The Million Dollar Way (The Bakken Oil Blog): 02/14/22

Monday, February 14, 2022

No New Permits; Eighteen Permits Renewed; MRO Reports Eight DUCs Completed; Huge Halo Effect Reported -- February 14, 2022

ISO NE: holy mackerel, less than an hour ago, ISO NE was in relatively good shape. Demand/supply was fine and pricing was only at the 6th decile, $125 / MW. Now, at the peak of the evening commute, and folks starting to cook dinner, things have come off the rails. Link here.
Demand is now over 18,000 MW

pricing is at the 8th decile, the highest it can possibly get; and trending toward $400 / MW
what happened? Since wind energy is not dispatchable, it couldn't keep up and ISO NE had to rush in with very, very expensive hydroelectricity

hydroelectricity: 13%
oil: 9%
coal: 2%
renewable energy: 9% -- tied with oil

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Back to the Bakken

Active rigs:

$95.00	2/14/2022	02/14/2021	02/14/2020	02/14/2019	02/14/2018
Active Rigs	32	15	56	65	57

No new permits.

Eighteen permits renewed:

CLR (11): four LCU Foster FIU and six LCU Foster Federal permits, all in Williams County; one Lundberg Federal permit in Dunn County
Petro Harvester Operating (6): four LFM2 and two LFM1 permits in Burke County;
Liberty Resources: an Ester permit in Mountrail County

Eight producing wells (DUCs) reported as completed (I haven't looked yet, but I bet there are going to be some great wells reported; let's see, holy mackerel, they are all MRO wells):

37733, 6,048, MRO, Kaye USA
37770, 3,664, MRO, Mabel USA
37771, 5,574, MRO, Plenty Horns USA
37772, 3,461, MRO, Little Owl USA
37673, 2,587, MRO, Herman USA,
37674, 4,933, MRO, Hartson USA
37675, 3,359, MRO, Etherington USA,
37677, 1,204, MRO, Ortman USA,

Although I'm way behind and this needs to be updated, the MRO Little Owl pad is tracked here. Maybe some day I will get around to updating it.

Other wells of interest:

19838, IA/1,069, MRO, Debbie Baklenko USA 12-26H, t6/11; cum 308K 3/21;
18880, 129, MRO, Everett Fisher USA 41-6H, Reunion Bay, t7/10; cum 527K 12/21; huge jump in production; see full production profile here.
21450, IA/1,600, MRO, Jessica USA 21-6TFH, Reunion Bay, t3/12; cum 372K 3/21;
21243, IA/1,787, MRO, Everett Fisher USA 31-6H, Reunion Bay, t2/12; cum 477K 3/21;
27152, 2,253, MRO, Cloon 14-32H, Reunion Bay, four-section spacing, t8/14; cum 375K 3/21;

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Recent Production: #18880

The well:

18880, 129, MRO, Everett Fisher USA 41-6H, Reunion Bay, t7/10; cum 527K 12/21; huge jump in production; see full production profile here. Hubbert's theory says this is not supposed to happen. Experts said this would not happen.

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	12-2021	22	11379	11483	5687	21346	20876	0
BAKKEN	11-2021	30	24253	24280	13903	37945	37061	0
BAKKEN	10-2021	31	33008	32976	20218	39638	38535	0
BAKKEN	9-2021	30	25500	25647	24378	28366	27396	172
BAKKEN	8-2021	29	36363	35998	99154	51854	48761	971
BAKKEN	7-2021	0	0	0	0	0	0	0
BAKKEN	6-2021	0	0	0	0	0	0	0
BAKKEN	5-2021	0	0	0	0	0	0	0
BAKKEN	4-2021	0	0	0	0	0	0	0
BAKKEN	3-2021	23	1070	1422	319	1596	1178	223
BAKKEN	2-2021	28	1431	1345	337	2158	1624	286
BAKKEN	1-2021	29	1438	1470	323	2185	1262	673

Dated Brent, Starting Next Year, Will Include WTI -- February 14, 2022

Break, break: earlier I said I was unable to find a reason for sudden surge in price of oil. Here it is, from two hours ago, Reuters: oil hits 7-year highs as Ukraine fears Russian attack imminent.

That reports says WTI rose $2.36, or 2.5%, to settle at $95.46 after hitting $95.82, the highest since September, 2014.

As folks may recall, Ukraine's president has said all along he did not expect an actual invasion, and the US Pentagon is still suggesting publicly that Putin has not made a final decision.
It now looks like February 16, 2022, is D-Day.

Flight radar 24:

Chief-One-One, a USAF B-52, is now back at Brize Norton, UK.
the amount of C-17 traffic -- huge USAF cargo plane -- into and out of western Ukraine is quite astonishing for anyone paying attention; right now I see at least two C-17s returning to England;
tracking C-17 activity in eastern Europe is the equivalent of tracking Domino pizza deliveries to the Pentagon
as usual, CNN seems to have a better handle on the situation than the US Pentagon.
it's look more and more like a West Ukraine / East Ukraine will emerge when this is all over.

Now, back to regular programming. From SPGlobal:

I do not yet understand the mechanics of this, how this will actually be accomplished, whether it will be a physical addition of Texas oil to Brent oil, or whether it will be a "paper exercise."

This is a huge, huge story and one that would not be taken lightly if some small group of very, very influential oil traders weren't concerned about losing lots of money. "Someone" is arguing "we" need to "save" Brent to maintain order in the global oil market. It suggests to me some very rich and influential British oil traders are running scared. Stay tuned.

Platts said the proposal to include a non-North Sea crude in the light sweet oil benchmark for the first time since its launch in 1987 envisages the change taking effect for cargoes loading from June 2023.
Dated Brent is seen as a bellwether for global oil markets, referred to by national oil companies in official selling prices and used in pricing other energy commodities such as LNG. The low-sulfur characteristics of North Sea crude often -- though not always -- mean oil from elsewhere trades at a discount to Dated Brent, particularly where refiners face pressure to produce low-sulfur fuels.

The inclusion of WTI Midland — a crude oil typically produced from onshore US shale plays — would extend across the complex of Brent-related trades, including Cash BFOE and related instruments, Platts said.

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For The Archives
Super Bowl LVI

The best thing I did not do yesterday? I did not watch the Super Bowl. Not one minute of it.

I knew that somehow my tuning in would be disrupted at some point during the game. I can't watch the Super Bowl if I can't enjoy it without interruption. For the record, I hate "super bowl parties." We had them when we were stationed in Alabama; I hated the parties. I attended, assuming we were going to watch a football game. LOL.

And even if the commercials are the best thing since sliced bread I knew they would drive me nuts.

I was not disappointed. I got a phone call about 7:30 p.m. CT or some such time, and the individual asked me if I was watching the game. I was not. Fortunately. Apparently the game was nearing its end when the individual called. I checked Google and saw that the Rams were behind by four points but were going to win anyway. There was like two minutes left in the game.

And as I mentioned to my wife and the caller, there will be another Super Bowl next year. Maybe next year I will check into an undisclosed location to watch the game.

I was rooting for the Bengals, of course, but when I saw the quarterback show up in this outfit, I knew it was all over for the Bengals. All he needed was a Joe Namath fur coat to complete the ensemble. How the Kansas City Chiefs did not end up in the Super Bowl this year is beyond me.

On another note, I received a text message from a person I did not know and about the same time from my older daughter telling me that I had won the Super Bowl pool -- the "square lottery." You know, the one where there is a ten-by-ten grid, you pick your square and then after all squares are picked, they put numbers across the top for one team and numbers along the side for the other team, and who ever has the box that has those numbers, wins the pool.

The individual texting me wanted to know how to get my "winnings" to me. LOL. I figured it was a Nigerian scam until my older daughter says they will send her the money and she will give it me tomorrow. I told her to keep it. The fun is winning; not actually collecting.

The pool I played had a 10x10 and each square cost $50. I bought four squares. One hundred squares at $50 / square. One can do the math. LOL.

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Lost In Translation

I have no idea where my younger daughter -- the one with two-year-old twins -- saw this sign. If it was on a walk with the boys, or somewhere from the internet, but it's her humor, so I assume she wrote the note:

WTI Surges And Closes Just Under $95 -- February 14, 2022

I was completely surprised by this surge in the price of oil late in the day. I have been off the computer since before noon and haven't watched any television (no CNBC) so I have no idea what this is all about.

The weekly API and EIA figures don't come out until tomorrow and Wednesday. It sounded like analysts were still betting that peace would break out in Ukraine.

This was earlier. WTI closed at $94.93.

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ISO NE

Wow, it just won't quit, the craziness.

It appears that ISO NE now has stocks of coal and oil back after having run out of same last week.

Demand today, Monday, Valentine's Day, shortly before the evening commute and dinner hour, is at a relatively unremarkable 17,571 MW.

To meet demand (and keep prices "reasonable"),

oil is providing a whopping 8% of the supply / demand;
coal is back to 2%
hydro, very expensive, is back to 11%
and this is despite renewables supplying 10% of demand and wind providing 59% of renewable

0.1 * 0.59 = almost 6% (wind, by itself)

Cost of electricity, 6th decile, about $125 / MW across the region.

CLR: 4Q21 And Full Year 2021 Production

CLR corporate presentation, February, 2022: link here.

From the press release sent to me be a reader:

Director's Cut, December, 2021, Data

Link here.

Wells off line for operational reasons.

Observations / Analysis

February 14, 2022, Grand Forks Herald: Bakken oil play now branded "mature" as industry appetites shrink in North Dakota. Link here.

Original Post

Crude oil:

December, 2021: 1,137,466 bopd (preliminary)
November, 2021: 1,158,622 bopd (final)
delta, m/m: 21,156 bopd
delta, m/m: 1.8%
revised revenue forecast = 1.2 million --> 1.1 million -->1.0 million bopd

Natural gas:

December, 2021: 2,990,340 MCF/day
November, 2021: 3,074,414 MCF/day
delta, m/m: 84,074 MCF/day
delta, m/m: -2.7%

Crude oil price, North Dakota light sweet:

today: $87.50
December: $65.46
November: $72.03

North Dakota market estimate, crude oil price, ND light sweet:

Revised Revenue Forecast: $50
December, 2021: $66.88. Revised forecast: +34%
today, February 14, 2022: $90.30. Estimated revised forecast: +81%

Rig count:

today: 32 oil and gas
January: 31 oil and gas
December: 31 oil and gas
November: 32 oil and gas

Wells, permitted:

January, 2022: 39
December, 2021: 45
November, 2021: 50

Wells, completed:

January, 2022: 75 (preliminary)
December, 2021: 81 (revised)
November, 2021: 60 (final)

Wells, inactive:

January, 2022:
December, 2021: 1,975
November, 2021: 1,957

Wells, producing:

January, 2022:
December, 2021: 17,114
November, 17,245 (all-time high?)

Frack spreads:

from 2020, the number of frack spreads dropped 25 to one
most recently: frack spreads are said to number: 10

Beautiful Winter Scenery -- Minnesota -- Vern Whitten -- February 14, 022

Winter set -- beautiful aerial photography, Minnesota.

Link here.

Vern would love to hear from you.

Vern Whitten Photography
www.vernwhittenphotography.com
(701) 261-7658

Video Of The Week: Clearing The Logjam At The Bridge -- February 14, 2022

Source: Ontario says it plans to lift proof of vaccination requirements from March 1, 2022. Needs to be fact-checked.

Masks: every Super Bowl attendee given free N95 mask as a souvenir.

Shale and $100 oil: from Rystad Energy. For all practical purposes, WTI is now "at $100":

oil at $100 could trigger an additional 2.2 million bpd of US tight oil output by 2023.
tight oil output in the core producing regions of the US – the Permian, Eagle Ford, Niobrara, Bakken and Anadarko – in the fourth quarter of 2021 was around 7.7 million bpd.
high oil prices are encouraging operators to increase production as supply from sources outside the US remains tight.

Chariots on fire: Stellantis recalls 20,000 plug-in minivans for fire risks. Link here.

An internal investigation found 12 incidents of fires in vehicles from the 2017 and 2018 model years, the automaker said Friday in a statement.

All of the minivans were parked and turned off, and eight were charging when the fires occurred.

Comment: probably not smart to park these vans in a garage or near a structure or near another car.

For investors:

NOG: to uplist to the NYST; effective February 17, 2022; same symbol; Thursday, this week;
Yahoo!Finance: T -- analysis indicates that ATT will stabilize and will pay a future dividend of $1.11. With an indicated price today, $24.50, yield will be 4.5%. Link here.
Berkshire Hathaway: owns three of the top ways to make money in this market. IBD.
RBC: $115 WTI summer; sustained $95+WTI through 2023; FCF over those two years would = ~67% of the entire capital structure of the average CDN energy stock. Link here.
Autos: North American automotive builds could increase by 2.1 million vehicles in 2022; link here.

Video of the week: clearing the logjam at the bridge.

Focus on Joan Crawford: link here to Roger Ebert.

Cartoon of the day:

Four Wells Coming Off Confidential List; WTI At $93 -- February 14, 2022

Active rigs:

$93.02	2/14/2022	02/14/2021	02/14/2020	02/14/2019	02/14/2018
Active Rigs	33	15	56	65	57

Monday, February 14, 2022: 29 for the month, 84 for the quarter, 84 for the year

34067, conf, Enerplus, Cobweb 149-92-32D-29H, Heart Butte, first production, 8/21; t--; cum 66K 12/21;
34065, conf, Enerplus, Tarantula 149-92-32C-29H, Heart Butte, first production, 8/21; t--; cum 132K 12/21;

Sunday, February 13, 2022: 27 for the month, 82 for the quarter, 82 for the year

36581, conf, CLR, Pasadena Federal 12-11H1, Banks, first production, 9/21; t--; cum 68K 12/21;

Saturday, February 12, 2022: 26 for the month, 81 for the quarter, 81 for the year

36580, conf, CLR, Pasadena Federal 13-11HSL, Banks, first production, 9/21; t--; cum 121K 12/21;

RBN Energy: smaller, crude-oil-focused producers are on a buying spree. Archived.

Multibillion-dollar mergers and acquisitions have attracted a lot of attention the past couple of years. Chevron buys Noble. ConocoPhillips acquires Concho. Cabot merges with Cimarex. Pioneer adds Parsley and DoublePoint. While it’s understandable that these mega-deals grab the spotlight, they tend to overshadow the many smaller-but-still-substantial agreements being announced at a rapid pace over the same period. Many of these less-than-$4-billion deals involve crude-oil-focused producers expanding their holdings in basins where they were already active, and many — no surprise — are happening in the Permian, although acreage in the Denver-Julesburg and the Eagle Ford are in play as well. In today’s RBN blog, we look at a few of the more interesting small and midsize acquisitions announced recently.

The period since the COVID-related meltdown in crude oil prices in April 2020 has been marked by the most impactful wave of corporate consolidation among E&Ps since the turn of the century, when a plunge in oil prices spurred deals that helped to form many of today’s supermajors and large independents. The last round of big-ticket M&As isn’t about getting bigger for bigness’s sake. Instead, the common goals among the acquiring E&Ps have been to boost their inventories of high-margin assets, accelerate free cash flow generation, and grow shareholder returns while slashing capital and corporate expenditures.

Wellhead Value Of Wells Coming Off Confidential List -- February 14, 2022

WTI, today: $93

Wells coming off confidential list: