Consolidation Talk -- January 24, 2022

From the blog, January 13, 2022:

There are three reasons given for rig counts not increasing:

• operators showing restraint; focused on free cash flow, not growth;
• supply chain shortages impacting oil industry;
• labor shortage.

• Consolidation: so, if operators want to grow, how do they do it? Simply buying land / mineral rights won't be enough. They need to acquire entire companies: drilling assets and human resources. 

From COP's CEO, link to Julianne Geiger:

• COP's CEO sees more consolidation.
• ConocoPhillips itself snagged some assets from Shell and Concho Resources last year in two deals worth nearly $20 billion. The deal catapulted Conoco into America's second most prolific Permian producer.
  

Halliburton Nearly Triples Quarterly Dividend -- January 24, 2022

Halliburton raises dividend from 4.5 cents / share to 12 cents / share. Link here.

• Reported net income of $0.92 per diluted share

• Adjusted net income of $0.36 per diluted share

• Cash flow from operating activities of $682 million and free cash flow of $478 million

• First quarter dividend of $0.12 per share

HAL's dividend history.

Comstock -- 4Q21 And Full Year 2021

From social media:

 
The press release:

Comstock Resources, Inc. announced today that its proved oil and natural gas reserves as of December 31, 2021 were estimated at 6.1 trillion cubic feet equivalent as compared to total proved oil and gas reserves of 5.6 Tcfe as of December 31, 2020. 

The 6.1 Tcfe of proved reserves at December 31, 2021 were 37% developed and 98% were operated by Comstock. 

The present value, using a 10% discount rate, of the future net cash flows before income taxes of the proved reserves, was approximately $6.8 billion, using the Company's average first of month 2021 prices of $3.33 per Mcf of natural gas and $62.38 per barrel of oil. 

Total reserve additions replaced 199% of the Company's 2021 production with drilling activities providing 161% of the reserve replacement in 2021. 

The Company spent $628.2 million on drilling and other development activities in 2021 to drill 100 (54.1 net) new horizontal Haynesville and Bossier shale wells and to put 95 (56.4 net) wells on production during 2021. Comstock also spent $21.8 million to acquire proved oil and gas properties and $35.9 million to acquire unproved oil and natural gas leases in 2021. 

Based on the 2021 proved reserve additions, Comstock's "all-in" finding costs were approximately 60¢ per Mcfe. Excluding acquisitions, Comstock's drill bit finding costs were 71¢ per Mcfe in 2021.

 Flashback, one year ago: hitting the jackpot, Jerry Jones.

An Old Hess Well In Banks Oil Field Shows Small Jump In Production -- January 24, 2022

Note: I did this relatively quickly and there may be more content / typographical errors than usual. 

The Bakken never ceases to amaze me. 

I was updating the Hess "SC-4WX-153-98-3130" in Banks oil field when I noticed some subtle changes in the production profiles over the past few months. 

Going to the map, I was unable to find any explanation for the change in production profiles, specifically no new wells and no new completions, at least that was easily noticeable. 

But I was curious. If one finds small production changes in new wells, one might find significant changes in older wells. 

Fortunately, there was an old well in the area of interest.

The well:

• 20222, 873, Hess, 3WX 3-1H, Banks, t9/12; cum 303K 11/21;

Full production is posted here. 

Here is the months of interest:

BAKKEN	1-2021	31	4875	4742	4620	8582	7610	662
BAKKEN	12-2020	31	3945	4137	3301	6818	5885	623
BAKKEN	11-2020	20	2960	2820	2267	4404	4098	113
BAKKEN	10-2020	28	4012	4174	3403	6637	6290	75
BAKKEN	9-2020	29	5619	5353	5228	8930	5051	3589
BAKKEN	8-2020	0	0	0	0	0	0	0
BAKKEN	7-2020	0	0	0	0	0	0	0
BAKKEN	6-2020	0	0	0	0	0	0	0
BAKKEN	5-2020	0	0	0	0	0	0	0
BAKKEN	4-2020	0	0	0	0	0	0	0
BAKKEN	3-2020	4	53	195	26	41	0	35
BAKKEN	2-2020	11	136	236	152	154	71	48
BAKKEN	1-2020	6	877	709	101	1242	1189	1
BAKKEN	12-2019	1	0	0	0	0	0	0
BAKKEN	11-2019	6	205	485	44	229	138	84
BAKKEN	10-2019	11	886	1173	699	1218	0	1116
BAKKEN	9-2019	11	1220	891	331	1604	0	1513
BAKKEN	8-2019	5	68	0	0	49	0	40
BAKKEN	7-2019	4	92	0	0	55	0	52
BAKKEN	6-2019	2	71	0	0	262	0	41
BAKKEN	5-2019	31	71	396	46	382	16	68
BAKKEN	4-2019	25	812	795	572	332	66	27
BAKKEN	3-2019	15	2699	2411	1901	250	98	2
BAKKEN	2-2019	2	90	466	1	10	0	0
BAKKEN	1-2019	27	3942	3787	3008	5138	4404	486
BAKKEN	12-2018	9	2501	2343	1781	3091	2604	397
BAKKEN	11-2018	0	0	0	0	0	0	0
BAKKEN	10-2018	0	0	0	0	0	0	0
BAKKEN	9-2018	3	49	221	38	132	103	4
BAKKEN	8-2018	31	1255	1381	529	3005	1673	1023
BAKKEN	7-2018	31	1206	1160	263	2734	2034	403
BAKKEN	6-2018	30	1126	1112	501	3075	2361	435
BAKKEN	5-2018	31	1376	1380	581	4410	3630	484

This well was producing about 1300 bbls/month back in mid-2018. Then it's very noticeable, the volatility in production, but finally in September, 2020, we saw the jump in production, and the well was back to steady performance. 

No obvious explanation from the map. Time to check the file report: nothing. I have no idea. Either a work-over on this well, or some work on one of the neighboring wells.

There was a lot of activity in the neighboring wells (fracking) back in 2020 but that wouldn't explain the jump in production in this well in 2019.

Maybe a reader knows. 

But the bottom line for me is that mom-and-pop mineral owners never know what surprises might show up in their next month's royalty checks. 

Twenty years from now they're going to say "we under-estimated the Bakken." LOL.

No New Permits; Thirty-One Active Rigs -- January 24, 2022

Active rigs:

$83.31	1/24/2022	01/24/2021	01/24/2020	01/24/2019	01/24/2018
Active Rigs	31	12	56	64	56

No new permits.

The XTO Nelson Federal wells have been updated; they are tracked here.

The Grayson Mill (Equinor) Marcia Wells In Last Chance Oil Field, Williams County

One Marcia well shares a CLR Gordon Federal pad to the west. In addition the Marcia wells are sited in the same section, but to the west of the Grayson Mill Jake wells.

The wells:

• 36783, SI/A, Grayson Mill, Marcia 3-10 7H, Last Chance, first production, t--; cum --;  
• 36038, SI/A, Grayson Mill, Marcia 3-10F XW 1H, Last Chance, first production, 11/21; t--; cum 5K over two days;  
• 36088, PNC, Grayson Mill, Marcia 3-10 8TFH, Last Chance, 
• 36087, PNC, Grayson Mill, Marcia 3-10 7HPNC, Last Chance, 
• 36036, SI/A, Grayson Mill, Marcia 3-10 6H, Last Chance, first production, 11/21; t--; cum --;  
• 36037, SI/A, Grayson Mill, Marcia 3-10 5H, Last Chance, first production, 11/21; t--; cum --;

• 22632, AB/2,400, Grayson Mill, Marcia 3-10 4THF, Last Chance, t2/13; cum 224K 5/19;
• 22631, AB/3,201, Grayson Mill, Marcia 3-10 3H, Last Chance, t2/13; cum 266K 5/19;
• 22453, IA/2,622, Grayson Mill, Marcia 3-10 2THF, Last Chance, t8/12; cum 265K 9/21;
• 22454, 3,634, Grayson Mill, Marcia 3-10 1H, Last Chance, t8/2; cum 312K 11/21; came back online, 11/21; 4K over 13 days;

The Grayon Mill (Equinor) Jake Wells In Last Chance Oil Field, Williams County

It looks like we have:

• parent wells, those completed in 2011
• daughter wells, those completed in 2013;
• granddaughter wells, those completed in 2021;

The wells:

• 23558, AB/2,320, Grayson Mill, Jake 2-11 2TFH, Last Chance, t7/13; cum 219K 1/19; off line 1/19; remains offline 11/21;
• 23557, AB/3,606, Grayson Mill, Jake 2-11 2H, Last Chance, t7/13; cum 248K 1/19; off line 1/19; remains offline 11/21;
• 36692, SI/A, Grayson Mill, Jake 2-11F 7H, Last Chance, first production, 11/21; t--; cum 29K 11/21;
• 36219, SI/A, Grayson Mill, Jake 2-11F 8H, Last Chance, first production, 11/21; t--; cum 22K 11/21;
• 36218, SI/A, Grayson Mill, Jake 2-11F XW 1H, Last Chance, first production, 11/21; t--; cum 22K 11/21;

• 24007, 3,315, Grayson Mill, Jake 2-11 6H, Last Chance, t11/13; cum 251K 11/21; off line 10/20; back on line 11/21;
• 24008, IA/2,430, Grayson Mill, Jake 2-11 5TFH, Last Chance, t11/13; cum 183K 11/21; off line 7/21; remains off line 11/21;
• 23547, AB/2,541, Grayson Mill, Jake 2-11 4H, Last Chance, t11/13; cum 224K 11/21; off line 5/21; remains off line 11/21;
• 23546, IA/2,338, Grayson Mill, Jake 2-11 3TFH, Last Chance, t11/13; cum 241K 11/21; off line 11/20; remains off line 11/21;

Production:

• 36218: 22K over 12 days extrapolates to 55K over 30 days --
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2021	12	22140	21807	15761	23530	20425	3105

• 36219: 22K over 23 days extrapolates to 28K over 30 days --

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2021	23	21560	21398	49611	23217	22156	106

• 36692: 22K over 19 days extrapolates to 45K over 30 days --

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2021	19	28637	28422	48400	34266	32653	1613

Meanwhile, In Apple News -- January 24, 2022

Design decisions: Apple's most questionable design decisions in recent memory -- MacRumors. #1 on the list -- the Magic Mouse 2. Because the charging port is on the underside of the mouse, one cannot charge the mouse and use it at the same time. Speaks volumes about folks critiquing Apple. Nine out of ten folks replying to this "design complaint" were not concerned; this was one design "flaw" that seemed to bother no one. However, anyone who thinks Apple did not have a specific reason for doing this does not understand Apple. It turns out this was a brilliant "design flaw":

From social media:

The Magic Mouse is an example of something that looks like poor design, but honestly isn't.

1. You can't use it while charging, which is by design. That should be obvious.
2. It's supposed to be a wireless mouse, and leaving it plugged in all the time is what most people would do. So ergonomically, forcing people to unplug it to use it is the intended use case.
3. Leaving the mouse plugged in all the time would also have implications for the battery; constant charging would be bad for it. Letting it drain while plugged in would be confusing.

Should Apple have made a charging dock or something similar? Probably. But making it impossible to use while charging is exactly what was intended, and it was executed quite well. And I've never met anyone who has one that cared one lick about it.

Demand exceeds supply: this is nothing new for Apple. Demand exceeds supply. LOL. That's a headline. Whatever. Three months after launch, Apple is still struggling to meet demand for their new 14-inch and 16-inch MacBook Pro. Source: Macrumors. These laptops are targeted for "pros" and start at $1,299 and $1,999 -- yes, you read that correctly, starts at $1,999 -- and demand exceeds supply.

Three months after their launch, the 14-inch and 16-inch MacBook Pros continue to experience high demand and seemingly short supply, with shipping dates for both models stretching into multiple weeks in several of Apple's key markets.

In the United States, the baseline 14-inch MacBook Pro with the M1 Pro chip is estimated to ship in three to four weeks, promising an arrival by at least mid-February. The 14-inch MacBook Pro with the higher-end ‌M1 Pro‌ configuration or the M1 Max chip faces an even longer wait, heading well into at least early March.

With the larger 16-inch model, the baseline configuration is seeing five to six weeks for estimated delivery, with higher configurations seeing shipping dates estimated to be in late February or early March. In the United Kingdom and Canada, the highest-end 16-inch MacBook Pro shows shipping dates of between five and eight weeks on Apple's online store at the time of writing. 

Count me naive, but I can't get too excited about having to wait a few weeks for an incredible laptop. 

Although, personally, the iMac Pro is way more than I need. The MacBook Air is still the best bang for the buck. 

Gasoline Demand: Number One Data Point That Correlates With Health Of US Economy -- January 24, 2022

Updates

Later, 5:17 p.m. CT:

Later, 4:59 p.m. CT: ISO NE — renewables providing five percent and wind is supplying two percent of that, or 0.1 percent of total generated electricity. I’ve never seen it that low. It’s difficult to get less than 0.1 percent of anything.

Later, 11:29 a.m. CT: Legacy Fund deposits posted for January, 2022. Increased month / month.

Later, 9:35 p.m. CT: for all the excitement about $100-oil, WTI is certainly struggling. WTI plummets in early morning trading, down 2.54%; down $2.16; and now trading at $82.98. As bad as it is, even worse when one considers war may break out in Europe; shouldn't that push oil higher? A Ukraine invasion could result in $100-oil -- Bloomberg. This suggests traders are finally looking at demand destruction / gasoline demand in the US as it collapses. Blamed on strong dollar.

Opening Comments

Connecticut: drops vaccine mandate for state employees. Says it reached its goal. I believe Buffalo Bills reached its goal also; record setting number of touchdowns in playoff game.

Jim Cramer: will be fascinating to watch this week. 

Sports talk television: will be fascinating to hear them talk about Mahomes and the Kansas City Chiefs; one for the ages. How 'bout them Cowboys?

• three of four top ranked teams fell over the weekend
• none of the four, except Kansas City Chiefs, were Super-Bowl-worthy
• should be easy road for Chiefs, but ...

Investors:

• AAP: down -- pre-market; just dropped below $160; might we see $155 before the week is over?
  
• NFLX: down -- down another $14; trading around $350
  
• ARKK: down - trading below $70
  
• RIVN: down - pre-market -- on opening could trade below $60
  
• BITC: down - pre-market -- down 5%; could it drop below $30,000 this week?
  
• TSLA: down - wow, wow, wow -- pre-market, just went below $900;
  
• AMD: down - 
• INTC: down -
  
• DWAC: down - 
• DIS: down - 
• MRNA: down - 
• TOST: is toast;
  

Peleton: why was it not in the list above? Peloton is in a league of its own.

Pelosi's portfolio: Roblox, Disney, and GOOG. 

Speaking of which: wow, wow, wow -- if one wants to jump in now, F will likely open below $20. I wasn't planning to do anything investing (not trading, I invest) today, but F at $19 and change seems to be a no-brainer. Thank goodness for CNBC crawlers; I would have completely missed that one. F now indicating a yield of almost 2%.

• Maybe another one to look at would be DE although compared to the rest of the market, DE seems to be holding up very well.
  

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.  

Pre-market: with the market looking to be in free fall, tell me again that Jay Powell will still talk about raising rates four times this year.

Revenue stream: wow, wow, wow, those with a revenue stream -- what a great time to be looking at investing opportunities. They don't come around often.  

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. 

Gasoline, demand destruction: GasBuddy --

• weekly (Sunday - Saturday) gasoline demand:
• fell 6.4% last week;
• lowest weekly number since March 7, 2021 -- almost one year ago
• confirms EIA data; crickets

Flashback, Condoleeza Rice, on German TV in 2014: wrong on both --

• "Russia will run out of cash long before Europe runs out of energy" -- Condoleeza Rice
  
• holy mackerel: how wrong could one be? I might have thought the same regarding Russian cash, but no way did I think Europe would be just fine with energy. Wow. 
• back in 2013, it was being predicted that Europe would be the first continent to be a net importer of energy (excepting Antarctica, of course); posted on the blog at that time.
  

Still waiting: Legacy Fund deposits for January, 2022, should be reported today.

Four Wells Coming Off Confidential List -- January 24, 2022

ND taxable sales and purchases: 3Q21 up 12% year / year.

Winter storm Jasper. Link here.

ISO NE, link here:

• moderate demand:
• electricity price surging; 8th decile; over $200/MWh
• burning lots of oil to keep the lights on
• oil: 18% which is greater than the nuclear share, at 16%
• renewable now to record lows at 6% and wind only 25% of that
• wind's contribution this morning: 1.5%

5G: rollout. Are the planes flying today? Asking for a friend.

Ukraine: has the US sent troops yet? Asking for that same friend.

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

Active rigs:

$85.12	1/24/2022	01/24/2021	01/24/2020	01/24/2019	01/24/2018
Active Rigs	28	12	56	64	56

Tuesday, January 25, 2022: 39 for the month, 39 for the quarter, 39 for the year

• None.

Monday, January 24, 2022: 39 for the month, 39 for the quarter, 39 for the year

• 37861, conf, CLR, Clear Creek Federal 11-35H, Westberg, no production data,

Sunday, January 23, 2022: 38 for the month, 38 for the quarter, 38 for the year

• 37863, conf, CLR, Clear Creek Federal 13-35H, Westberg, no production data,
  

Saturday, January 22, 2022: 37 for the month, 37 for the quarter, 37 for the year

• 38349, conf, Hunt, Blue Ridge 159-100-6-7H 5, Green Lake, some production;
• 37864, conf, CLR, Clear Creek Federal 14-35SL2, Westberg, no production data,

RBN Energy: celebrating a decade of RBN energy blogs.

Here’s an idea. Let’s start up a new company that does energy market fundamentals linked to rock & roll songs. Do it with practical, commercial insights. Keep the quality top notch. Then give it away for free!  Sound crazy? Maybe so. But that’s how RBN Energy got started 10 years ago, and it’s worked out pretty well. Now, 2,540 blogs later and with 35,000 members receiving our morning email each day, it seems like we ought to celebrate in RBN style by telling a couple of backstories that shed light on our approach to energy markets, delving into the whole rock & roll thing, and of course divulging a few deep RBN secrets never before revealed. Until now, that is. And there’s more! You might end up receiving a free RBN 10th Anniversary Commemorative Mug. Warning: Today’s blog is a trip down memory lane for hard-core RBNers.