The Million Dollar Way (The Bakken Oil Blog): 11/07/21

Sunday, November 7, 2021

Smith And Wesson Moves To Tennessee -- November 7, 2021

During the past couple of years, I have been surprised to see how many times I've seen Tennessee among the stop ten states for working, retiring, starting a business, etc.

As an example, the CNBC poll, "America's top states for business, 2021," posted July 13, 2021, Tennessee is ranked #5, right below Texas. Link here.

In the graphic above, the first column seems to be the most important variable. Among the top ten, Ohio was #2 when looking at the cost of doing business. What state was #1? #3?

Cost of doing business:

1. Oklahoma (#32 overall -- wow, what a disconnect)
2. Ohio.
3. Louisiana (#44 overall -- another huge disconnect)
4. Arkansas (#43 overall -- ditto)
5. Missouri (#25 overall)

Tennessee was a very, very respectable #8.

North Dakota was ranked #18 overall and also #18 for cost of doing business.

I was curious, and that's why I looked it up, when I saw that Smith and Wesson, after 170 years in Springfield, MA, announced it is moving lock, stock, and barrel (no pun intended, but truly perfect) to eastern Tennessee, specifically Maryville, TN, a suburb of Knoxville.

This is an incredibly beautiful part of the country, not just Tennessee. It includes Pigeon Forge.

Smith and Wesson Brands Inc is publicly traded, ticker symbol, SWBI.

market cap: $1 billion
operating cash flow: $340 million
levered free cash flow: $350 million

My only question: why did it take so long for Smith and Wesson to make this decision? It certainly is not going to be particularly expensive to move.

Smith and Wesson says the project will cost $125 million and will create 750 new jobs.

Corporate tax rate:

Massachusetts: 8%?
Tennessee: 6.5%

Did Dirty Harry carry a Smith and Wesson?

For all my European readers who have never seen a Smith and Wesson:

From Dirty Harry, five films in the series

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A Musical Interlude

I Don't Own A Single Gun, The Lumineers

Coming Out Of Left Field -- The CLR-Permian Deal -- A Thought Experiment -- November 7, 2021

My knee-jerk reaction to CLR's announcement that it had bought into the Permian for $3.250 billion was negative.

But after thinking about the announcement (not the deal) for about one hour, I quickly came around. Harold Hamm's decision to enter the Permian the way he did was brilliant.

Let me ask "you" a question: if the numbers are correct, that CLR can pay off this deal in less than 2.5 years with free cash flow, would you be happy with this deal?

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Harold Hamm To The Permian: I Just Want To Dance With You

I'm Happy Just To Dance With You, The Beatles

Are We Getting Closer To NDIC Data Problem Being Fixed? -- November 7, 2021

GIS map server:

will not load on Firefox, the browser I use almost exclusively; the map has always downloaded on Firefox but doesn't load tonight
will load on Chrome; I almost never use Chrome but it has least security so a go-to browser if nothing else works;
will load on Safari;
Microsoft? I have no idea. I never use Microsoft.

Scout tickets still not being updated.

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A Musical Interlude

I debated about posting this; I post too many Beatles songs, but when I saw la nina at 1:05 it was impossible to resist. This is Sophia, fifty-seven years ago. LOL.

I Want To Hold Your Hand, The Beatles

Two Permits, One Surface Hole -- November 7, 2021

Back on September 12, 2021, I noted something about the Goth pad. The graphics are at this link. Zooming in here is something I have not seen before. I assume there are other examples, but, if so, I haven't seen any examples. One of the problems is that the NDIC is not updating the map, the scout tickets, nothing -- since July 14th, or thereabouts -- so can't track what's going on. So, the graphics of the Bakken may be very, very old and certainly the scout tickets are out of date.

Here are the wells on the Goth pads: as of 9/12/21, file reports still available:

38304, loc, MRO, Goth 44-11H, Bailey,

2560-acre spacing; sections 1/2/11/12-146-94;

38305, ros, MRO, Stein 14-12TFH, Bailey,
38306, loc, MRO, Ebert 14-12H, Bailey, 283 FSL, 681 FWL,

1280-acre; sections 1/12-146-94;

38307, drl, MRO, Emiley 14-12TFH, Bailey,
38308, loc, MRO, Jarman 24-12TFH, Bailey, 283 FSL 681 FWL,

1280-acre; sections 1/12-146-94;

Let's take a very, very zoomed-in look at these two wells on the Goth pad:

Here's the zoomed-in look:

38306, loc, MRO, Ebert 14-12H, Bailey, 283 FSL, 681 FWL,

1280-acre; sections 1/12-146-94;

38308, loc, MRO, Jarman 24-12TFH, Bailey, 283 FSL 681 FWL,

1280-acre; sections 1/12-146-94;

There are two permits (#38306 and #38308) for the very same surface location. Very same. Surface location: 283 FSL, 681 FWL.

This is what it looks like on the map:

Notes From All Over -- Sunday Evening -- November 7, 2021

Kyle Larson: wins NASCAR cup series. All final four drivers finish in the top four. Standings going into the race: K. Larson; Elliott, Truex, Jr.; and, D. Hamlin.

LA Chargers (5-3) defeat the Philadelphia Eagles (3-6) with a last second field goal. Jim Cramer? Not gonna be happy tomorrow morning. NFC East, Dallas Cowboys are out in front.

Winter has arrived! In China. First snowfall recorded for the year. Twenty-three days early. Link here.

ISO NE: two spikes today; currently running $100 / MWh. And this is a quiet Sunday afternoon. Wow.

Covid-19: vaccinations -- overall numbers doing very well; vaccinations given each day running 1.5 million doses / day since the "Biden mandate" vs 700,000 doses / day prior to the "Biden mandate."

Futures:

much lower than I expected and mixed

Dow: +27
S&P 55: - 2
NASDAQ: -37
WTI: up slightly; $81.60

Tesla: what to watch for this week -- Elon Musk to sell ten percent of his Tesla shares.

Europe energy crisis, link to Tsvetana Paraskova:

lowest level of gas in storage in a decade
Europe could tap the so-called "cushion gas"

cushion gas is that gas the supplies "pressure" at storage facilities

would be easier if Russia supplied necessary gas
a cold winter: natural gas in storage could fall to zero by the end of March, 2022

Trial balloon: SecEnergy as much as said that the decision had been made to close Line 5 on the Sunday morning talk shows.

Three letters: CBR. And trucks. With or without the link, the demand will still be there. Just more expensive. It's only 540,000 bopd of Canadian oil; certainly OPEC+ can provide the shortfall if the line closed. Let them eat cake.

You know, it's interesting: the political damage has already been done, telegraphing they want to close that line. If they were politically astute there line should be, "we are going to do what it takes to make the line safer before we even consider closing it. And certainly we won't close it before this cold winter." SecEnergy Jennifer Granholm was the governor of Michigan before she was tapped by Brandon to move to DC.

Running the numbers: if you look at the numbers, do a little arithmetic, one can tell Pelosi knew exactly what she had, and we were all being played:

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Why Not, Again

Play this really, really loud and really, really pay attention to her voice, and maybe you can forget you are getting played.

Silver Threads and Golden Needles, Linda Ronstadt

Notes From All Over -- November 7, 2021

NASCAR championship later this afternoon: early afternoon.

Wrong message? Isn't October supposed to be brutal for investors? Fascinating article: sort of ruins Jim Cramer's narrative; certainly takes wind out of his October sail. From The WSJ today:

U.S.-stock mutual funds and exchange-traded funds in October logged their best monthly percentage gains of the year as a variety of worries—from inflation to the virus—failed to keep the market from hitting more records.
There was anticipation that October could be a time for market corrections, but instead, the market powered on—and has continued to do so in November.
“You’re really seeing a market driven by economic and earnings fundamentals which are strong, and those are joined at the hip.”

Surprise, surprise: government-bond swings burn Wall Street investors. Link to The WSJ. I understand bonds. I don't understand trading / investing in bonds.

A rapid U-turn in government-bond markets has sparked deep losses for some of Wall Street’s biggest investors, a stark demonstration of how even small shifts in expectations for economic growth and central-bank policy can upend the most carefully laid bets.

Behind the losses are recent abrupt moves in government-bond prices. With central banks signaling plans to end their extraordinary stimulus measures, short-term bonds have tumbled in price, sending yields—which rise when prices fall—to touch their highest levels since March 2020.

Natural gas exports lift prices for US utilities ahead of winter. Link to The WSJ.

American utilities are facing the highest natural-gas prices in years as they build stockpiles for winter. The reason: Exporters are sending more gas than ever to countries starved for the fuel.

Pipelines to Mexico and Canada and tankers traveling to Europe and Asia have moved record amounts of U.S. gas out of the country this year as parts of the world fall short of supplies. American frackers, meanwhile, are holding the line on new drilling as investors pressure them to maintain capital discipline and return money to shareholders.

The result is that natural-gas exports are pushing domestic prices higher—only the second time this has happened since companies began shipping shale gas from the Gulf Coast to other countries in 2016, other than a brief period during the February freeze in Texas.

What does the Z-Man have to say about that? Local natural gas distributor expects to see a 42% increase in average residential winter month bills. Link here.

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Mumbo, Jumbo

Mambo Italiano, Brigitte Bardot

Initial Production Data For Wells Coming Off The Confidential List This Next Week -- November 7, 2021

The wells:

37366, conf, Enerplus, Amphibolite, 147-93-08D-05H, Moccasin Creek, first production, 5/21; t--; cum 70K 9/21;

Date	Oil Runs	MCF Sold
9-2021	8880	6156
8-2021	16203	11315
7-2021	12176	8923
6-2021	17063	9340
5-2021	16598	10888

37661, conf, CLR, Harrisburg 2-27HSL, Indian Hill, no data,
37383, conf, Petro-Hunt, Jorgenson 158-94-12D-1-2H, East Tioga, no data,
36073, conf, Enerplus, Scoria 147-93-09C-04H-LL, Moccasin Creek, first production, 5/21; t--; cum 108K 9/21;

Date	Oil Runs	MCF Sold
9-2021	17803	11074
8-2021	22328	14322
7-2021	25682	17283
6-2021	23373	17596
5-2021	21116	16377

37500, conf, CLR, Harrisburg 7-34HSL, Indian Hill, no data,
37384, conf, Petro-Hunt, Jorgenson 158-94-12D-1-3H, East Tioga, no data,
37394, conf, Petro-Hunt, Blikre 158-94-13A-24-2H, East Tioga, no data,
36072, conf, Enerplus, Basalt 147-93-09C-04H-TF, Moccasin Creek, first production, 5/21; t--; cum 148K 9/21;

Date	Oil Runs	MCF Sold
9-2021	26408	15302
8-2021	23260	11838
7-2021	29849	15686
6-2021	35472	22829
5-2021	29325	20701

35485, conf, Oasis, Nikolai Federal 5397 42-33 3B, Banks, first production, 5/21; t--; cum 130K 9/21;

Date	Oil Runs	MCF Sold
9-2021	26138	99512
8-2021	29699	95650
7-2021	29490	81709
6-2021	28484	72672
5-2021	13662	31727

37393, conf, Petro-Hunt, Blikre 158-94-13A-24-3H, East Tioga, no data,
37499, conf, CLR, Harrisburg 6-34H, Indian Hill, no data,
36071, conf, Enerplus, Andesite 147-93-09C-04H, Moccasin Creek, first production, 5/21; t--; cum 64K 9/21; the Enerplus Igneous Rock pad is tracked here.
37979, conf, Hess, EN-Joyce-LE-156-94-1721H-6, Manitou, first production, 5/21; t--; cum 150K 9/21; the Hess EN-Joyce wells are tracked here.

Date	Oil Runs	MCF Sold
9-2021	21832	38150
8-2021	29596	51121
7-2021	33442	54380
6-2021	20926	26026
5-2021	47307	27719

35486, conf, Oasis, Nikolai Federal 5397 42-33 2B, Banks, first production, 5/21; t--; cum 90K 9/21;

Date	Oil Runs	MCF Sold
9-2021	19726	91718
8-2021	24135	80743
7-2021	27012	82939
6-2021	27616	79445
5-2021	11954	43355

36070, conf, Enerplus, Granite 147-93-09C-04H, Moccasin Creek, first production, 5/21; t--; cum 90K 9/21;

Date	Oil Runs	MCF Sold
9-2021	17869	10354
8-2021	18984	9664
7-2021	20278	10659
6-2021	20718	13337
5-2021	13032	9199

Wells Coming Off The Confidential List This Next Week -- November 7, 2021

Monday, November 15, 2021: 21 for the month, 24 for the quarter, 275 for the year:
37366, conf, Enerplus, Amphibolite, 147-93-08D-05H,

Sunday, November 14, 2021: 20 for the month, 23 for the quarter, 274 for the year:
37661, conf, CLR, Harrisburg 2-27HSL,

Saturday, November 13, 2021: 19 for the month, 22 for the quarter, 273 for the year:
37383, conf, Petro-Hunt, Jorgenson 158-94-12D-1-2H,
36073, conf, Enerplus, Scoria 147-93-09C-04H-LL,

Friday, November 12, 2021: 17 for the month, 20 for the quarter, 271 for the year:
37500, conf, CLR, Harrisbur 7-34HSL,
37384, conf, Petro-Hunt, Jorgenson 158-94-12D-1-3H,

Thursday, November 11, 2021: 15 for the month, 18 for the quarter, 269 for the year:
37394, conf, Petro-Hunt, Blikre 158-94-13A-24-2H,
36072, conf, Enerplus, Basalt 147-93-09C-04H-TF,
35485, conf, Oasis, Nikolai Federal 5397 42-33 3B,

Wednesday, November 10, 2021: 12 for the month, 15 for the quarter, 266 for the year:
37393, conf, Petro-Hunt, Blikre 158-94-13A-24-3H,

Tuesday, November 9, 2021: 11 for the month, 14 for the quarter, 265 for the year:
37499, conf, CLR, Harrisburg 6-34H,

Monday, Noember 8, 2021: 10 for the month, 13 for the quarter, 264 for the year:
36071, conf, Enerplus, Andesite 147-93-09C-04H,

Sunday, November 7, 2021: 9 for the month, 12 for the quarter, 263 for the year:
37979, conf, Hess, EN-Joyce-LE-156-94-1721H-6,
35486, conf, Oasis, Nikolai Federal 5397 42-33 2B,

Saturday, November 6, 2021: 7 for the month, 10 for the quarter, 261 for the year:
38194, conf, CLR, TRex SWD,
36070, conf, Enerplus, Granite 147-93-09C-04H,

In "N Out: Clearing Out The In-Box -- November 7, 2021

WTI: come Monday morning, expect to see $85-WTI. Yes, I know, it's a fool's errand to predict oil prices. Link here.

US equity markets: come Monday morning expect to see new all-time records.

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In 'N Out: Clearing Out The In-Box

Congressional calendar. Link here, a pdf will download.

Apple: future Apple Silicon Macs will use 3nm chips with up to 40 cores. Intel still trying to make 10-nm chips.

From social media:

PXD ends hedging. Link here.
Russia stopped sending natural gas to Germany over the weekend. Link here.
Infrastructure bill to be paid with oil profits. Link here. And, here.
Coal is dead! Long live coal: Chinese coal output sets new record. Link here.
Qatar orders six new LNG vessels. Link here.
Looks very cold. Got natural gas? Link here.
Productivity? What's this all about? Link here.
Congress with bill to stop banks financing fossil fuel plans. Link here.
The only thing we can do is laugh, it's that bad. Link here.
MPC: will seek private-sector fuel storage options in Mexico. Link here.
Woke: EOG will launch carbon capture project in 2022? Link here.

From others:

The double irony of asking OPEC to increase oil production. Link to Forbes.
Shale oil stocks beat 3Q21 expectations with focus on returning cash to shareholders. Link to Investor's Business Daily.
Bill Gates opines on oil. Link to CNBC.
California forced to embrace natural gas. Can anyone connect the dots? Link here to oilprice.
The DAPL could become superfluous: interesting commentary; link here;
Packaging: from a reader, link here. At the link, see comments.

Warren Buffett:

Nvidia just showed Warren Buffett how to do it. Link to Investor's Business Daily.
Berkshire's operating earnings pop 18% 3Q21; Buffett's cash pile at record $149 billion. Link to CNBC.
Five things we learned from the annual letter: not mentioned -- time to move on.

Personality of the day: Sterling Hayden.

A Chinese company has chosen Grand Forks as the site of a manufacturing facility that city officials said Saturday could be the largest private sector investment in the community’s history.

Fufeng Group Ltd. picked an approximately 370 acre site in Grand Forks’ agri-business park. The facility is expected to initially require 25 million bushels of corn annually.
The announcement did not give the size of the investment or specify which products will be made there. Fufeng makes products for the animal nutrition, food and beverage, pharmaceutical, health and wellness, oil and gas, and other industries. It’s a leading producer of xanthan gum. This will be its first U.S.-based manufacturing facility.

Data points: