Monday, November 15, 2021

ONEOK To Complete Previously Announced Natural Gas Processing Facilities -- November 15, 2021

Natural gas processing plants in North Dakota are tracked here.

A reader, thank you, alerted me to this ONEOK story. 

The company's press release via Yahoo!Finance:

ONEOK, Inc. today announced plans to complete previously announced natural gas and natural gas liquids (NGL) infrastructure projects, including:

  • Demicks Lake III, a 200 million cubic feet per day (MMcf/d) natural gas processing facility in the Williston Basin.

  • MB-5, a 125,000-barrel per day (bpd) NGL fractionator in Mont Belvieu, Texas.

The Demicks Lake III plant:

  • the 200-MMcf/d Demicks Lake III natural gas processing plant in McKenzie County, North Dakota, is expected to cost approximately $140 million to complete.
  • the facility, which is supported by acreage dedications with primarily fee-based contracts, is expected to be completed in the first quarter of 2023. 
  • the new plant will increase ONEOK's Williston Basin natural gas processing capacity to approximately 1.9 billion cubic feet per day.

"People" keep telling me the end is near for the Bakken, and then we get another one of these stories. 

See also this post, as well as many others if one searches "Demicks Lake."

Brigham Minerals Announces Acquisition In The DJ Basin -- November 15, 2021

Brigham Minerals: announced accretive DJ Basin acquisition. Press release here. The DJ Basin is tracked at the sidebar at the right. Social media here

From the press release:

  • deal:
    • 8,400 net royalty acres primarily in Weld County
    • $44 million in cash + 2.2 million shares of MNRL
    • acreage operated by Chevron (CVX), OXY, PDC Energy, and Civitas (Bonanza Creek +Extraction Oil & Gas + Crestone Peak Resources)
    • flowing, 2022: 1,200 boepd with 50% liquids
  • company anticipates increasing quarterly base dividend 7% to 15 cents / share after the close;
  • 1.6 net DUCs and 1.5 net permits for 3.1 net activity wells
  • back of the envelope:
    • 2.2 million shares x $24 = $50 million
    • cash: $44 million
    • $94 million / 8,400 net acres = $11,000 / acre
    • $94 million / 1,200 boepd = $80,000 / boepd
  • Note: I often make simple arithmetic errors.

Personal Notes

A fantastic weekend. First of all, absolutely beautiful weather. A bit cool in the early morning hours, but warms up nicely by the end of the day.

Our soccer player, Olivia, who made her high school varsity soccer team as a freshman (almost unheard of, and certainly unexpected in Texas where sports are taken very, very seriously) and also plays "club" soccer.

Over the weekend, her "club" soccer team participated in a north Texas tournament. Her team soundly won all three of their games. One was 6 - 2, before the losing team scored a time-ending point, making it 6 - 3. They won their second game (I did not hear the score); and they won their three of three games, 8 - 0. This should qualify them to play in the highly sought "Dallas Cup" later this season.

On the club team she plays defense; on the high varsity team she plays offense. 

Meanwhile, Sophia and her very, very close friend Anika, spent much of Saturday in Sophia's new "bat cave." 

The clear evening and night skies have been incredible. Sophia and I have enjoyed watching the moon, Jupiter, Saturn, and Venus play tag night after night. And, apparently, a partial lunar eclipse most nights this week.

Re-Posting As A Stand-Alone -- It's That Important -- November 15, 2021

Before we re-post it, a reminder: COP26 legitimized coal as the transitional fuel. John Kerry, China, India, and some two-hundred countries ratified that -- that coal would be needed, and that zero-net emissions would be a goal for .... 2070. 

Now, re-posting this as a stand-alone post:

COP26: wow, wow, wow. This is simply amazing. I was the first (feel free to fact check me on that) to suggest that COP26 was the high point in the global warming fad. I need to find the Hunter S Thompson quote along the same line. LOL. But I digress. I posted immediately following benediction of COP26 that the global warming movement had reached its high point and would not recede. Well, well, well, look at this. A reader just sent me this. Others are now suggesting the same thing, the link is here:

By the way, that Hunter S Thompson quote:
So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high water mark — that place where the wave finally broke, and rolled back.”
There have only been a handful of "experiences" that have greatly affected me. One was my visit to Shiloh, recently. The other was this quote from Hunter S Thompson, which I first read back in 2002, I believe. I'll have to check the dates. 

Notes From All Over -- Mostly Investing Notes -- November 15, 2021

COP26: wow, wow, wow. This is simply amazing. I was the first (feel free to fact check me on that) to suggest that COP26 was the high point in the global warming fad. I need to find the Hunter S Thompson quote along the same line. LOL. But I digress. I posted immediately following benediction of COP26 that the global warming movement had reached its high point and would not recede. Well, well, well, look at this. A reader just sent me this. Others are now suggesting the same thing, the link is here:

Amazon, ESG: someone noted that Amazon's consensus EPS estimates are now 20% to 30% lower than they were in May, 2021. Yet the stock is actually up about 10 percent since May .... which means that there has been massive multiple expansion. Conclusion of the individual who noted that: "it's the ESG bubble and money flow, as Amazon is the #3 stock in almost all ESG funds." Link here.

Apple, chips: I think we'll see the same thing when folks realize Apple is now a "chip" company.

For investors, link here:

Four DUCs Reported As Completed; Three Permits Renewed; CLR With Three New Permits; Thirty-Three Active Rigs; WTI Drops Below $80; Finishes Near $81 -- November 15, 2021

Brigham Minerals: announced accretive DJ Basin acquisition. Press release here. The DJ Basin is tracked at the sidebar at the right. Social media here.

California gasoline prices: hitting record highs. Analyst explains why. 

Link here;

Active rigs:

Active Rigs3216576255

Three new permits, #38649 - #38651, inclusive:

  • Operator: CLR
  • Field: Dimmick Lake (McKenzie County
  • Comments: CLR has three Ravin permits to be sited in Lot 2 section 1-150-97; 260 FNL and between 1743 FEL and 1818 FEL; it appears two will be middle Bakken wells; one will be a Three Forks well;

Three permits renewed:

  • BR: three Concord permits in Dunn County

Seven permits canceled:

  • Kraken: two Cass permits; two King permits; two Raymond permits, and one Fairbanks permit, the latter three in section 29-157-98; the first four in section 9-157-98;

Four producing wells (DUCs) reported as completed:

  • 36122, 1,442, Slawson, Stallion 5-1-12TFH, Big Bend, first production, 9/21; t--; cum --;
  • 36123, 2,210, Slawson, Stallion 7-1-12H, Big Bend, first production, 9/21; t--; cum --;
  • 36125, 2,003, Slawson, Stallion, 3-1-12, Big Bend, first production, 9/21; t--; cum --;
  • 36126, 809, Slawson, Stallion 4-1-12TFH, Big Bend, no production;

Active rigs: NDIC reports 34. One, in fact, is reported twice.

  • Nabors B21
  • Nabors B22
  • Nabors X24
  • Nabors X27
  • Nabors X28
  • Nabors B18
  • Nabors B26
  • Nabors B13
  • Nabors B27
  • Nabors B6
  • Nabors B1
  • Nabors X-10

  • H&P 492 is listed twice
  • H&P 456
  • H&P 516
  • H&P 515
  • H&P 259
  • H&P 640
  • H&P 454

  • Patterson 808
  • Patterson 806
  • Patterson 901
  • Unit 414,
  • Unit 411
  • AES 4
  • True Drilling 39
  • True 40
  • Stoneham 16
  • T&S Drilling 2
  • T&S Drilling 1
  • Cyclone 38
  • Cyclone 35

Rich States-Poor States -- 2021 Economic Outlook; North Dakota Ranks Twelfth; Minnesota 46th -- Oh, oh; Also, Covid-19: FWIW -- For The Archives -- November 15, 2021

Economic Outlook -- Rich States / Poor States -- 2021: link here. North Dakota ranks eighth.

  • Utah: 1
  • Florida: 2
  • Oklahoma: 3
  • Wyoming: 4
  • North Dakota: 8
  • Texas: 9
  • South Dakota: 10
  • Oregon: 44
  • California: 45
  • Minnesota: 46
  • New York state: dead last at #50

Rich states / poor states: flashback, 2017:

Covid 19 -- Third Wave


Later, 5:24 p.m. CT: this is quite fascinating. Prior to the "Biden mandate," daily Covid vaccinations were trending toward 600,000 / day. Now, about a month after the "Biden mandate," Covid vaccinations are trending toward 1.5 million / day. 

Later, 4:42 p.m. CT: this is pretty cool. I posted the original post earlier this morning. The point was obvious .... later this afternoon, Josh Young, over at twitter, noted the same thing. Link here His points:

  • tracking cases is meaningless (and has been since the get-go);
  • hospitalizations and deaths a better metric, but also have shortcomings;
  • personal observations: separating fact from fantasy.

Original Post

Covid-19: Minnesota --

  • at year-long high;
  • CBS Minnesota: "doctors urge Minnesotans to get vaccinated"; why get vaccinated? Asking for a friend.
    • restrictions; masking rules still apply;
    • medications available to treat disease;
  • graphics here: third wave

Colorado in the news two weeks ago: currently in third wave, also; deaths way down; why get vaccinated, asking for a friend? Medications now available. Graphics here.

Florida: third wave completed; graphics here.

Texas: third wave completed; graphics here.

North Dakota: closing out its second wave; graphics here.

Four Wells Coming Off Confidential List -- Monday, November 15, 2021

Coal: the new transitional fuel; net-zero goals extended to 2070 -- John Kerry, China, India, COP26.

Wind: UK wind generation is today the lowest in two months, providing less than 1GW. This requires the UK to rely on fossil fuels for more than 60% of its power this morning, resulting in pretty high prices. To say the least. "... pretty high prices." LOL. 

Ten-year Treasury: 1.573%

VIX: 16. At the lower end of the continuum in the past year. VIX values greater than 30 are generally linked to large volatility resulting from increased uncertainty, risk, and investors’ fear. VIX values below 20 generally correspond to stable, stress-free periods in the markets. 

WTI: below $80. Trading at $79.70.

Tesla bonds: link here. This page may load very, very slowly.

Back to the Bakken

Active rigs:

Active Rigs3216576255

Monday, November 15, 2021: 21 for the month, 24 for the quarter, 275 for the year:

  • 37366, conf, Enerplus, Amphibolite, 147-93-08D-05H, Moccasin Creek, first production, 5/21; t--; cum 71K 9/21;

Sunday, November 14, 2021: 20 for the month, 23 for the quarter, 274 for the year:

  • 37661, conf, CLR, Harrisburg 2-27HSL, Indian Hill, no production data,

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, East Tioga, no production data,
  • 36073, conf, Enerplus, Scoria 147-93-09C-04H-LL, Moccasin Creek, first production, 5/21; t--; cum 110K 9/21;

RBN Energy: the shipping industry's new push for net-zero CO2 emissions.

Leading international shipping associations and many of the large shipowners they represent are pressing the International Maritime Organization (IMO) to take a much more aggressive approach to decarbonizing their industry, and calling for a $100/metric ton fee on carbon dioxide emissions from ships to spur investment in no-carbon propulsion systems. 
In effect, shipowners—themselves under pressure from their large, ESG-minded customers, are telling the IMO that its goals of reducing global shipping’s carbon intensity by 40% by 2030 and total greenhouse gas emissions by 50% by 2050 are far too timid. They are insisting that the IMO set the industry on a course to quickly ramp down its carbon dioxide emissions in the 2020s and achieve net-zero CO2 emissions by mid-century. If the shipowners prevail, it could result in the phase-out of hydrocarbon-based bunker fuel in favor of low-carbon alternatives like ammonia, hydrogen, and electric batteries. In today’s RBN blog, we begin a review of the big changes ahead for global bunker fuel and what they mean for oil and gas producers and refiners.

Notes From All Over -- Early Morning Edition -- November 15, 2021

Adios. Huge story. Huge. Shell says it will leave The Netherlands. Shell is the largest company in The Netherlands. Goes back to the 1800's. Will reduce "A" shares and "B" shares to just one class of shares. This is huge.

RD-Shell is getting sued by its own government for not doing enough to go green. RD-Shell announced over the weekend it is moving its HQ (and its tax structure) to the UK from the Netherlands. The Hague says it is disappointed. Links later, perhaps, but I'm sure folks can find the story easily enough. One link here. And, here. And, here, probably the best.

Family-funded deals. I was going to comment on this some days ago, but ran out of ) interest; b) time; c) energy. In that order. The good news? HartEnergy did it for me. Link here. Two names come to mind: Slawson, privately funded; CLR, publicly traded. From the linked article, the lede:

“Anecdotally, yes, it seems like investment in oil and gas from family offices has increased on a percentage basis,” said Marc J. Sharpe, chairman and founder of the Family Office Association. “While it’s difficult to say if the trend is accelerating, it certainly feels like an institutional pullback in oil and gas investing, both debt and equity, is creating opportunity for family offices to fill the vacuum in funding.”

However, the specific motivations have more to do with internal governance and investment mandates, Sharpe noted.

Untrue? I think this is no longer true. I believe Tesla is now making a profit on selling cars, but finance statements being what they are, there could be a bit of smoke and mirrors. But ... link here.

NFL: wow, talk about some lopsided scores yesterday --

  • Patriots, 45 -- Browns, 7
  • Bills, 45 -- Jets, 17
  • Cowboys, 43- Falcons, 3
  • Chiefs, 41 - Raiders, 14
  • Panthers, 34 - Cardinals, 10
  • Eagles, 30 - Broncos, 13

Veterans Day, 2021 

Oh, Give Me A Break -- Another Brandon Apologist -- November 15, 2021

Link here

This link will take you directly to the Financial Times article. It may be behind a paywall. From the link:

As anger over surging petrol prices in America has grown, President Joe Biden’s critics have pounced. 
The president’s green shift has turned off the taps at America’s once gushing oil industry, they argue, fuelling higher prices and inflation. 
But it is Wall Street, not Washington, that has put the clamps on growth in America’s oil patch. Investors scarred by years of cash-burning growth have called time on a debt-fuelled drilling binge that made the US the world’s largest oil producer, but inflicted billions of dollars in losses on shareholders. 
Still, to Biden’s industry and political critics, American drivers are paying more to fill up because the nation’s oil producers are being held back by a climate-minded presidency that has piled on taxes and regulations, deprived the industry of drilling permits and shut down pipelines. Yet none of the actions from the White House have altered the trajectory of US crude supply in the 10 months since Biden took office.

This tells me all I need to know about what the writer knows about "US oil." Not very much.

Critics, for instance, often link today’s high pump prices with president Biden’s cancellation of the Keystone XL pipeline, which would have ferried oil from Canada to the US Gulf coast. Whatever the merits of the decision, the pipeline was still years away from construction. 
Today’s oil price is not rising because it was scrapped. 
Biden has also paused leasing of new parcels of federally-held lands for fracking. But this is not pushing up fuel prices either. Producers are sitting on thousands of permits for new wells on lands it has already leased, enough to keep drilling at a healthy clip for years. More to the point, the vast majority of US shale production comes from private lands, making the issue marginal to the broader US supply picture.

The writer forgets that US oil companies are "E&P" -- exploration and production. They manage their assets. 

The bigger problem: the writer fails to note that Brandon's only "oil policy" is to plead with OPEC to produce more oil while promoting policies to stifle US oil.

Full article archived.

The Marietta Basin And The Woodford Shale

The Woodford is tracked at the sidebar at this link.

From The University of Oklahoma, May 10, 2019: The Woodford Shale in the Marietta Basin (Oklahoma  and North Texas).

The Decline Curve Analysis shows average EUR of 90,000 bbl./1000ft lateral; therefore a 5000-foot lateral unbounded well (one section) could produce an average 450,000 bbl. of oil and 1 Bcf of gas. I show that EUR directly correlates with thicker "target intervals" (>80 feet) in the Woodford section and with deeper depth due to higher reservoir pressure support.

It all started with this, from twitter:

I wouldn't have bothered posting but look at this. Apparently, drilling these Maritta Basin wells is costing $16 million and 90 days to drill to a TVD of 16,000 feet. Compare with the Bakken: $7 million or lower; nine days or less with TVDs of around 21,000 feet.

Reason #1 Why I Love To Blog -- Hearing From Readers -- Correcting The Record -- November 15, 2021

Remember that story on the longest unit train in Honeyford, ND, setting a US record for length? I went back and re-read the story and re-watched the video after receiving a comment from a reader. There was some ambiguity with regard to the report in light of the reader's comment. Perhaps the record meant that this was the longest train to be filled by one privately-own agricultural co-op. I don't know.

But the reader is entirely correct. The story was certainly misleading if not entirely wrong. Trains much longer than this are being run routinely, i.e., daily across Canada and the US. 

Exhibit A: a GAO white paper, dated May, 2019. This will load as a pdf. From the report:

According to officials from all seven Class I freight railroads and representatives from AAR, FRA, STB, and other stakeholders we interviewed, freight train-length has increased in recent years; however, the data are limited. 
According to data that two Class I railroads provided to us, their average train length increased over the 10-year period of 2008 through 2017 by about 1,500 feet for one railroad (from about 6,000 to 7,500 feet, or up to about 1.4 miles) and about 1,200 feet for the other railroad (from about 4,900 to 6,100 feet, or up to about 1.2 miles). These data represent an increase in the average length of a train of about 25 percent for both railroads. 
Two additional Class I railroads reported average train lengths between about 5,800 and 6,600 feet for the year 2017.

Officials from two Class I railroads stated that operating longer trains is not a new practice, and one official noted that the railroad has been operating trains in excess of 10,000 feet in selected rail corridors for almost 30 years. Officials from AAR added that increases in train length over time have likely been gradual.

While two Class I railroads provided data on average freight train-length over time, officials from each of the seven Class I railroads stated that they operate longer trains. 
Railroad officials said they operate these trains in certain rail corridors that have the capacity to accommodate longer trains, and not over their entire rail networks. For example, officials from one Class I railroad said they are running on a daily basis a 12,000-foot train—which is about 2.3 miles long—and another reported that twice weekly it operates a 16,000-foot train—which is about 3 miles long—on a route linking the mid-west to the west coast
Both of these Class I railroads noted that longer trains such as these are a small percentage of the trains they operate. More specifically, one of these railroads reported that over the previous 24 months, about 1 percent of its train-miles were traveled by trains over 10,000 feet long, and the other reported that about 2 percent of its current train-miles were traveled by trains over 10,000 feet long.

So, there you have it. I have no idea what "record was set" in Honeyford, but certainly not the record implied or inferred.