Pages

Ukraine -- February 17, 2022

Link here

6:21 p.m. CT: An RC-135 -- Rivet Joint -- has just departed Souda Bay on the north side of Crete (Greece) headed north, obviously to Ukraine theater of operations. Call sign: Homer-Five-One.

Later, 3:17 a.m. CT, Friday morning, February 18, 2022: a significant increase in commercial air traffic over Ukraine, most of it in the west. An active Global Hawk; no River Joint.

A Closer Look At The Five DUCs Reported Completed Today -- February 17, 2022

From today's daily activity report.

Five producing wells (DUCs) reported as completed:

  • 37242, 3,567, MRO, Denny 11-3TFH, Killdeer,
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20212429407294483658824516224620
BAKKEN11-202136561634810091401535810
  • 37156, 4,122, MRO, Lowry 44-9TFH, Killdeer, 20K over 8 days extrapolates to 76K over 30 days:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-202130311203099937120263992418099
BAKKEN11-2021820191200302550314314130280
  • 38189, 1,102, CLR, Tallahassee FIU 8-21HSL, Baker, minimal production reported;
  • 38396, 1,330, CLR, Dvirnak 10-7HSL1, Corral Creek, no production reported;
  • 38320, 995, CLR, Dvirnak 11-7H, Jim Creek, no production reported;

********************************
For My Brother-In-Law In Montana

US Government Releases Whopping Number Of Covid-19 Vaccine Doses Today -- February 17, 2022

Link here.

On occasion, the numbers released are incorrect and updated at a later date by the CDC. 

Government generally distributes between 600,000 doses and one million doses per day, Monday through Thursday. Today, the government distributed / released a whopping 6,839,380 doses (fourth column, column B, change from day before). That represented almost one million more doses than the entire previous week (eighth column, line 6, with 6,077,570 doses for the entire 7-day week):

Screenshot of recent vaccine data.



A

B

C

D

F





Doses of vaccine distributed to health facilities

Change from day before

Vaccinations given

Change from day before

Percent of distributed vaccine that is actually administered

Doses received in past week, current Monday from previous Tuesday

Average number of doses given / day in past seven days

Thursday

February 17, 2022

684,648,105

6,839,380

548,934,364

542,750

80.18%



Wednesday

February 16, 2022

677,808,725

610,500

548,391,614

442,958

80.91%



Tuesday

February 15, 2022

677,198,225

547,300

547,948,656

502,492

80.91%



Monday

February 14, 2022

676,650,925

100

547,446,164

336,440

80.91%

6,077,570

546,667

Sunday

February 13, 2022

676,650,825

31,100

547,109,724

485,061

80.86%



Saturday

February 12, 2022

676,619,725

855,300

546,624,663

643,126

80.79%



Friday

February 11, 2022

675,764,425

1,088,700

545,981,537

504,417

80.79%



Thursday

February 10, 2022

674,675,725

1,067,480

545,477,120

704,423

80.85%



Wednesday

February 9, 2022

673,608,245

1,817,280

544,772,697

633,331

80.87%



Tuesday

February 8, 2022

671,790,965

1,217,610

544,139,366

519,874

81.00%



Monday

February 7, 2022

670,573,355

100

543,619,492

399,448

81.07%

4,254,060

611,742

Sunday

February 6, 2022

670,573,255

100,800

543,220,044

544,677

81.01%



Saturday

February 5, 2022

670,472,455

154,000

542,675,367

675,567

80.94%



Friday

February 4, 2022

670,318,455

1,005,215

541,999,800

684,801

80.86%



Thursday

February 3, 2022

669,313,240

1,005,215

541,314,999

684,801

80.88%



Wednesday

February 2, 2022

668,308,025

1,213,660

540,630,198

709,076

80.90%



Tuesday

February 1, 2022

667,094,365

775,070

539,921,122

583,826

80.94%



Monday

January 31, 2022

666,319,295

-100

539,337,296

507,376

80.94%

6,422,580

575,732

Best Thread Ever; Five DUCs Reported As Completed; No New Permits -- February 17, 2022

Best thread ever. Wow, it took them a long time to come around to what we've been saying for quite some time. Like the past ten years.

And from that thread, from Bloomberg, rigs don't matter (don't take that out of context):

And, more:

We've also said this for years, link here:

And that $72 for Saudi Arabia is low-balling it. Some years ago, it was $100. 

Link here.

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

Active rigs:

$91.76
2/17/202202/17/202102/17/202002/17/201902/17/2018
Active Rigs3315566456

No new permits.

Five producing wells (DUCs) reported as completed:

  • 37242, 3,567, MRO, Denny 11-3TFH,
  • 37156, 4,122, MRO, Lowry 44-9TFH,
  • 38189, 1,102, CLR, Tallahassee FIU 8-21HSL,
  • 38396, 1,330, CLR, Dvirnak 10-7HSL1,
  • 38320, 995, CLR, Dvirnak 11-7H,

Ukraine -- February 17, 2022

Link here

Two RC-135s -- River Joint -- flying along northern border of Ukraine between Kiev and Lviv. Both are apparently RAF a/c. Call signs RRR7214 and RRR6817.


It also appears that a Global Hawk has just entered Ukrainian airspace from the south, the call sign 23155 is an "invalid" call sign and no a/c is identified, but it's flying at an altitude of 51,000 feet -- the only a/c currently in this theater at that altitude is the Global Hawk. This one would be from NAS Sigonella. Later, 11:27 a.m. CT, that "23155" call sign has been replaced with "XCCRM," also a bogus call sign.

Transponders of all four aircraft have now "disappeared" -- 9:59 a.m. CT, February 17, 2022.

Mexico To Become Net Importer Of Crude Oil? Bloomberg -- February 17, 2022

On February 9, 2022, looking at global crude oil production, I wrote the following:

  • Historically: higher prices have led to increased production; groups to watch as oil trends toward $90 / bbl:
    • first tier:
      • US
        • US shale operators
        • US offshore (ex: Guyana)
      • Russia
      • Saudi Arabia
    • second tier:
      • OPEC - some Africa (outside Saudi Arabia, Russia, Libya)
      • Iran: in second tier only if one believes Biden will lift sanctions
      • Mexico: I'm being generous not moving Mexico to background noise
      • Canada: without Keystone XL and adequate seaports, pretty much flat-lined production;
    • background noise:
      • Ecuador -- not OPEC
      • some Africa including Libya  -- OPEC

Being reported today:

PEMEX: previously reported that Pemex would begin curtailing exports of crude oil this year, and completely end exports in 2023. There may have been an explanation and, if so, it just got worse. From Bloomberg: forecasts now suggest that Mexico will have to import crude oil to produce enough fuel for its own country.  

So, not only is Mexico moving from being an exporter of crude oil but now becoming an importer of crude oil.

From February 13, 2022, this is what conventional oil production in terminal decline looks like, graphic might have been drawn by Hubbert:


Enerplus Reports A Nice Heart Butte Well; War Has Begun -- February 17, 2022

Updates

Later, 10:06 a.m.: headline in WSJ confirms earlier note -- hostilities have begun. When is an incursion not an incursion? 

Later, 10:20 a.m.: wow, talk about a rigged women's figure skating at the Olympics. The favored-to-win, having tested positive for an illegal substance, is allowed to continue competing. Favored to win, she does not even medal. Her teammates won gold and silver. Had she won a medal there would have been no medals ceremony. We'll probably never see her again. My heart goes out to Ms Valieva; absolutely sickening. Talk about child abuse. Many things bothered me today; this may have bothered me the most.

Original Post

Futures: after a decade of blogging about oil, I finally understand futures, backwardation, and contango. 

An analogy: booking an airline flight.  
Six months ago, I booked a flight from DFW to Portland, Oregon. The cost: $256. Today, six months later, that flight now costs $656. Six months ago I was willing to pay $256 for a flight I would take six months from then. I did not know what the price would be six months ago, but I assumed it would be more expensive than $256. 
So, now we have oil futures. The futures curve is not a forecast of where commodity prices are heading, but rather a snapshot of what the market is willing to pay for delivery in the future.

Ukraine: has the invasion already begun? Shelling has already begun; Russia has expelled the US deputy ambassador to Russia; and, US SecState changed plans at last minute to speak at UN.

PEMEX: previously reported that Pemex would begin curtailing exports of crude oil this year, and completely end exports in 2023. There may have been an explanation and, if so, it just got worse. From Bloomberg: forecasts now suggest that Mexico will have to import crude oil to produce enough fuel for its own country. See also this article by Michael Kern.

WTI: $91.18.

Fair value, WTI: $122, link here

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

Active rigs:

$91.75
2/17/202202/17/202102/17/202002/17/201902/17/2018
Active Rigs3315566456


Thursday, February 17, 2022: 34 for the month, 89 for the quarter, 89 for the year

  • 34063, conf, Enerplus, Orbweaver 149-92-32C-29H, Heart Butte: first production, 8/21; t--; cum 128K 12/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-202118181311810921383130219296318
BAKKEN11-2021242695126990317342103516379280
BAKKEN10-202131394783951352996444312469014053
BAKKEN9-20211724843246803453722423140154621
BAKKEN8-2021141812717828378181398872714686

RBN Energy: is western Canada's gas production renaissance in jeopardy?

The gradual increase in Western Canada’s natural gas production in recent years has been powered by the highly prolific Montney formation, a vast unconventional resource that straddles the Alberta/British Columbia border. 
With Western Canadian gas price benchmarks at multi-year highs and producers enjoying their best financial position in ages, it would seem logical to expect more gas production growth from the Montney in the future. However, a recent ruling by the BC Supreme Court could negatively affect the pace of well developments and jeopardize future growth in the Montney formation. In today’s RBN blog, we consider this possibility.