Best Three Sites To Follow The "Cyclone Bomb," Winter Storm Kenan — January 28, 2022

The winds: one can pick any point on the globe, to get wind speed, direction and exact GPS coordinates. 

https://earth.nullschool.net/#current/wind/surface/level/orthographic=-71.09,30.29,2600/loc=-70.727,42.505.

ISO NE, of course: https://www.iso-ne.com/isoexpress/web/charts.

• at the linked site, find “fuel mix”;
• click on “renewables”
• note wind component
• % renewable  times % wind = % wind component

Flight radar here: https://www.flightradar24.com/36.22,-75.43/6. At the time I am updating this, there is one plane "stranded" at Logan Airport (Boston).

************************
UPDATE: ISO NE

Fuel mix:

• electricity demand: not very much, about 17,000 MW
• natural gas: from personal experience, this looks like a record low contribution, at less than 40%; running out of NG again, today?
• oil: for #2 among sources; providing 22% supply; tied with nuclear which is maxed out (nuclear is maxed out).
• hydro: at only 5% suggests incredibly expensive or other contract limitations
• renewables: holding up surprisingly well; blizzard not affecting wind?
• coal: insignificant; trending toward zero; did they use coal stockpiles; roads closed; no more coal deliveries? 

A reader who follows this much more closely than I do might be able to explain coal at zero percent when price of electricity is now at record highs; in the 8th decile. For newbies, based on the "screwiness" of the "deciles, we will "never" see prices in the 9th or 10th decile. In other words, electricity is now in the max decile in New England -- it can still go much higher, but it won't exceed the 8th decile .

Week 4: January 23, 2022 -- January 29, 2022

Top story of the week:

• Joe Biden is still president. The Biden boom.

Top international non-energy story of the week:

• Russia-Ukraine spat escalates; Putin separates US from Germany; crack in NATO;
• Trudeau goes into hiding;

Top international energy story of the week:

• EU / UK energy crisis worsens
• Across the board, countries are reneging on COP26 agreements; Japan; Denmark, Sweden, UK:
• WT
  

Top national non-energy story of the week:

• New England cyclone-bomb; Winter Storm Kenan, and, here; NE ISO on the brink of disaster.
• Earnings: AAPL blows away estimates; PSX; CVX surprises "everyone"; misses estimates; and, here;
• The Fed spooks the market;
• China okays AMD - XLNX merger;
  

Top national energy story of the week:

• US federal judge vacates federal government's largest GoM lease; and, here;
  
• Maverick acquires some of COP's Permian Basin assets;
• Natural gas spikes; one-day spike; largest jump ever in one day;
• Gasoline demand in free fall; no one talking about it.
• Geoff Simon's quick connects.
  

Top North Dakota non-energy story of the week:

• Longest-serving attorney general dies suddenly and unexpectedly; not Covid-related; huge friend of oil sector; guided the players through the Bakken revolution;
• Williston: to be site of world's largest data center;
  

Top North Dakota energy story of the week:

• Project Tundra, update;
• Legacy Fund deposits continue to grow;

Operators:

• Hess: 2022 CAPEX; update for 2022;
• Hess continues to report great wells;
• CLR building a position in the Powder River Basin; and, here;
• Hess reports four nice BB-State wells in Blue Buttes;
  

Operations:

• MRO with another monster well;
• Seven completed MRO monster DUCs;
• Carbon capture and storage permits;
• Monster wells reported by MRO;
• CLR has completed its eleven-well Gordon Federal pad; winter fur pad;
• Enerplus very active: in the FB Leviathan; winter fur pad;

Wells:

• The incredible CLR Mountain Gap wells updated;
  

Fracking:

Halo effect:

• An old well with 54x jump in production;

Pipelines:

Bakken economy:

Commentary:

• How the Bakken shale revolution saved Europe;
• Everyone talks about $100-oil;

Clearing Out The In-Box -- Friday Night -- January 28, 2022

ISO NE: might as well start here. It's gonna be a rough weekend. Right now:

Note the nuclear flat line until later this afternoon. See max nuclear below.  

From an earlier post:

For the record (from a reader who has better data points than I do on this issue),  max capacity, all numbers rounded and rounded slightly higher. I have no idea how accurate these are but they will provide me a baseline from which to start:

• fuel mix
  
• coal: 400 MW
• hydro: 1,000 MW (today's max: 750 MW)
• oil: 2,600 MW
• nuclear: 3,350 MW
• renewables: 2,000 MW
• natural gas, so far today: 4,200 MW

**********************************
In Other News

Natural gas:

• Southern Energy Corp will spud three Selma Chalk horizontal wells in the Gwinville field targeting natural gas
• Mississippi Interior Salt Basin: MISB is the most productive basin in the north-eastern Gulf Coast Region
• the basin has produced more than 1.5 billion bbls of oil and approximately 6.5 trillion cubic feet of gas;

Canada and the pipeline: link here -- 

• Alberta's Premier J Kenny is in DC
• says oil "supply is not a problem"
• the limitation is on shipment capacity through pipelines
• the "veto of Keystone" is the big impediment for Alberta

Phillips 66: open to M&A in retail, midstream. Link here. Investors take note.

S/P the Chevron debacle:

• Chevron to boost Permian output by 10 percent; link here;
• will double its spending on the top shale play:
• The second-largest US producer has earmarked about $3bn in spending on its Permian operations. It anticipates just over 200 wells being put on production in 2022, which would represent a 50pc increase over last year.
• "That is a meaningful step-up in activity," chief executive Mike Wirth said today after Chevron posted fourth quarter earnings. 

Permian, link here to Rystad Energy:

• Permian new well productivity set to breach 1,000 boepd in 2022 on record lateral footage;

S/P the Chevron debacle, link here:

• commenting on federal judge canceling GoM leases: "disappointed." Link here. 

SPR release: link here --

• trading houses set to capitalize on the release;

Pemex: link to Reuters --

• output rises 3% for the entire year, 2021; misses target;

Coal: link to Bloomberg paywall --

• far from dying, the coal sector is actually booming;

Apple earnings: link here --

• Apple did about $1.4 billion in revenues every day during 1Q22:
• reported 1Q22 net income: $34.6 billion
• the net income exceeds the market caps of HAL and BKR ($28 billion)
• AAPL's 88 cents / share dividend ($14 billion) is 2x bigger than EQT -- the largest gas producer in the US.

Whiting With Three New Sanish Permits; Six Permits Renewed -- January 28, 2022

Active rigs:

$86.82	1/28/2022	01/28/2021	01/28/2020	01/28/2019	01/28/2018
Active Rigs	30	13	53	65	57

Three new permits, #38762 - #38764, inclusive:

• Operator: Whiting
• Field: Sanish (Mountrail)
• Comments: Whiting has permits for three Locken / Locken Federal permits in Sanish oil field, 
• to be sited in SWNW 11-153-91;
• the wells will be sited between 2115 FNL and  2171 FNL and between 843 FWL and  864 FWL; 

Six permits renewed:

• Liberty Resources (4): one Albertson permit, one Thronson E permit; one Orris permit; and, one Dolores permit, the former two in Mountrail County; the latter two in Burke County;
• Enerplus (2): a Fin permit and a Right permit both in Dunn County

So Much For Global Warming; UN's COP26: And Greta -- January 28, 2022

Japan's coal imports soar amid surging natural gas prices. Link to Charles Kennedy. 

Japan is set to import the highest quantity of coal in January in just over two years, as utilities scramble to get supplies for power generation amid high spot liquefied natural gas prices.

A cold and snowy winter in Japan has raised the electricity demand, and domestic utilities are looking to buy more coal for power generation.

Japan is expected to import over 17.3 million tons of coal in January, according to Edwin Toh, a dry bulk manager at Kpler.

The volume would be Japan’s highest level of coal imports in one month since December 2019 and around 5 percent over the five-year seasonal average.

PSX Beats 4Q21 Earnings Estimate -- Shares Drop Almost Four Percent -- January 28, 2022

Maybe this is why, link here: 

• Phillips 66 says the cost to maintain / repair its refineries in 2022 will be $800 - $900 million. An anlyst noted this is the highest in the history of the company.

Link here.

Huge beat:

• EPS: $2.94 vs $1.93 estimate
• compares to a loss of $1.15 / share a year ago;
• earnings surprise of 52%
• revenues: $33.57 estimate vs 22.47 billion estimate

Fuel demand rebound powers Phillips 66 profit beat or go direct to Reuters here. 

*******************************
Tight Gasoline Supply Going Forward

Link to Tom Kool.

*****************************
$100 Oil?

From the Chevron CEO, link here.

My Hunch: Dr Fauci Not Involved In This -- January 28, 2022

Link here. 

I find this absolutely amazing. 

A most terrible parasite. Infected 3.6 million people as recently as 1986. 

Number of infected individuals last year: 14. 

Wow.

I'm glad Dr Fauci / the Chinese were not involved with this eradication program.

Czech Kolaches In Texas -- January 28, 2022

We've stopped here many times -- the half-way stop from north Texas to Austin, TX, or thereabouts, south on I-35. Link here.

From The Fed's Cash 'n Carry -- Inflation Is Transitory -- January 28, 2022

Link here.

$40K For Flowing BOEPD In The Permian -- January 28, 2022

Posted earlier: 

COP: Maverick to buy some COP Permian Basin assets. Link here.

• $440 million
• 144,500 net acres
• back-of-the-envelope: $3,000 / acre
• remember when Permian was selling for $30,000 / arcr
• at $3,000 / acre priced in same neighborhood as the better Bakken

Update, January 28, 2022, link here:

Conoco's Central Basin Platform, marketed sometime during the first half of 2021, is sold. EIG-backed Maverick Nat is paying $440 million for over 11,000 boepd, 144,500 net acres. Interesting to see a whole syndicate of banks providing RBL to fund the deal.  

Back of the envelope, as above, but now we have this new metric:

• $440 million / 11,000 boepd: $40,000 per flowing boepd -- on the very high side; great deal for COP; perhaps not so much for Maverick Nat?

Bureau Of Ocean Energy Management -- Thank You -- January 28, 2022

 

Old news by now; US federal judge annulled the government's massive GoM lease sale last November, 2021, on ground that the BOEM "broke environmental law." The was the biggest oil and gas lease ever in the Gulf of Mexico. 

Companies will be reimbursed. 

Analysis:

• analysts talk about need for oil companies to show restraint; not drill so much; focus on free cash flow and return cash to investors;
• nothing like vacating the biggest oil and gas lease ever to force these Big Oil companies to show restraint and quit drilling;
• they will have to increase activity in onshore shale to make up shortfall. Whoo-hoo.
  

Today: 

• WTI: surges 2.30% at already high prices
• up $2.00
• now trading solidly above $88.
• at this rate, up $2.00 / day, WTI will over $100 in six days (tongue in cheek; don't take seriously) 

**********************************
Hydrogen As A Transportation Fuel

Cliff's notes:

• hydrogen comes from electrolysis of water
• apply electricity to H2O to get hydrogen and oxygen
• that really, really, really takes a lot of electricity and is really, really, really expensive
• to make electrolysis even remotely competitive with conventional fuel sources, need inexpensive power source
• the most inexpensive power source, the dirtiest of the dirty: lignite
• [imagine the loss of energy going from lignite to electrolysis]
• definitions:
• brown hydrogen: "made" from coal, currently, generally lignite;
• blue hydrogen: "made" from natural gas
• green hydrogen: "made" from high-cost, high-energy wind towers and solar panels, energy

niche:

• hydrogen will have huge niche, particularly in forklifts in warehouses; clean; minimal maintenance;
• but almost all that hydrogen will come from fossil fuel for the next twenty years

Link here to Australian story about using lignite to make hydrogen.

Jim Cramer -- Love Him Or Hate Him -- January 28, 2022

Love him or hate him, if you are an investor, you are doing yourself a disservice if you don't subscribe to his newsletter 

There's a bit of "bait and switch" here.

Cramer has been advertising his daily newsletter for quite some time. It's free.

Recently he announced that he will remove access to some of his sites unless one pays for the "premium service" that will cost about $250 / year. I forget what the exact price was. I won't be buying the "premium service." 

Sort of like NDIC. I subscribe to the "basic service" at $50 / year but won't subscribe to the "premium service." Just too much data; way more than I need; and I would be overwhelmed. Same with Jim Cramer's "premium service," it appears. But the daily newsletter provides insights I would have otherwise missed. 

Most recently: his observation regarding Apple / margins / Services. Huge insight. I would have missed it. I think a lot of analysts missed it.  

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.

For The Archives -- What We Are Leaving Our Grandchildren -- January 28, 2022

"Net-zero" by 2050 needs $9.2 trillion annually. 

Not $9.2 trillion over thirty years, but $9.2 trillion every year between then and now. 

Link to Tsvetana Paraskova.

The transition required for the world to reach net-zero emissions by 2050 would need spending of $275 trillion between 2021 and 2050, or $9.2 trillion in annual average spending on physical assets, McKinsey & Company said in its new report. 

Two comments:

• I'm sure they misplaced the decimal points; and,
• McKinsey & Company apparently released this without laughing.

ISO NE (Or As Some Call It, Project Tundra II) -- January 28, 2022

ISO NE: link here.

• again, prices in the 8th decile;
• demand only at 16549 MW and yet prices very, very high;
• burning oil: at 17%
• nuclear: 19%
• renewables: 7% and wind only 24% of that small portion
• hydro at 9%

Now being reported: FLORIDA RECORD COLD

• Arctic air blasting across the country
• except here in Texas: beautiful weather
  

Economic data today: changes in wages came in a lot lower than expected;

• good for the market;

Lego:

Project Tundra Update -- January 28, 2022

Link here. Reminder: recommend subscribing to the

Project Tundra:

• notice to proceed on the $1 billion Project Tundra could be issued as soon as this year (2022)
• North Dakota's flagship CCS
• will capture up to 90% of CO2 emissions from the Milton R Young station
• equivalent to 800,000 gasoline-fueled vehicles off the road / 4 million metric tons of carbon;
• North Dakota: one of two states recently approved for issuing Class VI injection permits
• Project Tundra is the second Class VI injection permit is the second to be issued by the state;
• Minnkota Power is lead on this project
• 45Q tax credit: $50 / ton for CO2 permanently stored
• let's see: 4 million ton x $50 = $200 million tax credit
• if all goes to plan
• Minnkota anticipates construction to begin in late 2022
• three to four years to complete
• could be operational as soon as 2025, but more likely, 2026
• other partners involved include Oxygen Low Carbon Ventures
  

Yesterday, I posted this:

The Biden Boom: trending. 

• none of my readers are going to like this one;
• I can already hear the "but ... but ... but ... but ... but"
• facts don't matter; the narrative matters, and I haven't seen Mitch McConnell's narrative in several years;

Now, from The Williston Herald  -- Biden approves more drilling permits than Trump. Yeah, but.

Notes From All Over -- January 28, 2022

Rigzone: Chevron profit falls short of forecasts.  

Chevron linked the earnings miss to the shrinking value of legacy assets including a stake in an Australian gas development known as the Northwest Shelf, which the company has been trying to sell since 2020. Higher royalty and tax payments tied to rising commodity prices also played a role, as well as the timing of some gas trades.

CVX CEO Michael Wirth on CNBC this morning. Great interview. My takeaway:

• long-term investors are happy;
• numbers will continue to get better;
• recent investors will be disappointed

Re-posting: 

CVX misses. Now we know why the company pre-announced a dividend increase yesterday.

Link here.

CVX: anticipating 4Q21 earnings. IBD yesterday: estimate: $3.14 EPS. 

4Q21 EPS: $2.63 vs $3.15 estimate

Full year: $8.14 vs $8.15 estimate.

• Fourth quarter earnings of $5.1 billion; annual earnings of $15.6 billion

• Strong cash flow from operations of $29.2 billion in 2021

• Record free cash flow of $21.1 billion in 2021

• Dividends and share repurchases of $11.6 billion in 2021
  
  

Renewable energy: re-posting --

• link here;
• not going so well for Saudi Aramco;

Now, today: Shell's renewable boss steps down after less than two years. Link here. Or go direct to Reuters.

Growth Stocks

January 28, 2022: SeekingAlpha -- FCX, PBR, CI, CCS, ONTO.

Chevron Misses On Earnings -- January 28, 2022

Updates

Later, 1:27 p.m. CT: from twitter -- link here. 

Original Post

Release the kraken: new Covid variant identified. 

Ukraine: Russia mobilizing medics to join troops along the border. 

CVX misses. Now we know why the company pre-announced a dividend increase yesterday.

Link here.

CVX: anticipating 4Q21 earnings. IBD yesterday: estimate: $3.14 EPS. 

4Q21 EPS: $2.63 vs $3.15 estimate

Full year: $8.14 vs $8.15 estimate.

• Fourth quarter earnings of $5.1 billion; annual earnings of $15.6 billion

• Strong cash flow from operations of $29.2 billion in 2021

• Record free cash flow of $21.1 billion in 2021

• Dividends and share repurchases of $11.6 billion in 2021

COP: Maverick to buy some COP Permian Basin assets. Link here. Update, January 28, 2022, here.

• $440 million
• 144,500 net acres
• back-of-the-envelope: $3,000 / acre
• remember when Permian was selling for $30,000 / arcr
• at $3,000 / acre priced in same neighborhood as the better Bakken

Natural gas: that 60% surge at the close yesterday? Never mind. Had to do with expiring contracts.

• natural gas still up; and up another 3.55$ this morning; up 15 cents; trading at $4.435; but,
• not the 60% spike we saw yesterday;
• link here: 
• February delivery futures hit $7.346 / mmbtu, the highest intraday price since November, 2008, before falling back to $6.265
• move signaled a short squeeze ahead of the contract's expiration
• great graph at the link; after huge spike, dropped back to previous level;

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

Active rigs:

$87.42	1/28/2022	01/28/2021	01/28/2020	01/28/2019	01/28/2018
Active Rigs	31	13	53	65	57

Friday, January 28, 2022: 49 for the month, 49 for the quarter, 49 for the year

• 37985, conf, CLR, Clear Creek Federal 6-2H2, Westberg, no production data,
  
• 37906, conf, CLR, Charolais South Federal 8-10H, Elm Tree, no production data,
  

RBN Energy: how rocket technology could help power the energy transition.

Back in the early days of the Space Race, popular culture envisaged aerospace technology that might one day have us all zooming around town like George Jetson in his flying car. That hasn’t turned out to be the case, but developments that have evolved from rocket technology could one day play a different role here in the 21^st century, where producing cleaner power and managing the energy transition are two key global goals. In today’s RBN blog, we look at an innovative “bioenergy with carbon capture and sequestration” (BECCS) project being undertaken in California by Clean Energy Systems (CES) and its partners, how the company’s technology is designed to work, and what “carbon-negative energy” might mean.

The history behind CES starts with rocket pioneer Rudi Beichel, who worked under the famed Wernher von Braun and was one of 1,600 German scientists brought to the U.S. at the close of World War II as part of Operation Paperclip. Beichel played a critical role in the development of the U.S. space program during the height of the Cold War, helping to design the rocket that took Alan Shepard into space in 1961 and the engines that powered the Space Shuttle. The initial CES team of seven — each with a different specialty — was formed by Beichel in 1993 with an eye toward using the group’s aerospace expertise to develop new power plant technologies. It received its first patent in 1998, a year before Beichel died, and has continued to advance its technology through pilot projects and demonstrations, including U.S. Department of Energy (DOE) funding to develop its industrial-scale oxy-fuel turbine, which was successfully tested in 2013.