Monday, January 3, 2022
Lime Rock Resources Acquires Abraxas' Bakken Assets -- $87 Million -- January 3, 2021
Updates
January 4, 2022: see this thread and specifically, "Treadstone." Or, go directly to this link:
Lime Rock Resources, acquirers and operators of producing oil and gas properties in the United States, announces two acquisitions today. It has acquired the Williston Basin properties of Abraxas Petroleum for $87.2 million. It has also acquired properties from a private seller in the Austin Chalk and Eagle Ford in Texas for $271.3 million. Over the last four months, the Lime Rock Resources team has made over $850 million in total property acquisitions.
The acquisition from Abraxas Petroleum consists of approximately 3,500 acres in McKenzie County, North Dakota. The Lime Rock Resources team has been an active operator in the Williston Basin since 2014, and it now manages approximately 19,400 BOE per day of net production in North Dakota inclusive of the new assets.
The private acquisition is of producing properties on approximately 46,000 highly contiguous net acres located in Burleson, Milam, and Robertson Counties, Texas. The properties produced approximately 7,700 BOE per day as of the closing of the acquisition.
Fact: $87.2 million / 3500 acres = $25,000 / acre.
Idle back-of-the-envelope:
- 3500 acres / 1200 acres per drilling unit = three drilling units
- 468 producing wells
- each well, 600 bbls/month or 20 bbls / day
- 468 wells x 20 bbls / day = 9,360 bbls / day; round up to 12,000 boepd
- $87.2 million / 12,000 boepd = $75,000 / flowing boe.
Original Post
Jan. 3, 2022-- Abraxas Petroleum Corporation, a Nevada corporation, today announced (i) the cash sale of its Williston Basin assets to Lime Rock Resources for $87.2MM, (ii) the repayment of all of its revolving credit facility and (iii) the exchange of its entire Second Lien Term Loan held by Angelo Gordon Energy Funding, LLC into newly authorized Series A Preferred Stock. The transactions, which closed today, were part of the Company’s previously announced strategic alternatives review.
From The San Antonio Express-News:
At the end of 2020, Abraxas said it had 103 producing wells in the Permian and 468 in the Williston. Through the first nine months of 2021, the Permian wells produced more oil than those in the Williston. But the wells in North Dakota produced more natural gas and far greater amounts of natural gas liquids, which are used as an industrial feedstock.
Abraxas was kicked off the Nasdaq exchange last fall after its stock price slipped to less than $1 per share. The company has been trading on over-the-counter markets since August 4, 2021.
I can't find the net acreage Abraxas had in the Bakken, but I have to assume it was less than 10,000 net acres.
From MDW blog: Abraxas
- Whiting in talks with Abraxas to acquire the latter; Reuters; see this post;
- January, 2019, corporate presentation; looking to sell Bakken assets; EURs: middle Bakken, around 900K boe; Three Forks, around 800K boe;
- Filloon on AXAS, May 8, 2017;
- November 6, 2013: sells 2,563 non-producing Bakken acres in its Fairview Prospect, Montana (Richland County) for $10.9 million ($4,250/acre)
- August, 2013: sees 4,600 - 4,800 boepd December, 2013, exit rate;
- sells 13,500 net acres; non-operated assets; to NRP; $35.5 million -- June 17, 2013
- 4Q12e: 4,300 - 4,500 boepd
- Operations in both the Bakken and Eagle Ford
- 21,000 net acres in the Bakken (ND + MT); 20,853, SeekingAlpha, 2011
- BEXP presentation says Abraxas has 20,853 net acres
- Nesson: 2,600 net acres; nice acreage
- Carter: 3,200 net acres; northeast of best Bakken; +/- value
- North Fork: 3,200 net acres; nice acreage
- Elkhorn Ranch: 2000 net acres; southwest North Dakota
- Elm Coulee: 440 net acres; where it all started in 2000
- Harding: 5,800 net acres; Williston area; nice area
- Sheridan: 3,000 net acres; Montana northwest of Williston (quality?)
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Granddaughter Letters As Freshman Playing Varsity Soccer
Team Contends For Texas State Championship
Most Amazing Graph Of The Day -- January 3, 2022
I challenge readers to find another S&P 500 company that has decreased its number of outstanding shares as much as Apple:
At that site, you can compare other companies with Apple. Spoiler alert: all other companies are "flat" compared to Apple's outstanding share graph. I've never seen such a remarkable chart. Truly amazing.
First company to hit $3 trillion market cap:
At Market Close -- First Day Of Trading -- 2022 -- January 3, 2022
Chips: link here. Chips, semiconductor: link here.
Let's take a look at semiconductor chips today:
- TSM: up $8.49; up 7%; closed at $128.80.
- QCOM: up $3.34; up 1.83%; closed at $186.21.
- AMD: up $6.34; up 4.4%; closed at $150.24.
- NVDA; up $7.10; up 2.4%; closed at $301.21.
- XLNX: up $9.24; up 4.4%; closed at $221.27.
- AAPL: up $4.44; up 2.5%; closed at $182.01.
- INTC: up $1.71; up 3.32%; closed at $53.21.
Integrated oils:
- XOM: link here -- up $2.35, up 3.8%; closed at $63.54.
- CVX: link here -- up $1.91; up 1.6%; closed at $119.26.
- COP: link here -- up $1.59; up 2.2%; closed at $73.77.
Cramer: driven higher by hope --
- Tesla
- Pfizer
- Nvidia
- Apple
- Meta (Facebook)
- Lennar
- Netflix
- Amazon
- Toll Brothers
- Home Depot
S&P 500 top ten winners in 2021:
- Devon Energy, up 179%. Likely to repeat.
- Marathon Oil, up 146%. [Top operator in the Bakken.]
- Moderna, up 143%; not likely to repeat.
- Fortinet, p 142%; not a bargain at current price.
- Signature Bank, up 139%. Say what? Under the radar.
- Ford Motor, up 136%; will continue.
- Bath & Body Works, 132%; likely to continue.
- Nividia, up 125%; old Cramer favorite. Still one of Cramer's favorite; perhaps his favorite.
- FANG, Diamondback Energy, up 123%; $35-breakeven price; cutting back on drilling costs; like to repeat that 123% annual gain in 2022.
- Nucor, up 115%. Another favorite of Cramer's. Thinks current share price is way too low. Says no analyst agrees with him; that's why he likes Nucor even more.
The most interesting graph of the day: link here.
We All Survived The First Day Of Trading For 2022 -- Congratulations! January 3, 2022
Twitter: I've had a twitter account for a long, long time and I only post Bakken-related material on that account. That will continue. But I am now on another "twitter-like" account and for the first time in a long time I feel wonderful and comfortable that I won't be kicked off that platform because of my posts.
Roth vs traditional? Neither. Make sure you max out your company's "401" before considering Roth vs traditional. But if you are ready to decide whether to open a Roth or a traditional, or fund an existing Roth / traditional, without question: Roth. I've talked about this before. The consensus, it seems, is to go "with" the traditional IRA, but that is wrong on so many levels. Can't stress that enough.
AAPL: something no one is reporting, but now a talking head on CNBC is mentioning it -- due to "huge" buybacks, the number of AAPL's outstanding shares have decreased significantly which puts a floor under the company's share price. At least that's the theory. See graphic.
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Back to the Bakken
Active rig list: Nabors B 05 (B5) still not showing up on active rig list.
Active rigs:
| $76.07 | 1/3/2022 | 01/03/2021 | 01/03/2020 | 01/03/2019 | 01/03/2018 |
|---|---|---|---|---|---|
| Active Rigs | 32 | 13 | 55 | 65 | 53 |
Three new permits, #38728 - #38730, inclusive:
- Operator: Kraken
- Field: Oliver (Williams)
- Comments: Kraken has permits for two Raymond wells and one Fairbanks well, all three on SESE 8-157-98; to be sited 340 FSL and between 325 FEL.
Three producing wells (DUCs) reported as completed (typo on the daily activity report -- Wallace, not Walace):
- 37360, 1,272, Kraken, Wallace 6-7 3H, Oliver, no production data,
- 37361, 1,611, Kraken, Wallace 6-7 4H, Oliver, no production data,
- 37362, 1,600, Kraken, Wallace 6-7 1H, Lone Tree Lake, no production data,
The Ten-Year Treasury Breaks Through 1.6%; The Market Surges! What Happened? January 3, 2022
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.
Last summer, talking heads over at CNBC were talking the market down, worried about the ten-year Treasury heading higher, the first stop, 1.6% and then the second stop: 2.0%.
All of a sudden, the ten-year Treasury hits 1.6% (and trending higher) and CNBC talking heads are even suggesting we will see 2% before summer and yet the market surges.
So, what happened? What changed?
The narrative changed (see third major data point below), but more importantly, a lot of other stuff also changed. Even Steve Liesman sounded bullish this morning.
The Fed:
- at worse, the Fed raises the rate three times this year, but rates will still be very, very low
- tea leaves right now suggest that the Fed will raise rates only once this year
- regardless of how many times the Fed raises rates, Jay Powell will be watching risk of recession and the midterm elections very, very closely
My favorite chart
- link here;
- lots and lots and lots of money on the sideline;
The narrative has changed:
- this is the new narrative on CNBC: inflation can only be beat by investing in US equities
Covid-19, newest variant:
- cases are already peaking in some countries, specifically South Africa where it was first detected
- if so, this surge is just like previous surges; lasts about ten days to hit peak and then begins to recede
- regardless: severity of this variant is similar to a "cold"; hospitalizations are not rising
- there is every indication this is the beginning of the end of Covid-19 (by the way, if it is, President Biden can take this into the mid-terms arguing he ended Covid-19 as he promised)
Tesla:
- blew out analysts' forecast; risk-on investing back in vogue
AAPL:
- broke through resistance to hit $3 trillion market cap
Waiting for "guidance":
- investors were waiting to see which way the market would head on first day of trading in new year
- with risk-on trading back in vogue, new highs were set in early afternoon trading
WTI:
- up again, and every indication producers will watch this closely;
- up 1.5%; trading at $76.35
Weather:
- although the South is finally getting a bit of winter, all indications are this is going to be a mild, mild winter in the US;
Supply chain issues:
- we're easily through the worse; holidays are over, and "we" have six months to prepare for summer
Mid-term elections:
- incumbents won't want to upset the apple (no pun intended) cart
- Nancy Pelosi just put millions in to Disney, Roblox, and Alphabet (GOOG)
Temporary:
- a lot of folks sold at the end of the year (2021) to take losses for tax purposes;
- now, first day of trading in the New Year and folks are putting that cash to work
Short term:
- now that we see which way the market is headed temporarily, that opens up short term, and short term: FOMO
FDA Significantly Increases Pfizer Vaccine Emergency Use Authorization -- January 3, 2022
- Expand the use of a single booster dose to include use in individuals 12 through 15 years of age.
- Shorten the time between the completion of primary vaccination of the Pfizer-BioNTech COVID-19 Vaccine and a booster dose to at least five months.
- Allow for a third primary series dose for certain immunocompromised children 5 through 11 years of age.
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The Bat Cave
Weather folks said it was going to be freezing this week. Well, perhaps not so much.
We're in the "bat cave" today and it's almost perfect.
These Chairs Aren't Going To Sell Themselves -- Doomberg -- January 3, 2022
I was looking for a source of good writing. Airmail tempted me after one article, maybe a year ago, but then disappointed me and I no longer subscribe or follow.
Doomberg looks like a winner.
Note to readers: Doomberg will be linked at the sidebar at the right. Another change for the blog for 2022.
Bitcoin: To Save Fossil Fuels -- January 3, 2022
From the DigiEconomist, in 2021:
- Bitcoin:
- consumed 134 TWh, comparable to electrical energy consumed by Argentina;
- related CO2 emissions: 64 metric tons, = to entire global net savings from deploying EVs
But there's good news: Tesla smashed expectations; delivered way more EVs in 4Q21 than analysts forecast.
Natural gas, link here:
- Goldman Sachs: there is a risk "we" will run out of natural gas.
- BofA: the market will be oversupplied in 2022
- for the record: I'm "with" BofA on this one
The Pelosi portfolio:
- Disney: surges; up 1.6% in early morning trading
- Roblox: slumps, down 2.4%
- Alphabet (GOOG): up slightly up 0.2%)
First group "financial / economic" indicators:
- 10-Year Treasury: link here.1.604%, up 160 basis points.
- DXY: link here. Up a bit, at 96.29. Up 32 basis points.
- Silver: link here. Down. Interesting. Surprised me. Trading down almost 50 cents/ounce; trading at $22.91.
- CBOE volatility index: link here. Up a bit at 17.37.
AAPL: won't hit $3 trillion today. Later: I was very, very wrong. See below.
- up $3.30 / share; up 1.86% in early trading
- trading at $180.89
- market cap at $2.966 trillion
- the AAPL ads over the weekend were incredibly compelling
- caught the attention of Jim Cramer
- the Dick Tracy 🍏 watch
- MSFT: market cap at $2.488 trillion; shares down a bit today
- on a day, AAPL surges, MSFT falls back in an actively traded market;
Later: Apple, first company to hit a market cap of $3 trillion.
Clearing Out The In-Box -- January 3, 2022
Tesla smashed expectations; delivered way more EVs in 4Q21 than analysts forecast. Link here.
- record delivery for any quarter: 308,600 cars
- TSLA surges; company joins the exclusive $1 trillion market valuation club
- for the year: almost a million deliveries; actual: 936,000;
- analysts' forecast: 263,000 vs actual of 308,600 -- truly amazing -- and everyone was complaining about semiconductor chip supply chain issues
- this supports my view that supply chain issues had a lot to do with piss poor planning, not necessarily a supply chain shortage (don't take that out of context)
- TSLA: recently under $1,000 when Elon Musk started selling shares to pay outrageous federal and California state taxes; now, new price target of $1,400
Investing: the S&P 500 beat both the Dow and the NASDQ in 2021 by the widest margin in 24 years. Link here.
Chicago: announces vaccine. Goal: prevent new lockdowns.
Israel: offers fourth dose in less than a year. Previously, the fourth dose only for immuno-compromised; now available for everyone.
North Texas: it's cold down here. LOL. While cooking Cornish hen and lamb last night, I had to turn on the air conditioner to make the apartment a bit more comfortable for guests. Wow. What a great state. LOL.
Note to readers: the link to Victor Davis Hanson at
the sidebar at the right will be removed and replaced with Bjorn
Lomborg. This is the first change of many for the blog for 2022.
2022 Theme: Spare Capacity -- January 3, 2022
First up: Kuwait is fully out of spare capacity and seeing terminal decline issues that compete with Sauid, Mexico, etc...link here.
WTI At $75. EOG Breakeven At $30; Covers Dividend At $36 -- January 3, 2022
Stockpicker's market: wow!
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Back to the Bakken
Active rigs:
| $75.27 | 1/3/2022 | 01/03/2021 | 01/03/2020 | 01/03/2019 | 01/03/2018 |
|---|---|---|---|---|---|
| Active Rigs | 30 | 13 | 55 | 65 | 53 |
Monday, January 3, 2022: :1 for the month, 1 for the quarter, 1 for the year;
Sunday, January 2, 2022:1 for the month, 1 for the quarter, 1 for the year;
- 36999, conf, CLR, LCU Reckitt Federal 8-27H, Long Creek, no production
RBN Energy: top ten RBN Energy prognostications for 2022 -- Year of the Tiger.