Week 5: January 30, 2022 -- February 5, 2022

Top story of the week:

• Joe Biden is still president.

Top international non-energy story:

• Covid receding in rear-view mirror. 
  
• Beijing Olympics starts without a hitch and without an audience.
• Russian buildup on Ukraine border continues. 
  

Top international energy story:

• Brent to $94.

Top national non-energy story:

• FB implodes, taking the tech market with it. And, here.
• AMD/XLNX surge on merger announcement.
  
• Apple takes audience, playlists from Spotify. 
• Texas freeze hyped; turns out to be a non-story.
• Earthquake in Oklahoma.
  

Top national energy story:

• WTI to $93.
• Whiting exits the DJ basin. 
• ISO NE burning oil and price of electricity surges to over $400 / MWh.
• Electric rates in New England are outrageous. And, here.
  

Top North Dakota non-energy story:

Top North Dakota energy story:

• Rig count jumps by 13%, far outpacing all other shale plays.
• Kraken exits Mountrail County; entire activity is in Williams County. 
• Whiting acquires ~80 Sanish wells from Kraken;
  

Geoff Simon's top North Dakota energy stories:

• Quick connects.

Operators:

• Enerplus will divest all Canadian assets; Bakken pure-play; will present only in USD; and, here;
• Reminder: Enerplus acquires all of Bruin wells; some of Hess' wells;
  
• BR to have three rigs in North Dakota. First one sited.
  
• Is Kraken the next Slawson?
• XOM's breakeven price well below $50. 
• One can't talk about the Bakken without mentioning MRO. 
• If it weren't for CLR, would we even be talking about the Bakken?
  

Operations:

Wells:

Fracking:

Pipelines:

• MDU's natural gas North Bakken Expansion Project approved.
  

Natural gas:

• North Dakota production approaches all-time high.

Bakken economy:

Commentary:

• The future of fracking, The WSJ.

Another Sale In The Bakken? -- Hart Energy -- February 4, 2022

Another deal in the Bakken?

• link here.
• Arkoma Drilling II LP
• looking to sell a 113-well package in the Williston Basin
• four counties mentioned: Williams, McKenzie, Mountrail, and Dunn
• sealed-big offering will close  March 17, 2022

Pipeline extension request in Louisiana.

• link here;
• US pipeline company: Energy Transfer LP
• asks for three-year extension
• Lake Charles LNG facility
• to extend construction of the 16.4 mtpa facility through late 2028
• back in December, 2019, had received a five-year extension from FERC (through 2025)
• now, another extension through 2028
• Energy Transfer took over the project in March 2020 when Shell decided not to proceed with an equity investment in the project due to "current market conditions"

Whiting With One Permit; Interestingly Enough, In The Sanish Oil Field -- February 4, 2022

Jobs report: released today, very, very strange. 

Past reports were also very strange. That's all I will say until we find links to stories that analyze this strangeness. Very very strange, to say the least. "Pat, I'm ready to solve the puzzle." 

Reporting but no analysis.

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

Active rigs:

$92.31	2/4/2022	02/04/2021	02/04/2020	02/04/2019	02/04/2018
Active Rigs	34	14	54	63	58

One new permit, #38774:

• Operator: Whiting
• Field: Sanish (Mountrail)
• Comments: 
• Whiting has a new permit for a Crane Creek State well in NWNW 16-153-91;
• to be sited at 1209 FSL and 358 FWL

One producing well (a DUC) was reported as completed:

• 33564, 987, Grayson Mill Operating, Jennifer 26-35 4TFH, 

********************************
The New Whiting Sanish Permit

One new permit, #38774:

• Operator: Whiting
• Field: Sanish (Mountrail)
• Comments: 
• Whiting has a new permit for a Crane Creek State well in NWNW 16-153-91;
• to be sited at 1209 FSL and 358 FWL
• comment: "NWNW" doesn't match a site at "1209 FSL 358 FWL"; it looks more like "SWSW"
  

Wells sited in/abutting that same section:

• 18943, 2,169, Whiting, Locken 14-9XH, Sanish, t11/10; cum 591K 12/21; plateauing at 400 bbl/month; a relatively good well with production profile of typical Bakken wells;
• 17700, 3,405, Whiting, Rigel State 11-16H, Sanish, t4/09; cum 681K 12/21; plateauing at 700 bbl/month;
• 25515, 303, Whiting, Rigel State 11-16XH, Sanish, t8/13; cum 224K 12/21; plateauing out at 500 bbls/month; early, fast decline; never particularly good;
• 21061,1,006, Whiting, Crane Creek State 11-16TFH, Sanish, t11/11; cum 204K 12/21; plateauing at 700 bbl/month; never a particularly good well;
• 32922, loc/loc, Whiting, Crane Creek State 11-16H, Sanish, 1209 FNL 447 FWL (near the new permitted site)
• 18278, 2,894, Whiting, Rigel State 12-16H, Sanish, t7/10; cum 670K 12/21; plateauing at 1,300 bbl/month; no evidence of any halo effect since drilled almost twelve years ago;
• 25180, 1,630, Whiting, Crane Creek 14-16H, Sanish, t7/13; cum 293K 12/21; plateauing at 900 bbl/month;
  
  
  
  
  

Are We Done Here, Today? February 4, 2022

I have to leave shortly to study Spanish and do a bit of reading, John Dvorak's How The Mountaints Grew.

Some parting shots.

FB: it will take years for FB to recover. I'm not talking about share price, but that may also be true, but talking about its headwinds: Apple security policies; TikTok videos; and, metaverse, which may have been Zuckerman's biggest mistep ever. The rest of the market, excluding SPACs and specks (the meme stocks) will recover within weeks, if not days. Looking for a really, really strong week next week.

My favorite graph:

White House: looking in rear view mirror when talking about Covid. Excited to talk about availability of masks and vaccine mandates. Meanwhile, Alberta and Saskatchewan have said "enough is enough." 

White House: won't deny that lock downs were the worse thing that could have been done. In today's press conference. 

White House: great news. The White House continues to explore ways to bring down the price of crude oil.

WTI: at $93 was not on my bingo card today.

Amazon: shares soar 15% after earning; will hike membership fee, and 99.999% of current subscribers will re-subscribe. Unlike FB, Amazon is nowhere near maxing out subscriber growth.

Texas freeze: most-hyped Texas story in weeks, months? The grid never came close to failing. The "cold" lasted maybe 24 hours. Today, bright sunshine and 32°F will melt all ice. If by 8:00 p.m. tonight all that melted ice dries out, even sub-freezing temperatures overnight won't result in black ice. More importantly, the "ice-on-trees" resulted in very few downed power lines. And downed power lines are the fault of cities and/or homeowner associations who refuse to trim back trees before winter. Anti-Abbott heads are exploding. They wanted worse/worst. Everybody knows.

Saudi Arabia: inshallah. Read the social media responses from Saudi Arabia in the thread the link. Baghdad Bob is reporting.

Why The US Is Importing Record Amounts Of Crude Oil -- February 4, 2022

Lost the link.

US refiners, in general, cannot refine Bakken oil as a standalone feedstock.

Bakken, as a standalone feedstock, great for gasoline, not much else. 

Western Canadian oil now priced at greater than C$100. This is why Enerplus is going to dump Canadian dollars when reporting oil prices.

Most Interesting Geo-Political Story That Popped Up Today -- Another Story Not On My Bingo Card Today -- February 4, 2022

Link to Charles Kennedy, one of my four favorite contributors over at oilprice: Chevron in talks with Venezuela to boost oil production. 

Wow, can't wait to see how White House press secretary Jen Psaki spins this story. For those following this story, it's quite an amazing turn of events. 

The memes and observations:

• the US wanted to put a stranglehold on Venezuela; ever since former president in office;
  
• but, the US kept giving "waivers" to Chevron with regard to their Venezuelan relationship;
• now, with $100 oil, it makes it more difficult to shut out Venezuela

CVX ticker today: up 1.7%; up $2.26; trading at $136.43; yield, 4.2%; 52-week high: $137; intra-day high today? $137. Well, I guess that says it all. Sort of like the box score at a baseball game. 

Testing: 

Let's Do This Again -- But This Time, Use "Percentage Change" -- February 4, 2022

Link here. 

A reader reminds me that one of the four additional rigs in the Williston Basin was in the great state of Montana. 

Geo politics: in the big scheme of things, North Dakota, east of Minot needs to be given to Minnesota and the eastern Montana, east of Wolf Point, needs to be ceded to the "real" North Dakota.  Same with South Dakota, Wyoming, and Minnesota. Same number of states, just slightly different state lines. If only.

Let's do it again, this time as "percentage change":

• Bakken: up an astounding 13%
• Permian: up 0.03%
• DJ Niobrara: 0%
• Eagle Ford: down 2%
• Cana Woodford: down 4%;

It's a lot easier for the Bakken than the Permian to double the number of active rigs.

Apple, Oil, And The Texas Grid -- All In One Note -- February 4, 2022

Wow, wow, wow. Just as I predicted a few days ago! Enbridge partners with First Nations on proposed carbon capture project. Didn't post the original story at the time because I was able to see what was coming next. This is not rocket science. So many story lines here. "Co-opt" comes to mind.

The graphic you won't see in the Boston Globe or the Bismarck Tribune today, link here:

DFW: we live about a mile west of DFW, and have not yet had to turn the heat on in our little hovel. 

Electricity never went out. Sophia has a four-day weekend with us. Snowball fight yesterday. A walk to Target last night. What's not to like. DFW is where that big winter storm hit. At least that's what I'm reading in the newspapers on line. Almost as bad as the purported misinformation coming from Joe Rogan. Looking for TikTok videos of the DFW storm. 

Texas grid:

• capacity: 80 GW
• forecast: 75 GW
• actual: did not quite reach 69 GW

Gasoline prices, link here:

• above $3.00, coast-to-coast
• approaching $5.00 in California
• early February; many months until driving season begins

The meme, under Trump:

• drill, drill, drill
• build the Keystone XL
• energy independence
• Texas gasoline: $0.99 / gallon
• message: make America great again

The meme, under Biden:

• ban drilling on federal land
• vacate previously approved permits
• kill the Keystone XL on day 1
• Texas gasoline: $3.29 / gallon
• message: we're continuing to look at options

Shortfall or glut? To be or not to be, that is the question. 

I can find as many sources on the internet suggesting there will be a gut of crude oil this summer as I can find sources suggesting shortages and $100-WTI. 

Something to talk about. 

I'm in the camp that suggests there will be no shortage of oil; we'll be just fine. The bigger question is why are producers not projected to pump more petroleum out of the Permian? There are several reasons, but it's not due to "voluntrry operator restraint."

*****************************
The Apple Page

This will show 'em: to satisfy Dutch regulators, Apple will now collect a 27% commission rather than the typical 30% commission. Link here.

Taking advantage of Spotify: since launching in 2015, Music Music has offered a three-month free trial to first-time subscribers, but the trial period had now been reduced to one month. Link here. 

Upgrades: the new fifth-generaion iPad Air and the third-generation iPhone SE will have the A15 chip.

The new iPhone SE 5G: what to expect. For one thing, only $399.

Next Apple event: March, 2022. New iPhone SE and the new iPad Air to be announced. iPhone SE to be released March 8, 2022?

Is Kraken The Next Slawson? February 4, 2022

I track Kraken here, albeit not doing a good job. Yet. 

After my response to a reader regarding Kraken yesterday (link pending), another reader wrote:

We now have [x] wells with them in Williams County. Their returns have been absolutely fantastic. The production from their wells have far outpaced the production from the CLR wells previously drilled in neighboring pools. Hope they stick around!

My not-ready-for-prime-time reply with some additional material:

Yes, I'm sure Kraken is going to stick around. My hunch is they will add acreage in Williams County. They got a ton of cash from selling assets in the Sanish.

I find the Kraken fascinating.

When I started the blog, the EOG wells in the Sanish were said to be the "be-all, end-all" -- the best wells ever. I posted that often. Then EOG and the Sanish sort of went away.

I got the feeling, just before Mark Papa left EOG, he (and his company) never really understood the Bakken (as in "unconventional play") at the time. They learned a lot in the Bakken but saw greener pastures in the Permian and never optimized what they had in the Permian. Oasis followed suit but realized their mistake and came back as a pure-play Bakken operator.

Whiting seems to be hit-and-miss with wells, but Kraken -- every well is a winner, though they don't have nearly as many as some of the other operators.

Every year it seems like another operator steps up and surprises me. This year, it's Kraken. One year it was NOG (and they are still surprising me).

MRO is a perennial favorite. 

$93 WTI; 34 Rigs; Two Wells Coming Off Confidential List -- February 4, 2022

The story of the year: all this US LNG headed to Europe.

The story of next year: all this US LNG headed to Europe.

The story of the year after next year: all this US LNG headed to Europe. There is no evidence that Europe will get its act together any time soon. Germany will be shutting down its last nuclear during the worst energy crisis since WWII. 

Plaquemines: wow, wow, wow. We first talked about this two months ago -- and now, today, RBN Energy has a big story on this new export terminal. See below. Amazing.  Sophia, upon seeing the story, said, "We don't miss much do we?" My reply: except spelling errors. LOL.

ISO NE:

• demand at a paltry 16,559 MW
• priced at 8th decile (the highest decile it will ever reach)
• fuel mix:
• oil: 11%
• renewables: 9%; unpredictable, not dispatchable
• hydro: 6%; incredibly expensive
• coal: they've run out of coal

Texas grid:

• capacity: 80 GW
• forecast demand: 75 GW
• actual: 69 GW

Russian diesel: sets record. Exports to US at three-year high. Link to Irina Slav. 

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

Active rigs:

$92.68	2/4/2022	02/04/2021	02/04/2020	02/04/2019	02/04/2018
Active Rigs	34	14	54	63	58

Friday, February 4, 2022: 13 for the month, 68 for the quarter, 68 for the year

• 38423, conf, Crescent Point Energy, CPEUSC Reed 5-10-03-158N-100W-MBH,
• 35131, conf, Enerplus, Huntsman 149-92-32D-29H-TF1, 

RBN Energy: Venture Global's Plaquemines project could lead next wave of US LNG development. Archived.

It’s expected to be a big year for U.S. LNG. The U.S. was the top monthly exporter of LNG for the first time in December 2021 and is expected to hold onto that crown as new capacity at Sabine Pass and a new terminal, Calcasieu Pass, begin service this year. 

The chaos of European gas markets has made U.S. exports particularly attractive, especially after a year or more of high global demand, sky-high global gas prices, and an undersupplied market that has left offtakers clamoring for more. 

Last year saw those offtakers come back to the negotiating table for long-term sales and purchase agreements (SPAs) from new U.S. LNG capacity and several projects now have a realistic path to a positive final investment decision (FID) in 2022. 

In today’s RBN blog we begin a series taking a closer look at some of the projects most likely to reach FID this year, starting with arguably the most likely next contender, Venture Global’s Plaquemines LNG.

WTI Is Off The Rails At $93 -- White House Is Monitoring -- Announces Masks Are Available -- February 4, 2022

See first link: Rail Link is a rail line in Montana, not Odessa. See first comment. 

Picture of the day, Odessa. Rails? We don't need no stinkin' rails in the Permian. At $93, one needs to do what one needs to do.

White House presser:

Covid masks becoming easier to obtain. With all that's happening in the world right now, and with Covid-19 in our rear-view mirrors, does that mask announcement seem so ... weird?

Texas grid:

• forecast: demand would surge to 75 GW
• in fact: did not reach 69 GW
• ERCOT capacity: 80GW

WTI: $93.

Suncor: ouch.

• "every" other oil company is up 3 - 5% today on $93-WTI
• Suncor? down over a percent after earnings announced; still in the red for the day
• Suncor -- the darling of the Canadian companies reports earnings -- headlines:
• Suncor earnings: shares fall as 4Q21 swings to $1.5 billion profit
• Suncor posts a nice quarter

Quoth the Raven, link here -- remember when Cathie Wood said oil was going to $12:

"Oil demand probably hit a secular peak last year (2020) and, thanks to EVs, now is in secular "decline." 

"Though ARK has no formal forecast, I believe that oil prices are on their way back to $12, the level reached after the 1973 oil cartel crisis, or lower, now that EVs are taking off."

$92 —February 4, 2022