Parting Shot: To A Reader -- Thank You For A Very Nice Christmas Card -- Totally Unexpected -- December 21, 2021

If I remember, I will post a photo of the Christmas Tree ornament a reader sent me, arrived today. 

The card, without a return address, was from "Team X" (altered slightly to maintain anonymity). Pretty funny. 

Sempra To Sell 10% Interest In Infrastructure Partners -- $1.785 Billion -- SeekingAlpha -- December 21, 2021

CNBC Covid-19 catastrophes: Carl Quintanilla tests positive; probably "caught it" from Jim Cramer. Read (past tense) that on twitter, need to fact check. I haven't watched CNBC for over a week now and have watched it only one or two days since the flash crash after Thanksgiving. 

Apple: the other day, it was AirPods. Today it's the Apple HomePod

Amazon continues to lead the market for smart speakers and smart screens with devices like the Echo Dot and Echo Show, but Apple has nearly doubled its market share in this segment thanks to the HomePod mini.

Strategy Analytics estimates that Apple shipped 4 million smart speakers in the third quarter of 2021, taking a 10.2% share of the combined smart speaker and smart screen market. Google's Nest Mini was the top-selling device in the segment, followed by the HomePod mini and Amazon's fourth-generation Echo Dot.

Gasoline demand: link here -- according to GasBuddy data --

• Monday, yesterday: US gasoline demand jumped 6.8% from the prior Monday
• Monday, yesterday: 4.8% above the average of the last four Mondays
• Monday, yesterday; highest demand for a Monday since 2019 and beat the same Monday in 2019, pre-Covid

EU energy crisis: with Brent <$75 / bbl and natural gas at USD 340 per barrel, it would be less expensive to burn oil than natural gas to generate electricity. And, apparently, that's happening. In France, another oil burning power plant turned on in Europe. Others on twitter saying the same thing: switch from gas to oil is coming.

Sempra update:

• Sempra to sell a non-controlling 10% interest in Sempra Infrastructure Partners to a subsidiary of the Abu Dhabi Investment Authority for $1.785B in cash.
• This transaction implies an enterprise value for Sempra Infrastructure of $26.5B, including asset-related debt of approximately $8.6B.
• In October, company completed the sale of a 20% non-controlling interest in Sempra Infrastructure to a wholly owned affiliate of KKR.
• Proceeds from the sale will be used to help fund incremental capital expenditures at company's utilities and repurchase $500M of the company's stock.
•  SRE: dividend yield -- 3.4%. 

Diversions: LNG tankers starting to divert from Asia to Europe where prices are higher. Link to Argus.

Why oil and gas are here to stay: link to Julianne Geiger. Archived. 

Pemex:

• will require nearly $10 billion in financing next year; link here.
  
• about 10% less than this year;
• $10 billion / 1.8 million bopd / 365 days = $15 / bbl

Permian: still selling for upwards of $20,000 / acre. Link here.

• Earthstone buys Chisholm's Permian assets;
• $604 million
• 36,100 net acres
• $604 million / 36,100 = $17,000 / acre
• $604 million / 13,500 bbls = $45,000 / producing bbl

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

Active rigs:

$71.27	12/21/2021	12/21/2020	12/21/2019	12/21/2018	12/21/2017
Active Rigs	32	15	54	69	52

Two new permits, #38713 - 38714, inclusive --

• Operator: Murex
• Field: West Tioga (Dunn)
• Comments:
• Murex has permits for two Kayden Cole permits in SWSW 9-157-95; 
• the wells will be sited 301 FSL and between 826 FWL and 856 FWL; 

Three permits renewed:

• Enerplus: three Fort Berthold permits in Dunn County

Three producing wells (DUCs) reported as completed:
37324, 1,712, WPX, Patricia Kelly 2-1HUL, Antelope-Sanish, first production, 5/21; t--; cum 164K 10/21;
37831, 1,133, WPX, Dakota 1-36HW, Mandaree, first production, 4/21; t--; cum 178K 10/21;
36071, 2,587, WPX, Andesite 147-93-09C-04H, Moccasin Creek, first production, 5/21; t--; cum 75K 10/21;

 **************************************
Results

Early production:

• 37324, Antelope-Sanish: fracked 4/13/21 - 4/19/21; a small frack, 4.95 million gallons of water; 82.95 fresh water by mass; 16.33% sand by mass;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
SANISH	10-2021	31	20608	20600	12657	48808	48342	0
SANISH	9-2021	30	23918	23772	13566	52663	52376	0
SANISH	8-2021	31	26261	26261	18622	30459	30206	0
SANISH	7-2021	31	26264	26261	18622	24300	24007	0
SANISH	6-2021	30	30506	30588	27416	38435	34622	0
SANISH	5-2021	20	35961	35711	32016	41754	37541	0

• 37831, Mandaree, fracked 3/7/21 - 3/19/21; a small frack, 5.4 million gallons of water; 83.92% water by mass; sand, 15.3% by mass;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2021	31	31344	31290	18343	47190	47030	0
BAKKEN	9-2021	30	29635	29594	15784	32280	32125	0
BAKKEN	8-2021	31	25499	25426	22828	25259	25098	0
BAKKEN	7-2021	31	24553	24607	10877	26104	25943	0
BAKKEN	6-2021	30	21864	21855	32071	21749	19259	0
BAKKEN	5-2021	31	24898	24849	42441	25898	23073	0
BAKKEN	4-2021	26	20494	20424	43574	18588	15808	460
BAKKEN	3-2021	0	0	0	0	0	0	0

• 36071, Moccasin Creek: fracked 4/7/21 - 4/22/21; very small frack, 4.9 million gallons of water; fresh water, 50% by mass; produced water, 39.4% by mass; a second frack report, same dates, 4/7/21 - 4/22/21; 8.51 million gallons of water; exact same percentages of water / sand by mass;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2021	28	10636	10646	17304	8980	6277	784
BAKKEN	9-2021	27	11325	11295	14936	9119	6545	746
BAKKEN	8-2021	28	13879	13876	20078	10744	7061	1481
BAKKEN	7-2021	25	9458	9468	19474	7510	4972	945
BAKKEN	6-2021	12	7510	7541	9694	6273	4840	410
BAKKEN	5-2021	14	21834	21424	40784	17730	15123	0
BAKKEN	4-2021	0	0	0	0	0	0	0

USGS 2021 Survey, Bakken And Three Forks: Bakken: Still Has 4.3 Billion Bbls Of Undiscovered Oil -- This Is In Addition To The 8 Billion Already Proven Or Produced -- Williston Herald -- December 21, 2021

From a reader, thank you, link here:

In 2013, the Bakken and Three forks formations in the Williston Basin had 7.4 billion barrels of undiscovered but technically recoverable oil and 6.7 trillion cubic feet of undiscovered natural gas, according to a United States Geological Services survey.

Since 2013, more than 11,000 wells have been drilled in the Bakken and Three Forks formations. Produced resources, of course, no longer count as undiscovered. And the same goes for proven reserves.

Those factors have dropped the amount of undiscovered oil in the new undiscovered resources report substantially, to 4.3 billion barrels. Undiscovered gas, meanwhile, dropped to 4.9 trillion cubic feet.

The Geologic Survey, 2021, is linked here. 

Lynn Helms:

• at one million bopd, existing well inventory will produce another four billion bbls crude oil;
• another 4.3 billion of undiscovered or undrilled
  

This brings us back to discussions of OOIP. I'm not going to re-open that but I'm pretty confident I have a pretty good "feeling" for the Bakken.

Look how far we've come. 

These charts only go back to 2012, five years into the Bakken revolution. 

But even in 2012, with 200 active rigs, the Bakken was producing only 600,000 bopd. Earlier, the numbers were even higher (rig count) / lower (crude oil production):

Link here.  

2012: 200 rigs / 600K bopd production.

2019, pre-Covid, when things were "good": 50 rigs / 1.25 million bopd /

2021, Covid transitioning from a less-infectious Covid variant to a more-infectious variant; 25 rigs / 1.2 million bopd .

Completed wells per annum: perhaps the most amazing data point was the number of completions vs production. At one time, upwards of 3,200 wells were being completed in one year, and less than 750,000 bopd were being reported. This year, 1.1 million bopd and "we'll" be lucky to complete 350 wells this year (2021).

I've long lost the bubble but I believe that when the blog / Bakken were reaching their stride, the dots suggested that operators would be drilling new wells through 2050 and those wells, lasting thirty years, meant the Bakken could be active through most of the 21st century, if not the entire 21st century. Vertical wells drilled in the 1950s are still producing. That was seventy years ago. 

Eight billion bbls remain / 1 million bopd = 8,000 days = 22 years.

Reuters: US To Become World's Largest LNG Exporter By Capacity Next Year -- December 21, 2021

LNG: US to be world's biggest LNG export. Previously posted citing different source. From Reuters:

The United States is set to become the world's biggest liquefied natural gas (LNG) exporter in 2022, surpassing Qatar and Australia, and may hold that title for years to come.

In a year when China and other large economies in Europe and Asia scrambled to source enough supply for heating and power generation, the United States was sitting on a bevy of supply - one that will grow in coming years.

Global LNG demand has hit record highs each year since 2015, due mostly to surging demand in China and the rest of Asia. Much of that global appetite has been met by steadily rising U.S. LNG exports, which have reached new records every year since 2016 and is poised to continue in 2022.

The United States should remain the biggest LNG exporter by capacity until around 2025, when Qatar could regain the lead as its North Field expansion starts to enter service. But if some U.S. developers start building new LNG export plants, the United States may not give up the crown.

***********************************
Chorizo, Potatoes, And Eggs For Breakfast

Potatoes need to be sliced and diced, then fried before adding the chorizo and then the eggs. 

Cost:

• the eggs: $1.29 / dozen: I will use one egg. 12 cents.
• potatoes, I forget, but maybe 50 cents for one potato. I will use about one-fourth of one very large potato. 12 cents.
• the chorizo, $1.89 for one package. I will use maybe a sixth, more likely an eighth. 25 cents. 

• coffee: K-cup, 50 cents.

• jugo de naranja: 20 cents.

• toast and butter: inconsequential. 

DUC Update -- Bakken -- November, 2021

The raw data sent to me by a reader. Calculations (the last two columns) were added.

Reminder: it is now the norm in the Bakken for simultaneous fracking wells on the same pad, completing four to eight wells in the same two-week period (or near-simultaneous). So one frack spread can "knock out" four to eight wells "at a time, while a single rig is drilling to depth one, maybe two wells. 

Those DUCs are "money in the bank."

BAKKEN
	Drilled	Completed	DUCs	DUCs/Drilled	DUCs/Completed
Dec-13	--	--	570
Dec-14	224	194	732	327%	377%
Dec-17	77	65	733	952%	1128%
Dec-18	108	70	741	686%	1059%
Dec-19	94	86	843	897%	980%
Dec-20	20	50	778	3890%	1556%
Jan-21	20	42	756	3780%	1800%
Feb-21	19	26	749	3942%	2881%
Mar-21	25	47	727	2908%	1547%
Apr-21	27	52	702	2600%	1350%
May-21	29	68	663	2286%	975%
Jun-21	31	65	629	2029%	968%
Jul-21	32	62	599	1872%	966%
Aug-21	39	66	572	1467%	867%
Sep-21	41	68	545	1329%	801%
Oct-21	42	71	516	1229%	727%
Nov-21	43	73	486	1130%	666%

Burning Oil To Generate Electricity In NE ISO -- December 21, 2021

From Javier Blas, twitter:

When you see fuel-oil power plants firing up, that's the telltale of a grid throwing some of it's very last defences (sic) to keep supply and demand balanced.

Re-posting from last night:

Link here.

For the past week or so, ISO NE has been very, very affordable; wind energy bringing overall price down. 

But it surprised me today. I wasn't surprised so much by the spike in price (6th decile) as I was about the "source" of that electricity: oil. Oil? Are you kidding me? I can't even imagine burning any oil at in the United States to generate electricity, but "NE" is literally right next to the biggest source of natural gas in the known universe. 

The Middle East burns oil to generate electricity, but in the United States?

Whatever. 

Location Of The Bakken's Newest Natural Gas Processing Plant -- Located About Eighteen Miles West Of Williston -- December 21, 2021

This is not news, but it dawned on me overnight that I never posted the location of the Bakken's newest natural gas processing plant.

List of North Dakota's natural gas plants here. None will be added in CY22, but the next one, Dimmick's Lake III, will go on line in 2023.

Link here.  

Best Producing Well In The Bakken -- September, 2021

Link here.

The well:

• 37610, drl/NC, MRO, Black USA 11-35H, Antelope, 33-053-09439, first production, 6/21; t--; cum 230K 10/21; fracked, 5/19/21 - 5/28/21; a moderate frack: 7.5 million gallons of water; fresh water, 50.2% by mass; produced brine water, 33% by mass.

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
SANISH	10-2021	18	18263	18298	9919	42811	41558	600
SANISH	9-2021	30	40420	41095	22161	67155	65388	370
SANISH	8-2021	13	19034	18946	11043	41771	38510	1983
SANISH	7-2021	31	60889	60623	33556	106191	102416	0
SANISH	6-2021	30	91581	90991	68238	132168	34208	92544

Graphics:

Top Producing Wells In North Dakota -- September, 2021

Link here.

Top Producing Operators In North Dakota -- September, 2021

Link here.

Two Wells Coming Off Confidential List; Thirty-Two Active Rigs -- December 21, 2021

Active rigs: estimate based on NDIC's daily activity report:

$70.56	12/21/2021	12/21/2020	12/21/2019	12/21/2018	12/21/2017
Active Rigs	32	15	54	69	52

Tuesday, December 21, 2021: 77 for the month, 106 for the quarter, 332 for the year:

• 38301, conf, Armstrong, Fugere 31-23, South Camel Hump, no production data.
• 38283, conf, Rimrock, FBIR Johnson 13X-7F, Chimney Butte, first production, --; t--; cum --;

RBN Energy: US low-carbon hydrogen production set to advance in 2022.

A few things have changed since we wrote our first hydrogen blog a year ago. First, there’s heightened awareness of the many ways hydrogen can be used to help reduce greenhouse gas (GHG) emissions. Second, the number of proposed hydrogen production projects has proliferated, and our project list continues to grow each week. Third, and perhaps most importantly, the federal government has thrown its support — and billions in taxpayer dollars — behind low-carbon hydrogen. However, despite those positive developments, hurdles clearly remain in the hydrogen sector, with economics a major sticking point, though a few projects are set to get off the ground next year. In today’s RBN blog, we provide a year-end update on domestic hydrogen projects.

*************************
Results

From above, early production:

• 38283, conf, Rimrock, FBIR Johnson 13X-7F, Chimney Butte, first production, 10/21; t--; cum 35K 10/21; the FBIR Johnson wells are tracked here;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2021	30	35006	35270	49258	19727	19727	0
BAKKEN	9-2021	30	424	0	1012	0	0	0