For The Archives -- Watching This Play Out -- December 22, 2021

 From The WSJ:

The relationship between the White House and U.S. oil companies has sunk to a new low at a moment when President Biden needs the industry most.

Oil company executives have become openly frustrated with a Biden administration that spent months shunning the industry, only to start urging in recent weeks that it produce more oil to alleviate rising gasoline prices.

In closed-door meetings with Energy Secretary Jennifer Granholm over recent weeks, oil executives have made few promises about raising output, say people familiar with the matter, and explained that it may be months before higher oil prices lead to resurgent U.S. production.

At a time when Wall Street is telling oil companies to tamp down spending and deliver profits after years of poor returns, oil company leaders say Mr. Biden’s positions on oil make it even harder for them to justify new spending to grow.

AMD - Xilinx Merger Update -- Of Sorts -- December 22, 2021

USGS Survey, 2021, Bakken And Three Forks

National news release dated December 15, 2021. 

A huge "thank you" to the reader who alerted me to this and sent the link. Thank you very, very much.

Report here; a pdf will download. 

Assessment and methodology information at this site.

North Dakota Soybeans -- Again -- December 22, 2021

This was the first day in weeks that I've watched CNBC. I heard that Jim Cramer tested positive for Covid-19 earlier this week. Today, he's live on "Mad Money" and he looks perfectly normal, healthy, and hale. This is why we're shutting down the economy -- for folks testing positive for Covid-19 and looking as normal, healthy, and hale as Jim Cramer. Oh, give me a break. 

He has a full studio of camera people, a producer, housekeeping staff, hanger on, tour groups, and there he is, known to have tested positive and no mask! Say what? Tested positive, inside, and not wearing a mask?

But I digress. Back to the soybean story.

From The Bismarck Tribune: "groups combine to build new soybean plants in North Dakota" -- link here:

• byline: Casselton:
• deal finalized; has been in the works for two years;
• Louisiana-based CGB Enterprises Inc. and Minnesota Soybean Processors: joint venture
• to be called, North Dakota Soybean Processor LLC -- will own and operate the plant;
• to be located in Casselton, 25 miles west of Fargo, ND (in other words, not the high-tax state of Minnesota)
• to be fully operational by 2024; will create up to 60 new jobs:
• expected to crush 42.5 million bushels of soybeans in the first year
• big consumer? livestock

Ovintiv With Nine New Permits On A Single Pad; Seven DUCs Reported As Completed, Four Permits Renewed; Three Permits Canceled; And, A Partridge In A Pear Tree -- December 22, 2021

We haven't done this in awhile. In anticipation of the Santa Claus rally which officially begins next week.

First group "financial / economic" indicators:

• 10-Year Treasury: link here. Amazing: 1.462% and trending down today.
  
• DXY: link here. Almost no change after weeks: 96.06.
  
• Silver: link  here.  $22.85, trending up a bit today.
  
• CBOE volatility index: link here. Explained at Investopedia. 18.96. Coming down after a couple days of spiking.
  

Second group "financial / economic" indicators:

• 30-Year Treasury: link here. History.1.853% and trending down; trading in a narrow range.
  
• Copper: link here. 4.346.
  

Dear Park Refinery, Houston: Shell sells its 50% stake; owned entirely by Pemex; all refined products will no go directly to Mexico. Link to Argus.

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Back to the Bakken

Active rigs:

$72.76	12/22/2021	12/22/2020	12/22/2019	12/22/2018	12/22/2017
Active Rigs	32	14	54	69	53

Nine new permits, #38715 - #38723, inclusive:

• Operator: Ovintiv Production, Inc
• Field: Pembroke (McKenzie)
• Comments:
• Ovintiv has permits for nine Calhoun wells, to be sited in SESW 34-150-98; 
• the wells will be sited 870 FSL and 1694 FWL and 2084 FWL;
• see graphic below
  

Four permits renewed:

• BR: two Chuckwagon permits and two Renegade permits, all in McKenzie County

Three permits canceled:

• Petro Harvester: one Miller permit and two Ligi permits, all in Burke County;

Seven producing wells (DUCs) reported as completed:

• 37306, 2,478, WPX, Crosby Chase
• 37832, 793, WPX, Dakota 1-36HY,
• 37521, 4,165, WPX, Dakota 1-36HB,
• 37308, 2,345, WPX, Crosby Chase
• 37830, 1,009, WPX, Dakota 1-36HUL,
• 37230, 2,140, WPX, Patricia Kelly 2-1HS,
• 37304, 2,040, WPX, Crosby Chase 2-1HIL, 

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The Ovintiv Calhoun Pad

The CLR - Permian Gambit With Pioneer Has Closed -- $125 Million In Cash Flow Generated In Three Months -- December 22, 2021

The CLR Permian gambit is such a big deal, it has it's own website. 

The deal with Pioneer has closed, December 22, 2021, slightly earlier than anticipated.

• Assuming 100% of the purchase price adjustment of $125M was generated in free cash flow from the asset over the ~11 week period, would indicate the asset is generating ~$600m a year in free cash flow annually at current commodity prices; or around 20% of the purchase price.
• Pioneer also flagged that the Company's full-year and fourth-quarter guidance was predicated on the assets being with the Company through year end; given the earlier-than-expected closing date, analysts will need to back out the production and financial impact of the divested asset from December 20 onward.

******************************
Aker BP to buy Lundin Energy

Speaking of deals, announced today, Aker BP to buy Lundin Energy Oil and Gas in $14 billion deal. Link here:

• Aker BP: Norwegian oil and gas company;
• Lundin Energy: Swedish
• this will be a "combined independent E&P company";
• includes ownership of 31.6 percent in the Equinor-operated Johan Sverdrup field, delivering 755,000 bopd gross on plateau
• the new company will be the undisputed #2 on the Norwegian Continental Shelf
• 400,000 boepd and a resource base estimated to 2.7 billion boe

Apparently the company's name will remain Aker BP.

The Rimrock FBIR Johnson Wells Coming Off Confidential List This Week -- December 22, 2021

Still on confidential list:

• 38286, conf, Rimrock, FBIR Johnson 13X-7E; Heart Butte,

The FBIR Johnson wells are tracked here.

Coming off the confidential list this week:

Friday, December 24, 2021: 81 for the month, 110 for the quarter, 336 for the year:

• 38279, conf, Rimrock, FBIR Johnson 13X-7H, Heart Butte,

Date	Oil Runs	MCF Sold
10-2021	34165	19089

Thursday, December 23, 2021: 80 for the month, 109 for the quarter, 335 for the year:

• 38280, conf, Rimrock, FBIR Johnson 13X-7C, Heart Butte,

Date	Oil Runs	MCF Sold
10-2021	35957	20655

Wednesday, December 22, 2021: 79 for the month, 108 for the quarter, 334 for the year:

• 38282, conf, Rimrock, FBIR Johnson 13X-7B, Heart Butte,

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2021	26	36117	35952	45997	20292	20292

• 38281, conf, Rimrock, FBIR Johnson 13X-7G, Heart Butte,

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2021	30	32968	32817	45676	18235	18235	0

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

• 38283, conf, Rimrock, FBIR Johnson 13X-7F, Heart Butte,

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

There Are "Major Finds" And Then There Are "Major Finds" -- December 22, 2021

Can we re-visit the naysayers regarding the Bakken? LOL.

I see this every so often: a headline reporting "a major new oil find."

Here we go again, to quote RR. 

Over at Yahoo!Finance it's being reported that UAE has announced a "major oil find." Link here. 

Just last week, it was announced that the Bakken had at least another eight billion bbls of crude oil.

Hold that thought.

The "major UAE" find: recoverable reserves of "at least" 480 million bbls (that's less than one-half billion bbls), based on a provisional recovery rate of 40 percent for crude oil and 70 percent for natural gas.

I do believe the Bakken number is based on primary production which at best might hit 25%. If "we're" allowed to project 40% crude oil, that changes everything in the Bakken.

And, again, the last USGS survey was completed in 2013, and only covered the middle Bakken with a foreshadowing of the Three Forks first bench. That study is the "floor" for the Bakken.

Notes From All Over -- The Calcasieu And Plaquemines Parish, Louisiana, Edition -- Highest US Gasoline Price On Record Heading Into A Christmas Holiday -- Let's Go Brandon -- December 22, 2021

Breaking: Pfizer stock about to break out. Covid-19 "pill" given approval for "emergency use" -- can be given at home. Raises availability from 85 million treatment courses, to 120 million treatment courses. $59.49 right now, up 0.8% at same time as report broke on CNBC. 

Yes, first day I'm back to watching the market and CNBC in about three weeks. I've avoided watching the market / watching CNBC ever since the "flash crash" on Friday, the day after Thanksgiving, 2021.

Covid-19: check this out and no one knows why. 

Apple iPhone supply chain:

• one month ago: a 9-day wait
• today: a 1-day wait

*************************
US Growth -- 2022 -- Projected To Be Fast And Furious
Nominal US GDP Growth To Be Double Digit

This was mentioned on CNBC today, double-digit growth for US nominal GDP growth in early 2022.

Here is one source:

********************************
Energy

EIA: US crude oil production fell by 8% in 2020, the largest annual decrease on record. Hopefully Sunday's edition of Focus On Fracking catches that EIA report. Link here.

Gasoline demand: yesterday, Tuesday, US gasoline demand reached its second highest tally for a Tuesday in 2021, barely missing the Tuesday ahead of Thanksgiving. Link here.

• demand was up 5.8% from the prior Tuesday, and was 3.1% higher than the average of the last four Tuesdays

Highest US gasoline price on record: heading into a Christmas holiday. Link here. Thank you, Brandon.

US crude export outlook looks bleak amid surplus going into 1H22. Link here to Argus. 

US LNG output appears to be at full capacity as European prices keep surging 13 Bcf/d of feedgas demand observed December 21, 2021. Atlantic awash in LNG tankers heading east. Link here.

US natural gas production will outstrip export gains. Link here at Argus. Again, it's all about Louisiana:

US LNG exports, a key driver of the rally in Nymex gas prices over the past year, are expected to increase further this winter because of additional liquefaction capacity along the Gulf coast and as service begins at the 1.6 Bcf/d (45mn m³/d) Calcasieu Pass terminal in Louisiana.

Capacity at Cheniere Energy's Sabine Pass export terminal in Louisiana will rise to about 4.6 Bcf/d through facility modifications and as train 6 reaches full service, according to the US Energy Information Administration (EIA). Federal regulators also authorized Cheniere to boost output from Corpus Christi LNG by 14pc, lifting capacity there to 2.4 Bcf/d. The first LNG cargo from train 6 at Sabine Pass and the first LNG from Calcasieu Pass are expected before the end of this year.

Now, look at this, more of the same: CNOC to take first LNG cargo from new export facility in Louisians. Link to Tsvetana Paraskova.

And this from Miland earlier this month:

Weekly EIA Petroleum Report -- December 22, 2021

Weekly EIA petroleum report, are we starting to get folks' attention?

• US crude oil in storage decreased by a pretty significant amount of 4.7 million bbls;
• at 423.6 million bbls in US storage, US crude oil inventories are 8% below the five-year average;
• US crude oil imports averaged 6.2 million bopd, down by 277,000 bbls; yawn;
• four-week import average of 6.4 million bbls, yawn, but still almost 13% more than one year ago;
• refiners still operating below 90% operable capacity, but just barely (89.6%);
• distillate fuel inventories increased by 0.4 million bbls last week; still 8% below five-year average;
• propane was down;
• jet fuel product supplied was up 25.6% compared with same four-week period last year;
• most interesting metric: gasoline demand will be reported later this afternoon. 

Gasoline demand: pending.

From twitter early this morning:

Gasoline demand: yesterday, Tuesday, US gasoline demand reached its second highest tally for a Tuesday in 2021, barely missing the Tuesday ahead of Thanksgiving. Link here.

• demand was up 5.8% from the prior Tuesday, and was 3.1% higher than the average of the last four Tuesdays.

Several Rimrock FBIR Johnson Wells Coming Off Confidential List This Week -- Thirty-Two Active Rigs -- December 22, 2021

Did Intel just lay off all its unvax workers? Link here. There's not a lot of space between "laid off" and "unpaid leave." The former is determined/defined by the employer; the latter, in this case, is determined/defined by the employee.

Did Freeport- McMoRan just double its dividend?

• marketbeat shows an "up arrow" and $0.15 at this link: date December 22, 2021, with:
• record date: 1/14/22
• pay date: 2/1/22

• at this link, dividend history for FCX, pay date, selected dates:
• 11/01/21: 7.5 cents
• 2/3/20: 5 cents
• 1/13/15: 31.3 cents
  

EIA monthly report: large draw on crude oil.

WTI: up about half a percent, trading at $71.58.

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

Active rigs: estimated based on NDIC numbers from previous day --

$71.58	12/22/2021	12/22/2020	12/22/2019	12/22/2018	12/22/2017
Active Rigs	32	14	54	69	53

Friday, December 24, 2021: 81 for the month, 110 for the quarter, 336 for the year:
38279, conf, Rimrock, FBIR Johnson 13X-7H,

Thursday, December 23, 2021: 80 for the month, 109 for the quarter, 335 for the year:
38280, conf, Rimrock, FBIR Johnson 13X-7C,

Wednesday, December 22, 2021: 79 for the month, 108 for the quarter, 334 for the year:
38282, conf, Rimrock, FBIR Johnson 13X-7B ,
38281, conf, Rimrock, FBIR Johnson 13X-7G,

Tuesday, December 21, 2021: 77 for the month, 106 for the quarter, 332 for the year:
38301, conf, Armstrong, Fugere 31-23,
38283, conf, Rimrock, FBIR Johnson 13X-7F,

RBN Energy: Geopolitical tension with Russia sends global gas soaring again.

Global natural gas prices are once again at record levels as escalating tensions between Russia and the Western world have re-ignited fears over gas shortages in Europe this winter. The global gas market is in the midst of an epic bull run that has been going on for more than a year, taking prices from all-time lows in the summer of 2020 to repeated all-time highs. And while strong demand for gas and LNG has underpinned prices and tied global gas markets together, Europe has been the driving force behind most of the headlines and panic-driven price run-ups. Prices in Europe have climbed to nearly $60/MMBtu as market fears around Russian gas supplies into Europe have been renewed by threats of new U.S. sanctions on Russia over aggression toward Ukraine, delays to the startup of the controversial Nord Stream 2 pipeline, continued low gas flows from Russia to Europe on existing infrastructure, and now Europe is facing its first real cold snap of the season. In today’s RBN blog, we take a look at the situation in Europe and its impact on the global gas and LNG markets.