Wednesday, December 8, 2021

Notes From All Over -- December 8, 2021

1. First group "financial / economic" indicators:

2. AAPL market cap -- $2.872 billion.

  • 2.872 x = 3 * 175
  • (3*175)/2.872 = x
  • x = 183
3. ISO NE: link here. At 10:34 p.m. ET, prices spiking to $125 MWh.

Devon: $10,000 Bonuses -- December 8, 2021

Link here

Devon Energy Corp.’s rank-and-file workers are in for a surprise holiday treat: $10,000 bonus checks. 

In the latest sign that boom times are back for the U.S. oil patch, Devon told its 1,600 employees on Tuesday that workers below the vice president level will be getting the unexpected cash, CEO Rick Muncrief said in an interview. The bonuses are a reward for successfully integrating with WPX Energy Inc. after the companies agreed to merge last year, Muncrief said.

I keep forgetting that all the Devon shares I own came from years of accumulating WPX. Pretty funny.

And I got WPX from a WMB spin-off years before that. 

I wonder what comes next.

**********************************
How OPEC+ Regained Control Of The Oil Markets
During Brandon's Watch

Link to Tsvetana Paraskova:

Summary:

  • The combination of strategic petroleum releases from major oil importers and the discovery of a new Covid variant sent oil prices crashing last week 
  • There was plenty of pressure on OPEC+ to cancel its planned production increase on the back of that bearish news 
  • By sticking to its guns but ensuring markets that it would intervene if necessary, OPEC+ was able to regain control of the oil market.

Major SPR releases weren't from just major oil importers -- the US led the campaign to release crude oil from the SPRs. The new Covid variant was a one-week story. So far. 

From the linked article:

Last week’s decision from the alliance may have brought down a notch or two the tension with the U.S. Administration, but it also reminded the U.S. shale patch who is in charge of the oil market, just as American oil producers are drafting their capital budgets for 2022. 
U.S. oil firms are set to increase production next year, but they may not spend too much on new drilling activity, with oil slipping to $70 from $80 a barrel in just a few days and Omicron still creating uncertainty about demand.

Slawson Reports Two DUCs Completed; Thirteen Permits Renewed; Ovintiv With Three New Permits; Enerplus With One New Permit -- December 8, 2021

Mind the gap: link here.

The estimated copper shortfall by 2030 looks even worse.

AMD / XLNX acquisition: one more milestone reached.

  • tea leaves: announcement that deal is closed will be early next week, maybe Monday
    • 1.7234
    • AMD up slightly at the close; down a bit after hour -- $145.24 --> $250 implied for XLNC
    • XLNX up 0.4% at the close; up 0.25% after hours -- $225
  • back of the envelope
    • delta: $250 - $225 = $25 / XLNX share
    • some assume, I suppose, after it's announced that the deal closes, AMD drops a big and XLNX jumps a bit
    • 25/2 = 12.50
    • 145.24 - 12.50 = $132.75
    • 1.7234 * $132.75 = $228 / sh XLNX
    • $132.75 / sh AMD

King of LNG: US to beat Qatar at its own game: link to Tsvetana Paraskova. A reader said as much just a couple of days ago. EIA forecast for el fin de 2022:

  • US: 11.4 bcf/d
  • Australia: 11.4 bcf/d
  • Qatar: 10.3 bcf/d

WTI: continues to creep up; up 31 cents today; now at $72.36.

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

Flaring targets: link here

Active rigs:

$72.36
12/8/202112/08/202012/08/201912/08/201812/08/2017
Active Rigs2916556453

Four new permits, #38690 - #38693, inclusive:

  • Operators: Ovintiv (Newfield) (3; Enerplus
  • Fields: Westberg (McKenzie); Heart Butte (Dunn)
  • Comments:
    • Enerplus has a permit for a Lob well in SWSE 31-149-92; 
      • to be sited 829 FSL and 2084 FEL, part of the "Tennis" pad?
    • Ovintive has permits for three Clear Creek Federal wells in SESW 36-152-97; 
      • the wells will be sited 295 FSL and between 2529 FWL and 2489 FWL; 

Thirteen permits renewed;

  • CLR (6): two Berlain permits in McKenzie County; two Olympia and two Charleston permits, all in Williams County
  • MRO (6): all in Dunn County -- Sallie USA, OTT USA, Ellis USA, CHdester USA, Borrud USA, and Bean USA;
  • BR: one Hawktail permit in Dunn County

Producing wells (DUCs) reported as completed:

  • 37423, 1,263, Slawson, Tempest Federal 2-14H, Big Bend; how coincidental: I noticed the wells were starting to produce earlier to today and posted here;
  • 37424, 294, Slawson, Orca Federal 3-23-26H, Big Bend, first production, 10/21; t--; cum --;

Don't Judge A Book By The Cover; Don't Judge A Well By Its IP -- Not An Atypical BR Well -- December 8, 2021

The well:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-202131126911275976662396223518327
BAKKEN9-20213022121222221150642310392422940
BAKKEN8-20213124329242361519239010367972083
BAKKEN7-20213127754276961542241713399721598
BAKKEN6-2021302370423719154593410033263713
BAKKEN5-20213123760238091761236695351291436
BAKKEN4-20213019607196251707428578284680
BAKKEN3-2021311046810271736714644145690
BAKKEN2-202121008707000

Remember When? December 8, 2021

Remember when we thought Hess could never get a great Bakken well. That's all changed. Actually that changed some years go. Hess is now drilling some nice Bakken wells. Exhibit A, look at the IP:

  • 36532, 5,780, Hess, EN-Sorenson B-LW-155-94-3526H-1, Alkali Creek, t--; cum 139K in 3.5 months; huge; initial production extrapolates to 74K over 30 days; cum 374K 10/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-2021315370536938752041720286131
BAKKEN9-2021305954597943581966219535127
BAKKEN8-20213174727458707525910248371073
BAKKEN7-20212873937354570426245249361309
BAKKEN6-202119509451323864164501639852
BAKKEN5-20213187688760686226605254371168
BAKKEN4-20213093059274656125798241571641
BAKKEN3-20213194489415616028973270161957
BAKKEN2-20212663956453421814881135281353
BAKKEN1-2021311262012612724831564287412823
BAKKEN12-20202995779713564130483274833000
BAKKEN11-20203020139201474259238761343154446
BAKKEN10-20203127414272167716146624413315293
BAKKEN9-202064337453814419881274151397
BAKKEN8-20203132927329036996945468392226246
BAKKEN7-20203131988319567238755152466858467
BAKKEN6-20203030208302526964449219419207299
BAKKEN5-20201639465392411757444043370746969

Slawson's Tempest Federal Wells Starting To Produce -- December 8, 2021

Preliminary note. 

The wells:

  • 18119, was taken off line 2/20 and remains off line 10/21; 1,274/F, Slawson, Tempest Federal 1-14H, Big Bend, t10/09; cum 318K 2/20; neighboring wells being fracked; starting to produce, 10/21;
  • 35902, 178, Slawson, Tempest Federal 1SLH, Big Bend, t2/20; cum 130K 10/21; recent production --
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-202132083263620521407131181
BAKKEN9-20213020039199001787413261109582154
BAKKEN8-2021312327523330234241515792365766
BAKKEN7-20212823946240712023415470266512666
BAKKEN6-2021208584806115760560125602940
BAKKEN5-20211210493103215012684746882097
BAKKEN4-20210000000
  • 37422, conf, Slawson, Tempester Federal 4-14H, Big Bend, 
  • 37423, loc/NC, Slawson, Tempest Federal 2-14H, Big Bend,
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-2021311502571000
BAKKEN9-202128000

Notes From All Over -- Part 1 -- December 8, 2021

1. European inflation, link here.

2. Are we ready for Bakken 4.5? Stay tuned.

3. First group "financial / economic" indicators:

4. VIX:

Another CLR Kennedy Well Is A Great Well -- December 8, 2021

The CLR Kennedy-Miles wells are tracked here

The well:

  • 37535, loc/NC-->loc/A, CLR, Kennedy 15-31HSL, Dimmick Lake, first production, 5/21; t--; cum  129K 10/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-2021311253812620134483131830202739
BAKKEN9-2021302418524095157405288752010539
BAKKEN8-202131233562342618118671026677736
BAKKEN7-2021312680826810143385517754773119
BAKKEN6-2021303098431051157595720056825122
BAKKEN5-20216103471009857291839518256139
BAKKEN4-20210000000
BAKKEN3-2021338338306060606

 As long as we're here, here's another well on that pad / section:

  • 37502, loc/NC, CLR, Miles 14-6HSL, Dimmick Lake, first production, 6/21; t--; cum 28K over 23 days, 6/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20213125063250641232651867502611229
BAKKEN9-2021302857228527159015458453690556
BAKKEN8-202131407654081417386639436362034
BAKKEN7-2021313604335965173196264462215135
BAKKEN6-202123278352767212647444564416895
BAKKEN5-20210000000
BAKKEN4-2021310110101320132

FAQ 79: Best Bakken Well Ever Drilled; FAQ 9: Record IP In The Bakken -- December 8, 2021

FAQs are "tabbed" at the top of the blog. That link will take you to the first page of FAQs. I've had to start a second page.

FAQ 79:

79. What was the best Bakken well ever drilled? As of August 6, 2016, it was an EOG Riverview well, file #30286.

Some months ago, I quit updating record-setting Bakken wells. There were just too many. 

For example, any of the MRO wells at this link would have qualified at one time, but now they are just some of many such wells.  

Likewise FAQ 9:

9. What is the record IP to date in the Williston Basin? Note: as of November 13, 2018, FAQ #9 will be updated at this post

I won't be updating this very often either. 

From A Reader -- Native Americans, Batteries, Bets, And Target Practice -- December 8, 2021

The chief's most famous words: "I will fight no more, forever." 

That's exactly how I feel about renewable energy. I'm all in and investing accordingly. LOL. It's an open book test.

From a reader:
Chief Joseph's famous line.

Uttered in the movie by an actor named Ned Romero 😀.

Anyway, I don't know any of the Nez Perce language ... but, the first word I'd like to learn is "hypocrisy." [mic’yóox̣omtx will work for me.]



By the way - here's a photo of a lithium mine.  There are people that protest Canadian oil sands mining - but this is ok.  It's for batteries, so it's clean.  Spare me.

Anybody want to bet against me?  I've got $100 that says that battery will be target practice before the end of 2025.  

I guess I should make it $20.  Nobody would take my last standing bet.  I would have bet anybody that the Covid vaccines weren't going to be anything above 50% effective by the end of the year. Couldn't get anybody to bet $100 against me.  So - I've learned my lesson....  We'll set this bet at $20.

Up Thirty-Five Cents -- December 8, 2021

WTI: up 35 cents after EIA report released.

 
Weekly EIA petroleum report.

Link here.

  • Refiners operating at 89.8% of their operable capacity. Up slightly.
  • US crude oil in storage decreased by 0.2 million bbls. Yawn.
  • US crude oil in storage is now at 432.9 million bbls. Yawn.
  • US crude oil imports averaged 6.5 million bopd, down by 105,000 bopd from previous week. Yawn.
  • Distillate fuel inventories increased by 2.7 million bbls last week; still 7% below the five-year average.
  • Jet fuel supplied was up 27% -- compared to same four-week period last year. Wow. Lowest increase I've seen in quite some time. 

Fertilizer:

  • not being talked about yet, but Europe, Russia are cutting back on fertilizer by huge amounts;
  • I don't follow the story, but my hunch is that with the energy-rich status of the US, fertilizer companies here are going to do a booming business in 2022;
  • in fact, everything points to the US widening its lead over the EU in every category in 2022;
  • AMIRITE?

Time to google: Fertilizer Manufacturing Industry in the US -- Market Research Report, updated November 30, 2021. Link here. Most of it is behind a paywall, but the subject lines will take you were you need to go.

Inherited IRAs And The SECURE ACT 2020 -- December 8, 2021

We should start seeing articles on this issue as we come to the end of the year: inherited IRAs and the SECURE ACT of 2020. 

It appears much confusion reigns because the IRS had the information wrong in the publication addressing this issue when it was released back in 2020, and it has not been corrected in a revised 2021 publication. Instead, the IRS issued a letter "clarifying" the issue but apparently there remains some confusion.

Part of the confusion is purposely being generated by the IRS. It's clearly an entertaining story. I'm not going to say more at this time until I hear back from three different tax preparers. I'm sure we will get at least two different opinions. 

One screen shot but have fun, google irs rmd clarifies mistake 10-year rule.

COP Out -- COP To Sell Indonesia Assets; Will Raise Stake In Australia Pacific LNG -- Source; COP's Dividend News -- December 8, 2021

Link here

Now, back to that COP dividend story.

Backstory: COP recently made headlines that it would return more cash to its investors, or something to that effect. 

So, I was surprised when I saw this over at Marketbeat.com:

The Marketbeat.com robot has a nasty habit of doing this; I've been "tricked" more than once. 

Here's the story.

COP generally pays a quarterly dividend early in the following months, from nasdaq.com:

  • March, June, Sept, December;
  • the declaration date is earlier, the record date is earlier, but the pay date is usually near the first business day in those months;
  • in calendar year 2020 COP paid 42 cents/share on their usual dates and increased it to 43 cents at the end of the year
  • in calendar year 2021 COP paid 43 cents/share on their usual dates and increased the dividend to 46 cents in the last quarter, pay date December 1, 2021, and that dividend was paid on time

Now the "fishy" part.

On December 6, 2021, completely off-schedule, COP declares a "special" / "variable" dividend of 20 cents/share with a record date of January 3, 2021; and a pay date of January 14, 2020. 

The marketbeat.com robot saw that 20 cents and noted it was a decrease from the previously declared / paid 46 cents. 

So, it turns out that within days of COP announcing that it will increase shareholder return, COP does just that by declaring a "special" / "variable" dividend which was almost half of its regular dividend. 

It was reported that COP may have as many as eight dividends yearly for the next year or so. One would assume the regular dividend would be paid in the usual months, and in addition a smaller dividend would be paid in four "off" months.  

So much more could be said, but I will leave it at that.

No Wells Coming Off The Confidential List -- December 8, 2021

Omicron? Virus burning itself out. ala Spanish Flu? Whatever. Pfizer booster handles the variant just fine. Sort of like how seasonal flu is handled. Annual "seasonal flu" shot. PFE up slightly (very slightly) in early morning trading. 

Omigoodness: I just returned from the grocery store where I get potatoes, Spam, and Covid shots. I went in to get my Pfizer booster. No waiting, no appointment necessary, just walk-in. But I was early. I'm not "eligible" until December 19, 2021, to get the booster. That tells me everything I need to know about the seriousness of Covid-19 omicron. LOL.

From the Los Angeles Times: not saying this would happen in Texas, but my hunch is not as likely -- it's not as if the families didn't have enough time ...

Thousands of L.A. Unified students have not shown proof of vaccination About 34,000 students have yet to comply with the COVID-19 vaccine mandate in the Los Angeles Unified School District — and there’s no longer enough time for students to get the first shot and complete their required inoculation by the January 10, 2022, start of the second semester. 
This will probably force the nation’s second-largest school system into some difficult decisions. Students who are not fully vaccinated — or exempt — will be forced into the district’s independent study program or will have to leave the Los Angeles public school system. Shifting 34,000 students 12 and older into independent study would be challenging. And who would teach these students? 
The 34,000 total, by itself, would make up one of the 25 largest school systems among about 1,000 districts in California. There’s no current indication, however, that L.A. Unified is backing down. 

Chips to watch: XLNX, AMD. Link here

  • two SeekingAlpha articles remain optimistic: one week ago, and, about five days ago.
  • arbitrage: right now the spread is $24. Whoo-hoo. 
    • if the merger goes through, 1.7234 shares of AMD for every share of XLNX
    • today, at $144.57 (AMD) x 1.7234 = $249.15
    • XLNX at $225.70

Another one I missed: Trupanion (TRUP). Not related to The Don.

  • DWAC: surged yesterday but down today in early trading.

Kellogg: strike over?

  • strike has gone on for over two months;
  • union has rejected multiple offers
  • Kellogg announced yesterday it will start hiring permanent replacements;
  • no new talks scheduled (I've heard that before); links everywhere; here's one;
  • has anyone noticed any shortage of Kellogg products in the last two months; I have not;
  • Kellogg has adequate capacity in Mexico
  • Kellogg shares in trading range for past year; generally green; down slightly yesterday

Global warming:

Smack-down: but no one will read it or hear about it.

  • EQT response to Senator Elizabeth Warren;
  • links pending

COP: misleading dividend announcement by MarketBeat.com

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

Active rigs: last year at this time, we were down to sixteen active rigs in North Dakota; now, we're back to 32. The definitive rig report currently shows 29 active rigs but that's because some rigs are in the process of moving to new sites. 

Active rigs:

$71.72
12/8/202112/08/202012/08/201912/08/201812/08/2017
Active Rigs2916556453

No wells coming off confidential list today.

RBN Energy: Very low- and no-carbon alternatives to old-school bunker fuels, part 2.

International shipowners need to significantly reduce their carbon-dioxide emissions by 2030 and will come under pressure to achieve carbon neutrality by 2050. Given that the industry currently depends almost entirely on fossil fuels for ship propulsion — and that every zero- or near-zero-carbon alternative faces serious headwinds — it won’t be an easy or low-cost transition. One pathway would be expanding the use of LNG as a bunker fuel in the near term and then shifting to alternatives like bio-LNG and synthetic LNG as they become more commercially available and economic. Another would be to use “green” or “blue” hydrogen, ammonia, or methanol. But there are challenges to each, not the least of which are the small volumes of non-traditional fuels being produced — and their high cost — and the need for new infrastructure both to produce and distribute them, as we discuss in today’s RBN blog.

This is the second blog in our series on efforts to reduce emissions of carbon dioxide (CO2) and other greenhouse gases in the shipping industry, which accounts for about 3% of global GHGs. Previously, we looked at the push by leading international shipping associations and many large shipowners to have the International Maritime Organization (IMO) ratchet up the industry’s decarbonization goals. In effect, shipowners — themselves under pressure from their large, ESG-minded customers, shareholders, and lenders — are telling the IMO that its goals of reducing global shipping’s carbon intensity (CI) by 40% from its 2008 level by 2030 and total GHG emissions by 50% by 2050 are far too timid. They want the IMO to set a more aggressive CI-reduction target for 2030 as well as a goal of eliminating or fully offsetting GHG emissions by mid-century.

Further, a long list of international shipping associations — including the International Chamber of Shipping, Intercargo, and the World Shipping Council — has been pressing for the creation of a $5 billion research-and-development fund to accelerate the advancement and introduction of zero-emission technologies and fuels for maritime transport. If approved, the IMO-administered fund would be financed by a proposed $2-per-metric-ton ($2/MT) levy on all marine-fuel sales. There also have been a number of proposals — by countries, shipping organizations, and individual companies — to implement a levy on shipping companies for each metric ton of CO2 equivalent (CO2e) their fleets emit.