted above, "we have another opportunity today."

Back to Energy:

Buzz: the high price of natural gas in Europe and the UK could "drag" the price of crude oil to $100. That would be Brent. For WTI? $97/bbl. Source: BofA analysts.  

Copper: on another note, copper prices are surging. Link to Robert Rapier

Copper, one of the best conductors of electricity, is extensively used in the production of electric vehicles, wind turbines, and solar panels. Offshore wind farms, due to their extensive cabling, are particularly copper-intensive, requiring 9.6 metric tons of copper per megawatt (MW) of energy capacity. Onshore wind farms and solar photovoltaics (PV) are also highly copper-intensive, requiring 4.3 tons and 5 tons of copper per MW, respectively.

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

NDIC:

  • complete IT database is compromised
  • no idea if any of the scout tickets are even correct any more;
    • they do not appear to being updated
  • status of wells as reported by NDIC -- no clue if current
  • no update on the scout tickets for the two CLR wells that came off confidential list yesterday
    • this has been going on since July, 2021
  • now, the NDIC has removed the daily updating of active rig counts
  • so, data from NDIC that is posted daily is .... well, almost meaningless
  • oilprice has more credibility
  • but we press on

Active rigs (see above)* -- data below may be incorrect:

$71.12
9/21/202109/21/202009/21/201909/21/201809/21/2017
Active Rigs2058*
11586657

According to NDIC, no wells coming off confidential list today, but we really don't know, do we? It will be interesting to see if NDIC continues posting a daily activity report. My hunch: that goes away soon, also.

RBN Energy: why western Canada's natural gas production has been hitting multi-year highs

With natural gas prices reaching levels not seen in seven years, Western Canada is doing all it can to help increase gas supply, with recent data showing monthly production hitting multi-year highs. 
Moreover, Canadian forward gas prices are at the highest levels since 2014, gas pipeline expansions are in place or being constructed to accommodate future supply expansion, and gas-focused drilling activity remains strong — all of which may as well be a prescription for sending gas production to record levels later this year and in 2022. In today’s RBN blog, we provide an update on the recent gas production growth in Alberta and neighboring provinces and why more growth is coming.

That's Canada.

The US? Not so fast. We should start hearing stories about the Dem-led FERC this winter. 

Reminder: ISO NE. This morning, 7:12 a.m. EDT: $50. Should be below $20.

  • natural gas: 60%
  • nuclear: 30%
  • that totals ... let's see .... 60 + 30 = 90%
  • does anything else matter?