Wednesday, December 29, 2021

Drilling In Mercer County -- December 29, 2021

See this post for background

A reader sent me this photo today with the caption:

Wed, Dec 29 at 8:48 PM -- Nabors B05 or Nabors B5

Rigged up in Mercer county just north of the Morton county line on highway 49 a couple miles or so. 
I can't find the Nabors B5 rig at any of the NDIC sites (well search, confidential well, daily activity reports. I'll keep looking ... see if I can identify the well. 

The size of these rigs never cease to amaze me and, in this case, look at the small town that has popped up around this rig to drill a single well.

Truly amazing.

Record Snow Out West -- December 29, 2021

$4.00 Gasoline And The Keystone XL -- December 29, 2021

It's pretty much a given that all credible analysts argue that unleaded, regular gasoline could average $4.00 / gallon next spring (2022). 

For those who understand the pricing of gasoline in this country, one can connect the dots back to 2005 when the Keystone XL was first publicly proposed. 

It's a complicated story, not easily explained to the American public.

But at the end of the day, all discussions about $4.00-gasoline circle back to the Keystone XL.

A Request For Help From Readers -- December 29, 2021

Can any reader remember if any major US airport has ever been shut down, not because of weather or terrorism, but because not enough workers showed up for work?

DFW (Dallas-Ft Worth International Airport) has just been closed to all incoming flights because there are not enough workers

I have not fact-checked this, but I have that from a very, very reliable source. Local news. 

Following this story: all liquor stores in the DFW area will be closed this Saturday and Sunday. 

Boy Scouts: be prepared. 

Product Placement

Apple iPad: it just works. 

I was challenged with another "tech" problem earlier today; the iPad solved it for me. It just worked for me. It did what I wanted it to do. Didn't need a manual. Intuitive.

Sometimes I think Apple is transferring all its software folks to mobile and letting desktops twist in the wind. 

The iPad: it just works. 

Alamo Bowl Tonight

Oklahoma vs Oregon.


Sophia is with her family on the famed River Walk in San Antonio this week /weekend. 

Long story. But that's where Sophia and Corky are tonight. 

Off The Net In A Few Minutes

Bike ride before it gets too dark to pick up a rotisserie chicken for dinner, and I bet it's less expensive than a frozen "organic young chicken" in the back of the store.

Local Covid

This is great! Adult daughter -- ph.d. in nursing -- shows up for work today -- one of the employees tested positive for Covid -- the whole staff is off for the next ten days! 

Not exactly "off" -- they will work from home, but that's as good as being off in my book.

Long live Covid-19. More family time. Wow, what a great country. And 80-degree weather -- until winter hits this weekend for a couple of days.

Turn Up The Volume

Take On Me, A-Ha

No New Permits; XTO Reports A Dry Hole Due To Cementing Issues; Re-Drilled -- December 29, 2021

US equities:

  • Dow and S&P 500 trading near all-time highs
  • Dow: intra-day high -- 36,571.55
  • S&P 500: intra-day high -- 4,804.06; apparently closed higher for the 70th time this year, 4,793.06.
  • individual equities of interest
    • AAPL: flat but slightly green
    • SRE: held above $131
    • UNP: closed near its 52-week high; recently raised dividend second time in one year;

Alex Kimani's three energy picks for 2022:

  • COP
    • BoA with a $67 price target;
  • Cenovus Energy
    • C$14.50 price target;
  • APA
    • many irons in the fire around the globe

BRK-B: 30% appreciation from one year ago.

Back to the Bakken

Active rigs:

Active Rigs3113566648

No new permits.

Hess put a large number of old producing Madison wells on the "abandoned" list. 

Dry hole:

  • 35151, XTO, Bullberry Federal 24X-2D, Lost Bridge, will plug and abandon; cementing issues were encountered on the well. Re-drilled as the 24X-2DR (#35789); 
  • other wells on that pad, all drilled, but not completed:
    • 35789, SI/NCW, XTO, Bullberry Federal 24X-2DR, Lost Bridge,
    • 35150, SI/NCW, XTO, Bullberry Federal 24X-2H2, Lost Bridge,
    • 35154, SI/NCW, XTO, Bullberry Federal 24X-2G, Lost Bridge,
    • 35155, SI/NCW, XTO, Bullberry Federal 24X-2C, Lost Bridge,

A reminder: these wells are in the immediate vicinity of this well -- from an earlier post, note production in September, 2020, below.

MRO is on a roll. This is really quite incredible. Maybe more on this later, but for now, the well:

  • 32434, drl/NC-->4,679, MRO, Stillwell 21-13H, 33-025-03101, Lost Bridge, first production, 8/20; t--; cum 215K 9/20; fracked, 8/19/20 - 8/25/20; 7.9 million gallons of water; 81.2% fresh water by mass; 6.4% produced water by mass; production; note 90K in first full month of production; 215K in three months. Early in the boom, EURs of 300K were the expected; 403K 8/21; F;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Global Warming Smacks The Bakken -- December 29, 2021

Williston's Spring Lake Park Holiday Lights Drive fireworks: postponed due to frigid temperatures in the region. Link here.

In Six Months, From $70 To $17 -- Robbin' The Hood -- December 29, 2021

Link here

$73 last August, 2021 -- just five months ago.

$17, today.

Meanwhile, UNP, hits a 52-week high. Then, look at the dividend increases, link here, from 97 cents to $1.18 / share / quarter in less than a year (a 22% increase):

Then compare to COP which recently cut its dividend in half.

One Really Needs To Re-Consider The Definition Of The Word "Treason" -- December 29, 2021


January 2, 2022: even the EIA appears to be happy with the "Fauci effect." 

Original Post

Link here.

EIA's Weekly Petroleum Report -- US Implied Oil Demand -- All-Time High -- December 29, 2021

Before we get to the EIA report: US implied oil demand on a four-week basis just hit an all-time high for this time of the year. Link here.  

Link here.

  • US crude oil in storage decreased by an impressive 3.6 million bbls. WTI: up slightly on news.
  • US crude oil in storage stands at 420.0 million bbls; 7% below five-year average
  • US crude oil imports averaged 6.8 million bbls; yawn; increased by 0.6 million bbls; four-week average of 6.5 million bpd is almost 14% more than same four-week period last year;
  • US refiners are operating at 89.7% of their operable capacity; yawn
  • distillate fuel inventories decreased by 1.7 million bbls; 14% below the five-year average
  • jet fuel product supplied was up 20.6% compared with same four-week period last year;

US crude oil and oil products in storage, including SPR:

This was part of President Biden's plan to lower gasoline prices. Much of the decrease in US storage was due to the release of "our" strategic reserve as ordered by President Biden. Most of our "strategic reserve" released crude oil went to China and India. An example of strategic thinking.

Predictions For 2022 -- The Original List Was Completed Prior To Year-End 2021

JC Oviedo: link here.

Mine, in progress, not ranked in any particular order:

  • EV manufacturers will experience a "come-to-Jesus" moment; Chinese challenges for Tesla may be insurmountable;
    • there will be a relative glut of new cars by mid-summer as supply chain obstacles are resolved, and floodgate of 2022 cars released as well as beginning surge of EV -- prediction added January 3, 2022; prices may not be much better but more than enough new cars available;
  • WTI trends toward $90, but won't go over $100;
  • gasoline prices will dominate mid-term discussions; GOP re-takes the US House, US Senate
  • no major military action in the Pacific; in eastern Europe; in the Mideast; or on the Korean peninsula; another year of peace;
  • Covid-19 fades away; Omicron was the beginning of the end;
  • AAPL: first company to have a market cap of $3 trillion+
  • the Bakken "maintains"; 
    • active rigs trend toward 40; production returns to 1.2 million bopd;
    • EOG announces early EOR results
  • Fed will make only one rate increase, not three as telegraphed near end of 2021
    • implies increased risk of recession if more than one rate increase;
    • but only way to stop inflation from running out of control may be increased number of rate changes even if that increases risk of recession
  • NFL has best year in history; NBA not so much
    • Dallas Cowboys get past first round but don't make it to the Super Bowl
  • Jamie Dimon's initial thoughts on cryptocurrency will turn out to be correct
  • the milliondollarway blog will be better than ever

The one "issue" that completely confounds me: how much crude oil the US will have in storage measured in "number of days" through 2022.

  • if week-after-week, number of days of crude oil supply stays above 30 days, the "availability of oil" is a non-issue.;
  • if "we" stay between 22 days and 28 days, moving around an average of 26 days, plus or minus a couple of days, it's pretty much the same thing -- a yawner;
  • but if we get to 24 days and the trend is definitely downward, one would expect crude oil prices (and gasoline prices) to start going higher; 
  • for me the "breaking point" is 20 days AND a consistent downward trend, week-after-week
  • a second aspect of all this correlates with this maxim: the price of oil is not determined by the average price of all oil available, but the price of the last bbl being sold, if that makes sense -- the corollary? Once we hit go below a certain number of days of crude oil in storage, the price of oil won't move linearly with the drop in the number of days of oil storage. The price of oil will surge, not week/week, but day/day. Imagine walking toward the edge of a cliff .... that last step is not like the penultimate step before going over the edge ...  
  • days of supply is incredibly complicated:
    • first of all, it's a prediction
    • second, large number of variables, each of which by itself, can be incredibly difficult to predict
    • completely unpredictable geopolitical events can have huge effects
    • policy decisions by oil-producing countries can have huge effects, and some policy decisions can result in unintended consequences (e.g., Biden's decision to release oil from the SPR)
    • all one can do is pull out a yellow legal-size piece of paper, draw a line down the middle and put supply issues on one side and demand issues on the other other side (the most recent, perhaps best example -- the announcement by Mexico that as of 2023, that country will no longer export any of its oil

Notes From All Over -- Waiting For The Market To Open -- December 29, 2021

JNJ at SeekingAlpha: interesting update

Johnson & Johnson currently operates the company with three separate segments:

  1. Consumer Health
  2. Pharmaceutical
  3. Medical Devices

During the company's most recent quarterly report, these segments reported the following revenues:

  1. Consumer Health = $3.7B
  2. Pharmaceutical = $13.0B
  3. Medical Devices = $6.6B

The breakup of two separate businesses will have the consumer health segment, which owns products such as: Band-Aid, Listerine, Aveeno, Neutrogena, and Tylenol among other products.

The second business, although it will have much more risk, will be made up of the faster growing pharmaceutical and medical devices segments.

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.  

Apple / Honda Civic: link here

Vaccine passports don't help: link here. This article does not discuss it but I now understand why herd immunity is not yet working for Covid-19, and it may not ever work for this virus. One wonders if things might have been different had Covid-19 caused a disfiguring rash. Interesting thought. 

Montana State at NDSU: January 8, 2022 -- be sure to put this on your google calendar with a reminder.

Ford > GM: Ford's market cap exceeded that of GM's recently but this morning in extended traded, GM is still slightly above that of Ford. But F has doubled over the past year, one of the strongest market performers in the last three to four months.

More global warming for southern California:

The second of two storms forecast for this week is expected to hit Southern California today, bringing more precipitation to close out a wet December and likely providing more white stuff for skiers. 
Forecasters expect 1 to 3 inches of rain for coastal and valley areas, with 1½ to 2 inches in the mountains of Santa Barbara and Ventura counties. The area could also see significant snowfall at high elevations. Record-breaking snowfall hit the Sierra Nevada on Monday — a much-needed surprise for the bone-dry West, where only months ago, officials declared a state of drought emergency.

TILT: Mexican apples. One of the first words I learned on Duolingo? Manzana. Why? Last night on Perry Mason, season 5, episode 15, "The Case of the Roving River" began with a scene at the fictional "Manzana airport." Yo quiero comer un manzana. Tu tienes manzanas? Yo necesito manzanas. Me gustan mucho los manzanas. LOL. Apples from southern California? From Mexico? On another note, "The Case of the Roving River" reminded me of the "riparian" controversy in the Bakken. Fascinating. The court ruled in favor of the original landowner in that case. 

I guess we will quit here; the market has opened. Good luck to all. 

AAPL: touch and go, but AAPL is back up over $180 in early morning trading. 

Samsung: implies another supply chain disruption. Overnight Samsung announces it will "temporarily adjust operations" at their Xi'an, China, facility. First question: where do American automobile manufacturers get their chips?

UNP: whoo-hoo! Hit an intra-day high.

Whiting Reports One Well Today -- Unremarkable -- December 29, 2021

First group "financial / economic" indicators:

WTI: $75.66

Back to the Bakken

Active rigs:

Active Rigs3213566648

Wednesday, December 29, 2021: 86 for the month, 115 for the quarter, 341 for the year:

  • 37032, conf, Whiting, KR State 13-16-2TFHU, Sanish, first production, 9/21; t--; cum 22K 10/21;

RBN Energy: For alternative transportation fuels, a road crowded with possibilities, part 2

Countries around the world are formulating and refining their strategies to reduce greenhouse gas emissions. Their policies target numerous areas such as stationary emissions, electricity production, and transportation. Within the transportation sector, one aspect that has spurred quite a bit of investment relates to reducing the carbon intensity of transportation fuels. The low-carbon fuel policies that are in place today, coupled with those being evaluated for the future, have the potential to incentivize the development of a wide range of “greener” alternatives to petroleum-based fuels in the regions where they are adopted. In today’s RBN blog, we discuss highlights from Part 2 of our Drill Down report on low-carbon fuels, focusing this time on ethanol, biodiesel, sustainable aviation fuel, and hydrogen, and the government policies that help support them.