Notes From All Over -- Nothing About The Bakken -- The Thanksgiving Turkey Edition -- November 16, 2021

For newbies, I live just a mile or so west of the Dallas-Ft Worth International Airport (DFW). We live right at the dividing line between Grapevine, TX, and Euless, TX. Our residential area would be considered upper middle class, I suppose. 

Earlier today I mentioned that I was going to ride my bike down to Walmart just to check things out, not buy anything.

A beautiful day for a bike ride. At the gate outside our little hovel, if I turn right, I ride to Target in about two minutes (it takes longer to lock up the bike and find my mask than it is to ride there). If I turn left, I take a beautiful trail to Walmart about seven minutes riding time at most. 

It was early, about 9:30 a.m. and the parking lot was not as full as I expected. I don't think I have been to this Walmart since before the Covid lockdown -- don't know for sure; can't remember, but it's been a long time. I was impressed with how clean and uncluttered the store appeared. I remember Walmart stores being cluttered with merchandise in the aisles but not today. It almost had a Target appearance: open, uncluttered, clean. 

Whatever.

A casual observer might not have noticed, but it was clear that there supply chain issues. Some shelves were completely empty, but not particularly remarkable; lots of "gaps," as it were; and, often grocery items were not as deep back into the shelves as would be normal. But clearly, no one is going to go hungry in the US if they can afford to shop at Walmart. 

McCormick spices has had significant problems; the CEO was interviewed on CNBC some weeks ago because of the "spice" problem. Since then it has gotten a lot better. 

I was mostly interested in the price of turkeys and the price of bacon. From my note over at Schwa Nation:

Turkeys, just prior to Thanksgiving:

• Butterball: $0.98 / pound (vs $0.99 / pound at Target)
• Honeysuckle: 87 cents / pound

Bacon:

• brand (52 cents / ounce) to store brand (28 cents / ounce)
• about $8 for a pound of a bacon; $10 for a pound and a half

In the toy section, I checked out Lego which seemed to be the hardest hit at Target (in the toy section). It was the same at Walmart. Almost completely out of Lego sets. Enough there to get a present or two, but very, very limited selection. If there are normally 500 Lego sets, it appeared there were less than fifty today.

But most interesting: Amazon never seems to be out of stock. Of anything. 

Anyway, enough of this for now.  

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Bull Market

The market was on fire today. The S&P 500 came within a point of hitting an all-time high. The Dow closed well below its high for the day but overall, an incredible day. 

Generally speaking, the talking heads were remarkably bullish. I've posted my reasons why I think the bull market will go on for quite some time. 

I've mentioned before about all the cash Americans have but no one else seems interested. I will post my favorite graphic later but here it is mentioned in this article: Goldman Sachs expects bull market to extend into 2022. Morgan Stanley is saying the same thing. But back to the linked GS article:

Households own half of the $28 trillion in U.S. cash assets, an increase of $3 trillion since before the pandemic. We expect households will shift some of this capital into equities over time," adds Kostin.

Here it is, my favorite chart.

Money market monitor:

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Stump Siri

I am quite disappointed in Siri, LOL. The following was on the radio earlier this evening. I was curious: would Siri recognize this song / did she have it on her playlist? She did not recognize the song. Are you kidding me?

I Can't Help Falling In Love, The Stray Cats

Request For Reader's Help. Any Update On Rampart's Coteau Wells? November 16, 2021

For background, see this post from June 28, 2021 -- just a few months ago.

Rampart Energy Company:

• has been operating in North Dakota since 1959
• Rampart Energy has about 50 records on file
• Coteau 1: wildcat, SWSW 1-145-88; a "long way" from the Bakken;
• south of the lake; well east of the Bakken; southeast (outside) the Ft Berthold Reservation;
• if this is a crude oil well (not a natural gas well), this will be interesting to follow
  
• from "Bakken operators:

Rampart Energy Company 

• June 16, 2021

• Rampart's wildcat, Coteau 1, will be sited in SWSW 1-145-99, Mercer County, 555 FSL and 460 FWL; the oil field is also a wildcat; 
• Rampart has about 50 permits in North Dakota; it has been active in North Dakota since 1959; 
• Rampart's previous well in North Dakota, #27081, Craig Allen 10-3H, Stanley oil field; SESW 11-155-91; a Bakken well that was drilled in 2015 and has reported a respectable 228K bbls crude oil cumulative;

Now today: I believe these are carbon capture exploratory wells. To the best of my knowledge, NDIC is not updating the map or the scout tickets, so it's difficult to figure out what's going on. 

A reader writes:

I see they have a rig drilling the Coteau #1. I'm assuming it's for carbon capture? 

But a buddy of mine said there's what looks like 2 more drilling locations ready to MIRU between I-94 and Beulah on highway 49. Any insight on this?

If any reader has any update on the Rampert Energy rigs drilling these wells, readers would appreciate an update.

Later: 

This must the location the reader's buddy was reporting when he/she said there appeared to be two more drilling locations ready to MIRU between I-94 and Beulah on Highway 49. So far my sleuthing only comes up with Milton Flemmer 1. If the buddy is correct, we may also be looking at Milton Flemmer 2 but that's a bridge too far right now. 

See this post from October 20, 2021:

• Summit Carbon Solutions has a permit, #38622, for an Archie Erickson 2 well, to be sited in SWSW 12-142-88, a wildcat, to be sited 902 FSL and 794 FWL

So, the first map:

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Featured Artist Of The Day: Johnny Rivers

Wiki entry: enough trivia to last a full cocktail party.  

Secret Agent Man, Johnny Rivers

Update On The Trenton GTL Plant -- November 16, 2021

See this post for background.

Update here.

Agreement with Cerilon GTL. Williams County:

• will provide a no-interest $6 million loan agreement
• three loan payments of $2 million each
• first won't be disbursed until company has executed a land purchase agreement (which could happen today)
• the second payment: March, 2022
• the third payment: July, 2022
• loan to be repaid in quarterly installments once commercial operations begin or after seven years, whichever comes first.
• for the $.28 billion gas-to-liquid plant in Trent, previously announced.

Construction to begin 2021.

Initial capacity: 24,000 bbls per day of ultra-low sulfur diesel and other specialty products.

About 80 full-time employees.

Oasis With Five New Permits; Two DUCs Reported As Completed -- November 16, 2021

NOG: Permian Basin expansion, link here to press release -- and Hart Energy here --

• will acquire non-operated properties in the Permian Basis from entities affiliated with Vertias Energy, LLC
• assets primarily located in Lea and Eddy counties, NM, and Loving, Reeves, Ward and Winkler counties, TX
• deal:
• $406.5 million in cash
• 1.9 million common equity warrants; exercise price of $28.30
• 31.7 net producing wells
• 5.6 net wells in process
• 4.0 AFE'd or permitted net wells
• 40.8 risked net future development locations
• assets managed by Mewbourne, Devon, COP and EOG
• should close 1Q22
• current production:
• 11,500 boepd
• on closing, looking to increase quarterly dividend 50% to 12 cents per share, from current 8 cents per share, marking the third increase in NOG's dividend since its initiation in 2Q21
• back of the envelope: $406.5 million + warrants / 11,500 boepd = $42,000 / flowing bbl

NOG offering, link here: 10 million shares. NOG trading around $23. Update, November 17, 2021: NOG announces pricing at $20/share. Link to press release here.

S&P 500: missed an all-time high at the close by about one point.

Ten-year treasury: creeps / crept higher; a bit over 1.6%.

Asia, post-Covid: opening up. Apparently all of Asia is starting to open up; Malaysia is completely open.

$5 trillion in government spending bills in the last year or so still working its way through the economy; the most recent $1.5 trillion infrastructure bill was just signed by the president this week.

The Fed, easy money for as long as the eye(s) can see:

• even with tapering, they continue to buy assets: that buying won't be completed until next year, at the earliest, March, 2022, but then, the increased in the Fed rate will proceed very, very slowly; it will still be "easy money" as far as the eye can see
• the Fed needs to raise rates for a number of reasons: the most important? a high enough rate to allow a cut if temporary easing is needed (and it will be); in other words, putting that arrow back in the quiver;
• the Fed can't raise rates more than one percent for one simple reason: the US government won't have the cash to pay the interest .... without raising the debt ceiling
• some of that is finally starting to sink into the collective psyche of traders and investors

Semiconductors: on fire today; Morgan Stanley says the semiconductor shortage has been resolved.

Surge in oil prices: some say the "worst" is over. Flat for awhile, and then gradually come down next year.  

Final trades on Fast Money: Apple, Merck, Ford, and Target.

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Back to the Bakken

The Director's Cut was released today; September, 2021, data. 

Active rigs:

$80.75	11/16/2021	11/16/2020	11/16/2019	11/16/2018	11/16/2017
Active Rigs	23	14	57	63	55

Five new permits, #38652 - #38656, inclusive:

• Operator: Oasis
• Field: Dimmick Lake (McKenzie)
• Comments:
• Oasis has permits for five Ramirez wells in SESW 32-151-96; 
• sited between 277 FSL and 278 FNL and between 1931 FWL and 1799 FWL (my hunch is that there is an error there; probably all between 277 FSL and 278 FSL and between 1931 FWL and 1799 FWL; we'll see.

Two producing wells (DUCs) reported as completed:

• 36124, 2,228, Slawson, Stallion 8-1-12TFH, Big Bend, first production, 9/21; t--; cum --;
• 36797, drl/TASC-->807, Hess, BL-Myrtrice-156-96-2536H-6, first production, --; t--; cum --;

Director's Cut -- September, 2021, Data

Usual disclaimer: this is done for my benefit. I do it quickly. There will be content and typographical errors. I generally do not go back to correct errors. If this is important to you, go to the source.

Link here. 

From The Williston Herald: North Dakota production rises a half percent, but is still behind New Mexico by just a nose. Link here.

North Dakota added another rig this month, along with a half percent bump in production to 1.113 million barrels per day. That wasn’t enough to bump the state out of third place in the nation’s top oil producing shale plays, but it did bring it very close to New Mexico’s 1.12 million barrels per day in the Permian.

North Dakota Department of Mineral Resources Director Lynn Helms said North Dakota doesn’t actually have to match New Mexico’s rig count of 81 to beat New Mexico production. A Bakken rig produces almost twice as much as rigs in the Permian, based on data from the Energy Information Administration, the agency that tracks national energy data.

“We just have to get to 50 and then we’ll start to gain on them,” Helms said. So we’ll just keep track of that and we’ll watch that number.”

Well completions for the month were one above the state’s revenue forecast at 41, and prices were 32 percent above forecast.

Comments:

• an incredibly good report;
• natural gas capture rate up from 92% to 94%
• look at that crude oil price appreciation from August, 2021
• two consecutive months with increased production m/m
• rig count pretty much steady but up slightly
• DUC count down slightly, but not worth a headline
  

Crude oil production:

• September, 2021: 1,113,410 (preliminary)
  
• August, 2021: 1,107,359 bopd (final)
  
• July, 2021: 1,076,594 bopd (revised)
  
• June, 2021: 1,133,498 bopd
• delta, bopd: +6,051 bopd
• delta, percent: +0.55%
• revenue forecast: 1.2 million --> 1.1 million --> 1.0 million bopd

North Dakota light sweet crude price:

• today: $74.75
  
• September: $73.75
  
• August: $60.94
• July, 2021: $64.80
• June, 2021: $63.62
• revenue forecast: $50

Natural gas production:

• September, 2021: 3,015,567 mcf/day: +1.83%; 94% capture rate (final)
• August, 2021: 2,961,434 mcf/day; +2.85; 92% capture rate (final)
  
• July, 2021: 2,879,408 mcf/day; capture, 90% (revised)
  
• June, 2021: 2,987,829 mcf/day; capture, 92%

Rig count:

• today: 34
• September, 2021: 27
  
• August, 2021: 29 (included two SWD rigs))
• July, 2021: 23 (ditto)
• June, 2021: 20 (maybe one SWD rig)

Wells:

• October, 2021
• permitted: 37
• completed: 41 (preliminary)
  
• September, 2021
• permitted: 69
• completed: 34 (revised, but same as reported initially)
• inactive: 1,696
• DUCS: 503
• producing: 17,041 (preliminary -- new all-time high)
  
• August, 2021:
• permitted: 79 (final)
  
• completed: 47 (final)
  
• inactive:1,672
• DUCs: 521
• producing: 16,956 (final)
  
• July, 2021:
• permitted: 40
• completed: 53 (final)
• inactive: 2,082
• DUCs: 521
• producing: 16,890
• June, 2021:
• permitted: 75
• completed: 41 (final)
• inactive: 1,839
• DUCs: 680
• producing: 16,844 (all-time high)

 DUCs and inactive wells are tracked here.

The Fufeng Gambit -- November 16, 2021

Background: link here.  This is a huge economic story for North Dakota.

This is a corn milling story. Corn.

Quick: what state is know for corn? Sure, North Dakota has a lot of corn, but when you get right down to it, if one is interested in corn, one's first thought is Iowa and the states that border Iowa. Not North Dakota.

But if, for some reason, the state's incentives for bringing a Chinese company to North Dakota, why would China choose Grand Forks, not Fargo? For those on the east coast, Fargo is to NYC as Grand Forks is to Rahway, NJ. 

Fargo:

• closer to the rest of the world; Grand Forks is almost as remote as Williston, except on the other side of the sate
• has much better transportation; I-29 and I-94, two of the longest interstate systems in the US intersect at Fargo, not Grand Forks
• Fargo has a much larger population that could better support a huge new manufacturing complex coming into North Dakota
• has everything that Grand Forks could offer .... or does it....

The deal was likely done by the most internationally savvy group of businessmen and politicians the United States has, including the North Dakota Tax Commissioner (more on him later, perhaps).

So, anyway, that as a bit of background, what does the Grand Forks area have that would interest China over all those other areas in corn country, USA?

The answer at this link.

Three Wells Coming Off Confidential List -- November 16, 2021

Updates

Later, 8:30 p.m. CT: market opening -- wow, look at all that green. From the best business hour on television --

• there are signs that inflation may be more transitory than some think; it all depends on the timeline at which one is looking
• chips: the shortage has come to an end -- Morgan Stanley.
• oil rally: coming to an end.
• Peloton
• November 4, 2021: no need to raise cash; we're doing fine
• November 16, 2021: announces $1 billion of new Peloton shares to raise cash;
  
• Rivian: market cap is now bigger than that of Volkswagen; 
• trading at $160/share today Rivian is up another $16 today
  
• I believe VW is the biggest car company in the world in terms of number of vehicles sold; 
• did Apple miss this one?
  
• Home Depot: bigger market cap than Walmart today
  

Original Post

Not one headline so far regarding "the phone call" last night. Later: I've been watching CNBC for the past 2.5 hours, since 5:45 a.m. CT and not one mention of "the phone call." Wow. Amazing. Did it even occur?

Economic numbers announced today: Dow moves up. The US consumer is out and about and buying. 

From overnight:

• Canada's TransMountain pipeline -- Canada's only pipeline that carries both crude oil and refined products to the west coast -- is temporarily shut down due to storms, rain, and flooding. Nice photo of global warming at link.
  
• XOM calls it quits: says it will sall Barnett shale assets in Texas; I've seen $500 million figure; see this post. Pre-market: what is XOM doing? Nothing. In line with market in general; up ever so slightly. Traders / investors don't see this as a big deal at all.
  
• Russia's biggest move yet to take control of European natural gas market: link to Simon Watkins.
  
• Germany suspends Nord Stream 2 certification. Social media comments.
  
• two days ago, COP26 voted to suspend fossil fuel subsidies: overnight Japan announces fossil fuel subsidies to manage surge in prices; link here.
  
• keep an eye on Japan's power price rally: electricity rates for next-day delivery rose to a record for this time of year 
• high fuel costs (not news)
• cloudy weather cuts solar: weak available power supply vs last year
• the Bakken: huge headline story in the Financial Times (see below); behind a paywall; "The birthplace of America's oil boom a decade ago is struggling to recover from last year's market crash even as crude prices have surged back to $80 a barrel"
• not to worry: consider the source
• same ol' stuff
• article seems to be in response to CLR's entry into the Permian
• social media comments;
  
• the number of private jet flights has set a record in each of the past six months leading up to COP26;
  
• Platts feature on ISO NE; looks like a very, very good read; the blog has been following this story for years;
  
• Chinese's gambit in North Dakota: more than meets the eye

Pipeline: Permian's Double E pipeline enters service as West Texas gas output surges. Link here. 

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Back to the Bakken

Active rigs:

$81.43	11/16/2021	11/16/2020	11/16/2019	11/16/2018	11/16/2017
Active Rigs	23	14	57	63	55

Tuesday, November 16, 2021: 24 for the month, 27 for the quarter, 278 for the year:

• 37660, conf, CLR, Harrisburg 3-27H, Indian Hill, no production data,
• 37083, conf, Whiting, S-Bar 11-7HU, Sanish, no production data,
• 36225, conf, Enerplus, Horfels 147-93-08D-05H, Moccasin Creek, no production data,

RBN Energy: for Canadian producers, the most promising natural gas price outlook in years. 

As the new heating season in North America gets under way, the natural gas sector in Canada, the U.S., and even globally, is experiencing a surge in gas prices to levels unseen in many years. In Canada and the U.S., you would have to go way back to 2008-09 to find the most recent instance of $5/MMBtu-plus gas heading into a heating season. As for the rest of the world, it has never experienced prices at the levels reported in the past few months — north of $30/MMBtu in some places. The big question, as always, is: where do we go from here? In today’s RBN blog, we review our 2021 pricing outlook for Canadian gas and discuss our forecast for 2022.

It has been 11 months since we laid out our 2021 forecast for Canadian natural gas prices in RBN’s weekly NATGAS Billboard Canada report (January 19, 2021). At the time, our mid-scenario outlook — based on a Henry Hub price of $2.50/MMBtu, anticipated an average AECO price of $2.00/MMBtu, or C$2.43/GJ, for 2021. That looked very reasonable at the time, given that the two-buck forecast for AECO represented a gain of 20% over the 2020 average price ($1.67/MMBtu) and was within a dime of the average AECO forward prices for the remainder of the year as those stood in early January.

As we all know, 2021 did not turn out to be a normal year, especially on the energy front. The AECO price from January through October averaged $2.78/MMBtu (C$3.30/GJ; black bar in Figure 1), and cash prices as of Monday stood at $3.71/MMBtu (C$4.40/GJ). If the average price to date were to prevail for all of 2021, this would be the strongest average AECO price since the $4.05/MMBtu (C$4.24/GJ) average in 2014 (orange bar), though still well below the super-high price in 2008 (red bar). Further, if current cash prices held sway for the remainder of the year, the AECO price average would be closer to $2.96MMBtu (C$3.51/GJ). In both cases, this is well ahead of the $2.00/MMBtu (C$2.43/GJ) outlook we offered up at the start of the year, driven upward by very bullish fundamentals and global developments since then.

Reuters Exclusive: XOM Launches Sale Of Shale Gas Properties In Texas -- November 16, 2021

Story broke last night.  Link here. May need to sign in (for free).

•  Seeking Alpha.
• Offshore Technology.

XOM calls it quits: says it will sall Barnett shale assets in Texas; I've seen $500 million figure.

• valued between $400 and $500m, the assets to be divested include 2,700 wells covering an area of approximately 182,000 acres. 
  

German Suspends Nord Stream 2 Certification -- November 16, 2021

Germany suspends Nord Stream 2 certification:

• The Moscow Times: updated two hours ago. 
• The Financial Times: gas prices jump as energy regulator's decision deals another blow to Kremlin-backed project;  
• DW.com: link here. 
• MarketWatch: link here.
  

The Bakken: Sort Of Flatlined -- The Financial Times -- November 16, 2021

The Bakken: "sort of flatlined." -- The Financial Times. Archived. If you are initially unable to get around the paywall, consider googling: The birthplace of America's oil boom a decade ago is struggling to recover from last year's market crash.

• the Bakken: huge headline story in the Financial Times: behind a paywall; "The birthplace of America's oil boom a decade ago is struggling to recover from last year's market crash even as crude prices have surged back to $80 a barrel"
• not to worry: consider the source
• same ol' stuff
• article seems to be in response to CLR's entry into the Permian

From the article:

Tony Barrett, vice-president of exploration at Continental Resources, the Bakken’s largest producer, said the region is still in “the middle innings” of its development and sees scope for more growth from the region. 

Continental, owned by billionaire oilman Harold Hamm, a high-profile backer of former president Donald Trump, spent $3.25bn this month acquiring lands from Pioneer Natural Resources in the Permian basin, which spans Texas and New Mexico.

Barrett told the Financial Times it was “absolutely not true” they did the deal because of a lack of “inventory” in the Bakken, saying the company could expand for another decade without the Permian assets. 

Still, the deal echoes a broader shift of spending and industry activity away from ageing shale areas like the Bakken and towards the Permian, which is seen by investors as the most viable growth engine for companies.

The same old memes:

In addition to the dwindling high-quality well prospects, persistently high level of flaring — when unmarketable natural gas is burnt off at well sites — has also led some operators to turn away from the basin. “The easiest way to clean up your emissions profile is to divest your dirtiest assets,” Diederichs said, pointing as an example to Norway’s oil major Equinor, which sold its Bakken business earlier this year.

As usual, the writer fails to mention that the state has met / surpassed flaring goals and never compares the Bakken flaring to that of the Permian or the Mideast.

And, of course, Equinor leaving the Bakken had nothing to do with flaring. LOL.

Huge Energy Stories Breaking Overnight -- November 16, 2021

Each of these deserves a stand-alone post today. Huge stories breaking overnight. 

• Canada's TransMountain pipeline -- Canada's only pipeline that carries both crude oil and refined products to the west coast -- is temporarily shut down due to storms, rain, and flooding -- global warming?
• XOM calls it quits: says it will sall Barnett shale assets in Texas; I've seen $500 million figure;
• Russia's biggest move yet to take control of European natural gas market: 
• Germany suspends Nord Stream 2 certification
• two days ago, COP26 voted to suspend fossil fuel subsidies: overnight Japan announces fossil fuel subsidies to manage surge in prices
• keep an eye on Japan's power price rally: electricity rates for next-day delivery rose to a record for this time of year 
• high fuel costs (not news)
• cloudy weather cuts solar: weak available power supply vs last year
• the Bakken: huge headline story in the Financial Times: behind a paywall; "The birthplace of America's oil boom a decade ago is struggling to recover from last year's market crash even as crude prices have surged back to $80 a barrel"
• not to worry: consider the source
• same ol' stuff
• article seems to be in response to CLR's entry into the Permian
• the number of private jet flights has set a record in each of the past six months leading up to COP26 
• Platts feature on ISO NE
• Chinese's gambit in North Dakota: more than meets the eye

Links later but need to get ready to walk Sophia to school bus.