Ukraine

Initial Post, Friday, 11 February 2022, about 1:00 p.m.

Multiple sources including NBC reporting that Ukraine invasion is imminent. Multiple WH sources "confirming." Interestingly, with the Lester Holt interview, Biden said as much. If in hindsight that's accurate, Lester Holt had a huge breaking story / a huge "scoop" which he may have failed to pursue or may have missed. 

It's one thing for a WH press secretary or an unnamed source suggesting Americans should leave Ukraine, but it jumps to a entirely new level when the President of the United States tells Americans they need to get out of Ukraine now.

Or it may simply be rumors as President Biden continues to work like a devil to get the price of gasoline down.

1:48 p.m. CT:

• President Biden is reportedly getting ready to phone Vlad.
• WTI: 4.02%: $93.51
• Dow, NASDAQ: each down triple digits; S&P down 90+ points.
  

4:55 p.m. CT: I was gone the rest of the afternoon with Sophia at her school "run club." 

I did not pay attention to anything after I departed about 2:00 p.m. except for one update. Upon reading the update, it sure sounded like the White House is simply in "spectator mode" watching this all play out. As with the high price of crude oil, I assume the press secretary's "go-to" phrase is "we're monitoring the situation."

Saturday, February 12, 2022

10:00 a.m.: Biden to call Putin this morning. Most likely the last phone call between the two for awhile. Considering how dangerous the whole thing seems to be, it is eerily quiet. "Better red than dead?" Over at FlightRadar24 the #1 a/c being tracked by gamers like me was the USAF Global Hawk (or possibly NATO's Phoenix) flying multiple tracks over Ukraine. At 10:11 a.m. CT, the drone appears to be departing Ukraine. If it follows its ingress route, it will depart over Romania, across Bulgaria, and end somewhere in southern Greece or another Mediterranean location.

13:30 CT: the telephone call.

Conoco Rumored To Sell Permian Assets Valued At $1 Billion -- February 11, 2022

Link here.

• according to Bloomberg sources, Conoc has hired advisors to sell $1b+ worth of company assets in the Permian.
• this comes only months after Conoco acquired Shell's Permian position for $9.5b.
• when Conoco reported earnings earlier this month, CEO Lance voiced concern over accelerating shale production, and its potential impact on oil prices.
• Lance also indicated plans to high-grade the portfolio while keeping production flat in 2022.
• if the rumors prove to be true, it would be a chance for Lance and Conoco shareholders to cement value from higher prices, high-grade the portfolio, and ensure the Company is well positioned in the event of a return to mid-cycle oil prices.

Back-of-the-envelope:

• at $40,000 / acre = 25,000 acres

The $9.5 billion Shell deal, link here:

• 225,000 acres = $42,000 / acre
• 175,000 boepd = $54,000 / boepd

**********************************
It Could Have Been Worse

Notes From All Over -- Mid-Morning Edition -- February 11, 2022

Renewable energy: the Great Climate Backslide: how governments are transitioning back to fossil fuel. Bloomberg.

Reality sucks: the last time inflation was here, February, 1982, the Fed funds rate was 15%.

Fed rate: Not once ever, has raising the Fed rate turned out to have a good outcome. Needs to be fact-checked.

Day late, dollar short: not only is the IEA warning that OPEC+ may not be able meet supply demand, now IEA is warning that world demand will reach 100 million bbls a day in 2Q22, a quarter earlier than earlier forecast. Link here. A 50-million-bbl crude oil release from the US SPR will provide twelve hours of demand. 

Supply: the crude oil market is incredibly tight. Link here.

Canadian truck convoy: socialist condemn workers of the world for uniting. Link here. Speaking of which, have any of the following weighed in: Bernie Sanders? George Soros? Robert Reich?

Travel: four scenic road trips tailored for this spring. The WSJ. I've taken three of the four:

• Santa Fe, NM, to Denver: 715 miles
• Panama City to Miami: 700 miles
• Los Angeles to Mendocio: 700 miles
• New Haven, CT, to Bar Harbor, Maine: 672 miles

*****************************
Distracted Driving

At least he came to a full stop at the four-way intersection.

One Well Coming Off The Confidential List; ENB Reports Earnings; IEA Warns OPEC+ May Come Up Short -- February 11, 2022

Enbridge earnings:

• Enbridge press release, by the numbers;
• huge profit, great numbers but missed on both top and bottom lines;
• safest energy company Canada has to offer;
• ENB ticker today after earnings reported: up 1.49%; up 64 cents; trading at $43.52

Free cash flow:

• link here;
• 4Q21, $37 billion for the five supermajors
• Exxon, Shell, Chevron Total, and BP
• generated more free cashflow than at any point over a decade;
• highest since the 2008 mega-spike and with prices still a far cry from those levels;

AMD:

• the merger;
• the merger set to close Valentine's Day, 2022;

MSFT:

• article over at SeekingAlpha;

"The Market": hasn't looked this cheap in nearly two years -- WSJ;

• the year's top-performing S&P 500 sectors are those that ended 2021 with the lowest P/E ratios.

WTI at $91: we've been here before;

• back in 2014: WTI above $100;
• just one week ago: $93 on February 4, 2022

XeroHedge: don't forget to scan through the ZeroHedge headlines today. 

Canadian oil:

• Canadian oil exported from US Gulf coast hit record numbers; Reuters;
• why Canadian producers are not sending more oi to the US; link to Charles Kennedy;

OPEC+ short supply may drive prices higher: source? IEA.

• how long have we been saying this?
• IEA must be reading the blog;

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

Active rigs:

$91.08	2/11/2022	02/11/2021	02/11/2020	02/11/2019	02/11/2018
Active Rigs	33	15	55	63	58

Friday, February 11, 2022: 25 for the month, 80 for the quarter, 80 for the year

• 38061, conf, Hess, GO-Braaten-156-97-2833H-3,

RBN Energy: decarbonizing the Scotch whisky industry. 

It’s been heard in many a pub: “Liquor may not be the answer, but it’s worth a shot.” You could make the same argument for hydrogen. While many question whether it will ever make economic sense to use hydrogen as a supplement to — or replacement for — natural gas on a large scale, others insist that hydrogen has a great future as a climate-friendly fuel, assuming it receives sufficient developmental support from government and ESG-minded industry. As it turns out, an early test of hydrogen’s potential is coming from the liquor industry itself, or more specifically, the maker of a renowned single-malt scotch on the Isle of Islay, off Scotland’s western coast. In today’s RBN blog, we discuss the distiller’s hydrogen production and combustion project and the broader plan by members of the Scotch Whisky Association and Scotland itself to achieve net-zero carbon emissions within a generation, largely through the expanded use of hydrogen.

Not everyone likes the energy transition, and it may not happen nearly as fast as some hope, but the world is in the early stages of a shift to lower-carbon energy sources that is likely to have a massive impact on the oil and gas industry. Given this expectation, we’ve been blogging with increasing frequency about the low- or zero-carbon energy alternatives being implemented and explored. We’re doing this not only to discuss the challenges inherent in switching from energy sources that have driven extraordinary economic growth over the past 100 years but to highlight the opportunities that the energy transition may present to savvy companies within the oil and gas sector who, after all, know a thing or two about efficiently producing large volumes of energy commodities and transporting them to where they are needed.