Wednesday, November 3, 2021

Well, This Didn't Turn Out Like We Had Hoped -- CMP-- November 3, 2021

Note: this whole subject is well beyond my expertise but this is how I see it. Facts and opinions and personal understanding (which is often wrong) are interspersed in the post below and it is impossible to tell what is fact and what is fiction, but I bet I'm not too far off the mark.

In a long note like this, especially with a subject I know nothing about, there will be content and typographical errors. 

For this next news item / this next post to make sense, one must understand this diagram:

ISO-NE: The diagram shown here illustrates, in relative geographic location, the substations, transmission lines, and interconnections with neighboring grids that make up the New England power system

The diagram above shows existing facilities and facilities that are expected to be placed in service in the near future. If you feel this diagram is insufficient and that you need more detailed information, you can download a more detailed version of the diagram at the link. 

Okay. Now that you have the diagram, here's perhaps the most interesting news story of the day. 

"ISO NE" must meet -- by law -- certain renewable energy milestones. Massachusetts and more specifically, Boston, are most affected by these rules and regulations. 

Plan A, then Plan B, then Plan C ... Plan Y mostly fell back to Plan A: expensive hydroelectricity from Quebec to meet the renewable energy requirements for Boston as promulgated by law. 

Only one problem. 

There's this big state called Maine that sits between Massachusetts and Boston. 

Which reminds me. 

This is so ironic with a capital "I." 

Maine, at one time, was part of the Commonwealth of Massachusetts. In 1820 it voted to secede from Massachusetts to become a separate state for the sole purpose of raining on Boston's parade, as they say in Brookline. On March 15, 1820, under the Missouri Compromise, Maine was admitted to the Union as the 23rd state. 

Maine's one claim to fame is the fact that it is the only state whose name consists of a single syllable. 

Maine has a nasty habit of poking a stick in Boston's metaphorical eye. LOL. 

And that brings us to the most interesting story in the past twenty-four hours.

This link was sent to me by a reader. Thank you. 

For Boston to meet its renewable energy mandate, the only viable alternative is to bring expensive hydroelectricity in from Quebec, but that requires a really big transmission line and that line would go through Maine.

Well, a woman who I will call Rosa Parks, of Farmington, Maine, wouldn't go for that. She felt that this really, really big transmission line would only benefit Quebec and Massachusetts (of course, she is/was correct). It offered nothing for Maine. And so Rosa Parks and friends killed the project.

At the linked story

Central Maine Power -- CMP -- was dealt a major blow yesterday when voters voted to kill the utility's $1 billion hydropower corridor project.

The vote on the project has been nearly four years in the making. After a similar project was killed by New Hampshire regulators in 2018, the 145-mile corridor to bring Hydro-Quebec power to the regional grid through western Maine emerged as Massachusetts' best hope to fulfill a massive clean-power request.

Much more at the linked article. 

Rosa Parks harnessed grassroots anger, but look at this: the anti-hydro-electricity movement was funded by .... no, not George Soros ... but rather .... drum roll ... the fossil fuel industry.

LOL. I can't make this stuff up. 

Anyway, you get the gist of the story. If not, go to the linked story and google CMP hyropower corridor for background.  

End of the Line

End Of The Line, The Traveling Wilburys

Chillax. Keep Calm. Frack On. November 3, 2021

For those of you who are concerned about WTI pulling back below $80 please take some time to read the multiple threads at this link

It's counter-intuitive and scary, but the pullback below $80 is very, very important on so many levels. 

For those investing in the stock market this may provide some buying opportunities. 

Unless it's a prolonged pullback, more than three months, it should not affect royalty payments to much extent.

God must have a sense of humor and successful oil men must have nerves of steel. On the day Harold Hamm closes / announces a $3 billion deal to buy into the Permian, WTI crashes five percent and drops below $80.

Laugh, Laugh, I Thought I Would Die

Laugh, Laugh, Beau Brummels
The drummer is channeling Ringo.

This Doesn't Matter Whether It's True Or Not; It Won't Be Reported And It Won't Be Fact-Checked By Mainstream Media; The Science Is Settled -- November 3, 2021

Link here

Baby, It's Gonna Get Cold

Link here

Five New Permits; Rimrock Reports A Nice DUC Completed; WTI Drops Below $80 -- November 3, 2021

Active rigs: it looks like 32 active oil and gas rigs; a couple of errors on the NDIC spreadsheet, and one of the rigs is for a SWD well. See first comment.

Active Rigs3214576655

Five new permits, #38634 - #38638, inclusive:

  • Operators: Grayson Mill Operating (4) and Whiting
  • Fields: Poe (McKenzie); Sanish (Mountrail)
  • Comments:
    • Whiting has a permit for a Braaflat well in NWNW 11-153-91; sited 680 FNL and 501 FWL;
    • Grayson Mill (Equinor) has permits for four Viking wells in SWSW 16-151-100; sited between 918 FSL and 828 FSL and 350 FWL

One permit renewed:

  • 19881, Enerplus, Hall 23-21H, Squaw Creek,

Two permits canceled:

  • Crescent Point Energy: a CPEUSC Austin permit and a CPEUSC Narcisse permit, both in Williams County;

One producing well completed:

  • 36929, 3,019, Rimrock Oil & Gas, FBIR Guyblackhawk, first production, 7/21; t--; cum 77K 9/21;
DateOil RunsMCF Sold

The NDIC posted this notice today:

CURRENT ACTIVE DRILLING RIG LIST *Data published at under the Active Drilling Rigs, Confidential Well List, Well Search, GIS Map Server, and Basic/Premium Services are being impacted by a data migration. This has caused the data to remain temporarily stagnant. Data is accurate up to July 14, 2021. When an estimated date of repair is available, we will update this service notice. 

"Temporarily stagnant": this means that data at the listed sites has not been updated since July 14, 2021. 

Note: this "stagnant data" includes the map which means that the GIS Map Server has not been updated since July 14, 2021. At least that's how I understand that.

Note: no new scout tickets have been added since July 14, 2021. Scout tickets posted prior to that date have not been updated, but I believe production data is being entered (manually?).  At least that's how I understand that.

Note: there is estimated date when this will be rectified. Going on four months now.

Active rigs per the NDIC today: 35; note that two rigs are listed for the same well, file #37014. See screenshot below.

Yesterday, here were 34 rigs listed yesterday. Today, 35. Koda had one rig yesterday, two rigs today:

  • 37796, Koda, Stout 3409-1BH, SWSW 34-160-102; Hanks, to the southwest,
  • 37798, Koda, Stout 3427-3BH, SWSW 34-160-102; Fertile Valley, to the north,

But that's a  mistake. See first comment. It's the same rig. The rig is being moved from one well to another.

There is a third location on that three-well pad:

  • 37797, Koda, Stout 3410-2BH, Bar Butte, to the southeast.

In addition, in the same quadrant, a salt water disposal well:

  • 38288, Koda, Stout 34-1 SWD, Fertile Valley, 

Bottom line: today a new rig was added to the list, but it was a SWD well rig, so no increase in oil and gas active wells, and Koda did not add a rig.

Now, back to this note;

  • Active rigs per the NDIC today: 35; note that two rigs are listed for the same well, file #37014. See screenshot below. Also one rig named for two different wells. So, we should be at 33 active rigs in North Dakota.

See screenshot:  

Weekly EIA Petroleum Report -- November 3, 2021

Link here.

  • US crude oil inventories increased by 3.3 million bbls.
  • US crude oil inventories now stand at 434.1 million bbls, 6% below the very fat five-year average. In other words, more than enough crude oil in storage for the short term, and operators are adding more every week.
  • refiners are operating at 86.3% of their operable capacity;
  • US crude oil imports averaged 6.2 million bopd last week, down 83,000 bopd (yawn);
  • over the past four weeks, crude oil imports averaged about 6.1 million bopd, 14.9% more than same four week period last year.
  • distillate fuel inventories increased by 2.2 million bbls last week and are about 5% below the five year average; looking at a lot better than previously thought
  • jet fuel supplied was up 44.5% compared with same four-week period last year (but how did that compare to 2019, the year before the year of the plague)

Gasoline demand. Link here. Remains flat. Demand destruction at $4.50 / gallon?

MDU 3Q21 Earnings -- Big Miss, Top And Bottom Lines

Transcript here.

Link here to press release.

  • closed up 21 cents; up 0.68%; closed at $31.09
  • after hours: down almost 3%; down 88 cents; trading at $30.21

Misses on top and bottom line:

  • EPS: misses by 12 cents; misses by 17.48%;
  • revenue: also missed; misses by 17.87%

From the San Antonio Express-News:

  • 3Q21 earnings: $139.3 million;
  • revenue: $1.59 billion


  • EPS: 68 cents / share; $139.3 million
  • one year ago: 76 cents / share; $153.1 million
  • forecast: 82 cents / share
  • revenue of $1.59 billion, equal to that posted one year ago
  • full year guidance: EPS: $1.90 - $2.05

Stop The Presses -- Damn The Torpedoes -- Full Speed Ahead -- CLR To Acquire Permian Assets -- November 3, 2021


Later, from twitter, 9:02 p.m. CT: link here. The CLR deal works if WTI goes to $150. Someone else said that; not me. Don't kill the messenger. 

Original Post

Link here.

CLR has gains for the day; dropped 6% on the news.

Nov 3 (Reuters) - U.S. oil and gas producer Continental Resources Inc is nearing a deal to acquire the Delaware Basin assets of peer Pioneer Natural Resources for more than $3 billion, people familiar with the matter said on Wednesday.

Continental would add to its existing operations in the Bakken of North Dakota and Oklahoma's SCOOP/STACK shale formations through the acquisition, which could be announced by the companies when they report quarterly earnings later on Wednesday, the sources said.

Reuters reported in September that Pioneer was seeking to sell the assets in a bid to streamline its business and reduce debt after two big acquisitions this year.

Let's see, let's say $25,000 / acre = $3 billion / $25,000 = 120,000 net acres. See below: did CLR pay $60,000 / net acre in the Permian?

CLR could have bought a lot of Bitcoin for $3 billion.  
PXD: says it expects a $1 billion pre-tax loss on this divestiture. This is sounding more and more like the OXY / Anadarko experience.
  • OXY:
    • marketing 250,000 net acres in Delaware portion of the Permian;
    • $550 million
    • the company has targeted more than $2 billion from divestments in the first half of 2021

OXY / Anadarko: $40 billion
  • 10,000 drilling sites
CLR / PXD Delaware: $3 billion
  • 1,000 drilling sites

3Q21 Earnings

Link here

From the press release:

  • net income: $1.01 / share; $369.3 million net income; adjusted, $437.2 million; $1.20 EPS, adjusted;
  • cash flow: $1.0 billion from operations
  • highly accretive expansion into Permian Basin; see above; immediately additive to ECF (enterprise capital fund?) capacity; 
    • "92,000 contiguous net leasehold acres and 50,000 net royalty acres"
    • not sure if this is 142,000 acres or not; maybe someone explain the difference between "contiguous net leasehold acres" and "net royalty acres" but if bottom line is 50,000 net royalty acres:
    • a total of 92,000 net leasehold acres of which 50,000 are currently net royalty acres?
  • $3 billion / 92,000 = $32,608 / acre 

End-Of-Day Report -- RECORD DAY ON WALL STREET -- November 3, 2021

Inflation? What inflation?

  • WTI plummets: down almost 5%; down $3.86; testing the $80-floor
  • ten-year Treasury: remains under 1.6%; there were concerns that the TYT would trend toward 2% or worse; can't even get to 1.6% and hold
  • talking heads not even sure there will be an increase in the Fed rate next year; certainly not in the first half;
  • apparently Jay Powell says he does not "know" what "full employment" is. Agree completely. When there are ten million job openings and folks don't want to take them, that suggests to me, we have full employment
  • yes, I know all the arguments: Covid-19; day care issues; yada, yada, yada 

US equity markets:

  • all three to blow away all-time records again?
  • near the close:
  • S&P 500: up 26 points; up 0.6%
  • Dow 30: up 75 points; up 0.2%
  • NASDAQ: up 150 points; up almost 1%

Fed action and notes on the Fed action today: link here.

The Fed -- November, 2021

No surprises:

  • no rate hikes; remains at 0 - 0.25%; fed rates unhanged
  • taper to begin this month, $15 billion: $10 billion in bonds; $5 billion, mortgage-backed securities
    • will continue in December, 2021
  • an accommodative policy
    • Dow: down 140 just before the announcement
    • Dow: down 110 after the announcement -- a dovish taper
      • Steve Liesman does not yet consider this a dovish taper
      • sees some hawkishness -- already announcing the taper in December
      • wow, talk about splitting hairs
    • the S&P; up very slightly right after the announcement; now flat -- sees this as a dovish announcement;
    • ten-year Treasury: 1.577% yield
  • semiconductors on fire the past two weeks, continues
    • would not have aggressive move if they thought aggressive rate hike on the horizon

CNBC will now talk about this non-announcement for the next full hour. LOL.  Ah, yes, the "dot plot" is back. LOL. 

Semiconductors: on fire. Absolutely on fire. 

Market getting fun to watch:

  • Nasdaq moving up quickly.
  • S&P flirting with green but can't quite stay in the green.
  • Dow has cut it's "negative 140" to "negative 70" right now.
  • Yes, the "market" likes the Fed's comments. 

Steve Liesman: the lone voice suggesting the Fed announcement today was somewhat hawkish. Yes, he did say that.

Too late: everyone says the Fed waited too long to begin tapering; the market certainly suggests otherwise. Whatever. 


  • all four US equity markets set new records
  • Dow, S&P 500, NASDAQ, and the Russell 2000
  • thirteenth month in a row that the S&P 500 has hit a new high
  • remember: seasonal -- look at my favorite chart and remind yourself that Christmas spending is already beginning

My favorite chart, US money market fund monitor, link here. These folks are earning zero percent on their money. They are also ignoring the recent $1 trillion infrastructure bill already passed and the $3.5 trillion social infrastructure bill working its way through the US Congress.

About That John Deere Contract -- November 3, 2021

John Deere's unions did not agree to new contract offers which included an $8,500-one-time signing bonus. Do they have a legitimate "gripe?"

Deere has 70,000 employees; not all of them union.

A one-time bonus of $9,000 per employee = $630 million, a bit over one-half billion dollars. 


  • cash flow: $7.74 billion
  • total cash: $7.03 billion
  • P/E: 19.61

Deere has 310 million shares outstanding:

  • earnings per share: $17.24 / share
  • 310 million x 17.24 = $5.34 billion
  • if that one-time bonus was subtracted "immediately" from earnings:
  • $5.34 billion - 0.630 billion = $4.71 billion
  • $4.71 billion / 310 million = $15.19 / share
If this is a five-year contract:
  • 5 x 310 million x 17.24 = $26.7 billion
  • $26.722 billion - 0.630 billion = $26.72137 billion
  • $26.72137 billion / 1.55 billion = $17.24 / share.

I'm not going to do the math, but the union could probably argue for a one-time signing bonus of $20,000 vs the proposed $8,500 bonus.  

An investor could have bought 1,000 shares of DE on March 1, 2020 for $138,000.

Yesterday, 1,000 shares of DE were worth $355,000. 

That's in one year. Without the dividend. 

This will be fascinating to follow. 

Management has options; it will be interesting if the CEO / board of directors can think outside of the box.

An Old Whiting Well Appears To Be Coming Back On Line -- November 3, 2021

The well 

  • 23420, 1,861, Whiting, Frank 14-77PH, Bell, t11/12; cum 440K 1/21; cum 441K 9/20;

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

All Wells On This Four-Well MRO Pad Are Off-Line -- November 3, 2021

This well and the other three wells on this pad have just come off line:

  • 31061, 2,942, MRO, Juanita USA 13-35H, Antelope/Sanish, 13 days; percent in drilling target: 76% -- ouch, 40 stages; 11.99 million lbs; t7/16; cum 449K 10/19; cum 488K 8/21; off line 6/20; profile update here; back on line 8/20; off line 8/21;

The other wells on this pad, all off line:

  • 31060, 3,473, MRO, Heather USA 13-35TFH, Antelope-Sanish, t5/16; cum 429K 7/21;
  • 31058, IA/3,661, MRO, Clarks Creek USA 14-35H, Antelope-Sanish, t5/16; cum 529K 7/21;
  • 31057, IA/3,490, MRO, Charmaine USA 14-35TFH, Antelope-Sanish, t6/16; cum 529K 7/21;

Located in Antelope oil field, NWSE 34-152-94; I don't believe MRO has any rigs operating in this area but the NDIC map is not current. 

Even though the scout tickets don't show two of the wells as "inactive," in fact, they went inactive at the same time as the other two.

An Old Whiting Well In Twin Valley Goes Over 600K Bbls Crude Oil; Not On Pump -- November 3, 2021

The well:

  • 27522, 4,207, Whiting, Flatland Federal 11-4TFHU, 4 sections, TF2, in excess of 9,500 gas units, Twin Valley, F, t10/14; cum 608K 9/21; remains off line 6/20; back on line 7/20;

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

An Old Petro-Hunt Charlson Well To Go Over 900K Bbls Crude Oil By Thanksgiving -- November 3, 2021

The well:

  • 16963, A/IA/423, Petro-Hunt, USA 35D-1-1H, Charlson Three Forks, t12/08; cum 812K 1/21; NOTE: this is a 640-drilling unit; this is a dual lateral; it's quite a story; off line again, 5/20; remains off line 6/20; last sundry form received in 2012; nothing to explain recent production; cum 890K 9/21;

Recent production, note jump in production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The Bakken Never Ceases To Amaze Me -- This Is Worth The Cost Of The Subscription To The Blog -- Woodrow Star "A" 1 Is Back On Line -- November 3, 2021

This well was drilled back in 1958. It finally went off line in December, 2018, although it did produce 58 bbls over four days in June, 2019. 

And .... then nothing .... for two years ....

The well:

  • 1987, A/AB/IA/150, CLR/Pan American/Prima, Woodrow Star "A" 1, Antelope field; Sanish; t10/58; cum 1.105586 million bbls 12/18; a vertical well; went off line 1/19; cum 1.106121 million bbls 9/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare


The last three sundry forms:

  • July 16, 2012: authorization to purchase and transport oil from lease (standard, routine sundry form)
  • July 29, 2015: a standard, routine spill report; a tank leak; recovered oil: two bbls; contained within dike;
  • May 5, 2021: very rare letter from the NDIC regulator alerting CLR that this well has not produced oil or gas in paying quantities in over one year, and therefore the well will be placed in "abandoned-well status which has not produced oil or natural gas in paying quantities for one year."

There is not additional information. My hunch: for whatever reason, CLR did not want to abandon this well. I doubt that it was converted to a horizontal well and thus not fracked. If so, we would need to see a sundry form regarding that.

Titanic! November 3, 2021

Link here.

For newbies, to estimate the cost of any Lego set, simply multiply the number of pieces by ten and then place the decimal where it makes the most sense.

So, a 9,000-piece set should cost around $900. 

This has held true for years. If the set one is buying is less than ten cents/piece, it's a huge bargain. 

Years ago, probably five decades ago, a local toy store was going out of business. I bought every Lego set I could afford at the time. I calculated the prices to be five cents/piece, literally getting everything for half price. 

This 9,000-piece is going for less than $650. My hunch: on Amazon, eBay, elsewhere, we will see this product for more than $1,000 within a few years.

Currently, despite having just been released, it's out of stock

Boom! November, 2021, ISM -- Is Anybody Paying Attention? November 3, 2021

Any wonder there are supply chain shortages? 

What is the ISM? 

What Is the ISM Manufacturing Index? 

The ISM manufacturing index, also known as the purchasing managers' index (PMI), is a monthly indicator of U.S. economic activity based on a survey of purchasing managers at more than 300 manufacturing firms. It is considered to be a key indicator of the state of the U.S. economy.

An index of more than 50 indicates an expansion in the manufacturing segment of the economy in comparison with the previous month while a reading of 50 indicates no change and a reading below 50 suggests a contraction of the manufacturing sector.

Link here: this is the highest ISM in over ten years; the previous high? 64.

Boom! Link here

A Musical Interlude

Shades of Gray, The Monkees

Notes From All Over -- The Oreo Edition -- November 3, 2021

Boom! Link here

Oreos: in Target, currently sell for $3.79, for the "typical" Oreo package with which I am familiar. I quit buying Oreo years ago when prices jumped from $1.99 to $2.50. Wow, $2.50 -- that must have been a long time ago. Let's see, they say inflation in running at 7%? $3.79 - $2.50 = $1.29 / $2.50 = a 52% increase over the years. Looks like somebody is "padding" their bank account.

China: oh-oh. Covid-19, not looking good. Or go to direct to Bloomberg. Sounds like Dr Fauci was China's Trojan horse. LOL. Who wudda thought?

Inflation: all this talk about inflation -- USPS first class stamps up to 50 cents or more. I've forgotten what they cost. Does anyone buy any first-class stamps any more? 

Trains, Plains, and Automobiles

Final Scene, Planes, Trains, and Automobiles

No Wells Coming Off Confidential List -- WTI Down -- Bonanza Creek Is Now Civitas -- November 3, 2021

Trifecta! So far, three companies have made dividend announcements today -- and all three have increased their dividends, including a well-known name in the Permian: 

  • VNOM: 38 cents; yields 6.77%; record date, 11/10/21; payable, 11/18/2021;

VNOM: as long as we're looking at VNOM, look at its recent dividend history, ex-date, cash:

  • 11/09/21: 38 cents but still well below the payouts in 2019
  • 8/11/21: 33 cents
  • 5/21/21: 25 cents
  • 3/3/21: 14 cents
  • 11/20/20: 10 cents
  • 8/12/20: 3 cents

Zillow: wow, how fast it fell. Interestingly enough Jim Cramer called this when Zillow first announced it was getting into i-flipping. He was completely right on this one. Truly amazing. 

Pre-market equity indices: coming off record highs yesterday, not giving much back today (yet):

  • Dow: down about 34 points;
  • NASDAQ: up 17 points;
  • S&P 500: down three points;
  • Russell 2000: up two points;

Ten year Treasury: yield down today, albeit not much; yield at 1.538% -- doesn't make sense in era of high inflation. 

Bonanza Creek-->Civitas: follows back-to-back acquisitions. Link here

European energy crisis: four days have passed since gas stopped flowing to Germany through the Yamal pipeline. Link here.

COP: transcript. 3Q21

WTI: down today but some see $100-oil.

Back to the Bakken

Active rigs:

Active Rigs3314576655

No wells coming off the confidential list:

RBN Energy: Pacific Coast LNG export projects gain traction, part 4

After a record-breaking year in which the Japan-Korea Marker topped $30/MMBtu, it looks like 2022 could finally be the year when multiple projects in the long-awaited “second wave” of North American LNG export facilities reach final investment decisions. Developers, financiers, and offtakers are all taking their time, however, to make sure projects make sense in the long term. The recent run of high prices comes after years of price declines and a COVID-related price collapse in 2020, which reduced the spreads between U.S. production and LNG destination markets, slowing the pace of LNG project development. One thing’s clear: Asia — always the focus of LNG demand growth — will become even more important going forward, and perhaps the best way to attract Asian offtakers to U.S., Canadian, and Mexican projects is to export from the Pacific Coast, assuming that feedgas can be sourced and delivered easily. In today’s RBN blog, we conclude our series on Pacific Coast LNG export development, this time focusing on projects in Western Canada.