Wednesday, November 17, 2021

NOG: We Now Have Pricing -- $20 / Share -- Connected To The Recently-Announced Permian Deal -- November 17, 2021

Re-posting with new link for pricing of new shares.

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.

Five CLR LCU Truman Wells Have Now Started To Produce -- November 17, 2021

These CLR wells in the Long Creek Unit are now showing five days of production in September, 2021.

  • 36865, drl/NC, LCU Truman 9-23H, drl status noted 11/5/19; drl/NC, noted 6/17/21;
  • 36866, drl/NC, LCU Truman 10-23H1, drl status noted 11/6/19; drl/NC, noted 6/17/21;
  • 36867, drl/NC, LCU Truman 11-23H, drl status noted 11/9/19; drl/NC, noted 6/17/21;
  • 36868, drl, LCU Truman 12-23H1, drl status noted 11/11/19; 6398-acre drilling unit (10 sections); drl/NC, noted 8/24/21;
  • 36869, drl, LCU Truman 13-23HSL, drl status noted 11/12/19; 6398-acre drilling unit (10 sections); drl/NC, noted 8/24/21;

If it's a slow day tomorrow, I will post production for September, 2021, most recent data available, but this is pretty much what each well looks like:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN9-20215591591944000

COP26

 

*************************************
Stray Cats

Stray Cat Strut, Stray Cats

Microsoft Vs Apple -- November 17, 2021

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Jim Cramer says that Microsoft, by far, is the best tech company. Period. Dot. 

Microsoft (MSFT)

  • market cap: $2.546 trillion
  • trailing P/E: 37.66
  • forward P/E: 36.90
  • PEG ratio (5-yr expected): 2.86
  • price/sales (ttm): 14.50
  • price/book (mrq): 16.63
  • enterprise value / revenue: 13.96
  • enterprise value / EPITDA: 27.33
  • yield: 0.73%
  • profit margin: 38.51%
  • total cash: 130.58 billion
  • total debt: $78.93 billion

Apple (AAPL)

  • market cap: $2.518 trillion
  • trailing P/E: 26.74
  • forward P/E: 26.81
  • PEG ratio (5-yr expected): 3.22
  • price/sales (ttm): 6.92
  • price/book (mrq): 39.01
  • enterprise value / revenue: 6.90
  • enterprise value / EPITDA: 20.49
  • yield: 0.57%
  • profit margin: 25.88%
  • total cash: 62.64 billion
  • total debt: $136.52 billion

WIth One-Third The Number Of Active Rigs, North Dakota Almost Edges Out New Mexico For Second Place -- The Bakken? It's Pretty Special -- November 17, 2021

Disclaimer: I remain inappropriately exuberant about the Bakken. Past results to not guarantee future results. Your experience may be different. 

Director's Cut, September, 2021, data, posted earlier.

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.

***********************************|
A Musical Interlude

Note explanation of this video.

Then He Kissed Me, The Crystals

CLR's Ralph / Reckitt Wells In The Long Creek Unit -- November 17, 2021

Note: in a long note like this there will be content and typographical errors. 

Note: to the best of my knowledge, the NDIC is still not updating scout tickets and the map, and possibly other data. It is possible that some of the permits that have been canceled and that data not yet reflected on the blog or at the NDIC site. But I wouldn't know. If this information is important to you may have to contact the operator. 

CLR's Long Creek Unit is tracked at various locations:

Today, CLR added another six LCU Ralph / LCU Reckitt permits to their Long Creek Unit to day. 

Six new permits, #38657 - #38662, inclusive:

  • Operator: CLR
  • Field: Long Creek (Williams)
  • Comments: 
    • this is really quite amazing; 
    • CLR adds six more permits to the Long Creek oil field;
    • two LCU Ralph permits and four LCU Reckitt permits, all to be sited in NESW 22-153-99; the wells will be sited between 1744 FSL and 1625 FSL and 2600 FWL and 2472 FWL

The new permits / wells:

  • 38657, no scout ticket yet, conf, CLR, LCU Ralph 10-27H1X, 2560-acre spacing, Three Forks bench 1,
  • 38658, no scout ticket yet, conf, CLR, LCU Ralph 10-27HX, 1280-acre spacing, middle Bakken,
  • 38659 no scout ticket yet, conf, CLR, LCU Reckitt Federal 9-22H1X, 2560-acre spacing, Three Forks bench 1,
  • 38660, no scout ticket yet, conf, CLR, LCU Reckitt 10-22H1X, 2560-acre spacing, Three Forks bench 1,
  • 38661, no scout ticket yet, conf, CLR, LCU Reckitt 10-22HX, 1280-acre spacing, middle Bakken,
  • 38662, no scout ticket yet, conf, CLR, LCU Reckitt 12-22H1X, 2560-acre spacing, Three Forks bench 1,

Wells/sites already sited in section 22:

  • 30900, 640, CLR, Reckitt Federal 1-22H, Long Creek, t9/15; cum 276K 9/21; runs north;
  • 20976, AB, CLR, Ralph 1-22H, Long Creek, t9/12; cum 265K 1/20; ran south;
  • 36998, conf, CLR, LCU Ralph Federal 6-27H, Long Creek, 
  • 36997, conf, CLR, LCU Ralph Federal 7-27H1, Long Creek, 
  • 36996, conf, CLR, LCU Ralph Federal 8-27H, Long Creek, 
  • 36995, conf, CLR, LCU Ralph Federal 9-27H1, Long Creek,
  • 37002, conf, CLR, LCU Reckitt Federal 5-22H1, Long Creek, 
  • 37001, conf, CLR, LCU Reckitt Federal 6-22H, Long Creek, 
  • 37000, conf, CLR, LCU Reckitt Federal 7-22H1, Long Creek, 
  • 36999, conf, CLR, LCU Reckitt Federal 8-22H, Long Creek,
  • 37011, conf, CLR, LCU Foster Federal 12-28HSL1, Long Creek, 
  • 37015, conf, CLR, LCU Ralph Federal 2-27H,
  • 37014, conf, CLR, LCU Ralph Federal 3-27H1,
  • 37013, conf, CLR, LCU Ralph Federal 4-27H,
  • 37010, conf, CLR, LCU Reckitt Federal 2-22H,
  • 37009, conf, CLR, LCU Reckitt Federal 3-22H1
  • 37008, conf, CLR, LCU Reckitt Federal 4-22H,
  • 37012, conf, CLR, LCU Ralph Federal 5-27H1,
  • 36960, drl/drl, CLR, LCU Reckitt Federal 9-22H1,
  • 36959, drl/drl, CLR, LCU Reckitt Federal 10-22H1,
  • 36958, drl/drl, CLR, LCU Reckitt Federal 11-22H,
  • 36957 drl/drl, CLR, LCU Reckitt Federal 12-22H1,
  • 36956 drl/drl, CLR, LCU Ralph 10-27H1,
  • 36955 drl/drl, CLR, LCU Ralph 11-27H,
  • 36954 drl/drl, CLR, LCU Ralph 11-27H1,


The graphics:


Damn The Torpedoes, Full Speed Ahead -- CLR Adds Six More Permits To Its Long Creek Unit -- November 17, 2021

Covid-19, link here:

  • total vaccine doses delivered: 558,460,.315
  • total vaccine doses administered: 444,789,186
  • at least one dose: 228,175,638
  • fully vaccinated: 195,612,365

Final trades, Fast Money: Amazon, Morgan Stanley, PTC Inc., Netflix

  • Netflix's Red Notice on track to be the most popular movie per new metric

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

Active rigs:


$78.36
11/17/202111/17/202011/17/201911/17/201811/17/2017
Active Rigs3215576356

Six new permits, #38657 - #38662, inclusive, see this post:

  • Operator: CLR
  • Field: Long Creek (Williams)
  • Comments: 
    • this is really quite amazing; 
    • CLR adds six more permits to the Long Creek oil field;
    • two LCU Ralph permits and four LCU Reckitt permits, all to be sited in NESW 22-153-99; the wells will be sited between 1744 FSL and 1625 FSL and 2600 FWL and 2472 FWL

Two producing wells (DUCs) reported as completed:

  • 37786, 4,040, MRO, Harrington USA 11-4H,
  • 36121, 1,670, Slawson, Zephyr Federal 30-36H ,

Thirty-three active rigs per NDIC's daily activity report. I have not gone through the list but it's not uncommon for one rig or more to show up more than once.

Notes From All Over -- Explaining Gasoline To Brandon -- November 17, 2021

BREAKING: on a down day for the market, AAPL just popped. 

Weekly EIA petroleum report: link here. Another yawner.

  • US crude oil inventories down 2.1 million bbls; still 7% below five-year average;
  • imports unchanged week-over-week; absolutely in line with four-week average;
  • refineries still operating well below 90% of their capacity;
  • jet fuel supplied was up 44% but that's against the plague year; what is the data compared to 2019?

Shot across the bow: Amazon will no longer accept the VISA credit card in the UK.

Energy crisis, EU and UK:

  • coal power plants are running at full tile in parts of Europe and enjoying a rare bout of profitability. Link here.
  • oil pipeline from Russia to Europe closed "temporarily" for repair. Link here.

Apple: will now allow self-repair. Link here.

Autos: the big three -- Tesla, Rivian, Lucid. Link here.

Global warming: won't affect the well-being of humans. Period. Dot. IPCC. Link here.

$1.25-Tree: Dollar Tree raised all prices to $1.25. Link here.

The new reality: link here.

  • Uber has no cars ...
  • Airbnb has no real estate ...
  • Rivian has no cars OR revenue.

BRIC: flashback to  2001. Link here

Let's go, Brandon. Let's investigate this

One day Algeria stops the gas pipeline via Morocco into Spain. Another day Germany say it needs more time to approve Nord Stream 2 gas pipeline. And another Belarus stops temporarily the Druzhba oil pipeline from Russia into Europe. All spontaneous; no politics involved, mind you.

Amazon: no one has this set in stock -- not even Lego -- but Amazon does. Link here.

Target blinks: will mimic Walmart -- will absorb costs; will not pass them on to consumers. Huge.

Final trades, Halftime Report: Paypal, Apple, Dick's Sporting Goods, Pfizer.

*****************************
Get Out The Popcorn

Brandon is using two "gasoline spreads" to try to make his case:

  • the unfinished gasoline - finished gasoline spread
  • finished gasoline -- gasoline at the pump spread

And, Brandon, of course, to keep it simple, combines it into one spread:

  • the price of unfinished gasoline -- gasoline at the pump spread.

Today, his speech writers noted that the spread between the cost of unfinished gasoline and the price at the pump is widening. LOL. 

Explaining the jargon: the EIA at this link.

Econ 101:

  • getting from unfinished gasoline to finished gasoline: value added (think potato chips: cost of the potato vs the wholesale price of potato chips)
  • getting from finished gasoline to gasoline at the pump:  wholesale to retail (think potato chips: wholesale to retail)

This is not rocket science.

Let's tackle just one data point: getting from finished gasoline to gasoline at the pump.

What does that require.

Well, let's see what the EIA says at the linked article:

Blending terminals are more numerous and widely dispersed than petroleum refineries, and they have equipment for filling tanker trucks that transport finished motor gasoline to retail outlets.

Yup, there it is. Finished gasoline has to be trucked to the retail service station. What do we have right now? Yup, that's right. A trucking and a trucker shortage. 

This shouldn't be too hard to explain, even to an octagenarian. Perhaps two PowerPoint slides.

 But there's a much, much bigger story here.  

The fact that Brandon is dithering on this whole issue, taking no action except asking for an investigation, tells me one of two things is going on, and most likely it's a combination of the two.

First: he has no options to affect the price of gasoline in the near term (the holiday season).

Second: the Brandon administration has two competing factions. On the one hand, the ideologists love this, want the price of gasoline to spike, driving Americans to EVs and get off fossil fuels (not gonna happen); and, the realists who want Brandon to take real action, like opening the SPR, to bring down prices, even if it's only temporary. 

The fact that he is trying to bring down the price of gasoline with speeches and not taking tangible actions suggests he is dithering, unable to accept the recommendations of either of the factions in his White House.

Get out the popcorn.

Later, November 18, 2021, link here: the Reuters analyst questions who is advising Brandon ... to me it looks like debate between two parties in the White House --

Goal: Will Quit Drinking By 2050 -- November 17, 2021

Link here.

An Oil Chain For The Tesla -- November 17, 2021

Link here.

The Fufeng Gambit -- What China Sees In Grand Forks, ND -- November 17, 2021

Why is China so interested in a corn milling program in a remote town in a remote state known for wheat and oil? But not corn. 

UND EERC: link here. A world-class energy research center. Where oil and technology came together to become part of the US shale revolution, perhaps one of the most amazing energy revolutions ever. China: looking for shale technology.

UND Aerospace: link here. Where Saudi princes come to learn to fly. The second-largest degree-granting college at UND, the John D. Odegard School of Aerospace Sciences operates one of the largest fleets of civilian aircraft in North America

Drone research:  US DOT selects North Dakota DOT for unmanned aircraft BEYOND integration pilot program. Link here.  That link is just the beginning. Click on "drones" in search at the milliondollarwayblog. You can start here if you want. If one is seriously interested in drones, one thinks Grand Forks, ND.

Bottom line: UND / Grand Forks is home to a huge drone program, a huge aeronautics program, and a huge connection to the US space program as well as the entire history of the US shale revolution, open to the public. 

Okay.

Now for the good stuff.

Grand Forks AFB: it used to be home for the B-52 Stratofortress bomber, part of the nation's nuclear triad. 

Now, GFAFB is even more important for the nation as it affects / regards China: GFAFB is home of the 319th Reconnaissance Wing which maintains, operates, and flies the nation's Global Hawk High-Altitude ISR mission (see below), more important to real-time events than even the nation's satellite reconnaissance program. 

RQ-4 Global Hawk: fact sheet

PAVE PAWS: does anyone remember this? Star Wars? Ronald Reagan? Reagan made the SDI announcement in 1983. Pave Paws developed in 1980. See wiki, does this get your attention?

PAVE PAWS (Precision Acquisition Vehicle Entry[a] Phased Array Warning System) is a complex Cold War early warning radar and computer system developed in 1980 to "detect and characterize a sea-launched ballistic missile attack against the United States". 
With the first solid-state phased array deployed, the system at the perimeter of the contiguous United States used a pair of Raytheon AN/FPS-115 radar sets at each site[3] (two sites in 1980, then two more used 1987–95) as part of the United States Space Surveillance Network. 
One system was sold to Taiwan and is still in service. -- yes, in the lede paragraph of the wiki entry.

The exact location: Cavalier Air Force Station about one hour north of Grand Forks AFB / Grand Forks driving time. 

So, an operating system to ""detect and characterize a sea-launched ballistic missile attack against the United States" and still in service was sold to Taiwan

Okay, ask me again, why is China so interested in a corn milling program in a remote town in a remote state known for wheat and oil?

A huge thank you to a reader who brought this to my attention. I would love to take credit for this but I have to give all the credit to my readers.

Original Post

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?

No Wells Coming Off Confidential List -- Enbridge Heads To Federal Court -- November 17, 2021

Line 5: Enbridge invited to federal court. Link here

Buried? Why was this not the headline? Most recent filing, we learn what Warren Buffett bought, sold. Buried in the story: "...ramped up a bet on Chevron Corp., boosting that 24% to an investment valued at $2.91 billion at the end of the quarter."

EU / UK energy crisis: European natural gas prices post biggest one-day jump since the crazy days of mid-October. UK NBP rises 17% and Dutch TTF jumps 18%. Cold weather is yet to hit. Link here

EU natgas situation becomes ugly in December. Germany's suspension of Nord Stream II certification is a reaction, not the cause. The Russians were unable to deliver. Cold weather hits Europe next week. Link here.

US gasoline

  • New York gasoline supply crunch spurs hunt for pipeline space. Bloomberg. Paywall but headline says it all. Colonial Pipeline at capacity. Writer says pipeline raised its price; gasoline rose four cents / gallon.
  • California: record-high gas prices. Link here.

Lucid: will overtake GM in market value. 

Adios, Staples. Crypto.com Arena will be home of the LA Lakers this season. Rolls right off the tongue. Naming rights: $700 million.

Apple, Qualcomm:

  • Qualcomm hit all-time highs yesterday after rising 8% in one day; up 30% for the month;
  • Apple ready to break out, some say; has not participated in bull market this year;
  • iPhone 13 holiday demand appears robust: Wedbush; demand outstrips supply;
  • Apple could smash its iPhone holiday sales record: Barron's.
  • Qualcomm will combat Apple Silicon with new generation of PC chips; link here.

Say what? Do they know something we don't? Yes. The top 15 stocks bought by US congressional members. Excluding AOC, I assume. Link here. Ten of the top 15 stocks by US congressional members in the last month have been oil and gas companies. 


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

b-value for the Bakken: 1.6. Link here

CRK: closes Bakken divestiture. To realize a $160 million loss. Part of proceeds to fund acquisition of 23K acres in Haynesville area of ETX for $36 million. About $1,600 / acre in the Haynesville. Link here.

Active rigs:


$79.99
11/17/202111/17/202011/17/201911/17/201811/17/2017
Active Rigs32
15576356

No wells coming off confidential list

RBN Energy: increased OPEC+ crude oil supply depends on the Group's powerhouses.

The November 4 decision by the Organization of the Petroleum Exporting Countries and its collaborators — collectively known as OPEC+ –– to stay the course on crude oil production surprised few and disappointed many. Officials from leading oil-consuming nations, including the U.S., Japan and India, want the group to relax its production restraint by more than the scheduled 400 Mb/d in December. They see extra crude supply as an antidote for high prices that have been hampering recovery from the global economic slump caused by the COVID-19 pandemic. 
But OPEC+ leaders made clear that they’re in no mood to accelerate their phase-out of production cuts. They know the market pressures now elevating crude prices won’t last forever and can change unexpectedly. They also face internal strains that might weaken the quota discipline that has kept the group’s supply management intact, despite the occasional upset, for nearly five years. 
One of those strains is the number of OPEC+ participants already producing as much crude as they can while falling short of existing ceilings — a number that grows as the ceilings rise. Today’s RBN blog looks at oil-market expectations underlying OPEC+ members’ cautious approach and at the growing divide among those unable to keep up with output targets and the relatively few but volumetrically overpowering counterparts with capacity to spare.