Monday, October 11, 2021

Bitcoin Is The New "Gold"; CLR With Five New Permits; Thirteen Permits Renewed; Rig Count Jumps -- October 11, 2021

Stagflation: Jim Cramer takes contrarian view on "stagflation." His views are in line with mine which I have posted. Bottom line: neither he nor I are concerned about "stagflation." 

Stagflation: headline story today Goldman lowered GDP projections. Scary headline. But did anyone report the numbers? Here they are. Be sure to sit down before looking at this huge Goldman Sachs cut when they revised their 2021 / 2022 GDP forecast:

  • for 2021: previous, 5.7%; revised, 5.6% -- give me a break; that's a headline story?
  • for 2022: previous, 4.4%; revised, 4% -- ditto.

Color me cynical: I saw the Goldman Sachs headline; several readers sent me the headline link; makes me wonder if the readers even read the story -- a revision of 5.7% to 5.6% gets the headline -- from a trading house that is consistently bearish, and if not bearish, tends to speak out of both sides of its collective mouth. A revision from 4.4% to 4% is a bit more bearish but what GDP was Trump seeking? What did he get?

Color me really cynical: compare those revisions with GDP growth under Trump (less than 1%); Obama (1.6%); Bush II (2.2%); Bill (3.88%) ; Bush I (2.3%); the actor (3.5%); and the worse president in modern times (3.3%). If Biden hits 4% he's going to be #1 among the most recent eight presidents. Yes, I know it's all relative. But anyone acting on Goldman's revision for 2021 ... well, what can I say. I have too much faith in free market capitalism to worry about a revision of 5.7% to 5.6%. 

Jim Cramer: there's always a bull market somewhere. And with a projected GDP of 5.6% there should be a lot of opportunities for investors.

Bitcoin: trading over 57,000 is at its highest in five months. Jamie Dimon has aged. He still says Bitcoin is worthless. 

  • For me: Bitcoin is the new "gold." Karen Finerman and Jamie Dimon will have to agree to disagree on Bitcoin. 

Trends: I missed it; I'm not sure I'm the only one. It hit home last weekend at Family Weekend at Vanderbilt University, Nashville, TN. 

Horse troughs filled with cold non-alcoholic drinks -- water and sodas. In the past, the water would have been in plastic bottles for sure, and many of the Coke products would have been in plastic. But this time: no plastic whatsoever. Everything was in aluminum cans, most cleverly camouflaged and crafty. But everything was aluminum. Does this suggest to me that the "plastic straw" "woke" crowd finally reached the C-suites in the RTD industry?

If this is accurate: a win for Alcoa?

Another interesting observation: the standard "Coke" can was 12 ounces; if I recall correctly, the standard size "Coke" aluminum can to look like a beer bottle was 16 ounces. Bloomberg must be really, really frustrated.

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

Small jump in number of active rigs in North Dakota! But there is a typo: one well is listed twice.

Active rigs, is updated at the end of the day on non-holiday weekday; not sure if Indigenous Peoples Day is a holiday for NDIC or not:

$80.52
10/11/202110/11/202010/11/201910/11/201810/11/2017
Active Rigs29
13586859

Active rigs:

  • CLR (10): Flint Chips FIU, Dolezal FIU, Jack, Whitman FIU, Thorp Federal, Clear Creek Federal, Charolais South Federal, LCU Reckitt Federal, LCU Reckitt Federal, LCU Ralph,
  • MRO (3): Seidler USA, Porter, Ermina,
  • Hess (3): AN-Norby; BL-Olson; CA-E Burdick; 
  • Enerplus (2): FB Leviathan 16B, FB Leviathan 17T,
  • Whiting (2): Platt, Ark;
  • Crescent Point Energy (2): Reed, CPEUSC Pankake
  • Hunt: Halliday,
  • Petroshale: Crockett Federal
  • Oasis: Swenson Federal,
  • Ovintiv: Bernice,
  • Sinclair: Grasslands Federal,
  • Slawson: Rainmaker Federal,
  • Kraken: Alamo

Five new permits, #38606 - #38610, inclusive:

  • Operator: CLR
  • Field: Cedar Coulee (Dunn County)
  • Comments:
    • CLR has permits for five wells in SESE 4-146-96, Cedar Coulee
    • four of the wells will be sited 551 FSL and between 562 FEL and 652 FEL; one well will be sited 550 FSL and 427 FEL (assuming there was no typographical error)

Thirteen permits renewed:

  • Crescent Point Energy (8): one Dorothy permit; four Narcisse permits; and, three Austin permits, all in Williams County
  • Grayson Mill Operating(5): five Tufto permits, all in Williams County;

Notes From All Over -- Part 2 -- The Road To New England -- October 11, 2021

From New Hampshire Business Review: New Hampshire electric rates to jump due to spike in natural gas cost. Sixty percent hike in rates seen for Unitil customers.

Is anyone paying attention? How did that pipeline action work out?

Again, utility rates will jump sixty percent. 

Link here

Look at this:

Electric rates for the winter are going up a lot, and two utilities have announced rate hikes that take into account the dramatically higher cost of natural gas: Unitil and the New Hampshire Electric Cooperative.

Unitil’s winter rates will rise 60 percent for a household that uses around 650 kWh per month, while the New Hampshire Electric Cooperative customers can expect a 17 percent increase compared to summer rates.

In both cases, the reason for the dramatic increase in the cost of electricity is tied to the spike in the cost of natural gas.

See comments: from a reader, this link. 

ISO NE is tracked here. At the moment, 87% of energy demand supply by the two "n's" -- natural gas (75%) and nuclear (12%).

The Energy Crisis -- Trolling -- October 11, 2021

This sudden energy crisis is absolutely fascinating. I've still not seen a good analysis.

It would be interesting if anyone can come up with the "single event" that precipitated the whole crisis.

Remember Richard Feynman's explanantion for the Challenger disaster? That's what I'm looking for. I'm looking for a Richard Feynman who can show in one simple graph how this energy crisis seemed to have happened overnight.

I have an idea and will post it later but it will be posted deep in the blog so I have the time/date stamp for bragging rights, but I want to bury it so I don't have to put up with a lot of push back from readers before some time has passed to see how this has played out.
 
The answer will be in two graphs -- technically four graphs but only two are needed, but I had to expand those two to make it clear. 
 
Some hints:
  • the answer is not "under investment" in fossil fuel production;
  • the cause of the crisis is not related to supply chain issues;
  • to some extent the cause might be geopolitical but that's only part of it;
  • some will argue the cause was all about renewable energy, it was not, but there is a connection;
  • the explanation is incredibly simple; because it is so simple, the explanation will result in a lot of push back; it's human nature not to accept a simple explanation for something that seems complicated (see the Fehnman link above);
  • but again, the challenge is to find the "one thing" that precipitated the current energy crisis

Off The Net For Awhile -- Need To Recollect My Thoughts -- Some "ME" Time --- October 11, 2021

Lego Stuntz are out of stock

I saw these for the first time at a Lego Store in Nashville, TN. Most interesting Lego concept in a long time. Can't keep them in stock. 

*************************
At The Wave
Kanab, UT

Readers in southwestern United States will be able to explain this phenomenon. This is Olivia running across the "non-Newtonian fluid."



Perhaps: 

... a mixture of fine sand, very fine micron-sized particles of clay, and water. ... liquid mixtures with these properties are known as 'shear-thinning thixotropic non-Newtonian fluids' as they don't seem to follow the normal liquid/solid rules.

They had me at "thixotropic." 

When Olivia's dad attempted to cross, he sunk in three feet deep, mid thigh, had a devil of a time getting out. Soles of hiking shoes separated from the shoes due to strong "suction" of sand-fluid pulling against shoes. 

They came across similar patches without knowing how deep the mixture went. 

Notes From All Over -- Part 1 -- October 11, 2021

William Shatner: age 90; oldest man to go into space; launch Wednesday morning, this week, from west Texas. Jeff Bezos' Blue Origin. True space trip, though short, not like Virgin Galactic.

NFL:

  • yesterday: Tampa Bay Buccaneers, 45 -- Miami Dolphins, 17 -- close game until Dolphins fell apart in fourth quarter;
  • yesterday: Kansas City Chiefs and Mahomes, lose
  • tonight: Indianapolis Colts, 1-3, at Baltimore Ravens, 3-1;

Underinvestment in fossil fuel: maybe the story for the rest of the year?

I had/have a reader that has written me often over the years about this very subject. I tended to ignore that observation, but more and more analysts are saying the same thing. One can agree that there has been underinvestment but that doesn't necessarily mean that explains the current situation.

Really?

"I'm concerned hydrocarbon demand is not falling fast enough to match the potential under-investment in fossil fuels," said Jason Bordoff, dean of the Columbia Climate School and a former senior energy official in the Obama administration. Link here.

NASCAR: the Harvick, Elliott feud. Gonna make the last four (?) races very, very exciting. The former has nothing to lose; first time he did not advance to field of eight. Elliott, everything to lose if this feud doesn't end. Gonna be fascinating to watch. Google Rick Hendrick, Harvick, Elliott, Fox News.

Bitcoin: holy mackerel! Is anyone paying attention? 

Up 4% today; up over $2,000; now trading over $57,500. Remember: just a week or so ago, it was trading around $42,000. You can fact check me on this; I don't follow Bitcoin very closely but this seems to be what I recall.

Japan and nukes: the island country is re-starting its nuclear facilities. Says they are doing it to lower emissions. Okay. Link here

All US indices: up nicely today.

  • trading volume down?
  • bond market closed?
  • commodities drive

********************************
Airline Cancellations

Re-posting:

Big story: I was wrong. I thought this would be a huge story in the media today with regard to Southwest Airlines canceling flights over the weekend. 

It is incredibly obvious what's going on. Most analysts seem to be playing checkers with regard to this while the Biden administration is playing chess. Truly, truly enlightening. The ATC issues and the weather issues apparently only affected Southwest Airlines and American Airlines. By the way, I had forgotten something pretty basic when it comes to flight medicine: pilots go DNIF if placed on a new medication. This vaccine would be a "new medication."

Classic game of "playing chicken." Who will blink first?

Most interesting: media is avoiding this story. 

Football in America: college football yesterday -- link here.

WTI Flirting With $82; No Wells Coming Off The Confidential List -- October 11, 2021

Focus on Fracking: posted

ISO NE: again, very strange, just not as marked. Link here.

  • Balmy autumn days and nice weather and yet rates are spiking again today, towards $80.

Big story: I was wrong. I thought this would be a huge story in the media today with regard to Southwest Airlines canceling flights over the weekend. 

It is incredibly obvious what's going on. Most analysts seem to be playing checkers with regard to this while the Biden administration is playing chess. Truly, truly enlightening. The ATC issues and the weather issues apparently only affected Southwest Airlines and American Airlines. By the way, I had forgotten something pretty basic when it comes to flight medicine: pilots go DNIF if placed on a new medication. This vaccine would be a "new medication."

Washington State ferries: walkouts / shutdown. Media blackout. Link here

WTI: $81.43.

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

Active rigs*, updated by NDIC at COB:

$81.43
10/11/202110/11/202010/11/201910/11/201810/11/2017
Active Rigs26*13586859

No wells coming off the confidential list today.

RBN Energy: the rise of responsibly sourced natural gas.

Given everything that’s happened lately on the ESG front — with a lot more expected — it’s safe to say that while hydrocarbons will continue to play an important role in the global economy for the foreseeable future, the companies that produce, transport and process crude oil, natural gas and NGLs will need to work much harder to minimize and mitigate their impact on the environment. Traditional energy companies have been scrambling to respond to the full-court press by investors, lenders and others to rein in and offset their greenhouse gas (GHG) emissions. In addition to establishing goals for slashing their GHGs, and taking steps to tighten their upstream, midstream, and downstream operations, they’ve offered and delivered “carbon-neutral” shipments of LNG, oil and LPG to overseas buyers, using “nature-based” carbon credits to offset their life-cycle emissions. Now, as we discuss in today’s RBN blog, there’s a big push by U.S. gas distributors and other buyers to shift to gas that’s been produced, gathered, processed and transported as cleanly as humanly possible.

Say What You Want, The Bakken Is Simply Amazing -- October 11, 2021

More than a year ago, I noted that this old Petro-Hunt well had a 10-fold increase in production. Now, exactly one year after that, it's had another huge jump in production. 

The well:

  • 16963, 423, Petro-Hunt, USA 35D-1-1H, Charlson, t12/08; cum 883K 8/21;

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-2021317918788650151781989598644
BAKKEN7-2021311001594966187977695600
BAKKEN6-20212910812112786602409038880
BAKKEN5-2021311415814160730323212852014476
BAKKEN4-202130166561649773181288573285348
BAKKEN3-2021271181311497741011599114160
BAKKEN2-20210000000
BAKKEN1-20210000000
BAKKEN12-202020343836041410463644900
BAKKEN11-202030659368252285825880490
BAKKEN10-2020317731767922251003498180
BAKKEN9-202030716973382687865184420
BAKKEN8-2020241409333523397
BAKKEN7-20201101001241240
BAKKEN6-20201103001071070
BAKKEN5-20200000000
BAKKEN4-20202743575061193550753190
BAKKEN3-202022600453652128648663370

The Slawson Orca Wells

The Slawson Orca Federal wells:

  • 19916, 486, Slawson, Orca Federal 1-23-26H, Big Bend, F, t7/11; cum 449K 8/21; was taken off line 1/20; returned to production for 18 days, 8/21; 19K over 18 days; prior to that 3,000 bbls/month; see recent production below; off line for almost two years; comes back stronger than ever;
  • 37236, 1,928, Slawson, Orca Federal 6-23-26TFH, Big Bend,
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20212128596283139034124785024680
BAKKEN7-2021241205819347033
  • 37237, 2,258, Slawson, Orca Federal 7-23-26TFH, Big Bend,
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20212125310250394567321783021676
BAKKEN7-20213367082833040291
  • 37238, 2,225, Slawson, Orca Federal 8-23-26H, Big Bend,
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20211723002223193786818558018474
BAKKEN7-20213153058201210106
  • 37424, loc, Slawson, Orca Federal 3-23-26H, Big Bend,
  • 37425, loc, Slawson, Orca Federal 5-23-26TFH, Big Bend,
  • 37426, loc, Slawson, Orca Federal 2-23-26H, Big Bend,
  • 37427, loc, Slawson, Orca Federal 4-23-26TFH, Big Bend,
  • 35903, 481, Slawson, Orca Federal 1 SLH, Big Bend, t10/20; cum 143K 8/21;

**********************************
Production

35903:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20213122132220682896617405105476703
BAKKEN7-20213122033223673830717053386413034
BAKKEN6-2021201441213498526031095437547100
BAKKEN5-20210000000
BAKKEN4-20212223416241072163217923125345279
BAKKEN3-20213130187302362602023073188304088
BAKKEN2-20212418783182451693914129116952315
BAKKEN1-20211390029177
BAKKEN12-20201211285119896560899463252610
BAKKEN11-20201260019131
BAKKEN10-202031020014931821660147
BAKKEN3-20200000000
BAKKEN2-20200000000

#19916:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-202118186551793938555878008692
BAKKEN7-202110063942580251
BAKKEN6-20210000000
BAKKEN5-20210000000
BAKKEN4-20210000000
BAKKEN3-20210000000
BAKKEN2-20210000000
BAKKEN1-20210000000
BAKKEN12-20200000000
BAKKEN11-20200000000
BAKKEN10-20200000000
BAKKEN9-20200000000
BAKKEN8-20200000000
BAKKEN7-20200000000
BAKKEN6-20200000000
BAKKEN5-20200000000
BAKKEN4-20200000000
BAKKEN3-20200000000
BAKKEN2-20209964176856378371624
BAKKEN1-202031338431311423312526140
BAKKEN12-2019202222199311661602125019
BAKKEN11-20190000000
BAKKEN10-20192116002220983171314410
BAKKEN9-201928230020381133188915041
BAKKEN8-20192316801609951166013640
BAKKEN7-20193126032560856262321880
BAKKEN6-2019252750288795521331583132