Friday, September 24, 2021

TGIF -- September 24, 2021

Movie night: wow, wow, wow: A Hard Day's Night on TCM. Incredible. What a treat. From wiki. The end credits are incredible.

Ale: "Boombox" from the Real ale Brewing Company, Blanco, TX, hill country. 8.1% abv, India Pale Ale. $8.99 / six-pack at Target.

Just Happy To Dance With You:

I'm Happy Just To Dance With You, The Beatles
 
It is amazing all the "trivia" associated with this wonderful song. It was released July 20, 1964; released exactly, to the day, five years before the first moon landing. 

My parents went to England in 1964. Mom brought back a Beatles album for me.  No, I no longer have the album.
 
Tonight's races, eighteen months old:
 

Week 38: September 19, 2021 -- September 25, 2021

Top story of the week:

Top international non-energy stories:

Top international energy stories:

  • Saudi Arabia was not in the news.
  • The UK is in the news. And not in a good way.
  • Natural gas prices surging in the UK; gasoline is being rationed.

Top national non-energy stories:

Top national energy stories:

Top North Dakota non-energy stories:

Top North Dakota energy stories:

Geoff Simon's top North Dakota energy stories:

Operators:

Operations:

Wells:

Fracking:

Pipelines:

Other energy plays:

Bakken economy:

Commentary:

Miscellaneous:

Whiting's TTT Ranch And Others In NWNW 26-154-92, Sanish -- September 24, 2021

These are the three new Whiting permits today:

Three new permits, #38581 - #38583, inclusive:

  • Operator: Whiting
  • Field: Sanish (Mountrail)
  • Comments:
    • Whiting has permits for three TTT Ranch wells, to be sited in NWNW 26-154-92; 
    • they will be sited 255 FNL and between 591 FWL and 531 FWL; 

Already in that drilling unit:

  • 18098, 1,339, Whiting, TTT Ranch 11-26H, Sanish, t7/09; cum 444K 7/21;
  • 18401, 2,251, Whiting, TTT Ranch 21-26H, Sanish, t3/10; cum 473K 7/21;
  • 20444, 309, Whiting, Danita TTT 21-26TFH, Sanish, t10/11; cum 180K 7/21;
  • 23237, 523, Whiting, Brittany TTT 13-26TFH, Sanish, t10/12; cum 166K 7/21;
  • 23236, 1,662, Whiting, Matt TTT 13-26H, Sanish, t10/12; cum 241K 7/21;
  • 25719, 1,210, Whiting, Savannah TTT 41-26H, Sanish, t8/13; cum 286K 7/21;
  • 29809, 1,169, Whiting, Remington TTT 41-26TFH, Sanish, t5/15; cum 242K 7/21;

All of the existing wells are spaced at two-section / 1280 acres, but #23236 and #23237 are much shorter. TD:

  • 18098, 20,100 feet (middle Bakken)
  • 18401, 19,795 feet (middle Bakken)
  • 20444, 20,296 feet (Three Forks)
  • 25719, 17,223 feet (middle Bakken)
  • 29809, 18,624 feet (Three Forks)
  • 23236, 17,278 feet (middle Bakken)
  • 23237, 17,523 feet (Three Forks)

Whiting With Three New Permits In Sanish Oil Field -- September 24, 2021

Apple, Inc: New York City's newest Apple store features [permanent] dedicated pick up zone. Link here

  • "Picking up your order from our patented built-in, instant-on, soft-close drawers makes buying the latest Apple device even more rewarding. They're the best drawers Apple has ever made -- we think you're gonna love them."
  • designed by IKEA?

General Milley: what he got right; what he got wrong -- Peggy Noonan at The WSJ. In the big scheme of things I agree with her. But have you noticed how fast the Afghanistan evacuation story disappeared? I mean, that story has really, really disappeared.

Energy poverty: when, not if; just a matter of time. UK, link here:

  • paying the highest ever wholesale electricity prices;
  • suffering the highest ever wholesale natural gas prices
  • rising retail power / gas prices
  • BP is running short of gasoline
  • 1.5 million households have seen their retail energy provider collapse

Peak oil? Worldwide energy shortage shows up in surging coal, gas and oil prices. Link to twitter and then to Reuters.

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

Active rigs, NDIC no long reporting active rigs, best guess*:

$73.98
9/24/202109/24/202009/24/201909/24/201809/24/2017
Active Rigs24*11576457

Three new permits, #38581 - #38583, inclusive:

  • Operator: Whiting
  • Field: Sanish (Mountrail)
  • Comments:
    • Whiting has permits for three TTT Ranch wells, to be sited in NWNW 26-154-92; 
    • they will be sited 255 FNL and between 591 FWL and 531 FWL;

One permit renewed:

  • Lime Rock, #37841, State B 3-25-36H-143-97, in Dunn County

NDIC no longer reporting active rigs.

Energy Notes From All Over -- September 24, 2021

WTI: some say WTI closed at $74. Let's check.

Bakken economy: North Dakota aircraft boarding numbers declined in August, m/m, but numbers in Williston continued to rise. Most important word: "continued."

UK: 50-fold jump in power rates. Link to Tsvetana Paraskova. Putin lovin' it. The good news? It's transitory. Likely to last only through 2027.

UK petrol: panic buying overwhelms UK filling stations. Again, simple procedures put in place would prevent it. Odd/even license plates; max: half tank. 

UK / EU: French and Germany electricity wholesale prices (one-year forward) have hit all-time highs, showing that the European energy crunch isn't going away anytime soon. 

Coal: highest levels in thirteen years. Reasons?

  • high natural gas prices (why?);
  • high power demand (why?);
  • nuclear plant closures (why?);
  • low wind generation

Arctic: oil is booming despite strong opposition. Link here. And look at this -- look which American company is among three international E&P companies? Gazprom, Total, and COP. For the record, I'm accumulating shares in two of the three. LOL. American banks providing huge amounts of financing, along with private equity giants like BlackRock. Report provided by a faux environmentalist.

US natural gas: it might not average $10 in 2022, but some pundits see $20+ in some regions.

Groningen: from Alexander Stahel @BurggrabenH -- Groningen was a key EU gas producer (yes, ageing but still solid) and is to be turned off next year due to seismic risk in the region. JSMH. Link here

  • a reminder: commodities are priced at the margin, and it exactly those marginal bcfs/barrels/pounds that will be missed most in the coming years and that ARE setting prices. 
  • with Nord Stream 2, the Russians conquer Europe without firing a shot.

***************************
Never Too Old

Go for it.

  • Chuck Grassley: will run for sixth term. Next year he will be 89 years old. But he's still young. 
  • Dianne Feinstein: has already filed papers to run in 2024 when she will be 91 years old.

And they survived Covid-19, the plague year.

No one should complain. US judgeships are generally lifelong appointments.

  • RBG died "in office" at the age of 87.

****************************
Personal Matters

Your resume. What to include; what to leave out. Link here to The WSJ. There's some valuable tidbits for college students. 

Academic coursework: Listing courses taken while earning a degree or certification tells employers nothing about your abilities; it only speaks to your attendance. Neither does a GPA, which only demonstrates that you were a good student. Even if you are a recent college graduate, a better strategy is to write about a group project, a case study you wrote or a hypothetical model you built while in school. These types of details demonstrate to employers what you are capable of far better than a course list or GPA.

Active Rigs In North Dakota -- Anticipation -- September 24, 2021

From a reader, the following will be added to the post were I now follow active rigs in North Dakota

September 24, 2021: a reader provided additional information that can be added to previously posted information -- with these additions, one could argue that the number of active rigs in North Dakota might trend toward 40 in early 2022; drillers drill throughout the year in North Dakota, but due to severe winters, some of this could be delayed to 2Q22. Fracking really slows down in the first quarter due to weather. 

  • Crescent Point has B21 running now. 
  • Oasis has picked up B26 from Liberty. 
  • Hess: rumors that it will be picking up X25 in beginning of 22; 
  • Greyson Mill will start a drilling program in 22 (rumor from reader, "I have heard...". 
  • Whiting to add 1,
  • Ovintiv possibly add 1, 
  • Iron Oil and Gas add 1,
  • Koda Resources to add 1 rig for a 4-hole pad,
  • Continental to add 1 more,,
  • Sinclair to add 1 rig for a single well. 
  • Reader "wouldn’t be surprised if the operators that add continue extending contract term length as oil prices stay above $65." 
I "predicted" CLR, Whiting might add a rig; that CPEUSC would have a rig (apparently they do). I forgot about Koda Resources and Iron Oil and Gas. I actually thought about Iron Oil and Gas last night -- this is nice to see.

Notes From All Over -- The Dockets Edition -- September 24, 2021

WTI: might WTI hit $74 today? At 1:52 p.m. CT only seven cents away from $74.

Hearing dockets: one of the highlights each month with regard to the Bakken is the posting of the monthly hearing dockets. Two things jumped out at me in the October, 2021, dockets:

  • Slawson broke up some large drilling units into much smaller drilling units; this should be good news for small mom-and-pop mineral owners;
    • EOG, on the other hand, continues with large drilling units;
  • but did you notice this? the tea leaves for the past year suggested EOG was about to exit the Bakken; now, in the October, 2021, hearing dockets, we see EOG eyeing additional permits; they could be sprucing up their mineral acreage prior to putting their Bakken assets on the auction block, but that is not something I would expect to see; that seems to be a stretch; 
    • in addition, there have been at least two operators (Oasis, and, more recently, COP). who have reiterated interest in the Bakken. 

Covid hypocrisy:

  • A-listers test positive
  • either breakthrough (highly unlikely) or never vaccinated [Later: they say they were vaccinated; details not provided; fully vaccinated?]
  • bigger question: why were they allowed on set before they had results back; why was set not completely closed down after two of the four tested positive?
  • obviously asymptomatic; others coughing throughout rest of show;
  • what are the odds? just how widespread is asymptomatic Covid; it must be "everywhere"; how many folks are not being test everyday .. like 329 million?  (in the US)
  • these are the elite who attend Obama-like events where proof of vaccination is required
  • co-hosts of the view scheduled to interview VP Kamala Harris unexpectedly test positive and exit stage left mid-show before interviewing Harris -- google the story, September 24, 2021

Fox News:

  • loses credibility with the "Sleepy Joe" meme (as does Powerline lose its credibility with perpetuating (?) that meme):
  • the average viewer is not seeing that
  • good, bad, indifferent, Biden had a remarkable press conference this a.m.
  • sense of humor; bright-eyed and bushy-tailed; spoke clearly and coherently; spoke like a statesman; took questions; walked off in dignified style;
  • those with an agenda (at either end of the spectrum) will spin the story, but the "sleepy Joe" meme is not working

Sports:

  • by the way, I completely missed this
  • Ryder Cup in play?
  • wow: I saw the ads; I thought the Ryder cup was weeks away based on the commercials
  • I find match play (or whatever it's called) incredibly boring and hard to understand. Shirley, they could find much better formats. And, please, quit calling me Shirley 

The numbers:

  • Dow: minor movements above, below yesterday's closing
  • WTI: up 40 cents, up 0.55%; trading at $73.70
  • DXY: WTI up, so DXY must have been down; in fact, DXY is down slightly, to 93.36
  • TNT: a pretty noticeable jump from the 1.30% range; now yielding, 1.454%;
  • of note:
    • DVN: up 0.67%; up about twenty cents; trading at $33; one year ago, trading at $8
    • NIKE: Jim Cramer not buying the "SOLELY" due to supply chain problems; down 7% this morning; down $11/share; trading at $149
    • AAPL: not surprising -- profit taking; down 0.4%; this $145-stock is trading at $146;
    • leader board included: PDX, MRK
    • SRE: this $124-stock is trading at $129
    • ARKK: this $120-stock is trading at $117; down almost 2%; down over $2; obviously related to China banning cryptocurrency trading/transactions
    • OKE: flat; down two cents; trading at $57.44; apparently it hit an intra-day high at $57.74 already, earlier this morning

Question:

  • with the most job openings ever in the history of the United States ...
  • with eleven million job openings ...
  • how can we have a "headline" unemployment rate of 5.1%?
  • something suggests definitions and/or requirements for unemployment status need to be changed 
  • it looks like somewhere between 4% and $8% unemployment is "full employment" in a country like the US with such a huge safety net; Euopre / UK with an even larger safety net (health care), one could argue 6% to 12% unemployment would indicated full employment.

Investing:

  • finally
  • I am way overweighted in energy -- it's been that way for decades -- not dollar amount but "share amount" if that makes sense
  • I am way underweighted in technology -- I am working as hard as I can to change that
  • but finally, a loss in my technology portfolio no longer drags down the entire portfolio; that overweight in energy really helps; LOL

What's a WAAC? Weighted average cost of capital. Link here

  • If the ROIC is greater than the WACC, then value is being created as the firm invests in profitable projects. Conversely, if the ROIC is lower than the WACC, then value is being destroyed as the firm earns a return on its projects that is lower than the cost of funding the projects. Link here.
  • Karen Finerman brought this up on CNBC yesterday. 

October, 2021 - Hearing Dockets

The usual disclaimer pertains. This is done quickly; there will be typographical and content errors. Shorthand notes necessarily are incomplete. If this information is important to you, go to the source. 

Link here.

Wednesday
October 20, 2021
Seven pages

Remember, these are cases, not permits.

  • 28985, NDIC, Reunion Bay-Bakken, consider appropriate spacing for wells completed in a 2560-acre unit, sections 28/29/32/33-152-93, McKenzie, Mountrail
  • 28986, MRO, Bailey-Bakken reduce setback, Dunn County
  • 28987, Hess, Ross-Bakken, establish a standup 1920-acre unit; sections 12/13/24-156-92, five wells, Mountrail County
  • 28988, Hess, Tioga-Bakken, establish an overlapping 2560-acre unit, sections 23/24/25/26-158-95; one well; Williams County
  • 28989, Slawson, Big Bend-Bakken, i) establish two overlapping 640-acre units; S/2 of sections 14/15, and the N/2 of sections 17/18-152-92; four wells; ii) establish an overlapping 960-acre unit, S/2 of sections 16/17/18-152-92, four wells; terminate an existing 1290-acre unit and an existing 1600-acre unit; Mountrail County
  • 28990, Slawson, Big Bend-Bakken, i) establish two overlapping 1920-acre units; two wells; ii) terminate an existing 3840-acre unit; in Zone L, Mountrail County;
  • 28991, Slawson, Big Bend-Bakken, i) four wells on an existing 640-acre unit, section 22-152-91; ii) establish an overlapping 1280-acre unit, sections 27/28-152-91, two wells; iii) establish two overlapping 2560-acre units; one well; iv) terminate an existing 2560-acre unit, Zone XLIII, and a 3840-acre unit, Zone XLVIII, Mountrail County
  • 28992, MRO, Antelope-Sanish, pooling,
  • 28993, MRO, Reunion Bay, pooling,
  • 28994, MRO, Reunin Bay, pooling,
  • 28995, MRO, Reunion Bay, pooling,
  • 28996, MRO, Lost Bridge, pooling,
  • 28997, MRO, commingling,
  • 28998, MRO, commingling,
  • 28999, Hess, Tioga-Bakken, pooling,
  • 29000, Hess, pooling,
  • 29001, Hess, pooling,
  • 29002, Hess, commingling,
  • 29003, Hess, commingling,
  • 29004, Hess, commingling,
  • 29005, Slawson, Big Bend, pooling

Thursday
October 21, 2021
Seven pages

Remember, these are cases, not permits.

  • 29006, EOG, Stanley-Bakken, establish a 3200-acre unit, sections 18/19/20/29/30-155-90; four wells; Mountrail; 
  • 29007, EOG, Parshall-Bakken, establish an overlapping 1920-acre unit, one well; Mountrail
  • 29008, EOG,  Stanley and/or Parshall-Bakken, establish i) an overlapping 2240-acre unit, one well; ii) an overlapping 2560-acre unit, two wells; Mountrail
  • 29009, NDIC, Glass Bluff-Madison, bond requirement, Liberty Resources, McKenzie, Williams
  • 29010, CLR,  Pleasant Valley, Beaver Lodge, Big Butte and/or Manitou-Bakken; establish two overlapping 3840-acre unit, one well; Williams, Mountrail; 1/2/11/12/13/14-156-95; 1/12/13-156-95 and sections 6/7/18-156-94;
  • 29011, Zavanna, revoking a Petro-Hunt permit 
  • 29012, WPX, Squaw Creek-Bakken, establish an overlapping standup 960-acre unit, E/2 of sections 8/17/20-149-94; four wells; McKenzie; 
  • 29013, WPX, Squaw Creek-Bakken, establish an overlapping standup 960-acre unit, W/2 of sections 8/17 and 20-149-94; four wells; McKenzie 
  • 29014, WPX, Squaw Creek-Bakken, establish an overlapping standup 1920-acre unit; one well; McKenzie; 
  • 29015, WPX, Squaw Creek-Bakken, establish an overlapping standup 1920-acre unit, one well; McKenzie
  • 29016, PetroShale, Croff-Bakken, exception for siting location
  • 29017, CLR, pooling,
  • 29018, CLR, pooling, 
  • 29019, CLR, Pleasant Valley-Bakken; eight wells on an existing 1920-acre unit; Williams County 
  • 29020, CLR, Cedar Coulee-Bakken; thirteen wells on an existing 1280-acre unit, section 33-147-96 and section 4-146-96; Dunn County 
  • 29021, CLR, commingling, 
  • 29022, CLR, commingling,
  • 29023, Hunt, commingling,
  • 29024, Denbury, SWD conversion well; file # 8119;
  • 29025, Denbury, SWD conversion well; file #15589;
  • 29026, Denbury, SWD conversion well; file #15786;
  • 29027, Denbury, SWD conversion well; file #14265;
  • 29028, Denbury, SWD conversion well; file #90108;

Tuscaloosa Marine Shale Back In The News -- September 24, 2021

The Tuscaloosa Marine Shale play is tracked here

RBN Energy has update today

Most recently, August 5, 2021, there was a discussion regarding CLR and the TMS play. 

A reader alerted me to this wildcatter (?). New TMS activity;

Petition of State Line Exploration, LLC, requesting the Board to integrate, with alternate risk charges, all interests in 2,160.5-acre oil unit, situated in in Sections 7, 9, 10, 11, 22, 23 and 24, Township 1 North, Range 2 East, to horizontally drill the Reese 11 No. 1H Well to a depth of 12,500’ to test the Tuscaloosa Marine Shale Formation at a regular bottomhole location, with authority to drill multiple horizontal wellbores.  Alternately, Petitioner requests the Board to integrate all interests in said unit without alternate risk chares.

Information suggest the approximate vertical depth will be 12,500 feet with an estimated measured depth of 19,000 feet. Very similar to Bakken depths. A 2,160.5 acre drilling unit would be a four-section line unit (overlapping unit) in the Bakken.

Cost: again, around the same costs as Bakken wells early in the Bakken boom, less than $10 million but more than $7 million.

I may have my geography wrong, but the original (recent) note on the TMS was centered on tracts west of Baton Rouge and directly east of the Texas - Louisiana state line. 

On the other hand, this newest wrinkle, the Reese 11-1H is near Amite City, Tangipahoa Parish, is well northeast of Baton Rouge and northwest of New Orleans. 

By the way, on another note, the name of this LLC is interesting: "State Line Exploration, LLC." Obviously the "state line" is the Texas - Louisiana state line.

If nothing else, I'm starting to learn the geography and parishes of Louisiana. 

No Wells Coming Off Confidential List -- Update On The Tuscaloosa Marine Shale -- September 24, 2021

China: the electricity shortages in China are worsening ... it's getting so bad, Beijing is now asking some food processors (like soybean crushing plants) to shut down. Link here

Jargon: I heard this phrase for the first time the other day on CNBC from one of my favorite analysts: "ROIC greater than WACC." Need to explore. I know nothing about WACC. Link here. "Burggraben" was also new to me. German for "moat."

No surprise: China's central bank bans cryptocurrency. Bitcoin slumps. Link here

Apple, Inc: I updated my thoughts on Apple (very, very positive) last night but put the post in draft thinking I was too far ahead of my headlights. Today, it's being reported that my observations were spot on. Now, we have a new rating: a "strong buy" recommendation wiht a new price of $198, up 35% from current levels. Why don't we just all it $200? Because $198 sounds so much more "real." Link here

Unhelpful: another WSJ article on the bottleneck at California ports but no explanation why. Link here.

Covid-19: Alberta -- the oil province -- has by far the highest Covid-19 case numbers among Canadian provinces, and one of the lowest vaccination rates. But apparently holding Covid parties to enhance natural immunity. Link here.

Baker Hughes: warns on energy transition. Link to Irina Slav 

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

Active rigs: no longer being reported by NDIC. Best estimate: 26*.

$73.28
9/24/202109/24/202009/24/201909/24/201809/24/2017
Active Rigs26*11576457

No wells coming off confidential list according to NDIC.

RBN Energy: can higher crude oil prices revive the Tuscaloosa Marine Shale play? Archived.

A long, long time ago — or, more precisely, in the spring of 2014, when WTI was selling for more than $110/bbl — a handful of exploration and production companies were convinced they were onto something big in southwestern Mississippi and east-central Louisiana. 
There, they believed, the Tuscaloosa Marine Shale (TMS) was poised to become the next Bakken, the U.S.’s premier shale play at the time, but even better for producers seeking more robust crude prices because of TMS’s very low gas-to-oil ratio — an oil cut north of 92%! –– and proximity to Gulf Coast refineries
While there had been a host of failed efforts by producers to wring out large volumes of premium-priced Louisiana Light Sweet (LLS) oil from the marine shale’s sedimentary silts and clays, the E&Ps felt in their bones that they were finally “cracking the code.” Then, at just the wrong time, came an oil price crash that set the whole industry back on its heels and activity in the TMS quickly slowed to a crawl. As we discuss in today’s RBN blog, an even smaller cadre of Tuscaloosa Marine Shale true believers is now banking on a production revival in the core of the play.